Introduction: Six Sigma

Six Sigma is a proven business strategy (structured according to the DMAIC phases) to
measure, analyze and improve the performance in terms of operational excellence.
The methodology, thanks to a wide range of qualitative and quantitative tools, aims to optimize
the manufacturing and transactional processes through reduction of their variability.
The 5 stages in the DMAIC approach are:

DEFINE: Select the appropriate response (the Ys, performance metrics) to

be improved

MEASURE: Data must be gathered to measure the response variable Y and

possible causes X

ANALYZE: Identify the root causes of defects, defectives or significant measurement

deviations whether in or out of specifications. (The Xs, independent variables)

IMPROVE: Reduce variability or eliminate the causes

CONTROL With the desired improvement in place, monitor the process to
sustain the improvement

Specifically:
Our Outputs (Ys) are determined by our Inputs (Xs). If we know
enough about our Xs we can accurately predict Y without having to
measure it.
Specifically, it is very important to find the following relationship, called
transfer function:

Y = f ( X1 , X 2 , X 3 ,..., X k )
By knowing and controlling the Xs, we can set Y in right place, and
reduce the variability in Y, which decrease the number of defects, cycle
time, etc. We can also eliminate or reduce inspection, test, and rework.

Example: Surgery Service Process

OR Suites

Patients
Arrival

Pre
Operative
Care

Post
Operative
Care

Out Sourcing
Discharge

Commonly Used Performance Metrics

Most Often Used Metrics

First Case

Rate of first case start on time---percent

First case delay in minutes

Cancellation rate
# of cases completed (Output)
Utilization
General (Raw) Utilization
Block (Service) Utilization

Turn Around Time

Set up time
Clean-up time
4

OR (Raw) Utilization
OR (Operating Room) General (Raw) Utilization:

patient in OR

setup

clean evening
resource _ hours

/ weekend / holiday _ hours

Resource hours=total number of hours scheduled to be available for

performance of procedures. (i.e. the sum of open time)
Evening/weekend/holiday hours (EWHH)=hours of case time performed
outside resource hours.

st

OR07

1 case

OR-06

1 case

OR-05

1st case

OR-04

1st case

OR-03

1st case

OR-02

1st case

OR-01

1st case

st

8:00 AM

Operating Room Open Time

4:00 PM

Xs vs Ys
First Case
Delays

% First Cases
Start on Time

Scheduling
Facility Utilization

Surgery Operation

Surgeon Time Utilization

Block Utilization
Errors
# of Cases?
Productivity?

Cancellation
Rate

Set up Time Clean Up time

Business systems and processes

Business system: a business system is defined as a series of actions, activities, elements,

components, departments or processes that work together for a definite purpose. System
effectiveness is a measure of the degree to which a system can be expressed to achieve a set
Of specific (mission) requirements, that may be expressed as a function of performance
(availability, dependability and capability). Subsystems are major divisions of a system that
are still large enough to consist of more than one process.

Process: a combination of inputs, actions and outputs".

"a series of activities that takes an input, adds value to it and produces an output for a customer

Inputs

Process 1

Data
Options and ideas
Orders
Specifications
Money
Customer needs
Suppliers

Process 2

Process N

Outputs
Products
Services
Remedies
Designs
Root Causes
Training
Others, Etc.

End
Customer

Feedback

A business system

SIPOC Diagram
(Supplier-Input-Process-Output-Customer) diagram:

Supplier

Input

Process (X)

Output

Cus-

(Y)

tomer

1. Supplier: The person or group that provides key information, materials, and/or other
resources to the process
2. Input: The thing provided
3. Process: The set of steps that transforms and ideally, add value to the input
4. Output: The final product of the process
5. Customer: The person, group, or process that received the output

Example: An academic teaching program of an university department

Suppliers: Book publishers and bookstores, university administrators and facility support people,
lab equipment suppliers, acredation board, tuition payers and so on.
Inputs: Books, classrooms and facilities, labs and facilities, academic program standard, tuition.

Process: The academic program, which includes Curriculum system, degree program setup, courses,
professors, counselors and so on. The process transform inputs to a system of courses, academic
standards (quality control system) and academic records, under this system, incoming students are
processed into graduating students in many steps (course- work)
Output: Graduating students with degrees
Customers: Employers of future students, students themselves.
Key requirements for output: Excellent combination of knowledge for future career, high and
consistent learning qualities, and so on.

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Six Sigma Roles

Black Belt
Most effective in full time process improvement position
Studied and demonstrated in 6 Sigma body of knowledge and implementation abilities (through projects)
Could be a team leader responsible for measuring, analyzing, improving and controlling key processes that
influence customer satisfaction and/or productivity growth
Could be a internal consultants, working with a number of teams at once.
Could be a instructor
Could be a mentor for green belts and black belts candidates

Master Black Belts

Typically a full time process improvement positions
Needs both quantitative skills and the ability to teach and mentor
Promoted from black belt who has excellent records on projects
MBB are teachers who mentors black belts and review their projects

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Green belts
Usually not in full time process improvement positions
May be black belt in training, having less experience
Must demonstrate proficiency with core statistical tools by using them in projects
May remain green belts for a few years
Operate under the supervision and guidance of a black belt or master black belt.

Executive Sponsors
Executive sponsorship is a key element in effective 6 Sigma program
Executive leadership sets the direction and priorities for the organization
Executive team is comprised of leaders that communicate, lead and direct the companys overall objectives
towards successful 6 Sigma deployment
Executives typically receive training that include six sigma program overview, deployment strategies and
tools/methods of 6 sigma

Champions
They are typically upper level managers that control and allocate resources to promote process improvements
They are trained in core concepts of 6 Sigma and deployment strategies
They lead the implementation of 6 Sigma program.
They work with black belts to ensure that senior management is aware of the status of 6 sigma deployment
They ensure that resources are available for training and project completion
They are involved in all project reviews

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Process Owners
Key processes should have a process owner
A process owner coordinates process improvement activities and monitors progress on a regular basis
Process owners work with black belts to improve the processes for which they are responsible
Process owners should have basic training in core statistical tools
In some organizations, process owners may be Six Sigma Champions

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Training
Senior Management Sponsorship training

Master Black Belt Candidates Master Black Belt Training

Management Executive training
Black Belt Candidates Black Belt Training

Supervisors Overview training

Green Belt Candidate Black Belt Training
Everyone Six Sigma Orientation Training

14

Typical Six Sigma Training (Black Belt)

Week one
Six Sigma overview and DMAIC roadmap
Process mapping
Quality function deployment
Failure Mode and Effects Analysis
Organization Effectiveness
Minitab Usage
Process Capability
Measurement System Analysis

Week Two
Statistical thinking
Hypothesis Testing and confidence intervals
Correlation
Multi-vari Analysis
Regression

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Week three
ANOVA
Design of experiments
Factorials
Fractional factorials
Balanced block designs
Response surface designs
Multiple regression
Facilitation tools

Week four
Control Charts
Control Plans
Mistake Proofing
Team Development

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Functions in Six Sigma Organization

Functions

Structures Options (Who is

performing the function)

Executive Direction

Six Sigma Steering Committee

Quality Council
Executive Steering Council

Six Sigma management

Six Sigma Manager

Six Sigma Director
Master Black Belt

Process owner

Champion
Sponsor

Sponsor

Process Owner
Champion

Coach

Master Black Belt

Black Belt

Team Leader

Trained Supervisor/Facilitator
Black Belt
Green Belt

Team Member

Associate with Team Training

Associate with Process Knowledge
Green Belt

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Quality History Influencing Six Sigma

Guru

Contribution

Phillip B. Crosby

Senior management involvement

4 absolutes of quality management
Quality cost management

W. Edwards Deming

Plan-do-study-act
Top management involvement
Concentration on system improvement
Constancy of purpose

Armand V. Feigenbaum

Total quality control/management

Top management involvement

Kaoru Ishikawa

Cause and effect diagram

Company wide quality control
Next operation as customer

Joseph M. Juran

Top management involvement

Quality trilogy
Quality cost measurement
Pareto analysis

Walter A Shewhart

Assignable cause vs chance cause

Control charts
Plan-do-check-act
Use of statistics for improvement

Genichi Taguchi

Loss function
Signal to noise ratio
Experimental design methods
Concept of design robustness

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Philip Crosby (1928-2001)

Four absolutes of quality management
1. Quality means conformance to requirements (requirements are what customer say they are)
2. Quality comes from prevention (not inspection or sorting)
3. The quality performance standard is zero defects.
4. Quality measurement is the price of nonconformance (sort of quality loss function)
14 step approach to quality improvement:
1.
Management Commitment
2.
Quality Improvement Team
3.
Measurement
4.
Cost of Quality
5.
Quality Awareness
6.
Corrective Action
7.
Zero Defect Planning
8.
Employee Education
9.
Zero Defect Day
10. Goal Setting
11. Error Cause Removal
12. Recognition
13. Quality Councils
14. Do it All Over Again

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Dr. W. Edward Deming (1900-1993)

14 points for managing the improvement of quality, productivity, and competitive position:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.

create constancy of purpose for improving products and services,

adopt the new philosophy,
cease dependence on inspection to achieve quality,
end the practice of awarding business on price alone; instead, minimize total cost by working with a single
improve constantly and forever every process for planning, production and service,
institute training on the job,
adopt and institute leadership,
drive out fear,
break down barriers between staff areas,
eliminate slogans, exhortations and targets for the workforce,
eliminate numerical quotas for the workforce and numerical goals for management,
remove barriers that rob people of pride of workmanship, and eliminate the annual rating or merit system
institute a vigorous program of education and self-improvement for everyone and

14. put everybody in the company to work to accomplish the transformation

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Seven Deadly Diseases that management Must cure

1.
2.
3.
4.
5.
6.
7.

lack of constancy of purpose to plan a marketable product and service to keep the company in business
and provide jobs
Emphasis on short term profit
Personal evaluation appraisal
Mobility of management: job hopping
Use of visible figures for management
Excessive medical costs
Excessive costs of warranty, fueled by lawyers that work on contingency fees

21

Dr. Kaoru Ishikawa (1915-1989)

11 points:

Quality begins with education and ends with education.

The first step in quality is to know the requirements of the customer.

The ideal state of quality control is when quality inspection is no longer necessary.

Remove the root cause, not symptoms.

Quality control is the responsibility of all workers and all divisions.

Do not confuse means with objectives.

Put quality first and set your sights on long-term objectives.

Marketing is the entrance and exit of quality.

Top management must not show anger when facts are presented to subordinates.

Ninety-five percent of the problem in a company can be solved by seven tools of

quality.

Data without dispersion information are false data.

Seven tools of quality:

Tools that help organizations understand their processes
to improve them. The tools are:
1. the cause and effect diagram,
2. check sheet, 3. control chart, 4. flowchart, 5. histogram, 6. Pareto chart , 7. scatter diagram
22

Dr. Joseph Juran (1904-)

Juran Trilogy
Quality planning
Quality control
Quality improvement

Jurans basics for success

Top management must commit the time and resource for success
Specific quality improvement goals must be in the business plan and include:
The means to measure quality results against goals
A review of results against goals
A reward for superior quality performance
The responsibility for improvement must be assigned to individuals
People must be trained for quality management and improvement
The workforce must be empowered to participate in the improvement process

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Dr. Genichi Taguchi

1.

Evaluation of Quality : Quality Loss Function

2.

Quality Through Design

System Design
Parameter Design
Tolerance Design

By using Quality Function Deployment (QFD), S/N ratio, Design of Experiment

3. Online Quality Control

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Lean Pioneers
Lean Pioneer

Contribution

Frederick W. Taylor

Divided work into component parts

Efficiency Expert
Applied scientific method to maximize output

Henry Ford

Father of Mass Production

Advocated Waste Reduction
Founded Ford Motor Company
Brought affordable transportation to masses

Kiichiro Toyoda

Promoted mistake proofing concepts

Eiji Toyoda

Developed an automotive research lab

Taichi Ohno

Created the Toyota production system (TPS)

Integrated TPS into the supply chain
Had the vision and focus to eliminate waste

Shigeo Shingo

Developed the SMED system

Assisted in the development of other TPS elements

James Womack
Daniel Jones

Well-known promoters of lean methods

Influential English book

25

Frederick W Taylor (1856-1915)

Father of Industrial Engineering, Author of The principles of Scientific Management

Time and Motion Study

Stop Watch to Measure Task Speed.

Key Taylor Concepts:

Understand each element of the task
Select, train and develop the worker
Have a division of work between management and worker
Cooperate with the worker to follow the procedures

26

Henry Ford (1863-1947)

1896: Built his first automobile
1903: Founded Ford Motor Company
1913: Started the first moving assembly line in Highland Park Plant
1918: Constructed the world largest industrial complex (Rouge Plant)
1919: One of every three cars purchased is a Model T
1927: The 15 million Model T was produced

Key Henry Techniques:

Standardized, interchangeable parts
Interchangeability of workers
Simpler task at each work station
Moving Assembly Line

27

Taiichi Ohno (1912-1990)

Father of Toyota Production System,
Some Interesting facts on early 1950s:
1937-1950: Toyota total production of vehicles: 2685
Ford Rouge Plant: more than 8000/day
9 Japanese workers productivity = 1 American worker

Key Ohnos Techniques:

Pull system (Supermarket)
Muda (7 wastes)
Quick die change (from days to minutes and seconds)
Flexible job assignments
Removing non-value added work
Kanban methods
U-shaped cells
One-Piece flow
Production leveling

28

Shigeo Shingo (1909 - 1990)

Key Books:
Revolution in Manufacturing: The SMED System
Zero Quality Control: Source Inspection and Poka-Yoke System
Non-stock Production
The Toyota Production System from an Industrial Engineering Viewpoint

James Womack and Daniel Jones

Key Books:
The Machine that changed the world
Lean Thinking

29

Introduction: Lean methodology

Lean methodology aims to relentlessly identify and eliminate waste in order to maximize speed
and flexibility of business processes in order to deliver what is needed, when needed and the
quantity needed by the Customer.
Terms like "Lean Manufacturing" or "Lean Production" are deliberately not used, as the Lean
method can be widely used in a variety of processes such as production processes and
transactional processes, for example:

Lean Production or Manufacturing for production processes

Lean Office for service/support processes
Lean Design inside the Research & Development process

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Introduction to Waste
What is the meaning of "waste"?
It is the use of resources (time, material, labor, etc.). for doing something that customers are
not willing to pay for, and so it does not add value to the product or service provided.
Eliminating waste improves the value of products and services.
The Lean philosophy highlights 8 macro-categories of waste:

Over-production
Transportation
Defects
Inventory
Waiting
Over-processing
Motion
Underutilized people
31

The 8 Wastes
Waste
Category

Description

Root Causes

Goals

Overproduction

Overproduction happens when a process

produces more products/services than
necessary

Batch Production
Production on forecast

Produce just the necessary, in the

right time at the right quality

Defects

Production of defective parts/services that

cant be sold to the Customer. Defects can be
scraps or reworks, which add tremendous
costs to organizations

Lack of standardization
Lack of training
Lack of error proofing system
Poor quality of supply
Obsolete process

Produce right first time

Stop the process when the defect
occurs, solve the problem in order to
remove it definitively

Transportation

Unnecessary transport of materials

Batch Production
Inefficient layout
Long set-up time

Minimize the movement by arranging

processes in close proximity to each
other.

Inventory

Too many finished goods in inventory, WIP

inventory, raw material inventory

Batch Production
Long set-up time
Bottleneck
Lack of continuous flow
Push organization

The inventory must be dimensioned

based on the real actual usage and
on the supplier delivery time.

Waiting

Customer waiting, waiting for materials,

waiting for employees

Maximise "value adding" time to

reduce waiting and to arrange
processes in a continuous flow
approach

Overprocessing

Unnecessary processes or operations

Non Value Added activity

Lack of investigation of
Customer needs
Activity by tradition

Optimize Value Added activities to

remove all the unnecessary steps

Motion

Non Value Added movement of people and

machines

Inefficient layout and process

flow
Lack of standardization

Remove unnecessary motion and

improve disposition of material in the
workplace

Underutilized
People

Not using peoples skills, people are seen as

a source of labor and are not involved in
finding solutions/opportunities to improve
processes

Lack of involvement
Old Culture

People are the most important

32involve
resource in a company: lets
them as much as possible in
company activities

Bottleneck
Lack of continuous flow
Lack of standardization
Unbalanced workload

Introduction: Lean Thinking approach

Every time a Lean expert looks at a process optimization he/she must
consider the 5 Lean Thinking principles:
1 LEAN
PRINCIPLE
Value

Identify the value of the product/service and

process from Customers point of view

2 LEAN
PRINCIPLE
Value Stream

Map the process value stream to discover and

understand what is value for the Customer

3 LEAN
PRINCIPLE
Flow

Value added processes must be arranged in a

continuous flow without delays and interruptions,
so Lead Time is reduced (ideal situation one piece
flow)

4 LEAN
PRINCIPLE
Pull

5 LEAN
PRINCIPLE
Perfection

Produce to Customer demand (the right product,

in the right time and in the right quantity)
Move from a reactive point of view to a
proactive one,
to establish a continuous
improvement process of performance (looking for
new Customer expectations and new possibilities
33
to eliminate waste)

The power of Lean Six Sigma

LEAN PURPOSE:
Speed and flexibility through
waste
identification
and
elimination

SIX SIGMA PURPOSE:

Variability reduction

FINISH

LEAN SIX SIGMA APPROACH

FINISH

Non
value
added
activities
reduction/elimination
Variability reduction

The final process is fast

and capable
34

Comparison of Six Sigma and Lean

Topic

Six Sigma

Lean

Improvement

Reduce variation

Reduce Waste

Justification

Six Sigma Quality (3.4 DPMO) Speed (velocity)

Main Saving

Cost of Poor Quality

Operating Costs

Learning Curve

Long

Short

Project Selection Various approaches

Value Stream Mapping

Project Length

2-6 Month

1 week - 3 month

Driver

Data

Demand

Complexity

High

Moderate

35

Lean
If major business problems are:
There seems to be a lot of wastes
There is a need to minimize inventories and redundancies
There is a need to improve work flows
There is a need to speed p processes
There are human mistakes
Then, Lean techniques can be used to:
Eliminate wastes
Simplify processes
Increase speed
Improve flows
Minimize inventories
Mistake proof processes

36

Six Sigma
If major business problems are:
There are quality issues
There is excessive variation
There are complex problems
There are challenging root cause identifications
There are numerous technical considerations
Then, Six Sigma techniques can be used to:
Minimize variation
Apply scientific problem solving
Utilize robust project chartering
Focus on quality issues
Employ technical methodologies

37

Lean and Six Sigma Tools for DMAIC

Define

Measure

Analyze

Improve

Control

Value Stream
Mapping

Prioritization
Matrices

Regression
Analysis

DOE

SPC

Charter-Problem
Statement

MSA Studies

5 Whys

Kaizen Events

Visual Controls

Voice of the
Customer

Capability
Studies

Cause-Effect
Diagrams

TOC

Control Plans

Communication plans

Video taping

Root Cause
Analysis

Pull Systems

TPM

CTQ Issues

Time Studies

ANOVA

SMED

Standard Work

SIPOC

Multi-Vari
Analysis

5S

Procedures and Work

Instructions

Collecting Data

Hypothesis
Testing

Work Flow
Improvements

Training Requirements

Business Results
Benchmarking

38

Linking Projects to Organization Goals

Performance Metrics
Profitability
Productivity
Quality

Performance

Do

Low

Concentrate on basics
Use problem solving teams
Apply cost management
Engage in customer
innovation

Medium

Set goal and monitor them

Use process simplification
Use department
improvement teams
Get middle management
involved

High

Benchmark other forms

Empower employees
Communicate strategic
plans
Continuously improve

Dont Do
Empowerment
Benchmarking
Strategic Planning

39

When Six Sigma should be used and when it should not be used
Pure Six Sigma approach achieves the best results if it is implemented
by high performance organizations
Medium and low performance companies should consider more basic
techniques to pick up low hanging fruit

A decision on Six Sigma might be negative if the following

conditions exist
The company already has a strong, effective performance and process
improvement effort in place
Current changes are already overwhelming the companys people and
resources
The potential gains arent sufficient to finance the investments
necessary to support Six Sigma

40

Six Sigma project focus areas

Focus on project cost savings
Focus on customer satisfaction deliverables
Focus on processes
Focus on problems
Focus on a targeted locations (a good way to introduce Six Sigma)
Focus on design
Focus on supplier processes

41

Risk Analysis
SWOT (Strength, Weakness, Opportunity, Threat) Analysis
Basis for strategic planning
Different SWOTs will come up with different strategies
Copy other companys success without analyzing SWOT of your
own company will likely lead to failure
Strength: Something a company is good at, e.g., engineering expertise, skilled workforce,
solid financial position etc
Weakness: Something that the firm lacks or is a condition that put it at a disadvantage, e.g.
poor cash flow, outdated technology, high overhead expenses etc
Opportunity: Something external that the firm can take advantage of, e.g., overseas connection
Threat: Something external that could harm the firm, e.g. law suits

42

SWOT Analysis Ideas

Internal Strengths

Internal Weaknesses

Core competencies in critical areas

Solid finances
Market leader
Proprietary technology
Cost advantage
Good marketing skills
Management excellence
World class manufacturing
Good technical and work force skills
Superior brand names
Web skills

Too many goals

Lack of strategic focus
Obsolete facilities
Outdated technology
Inexperienced management
Manufacturing problems
Weak marketing skills
Lack of growth capital
Weak cash flow
Inadequate R&D
Can not implement plans

External Opportunities

External Threats

Expansion to new markets

Product line can be broadened
Transfer technical skills to new products
Low industry rivalry
Minimal regulatory requirements
New emerging technologies
Positive growth cycle
E-commerce

Global competition
Substitute products are available
Legal and regulatory requirements
Recessionary cycle
New competitors
New technology
E-commerce

43

SWOT Analysis Deployment

SWOT requires management to develop an objective view of firm

However, top management tends to be consists of the same type of person, come up with
same kind of analysis and judgment and it is often not accurate or impartial
It is recommended that different kind of people, such as new employee, low ranking employee
and outsiders, be brought into the analysis process

44