simple six sigma-bsg

8/6/2019 Simple Six Sigma-BSG

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12/28/2010 Brain Gain/BSG _ Six Sigma 2

Why is it called Six Sigma?Why is it called Six Sigma? Sigma ( ) is the symbol used to denote Standard

Deviation which is a metric to define dispersion of data,(measurements, occurrences ,etc.) in a given set ofobservations (population);

Data is distributed around a central tendency (meanor mode or median) and to define this spread ofdata (deviations from central tendency), the rootmean square of the sum of all deviations iscalculated to give an unique value.

Generally, data is assumed to be normallydistributed i.e.: the central tendency is such that mean/mode/ median

are the same value Almost all data are contained within the values defined

by the interval: Mean +/- 3 .


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Why is it called SixWhy is it called SixSigma?Sigma?

Graphically Normal Distribution is represented in a histogram

If we can achieve a +/- 3 spread with our output,within the range of specs.,we are on target !

Thus the name six sigma.

Upper .SpecifLimit

Lower.Specif

Limit

- 3 + 3


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What is 6 sigma?What is 6 sigma?

6 sigma is a management methodology of whichthe goal is to improve dramatically the performanceand the quality of all your processes, services andproducts. It is:

Customer centric

Based on data/measurements/statistics

A pragmatic & disciplined approach

Business oriented, providing high returns

Focused on reducing variability & defects


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6 sigm a Basics6 sigm a BasicsqIf there is an output, there is a process!

qIf there is a process there isaperformance variation

qIf there is variation there is a probability ofdefect

qThe customer always feels the output process variation.

qA 6 sigma processproduces only3.4 defects per million ofopportunities (operations)

qA process operating at 3 sigma produces66807defects per million of opportunities

qA 3 sigma process cost you up to 20 % of your salesrevenue

qA 6 sigma process cost you less than 1% of your salesrevenue


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7/2512/28/2010 Brain Gain/BSG _ Six Sigma 7

2 3 4 5 6 7 8 9 1210 16151413111

Upper.Specif

Limit

Sigma curveSigma curve

In a 3 sigma process the values are widely spread,along the center line showing the higher

.variation of the process,In a 6 Sigma process the values are closer to the

.center line showing less variation in the process

6 sigma Basics6 sigma BasicsResult of variationResult of variation

SpreadSpread

Lower.Specif

Limit



process shiftprocess shift

2 3 4 5 6 7 8 9 1210 16151413111

LSL USL

1.5 1.5


: 3 +/- .5 = .5 x2 = 9 ; =ince R 12 +/- .ther 2 x 1 5 ( ) or shift in spread

R

6



Cost of quality at various levels of SigmaCost of quality at various levels of Sigma

Sigma ( )Defect rate PPM Cost of quality Competitive level

3.4 40%

WorldClass

Industry

Average

NonCompetitive

6

5

4

3

2

1




Six Sigma MethodologySix Sigma Methodology(DMAIC)(DMAIC)

Define

Measure

Analyse

Control

Improve



DMAIC StepsDMAIC Steps1. Define1. Define

Identify projects that are measurable

Define projects including the demands ofthe customer and the content of theinternal process. (CTQ)

Develop team charterDefine process map

1. Define2.

Measure

3. Analyze 4. Improve 5. Control


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DMAIC StepsDMAIC Steps3. Analyse3. Analyse

Establish process capabilityDefine performance objectives

Identify variation sources

Tools for analysisl Process Mappingl &Failure Mode Effect Analysis

l Statistical Testsl Design of Experimentsl Control chartsl Quality Function Deployment

( )QFD

3. Analyse1. Define 2.Measure

4. Improve 5. Control



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DMAIC StepsDMAIC Steps4. Improve4. Improve

Screen potential causes

Discover variable relationships among causes and

effectsEstablish operating tolerances

Pursue a method to resolve and ultimately eliminateproblems. It is also a phase to explore the solution howto change, fix and modify the process.

Carryout a trial run for a planned period of time toensure the revisions and improvements implementedin the process result in achieving the targeted values.

4.

Improve

1. Define

2.

Measure

3.

Analyse

5.

Control



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DMAIC StepsDMAIC Steps5. Control5. Control

Monitor the improved process continuously toensure long term sustainability of the newdevelopments.

Share the lessons learnt

Document the results and accomplishments ofall the improvement activities for futurereference.

5. Control1. Define 2. Measure 3. Analyse 4. Improve



An example:The cycle time of a distribution company, from

customer order to customer delivery should notexceed 3 days (contractual terms & conditions)

Customers complain delays; competitors arebetter: they never exceed 3 days

Management says We are loosing money

Team in place says We dispatch on average the

same day we receive the order and we alwaysuse a 24 hours delivery carrier

6 sigma Basics6 sigma Basics



6 sigma steps (DMAIC)6 sigma steps (DMAIC)

DDefine the business problem

MMeasure the process (Y) performance

Find the root causes (Xs) of the problem (AAnalyse)

IImprove, iimplement new solution

Deliver (Y) performance over time (Control)


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process as felt by the customer

eceiptforderromCustomerInputOrder

Outputnit delivery

u p p l i e r=yC o m p a n y

yC u s t o m er

DefinitionpecificationPerformanceTargets*TQ ead time days . %


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MeasureMeasure

Measurethe :problem and defects( )Lead time distribution

ime fromrder to deliveryn days

No ofoccurrences

0

defectefects

/ontractual CustomerSpecificationLimit

3 days

10

1 day 2 days

50

Histogram

bservedprobabilityf=efects . %2 03/26 216

Variation

Trend


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Measure conclusionMeasure conclusion . %!observed a probability of defect of 12 03

. ( ) !performance is 2 67 Z value We have a problem . %6 sigma goal is to reach 0 00034 of probability of!defect

value*

2

3

4

5

6

Defects per million ofopportunities

308537

66807

6210

233

3.4

% defects

30.8537%

6.6807%

0.6210%

0.0233%

0.00034%

12.03%2.67

*For short term data


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AnalyzeAnalyzenalysis finding the root causes

( )!Xs> Pareto chart of the 26 defects

iss 3pmcarrieforoutsidePuneregion

=0 %7

Incompleteshippingaddress

4= 15%

Other2= 8%

> %2 causes represent 92 of defects


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ImproveImprove

actionstaken :> Process

OutsidePune region

orders first& organizean earlier

transfer toshipping

department> Change address

format andcontrol atorder taking

time ime fromrder to deliveryn days

no ofoccurences

0

defects

/ontractual CustomerSpecificationLimit

3 days

10

1 day 2 days

50

Histogram

bserved probability=f defects %xpected performance:6 is between

.and the spec limit andthe distribution is

!normal

6x

ew Cycle time from order to delivery dist


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ControlControlelivery time performance for the year

Month

DeliveryP99indays

121110987654321

3,4

3,2

3,0

2,8

2,6

2,4

2,2

2,0

3 days

Control chart of Delivery P99 over one year


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6 sigma financial impact6 sigma financial impact

40%

35%

30%

20%

15%

10%

5%

.4 233 6210 66807 308537 500000 5 4 3 2

Rs.!!

/Business Case : .Sales Rs 10 every unit : %Operating margin 25 : .Every defect costs Rs 24 .t 2 67 oss was 38 paisaor every sale

=DPMO Defective per Million Opportunities

i x S i g m aR o u t e


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12/28/2010 B i G i /BSG Si Si 25

Six Sigma business contributionSix Sigma business contribution

Contribution to growth through:Customer satisfaction increase

Introduction of quality products &services

Productivity gains:

Product quality improvementHigher service performanceProcess efficiency

simple six sigma-bsg

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