Session 2

Six Sigma Methodology & Tools

Agenda
O Selection of Improvement methodologies
O Six sigma improvement methodology
O DMAIC
O CASE: DMAIC methodology
O Six sigma organization structure

It takes money to
save money!

Selection of Improvement methodologies

Agenda
O Selection of Improvement methodologies
O Six sigma improvement methodology
O DMAIC
O CASE: DMAIC methodology
O Six sigma organization structure
O Six sigma benchmarks

Six Sigma Methodology

O DMAIC
Improving existing business process

O DMADV(DFSS)
Creating new process which will perform at Six

Sigma

Agenda
O Six sigma improvement methodology
O DMAIC
O CASE: DMAIC methodology
O Six sigma organization structure
O Six sigma benchmarks

Case:
O The cycle time of a mail order distribution

company, from customer order to customer

delivery should not exceed 3 days (our
contractual terms & conditions)
O The Customers complain, The competitors are
better than us. They never exceed 3 days
O The Management says We are loosing money
O The team in place says We dispatch in
average the same day we receive the order and
we always use a 24 hours delivery carrier

Six Sigma Methodology

Define

Define
ODescribe the problem in

operational terms
ODrill down to a specific problem
statement (project scoping)
OIdentify customers and CTQs,
performance metrics, and
cost/revenue implications
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CTQ Tree

SIPOC

SIPOC for Photocopying process

Case:Define
Problem Statement:
We miss our contractual obligations of delivering in less than 3 days

Process in which we have a business problem:

CTQ*

Definition

Specification
Limit

Performance Target / Goal

Lead time

3 days

99% < 3 days

Six Sigma Methodology

Measure

Y = f(X)
O Y is the set of CTQs and X represents the set of

critical input variables that influence Y.

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Measure
ODevelop Operational definitions
OKey data collection questions
O What questions are we trying to answer?
O What type of data will we need to answer
the question?
O Where can we find the data?
O Who can provide the data?
O How can we collect the data with minimum
effort and with minimum chance of error?
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Data Collection Plan

Baseline Sigma(Process capability

study)

Measure
Measure your problem and your defects.

Lead Time Distribution

Measure Conclusion
O I observed the probability of defect of 12.03%!
O My performance is 2.67 ST*. We have a problem!
O 6 Sigma goal is to reach 0.00034% of probability of defect!

ZST Value*

DPMO (Defects per

million of opportunities)

% Defects

308,537

30.8537%

66,807

12.03%
6.6807%

6,210

0.6210%

233

0.0233%

3.4

0.00034%

2.67

*for long term data with ZST = ZLT + 1.5

Six Sigma Methodology

Analyse

Analyze
OFocus on why defects, errors, or

excessive variation occur

OSeek the root cause
O5-Why technique
OExperimentation and
verification
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Analyse
Analysis finding the root causes (Xs)

Pareto Chart of the 26 defects

77
%
15
%

20

8%

2 causes represent 92% of my defects.

Improve

Improve
OIdea generation
OFMEA
OBrainstorming
OEvaluation and selection
OImplementation planning

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FMEA
O A structured approach to:
O Identifying the ways in which a product or

process can fail

O Estimating risk associated with specific
causes
O Prioritizing the actions that should be taken
to reduce risk
O Evaluating design validation plan (design
FMEA) or current control plan (process FMEA)
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Types of FMEA

Analyzing
Failure &
Effects

Severity, Occurrence,
and Detection
OSeverity
O Importance of the effect on customer requirements

OOccurrence
O Frequency with which a given cause occurs and

creates failure modes (obtain from past data if possible)

ODetection
O The ability of the current control scheme to detect

(then prevent) a given cause (may be difficult to

estimate early in process operations).
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Assigning
Rating
Weights

Rating Scales
O There are a wide variety of scoring

anchors, both quantitative or qualitative

O Two types of scales are 1-5 or 1-10
O The 1-5 scale makes it easier for the teams
to decide on scores
O The 1-10 scale may allow for better
precision in estimates and a wide variation
in scores (most common)
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Assigning
Rating
Weights

Rating Scales
O Severity
O 1 = Not Severe, 10 = Very Severe

O Occurrence
O 1 = Not Likely, 10 = Very Likely

O Detection
O 1 = Easy to Detect, 10 = Not easy to Detect

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Calculating a
Composite
Score

Risk Priority Number (RPN)

RPN is the product of the severity, occurrence,

and detection scores.

Severity

Occurrence

Detection

RPN

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A Closer Look

The FMEA Form

Identify failure modes

and their effects

Identify causes of the

failure modes
and controls

Prioritize

Determine and
assess actions

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FMEA Procedure
1. For each process input (start with high value
inputs), determine the ways in which the input
can go wrong (failure mode)
2. For each failure mode, determine effects
O Select a severity level for each effect

3. Identify potential causes of each failure mode

O Select an occurrence level for each cause

4. List current controls for each cause

O Select a detection level for each cause
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Process Steps

FMEA Procedure (Cont.)

5. Calculate the Risk Priority Number (RPN)
6. Develop recommended actions, assign
responsible persons, and take actions
O Give priority to high RPNs
O MUST look at severities rated a 10

7. Assign the predicted severity, occurrence,

and detection levels and compare RPNs

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41

PUGH MATRIX

Six Sigma Methodology

Control

Control
OMaintain improvements
OStandard operating procedures
OTraining
OChecklist or reviews
OStatistical process control charts

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Control
2003 Delivery Time Performance

Six Sigma Project Selection

O Top-down
O Bottom-up

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Agenda
O Six sigma improvement methodology
O DMAIC
O CASE: DMAIC methodology
O Six sigma organization structure
O Six sigma benchmarks

SixSigma Organizational Architecture

O Quality Leader/Manager (QL/QM)
O Master Black Belt (MBB)
O Process owner(PO)
O Black Belt (BB)
O Green Belt(GB)

Conclusion
Six Sigma is methodology used for:
O Aligning key business processes to
achieve those requirements.
O Utilizing rigorous data analysis to
minimize data variation in those
processes.
O Driving rapid and sustainable
improvement to business processes.
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End of Session 2..