Six Sigma: DMAIC Y F (X)

 D efine
M easure
A nalyze
I mprove
Operational C ontrol
Excellence
Six Sigma
Six Sigma: DMAIC; Y=f(x)

Is it a Goal, a Measure, a Process,
a Tool or an expletive deleted?
By Lee Olson
 D efine Presentation to INFORMS
M easure
A nalyze
I mprove
C ontrol
 D efine
M easure
Objectives A
I
nalyze
mprove
C ontrol
l Understand the Basics of the Six Sigma Program

l Understand How Six Sigma Relates to Lean, TOC, TQM
 (Theory Of Constraints; Total Quality Management)
l Ability to Define a Strategy and Roadmap for Success

Operational Excellence Training

 D efine
M easure
Define A
I
nalyze
mprove
C ontrol
l
l
Is it a Goal, a Measure, a Process, a Tool or an expletive
deleted?
l
l
l
lYes

 D efine
M easure
Define A
I
nalyze
mprove
C ontrol
Six Sigma

l Is a management methodology
 Customer focused
 Data driven decisions
 Breakthrough performance gains
 Validated bottom line results
l

 D efine
M easure
Customer Focused A
I
nalyze
mprove
C ontrol
ON TIME DELIVERY (sample)

The percentage of sales order line items that ship complete on or before the original customer promise date, for
all line items shipped in the month.
On-Time Delivery
Our Performance Compared to Competitors

Pareto of Drivers
100%
90% 100%
80% 75%
% Impact
70%
60% 50%
50%
Complete
25%
40%
30% 0%
xyz Cell
Credit Hold
Engineering
Deliveries
Unrealistic
on part abc
Always
Orders on
Supplier
Low Yield
Promise
20%
Late
Change
Orders
Late
Date
Target
10%
Importance to Customers
Quality OTD
0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Reason
Top 5 Action Items

Original Due Current
High
Driver Action Description Status Status Description Ow ner Date Due Date
Late Supplier Deliveries Monthly reporting to suppliers on delivery & On Report Cards Implemented. Adam 5/21 5/21
quality metrics. track
Late Supplier Deliveries Arrange face to face meetings with top On Meetings Complete with top 10 Beth 6/15 6/15
offenders. track Suppliers.
Late Supplier Deliveries Review and approve supplier's corrective action Caution Corrective Action Plan in Place for 2 Carlos 7/15 9/15
plan. major Suppliers
xyz Cell Always Late Kaizen Event to focus on improving throughput On Event held 5/1. 25% throughput Doreen 5/21 5/21
by 40% and improve labor efficiency by 35% track improvement in May. Labor Efficiency
Increase of 30%
Unrealistic Promise Date Focus on custom products to provide realistic Problem Continued lack of progress. Re- Earnest 6/15 8/15
ATP based on inventory and leadtime of structured and focused team.
components. Developing detailed plan.
Training
Moderate-
Price
Shared Goals Complaints to-’Low’
We’re Better They’re Better

 D efine
Data Driven Decisions M

A
I
easure
nalyze
mprove
C ontrol
Y= f (X)
To get results, should we focus our behavior on the Y or X ?
 Y X1 . . . XN
 Dependent Independent
 Output Input-Process
 Effect Cause
 Symptom Problem
 Monitor Control
 Response Factor
Why should we test or inspect Y, if we know this relationship?

 D efine
M easure
Breakthrough performance gains A

I
C
nalyze
mprove
ontrol
(Distribution Shifted ± 1.5σ )
σσ PPM
PPM
2 308,537
3 66,807
4 6,210
5 233
6 3.4
Process
Process Defects
Defectsper
perMillion
Million
Capability
Capability Opportunities
Opportunities
Sigma is a statistical unit of measure which reflects process

capability. The sigma scale of measure is perfectly correlated to such
characteristics as defects-per-unit, parts-per million defective, and
the probability of a failure/error.

I
L mott o BP not ca p m
ri c
e
In
cr
ea
Vo M se
lu at
m er
ia
e lC
In
c. os
w ts
ith
Le
ve
ra
M g e
an
uf
ac
tu
rin
g
Vo
lu
m
e SG
In

c. &A
No
Le
ve
ra
g e
Ta
x
Factors
es
La
G W bo
en or r
ki
er
al n g
-5 Ca
% p
Pr ita
ic l
e
Assuming a 10% change in the factor
Re
d
Validated bottom line results
uc
tio
n

C
I
A
M
D efine
ontrol
mprove
nalyze
easure
 D efine
M easure
Define A
I
nalyze
mprove
C ontrol
Methodology

l Define
l Measure
l Analyze
l Improve
l Control

 D efine
Roadmap M
A
easure
nalyze
Example I
C
mprove
ontrol
Define
Customers, Value, Problem Statement Validate
Scope, Timeline, Team Project $
Celebrate Primary/Secondary & OpEx Metrics
Project $ Current Value Stream Map Measure
Control Voice Of Customer (QFD) Assess specification / Demand
Document process (WIs, Std Work) Measurement Capability (Gage R&R)
Mistake proof, TT sheet, CI List Correct the measurement system
Analyze change in metrics Process map, Spaghetti, Time obs.
Value Stream Review Measure OVs & IVs / Queues
Prepare final report
Validate
Project $
Validate
Project $
Improve Analyze (and fix the obvious)

Optimize KPOVs & test the KPIVs Root Cause (Pareto, C&E, brainstorm)
Redesign process, set pacemaker Find all KPOVs & KPIVs
Validate
5S, Cell design, MRS FMEA, DOE, critical Xs, VA/NVA
Project $
Visual controls Graphical Analysis, ANOVA
Value Stream Plan Future Value Stream Map

Plan Execute  D efine
•Strategic Link to Business Plan defined in Project Selection Process M easure
•Defined Business Impact with Op Ex Champion support A nalyze
DEF
Identify •Structured Brainstorming at all organizational levels I mprove
Problem •Cause and Effect Diagrams identifying critical factors C ontrol
•Primary and Secondary Metrics defined and charted
Operational Excellence
•Multi-Level Pareto Charts to confirm project focus
INE •Develop a focused Problem Statement and Objective

•Develop a Process Map and/or FMEA
PERFECTION
•Develop a Current State Map
ME
Practical
Problem •Identify the response variable(s) and how to measure them
•Analyze measurement system capability
Methodology
Solutions
Practical
•Assess the specification (Is one in place? Is it the right one?)
ASU •Characterize the response, look at the raw data

•Abnormal? Other Clues? Mean or Variance problem?
•Time Observation • Spaghetti Diagram • Takt Time
RE
ANA
Problem •Future State Maps • Percent Loading
Definition •Standard Work Combination
•Use Graphical Analysis, Multi-Vari, ANOVA and basic
statistical tools to identify the likely families of variability
LYZ •Identify the likely X’s

•5S • Set Up Time Reduction (SMED)
•Material Replenishment Systems
E
IMP
Problem •Level Loading / Line Leveling
Solution •Cell Design • Visual Controls
•Use Design of Experiments to find the critical few X’s
•Move the distribution; Shrink the spread; Confirm the results
ROV •Mistake Proof the process (Poka-Yoke)

•Tolerance the process
•Measure the final capability
Problem
Solving
What do you want to know?
E
CO
Problem •Place appropriate process controls on How do you want to see what it is that you need
to know?
Control the critical X’s What type of tool will generate what it is that you
•Document the effort and results need to see?
•Standard Work What type of data is required of the selected tool?
• TPM
Where can you get the required type of data?
Execute Plan
Based in part on Six Sigma Methodology developed by GE Medical Systems and Six Sigma Academy ,Cra
Incne. Co . Op . Ex . Methodology Originated by MBBs ; D . Braasch , J . Davis , R . D ugg ins , J . O ’ Callaghan , R .
 D efine
Define M
A
easure
nalyze
Key Items I
C
mprove
ontrol
l Customers, Value, Problem Statement

l Scope, Timeline, Team
l Primary/Secondary & OpEx Metrics
l Current Value Stream Map
l Voice Of Customer (QFD)
 (Quality Function Deployment)


 D efine
Project Selection M
A
easure
nalyze
Impact I
C
mprove
ontrol
l Business Impact
 Revenue Growth
 Cost Reduction
 Capital Reduction
 Key Business Objectives
 On Time Delivery
 Lead Time
 Quality
 Customer Satisfaction
l Impact on Operational Excellence Metrics

 D efine
Evaluate and Rank Suggestions M

A
easure
nalyze
Effort and Risk I

C
mprove
ontrol
l Effort required
 People Resources
 Capital Resources
 Duration of Project
l Probability of success
 Technical Risk
 Management Risk
l Impact vs. Risk vs. Effort

 Assess ROI (Return On Investment)
 Assign priorities to projects

 D efine
M easure
Evaluate and Rank Suggestions A

I
nalyze
mprove
C ontrol
Project Information Impact Effort Risk
Duration of Project
People Resources
Capital Resources
Management Risk
Capital Reduction
On Time Delivery
Revenue Growth
Cost Reduction
Technical Risk
Total Impact
Key Business
Total Effort
Satisfaction
Total Risk
Lead Time
Customer
Objective
Quality
Mfg
(M)
or
Admin
# (A) Project Description
Variable weightings 20% 15% 10% 15% 20% 5% 5% 10% 100% 50% 20% 30% 100% 40% 60% 100%
1 A Customer Billing Errors 0 2 0 4 4 2 2 5 2.4 2 1 3 2.1 1 4 2.8
Warranty
2 M 0 2 0 1 1 0 3 3 1.1 4 4 5 4.3 4 2 2.8
scrap warranty vs sales
3 A Vendor Delivery Performance 0 2 2 2 5 4 3 0 2.2 1 1 3 1.6 1 2 1.6
4 M On Time Shipping Performance 2 1 2 4 5 0 1 5 2.9 4 1 2 2.8 1 3 2.2
Hiring and Retention
5 A 20% - 24% Turnover 0 3 0 2 1 0 3 2 1.3 3 2 4 3.1 1 4 2.8
New Product Development Cycle Time

6 A 3 4 2 5 3 3 4 5 3.6 5 3 5 4.6 5 5 5.0
Manufacturing Maintenance
7 M 0 3 0 1 2 3 1 0 1.2 1 4 1 1.6 1 1 1.0
Tooling Maintenance
8 A Day Sales Outstanding (DSO) 0 0 4 2 0 0 0 0 0.7 1 0 2 1.1 1 1 1.0
9 M FTY of 65% on product 123 4 4 2 5 4 4 5 5 4.1 2 1 1 1.5 2 1 1.4
 Example tool to rank projects

 0106-01 Project Rating.xls

 D efine
M easure
Project Risk =
A
I
C
nalyze
mprove
ontrol
Project
Ranking Ball Size
Number
n
4 9
6
3 4
Impact
1
3
2
7 5
1 2
8
0
1 2 3 4 5
Effort
 Example chart to rank projects 0106-01 Project Rating.xls

 D efine
M easure
Measure A
I
nalyze
mprove
C ontrol
l Establish measurement capability

 Validate the database (transactional)
 Gage R&R (Repeatability & Reproducibility)
 Calibration is not enough
 Many (or most) measurement systems are not capable
 How good is the data you are using to make decisions?
l
l Fix the measurement system
 Enables calculation of process capability
 Enables calculation of alpha & beta risks

 This step is often skipped

 D efine
Analyze M
A
easure
nalyze
(and fix the obvious) I

C
mprove
ontrol
l Find all KPOVs & KPIVs

 (Key Process Output Variables; Key Process Input
Variables)
l FMEA, DOE, critical Xs, VA/NVA
 (Failure Modes Effects Analysis; Design Of Experiment)
l Graphical Analysis, ANOVA
 (Analysis Of Variance)
l Future Value Stream Map

 D efine
M easure
Improve A
I
nalyze
mprove
C ontrol
l Optimize KPOVs & test the KPIVs

 (Key Process Output Variables; Key Process Input
Variables)
l Redesign process, set pacemaker
l 5S, Cell design, MRS
 (Material Replenishment System)
l Visual controls
l Value Stream Plan


 D efine
M easure
Control A
I
nalyze
mprove
C ontrol
l Management of Change
 Owned by project champion and value stream manager
 Critical to long term success of project
 Physical and cultural changes
l Measurement controls
 On-going metrics
l Visual Controls
 Enable workers to self-manage the process

l

 D efine
Basic Implementation M
A
easure
nalyze
Roadmap I
C
mprove
ontrol
Identify Customer Requirements
Understand and Define

Entire Value Streams
Vision (Strategic Business Plan)
Deploy Key Business Objectives
- Measure and target (metrics)
- Align and involve all employees
- Develop and motivate
Continuous Improvement
(DMAIC)
Define, Measure, Analyze, Improve
Identify root causes, prioritize, eliminate
waste,
make things flow and pulled by customers
Control
-Sustain Improvement
-Drive Towards Perfection

3.0 Improve Customer Focus
3.1
3.2
2.0 Educate/Get Everyone Involved
2.1
2.2
1.0 Improve the Metrics
1.1
1.2
8
7
6
5
4
3
2
1
1
2
3
4
5
6
Your Manager's 1-Year
Breakthrough
Objectives
Train functional leaders as LGBs

Improve On Time Delivery to 98%
Establish tracking of OTD in every cell
Benefits
Conduct interviews with top 10 customers
Objectives
Train leadership team as Lean Green Belts (LGB)
Trainworkers inhow our products are used by our major customers
Your Annual Breakthrough
Indicator's and Goals

Complete 1 Leadership LGB training course
100% Completion of LGB Projects

Leaders have ability to map a value stream
Metrics module in all appropriate training sequences
Training projects demonstrate flowdown of metics to

✔ ✔ ✔
✔ ✔
operational level
Develop culture of teams

✔
Trainees participate in customer survey

✔ ✔ ✔ ✔ ✔ ✔ ✔
✔ ✔
Complete 3 functional LGB training courses

✔ ✔ ✔ ✔ ✔ ✔ ✔
Type in
Key:
Bring reps from top 10 customers in for plant tours

-->
✔
✔
4
Implement lean concepts in top 3 volume lines

✔
establish pareto of drivers for OTD

✔ ✔
✔ ✔
✔ Impact
IT
l
Operations
●
●
❍ ●
Quality
Engineering
Hoshin
● Owner
Maintenance
❍ ● ❍ ❍ ❍
Resource
m
Marketing

❍
❍
C
I
A
M
D
Training
❍ ❍ ❍ ❍ ❍ ❍ ●
●
❍
❍ Support
efine
ontrol
mprove
nalyze
easure
 D efine
M easure
ON TIME DELIVERY (sample) A nalyze
The percentage of sales order line items that ship complete on or before the original customer promise date, for I mprove
all line items shipped in the month. C ontrol
On-Time Delivery
Pareto of Drivers
100%
90% 100%
80%
75%
% Impact
70%
60% 50%
50%
25%
40%
30% 0%
Engineering
Credit Hold
xyz Cell
on part abc
Deliveries
Unrealistic
Always
Orders on
Low Yield
Supplier
Promise
20%
Late
Change
Orders
Late
Date
Target
10%
0%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Reason
Top 5 Action Items

Original Due Current
Driver Action Description Status Status Description Ow ner Date Due Date
Late Supplier Deliveries Monthly reporting to suppliers on delivery & On Report Cards Implemented. Adam 5/21 5/21
quality metrics. track
Late Supplier Deliveries Arrange face to face meetings with top On Meetings Complete with top 10 Beth 6/15 6/15
offenders. track Suppliers.
Late Supplier Deliveries Review and approve supplier's corrective action Caution Corrective Action Plan in Place for 2 Carlos 7/15 9/15
plan. major Suppliers
xyz Cell Always Late Kaizen Event to focus on improving throughput On Event held 5/1. 25% throughput Doreen 5/21 5/21
by 40% and improve labor efficiency by 35% track improvement in May. Labor Efficiency
Increase of 30%
Unrealistic Promise Date Focus on custom products to provide realistic Problem Continued lack of progress. Re- Earnest 6/15 8/15
ATP based on inventory and leadtime of structured and focused team.
components. Developing detailed plan.
 D efine
M easure
Does it work?. A
I
nalyze
mprove
C ontrol
The top companies in Customer Satisfaction grow MVA at

nearly twice the rate of their poor-performing counterparts.
In Billions $
50
$42
Market Value Added
1999 40
73 companies
Ralston Purina 30 $23
Quaker Oats
Hilton Hotels
Coca-Cola 20
Unilever
etc.
10
0
Low High
Customer Satisfaction Index Score
Source: American Customer Satisfaction Index, U Michigan, HBR, 2001

 D efine
M easure
What about Lean, TOC, TQM A

I
nalyze
mprove
C ontrol
l Six Sigma
 Remove defects, minimize variance
l Lean
 Remove waste, shorten the flow
l TOC
 Remove and manage constraints
l TQM
 Continuous Improvement

 D efine
M easure
Value Stream Map - Current State A

I
nalyze
mprove
C ontrol
6 WEEK Production 90/60/30 day

Forecast Control Forecasts Customer
y
Suppliers ekl
We ax MRP Order
Entry
F Demand = 45 per day
Orders/d 2 shifts
ay
Lead Time - 34 = 36 Takt Time
Days Queue = 18.2 Minutes
WEEKLY SCHEDULE = 1.5
Days Competitive Lead Time
= 3 Days
1X
Daily
I
Coils Stamping S. Weld # 1 Assembly Test Shipping
5 days I I
342 I I I
81 122 90
202
CT=1sec CT=3 min CT= 15 min CT= 67 min CT= 4 min Lead Time
Co=1 hr. Co=10 min. Co=0 min. Co= 23 min Co=0 =23.6 days
Uptime=85% Uptime=70% Uptime=100% FTY = 67% Uptime=100%
2 shifts 2 shifts Touch Time
1 shift 1 shift 2 shifts
= 89 min
5 days 7.6 days 1.8 days 2.7 days 4.5 days 2 days
1 sec 3 min 15 min 67 min 4 min
Demand = 45/day
Customer Data  D
M
efine
easure
On-Time Delivery
A nalyze
I mprove
C ontrol
Takt Time = 18.2 min
Competitive LT = 3 days
y
Suppliers ekl
We ax MRP Order
Entry
Orders/d 2 shifts
ay
= 3 Days
1X
Daily
I
5 days I I
342 I I I
81 122 90
202
= 89 min
 D efine
Raw = 5 days Inventory M

A
I
easure
nalyze
mprove
C ontrol
WIP = 12.1 days
Forecasts Customer
FG = 6.5 days Forecast Control
y
Suppliers ekl
We ax MRP Order
Entry
Orders/d 2 shifts
ay
= 3 Days
1X
Daily
I
5 days I I
342 I I I
81 122 90
202
= 89 min
Lead Time = 23.6 days
Flow of Value  D
M
efine
easure
Lead Time
A nalyze
I mprove
C ontrol
Touch Time = 89 min
y
Suppliers ekl
We ax MRP Order
Entry
Orders/d 2 shifts
ay
= 3 Days
1X
Daily
I
5 days I I
342 I I I
81 122 90
202
= 89 min
Max Wip = 7.6 days
Constraints  D
M
efine
easure
OTD, Lead Time

A nalyze
I mprove
C ontrol
CT (67) > Takt Time (18)
y
Suppliers ekl
We ax MRP Order
Entry
Orders/d 2 shifts
ay
= 3 Days
1X
Daily
I
5 days I I
342 I I I
81 122 90
202
= 89 min
CO = 1 hour
Setup Times  D
M
efine
easure
OP Margin, Lead Time

A nalyze
I mprove
C ontrol
CO = 23 min
Forecasts Customer
CO = Changeover
Forecast Control
y
Suppliers ekl
We ax MRP Order
Entry
Orders/d 2 shifts
ay
= 3 Days
1X
Daily
I
5 days I I
342 I I I
81 122 90
202
= 89 min
Uptime = 70%
Maintenance  D
M
efine
easure
OTD, Lead Time

A nalyze
I mprove
C ontrol

y
Suppliers ekl
We ax MRP Order
Entry
Orders/d 2 shifts
ay
= 3 Days
1X
Daily
I
5 days I I
342 I I I
81 122 90
202
= 89 min
 D efine
FTY = 67% Quality M

A
I
easure
nalyze
mprove
C ontrol

y
Suppliers ekl
We ax MRP Order
Entry
Orders/d 2 shifts
ay
= 3 Days
1X
Daily
I
5 days I I
342 I I I
81 122 90
202
= 89 min
Flow of Value  D
M
efine
easure
Who is setting the pace?
OTD, Lead Time
A nalyze
I mprove
C ontrol
What is the pitch time?
y
Suppliers ekl
We ax MRP Order
Entry
Orders/d 2 shifts
ay
= 3 Days
1X
Daily
I
5 days I I
342 I I I
81 122 90
202
= 89 min
 D efine
M easure
Making it happen A
I
nalyze
mprove
C ontrol
Three major roles


l Implementer
 Learns the tools
 Works the process
 Solves day to day problems
l Manager Where do you
 Learns the methodology need to focus?
 Manages a value stream
 Reviews project teams
l Leader
 Establishes the vision for the future
 Sets priorities
 Encourages

 D efine
M easure
What Is a Sigma? A
I
nalyze
mprove
C ontrol
l A metric that indicates how well a process is performing.

 Higher is better
 Measures the capability of the process to perform defect-
free work
 Also known as “z”, it is based on standard deviation for
continuous data
 For discrete data it is calculated from DPMO

 D efine
M easure
A nalyze
I
The Normal Curve and Capability
mprove
C ontrol
Units of Measure
Performance
Limit
Area of Yield Probability
of a Defect µ Units of Measure
µ
Units of Measure
Excellent
Poor Process Process
Capability Capability
VeryHigh VeryHigh VeryLow VeryLow
Probability Probability Probability Probability
of Defects of Defects of Defects of Defects
LSL USL LSL USL
Low
LowSigma
Sigma High
HighSigma
Sigma

Six Sigma: DMAIC Y F (X)

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Six Sigma: DMAIC Y F (X)

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 D efine

Six Sigma: DMAIC; Y=f(x)

l Understand the Basics of the Six Sigma Program

Operational Excellence Training

Operational Excellence Training

Operational Excellence Training

ON TIME DELIVERY (sample)

Our Performance Compared to Competitors

Top 5 Action Items

We’re Better They’re Better

Operational Excellence Training

Data Driven Decisions M

Why should we test or inspect Y, if we know this relationship?

Operational Excellence Training

Breakthrough performance gains A

(Distribution Shifted ± 1.5σ )

Sigma is a statistical unit of measure which reflects process

Operational Excellence Training

Operational Excellence Training

Operational Excellence Training

Improve Analyze (and fix the obvious)

Operational Excellence Training

•Multi-Level Pareto Charts to confirm project focus

INE •Develop a focused Problem Statement and Objective

ASU •Characterize the response, look at the raw data

LYZ •Identify the likely X’s

ROV •Mistake Proof the process (Poka-Yoke)

l Customers, Value, Problem Statement

Operational Excellence Training

Operational Excellence Training

Evaluate and Rank Suggestions M

Effort and Risk I

l Impact vs. Risk vs. Effort

Operational Excellence Training

Evaluate and Rank Suggestions A

Project Information Impact Effort Risk

New Product Development Cycle Time

 Example tool to rank projects

Operational Excellence Training

 Example chart to rank projects 0106-01 Project Rating.xls

l Establish measurement capability

Operational Excellence Training

(and fix the obvious) I

l Find all KPOVs & KPIVs

Operational Excellence Training

l Optimize KPOVs & test the KPIVs

Operational Excellence Training

Operational Excellence Training

Identify Customer Requirements

Understand and Define

Operational Excellence Training

Train functional leaders as LGBs

Your Annual Breakthrough

Indicator's and Goals

100% Completion of LGB Projects

Operational Excellence Training

Metrics module in all appropriate training sequences

Training projects demonstrate flowdown of metics to

Develop culture of teams

Trainees participate in customer survey

Complete 3 functional LGB training courses

Bring reps from top 10 customers in for plant tours