General Introduction

BB 1_01
Why Quality Improvement:

Good
input Process Step Inspection customer
product

Rework
Waste

The hidden Factory

CONFIDENTIAL 2
BB 1_01 Introduction Six Sigma
The hidden factory

The hidden factory has implications for:

Defects
– Producing right/good first time
– Reduce number of defective products

Cycle time
– Producing right/good first time
– Reduce cycle time

Cost
– Producing right/good first time
– Reduce cost

CONFIDENTIAL 3
BB 1_01 Introduction Six Sigma
The effect of complexity

Example:
17% of trains is delayed
– Probability to arrive in time: 0.83

Trip by train with 3x changeovers,

47%
– probability to arrive in time = 0.83x0.83x0.83 = 0.47

Trip by train (go and return, 3x changeovers)

– probability to arrive in time = 0.838 = 0.23
23%

CONFIDENTIAL 4
BB 1_01 Introduction Six Sigma
The effect of complexity
Process steps vs Yield
% Rolled Throughput Yield

Processes 3s 4s 5s 6s
1 93.32 99.379 99.9767 99.99967
10 50.09 93.96 99.77 99.9966
100 0.1 53.64 97.7 99.966
500 0 4.44 89.02 99.83
1000 0 0.2 79.24 99.66
2000 0 0 62.75 99.32
2955 0 0 50.27 99.0

CONFIDENTIAL 5
BB 1_01 Introduction Six Sigma
Overview cost of poor quality
Internal failure:
(Yield) losses
Rework
Losses due to poor supplies
Unplanned stops
Resolving cause of stops
Retesting
External failure:
Customer treatment
Rejects from market
Keeping a customer service
Loss of goodwill
Fines
Prevention costs:
Training and education
Planning of quality
Process control
Pilot series production
Qualifying supplies
Customer service
Testing & Examination:
Inspection of supplies
Maintenance of equipment
Calibration
Quality department
Testing
Quality audits
CONFIDENTIAL 6
BB 1_01 Introduction Six Sigma
Quality costs
Sigma-level DPMO costs of failures
(% of sales)
6σ 3.4 < 10%
5σ 230 10-15%
current
4σ 6.200 15-20%
industrial
standard 3σ 67.000 20-30%
2σ 310.000 30-40%
Target

Defects: 3.4 per

million
σ opportunities

± 6σ
Acceptable Window
or “Spec Limits”

CONFIDENTIAL 7
BB 1_01 Introduction Six Sigma
Quality

Fitness for use

– Determined by customer

Quality of Design
– The extend to which the (intentional) features of a type of product
comply with the needs of a customer

Quality of conformance
– The extend to which an individual product is free of defects

CONFIDENTIAL 8
BB 1_01 Introduction Six Sigma
Quality Management

Quality Planning
– The determination of the needs of the customers and the development of
products/process required to comply to these needs.
• DFSS

Quality control Æ Reactive

– The detection and reaction to irregularities in the production process
• SPC, APC, Inspection, etc…

Quality improvement Æ Pro-active

– An organized and systematically pursued change to increase the quality to
unprecedented level ( breakthrough )
• DMAIC

CONFIDENTIAL 9
BB 1_01 Introduction Six Sigma
Quality Management

Quality control
Quality Panning (During operation)
Trend, ….

Quality
Lessons learned Improvement
Project

CONFIDENTIAL 10
BB 1_01 Introduction Six Sigma
Why quality improvement?

Current production processes are on the edge of what

technically feasible:
– Volume
– Cycle time
– Complexity of products and processes

The reactive approach of quality control is no longer

suffices.
Attention shifts toward: Systematical attack of disturbances
and problems.

CONFIDENTIAL 11
BB 1_01 Introduction Six Sigma
How to improve processes

Zero Defects / USA

Management by objectives
Kaizen ( continuous improvement)
Quality circles / Japan
Business Process Reengineering ( BPR)
Business Balanced Score Card ( BBSC)
ISO 9000
Total Productive Maintenance ( TPM)
Etc…

CONFIDENTIAL 12
BB 1_01 Introduction Six Sigma
How to improve processes

Quantative improvement approaches

Improvement actions are based:

– NOT on emotions, assessment, experiences, authorities,
conviction,etc..
– BUT on empirical investigation, measurement, experiments

Improvement is:
– NOT only the application of technical knowledge,
– BUT the discovery of new knowledge

CONFIDENTIAL 13
BB 1_01 Introduction Six Sigma
Discovery
Learning by scientific method

Hypothesis ( potential variables)

Cr inkin
ink e

Th
Th eativ
i ng

itic g
al
Cr

Data, measurement, observations

Exploratory
Testing
Study

CONFIDENTIAL 14
BB 1_01 Introduction Six Sigma
Discovery and statistics

Statistics
– Methods for collection, presentation and analysis of data.
– Based on mathematics and mathematical modeling

Statistical approach to quality improvement:

– Explain Æ Predict Æ Control

• Y = f ( X1, X2, ………, Xn

– All ideas are empirically tested before they are accepted.

• Show me the data / evidence

CONFIDENTIAL 15
BB 1_01 Introduction Six Sigma
Quality Control History

Statistical Quality Control

ISO, QSS
System
6s
Statistical Techniques

Total QC
Inspection of line Quality

Development of

TQM
1980’s
Total Quality Management
TQC world wide
1970’s
Japanese mass production
SQC Deming and Juran principles
1940’s
US Weapon Industry World War II
IQC
18th C
Start of Industrial Revolution / mass production

CONFIDENTIAL 16
BB 1_01 Introduction Six Sigma
The Six Sigma Program

SPC TQM Taguchi Shainin

Six Sigma

CONFIDENTIAL 17
BB 1_01 Introduction Six Sigma
Six Sigma
Introduction Six Sigma, objectives

This module contains:

– History of Six Sigma

– What is Six Sigma
– Why Six Sigma
– Basics of Six Sigma
– Six Sigma and variation
– DMAIC cycle
– Six sigma build-up and organization
– Green/black Belt profile
– Summary

CONFIDENTIAL 20
BB 1_01 Introduction Six Sigma
History of Six Sigma
••1987
1987 ••Motorola
Motorola CEO
CEO Declares
Declares Motorola
Motorola will be 66σσ••by
will be by 1992
1992
••1988
1988 Original 66 σσ••Consortium
••Original Consortium Formed
Formed
••(Motorola,
(Motorola, Raytheon,
Raytheon, ABB,
ABB, CDI,
CDI, Kodak)
Kodak)
••1990
1990 ••IBM
IBM and
and DEC try 66σσ••and
DEC try and fail
fail
••1993
1993 ••Allied
Allied Signal
Signal embraces
embraces new
new approach to 66σσ
approach to
••(Dedicated
(Dedicated Black
Black Belts
Belts with
with Supporting
Supporting Infrastructure)
Infrastructure)

••1995
1995 ••GE’s
GE’s Jack
Jack Welch adopts 66σσ
Welch adopts

••1996/1997
1996/1997 6 σσ••implementation
••6 implementation begins
begins en
en mass
mass per
per Allied
Allied &
& GE’s
GE’s success
success (Siebel
(Siebel••,,
••Bombardier,
Bombardier, Whirlpool,
Whirlpool, Navistar,
Navistar, Gencorp,
Gencorp, Lockheed
Lockheed Martin
Martin
••Polaroid,
Polaroid, Sony,
Sony, Nokia,
Nokia, John
John Deere)
Deere)

••1997/1999
1997/1999 ••Number of 66σσ••companies
Number of companies grows
grows rapidly
rapidly (Siemens,
(Siemens, BBA,
BBA, Seagate,
Seagate, Compaq,
Compaq,
••PACCAR,
PACCAR, Toshiba,
Toshiba, AmEx,
AmEx, DuPont,
DuPont, Lear)
Lear)

••1999
1999 ••Exponential
Exponential growth;
growth; ASQ
ASQ begins offering 66σσ••training
begins offering training
••(J&J,
(J&J, Air
Air Products,
Products, Maytag,
Maytag, Dow
Dow Chemical,
Chemical, Honeywell,
Honeywell, PraxAir,
PraxAir, Fo
Fo••rd,
rd,
••BMW,
BMW, Johnson
Johnson Controls,
Controls, Samsung)
Samsung)

••2000
2000 ••Philips
Philips begins BB Program/MEDIC
•2006/7 •NXP
CONFIDENTIAL 21
BB 1_01 Introduction Six Sigma
Preface “Six Sigma”

● If we can’t express what we know in the form of numbers, we really

don’t know much about it.
● If we don’t know much about it, we can’t control it.

● If we can’t control it, we are at the mercy of chance.

Dr. Mikel J. Harry, President & CEO, Six Sigma Academy, Inc.

“Six
“SixSigma
Sigmawill
willbring
bringGEGEtotoaawhole
wholenew
newlevel
levelof
ofquality
qualityininaafraction
fractionof
ofthe
thetime
timeitit
would
wouldhave
havetaken
takentotoclimb
climbthe
thelearning
learningcurve
curveon
onour
ourown.”
own.”
Jack
JackWelch,
Welch,CEO,
CEO,GE GE(1995
(1995GE GEAnnual
AnnualReport)
Report)

“{Six
“{SixSigma-The
Sigma-Thebreakthrough
breakthroughStrategy}
Strategy}isisone
oneof
ofthe
themost
mostimportant
importantinitiatives
initiativesGE
GE
has
hasever
evertaken…it
taken…itisispart
partof
ofthe
thegenetic
geneticcode
codeofofour
ourfuture
futureleadership.”
leadership.”
Jack
JackWelch,
Welch,CEO,
CEO,GE GE(1998
(1998GEGEAnnual
AnnualReport)
Report)

CONFIDENTIAL
BB 1_01 Introduction Six Sigma
What is Six Sigma?
A vision and philosophy of data based decision making and a
commitment to improved product quality for the customer

A measurement methodology of our product and process capability

A transparent methodology to apply Statistical Tools to:

Define - the business problem (from customer issue)
Measure - the current process
Analyze - the critical process factors (vital few)
Improve - the critical factors to optimum
Control - the critical factors (ensure improvement)

Six Sigma combines many known methods and statistical tools into one
structured approach

DMAIC equivalent DIDOV

CONFIDENTIAL 23
BB 1_01 Introduction Six Sigma
Why Six Sigma?
Better control of quality to our customers to prevent high Costs Of Poor
Quality (COPQ) Æ Business improvement

Awareness of customer requirements (Customers don’t judge on average ).

Awareness of importance to measure the related process capability well

Emphasis on capable designs and processes

The DMAIC Way of Working is systematic, uniform and transparent

People development

CONFIDENTIAL 24
BB 1_01 Introduction Six Sigma
Basics of Six Sigma
Commitment to improved Customer Quality and
Company Profitability

Show me the money!!!

Methodology to Measure and Improve

Product & Process Capability

Show me the data!!!

CONFIDENTIAL 25
BB 1_01 Introduction Six Sigma
Six Sigma Build-up
Define Measure Analyze Improve Control

Project Charter

Applying
Applyingthe
the Business Case

Goal Statement
Opportunity Statement

Project Scope

Methodology
Methodology Project Plan Team Selection

UCL

Using
Using
Building
Buildingthe
the
Quantified Root Causes
LCL

Tools
Tools 50%

Organization
Organization Problem
Statement
25%

CTQ

Gap

CONFIDENTIAL 26
BB 1_01 Introduction Six Sigma
How do we work mostly?
The classical Way of Working in DMAIC terminology:

– Define the CTQ/customer requirement:

– usually we are not specific enough in our problem definition
– Measure the CTQ:
– usually we are not critical enough towards the statistics behind our
measurements
– Analyze:
– we have a lot of prejudices, which are true, no discussion
– Improve:
– here lies our heart, we love to experiment, but in a structured way?
– Control:
– we tend not to finish a project completely (due to pressure) and we
want to start with a new one

CONFIDENTIAL 27
BB 1_01 Introduction Six Sigma
The DMAIC cycle
Consolidate Gage r&R
e.g. SPC, OCAP Define
Define Capability NOW

Problem & Target for

CTQ PSU Measure
Measure
Control
Control
FMEA
Design of Experiment Possible Causes
Finding vital few X’s CTQ=f(X1..Xn)
Optimize for vital few X’s
Capability IMPROVED
Analyze
Analyze
Improve
Improve
Six Sigma Way of Working (WoW)
CONFIDENTIAL 28
BB 1_01 Introduction Six Sigma
Approach: DMAIC methodology
Oven temp
350 +/- 50 F,
Practical
Practical too wide a
Problem
Problem Statistical
Statistical range
Improve the Problem
Problem
taste of
cookies: MIND SET
more
consistent TOOL SET

Adjust oven
Reduce
temperature
standard
Practical
Practical Statistical
Statistical deviation
Solution
Solution Solution
Solution
Replace
temperature
sensor DMAIC provides the framework
CONFIDENTIAL 29
BB 1_01 Introduction Six Sigma
Tools Note: This only gives an indication when a tool may often be used,
however the same tool may be used in a number of different phases

D-phase M-phase A-phase

Voice of the customer VOC Process mapping Graphical tools, Box plot, etc..
QFD Data collection Cause & Effect (Fishbone) diagram
Project / Problem definition tree Tolerances analysis, simulation
Basic statistics / Minitab
SIPOC (Map)
Graphing data Central limit theorem
Pareto/Fishbone
Fishbone / Pareto Confidence intervals
Logic Tree
Decision Tree Hypothesis testing / Regression
Project charter
Measurement system analysis R&r FMEA, Risk analysis
Change management : all DMAIC
Process capability, SPC Change management: all DMAIC
Risk assessment
I-phase Change management: all DMAIC C-phase
Idea generation / selection Mistake-proofing
Graph analysis Statistical process control
Regression analysis /ANOVA Control charts
Design of Experiments (DOE) R&r
Process mapping Change management and Control plan / OCAP
Stakeholder analysis Human dynamics tools are Process capability
applicable in all DMAIC Project closure & audit
Implementation / Communication plan
phases
Pilot runs Evaluation sheet
Change management: all DMAIC Change management: all DMAIC

CONFIDENTIAL 30
BB 1_01 Introduction Six Sigma
Six Sigma and Variation

CONFIDENTIAL 31
BB 1_01 Introduction Six Sigma
Variation causes the pain

Oops, I heard that

the average depth is
4 meters …

Well, variation is always there and in many cases it

will be experienced as a nuisance
CONFIDENTIAL 32
BB 1_01 Introduction Six Sigma
Sigma and process capability level
LSL USL

3σ Process Capability
1σ 2σ 3σ

Average

LSL USL

6σ Process Capability
1σ 2σ 3σ 4σ 5σ 6σ

Average

CONFIDENTIAL 33
BB 1_01 Introduction Six Sigma
Mindset of σ level companies
3 sigma level company
• 20∼30% of sales is failure cost.
• Having 66,807 defects per million.
• Depends on the defect to find
the defect product.
• Believes that high quality is
expensive.
• No systematic improvement
approach available.
• Benchmarking against competing
companies.
• Believes 99% is good enough.
• Defines CTQ’s internally.
6 sigma level company
• 5 ∼10% of the sales is failure cost.
• Having 3.4 defects per million.
• Focusing on process not to produce
defects.
• Realizes that high quality creates
low cost.
• Uses know-how of measurement,
analysis, improvement & control.
• Benchmarking to the best in the world.
• Believes 99% is unacceptable.
• Defines CTQ’s in view point of
the customer.
CONFIDENTIAL 34
BB 1_01 Introduction Six Sigma
Sigma and making decisions (1)

Stupid. Wrong decision

knowing average depth
is 4 m and sigma is 2 m

The process variation is known

but not yet reduced
CONFIDENTIAL 35
BB 1_01 Introduction Six Sigma
Variation and Quality
The customer “feels” the variation in properties of
products
Low variation means good performance
= good quality
Focus to reduce variation in each process
Be aware that all processes do have variation;
but some have more and some have less
Make decisions based on the level of variation to adapt a
process

CONFIDENTIAL 36
BB 1_01 Introduction Six Sigma
Sigma and making decisions (2)

Yeah, no more headache!!!

Diving is safe when the average
depth is 4 m and sigma 0.1 m

The process is under control

Variation is reduced effectively
CONFIDENTIAL 37
BB 1_01 Introduction Six Sigma
Six Sigma and manufacturing
Effect of Sigma value and number of processes
on Rolled Troughput Yield

100
Rolled Throughput Yield (%))

80
3s
60 4s
5s
40
6s
20

0
1 10 100 1000 10000
Number of subsequent processes

CONFIDENTIAL 38
BB 1_01 Introduction Six Sigma
Six Sigma concept
σ-Level PPM Sweet Fruits
Design for
6 3.4
productivity

Bulk of Fruit
Process
5 233
characterization
and Optimization

4 6,210 Lower Fruit

7 Basic Tools of QC

3 66,807
Ground Fruit
Depend on straight
viewpoint
2 308,537

CONFIDENTIAL 39
BB 1_01 Introduction Six Sigma
Business impact of Quality work
100
90
80
70
60
50
Cost in $
40
30
20
10
0
R&D Mfg Field Return

1$ well spend in R&D represents prevention of 100$ in field returns

CONFIDENTIAL 40
BB 1_01 Introduction Six Sigma
 Tested and validated by

Deployment structure & strategy many world-class companies

Committed leadership

Customer and Full time resources & Business

Strategy alignment
Process Data Organization Process framework

Define Measure Analyze Improve Control

Project VOC Statistical Process Project

chartering measurement Analysis control management

Systematic Benefits Performance Knowledge Program

approach to change & Tracking management management management

CONFIDENTIAL 41
BB 1_01 Introduction Six Sigma
Organization: Typical Six Sigma structure
CEO / GM

Six Sigma
Champion

Master Black Belt

Black Belt Black Belt Black Belt

Green Green Green Green Green Green

Belt Belt Belt Belt Belt Belt

Yellow Belts

CONFIDENTIAL 42
BB 1_01 Introduction Six Sigma
Six Sigma operational system
Champion
General manager
Monthly Champion Review

Re
t

po
or
pp

r
tin
Su

g/
en

Co
i ll

i tm

Re
Sk

m
m

qu
it m
6σ

e
Co

sti
en

ng
t
Coaching/Supporting

Request supporting
Six Sigma Coordination/MBB Project Teams BB’s & GB’s
Dedicated team from the site Weekly joint meeting
On-line project support Exchange practice
Problem solving and progression
Consultant: training during start up
and fill in the local MBB function
CONFIDENTIAL 43
BB 1_01 Introduction Six Sigma
Few examples of Companies using Six Sigma, the list is much longer

CONFIDENTIAL 44
BB 1_01 Introduction Six Sigma
Conclusions
The DMAIC is a structured and transparent way of work

Voice of the customer is the starting point.

Data driven and business oriented .

High attention/focus on Variation.

CONFIDENTIAL 45
BB 1_01 Introduction Six Sigma