Session 2

Six Sigma Methodology & Tools

Agenda
O Selection of improvement methodology
O Six sigma improvement methodology
O Six sigma toolkit
O DMAIC
O CASE: DMAIC methodology
O Six sigma project selection
O Six sigma organization structure
It takes money to
save money!
Selection of improvement
methodology
Selection of improvement
methodology
Types of Quality Problems

O Conformance problems.
O Efficiency problems
O Unstructured performance problems
O Product design problems
O Process design problems.
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Agenda
O Selection of Improvement methodologies
O Six sigma methodologies
O Six Sigma toolkit
O DMAIC
O CASE: DMAIC methodology
O Six sigma organization structure
Six Sigma Methodology
PDCA Cycle

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 Six Sigma Methodology

O DMAIC
Improving existing business process

O DMADV(DFSS)
Creating new process which will perform at Six
Sigma

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Agenda
O Selection of Improvement methodologies
O Six sigma methodologies
O Six Sigma toolkit
O DMAIC
O CASE: DMAIC methodology
O Six sigma organization structure
Tools for Process Improvement
O Elementary statistics
O Advanced statistical tools
O Product design and reliability
O Measurement
O Process control
O Process improvement
O Implementation and teamwork

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The Seven QC Tools
O Flowcharts
O Check sheets
O Histograms
O Cause-and-effect diagrams
O Pareto diagrams
O Scatter diagrams
O Control charts

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Application of the Seven QC Tools in
Six Sigma

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Flowcharts

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Run chart
Control Chart

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Check Sheet

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Histogram

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Pareto Diagram

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Cause and Effect Diagram

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Agenda
O DMAIC
O CASE: DMAIC methodology
O Six sigma project selection
O Six sigma in services
O Six sigma organization structure
DMAIC Methodology
Case illustration:
O The cycle time of a mail order distribution
company, from customer order to customer
delivery should not exceed 3 days (our
contractual terms & conditions)
O The Customers complain, The competitors are
better than us. They never exceed 3 days
O The Management says We are loosing
money
O The team in place says We dispatch in
average the same day we receive the order
and we always use a 24 hours delivery carrier
Six Sigma Methodology
Define

Define Measure Analyse Improve Control

What is Important?
Motive
State the Practical Problem

Project Charter
Tools
CTQ(Critical to Quality)
SIPOC ( Supplier-Input-Process-Output-Customer)
Define
O Describe the problem in operational
terms
O Drill down to a specific problem
statement (project scoping)
O Identify customers and
CTQs, performance metrics, and
cost/revenue implications
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SIPOC: Photocopying process
Supplier Inputs Process Outputs Customer
Put Original on
Manufacturer Copier Copies You
Glass
Office Supply Paper Close Lid File
You Toner Adjust Settings Others
Power
Original Press Start
Company
Remove
Electricity Originals &
Copies

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Case:Define
Problem Statement:
We miss our contractual obligations of delivering in less than 3 days

Process in which we have a business problem:

Definition Specification Limit Performance Target / Goal

CTQ* Lead time 3 days 99% < 3 days

Six Sigma Methodology
Measure

Define Measure Analyse Improve Control

Motive How are we doing?

Validate practical problem by collecting Data

Measurement System Analysis (Guage R&R)

Tools
Data Collection Plan
Process Capability Study
histograms
Measure
O Measure internal processes that impact
CTQs
O Operational definition
O Key data collection questions
O What questions are we trying to answer?
O What type of data will we need to answer
the question?
O Where can we find the data?
O Who can provide the data?
O How can we collect the data with minimum
effort and with minimum chance of error?
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Y = f(X)
O Y is the set of CTQs and X represents the set of critical
input variables that influence Y.

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Measure
Measure your problem and your defects.

Lead Time Distribution

Measure Conclusion
O I observed the probability of defect of 12.03%!
O My performance is 2.67 ST*. We have a problem!
O 6 Sigma goal is to reach 0.00034% of probability of defect!

DPMO (Defects per million of

ZST Value* % Defects
opportunities)
2 308,537 30.8537%
2.67 12.03%
3 66,807 6.6807%

4 6,210 0.6210%

5 233 0.0233%

6 3.4 0.00034%
*for long term data with ZST = ZLT + 1.5
Six Sigma Methodology
Analyse

Define Measure Analyse Improve Control

What is wrong?
Motive
Convert practical problem to a Statistical
one, identify statistical solution
Cause & Effect Diagram
Tools
Pareto Chart
Control Charts etc.
Analyze

O Focus on why defects, errors, or

excessive variation occur
O Seek the root cause
O 5-Why technique
O Experimentation and verification

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Analyse
Analysis finding the root causes (Xs)

Pareto Chart of the 26 defects

77%

15% 8%
20 4 2

Miss 3pm
Incomplete
carrier for
shipping Other
outside Paris
address
region
Defects 20 4 2

2 causes represent 92% of my defects.

Six Sigma Methodology
Improve

Define Measure Analyse Improve Control

Fix Whats Wrong.

Motive
Test statistical solutions

Design of Experiment or out of boxing thinking

Tools
Brainstorming 35

Mistake proofing (POKA-YOKE) etc.

Improve
O Idea generation
O Brainstorming
O Evaluation and selection
O Implementation planning

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Six Sigma Methodology
Control

Define Measure Analyse Improve Control

Motive Ensure gains are maintained.

Convert statistical solution into a practical one

Tools Control Plans

Control
O Maintain improvements
O Standard operating procedures
O Training
O Checklist or reviews
O Statistical process control charts

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Control
2003 Delivery Time Performance
Agenda
O DMAIC
O CASE: DMAIC methodology
O Six sigma project selection
O Six sigma in services
O Six sigma organization structure
Six Sigma Project Selection
O Top-down
O Bottom-up
O Champions
Six Sigma Project Selection

O Financial return, as measured by costs

associated with quality and process
performance, and impacts on revenues
and market share
O Impacts on customers and organizational
effectiveness
O Probability of success
O Impact on employees
O Fit to strategy and competitive advantage
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Agenda
O DMAIC
O CASE: DMAIC methodology
O Six sigma project selection
O Six sigma in services
O Six sigma organization structure
Six Sigma in Services
O More saving opportunity lies outside
manufacturing.

O Transactional Six Sigma

O Challenges
Six Sigma Metrics in Services

O Accuracy
O Cycle time
O Cost
O Customer satisfaction

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Service Applications
O Banking & Finance
O Improve the accuracy of journal entries
O Reduce variation in cash flow
O Close the books faster
O improve accuracy and cycle time of standard
financial reports
Service Applications
O Healthcare
O Increasing capacity in X-RAY or surgical deptt.
O Reducing discharge delays
O Decreasing patient waiting time
O Reducing defects in billing or patient records
Service Applications
O Public services
O Utility services e.g water and electricity
O Education
O Military operations
Agenda
O DMAIC
O CASE: DMAIC methodology
O Six sigma project selection
O Six sigma in services
O Six sigma organization structure
Six Sigma Organizational
Architecture
O Quality Leader/Manager (QL/QM)
O Master Black Belt (MBB)
O Process owner(PO)
O Black Belt (BB)
O Green Belt(GB)
Conclusion
Six Sigma is methodology used for:
O Aligning key business processes to
achieve those requirements.
O Utilizing rigorous data analysis to
minimize data variation in those
processes.
O Driving rapid and sustainable
improvement to business processes.

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End of Session 2..