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Six Sigma for Managers

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Contents :
Six Sigma : An Overview
What is Six Sigma? Why Six Sigma? Six Sigma Phases : Define, Measure, Analyze, Improve and Control Tools and Key Roles for Six Sigma

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Why Six Sigma?

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What is Sigma ?
A term used in statistics to represent standard deviation, an indicator of the degree of variation in a set of a process

Sigma

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What is Six Sigma?


A statistical concept that measures a process in terms of defects at the six sigma level, there 3.4 defects per million opportunities
A philosophy and a goal : as perfect as practically possible A methodology and a symbol of quality
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Six Sigma

Sigma Level
Sigma Level (Process Capability) Defects per Million Opportunities

2
3 4 5 6

308,537
66,807 6,210 233 3.4

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Sigma Level

Six Sigma = 99,9997%

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Sigma Level
Why not Four Sigma or 99.379% ?
Every hour the postal service would lose 20,000 pieces of mail Every day our drinking water would be unsafe for almost 15 minutes Every week there would be 5,000 surgical operations that go wrong in some way Every month we would be without electricity for almost seven hours
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Why Six Sigma?


Money Customer Satisfaction Quality Competitive Advantage

Growth

Employee Pride

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Why Six Sigma?


At GE, Six Sigma added more than $ 2 billion to the bottom line in 1999 alone Motorola saved more than $ 15 billion in the first 10 years of its Six Sigma effort AlliedSignal reports saving $ 1,5 billion through Six Sigma.

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Why Six Sigma?


Six Sigma is about practices that help you eliminate defects and always deliver products and services that meet customer specifications

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Cost of Poor Quality


What is cost of scrap?

What is cost of rework?


What is cost of excessive cycle times and delays?

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Cost of Poor Quality


What is cost of business lost because customers are dissatisfied with your products or services? What is cost of opportunities lost because you didnt have time or the resources to take advantage of them?

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Critical-to-Quality (CTQ)
Elements of a process that significantly affect the output of that process. Identifying these elements is figuring out how to make improvements that can dramatically reduce costs and enhance quality.

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Six Sigma Phases

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Six Sigma Phases Define Measure Analyze

Improve

DMAIC
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Control
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Six Sigma Phases


Define

Define the project goals and customer (internal and external) deliverables

Measure

Measure the process to determine current performance

Analyze
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Analyze and determine the root cause(s) of the defects


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Six Sigma Phases


Improve the process by eliminating defects
Improve

Control

Control future process performance

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Six Sigma Phases


Define Customers and Requirements (CTQs)

Define

Develop Problem Statement, Goals and Benefits

Identify Champion, Process Owner and Team


Define Resources Evaluate Key Organizational Support

Develop Project Plan and Milestones


Develop High Level Process Map

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Six Sigma Phases


Define Defect, Opportunity, Unit and Metrics

Measure

Detailed Process Map of Appropriate Areas Develop Data Collection Plan

Validate the Measurement System


Collect the Data Begin Developing Y=f(x) Relationship

Determine Process Capability and Sigma Baseline

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Six Sigma Phases


Define Performance Objectives

Analyze

Identify Value/Non-Value Added Process Steps Identify Sources of Variation Determine Root Cause(s) Determine Vital Few x's, Y=f(x) Relationship

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Six Sigma Phases


Perform Design of Experiments

Improve

Develop Potential Solutions

Define Operating Tolerances of Potential System


Assess Failure Modes of Potential Solutions Validate Potential Improvement by Pilot Studies Correct/Re-Evaluate Potential Solution
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Six Sigma Phases


Control
Define and Validate Monitoring and Control System Develop Standards and Procedures Implement Statistical Process Control Determine Process Capability Develop Transfer Plan, Handoff to Process Owner Verify Benefits, Cost Savings/Avoidance, Profit Growth Close Project, Finalize Documentation Communicate to Business, Celebrate
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Define

Measure

Analyze

Improve

Control

Deliverables : Fully trained team is formed, supported, and committed to work on improvement project. Team charter developed, customers identified and high impact characteristics (CTQs) defined, business process mapped.

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Define

Measure

Analyze

Improve

Control

Checkpoints for Readiness


Team Readiness : Team is sponsored by a champion or business leader. Team formed and team leaders assigned. Improvement team members fully trained on Six Sigma and DMAIC.

Team Charter : Completed project management charter, including business case, problem and goal statements, project scope, milestones, roles and responsibilities, communication plan.
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Define

Measure

Analyze

Improve

Control

Checkpoints for Readiness Customers Customer(s) identified and segmented according to their different needs and requirements.

Data collected and displayed to better understand customer(s) critical needs and requirements.

Business Process Mapping Completed, verified, and validated high-level 'as is' (not 'should be' or 'could be') business process map. Completed SIPOC representation, describing the Suppliers, Inputs, Process, Outputs, and Customers.
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Define

Measure

Analyze

Improve

Control

Deliverables : Key measures identified, data collection planned and executed, process variation displayed and communicated, performance baselined, sigma level calculated.

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Define

Measure

Analyze

Improve

Control

Checkpoints for Readiness


Key Measures Identified Key measures identified and agreed upon.

High impact defects defined and identified in the business process.


Data Collection Planned and Executed Solid data collection plan established that includes measurement systems analysis. Data collected on key measures that were identified.

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Define

Measure

Analyze

Improve

Control

Checkpoints for Readiness


Process Variation Displayed/Communicated Process variation components displayed/communicated using suitable charts, graphs, plots. Long term and short term variability accounted for. Performance Baseline/Sigma Calculation Measure baseline process performance (capability, yield, sigma level).
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Define

Measure

Analyze

Improve

Control

Deliverables : Data and process analysis, root cause analysis, quantifying the gap/opportunity.

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Define

Measure

Analyze

Improve

Control

Checkpoints for Readiness


Data and Process Analysis Identify gaps between current performance and the goal performance. Root Cause Analysis Generate list of possible causes (sources of variation). Segment and stratify possible causes (sources of variation). Prioritize list of 'vital few' causes (key sources of variation). Verify and quantify the root causes of variation.
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Define

Measure

Analyze

Improve

Control

Checkpoints for Readiness


Quantifying the Gap/Opportunity Determine the performance gap.

Display and communicate the gap/opportunity in financial terms.

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Define

Measure

Analyze

Improve

Control

Deliverables : Generate (and test) possible solutions, select the best solutions, design implementation plan.

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Define

Measure

Analyze

Improve

Control

Checkpoints for Readiness


Generating (and Testing) Possible Solutions Possible solutions generated and tested.

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Define

Measure

Analyze

Improve

Control

Checkpoints for Readiness


Selecting The Best Solution(s) Optimal solution selected based on testing and analysis. New and improved process ('should be') maps developed. Cost/benefit analysis of optimal solution(s). Small-scale pilot for proposed improvement(s). Pilot data collected and analyzed. Improved process ('should be') maps modified based on pilot data and analysis. Project impact on utilizing the best solution(s).
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Define

Measure

Analyze

Improve

Control

Checkpoints for Readiness


Designing Implementation Plan Solution implementation plan established, including schedule/work breakdown structure, resources, risk management plan, cost/budget, and control plan. Contingency plan established.

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Define

Measure

Analyze

Improve

Control

Deliverables : Documented and implemented monitoring plan, standardized process, documented procedures, response plan established and deployed, transfer of ownership (project closure).

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Define

Measure

Analyze

Improve

Control

Checkpoints for Readiness


Monitoring Plan Control plan in place for sustaining improvements (short and longterm). Process Standardization New process steps, standards, and documentation are ingrained into normal operations. Documented Procedures Operating procedures are consistent. Knowledge gained on process is shared and institutionalized.
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Define

Measure

Analyze

Improve

Control

Checkpoints for Readiness


Response Plan Response plans established, understood, and deployed. Transfer of Ownership (Project Closure) Transfer ownership and knowledge to process owner and process team tasked with the responsibilities.

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Tools and Roles for Six Sigma

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Tools for Six Sigma


Creating flowcharts of the step in a process operations, decision points, delays, movements, handoffs, rework, loops, and controls or inspections. A process map is illustrated description of how a process work. Process Mapping

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Tools for Six Sigma


DOE is a structured, organized method for determining the relationship between factors (Xs) affecting a process and the output of that process (Y). Design of Experiments or DOE

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Tools for Six Sigma


A group of rows and columns, with one set of increments marked along the X (horizontal) axis and another set of increments marked along the Y (vertical) axis. The purpose of using XY matrix is to study and understand the relationship between what you are putting into a process and what your customer is getting out of it. The XY matrix allows the team to identify gaps, areas for improvement.
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XY Matrix

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Tools for Six Sigma


The goal of this tool is to ensure that your measurement system is statically confident that its both accurate and precise each and every time it is used. Undertaken during Measure phase, your MSA determines whether or not you can take a certain measurement and repeat or reproduce it among different people who take the same measurement.
Measurement System Analysis

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Tools for Six Sigma


Process capability tool is the measure of a process being able to meet specification requirements and fulfill customer CTQ needs on a long term basis.
Process Capability Tool

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Tools for Six Sigma


Investigating a theory about the suspected cause (s) of a particular effect in a process to determine if it is correct. Its a compass that points you directly to the vital few factors that are most affecting your process. Hypothesis Testing

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Tools for Six Sigma


The manner in which a part or process can fail to meet a specification, creating a defect or non-conformance, and the impact on the customer if that failure mode is not prevented or corrected. Failure Mode Effect Analysis

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Tools for Six Sigma


A detailed assessment and guide for maintaining all the positive changes you, your black belt, and the project team have made. It ensures that all your analysis and efforts stay in effect and that you have information at your disposal to prevent backsliding or a return to less than optimal performance standard. Control Plan

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Key Roles for Six Sigma


Executive Leadership Includes CEO and other key top management team members. They are responsible for setting up a vision for Six Sigma implementation.

Champions

Are responsible for the Six Sigma implementation across the organization in an integrated manner. Champions also act as mentor to Black Belts.

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Key Roles for Six Sigma


Master Black Belts Identified by champions, act as in-house expert coach for the organization on Six Sigma. They devote 100% of their time to Six Sigma.

Black Belts

Operate under Master Black Belts to apply Six Sigma methodology to specific projects. They primarily focus on Six Sigma project execution.

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Key Roles for Six Sigma


Green Belts Are the employees who take up Six Sigma implementation along with their other job responsibilities. They operate under the guidance of Black Belts and support them in achieving the overall results.

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Six Sigma Dos


Do communicate the commitment companywide Do demonstrate the commitment of company leaders Do empower your key human resources Do provide on-site mentoring for black belts
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Six Sigma Dos


Do be patient at the inception of you six Sigma initiative

Do claim and advertise early wins


Do benchmark

Do establish project baseline and goals

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Recommended Further Readings:


1. 2. Greg Brue, Six Sigma for Managers, McGraw Hill George Eckes, Six Sigma for Everyone, John Wiley and Sons

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End of Material

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