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INTRODUCTION TO SIX SIGMA
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WHY TO ATTAIN THIS WORKSHOP?
Organization is considering implementing Six Sigma
and you want to understand what is it and how it
works?
You are responsible in some way for Six Sigma
initiatives.
You have heard about six sigma and you are curious
about how it works and what result you can expect
from putting it to work for our organization.
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PURPOSE OF SIX SIGMA
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To make customer happier and
increase profits
WHAT RESULTS HAVE BEEN ACHIEVED WITH SIX SIGMA?
Effect of Quality
Benefits for customers
Financial Benefits.
Benefits for employees
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SIX SIGMA : FROM WHERE IT CAME?
1985 : Dr. Mikel J Harry wrote a paper relating early failures to quality.
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SIX SIGMA AND FORTUNE 500 COMPANIES
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WHAT IS SIX SIGMA
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SIX SIGMA : AN AGGRESSIVE GOAL
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PILOTS SIX SIGM PERFORM NCE
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Width of landing
strip 1/2 Width
of landing
strip
If pilot always lands
within 1/2 the landing strip
width, we say that he has Six
Sigma capability.
WHAT CAN IT DO? SUCCESS STORIES )
Motorola: 5-Fold growth in Sales
Profits climbing by 20% pa Cumulative savings of $14 billion over 11 years
General Electric: $2 billion savings in just 3 years
The no.1 company in the USA
Bechtel Corporation: $200 million savings with investment of $30 million
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GE SIX SIGMA ECONOMICS
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1996 1998 2000 20020
500
1000
1500
2000
2500
1996
Cost
Benefit
(in millions)
Source: GE Annual Report, Jack Welch Letter to Share Owners and Employees - progress
based upon total corporation cost/benefits attributable to Six Sigma.
OVERVIEW OF SIX SIGMA
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PAIN, URGENCY, SURVIVAL
COSTS
OUT
GROWTH
TRANSFORM THE
ORGANIZATION
CHANGE
THE
WORLD
6 SIGMA AS
A
STATISTICAL
TOOL
6 SIGMA AS
APHILOSOPH
Y
6 SIGMA AS
A PROCESS
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OVERVIEW OF SIX SIGMA
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It is a Philosophy
Anythinglessthanidealisanopportunityforimprovement
Defectscostsmoney
Understandingprocessesandimprovingthemis
themostefficientwaytoachievelastingresults
It is a Process
Toachievethislevelofperformanceyouneedto:
Define,Measure,nalyse,ImproveandControl
It is
Statistics
6Sigmaprocesseswill
producelessthan3.4
defectspermillion
opportunities
1 . PHILOSOPHY
Know Whats Important to the Customer
(CTQ)
Reduce Defects (DPMO)
Centre Around Target (Mean)
Reduce Variation (Standard Deviation)
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DATA DRIVEN DECISION
Y X1 . . . Xn
Dependent Independent
Output Input-Process
Effect Cause
Symptom Problem
Monitor Control16
f(X)Y=
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2. PROCESS
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Define
Measure
Analyze
Improve
Control
Define
Measure
Analyze
Design Verify
DMAIC DMADV
Existing
Processes
NewProcesses
COPQ (COST OF POOR QUALITY)
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- Lost Opportunities
- The Hidden Factory
- More Setups
- Expediting Costs
- Lost Sales
- Late Delivery
- Lost Customer Loyalty
- Excess Inventory
- Long Cycle Times- Costly Engineering
Changes
Average COPQ
approximately 15% of Sales
Hidden Costs:
- Intangible
- Difficult to Measure
Traditional Quality Costs:
- Tangible
- Easy to Measure
- Inspection
- Warranty
- Scrap
- Rework
- Rejects
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COPQ VS. SIGMA LEVEL
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2 3 4 5 6
20
C
ostofQuality%Sales
Sigma Level
DEFECTS VS. DEFECTIVES
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CLASSICAL YIELD,% DEFECTIVE & DPU
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IN PROCESS YIELD
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ROLLED THROUGHPUT YIELD
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EXERCISE
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DPMO: DEFECTS PER MILLION OPPORTUNITY
Opportunities for defects focus on:
noncompliance to design intent
noncompliance to customer expectations
Defects Per Million Opportunities (DPMO)Normalizes forComplexity
DPMO Allows comparison of dissimilar products.
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3. IT IS STATISTICS?
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VARIATION- SOME FACTS
WHAT IS STATISTICS?
Six Sigma Belt- Common Tasks
- To predict behavior of the process- To compare the behavior with the target
- To identify the causes and link with the process
behavior
A lot of information are needed about the
process
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WHAT IS STATISTICS?
The set of information derived from the
Sample data to estimate the process
(Population) are called Statistics
POPULATION VS SAMPLE
Population
- Set of all possible outcomes of the process
Samples
- Subsets of populations:
Data is obtained using samples because
- we seldom know the entire population
- Population statistics are desired, but often not available
- Samples approximate the population
Descriptive statistics apply to samples
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STATISTICS PRACTICALLY
IMPORTANT BASIC STATISTICS
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PROCESS CAN BE DIFFER IN
STATISTICS FOR LOCATION
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STATICS FOR SPREAD
STATISTICS FOR SHAPE
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POPULATION VS SAMPLE STATISTICS
MEAN
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MEAN : EXAMPLE
Calculate the mean of following dataset
MEDIAN
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MODE
RANGE
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STANDARD DEVIATION
VARIANCE
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STANDARD DEVIATION :EXAMPLE
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EXERCISE
HISTOGRAM
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NORMAL DISTRIBUTION CURVE ( BELL CURVE)
Normal distribution issymmetrical about itsmean
In normal distribution ,themean, the median and themode are equal.
Normal distributions are
divide up into 3 standarddeviations on each side ofthe mean
CAUSES OF VARIABILITY
Common Causes:
Random variation within predictable range (usual)
No pattern Inherent in process
Adjusting the process increases its variation
Special Causes
Non-random variation (unusual)
May exhibit a pattern
Assignable, explainable, controllable
Adjusting the process decreases its variation
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LIMITS
Process Control limits: Statistical
Process limits are used for individual items
Control limits are used with averages
Limits = 3
Define usual (common causes) & unusual (special causes)
Specification limits: Engineered
Limits = target tolerance
Define acceptable & unacceptable
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USUAL VS. UNUSUAL, ACCEPTABLE VS. DEFECTIVE
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Another View
LSL USL
Off-Target
USLLSL
Large
Variation
CenterProcess
ReduceSpread
The statistical view of a
problem
On-
Target
USLLSL
LSL = Lower spec
limit
USL = Upper spec
limit
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MORE ABOUT LIMITS
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Good quality:defects are rare (Cpk>1)
Poor quality:defects are common
(Cpk
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PROCESS SHIFT ALLOWED
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2 3 4 5 6 7 8 9 1210 111
LSL USL
SD = 1
1.5 SD 1.5 SD
SIX SIGMA MEASUREMENT
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4
5
6
7
66810
6210
233
3 4
0.02
Sigma
DPMO
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SIX SIGMA MEASUREMENT
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0
100,000
200,000
300,000
400,000
500,000
600,000
1.5 2.5 3.5 4.5 5.5
# of Sigmas
#ofDefectperMillion
Sigma Defects
numbers
per million
1.5 500,000
2.0 308,300
2.5 158,650
3.0
67,000
3.5 22,700
4.0 6,220
4.5 1,3505.0 233
5.5 32
6.0 3.4
EXAMPLE
Process A Process B
3.7 4.7
6.5 5.3
3.2 4.7
3.2 5.4
5.7 4.7
7.4 4.4
5.7 4.7
7.7 5.8
4.2 4.2
2.9 5.7
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COMPONENTS OF SIX SIGMA
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COMPONENTS OF SIX SIGMA
Two components of Six Sigma
Process Power
People Power
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PROCESS POWER
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APPROACH
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Practical
Problem
Statistical
Problem
Statistical
Solution
Practical
Solution
DMAIC - SIMPLIFIED
Define What is important?
Measure How are we doing?
Analyze What is wrong?
Improve Fix whats wrong
Control Ensure gains are maintained to guarantee performance
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DMAIC APPROACH
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D
Define
M
Measure
A
Analyze
I
Improve
C
Control
Identify and state the practical problem
Validate the practical problem by collecting data
Convert the practical problem to a statistical one, definestatistical goal and identify potential statistical solution
Confirm and test the statistical solution
Convert the statistical solution to a practical solution
DEFINE
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D
Define
M
Measure
A
Analyze
I
Improve
C
Control
VoC- Who wants the project and why ?
The scope of project / improvement (SMART
Objective)
Key team members / resources for theproject
Critical milestones and stakeholderreview
Budget allocation
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MEASURE
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D
Define
M
Measure
A
Analyze
I
Improve
C
Control
Ensure measurement system reliability
Prepare data collection plan
Collect data
- Is tool used to measure the output variable
flawed ?
- How many data points do you need to
collect ?
- How many days do you need to collect
data for ?
- What is the sampling strategy ?
- Who will collect data and how will data
get stored ?
- What could the potential drivers of
variation be ?
ANALYZE
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D
Define
M
Measure
A
Analyze
I
Improve
C
Control
How well or poorly processes are workingcompared with- Best possible (Benchmarking)
- Competitors
Shows you maximum possible result
Dont focus on symptoms, find the rootcause
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IMPROVE
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D
Define
M
Measure
A
Analyze
I
Improve
C
Control
Present recommendations to process owner.
Pilot run- Formulate Pilot run.
- Test improved process (run pilot).
- Analyze pilot and results.
Develop implementation plan.
- Prepare final presentation.
- Present final recommendation to ManagementTeam.
CONTROL
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D
Define
M
Measure
A
Analyze
I
Improve
C
Control
Dont be too hasty to declare victory.
How will you maintain to gains
made?
- Change policy &
procedures
- Change drawings
- Change planning
- Revise budget
- Training
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PEOPLE POWER
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Tell me, I forget.Show me , I remember.
Involve me, I understand.
6 S TRAINING
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Master
BlackBelt
Black
Belts
Green Belts
Team Members /
Yellow Belts
Champions
Mentor, trainer, and coach of Black Belts and others
in the organization.
Leader of teams implementing the six sigma
methodology on projects.
Delivers successful focused projects using
the six sigma methodology and tools.
Participates on and supports the project
teams, typically in the context of his or her
existing responsibilities.
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CHAMPION
Plans improvement projects
Charters or champions chartering process
Identifies, sponsors and directs Six Sigma projects
Holds regular project reviews in accordance withproject charters
Includes Six Sigma requirements in expense andcapital budgets
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Champions
CHAMPION
Identifies and removes organizational and culturalbarriers to Six Sigma success.
Rewards and recognizes team and individualaccomplishments (formally and informally)
Communicates leadership vision
Monitors and reports Six Sigma progress
Validates Six Sigma project results
Nominates highly qualified Black Belt and/or Green Beltcandidates
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Champions
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MASTER BLACK BELT
Enterprise Six Sigma expert
Permanent full-time change agent
Certified Black Belt with additional specialized skills or
experience especially useful in deployment of Six
Sigma across the enterprise
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Master
Black Belt
MASTER BLACK BELT
Highly proficient in using Six Sigmamethodology (e.g., advanced statistical analysis,
project management, communications, programadministration, teaching, project coaching)
Identifies high-leverage opportunities for applyingthe Six Sigma
Basic Black Belt training
Green Belt training
Coach / Mentor Black Belts
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Master
Black Belt
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BLACK BELT
Six Sigma technical expert
Temporary, full-time change agent (will return toother duties after completing a two to three yeartour of duty as a Black Belt)
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BlackBelts
BLACK BELT
Leads business process improvement projects whereSix Sigma approach is indicated.
Successfully completes high-impact projects that result
in tangible benefits to the enterprise Demonstrated mastery of Black Belt body of knowledge
Demonstrated proficiency at achieving results throughthe application of the Six Sigma approach
Coach / Mentor Green Belts
Recommends Green Belts for Certification
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BlackBelts
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GREEN BELT
Six Sigma Project originator
Part-time Six Sigma change agent. Continues to performnormal duties while participating on Six Sigma projectteams
Six Sigma champion in local area
Recommends Six Sigma projects
Participates on Six Sigma project teams
Leads Six Sigma teams in local improvement projects
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Green Belts
YELLOW BELT
Learns and applies Six Sigma tools toprojects
Actively participates in team tasks Communicates well with other team
members
Demonstrates basic improvement toolknowledge
Accepts and executes assignments asdetermined by team
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Team Members /
Yellow Belts
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FINANCIAL ANALYST
Validates the baseline status for each
project.
Validates the sustained results / savings
after completion of the project.
Compiles overall investment vs. benefits on
Six Sigma for management reporting. Will usually be the part of Senior Leadership
Team.
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PROJECT SELECTION
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SOURCES OF PROJECTS
External Sources:
Voice of Customer
What are we falling short of meeting customer needs?
What are the new needs of customers?
Voice of Market
What are market trends, and are we ready to adapt?
Voice of Competitors What are we behind our competitors?
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SOURCES OF PROJECTS
Internal Sources:
Voice of Process
Where are the defects, repairs, reworks? What are the major delays?
What are the major wastes?
Voice of Employee What concerns or ideas have employees or managers raised?
What are we behind our competitors?
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HARVESTING THE FRUIT OF SIX SIGMA
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- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Sweet Fruit
Design for RepeatabilityProcess Enhancement
Bulk of Fruit
Process
Characterization
and Optimization
Low Hanging Fruit
Seven Basic Tools
Ground Fruit
Logic and Intuition
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WHAT QUALIFIES AS A SIX SIGMA PROJECT ?
Three basic qualifications:
There is a gap between current and desired / needed
performance. The cause of problem is not clearly understood.
The solution is not pre-determined, nor is the optimal solution
apparent.