Six Sigma Awareness - Short

Six Sigma Awareness Session
Handry Satriago
GE Power Systems
1
Why Six Sigma Quality?
Getting Grounded in Reality

You Dont Know What You Dont Know If You Dont Benchmark, Youll Never Start to Know If You Cant Express What You Know Numerically, You Really Dont Know Much About It If You Dont Know Much about It, You Cant Control It If You Cant Control It, You Are at the Mercy of Chance It Applies to Everything We Do
Competitive Realities of the 90s

Fierce, global competition Accelerating pace of change
Cost Speed
Quality: increasing expectations Cost: only the low cost manufacturers will survive Speed to market: must cut new product introduction time by >50%
Quality
All Interrelated, But Quality is the Most Fundamental Issue All Interrelated, But Quality is the Most Fundamental Issue
4
Fortune Global 500 - 2003

Total Revenue $ 13,729 Billion Total Profit $ 133 Billion
-2 %
Changes from 2001
AOL Time Warner (loss 98.7B) US companies down 93% in profit\ PRICE VOLUME COST
-56 %
Changes from 2001 The Key Competitive is EFFICIENCY 5
Cost Of Poor Quality

Traditional Quality cost 4-6% of Sales
Inspection Inspection Warranty Warranty Scrap Scrap Reworks Reworks Rejects Rejects
Additional Cost of Poor Quality 25 35% of Sales More setups Expediting costs Lost sales Late delivery Lost Customer loyalty Excess inventory Long cycle times Engineering change orders
(Intangible, Difficult or Impossible to Measure) LOST OPPORTUNITY HIDDEN FACTORS

6
Bringing Quality to Management

Joseph M. JURAN, the father of Quality invented the relationship between Statistical Calculation and Management in 1930s and produced Standard of Quality Control (1951) and Managerial Breakthrough (1964)..
Higher Quality = Higher Cost High Quality = Expensive Quality is at Manufacture Quality is Quality Control (Inspection) Cost of Poor Quality is only 5% of Total Sales
7
Old Believe of Quality:
Cost of Quality Mindset Change
$
Internal Failure Scrap Rework
Internal And External Failure
Old Believe Increased Quality, Higher Cost
Appraisal
Appraisal Inspection Test Quality Audits Test Equipment
Quality
$
External Failure Cost to Customer Warranty Cost Complaint Cost Returned Material
Internal And External Failure
New Believe Increased Quality, REDUCED Cost
Appraisal
3 4 5 6
Quality
Prevention Quality Planning Process Planning Process Control Training

8
The Eye of the Beholder

Customers View
How Did Supplier Influence My A Performance? C
Customer Process
Need GE Process
Decommission
How Did I do Against My A Obligations? B
Suppliers View
9
So, Why We Need Quality Now?
Business needs faster, cheaper, better, and smarter action now!

Competition is a reality of our business world. To beat competition in these tough economic times, we are all asked to do more with less. Not only faster, but with even higher quality
10
To be the Best In Class.Enormous Opportunity

Cost of Poor Quality
Tangible Costs
% of Sales
Inspection Scrap Rework Warranty
30% 25% 20% 15% 10% 5% 0%
Intangible Costs
Expediting Lost Customers Late Delivery Longer Cycles
World-Class Company
3.4 6 233 5 6210 4
Ave.. US Company; GE 96
Defects per Million Sigma
66,807 3
308,537 2
Quality Level
11
Why Pursue Six Sigma?

Proven
Motorola (1987) Texas Instruments (1988) Asea Brown Boveri (1993) Allied Signal (1993) GE (1995)
Comprehensive
Philosophy Tools Business Metrics
Flexible
Manufacturing / Design Sales / Service Finance / Information Management
Consistent
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Concept and Meaning of Six Sigma
13
History of Six Sigma:

Carl Frederick Gauss (1777-1885) introduced the Normal Curve concept. Walter Shewhart (1920): Six Sigma as a measurement standard in product variation Bill Smith, an engineer from Motorolla terminologized the Six Sigma In the late 1970's, Mikel Harry, a senior engineer at Motorola's Government Electronics Group (GEG), began to experiment with problem solving through statistical analysis. Using his methodology, GEG began to show dramatic results GEG's products were being designed & produced faster and cheaper. Dr. Mikel Harry and Richard Schroeder, were responsible for creating the unique combination of change management and data-driven methodologies that transformed six sigma from a simple quality measurement
The Meanings of SIGMA

The term of Sigma is used to designate the distribution or spread about the average (mean) of any process or procedure For a business process (manufacturing or transactional process) the Sigma Capability (Zvalue) is a METRIC that indicates how well the process is performing. Sigma capability measures the capability of the process to perform DEFECT-free work. A defect is anything that result in customer dissatisfaction. As Defect goes down, the Sigma level goes up 14
Quality and Sigma
Quality is the degree of excellence of a product, process or service from the customers viewpoint Sigma (s) is a measure of the statistical variation about an ideal or target value
Target
Target
Defects: 308,000 per Million Opportunities
Defects: 3.4 per Million Opportunities
2
Acceptable Window or Spec Limits
6
Acceptable Window or Spec Limits
2 Quality
6 Quality
15
TQM Focus vs. Six Sigma Focus

Total Quality Management
TQM programs often focus on improvements in individual operations with unrelated processes. The consequence is that with many quality programs, regardless of how comprehensive they are, it takes many years before all the operations within a
Six Sigma
Six Sigma architects focus on making improvements in all operations within a process, producing results more rapidly and effectively.
16
What Is Six Sigma?

Measure of Quality
Process For Continuous Improveme Enabler for Culture Change
17
Measure of Qualit Manufacturing Example Steel Rolling Mill

Sheet Thickness is a CTQ
(Critical to Quality Parameter) Nominal Thickness Minimum Spec =
= 1000 950 m
Maximum Spec = 1050 m
Scrap Production averages 100 meter / C 18
Measure of Qualit Manufacturing Example - Steel Strip Thickness

Lower Specification Limit Upper Specification Limit
Steel Strip Thickness
Scrap
Scrap
No Less Than
950 m
No More Than
1050 m
Quite some Variation -Ending up as Scrap

19

Standard Deviation
25 m
Lets Look at some Basic Statistics

Mean Thickness 993 m =
Mean Thickness
993 m
Standard Deviation = 25 m
On Average its OK - its a Variation issue On Average its OK - its a Variation 20 issu

Standard Deviation
25 m
How Capable is our Process to Produce within Spec?

Sigma Rating = Spec Width / 2* SD = 100 / 50 =
Spec Width (1050-950)
100 m
21

Reducing Variation is Clearly the Key to Improving Spec Width 100 Process m Capability Std Dev
25
m
22

Reducing Variation is Clearly the Key to Improving Spec Width Process 100 m Capability Std Dev
17
m
23

12
m
24

10
m
25

8
m
Scrap Production is significantly reduced -- but by how much? Scrap Production is significantly reduced but by how much? 26
Measure of Qualit Manufacturing Example - Steel Strip Thickness 6 Sigma Lingo Unit : Each Measurement
Spec Standard Sigma DPMO % Width Deviation Level In Spec 100 25 2 308,500 69.1
Defect : Measurement out of Spec Defect Opportunities per Unit : 1 Quality expressed as DPMO ( Defects per Million Opportunities)
27
Measure of Qualit Manufacturing Example - Steel Strip Thickness 6 Sigma Lingo Unit : Each
Spec StandardSigma DPMO Width Deviation Level Spec 100 25 2 308,500 69.1 100 17 3 66,800 93.3
% In
Measurement Defect : Measurement out of Spec Defect Opportunities per Unit : 1 Quality expressed as DPMO ( Defects per Million Opportunities)
28
Spec StandardSigma DPMO Width Deviation Level Spec 100 25 2 308,500 69.1 100 17 3 66,800 93.3 100 12 4 6,200 99.4
% In
29
Spec StandardSigma DPMO Width Deviation Level Spec 100 25 2 308,500 69.1 100 17 3 66,800 93.3 100 12 4 6,200 99.4 100 99.98 10 5 233
% In
30
Spec StandardSigma DPMO Width Deviation Level Spec 100 25 2 308,500 69.1 100 17 3 66,800 93.3 100 12 4 6,200 99.4 100 99.98 100 99.9997 10 8 5 6 233 3
% In
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Measurement of Process Capability (or Quality of process and product)
VARIATION is the Enemy!

Transactional Example
PT X deliver their products to its customer five times, their delivery time data are 21 days, 15 days, 12 days, 10 days, and 2 days. The AVERAGE (Mean) of Their Delivery Time is: 21 + 15 + 12 + 10 + 2 = 60/5 = 12 DAYS
As a Customer, Which one do You choose?

PT Y deliver their products to its customer five times, their delivery time data are 14 days, 12 days, 12 days, 12 days, and 10 days. The AVERAGE (Mean) of Their Delivery Time is: 14 + 12 + 12 + 12 + 10 = 60/5 = 12 DAYS 32
Transactional Example Delivery Time

PT X The AVERAGE (Mean) of Their Delivery Time is: 12
DAYS
Lower Specification Limit
Upper Specification Limit
But Standard Deviation = 7.0

PT Y The AVERAGE (Mean) of Their Delivery Time is: 12
DAYS
And. Standard Deviation = 1.4

33
Another Example Delivery Time (days)

Baseline Improved (?)
12 24 14 7 16 8 20 25 14 10 11 30 16 27 7 15 4 18 6 23 6 2 24 2 6 5 11.2
Using mean-based thinking, we improve average performance by 29%, and break out the champagne.. BUT.our customer only feels the VARIANCE,.and cancel the next orders!
What the Company Feels
Mean 15.8
11.2
15.8
SD
7.0
9.0
What Customer Feel

34
One More Example Delivery Time (days)

Improved (?)
11 11 10 10 12 11 11 11 11 12 12 12 10
Now it is improved.the Mean is 11, and the STD is below 1. but UNFORTUNATELY, what the customer wants is 9 days.so it is not variance issue anymore, but now about the Process Centering issue
Mean 11.07
SD
0.76
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Variation Reduction
A Process is A Distribution of Distributions
Goal: Reduce Process Width-Variation is the Enemy

36
What is Variance Based Thinking?

Before VBT
Y: Measured on a Customer Unit Basis
30,000 25,000
After VBT
Y: Measured on a Customer Unit Basis

30,000 25,000 20,000
20,000
15,000
15,000 10,000
10,000
5,000
5,000 0
Time
Time
Drive consistency and reliability in products and processes Reduce variation (process width) Focus on Xs that drive variation rather than mean
Find Xs that drive tails of distribution
Use Six Sigma tools and methodology as a backbone
Drive Consistency and Reliability In Your Process37
Identifying Variation Sources

X1 X2 X3
Process
X4
OUTPUT Y
Xn-2
Xn-1
Xn
Y = f ( X1, X2, X3, X4, , Xn-2, Xn-1, Xn)

Inside the Box Xs Controllable Outside the Box Xs Un-Controllable
Look Inside the Box and Outside Box
38
Nature Of The Problem

Off-Target X X X XXX X XX On-Target X X XXX XX XX X Center Process Reduce Spread Variation X X X X X X X XX X X X
Six Sigma Methodology Identifies Processes That Are Off-Target, And/Or Have A High Degree Of Variation, And Corrects The Process
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Six Sigma Quality as a GOAL DPM DPM
AVERAGE COMPANY
The Goal For Continuous Improvement
2 3 4 5 6
Process Capability
308,537 66,807 6,210 233 3.4
Defects Per Million
Defects per Million Opportunities

40
Why is 6 Sigma So Much Better?

99% Good (3.8 )
20,000 lost articles of mail per hour Unsafe drinking water for almost 15 minutes each day 5,000 incorrect surgical operations/week Two short or long landings at most major airports each day 200,000 wrong drug prescriptions/year No electricity for almost 7 hours/month
99.99966% Good (6 )
Seven articles lost per hour One unsafe minute every seven months 1.7 incorrect operations/week One short or long landing every five years 68 wrong prescriptions/year One hour without electricity every 34 years
3 Capability 4 Capability 6 Capability
67,000 dpmo 6,200 dpmo 3.4 dpmo
Historical Standard Current Standard New Standard

41
The Athletic View of Performance

Consider a goalkeeper who plays 50 games a year and faces 40 shots on goal each game. A defect is when the opposition scores. A 6 goalkeeper will be scored against once in every 147 years.
42
Is 6 Sigma Impossible? Some Examples of Quality
US airline baggage handling: 30-50,000 lost items per million, ~ 3 - 3.5
Average Companies: 30-50,000 defects per million ~ 3 - 3.5 World-Class Companies: <1000 defects per million 5 - 5.5
US airline fatality rate: < per million flights, > 6
43
Sigma Level & Defects - across industries
DPM
1,000,000 100,000 10,000 1,000 100 10 1
IRS - Tax Advice (phone-in) (140,000 DPM) Restaurant Bills Doctor Prescription Writing Payroll Processing Order Writeup Journal Vouchers Wire Transfers Airline Baggage Handling Purchased Material Lot Reject Rate
Best-in-Class
Domestic Airline Flight Fatality Rate(0.43 DPM)
Average Company 1 2 3 4 5 6
Sigma Scale of Measure

1994 Dr. Mikel J. Harry - V4.0
44
Six Sigma Approach

Fixing Products so they are perfect Fixing Processes to They produce perfection
We need to learn This!
It takes leadership energy to shift paradigms.6 Sigma is the tool kit to get us there
45
6 Sigma focuses on the reduction of variation that generates defects for Customers
Market
Suppliers Inputs Business Processes Process Outputs Critical Customer Requirements
Defects
Variation in the Process Output Causes Defects that are seen by the Customer
Output Variation is caused by Variation in Process Inputs and by Variation in the Process itself
46
The Focus of Six Sigma - Process Characterization
Y=
f (X)
To get results, we should focus our efforts on the Xs, instead of the Ys
s s s s s s
Y Dependent Output Effect Symptom Monitor
s s s s s s
X1 . . . Xn Independent Input-Process Cause Problem Control
Historically the Ys, with 6 Sigma the Xs Historically the Ys, with 6 Sigma the Xs
47
Methodology For Continuous Improvement
A Breakthrough Strategy (Invented by Mikel Harry)
D MA IC
Defin e Measure Analyze Improve Control
For improve EXISTING process/products

48
DMAIC Methodology For each product or process CTQ
Y = f(X) expectations of the process? Define 1. Customer

Measure Analyze Improve Control 2. 3. 4. 5. What is the frequency of defects? Why, when, and where do defects occur? How can we fix the process? How can we make the process stay fixed?
49
Methodology For New Process/Products
D M ADV Or DFSS
Defin e Measure Analyze Design Verify
For improve NEW process/products

50
Six Sigma DMADV Project

1 2 3 4 5
Define
Understand Environment - Meet business leader - Establish key contacts - Tour process - Identify process owner - Identify team members
Measure
Train Team on 6 sigma tools
Analyze
Review Measure Phase - Champion comments - Update team / stakeholders Train Team on 6 sigma tools
Design
Review Analyze Phase - Champion comments - Update team / stakeholders Train Team on 6 sigma tools Review existing process map (if applicable)/Design new process flow Design Measurement System around New Process Develop Pilot/Test Plan Develop/Document Implementation Plan Develop Risk Assessment Risk Abatement Plan Obtain buy-in / support new process Conduct IT Needs Assessment
Verify
Review Design Phase - Champion comments - Update team / stakeholders Train Team on 6 sigma tools Implement New Process Measurement System Pilot Execution of New Process Verify Process Performance 30% 10%
Identify Customers
Identify Problem Create Problem Statement Document Business Impact Complete Financial Analysis on Potential Process (ROI)
20%
Identify Customer Requirements - CTQs via QFD or Survey - Identify additional data Needs Create Process Map for Current Process if Applicable
Define Process Requirements for Y
Process Map Current Process (if applicable) Identify Sources of Variation Identify Xs - Cause & Effect Diagram Benchmark similar products/ processes/services
Determine Process Capability from Pilot Execution Design and Implement Process Control Plan Identify Follow-up Action Plan and Individuals Responsible Identify Opportunities for Standardization List Best Practices and Identify Lessons Learned Identify opportunities to leverage improvements Train/Handoff project to Process Owner Develop Presentation - Review Team / MBB / Sponsor - Present results to Champions and Operational Leaders Monitor process performance
40%
Project Launch Decision
Coordinate with ITS for systems resources where applicable Define performance standards - Gather / Pareto data - Review Historical data Evaluate measurement system (if it exists) Create CTQ Tree Define a Defect Measure Current Process/ Calculate Zlt/Zst (if applicable) Develop Presentation - Review Team / MBB / Sponsor - Present results to Champions and Operational Leaders
50%
Develop Deployment Strategy
60%
Create Deployment Team
Determine Process Capability of Current Process (if applicable) Analyze Data - Apply Statistical Tools - Hypothesis Tests Define additional data needs Develop Presentation - Review Team / MBB / Sponsor - Present results to Champions and Operational Leaders
70%
Document New Process Details Communicate Improvements Develop Presentation - Review Team / MBB / Sponsor - Present results to Champions and Operational Leaders
80%
90%
x % Complete
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100%
Is Six Sigma for Techies Only?

When There Is an Output There Is a Process When There Is a Process There Is Performance Variation
When There Is Sensitivity Towards Variation There Is a 6 Opportu
Business Process
Processes
Output
52
It Can Be Applied to All Functions, Disciplines, Business
Driver for a Company Culture Change Before 6 Sigma:

1) Inspect the product 2) Pareto the symptoms perceived as being the cause of out of spec material 3) Initiate action to mitigate / eliminate the symptoms
Tough to achieve long-term sustainable improvement
With 6 Sigma :
1) Measure the process output & analyze the data 2) Discover quantitative relationships between the output & in-process variables 3) Develop & implement control plan
Sustainable via In-process Control - no Product Inspection
Fundamentally Different Approach

53
Applying Six Sigma on Your Organization
54
The 6 Sigma Success Factors

Business Process Framework
Establishing these factors provides the seeds of success. They need to be integrated consistently to fit each business. They are all necessary for the best result
Strategy Integration
Quantifiable Measures & Results Committed Leadership Incentives & Accountability
Customer & Market Network
The most powerful success factor is committed leadership.
Full Time 6 Sigma Team Leaders 55
Ingredients for Success

People Dollars Training Metrics Executive Involvement
Vital Xs to the Six Sigma Introduction Process
Six Sigma Projects

Each Ingredient Needs a Plan
56
What Is Six Sigma Projects?

Project needs to be done by Every Employee (Green Belt) Project using Six Sigma methodology (DMAIC/DMADV) Project that making Improvement (DPMO reduction) Project that has a measurable unit and defect Project that has a measurable impact
57
DMAIC Methodology SIMPLE EXAMPLE of Six Sigma Project: Sales Payment Collection DEFINE
Luis, Sales from Company ABC, found that a payment collection from Distributor A always late. He then conducts a 6 Sigma Project. Unit/Opportunity to be measured : Days of payment collection from Distributor A Defect : Collection more than 7 days (Company ABC Standard) 58 Data Range : Payment Collection from Jan
MEASURE
DMAIC Methodology SIMPLE EXAMPLE : Sales Payment Collection Descriptive Statistics

Variable: C1
Anderson-Darling Normality Test A-Squared: P-Value: Mean StDev Variance Skewness Kurtosis N Minimum 1st Quartile Median 3rd Quartile Maximum 8.4740
7 8 9 10 11 12
Here is the data from 6 months Payment Collection from Dist. A (25 Payment Collection Mean = 10 days Std Dev = 3.7 days Data Normal
0.449 0.256 10.0000 3.6968 13.6667 0.403385 -8.5E-01 25 4.0000 7.0000 9.0000 13.0000 17.0000 11.5260 5.1429 11.8019
12
16
95% Confidence Interval for Mu
95% Confidence Interval for Mu 95% Confidence Interval for Sigma 2.8866 95% Confidence Interval for Median 7.1981 95% Confidence Interval for Median
59
MEASURE
DMAIC Methodology SIMPLE EXAMPLE : Sales Payment Collection

Process Performance
Actual (LT) Potential (ST)
Report 1: Executive Summary

Process Demographics
Date: Reported by: Project: Department: Process: Characteristic: Units: Payment Collection 7 0 1 Upper Spec: Lower Spec: Nominal: Opportunity: 07/21/2002 Iwan A Shorten Collection Period Sales Cycle time reduction
Luis then set up current Performance: DPMO = 794877 Sigma = 0.84 He then Set Up the target to achieve more than 4 Sigma
LSL
USL
0
1,000,000
10
20
100,000
10,000
Baseline Sigma
Process Benchmarks
1000 100
Sigma
(Z.Bench)
-0.82
0.84
10
PPM
1
794877 199360
10
15
20
25
60
ANALYSE
Luiss analysis on the main factors (Critical Xs) that make the payment collection defects (more than 7 days) happened because of these reasons: Late Invoice sent out by Company ABC Finance team No follow up from Sales team after the invoice sent out No punishment process if distributors 61 pay late
IMPROVE
DMAIC Methodology SIMPLE EXAMPLE : Sales Payment Collection Report 1: Executive Summary
Process Performance Process Demographics
Luis then made improvement on those Critical Xs. He does:
Date: Reported by: Project: Department: Process: Characteristic: Units:
07/21/2002 Iwan A Shorten Collection Period Sales Cycle time reduction Payment Collection 7 0 1
LSL
USL
0
1,000,000
Upper Spec: Lower Spec: Nominal: Opportunity:
Create a monitoring systems for ensuring an invoice sent out from Finance 1 day after product sent to distributors Create a data base systems for follow up and monitoring collection
100,000
10,000
1000 100
10
Data after improvement collected (15 collections after June02)

0
Process Benchmarks
Sigma
(Z.Bench)
0.82
5.00
SIGMA Improved!
5 10
PPM
15
207108 0.279760
62
CONTROL

Report 2: Process Capability for C1
9 8 7 6 5 4 Observ. 3 2 1 0 R=0.7857 -3.0SL=0.00E+00 0 5 10 15 3.0SL=2.567 -3.0SL=4.244
To make sure that his improvement continuous, Luis make a control plan, which acknowledge by Sales Directors:
A new SOP with standard time for sent out invoice and follow up by sales team The punishment systems for distributors included on Distributors agreement
I and MR Chart
3.0SL=8.423 X=6.333
Capability Indices
ST Mean StDev Z.USL Z.LSL Z.Bench Z.Shift P.USL P.LSL P.Total Yield PPM Cp Cpk Pp Ppk 3.50000 0.68139 5.13660 5.13660 5.00469 4.18819 LT 6.33333 0.81650 0.81650 7.75672 0.81650 4.18819
0.000000 0.207108 0.000000 0.000000 0.000000 0.207108 100.000 0.279760 1.68 0.32 1.40 0.27 79.2892 207108
Potential (ST) Capability

Process Tolerance
1.41906
I I I I I I
Actual (LT) Capability

Process Tolerance
3.83977
I I I I I
5.58094
8.82690
I
Specifications
Specifications
Data Source: Time Span: Data Trace:
63
People and Organization : Driver for a Company Culture Change Driver for a Company Culture Change
1) Organization of 6 Sigma GB All employee BB Project Mentor, 100% time for Quality, work directly with GB to complete projects MBB Project Strategic planner, 100% time for Quality Champion Business leaders who leads the initiatives at their organization Comprehensive training program Reward and Punishment implemented Set up a Company target of Number of projects to be achieved, Company Savings, and Customer Impact
6 Sigma Infrastructure
1) 2) 3)
Involved Everyone, Everywhere in the Company

64
Six Sigma Organization

CEO
Function Leader Business Leader Business Leader Six Sigma Company Leader
Six Sigma Function Leader MBB and BB
Six Sigma Business Leader MBB and BB
Six Sigma Business Leader MBB and BB
Cross Function, Cross Business, Cross Country/Region, but All Quality Team Integrated
65
Metrics
The company applying Six Sigma must have a metrics to measure their performance of Six Sigma Implementation Example of Metrics are # of Project, $ savings, # of People trained, etc. Must Be Data Driven Incorporate Key Statistics to see the overall company performance
Central Tendency (Mean, Median) Variation (Standard Deviation, Variance, Span)
Shaped by Desired State - Drive Behavior Focused on Your Companys Critical Success Factors (i.e.
Availability, Reliability, Capacity) Based on the metrics, Pursue the Strectch Target
66
Metrics : Example from Texmaco

EXECUTIVE PROJECT SUMMARY
Status : 25 Agustus 2003
PROJECT NO Unit Total Closed 8 17 96 195 17 73 23 2 25 2 22 31 9 4 4 4 5 2 8 26 2 5 3 2 15 600 0 0 13 81 9 0 0 0 0 0 0 10 1 0 0 0 0 0 0 2 0 0 0 0 0 116 In Progres 8 17 92 114 8 73 23 2 25 2 22 21 8 4 4 4 5 2 8 24 2 5 3 2 15 493
Potensial Benefit ( Rupiah )
PHASE D 0 0 11 34 1 53 13 14 3 2 6 6 1 1 2 3 1 24 1 14 5 1 1 78 5 5 3 3 2 2 1 1 2 1 1 1 64 1 2 5 1 2 4 2 M 1 11 13 16 0 10 2 A 0 0 26 23 1 2 2 I 5 1 0 23 20 1 1 C 2
CTQ Q C D 6 2 4 2 6 14 3 18 50 13 30 21 129 47 19 9 4 13 11 37 28 4 10 7 2 2 1 4 11 2 12 2 1 7 1 11 9 4 4 5 1 8 9 2 5 3 2 4 3 7 4 1 3 14
Result(Rupiah)
REMARK
1 2 3 4 5 6 7 8 9 10 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Bima, Cakung TTS_III, KRW TJ, KRW TJ, PML PEP, KRW WI, Batu CIT, Bandung TPF, KRW SS. Padang TTS_I, KLW SJS, Batang
Fabric
37579240 4,636,114,242 872645440 726000000
53683200 6,217,888,506 1886765630 728000000
Engineering
HFD, KRW MTD, KRW PMD, KRW Supporting Depts, Tool room BPMT Seamless Tube TPE, KLW HE, SBG TMIU, KRW Tiller Subang Trans & Axle Plan Engine Plant Vehicle Plant TOTAL
268840500
268840500
11 86 9155177836
6541179422 148 103
78 335 137
Prepared by I Wayan Jardana Master Black Belt
Approved by IDK Dharmaja Head of PPSDM
67
Metrics : Example from GE
See the Excel Slides (not to be copied)
68
Training
Curriculum and Content for:
Green Belts Black Belts Master Black Belts
Critical Success Factors

Your Company Language Disciplined-Flexibility Communication Commitment
Roles Outlined for:

Black Belts Master Black Belts Quality Leaders Champions Project Focused
69
Executive Involvement
MBBs and Quality Leaders Report in at Executive Level BB has direct access to executives and business leaders VPs, Quality Leaders and MBBs Set Strategy
Determine Key Initiatives Establish Six Sigma Goals Challenge Organizations Emphasize the Drill Down to Granularity Cluster Projects Around Critical Improvements
Ask Questions that Require Data Driven Responses VP Six Sigma Project Reviews
70
Financial Implementation
Launch
Train
Deploy
Initial Project Closure
Program Implementation
Six Sigma Program Becomes Self-Funding in 1 Year

71
Harvesting the Fruit of Six Sigma

Sweet Fruit - 6
Design for Six Sigma (DFSS) Process Entitlement
Bulk of Fruit - 4 to 5
Process Improvement Six Sigma Tools
Low Hanging Fruit - 3 to 4

Basic Quality Tools
Ground Fruit - up to 2
Logic and Intuition
Start With Low Hanging Fruit
72
Examples of Successful Six Sigma Implementation

73
Implementing Six Sigma Quality
MOTOROLLA
First company to implement 6 Sigma in 1980s Develop a rigorous program at Manufacturing, and successfully reduce cost and improve quality of the Pager products Implementing 6 Sigma through Motorolla University with the systems of Business Improvement Campaign Win the 1st Malcom Bridges Quality Award in 1988 because of the 6 Sigma implementation that give US$2.2B savings in the 90s and continuously increase in the 2000s
74
Honeywell
Six Sigma is one of the most potent strategies ever developed to accelerate improvements in processes, products, and services, and to radically reduce manufacturing and/or administrative costs and improve quality. It achieves this by relentlessly focusing on eliminating waste and reducing defects and variations. Honeywell has realized $2.2 billion in cumulative savings from Six Sigma-related activities. It saved $500 million in 1998, more than $600 million in 1999, and this year it expects Six Sigma Plus cost savings to total at least as much. Honeywell 2000 Annual Report
Others
Toshiba
The group-wide numbers of MI-trained Quality Experts (QE) and Senior Quality Experts (SQE) are expected to increase to 3,200 by fiscal 2003. The 15,000 projects and cost-saving benefits before taxes of 131.7 billion yen achieved in fiscal 2000 are to climb to 28,000 projects and 210 billion yen in fiscal 2003. Mid-term Business Plan and Management Strategies Toshiba web site
Ford
In the past year we launched Consumer Driven 6-Sigma, a scientific, data-driven process to uncover the root cause of customer concerns and drive out defects. We now have more than 1,800 full-time, trained problem-solvers called Black Belts leading customer satisfaction team projects. The 215 projects they completed last year have already saved us $52 million, and will save us more than $200 million in the next two years. Ford 2000 Annual Report
Dow
In 2000, we delivered on our plan to accelerate implementation of Six Sigma. We now have almost 1,000 Black Belts trained and 1,500 projects in motion. We strongly believe that our commitment to deliver $1.5 billion in EBIT cumulatively by 2003 from the combined impact of Six Sigma on revenue growth, cost reductions and asset utilization is well within our reach. Michael D. Parker President and Chief Executive Officer Dow 2000 Annual Report
DuPont
Six Sigma implementation continues to gain momentum. At the end of the year 2000, there were about 1,100 trained Black Belts and over 3,400 active projects. The potential pretax benefit from active projects was $700 million. DuPont Fourth Quarter and Full Year 2000 Earnings Report
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General Electric (GE)

This is the most important initiative this Company has ever undertaken. (It) will fundamentally change our Company forever.
John F. Welch, Jr.. Letter to GE Officers, May 18, 1996
Start the initiative in 1995 as a Continuation of GE initiatives Build the organization of Quality (BB/MBB, Quality Leaders, Champion Become the new DNA of the companythey way they work the way they lead
High
Digitization
Six Sigma Quality

Making Customers Winners : GE Tool Kit Key Strategic Initiatives : QMI*NPI*, OTR*, SP*, Productivity, Globalization
Intensity of Change
Change Acceleration Process

increase success and accelerate change Process Improvement Bullet Train Approach continuous improvement, re-engineering Productivity/Best Practice Best Practice Sharing looking outside GE Work-out TM /Town Meeting empowerment, bureaucracy busting, action
* Quick Market Intelligence New Product Introduction Order to Remittance Supplier Management Action Work-OutsTM Customized Work-OutsTM
Low
Time
76
Evolution Of Six Sigma in GE
GE Launches Six Sigma Throughout Company

Focus : Core Activities
Timeli 1995 1996 1997 1998 1999 2000 1995 2001 2001+ ne 77
g 1995 Headlines
Six Sigma Evolution 1995 PRODUCTIVITY
Objective : Productivity & Asset Utilization
GE Turns to Six Sigma For New Products

Focus : New Product Design
Objective : World Class Capability in the Market Place
Timeli 1995 1996 1997 1998 1999 2000 1997 2001 2001+ ne 78
g 1997 Headlines
Six Sigma Evolution 1995 PRODUCTIVITY 1997 PRODUCT DESIGN
GE Turns Six Sigma Loose at the Customer

Focus : Customer Productivity & Value Add Services Objective : Revenue Growth & Share Shift
Timeli 1995 1996 1997 1998 1999 2000 1998 2001 2001+ ne 79
g 1998 Headlines
Six Sigma Evolution 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER
Fulfillment Processes get Six Sigma Focus
Focus : Meeting Customer Request Objective : e-Enabling our Business Transaction Processes
Timeli 1995 1996 1997 1998 1999 2000 1999 2001 2001+ ne 80
g 1999 Headlines
Six Sigma Evolution 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT
Digitization at GE needs Six Sigma Execution

Focus : Automating Business Processes Objective :
Speed & Reliability on the Web @ Far Lower Cost
Timeli 1995 1996 1997 1998 1999 2000 ne 81 2001+
g 2000 Headlines
Six Sigma Evolution 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION 2001 CERTIFICATION
2001+ ACFC
mple of GE Products from 6 Sigma Six Sigma GEMS LightSpeed CT Scanner Evolution
1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION
Exam Time Exam Time Procedures Before per Year After
HEAD 1 minute SPINE 2 minutes 15 seconds 19 seconds
9 million
1 million
Head: skull, brain
CHEST 4 million ABDOMEN PELVIS 3 minutes 17 seconds LIVER 6 million 20 seconds 06 seconds
Abdomen: liver, spine, kidney
Image Speeds Image Speeds
Before After
82
Unparalleled Resolution in a Fraction of the Time Unparalleled Resolution in a Fraction of the Time
esults from 6 Sigma

Six Sigma Evolution
1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION
$4.4B $3.5B
$500 $900
6 Sigma Cost 6 Sigma Productivity Delighting Customers $2.5B
$3.0B
$3.5B
$1.2B $700 $200 $170 $380 $450 $500 $600 $600
CostBenefit CostBenefit CostBenefit CostBenefit CostBenefit Cost Benef it 1996 1997 1998 1999 2000 2001
$4.4 Billion in 2001 Customers & Shareholders Love It!
Es Lesson Learned
The Six Sigma initiative is a Top Down approachHigh level management should get trained, make projects and drive the team first. Regularly and continously review and evaluationin line with business review (monthly, quarterly, yearly), always shows Six Sigma result on every business meetings, have Six Sigma Clinics Top Management never stops communicating directly to the lower levellinked Six Sigma with the company strategy Reward and punishment implemented seriously Set up target clearly in the beginning
84
hat The Customers Say out GEs Six Sigma
Movie Clip
85
ACO MACO : Link 6 Sigma To business Strategy

What Business Are We In What Business Are We In
WBAWI WBAWI
Fabrics Business STRATEGY
VISION 2003 supplying products that satisfy our customer VISION 2003 OBJECTIVE OBJECTIVE
Business Goals Sales EBIDTA Sales EBIDTA per person Sigma Inventory Turns Debtors Processing A grade Ontime Delivery On time A grad Qty Bonus Bonus Amount Processing Manpower Avg Bonus per person Weaving A grade Ontime A grad Qty Bonus Bonus Amount Weaving Manpower Avg Bonus per person Management EBIDTA Industry Key US$: .. (000.000) US$: Yds: 000 US$ Year 0 Turns / year Days
Strive to be one of the best companies in the world, by consistently
Excellence Business Process
Integrated Business Information Syste

Mln yds Rupiah / yd Rupian mln
Total Customer Satisfaction
Develop an established corporate cul

Rupiah / yd Rupiah / Mln
WINNING CONCEPT
Month Salary Company
Success Factors
Key Success Factors
COMPANY DEVELOPMENT STRATEGY 2001 2002 2003 2004 2005
Six Sigma
Technology Technology Integrated HR (training HR System and Highly competency & people development program, high motivated people Establish Texmaco Culture which Development
align Strong Training Program to Texmaco business Excellence Business Six Sigma level ( 3 = 2003, 4 Process
Integrated Information
86
= 2005 )
MACO XMACO : Result From Six Sigma

Grafik Produktivitas Sebelum dan Sesudah Six Sigma
2531
2500
2400
2334
2300
Yards/orang
2260 2206
2200
2074 2086 2099 2118
2165
2100
2070
2000
1900 Agt-01 Sep-01 Oct-01 Nov-01 Des-01 Jan-02 Peb-02 Mar-02 Apr-02 May-02
Sebelum SS
Sesudah SS
87
Malaysia Airlines
Every executive MUST complete a Six Sigma or Change Acceleration Process (CAP) project Every Management Trainee MUST complete a Six Sigma project prior to confirmation in employment We Are using Six Sigma not only for operational efficiency, but also in our PLANNING process MAS Gemilang together we can make it Program
Mobilize Commitment
Six Sigma
Initatives
CAP
QCC
Scientific Way of Doing Things
88
nal Healthcare Group (NHG) Singapo

Why Six Sigma In Healthcare?
Increasing medical cost Increasing complexity of patient care processes Patient demand timely care with affordable cost
Implementing Six Sigma in NHG

Started in 2001 with consultancy from GEMS By end 2002, 30 projects conducted in 4 hospitals In 2003, training of additional 16 BB, 20 GB, and 5 Champions
Where Six Sigma Can Help in Healthcare Setting

Improving waiting time for patients in A&E, SOCs, and Pharmacy Reducing turnaround time for lab investigations and X-Rays Efficient and timely discharge of patiens from wards Improving inventory management of pharmacy drugs and medical consumables Accurate and timely billing
Examples at NHG
Improve patient turnaround time at A&E and SOCs Improve ultrasound patients throughput Improve A&E walk-in patient thoughput to less than 15 mins at X ray Dept. Improve patients appointment for Gastroenterology Reduce the turnaround time of discharge process Reduce waiting time for scheduled outpatient at physiotheraphy and opthalmology 89

Six Sigma Awareness - Short

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Six Sigma Awareness - Short

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Six Sigma Awareness Session

Why Six Sigma Quality?

Getting Grounded in Reality

Competitive Realities of the 90s

Fortune Global 500 - 2003

Cost Of Poor Quality

(Intangible, Difficult or Impossible to Measure) LOST OPPORTUNITY HIDDEN FACTORS

Bringing Quality to Management

Old Believe of Quality:

Cost of Quality Mindset Change

Internal And External Failure

Old Believe Increased Quality, Higher Cost

Appraisal Inspection Test Quality Audits Test Equipment

Internal And External Failure

New Believe Increased Quality, REDUCED Cost

Prevention Quality Planning Process Planning Process Control Training

The Eye of the Beholder

How Did I do Against My A Obligations? B

So, Why We Need Quality Now?

Business needs faster, cheaper, better, and smarter action now!

To be the Best In Class.Enormous Opportunity

Defects per Million Sigma

Why Pursue Six Sigma?

Concept and Meaning of Six Sigma

History of Six Sigma:

The Meanings of SIGMA

Quality and Sigma

Defects: 308,000 per Million Opportunities

Defects: 3.4 per Million Opportunities

TQM Focus vs. Six Sigma Focus

What Is Six Sigma?

Process For Continuous Improveme Enabler for Culture Change

Measure of Qualit Manufacturing Example Steel Rolling Mill

Maximum Spec = 1050 m

Scrap Production averages 100 meter / C 18

Measure of Qualit Manufacturing Example - Steel Strip Thickness

Steel Strip Thickness

Quite some Variation -Ending up as Scrap

Measure of Qualit Manufacturing Example - Steel Strip Thickness

Lets Look at some Basic Statistics

Measure of Qualit Manufacturing Example - Steel Strip Thickness

How Capable is our Process to Produce within Spec?

Spec Width (1050-950)

Measure of Qualit Manufacturing Example - Steel Strip Thickness

Measure of Qualit Manufacturing Example - Steel Strip Thickness

Measure of Qualit Manufacturing Example - Steel Strip Thickness

Measure of Qualit Manufacturing Example - Steel Strip Thickness

Measure of Qualit Manufacturing Example - Steel Strip Thickness

Measurement of Process Capability (or Quality of process and product)

VARIATION is the Enemy!

As a Customer, Which one do You choose?

Transactional Example Delivery Time

Lower Specification Limit

Upper Specification Limit

But Standard Deviation = 7.0

And. Standard Deviation = 1.4

Another Example Delivery Time (days)

What Customer Feel

One More Example Delivery Time (days)

Goal: Reduce Process Width-Variation is the Enemy

What is Variance Based Thinking?

Y: Measured on a Customer Unit Basis