Introduction to Six Sigma

• Six Sigma is a disciplined, data-

driven methodology to eliminate
defects in a process
• A way to assess performance of a
process
– Devised at Motorola in 1987
– Higher the process sigma, the fewer the
defects
• Focused on customer requirements
– Internal, but especially external customers
– Track Defects (aka CTQs) that affect
satisfaction, loyalty, revenue, market share
Origin of Six Sigma
• 1987 Motorola Develops Six Sigma
– Raised Quality Standards

• Other Companies Adopt Six Sigma

– GE
– Dow Chemical, DuPont, Honeywell,
Whirlpool
 Time Line

Allied Signal
Johnson & Johnson,
Ford, Nissan,
Motorola
General Electric Honeywell

1985 1987 1992 1995 2002

Dr Mikel J Harry wrote a

Paper relating early failures to
quality
 Six Sigma

A scientific and practical method to achieve improvements in a

company

Scientific:
• Structured approach. “Show me
• Assuming quantitative data. the data”
”Show me
the money” Practical:
• Emphasis on financial result.
• Start with the voice of the customer.
 It is a Process
 To achieve this level of
performance you need
It is a Philosophy to: Define, Measure,
Anything less than Analyse, Improve and
ideal is an opportunity Control
for improvement
Defects costs money
Understanding
processes and It is Statistics
improving them is the
most efficient way to 6 Sigma processes will
achieve lasting results produce less than 3.4
defects per million
opportunities
Philosophy
Know What’s
Important to the
Customer (CTQ)
Reduce Defects
(DPMO)
Center Around
Target (Mean)
Reduce Variation
(Standard Deviation)
Data Driven
Decision

Y= f(X)
• Y • X1 . . . Xn
• Dependent • Independent
• Input-Process
• Output • Cause
• Effect • Problem
• Symptom • Control
• Monitor

The focus of Six sigma is to identify and control Xs

Two Processes
DMAIC DMADV

• Existing Processes • New Processes

• DFSS

• Define • Define
• Measure • Measure
• Analyze
• Analyze • Design
• Improve • Verify
• Control
 Where can Six Sigma be applied?

Service
Design
Management

Purchase

Administration Six Sigma

Methods Production

IT
Quality
Depart.
HRM M&S
Is Six Sigma New?

• The basic premise of Six Sigma

started in 1600 B.C. by Egyptian
physicians and is noted on the
Edwin Smith papyrus. It
essentially says:
• Make no remedy without first
understanding the cause.

Juran, Deming, Shewhart, and Crosby simply restated this principle.

Key Concepts
CTQ (Critical-To-
Quality)
• CTQ characteristics for the process,
service or process
• Measure of “What is important to
Customer”
• 6 Sigma projects are designed to
improve CTQ
• Examples:
– Waiting time in clinic
– Spelling mistakes in letter
– % of valves leaking in operation
Defective and Defect
• A nonconforming unit is a defective unit
• Defect is nonconformance on one of many
possible quality characteristics of a unit
that causes customer dissatisfaction.
• A defect does not necessarily make the unit
defective
• Examples:
– Scratch on water bottle
– (However if customer wants a scratch free
bottle, then this will be defective bottle)
Defect Opportunity
• Circumstances in which CTQ can fail
to meet.
• Number of defect opportunities relate
to complexity of unit.
• Complex units – Greater opportunities
of defect than simple units
• Examples:
– A units has 5 parts, and in each part there are 3
opportunities of defects – Total defect
opportunities are 5 x 3 = 15
DPO (Defect Per
Opportunity)
• Number of defects divided by number
of defect opportunities
• Examples:
– In previous case (15 defect opportunities), if 10
units have 2 defects.
– Defects per unit = 2 / 10 = 0.2
– DPO = 2 / (15 x 10) = 0.0133333
DPMO (Defect Per Million
Opportunities)
• DPO multiplies by one million
• Examples:
– In previous case (15 defect opportunities), if 10
units have 2 defects.
– Defects per unit = 2 / 10 = 0.2
– DPO = 2 / (15 x 10) = 0.0133333
– DPMO = 0.013333333 x 1,000,000 = 13,333

Six Sigma performance is 3.4 DPMO

13,333 DPMO is 3.7 Sigma

Yield
• Proportion of units within specification
divided by the total number of units.
• Examples:
– If 10 units have 2 defectives
– Yield = (10 – 2) x 100 /10 = 80 %
• Rolled Through Yield (RTY)
– Y1 x Y2 x Y3 x ……. x Yn
– E.g 0.90 x 0.99 x 0.76 x 0.80 = 0.54
Examples of what Six Sigma means in
business
COPQ (Cost of Poor
Quality)
- Inspection
- Warranty
- Scrap
- Rework Traditional Quality Costs:
- Rejects - Tangible
- Easy to Measure

- More Setups
- Expediting Costs
Hidden Costs:
- Lost Sales - Intangible
- Late Delivery - Difficult to Measure
- Lost Customer Loyalty - Lost Opportunities
- Excess Inventory
- Long Cycle Times - The Hidden Factory
- Costly Engineering Changes

Average COPQ approximately 15% of Sales

 Financial Aspects

Benefits of 6σ approach w.r.t. financials

σ-level Defect rate Costs of poor quality Status of the

(ppm) company
6 3.4 < 10% of turnover World class
5 233 10-15% of turnover
4 6210 15-20% of turnover Current standard
3 66807 20-30% of turnover
2 308537 30-40% of turnover Bankruptcy
Statistical background

Some Key measure

Target = µ
Statistical background
‘Control’ limits

+/ − 3 σ

Target = µ
 Statistical background
Required Tolerance

LSL USL
+/ − 3 σ

Target = µ
 Statistical background

Tolerance

LSL USL
+/ − 3 σ

Target = µ

+/ − 6 σ

Six-Sigma
 Statistical background

Tolerance

LSL USL
+/ − 3 σ

1350 1350
ppm ppm

Target = µ

+/ − 6 σ
 Statistical background

Tolerance

LSL USL
+/ − 3 σ

1350 1350
ppm ppm
0.001 0.001
ppm ppm

Target = µ

+/ − 6 σ
 Statistical background

Tolerance
LSL USL
1. 5σ

3.4 66807
0 ppm ppm ppm 3.4
ppm

+/ − 6σ
 Performance Standards

σ PPM Yield
2 308537 69.1%
3 66807 93.3%
4 6210 99.38% Current standard
5 233 99.977%
6 3.4 99.9997%
World Class

Process Defects per Long term

performance million yield
 Reduce Process Variation &
Centering
Off-Target Too Much Variation

Centered
On-Target

Center Reduce
Process Spread

The objective is to understand customer requirements and reduce

process variation and center of target
 Critique of ISO 9000

• Bureaucratic, large scale

• Focus on satisfying auditors, not customers
• Certification is the goal; the job is done when
certified
• Little emphasis on improvement
• The return on investment is not transparent
• Main driver is:
– We need ISO 9000 to become a certified supplier,
– Not “we need to be the best and most cost
effective supplier to win our customer’s business”
• Corrupting influence on the quality
profession
Components of Six Sigma
 Components

Two components of Six Sigma

1. Process Power

2. People Power
Process Power
 P-D-C-A

Act Plan
A P Plan the change
Act on what
was learned

Check C D Do
Check the results Implement the change on a
small scale.
 DMAIC - simplified
• Define
– What is important?
• Measure
– How are we doing?
• Analyze
– What is wrong?
• Improve
– Fix what’s wrong
• Control
– Ensure gains are maintained to guarantee
performance
 DMAIC approach

D Identify and state the practical problem

Define

Validate the practical problem by collecting data

M
Measure
Convert the practical problem to a statistical one,
A define statistical goal and identify potential statistical
Analyze solution

I Confirm and test the statistical solution

Improve

C Convert the statistical solution to a practical solution

Control
 Define

D VoC - Who wants the project and why ?

Define

The scope of project / improvement (SMART

M
Objective)
Measure

A Key team members / resources for the project

Analyze

I
Improve Critical milestones and stakeholder review

C
Control Budget allocation
 Define
Business Case Voice of the Customer
VOC Key Issue CTQ
Delighters

More Is Better

Must Be

Project Charter Initial Process Mapping

CUSTOMERS
SUPPLIERS
Problem Statement:
Goal: Inputs Process Outputs
Business Case:
Scope: Yield: 60%
Cost Benefit Projection:
Milestones:
Yield: 90%

Yield: 45%

Yield: 98%
 Example - SIPOC
A SIPOC will allow your project team to put parameters around
the process being reviewed and identify the areas impacted
both up and down stream

SIPOC
Suppliers Input Process Output Customer
Clients Requirements Profile Client
Sales People Resumes Interview Summaries Sales People
Candidates Profiles Offer Letters Delivery Management
Web Site Margin Template Candidate/Employee
Recruiting Data Base

Get Search for Screen Present

Make Offer Fill Requirement
Requirement Candidate Candidate Candidate

 Suppliers – who feeds the process

 Inputs – what do they feed
 Process – steps in the process
 Outputs – outputs of the process
 Customer – who pulls from the process
 Measure

D Ensure measurement system reliability

Define
- Is tool used to measure the output variable flawed ?

M
Measure

A Prepare data collection plan

Analyze - How many data points do you need to collect ?
- How many days do you need to collect data for ?
I - What is the sampling strategy ?
Improve - Who will collect data and how will data get stored ?
- What could the potential drivers of variation be ?

C
Control Collect data
 Measure
Identify the Metrics Identify Process Capability Display Data
LSL USL 1000
UCL

Cp = 0.4
I P O s = 2.7
0
X

-1000 LCL

10 20 30 D B F A C E Other

Measure
the
process

Validate Measurement
Prioritize the Metrics Data Collection Plan Systems
Data Collection Plan Col # 1 2 3 4 5 6
O1 O2 O3 O4 What questions do you want to answer? Inspector A B
Sample # 1st Trial 2nd Trial Diff 1st Trial 2nd Trial Diff
I1 Data Operational Definition and Procedures
1 2.0 1.0 1.0 1.5 1.5 0.0
I2 FMEA What Measure type/ How Related Sampling How/ 2 2.0 3.0 1.0 2.5 2.5 0.0
I3 Data type measured conditions notes where 3 1.5 1.0 0.5 2.0 1.5 0.5
4 3.0 3.0 0.0 2.0 2.5 0.5
I4 5 2.0 1.5 0.5 1.5 0.5 1.0
Totals 10.5 9.5 3.0 9.5 8.5 2.0
Averages 2.1 1.9 0.6 1.9 1.7 0.4

How will you ensure What is your plan for Sum 4.0 Sum 3.6
consistency and stability? starting data collection? R 1.8 R
XA 2.0 A XB B
How will the data be displayed?
 Analyze

D
Define
How well or poorly processes are working
compared with
M - Best possible (Benchmarking)
Measure - Competitor’s

A Shows you maximum possible result

Analyze

I Don’t focus on symptoms, find the root cause

Improve

C
Control
 Analyze
Process Door Data Door
VA NVA 22 O O

21 O

Cause & Effect 20

19
O

n
O
n O n

O
n

18 X O X n X

17 n O n
X

16 n X O

15 X n X

14 X n

13 X

12

1 2 3 4 5 6 7 8 9 10
.

Hypothesis-Testing Design of Experiments

Chi-Square t-test
c² ANOVA

Y Regression Analysis
Regression
X1

.
.
 Improve

Present recommendations to process owner.

D
Define
Pilot run
- Formulate Pilot run.
M
- Test improved process (run pilot).
Measure
- Analyze pilot and results.
A
Analyze Develop implementation plan.

I - Prepare final presentation.

Improve
- Present final recommendation to Management
Team.
C
Control
 Improve
Plan
Generate Solutions Implementation
A 4 1 2 3 4 5 6 7 8 9 10
A
B 1 B
C

C 3 G
E
D

D 2 H
G

I J

Perform
Cost-Benefit Run Pilot
Full scale
Analysis Original
Test

Assess Risks
Select the Solution FMEA
 Control

D Don’t be too hasty to declare victory.

Define

M
Measure

A
Analyze How will you maintain to gains made?

- Change policy & procedures

I
- Change drawings
Improve
- Change planning
- Revise budget
C
- Training
Control
 Control
Document & Key Learnings
Standardize Closure
Results
Training Op
Pro erati ng
Curriculum
Training ced
Manual Maunres
ual Learnings
•
•
•
Fill to here Recommendations
next

QC Process Chart
Date of Issue: Issued by: Approved by:

Process
Revision Date Reason Signature
Product Name
Process Name
Process Code #

Control/Check Points Response to Abnormality

Owner Evaluate Project

Work
Flowchart Instructions Code # Charac- Control
teristicsLimitsMethod
W ho
Immediate Permanent
Fix Fix Who Notes
.

Results
1

12

Ownership &
Monitoring Process Change s =
Cp =
3.7
1.4 LSL
s = 2.7
Cp = 0.4
USL
Management
Before After

UCL } Improvement

A1 A2 A3 A4 A2 A1 A3 A4
Before After Good

} Improvement
} Remaining Gap

. LCL Step 4 changes

implemented
Target
 Tools for DMAIC

Define Measure Analyze Improve Control

What is wrong? Data & Process When and where How to get Display
capability are the defects to six sigma key measures

 Benchmark  7 Basic Tools  Cause & Effect  Design of Statistical Controls

 Baseline  Defect Metrics Diagrams Experiments  Control Charts
 Contract /  Data Collection,  Failure Models &  Modelling  Time Series
Charter Forms, Plan,  Effect Analysis  Tolerancing Methods
 Kano Model Logistics  Decision & Risk  Robust Design Non Statistical
 Voice of the  Sampling Analysis  Process Map Controls
Customer Techniques  Statistical  Procedure
 Quality Function Inference adherence
Deployment  Control Charts  Performance
 Process Flow Map  Capability Mgmt
 Project  Reliability  Preventive activities
Management Analysis
 Poke yoke
 “Management by  Root Cause
Analysis
Fact”
Fact” – 4 What’
What’s
 5 Why’
Why’s
 Systems
Thinking
 6 σ Training
Mentor, trainer, and coach of Black Belts and othe
Masterin the organization.
Black
Belt

Leader of teams implementing the six sigma

Black Belts methodology on projects.
Champions

Delivers successful focused projects usin

the six sigma methodology and tools.

Green Belts

Team Members / Participates on and supports

the project teams, typically
Yellow Belts in the context of his or her
existing responsibilities.
 Six Sigma
Organization Master
Black
Belt
Champion

Black Black Black

Belt Belt Belt

Green Green Green Green Green

Belt Belt Belt Belt Belt

Yellow Yellow
Belt Belt

Yellow Yellow
Belt Belt
Champion

Plans improvement projects

Charters or champions chartering
process
Identifies, sponsors and directs Six
Sigma projects
Holds regular project reviews in
accordance with project charters
Includes Six Sigma requirements in
expense and capital budgets
Champion Cont.
Identifies and removes
organizational and cultural barriers
to Six Sigma success.
Rewards and recognizes team and
individual accomplishments
(formally and informally)
Communicates leadership vision
Monitors and reports Six Sigma
progress
Validates Six Sigma project results
Master Black Belt
Roles Responsibilities
- Enterprise Six Sigma - Highly proficient in using Six
expert Sigma methodology to achieve
- Permanent full-time tangible business results.
change agent - Technical expert beyond Black Belt
- Certified Black Belt with level on one or more aspects of
additional specialized skills process improvement (e.g.,
or experience especially advanced statistical analysis, project
useful in deployment of Six management, communications,
Sigma across the program administration, teaching,
enterprise project coaching)
- Identifies high-leverage
opportunities for applying the Six
Sigma approach across the
enterprise
- Basic Black Belt training
- Green Belt training
- Coach / Mentor Black Belts
Black Belt
Roles Responsibilities
- Six Sigma technical expert - Leads business process
- Temporary, full-time change improvement projects where Six
agent (will return to other Sigma approach is indicated.
duties after completing a - Successfully completes high-
two to three year tour of impact projects that result in
duty as a Black Belt) tangible benefits to the
enterprise
- Demonstrated mastery of Black
Belt body of knowledge
- Demonstrated proficiency at
achieving results through the
application of the Six Sigma
approach
- Coach / Mentor Green Belts
- Recommends Green Belts for
Certification
Green Belt
Roles Responsibilities
- Six Sigma Project originator - Recommends Six Sigma projects
- Part-time Six Sigma change - Participates on Six Sigma project
agent. Continues to perform teams
normal duties while - Leads Six Sigma teams in local
participating on Six Sigma improvement projects
project teams
- Six Sigma champion in local
area
Yellow Belt
Roles Responsibilities
- Learns and applies Six - Actively participates in team
Sigma tools to projects tasks
- Communicates well with other
team members
- Demonstrates basic improvement
tool knowledge
- Accepts and executes
assignments as determined by
team
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.
Project Selection

The first step to implement Six Sigma

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?
Sources of Projects
Cont.
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?
Project Selection

A Problem Statement should be SMART:

 Specific - It does not solve world hunger
 Measurable - It has a way to measure
success
 Achievable - It is possible to be
successful
 Relevant - It has an impact that can be
quantified
 Timely - It is near term not off in the
future
 Cost of implementing
Direct Payroll
Full time (Black Belts, Master Black
Belts)
Indirect Payroll
Time by executives, team members,
data collection
Training and Consulting
Black Belt course, Overview for Mgmt
etc.
Improvement Implementation Costs
Questions and Answers