Six Sigma and

Process
Improvement

1
Six-Sigma
 Juran defined breakthrough as the
accomplishment of any improvement that takes
an organization to unprecedented levels of
performance.
 The objectives of Six Sigma often focus on
breakthrough improvements that add value to the
organization and its customers through
systematic approaches to problem solving.
 “Six sigma” represents a quality level of at most
3.4 defects per million opportunities (dpmo).

2
Key Idea
A six sigma quality level corresponds
to a process variation equal to half of
the design tolerance while allowing the
mean to shift as much as 1.5 standard
deviations from the target.

3
Six-Sigma Quality

4
k-Sigma Quality Levels

5
Calculating the Sigma Level
 Excel function:

= NORMSINV(1 - Number of Defects/Number of

Opportunities) + SHIFT
or
= NORMSINV(1 - dpmo/1,000,000) + SHIFT

6
Key Idea
Although originally developed for
manufacturing in the context of tolerance-
based specifications, the Six Sigma
concept has been operationalized to apply
to any process and has come to signify a
generic quality level of at most 3.4 defects
per million opportunities.

7
DMAIC Methodology
1. Define
2. Measure
3. Analyze
4. Improve
5. Control

8
Define
 Describe the problem in operational
terms
 Drill down to a specific problem
statement (project scoping)
 Identify customers and CTQs,
performance metrics, and cost/revenue
implications

9
Measure
 Key data collection questions
 What questions are we trying to answer?
 What type of data will we need to answer the
question?
 Where can we find the data?
 Who can provide the data?
 How can we collect the data with minimum
effort and with minimum chance of error?

10
Y = f(X)
 Six Sigma uses the notion of a function in
mathematics to portray the relationship between
process performance and customer value
 Y is the set of CTQs and X represents the set of critical
input variables that influence Y.

11
Analyze
 Focus on why defects, errors, or
excessive variation occur
 Seek the root cause
 5-Why technique
 Experimentation and verification

12
Improve
 Idea generation
 Brainstorming
 Evaluation and selection
 Implementation planning

13
Control
 Maintain improvements
 Standard operating procedures
 Training
 Checklist or reviews
 Statistical process control charts

14
Types of Quality Problems
 Conformance problems are defined by unsatisfactory
performance by a well-specified system.
 Efficiency problems result from unsatisfactory performance
from the standpoint of stakeholders other than customers.
 Unstructured performance problems result from
unsatisfactory performance by a poorly specified system.
 Product design problems involve designing new products that
better satisfy user needs—the expectations of customers that
matter most to them.
 Process design problems involve designing new processes or
substantially revising existing processes.

15
Key Factors in Six Sigma
Project Selection
 Financial return, as measured by costs associated
with quality and process performance, and
impacts on revenues and market share
 Impacts on customers and organizational
effectiveness
 Probability of success
 Impact on employees
 Fit to strategy and competitive advantage

16
Tools for Process Improvement
 Elementary statistics
 Advanced statistical tools
 Product design and reliability
 Measurement
 Process control
 Process improvement
 Implementation and teamwork

17
Key Idea
Although we view process improvement
tools and techniques from the
perspective of Six Sigma, it is important
to understand that they are simply a
collection of methods that have been
used successfully in all types of quality
management and improvement
initiatives, from generic TQM efforts, to
ISO 9000, and in Baldrige processes.
18
The “Seven QC Tools”
1. Flowcharts
2. Check sheets
3. Histograms
4. Cause-and-effect diagrams
5. Pareto diagrams
6. Scatter diagrams
7. Control charts

19
Application of the Seven QC Tools
in Six Sigma

20
Key Idea
A flowchart or process map identifies the
sequence of activities or the flow of
materials and information in a process.
Flowcharts help the people involved in the
process understand it much better and
more objectively by providing a picture of
the steps needed to accomplish a task.

21
Flowcharts
 Shows unexpected complexity, problem areas,
redundancy, unnecessary loops, and where
simplification may be possible
 Compares and contrasts actual versus ideal
flow of a process
 Allows a team to reach agreement on process
steps and identify activities that may impact
performance
 Serves as a training tool

22
Example

23
Key Idea
Run charts show the performance and the
variation of a process or some quality or
productivity indicator over time in a
graphical fashion that is easy to
understand and interpret. They also
identify process changes and trends over
time and show the effects of corrective
actions.

24
Run Chart
 Monitors performance of one or more
processes over time to detect trends, shifts, or
cycles
 Allows a team to compare performance before
and after implementation of a solution to
measure its impact
 Focuses attention on truly vital changes in the
process
* *
* *
* * *
25
Control Chart
 Focuses attention on detecting and
monitoring process variation over time
 Distinguishes special from common causes of
variation
 Serves as a tool for on-going control
 Provides a common language for discussion
process performance

26
Structure of a Control Chart

27
Key Idea
Check sheets are special types of data
collection forms in which the results may
be interpreted on the form directly without
additional processing.

28
Check Sheet
 Creates easy-to-understand data
 Builds, with each observation, a clearer
picture of the facts
 Forces agreement on the definition of each
condition or event of interest
 Makes patterns in the data become obvious
quickly
xx
xxxxxx
x

29
Examples

30
Key Idea
Histograms provide clues about the
characteristics of the parent population
from which a sample is taken. Patterns
that would be difficult to see in an ordinary
table of numbers become apparent.

31
Histogram
 Displays large amounts of data that are
difficult to interpret in tabular form
 Shows centering, variation, and shape
 Illustrates the underlying distribution of the
data
 Provides useful information for predicting
future performance
 Helps to answer “Is the process capable of
meeting requirements?

32
Key Idea
A Pareto distribution is one in which the
characteristics observed are ordered from
largest frequency to smallest. A Pareto
diagram is a histogram of the data from
the largest frequency to the smallest.

33
Pareto Diagram
 Helps a team focus on causes that have the
greatest impact
 Displays the relative importance of problems
in a simple visual format
 Helps prevent “shifting the problem” where the
solution removes some causes but worsens
others

34
Example

35
Key Idea
A cause-and-effect diagram is a simple
graphical method for presenting a chain of
causes and effects and for sorting out
causes and organizing relationships
between variables.

36
Cause and Effect Diagram
 Enables a team to focus on
the content of a problem,
not on the history of the
problem or differing
personal interests of team
members
 Creates a snapshot of
collective knowledge and
consensus of a team;
builds support for
solutions
 Focuses the team on
causes, not symptoms

37
Scatter Diagram
 Supplies the data to confirm a hypothesis that
two variables are related
 Provides both a visual and statistical means to
test the strength of a relationship
 Provides a good follow-up to cause and effect
diagrams

*
* *
* *
*
38
Lean Tools
 Lean production refers to approaches that
originated at the Ford Motor Company in the
early 1900s, but which were refined and
modernized by the Toyota Motor Corporation
later in the century.
 Lean approaches focus on the elimination of
waste in all forms, including defects requiring
rework, unnecessary processing steps,
unnecessary movement of materials or people,
waiting time, excess inventory, and
overproduction.
39
Tools of Lean Production
 The 5S’s: seiri (sort), seiton (set in order), seiso
(shine), seiketsu (standardize), and shitsuke
(sustain).
 Visual controls.
 Efficient layout and standardized work.
 Pull production.
 Single minute exchange of dies (SMED).
 Total productive maintenance.
 Source inspection.
 Continuous improvement.
40
Lean Six Sigma
 Six Sigma is a useful and complementary approach to
lean production as both are driven by customer
requirements, focus on real dollar savings, have the
ability to make significant financial impacts on the
organization, and can easily be used in non-
manufacturing environments.
 Lean production addresses visible problems in
processes, for example, inventory, material flow, and
safety.
 Six Sigma is more concerned with less visible
problems, for example, variation in performance.
41
Key Idea
All Six Sigma projects have three key
characteristics: a problem to be solved, a
process in which the problem exists, and
one or more measures that quantify the
gap to be closed and can be used to
monitor progress.

42
Six Sigma Metrics in Services
 Accuracy
 Cycle time
 Cost
 Customer satisfaction

43
Implementing Six Sigma or Lean
in Small Organizations
 Obtain management commitment.
 Identify key processes and goals.
 Prioritize the improvement projects.
 Be systematic.
 Don’t worry about training Black and Green Belts.
 Use just-in-time practices to learn the Six Sigma tools
necessary to successfully carry out specific projects.
 Communicate successes and reward and recognize
performers.

44