Six SigmaSix Sigma

Dr. Ron Tibben-Lembke

SCM 462

Dr. Ron Tibben-Lembke

SCM 462

What is it?What is it?

“It is the relentless and rigorous pursuit of the reduction of variation in all critical processes to achieve continuous and breakthrough improvements that impact the bottom line of the organization and increase customer satisfaction.” (p. 723)

“It is the relentless and rigorous pursuit of the reduction of variation in all critical processes to achieve continuous and breakthrough improvements that impact the bottom line of the organization and increase customer satisfaction.” (p. 723)

Process Capability

A “capable” process has UTL and LTL 3 standard deviations away from the mean, or 3σ.

A “capable” process has UTL and LTL 3 standard deviations away from the mean, or 3σ.

LTL UTL

3 6

LTL UTL

6 (6 sigma)6 (6 sigma)3 sigma: Probability outside range = (1 – 0.99865) * 2 = 0.0027Defect rate = 2,699 defects per million opportunities

6 sigma: Probability part outside range = 0.00000000198024Defect rate = 0.00197 dpm 1.97 defects per BILLION

3

6

Defect Rates - 1Defect Rates - 1

3 sigma: 1/.0027 = 1 every 370 parts 6 sigma: 1/ 0.00000000198024 = 1 every 504.9 million parts

If we make a million parts per year, we have: 3σ: 2,699 defectives 6σ: 0.0019732 defectives

3 sigma: 1/.0027 = 1 every 370 parts 6 sigma: 1/ 0.00000000198024 = 1 every 504.9 million parts

If we make a million parts per year, we have: 3σ: 2,699 defectives 6σ: 0.0019732 defectives

Shifts in meanShifts in mean

Motorola, GE, Allied Signal say mean can shift 1.5 σ during early stages of 6σ implementation

A 6σ process then becomes 4.5σ. If this happens to a 3σ process, it becomes 1.5σ

Motorola, GE, Allied Signal say mean can shift 1.5 σ during early stages of 6σ implementation

A 6σ process then becomes 4.5σ. If this happens to a 3σ process, it becomes 1.5σ

6 4.57.5

Defects - 2Defects - 2

With a 1.5σ shift, defect rates become: 3σ 66,807 dpm 6σ 3.4 dpm The commonly accepted definition of 6σ

quality is having a defect rate <= 3.4 dpm

With a 1.5σ shift, defect rates become: 3σ 66,807 dpm 6σ 3.4 dpm The commonly accepted definition of 6σ

quality is having a defect rate <= 3.4 dpm

History at MotorolaHistory at Motorola

1986 began efforts 1987 plan to get to 3.4 dpmo by 1992 1988 Malcolm Baldridge Quality Award 1991 Black Belt (2nd generation) initiative 1992 10x defect reduction every 2 years, cycle time every

4 1998 Corporate renewal 1999 Rules of engagement, Performance Excellence,

Balanced Scorecard 2002 six sigma business improvement 2003-05 Digital six sigma (3rd generation)

1986 began efforts 1987 plan to get to 3.4 dpmo by 1992 1988 Malcolm Baldridge Quality Award 1991 Black Belt (2nd generation) initiative 1992 10x defect reduction every 2 years, cycle time every

4 1998 Corporate renewal 1999 Rules of engagement, Performance Excellence,

Balanced Scorecard 2002 six sigma business improvement 2003-05 Digital six sigma (3rd generation)

Six Sigma at GESix Sigma at GE

Popularized by GE in 1996 major initiative by Jack Welch Better focus on customers Data-driven decisions Improved design & mfg capabilities Individual rewards for process improvements

Popularized by GE in 1996 major initiative by Jack Welch Better focus on customers Data-driven decisions Improved design & mfg capabilities Individual rewards for process improvements

Brought to you by:Brought to you by:

Champions: Upper executives who will back up the proposals the black belts come up with Responsible for financial & political well-being Selects projects to be worked on Understands discipline and tools of 6σ Promotes the methodology throughout the organization Serve as coach, mentor, supports teams Owns the process – monitoring process and measuring the

savings realized Allocates resources 20%-30% of time on 6 sigma

Champions: Upper executives who will back up the proposals the black belts come up with Responsible for financial & political well-being Selects projects to be worked on Understands discipline and tools of 6σ Promotes the methodology throughout the organization Serve as coach, mentor, supports teams Owns the process – monitoring process and measuring the

savings realized Allocates resources 20%-30% of time on 6 sigma

Black Belts: Stars of the ShowBlack Belts: Stars of the Show Coach or lead 6 sigma

improvement teams Full-time work on defining,

measuring, analyzing, improving, controlling processes

Coach or lead 6 sigma improvement teams

Full-time work on defining, measuring, analyzing, improving, controlling processes

A “thoroughly trained agent of improvement”Avg project saves $175k?Works on 4-6 projects per yearMake sure what gets improved stays improved

Master Black BeltsMaster Black Belts

Have in-depth statistical training, serve as Black Belts for more teams

Help companies get started, choose team and projects

Teacher, mentor, lead agent of change Skillfully facilitate change without taking over Pass certification exam, supervise two black belts

on successful projects

Have in-depth statistical training, serve as Black Belts for more teams

Help companies get started, choose team and projects

Teacher, mentor, lead agent of change Skillfully facilitate change without taking over Pass certification exam, supervise two black belts

on successful projects

Green BeltsGreen Belts

Some 6 sigma training Work on projects part-time, in a specific

area Solve chronic problems in their regular area Take part in teams, small solo work “Worker bees” critical to success Must pass an exam, and participate in at

least one project

Some 6 sigma training Work on projects part-time, in a specific

area Solve chronic problems in their regular area Take part in teams, small solo work “Worker bees” critical to success Must pass an exam, and participate in at

least one project

Financial return Impact on customers and organizational

effectiveness Probability of success Impact on employees Fit to strategy and competitive advantage

Financial return Impact on customers and organizational

effectiveness Probability of success Impact on employees Fit to strategy and competitive advantage

Selection ConsiderationsSelection Considerations

Selecting ProjectsSelecting Projects

Conformance Projects Unstructured Performance Projects

Problems because system poorly specified Efficiency Projects

Acceptable products, not meeting internal goals Product Design

Not meeting customer CTQ Process design

Conformance Projects Unstructured Performance Projects

Problems because system poorly specified Efficiency Projects

Acceptable products, not meeting internal goals Product Design

Not meeting customer CTQ Process design

DMAICDMAIC

Define Measure Analyze Improve Control

(Alternate meaning: Dumb Managers Always Ignore Customers)

Define Measure Analyze Improve Control

(Alternate meaning: Dumb Managers Always Ignore Customers)

DefineDefine Charter / rationale for the project

Why this, not others, need for project, costs, benefits

Developing a project charter (statement of the project) Scoping:

Improve motor reliability Most problems from brush wear Problem with brush hardness Reduce variability of brush hardness

Charter / rationale for the project Why this, not others, need for project, costs, benefits

Developing a project charter (statement of the project) Scoping:

Improve motor reliability Most problems from brush wear Problem with brush hardness Reduce variability of brush hardness

DefineDefine

Gather voice of the customer data to identify critical-to-quality (CTQ) characteristics important to customers

Select performance metrics What are current levels Expected improvements What will need to be done, by whom

Gather voice of the customer data to identify critical-to-quality (CTQ) characteristics important to customers

Select performance metrics What are current levels Expected improvements What will need to be done, by whom

DefineDefine

SIPOC Understand the relationships between Suppliers Inputs Process Outputs Customers

SIPOC Understand the relationships between Suppliers Inputs Process Outputs Customers

Develop operational definitions for each CTQ characteristic Figure out how to measure internal processes affecting each

CTQ Figure 10.3

Figure out what data we need to collect Easy to collect correctly Interrupt process as little as possible Collectors understand why collecting “gage study” to determine the validity (repeatability and

reproducibility) of the measurement procedure for each CTQ Baseline data

Collect baseline capabilities for each CTQ Determine the process capability for each CTQ

Develop operational definitions for each CTQ characteristic Figure out how to measure internal processes affecting each

CTQ Figure 10.3

Figure out what data we need to collect Easy to collect correctly Interrupt process as little as possible Collectors understand why collecting “gage study” to determine the validity (repeatability and

reproducibility) of the measurement procedure for each CTQ Baseline data

Collect baseline capabilities for each CTQ Determine the process capability for each CTQ

Measure PhaseMeasure Phase

Understand why defects and variation occur Find the root causes 5W = 1H Identify key causes

Experiments to verify impact Formulate hypothesis, collect data

Understand why defects and variation occur Find the root causes 5W = 1H Identify key causes

Experiments to verify impact Formulate hypothesis, collect data

Analyze PhaseAnalyze Phase

AnalysAnalys

Identify upstream variables (x’s) for each CTQ Process mapping

Operationally define each x Collect baseline data for each x Perform studies to determine the validity (repeatability

and reproducibility) of the measurement process for each x

Establish baseline capabilities for each x Understand the effect of each x on each CTQ

Identify upstream variables (x’s) for each CTQ Process mapping

Operationally define each x Collect baseline data for each x Perform studies to determine the validity (repeatability

and reproducibility) of the measurement process for each x

Establish baseline capabilities for each x Understand the effect of each x on each CTQ

Brainstorm ideas of how to improve Determine optimal levels of critical x’s to optimize the

spread, shape and center of the CTQ’s Action plans to implement the optimal level of the x’s Conduct pilot test of the revised process

Brainstorm ideas of how to improve Determine optimal levels of critical x’s to optimize the

spread, shape and center of the CTQ’s Action plans to implement the optimal level of the x’s Conduct pilot test of the revised process

Improve PhaseImprove Phase

Risk abatement planning and mistake-proofing to avoid potential problems with the revised settings of the x’s

Standardize successful process revisions in training manuals

Control revised settings of the critical x’s Turn revised process over to the process owner for

continuous improvement using the PDSA cycle

Risk abatement planning and mistake-proofing to avoid potential problems with the revised settings of the x’s

Standardize successful process revisions in training manuals

Control revised settings of the critical x’s Turn revised process over to the process owner for

continuous improvement using the PDSA cycle

Control PhaseControl Phase

Report PhaseReport Phase

Tell everyone what you did, so they can learn from it Tell everyone what you did, so they can learn from it

Six Sigma Training ProgramsSix Sigma Training Programs

Black belt: 5 day sessions: 4 of them, with three weeks in-between 1: Define &Measure 2: Analyze 3: Analyze & Improve 4: Control & future steps

Green belt: 2 5-day sessions, three weeks in-between

Black belt: 5 day sessions: 4 of them, with three weeks in-between 1: Define &Measure 2: Analyze 3: Analyze & Improve 4: Control & future steps

Green belt: 2 5-day sessions, three weeks in-between

Training ScheduleTraining ScheduleWeek 1

Overview

Process improvement planning

Process mapping

Quality Function Deployment

Failure mode and effects analysis

Organizational effectiveness concepts

Basic statistics

Process capability

Measurement systems analysis

Week 2

Statistical thinking

Hypothesis testing

Correlation

Simple regression

Team assessment

Week 3

Design of experiments

Analysis of variance

Multiple regression

Facilitation tools

Week 4

Control plans

Statistical process control

Mistake-proofing

Team development

Costs of Training ProgramsTraining time costsMaterial costsTraining manual development costsAdministrative and operating costs for DMAIC projectsInfrastructure costs such as the sots of constructing and using organizational metric tracking systemsMonitoring DMAIC project costsAnecdotal evidence strongly indicates that he benefits of a Six Sigma process far outweigh the costs.This book suggests benefits of $250k per project

Improved communication through six sigma terminology (for example, DPMO and process sigma)

Enhanced knowledge and enhanced ability to manage knowledge Higher levels of customer and employee satisfaction Increased Productivity Reduced total defects Improved process flows Decreased work-in-progress (WIP), inventory, increased liquid capital Improved capacity and output Increased quality and reliability Decreased unit costs Increased price flexibility Decreased time to market, faster delivery time

Improved communication through six sigma terminology (for example, DPMO and process sigma)

Enhanced knowledge and enhanced ability to manage knowledge Higher levels of customer and employee satisfaction Increased Productivity Reduced total defects Improved process flows Decreased work-in-progress (WIP), inventory, increased liquid capital Improved capacity and output Increased quality and reliability Decreased unit costs Increased price flexibility Decreased time to market, faster delivery time

Benefits of Six Sigma