Six Sigma

Six Sigma is the measure of quality that strives for near perfection. It is a disciplined, data-driven methodology focused on eliminating defects. A Six Sigma defect is defined as anything that falls outside of a customer's specifications. Six Sigma is a reference to a statistical measuring system, equivalent to just 3.4 defects per every million opportunities

 Six sigma incorporates the basic principles and techniques used in business, statistics and engineering. Six sigma focuses on improving quality ( i.e, reducing wastes) by helping organizations produce products and services better, faster and cheaper. It focuses on defect prevention, cycle-time reduction and cost savings. It identifies and eliminates cost which provide no value to customers. Companies operating at three or four sigma typically spend between 25 and 40 percent of their revenues fixing problems.

 Intense competitive pressures especially from rapid globalization. Greater consumer demand for high quality products and services, little tolerance for failures of any type. Top management (and stockholder) recognition of the high costs of poor quality. The availability and accessibility of large data bases and the increasing ability to explore, understand, and use the data.

Key Six Sigma concepts

Critical to quality (CTQ): Attributes most crucial for the customer. Defect: Failing to deliver what the customer wants Process capability: what ones process can deliver Variation: what the customer sees and feels Stable operations: ensuring consistent, predictable processes to improve what the customer sees and improve Design for six sigma: designing to meet customer needs and process capability

Sigma and % Accuracy

Defects per Million Opportunities (DPMO) One Sigma 691,500 Two Sigma 308,500 Three Sigma 66,810 Four Sigma 6,210 Five Sigma 233 Six Sigma 3.4 Seven Sigma 0.020 % Accuracy 30.85% 69.15% 93.32% 99.38% 99.977% 99.9997% 99.999998%

Cost of poor quality

Fig. 1 Cost of poor quality versus Sigma level

Cost of poor quality as % of earnings

Sigm a Le ve l

General Electric: What Is Six Sigma?

Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services Saved $750 million by the end of 1998 Cut invoice defects and disputes by 98 percent, speeding payment, and creating better productivity Streamlined contract review process, leading to faster completion of deals and annual savings of $1 million

Honeywell Six Sigma is one of the most potent strategies ever developed to accelerate improvements in processes, products, and services, and to radically reduce manufacturing and/or administrative costs and improve quality. It achieves this by relentlessly focusing on eliminating waste and reducing defects and variations. Initiated Six Sigma efforts in 1992 and saved more then $600 million a year by 1999. Reduced time from design to certification of new projects like aircraft engines from 42 to 33 months. Increased market value by a compounded 27% per year through fiscal year 1998.

Selecting the right projects for SIX SIGMA

Assure that the importance of the projects is evident or can be readily demonstrated. Assure the projects are viable and doable in a short time. Assure that the success of the projects can be readily quantified.

Six Sigma Quality: DMAIC Cycle

Define, Measure, Analyze, Improve, and Control DMAIC Developed by General Electric as a means of focusing effort on quality using a methodological approach Firms striving to achieve six-sigma generally adopt DMAIC cycle. DMAIC are the typical steps employed in continuous improvement (a.k.a. Kaizen) concept which seeks to continually improve all aspects of production (parts, machines, labor, processes, etc) Overall focus of the methodology is to understand and achieve what the customer wants A 6-sigma program seeks to reduce the variation in the processes that lead to these defects

Six Sigma Methodology (DMAIC)

Define

Measure Control

Analyse Improve

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DMAIC Steps
1. Define

1. Define

2. Measure

3. Analyze

4. Improve

5. Control

Identify Critical to Quality characteristics (CTQ). The customers perception about quality attributes are updated from time to time by conducting customer surveys.

Key Questions: What are the problems and their scope? What is its criticality and importance to the customer? What is the benchmark? How should resources be allocated? What are the independent and dependent variables affecting the project? Is the voice of customer being captured directly?

Key Issues: Which team is to handle the issue? What will they accomplish? What is the clear definition of project scope, including operational details? What are the various milestones of the project? What are the roles of team members? What are Critical to Quality (CTQ) parameters? Identification of critical success factors (CSF)

Important tools used: Brainstorming Quality Function Deployment (QFD)

method to transform user demands into design quality, to deploy the functions forming quality, and to deploy methods for achieving the design quality into subsystems and component parts, and ultimately to specific elements of the manufacturing process. QFD is designed to help planners focus on characteristics of a new or existing product or service from the viewpoints of market segments, company, or technology-development needs. The technique yields graphs and matrices.

 Pareto analysis
a statistical technique in decision making that is used for selection of a limited number of tasks that produce significant overall effect. It uses the Pareto principle the idea that by doing 20% of work, 80% of the advantage of doing the entire job can be generated. Or in terms of quality improvement, a large majority of problems (80%) are produced by a few key causes (20%).

Steps to identify the important causes using Pareto analysis

Step 1: Form an explicit table listing the causes and their frequency as a percentage. Step 2: Arrange the rows in the decreasing order of importance of the causes (i.e., the most important cause first) Step 3: Add a cumulative percentage column to the table

Step 4: Plot with causes on x- and cumulative percentage on y-axis Step 5: Join the above points to form a curve Step 6: Plot (on the same graph) a bar graph with causes on x- and percent frequency on y-axis Step 7: Draw line at 80% on y-axis parallel to x-axis. Then drop the line at the point of intersection with the curve on x-axis. This point on the x-axis separates the important causes (on the left) and trivial causes (on the right) Step 8: Explicitly Review the chart to ensure that at least 80% of the causes are captured

Project management fundamentals to ensure scope Process mapping

2. Measure

5.0 Control

1. Define

2. Measure

3. Analyze

4. Improve

5. Control

Important processes influencing CTQs are identified and performance measurement techniques are established for these processes. Define performance standards Measure current level of quality. It precisely pinpoints the area causing problems. Identify all potential causes for such problems.
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Key questions: What are the performance variables and their impact? What is the gap between benchmark and existing status? What is the performance capability of the process/processes? Key issues are: What does the customer really want? Validation of measurement schemes Development of key input, process and output measures

Important tools used: Process mapping QFD Cause and effect matrix Creativity techniques ANOVA

3. Analyse

1. Define

2. Measure

3. Analyse

4. Improve

5. Control

Analyze the process to determine the most likely causes of defects Define performance objectives Identify variation sources
3.0 Analyze

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Key questions: What are the success factors? What is the performance goal? What are the sources of real variation? What is the target percentage for improvement? Key issues: What is the companys capability to make /deliver? What is the characterization of the problem? Selection of performance variable and their quantification.

Important tools used: Gap analysis Process map analysis Data stratification Advanced analytical tools Regression analysis ANOVA Tests of hypothesis

4. Improve
1. Define 2. Measure 3. Analyse

4. Improve

5. Control

Screen potential causes Discover variable relationships among causes and effects Pursue a method to resolve and ultimately eliminate problems. It is also a phase to explore the solution how to change, fix and modify the process. Carryout a trial run for a planned period of time to ensure the revisions and improvements implemented in the process result in achieving the targeted values.

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Key questions: How is the interaction between various factors studied? How are operating limits and new process capability established? How is optimum solution selected? How is implementation planned? Key Issues: What really affects the companys make/deliver? How is performance improvement verified?

ability

to

 Action plans Generation of solutions to address root causes and the criteria to screen and select Establishment of operating tolerances Important tools used: DOE (Design of Experiments) techniques Tests of hypothesis Confirmation or validation studies

1. Define

2. Measure

3. Analyse

4. Improve

5. Control

Monitor the improved process continuously to ensure long term sustainability of the new developments. Share the lessons learnt Document the results and accomplishments of all the improvement activities for future reference.

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Six Sigma Training Programmes

Champions and Sponsors High level individuals Champions must be proficient in four areas (business and operation interface, project selection, pace mediation, result implementation) Mostly it is led by a full time high level champion Sponsors are the owners of processes and systems that help initiate and coordinate six sigma improvement activities in their areas of responsibilities.

Master Black Belt Responsible for strategic deployment of six sigma. Provide mentoring and support to Black Belts, Green Belts, and Six Sigma teams to use the improvement tools. Develop, maintain and revise Six Sigma curriculum, delivering classroom training and serving as liaisons with external agencies in the delivery of Six Sigma training. Networking with other Master Black Belts.

Black Belt A professional who can explain Six Sigma philosophies and principles including supporting systems and tools. Demonstrate team leadership, understand team dynamics and assign roles and responsibilities to team members. Have a thorough understanding of DMAIC model They receive 160 hours of training and 1 to 1 Project Coaching from Master Black Belts & Consultants.

Green Belt Project leaders capable of forming & facilitating Six Sigma Teams and managing Six Sigma Projects from conception to completion They receive 5 days of classroom training in conjunction with Six Sigma Project covering Project Mgt., Quality Mgt. Tools, Quality Control Tools, Problem Solving and Descriptive Data Analysis They operate in support or under the supervision of Black Belts, analyses and solves quality problems and involved in Quality Improvement Projects.

Yellow Belt Its an introductory training in the fundamentals of Six Sigma, provides an overall insight to the Techniques of Six Sigma, its metrics and methodologies They have basic knowledge of Six Sigma but does not leads project on its own. Responsible for development of Process Maps to support Six Sigma projects May often be responsible for running smaller process improvement projects using the PDCA methodology.

Six Sigma Implementation

Step 1
All top level management should be on board. Adequate financial and managerial resources are available. Systems are developed for establishing close communication with customers, employees and suppliers. Policies and guidelines should be established. Training needs assessed and training programmes conducted.

Step 2
Define project scope and goals based on customer feedback and needs (through surveys). Set goals for the whole organization or specific level of organization that needs improvement.

 Step 3
Analyze the system to identify defects and problems. Measure the defects in the current system and performance Identify the possible causes of problems Explore possible solutions and assess their possible effect on the organization Use statistical data analysis

Step 4
Improve system by finding ways to do things faster, cheaper or better. Use management planning tools to put the improvement projects into place Test the improvement with statistical data

 Step 5
Control the new process by modifying systems and measuring processes to continue to achieve results. Use customer feedback and statistical tools State what was done to improve performance Document methods to recognize and solve future problems