Six Sigma

An Overview

What is Six Sigma?

A Metric Philosophy Initiative Method / Tools

Philosophy
Sources of variation can be Identified Quantified Eliminated Controlled

Initiative
Breakthrough Improvement Systematic, Focused Approach Projects Linked to Business Strategy Key People Selected & Trained Project Management & Reviews Results
Strategic Process Improvement Financial Results

Sustain the Gains

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Method and Tools

Process Thinking Process Variation Facts, Figures, Data Critical Few Drivers Customer Satisfaction Cycle Time

Six Sigma Organization

Champions Master Black Belts Black Belts Green Belts

Champions
Provide direction and resources. Facilitate the identification and selection of projects with senior leadership. Track progress of projects. Breakdown barriers. Create support systems.
Six Sigma Catalysts
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Master Black Belts

Internal experts in Six Sigma methods and tools. Train and mentor Black Belts. Develop and deliver training. Assist Champions. Leverage best practices.
Six Sigma Experts

Black Belts
Project Lead Strategic high impact multifunctional projects 2-4 projects per year

Black Belts

contd.

Mentor and coach Green Belts Dedicated role for 18 30 months

Six Sigma Change Agents

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What Makes a Good Black Belt?

Open mind. Desire to find out why things happen. Ability to lead and direct people. Ability to handle conflict. Capable of self-directed activity. Sense of urgency. Good grasp of computer skills and a basic understanding of math.

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Green Belts
Lead day-to-day functional projects and support strategic Black Belt projects Maintain current role in organization with 20-50% of time dedicated to a Six Sigma project Sustain the gains Six Sigma Institutionalizers
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Characteristics of a Good Project

Problem is clearly connected to business priorities
Improvement in process metrics > 50% Financial impact > People will support a project they understand and see as important

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Characteristics of a Good Project contd.

Clear quantitative measures of success Reasonable scope Do able in 4-6 months Has the support and approval of management needed to get resources and remove barriers

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Examples of Black Belt Projects

Increase process throughput Reduce cycle time of assembly Reduce process downtime and scrap Reduce freight costs Reduce costs of waste disposal Reduce bulk material transportation costs

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 Reduce amount of accounts receivable Material loss: Reduce scrap & increase yield Reduce warranty costs 50%

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Examples of Black Belt Projects (Actual)

Reduce road construction change orders 20%. Improve sewage plant efficiency by 25%. Reduce lime usage in water softening at city water plant by 20%. Reduce invoice to cash cycle time by 50%. Reduce processing time of billing customers for 3rd party orders.
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Examples of Black Belt Projects (Actual) contd

Reduce overpayment of benefits. Reduce document retention for legal cases. Reduce cycle time of legal transcript transmittals.

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Six Sigma Applies to All Processes in All Industries

Customer Service Design Purchasing Manufacturing Sales Marketing Administration
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 Manufacturing Financial Telecommunications Health Care Government Education

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What is Different? Why Does Six Sigma Work?

Driven by top leadership Top-down deployment - integrated with business strategies Bottom-line cost-benefit Disciplined approach (DefineMeasure-Analyze-Improve-Control)

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 Sense of urgency (4-6 month projects) Well defined roles & infrastructure (Champion, MBB, BB, GB, etc) Statistical and data based decisions Customer and process focus
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Define-Measure-AnalyzeImprove-Control
Define: Define the problem, measures and process associated with the problem; quantify benefits; and identify project team. Measure: Determine the capability of the current process and the measurement system.

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 Analyze: Analyze data to assess patterns and trends between inputs and outputs. Improve: Verify critical inputs and determine optimum settings. Implement. Control: Implement controls to sustain the gains.

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DMAIC
DMAIC is an acronym that stands for the 5 major steps within the Six Sigma program. D - Define M Measure A - Analyze I - Improve C - Control

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 DMAIC is a structured, disciplined and aggressive approach to process improvement that consists of the above five phases. Each phase is linked logically to the previous phase, and to the next phase at the same time. The purpose of this rigorous methodology is to achieve the overall goal of Six Sigma, which is 3.4 defects per million parts, or opportunities.
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PHASE ONE - DEFINE

In this phase, the project's purpose and scope are defined. Customer information and background information on the process is collected. The output of this phase is: 1. A clear statement of the intended improvement. 2. A high-level map of the process (SIPOC defined further later). 3. A list of what is important to the customer (Voice of the customer).
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PHASE TWO - MEASURE

The goal of the Measure phase is to focus the improvement effort by gathering information on the current situation. The output of Measure is: 1. Baseline data on current process performance. 2. Data that pinpoints problem location or occurrence. 3. A more focused problem statement.

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PHASE THREE - ANALYZE

The goal of the Analyze phase is to identify root cause(s) and confirm those with data. The output is a theory that has been tested and confirmed. The verified cause(s) will form the basis for solutions in the next phase.

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PHASE FOUR - IMPROVE

The goal of the Improve phase is to do trials and implement solutions that address the identified root cause(s). The output is planned, tested actions that should eliminate or reduce the impact of the identified root cause(s). A plan is also created as to how the results will be evaluated in the next phase.
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PHASE FIVE - CONTROL

The goal of the Control phase is to evaluate the solutions and the plan, maintain the gains accomplished by standardizing the process, and outline steps for on-going improvements including opportunities for replication.

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 It is also important to consider if this improvement affects similar lines of production. The output is: 1. Before and after analysis. 2. A monitoring system. 3. Completed documentation of results, learning's, and recommendations.
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Step #1 - DEFINE
Project
SIPOC (Suppliers, Inputs, Process, Outputs and Customers ) VOC (Voice Of The Customer )

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 In this phase, you will be setting project goals and boundaries based upon your knowledge of your organization's business goals, customer needs, and the process that needs to be improved to get you to a higher sigma level.

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The tools that are most commonly used in the define phase are:
1. Project charter (to include the business case). 2. Stakeholder analysis. 3. SIPOC (Suppliers, Inputs, Process, Outputs and Customers 4. Rolled Throughput Yield 5. Voice of the customer 6. Affinity Diagram 7. Kano Model 8. Critical-to-Quality (CTQ) tree

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Project Charter
The charter is a contract between the organization's leadership and the team created at the onset of the project with the purpose of: Clarifying what is expected of the team. Keeping the team focused. Keeping the team aligned with organizational priorities. Transferring the project from the champion to the team.
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The main elements of the Charter are:

Business case (financial impact) Problem statement Goal statement Project scope Roles of the team members Milestones/deliverables Support required and from whom.

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Business Case
Since most organizations do not have unlimited resources, teams should be assigned to projects with a significant financial impact. Rough estimates can be used

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Some examples could be:

Reduce inventory levels to reduce capital investment in inventory. Reduce time-to-market to increase revenues through increased sales. Reduce equipment downtime to increase capacity and production. Reduce rejects and rework to decrease material costs rendering a greater ROI

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 Speed up delivery time to increase revenues. Reduce set-up time to increase capacity and reduce downtime. Teams should be aware that these estimates are likely to change as the team finds out more about the problems, constraints, and root cause, and the problem itself becomes more of a focus. It is generally advisable to quantify your anticipated results with someone from the Finance Department.
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Six Sigma Deployment & Baldrige Performance Excellence Framework

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Leadership
Set Values, Direction, & Performance Expectations, Manage Performance Strategic Planning Strategy Formulation, Planning, Budgeting & Resource Allocation Focus = Customer & Market Knowledge
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Human Resource
Belt Selection Compensation Career Development Training Process

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Management
Project Selection Project Assign Project Tracking Review Results

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Business = Six Sigma Deployment

Information and Analysis Organizational Environment, Relationships & Challenges Data & IS Support Mfg, Design & Service Capability Finance Communication
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