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Presentation Adapted from Brian Ashley Northrop Grumman Newport News Shipbuilding
Six Sigma Overview
• • • • History of Six Sigma Why Six Sigma? What Does Six Sigma Mean? The Six Sigma Methodology
Six Sigma History
1. Motorola (1987) 2. Texas Instruments (1988) 3. Digital Equipment (1989) 4. IBM (1990) 5. ABB (1993) 6. AlliedSignal & Kodak (1994) 7. GE (1995) … and now, many, many others.
Six Sigma Success
• Motorola: MBNQA winner (1989) 14$B savings over 10 years • GE: $10-15B revenue & savings by 2000 • AlliedSignal (Honeywell): $2.2 B Cumulative Savings • Other companies embracing Six Sigma :
Asea Brown Boveri Dupont Gateway Navistar Sony Howmet Boeing Ford Compaq Nokia Lockheed Martin Sequa Black & Decker Dow Chemical Johnson & Johnson Polaroid Toshiba Citigroup Cessna Kohler Libby -Owens Ford Delphi Automotive Samsung Bombardier Federal Express Kodak Seagate Technology Raytheon Northrup Grumman Hyundai TI Automotive GenCorp NEC Merck
And the list keeps growing…and growing!
What is Six Sigma?
• Philosophy • Methodology • Approach • Goal • Vision • Culture
SIX SIGMA PHILOSOPHY OF EXCELLENCE
Measure E verything T hat R esults I n C ustomer S atisfaction
Six Sigma Philosophy
• The goal of Six Sigma is to identify, isolate, and eliminate variation • Defect prevention versus defect detection • Proactive problem-solving versus reactive firefighting
Variation Reduction Defect Prevention
Six Sigma Methodology
Define Characterize Measure Analyze Improve Optimize Control “Before we can improve any system one must listen to the voice of the system (the voice of the process). Then one must understand how the inputs affect the outputs of the system. Finally, one must be able to change the inputs (and possibly the system) in order to achieve the desired results. This will require sustained effort, constancy of purpose, and an environment where continuous improvement is the operating philosophy.”
Donald J. Wheeler
The Six Sigma Methodology
is based on
• You need baseline data to understand the process • Don’t trust historical data! If it’s all that’s available…question it! • Analysis & improvement plans must be based on data! • Improvements must be validated with data • Monitoring & control plans require data
Six Sigma Methodology
• • • •
Identify Customer and Requirements Identify Opportunities Map the Process Perform Measurement System Evaluations (if needed) • Perform Failure Mode and Effect Analysis • Reduce the Sources of Variation and their contribution to Outputs • Incorporate Controls on Critical Variables
Six Sigma Approach
• 6σ uses problem solving tools that can vary from Pareto charts to Designed Experiments. • Causes for defects are searched out and eliminated by taking appropriate action. • Concentration on continuous improvement and reduction of variation are key.
Applying Six Sigma to All Work
• • • • Identify who your work is for (your Customer) Identify the work you do (your Product/Service) What do you need to do your work (your Suppliers) What are the ‘key characteristics’ of your product/service? (i.e. ‘Critical To Quality’: those features/requirements that most directly affect your Customer’s satisfaction with your product/service.) Map the process. Evaluate the measurement system. Measure the current performance of the process. Analyze the capability of critical measurements in process. Analyze variation in key characteristics and determine what controls the variation. Reduce variation and/or eliminate defects in the process. Eliminate non-value-added steps/processes Implement control plans to monitor/maintain improvements over time. Continue to reduce variation and eliminate defects, toward Six Sigma performance.
• • • • • • • • •
What is a Defect?
p A defect is any variation of a required characteristic of the product or its parts, which is far enough removed from its target value to prevent the product from fulfilling the physical and functional requirements of the customer or internal quality standards. p Anything not done right the first time. p Anything requiring rework. p Any variation of a required characteristic within a product preventing that product from fulfilling the specific requirements of the customer or quality standards. Record a defect if: • scrap is created, • rework is necessary to correct the defect, • work is required to adjust, correct, or modify the process.
Examples of Defects
p p p p p p p p p p p p Purchase order Revisions Discrepancy Reports Excessive Grinding of Welds Late Job order releases General ledger entry errors Late Deliveries from Suppliers Late Response to Customer requests Material kitting errors p shortages p wrong parts Rework Time Card Errors Pre-Fixes Audit Findings p p p p p p p p p p p p p p Quality Notifications Material cycle counts Inspection errors Material handling errors Packaging errors Safety errors Personnel record errors Training schedule revisions Forecasting errors Late product or service delivery Rework, Rework, Rework ... Maintenance errors Process instruction revisions Personnel policy errors
“Anything not done right the first time is a defect.”
Variation in Product Characteristics = Function (Variation in Process Parameters) or
Variation is the enemy!
We must address all sources of variation!
Causes of Variation
• Organizations typically assign responsibility or fault from defects and or errors to people • A poorly designed process will allow errors to occur • According to Dr. Deming, 85% of defects are caused by system errors and 15% of defects are human errors • Systematic faults and errors are common cause events • Specific or attributable faults and errors are special cause events
The variation in the outputs is a function of the variation in the inputs: Y = f(x)
The “Language of Variation”
Data can tell us . . . 1. The shape, or distribution, of the process output 2. Where, on average, the process is operating 3. How much the process “scatters” 4. How much variation is normal in the process 5. How well the process can meet customer needs
The Normal Distribution
µ = mu = mean σ = sigma = standard deviation
µ 1σ 68.26% 95.46% 99.73% 99.99999975%
Areas under the normal distribution curve
For each of the following samples of data, what shape of distribution would you expect?
– – – – – – – – – Rolling a fair die Throwing darts at a target Dropping a handful of sand on the floor Machining a dimension on a lathe Measuring a single part many times with a single gage Mean time to component failure Cycle time to complete a work order Defects per length of weld Your commute time to work
Note: There are methods of mathematically transforming other types of populations into a normal distribution.
Six Sigma as a Goal
• Sigma (σ) is a term used to refer to standard deviation--a measure of variation • Six Sigma refers to a process having 6 standard deviations between the process center and the nearest specification limit. • Determining Sigma allows us to relate the voice of process to the voice of customer
What a 2σ process looks like...
308,537 Defects Per Million
• 308,500 Defects Per Million • High Warranty Cost • Poor Deliveries, High Inventories • Hard-To-Build Designs • 69.4% Rolled Throughput Yield
2 standard deviations
Profile of the Average Company
• • • • • Profitable and growing Market prices declining Competitors increasing • • Believes that a zero-defects goal is neither realistic nor achievable. Has 10X the number of suppliers required to run the business 5-10% of the firm’s customers are dissatisfied with product, sales, or service and will not recommend that others purchase products or services
Has a quality assurance program • Spending 15-25% of sales dollars on repairing or reworking product before it ships Unaware that best in class companies have similar processes that are greater than 100X more defect-free
What a 6σ process looks like...
3.4 Defects Per Million
• 3.4 Defects Per Million • Agile & On-time, Low Inventories • Integrated with Customer & Supplier • Few Facilities, Low Overheads • 99.9%+ Rolled Throughput Yield
6 standard deviations
The 1.5 Sigma Shift
SIGMA QUALITY LEVELS BEFORE AND AFTER A SHIFT IN THE AVERAGE
SIGMA LEVELS 1 2 3 4 5 6 DPMO* WITHOUT SHIFT WITH SHIFT 317,400 697,700 45,400 308,537 2,700 66,807 63 6,210 0.57 233 0.002 3.4
To compensate for the inevitable consequences associated with process centering errors, the distribution mean is offset by 1.5 standard deviations. This adjustment provides a more realistic idea of what the process capability will be over repeated cycles. * Defects per million opportunities
What Does Six Sigma Mean In Your Daily Life ?
1000000 100000 10000 1000 100 10 1 1 2 3 4 5 6 7
Airline Safety Rate IRS - Tax Advice Prescription Writing Restaurant Bills Payroll Processing
It’s Not Easy!
Rate of Change in Defects Over the Previous Sigma
80 70 60 50 40 30 20 10 0 To: 3.0 From: 2.0 4.0 3.0 5.0 4.0 6.0 5.0
2 3 4 5 6
308,538 4.62X 66,807 10.76X 6,210 26.69X 232.7 68.42X 3.4
99% as a Goal
Is 99% good enough?
• If 99% were good enough -- this means: – 2,000 lost articles of mail per hour – 5,000 incorrect surgical operations/week – 2 short or long landings at most major airports each day – No electricity for almost 7 hours each month – Telephone would not work for 4 hours each month – Unsafe drinking water for almost 15 minutes each day – Your car wouldn’t run for about one hour each week
Definitions Of Yield
• First Pass Yield (FPY) -- Total parts accepted as output from a process step the first time, divided by the total started into the process step. • Rolled Throughput Yield (RTY) -- Probability of a part passing through all process steps the first time without a defect
RTY = FPY1 * FPY2 * FPY3 * ….. * FPYn
n = number of processes
The Hidden Factory
“the hidden factory”
Hidden Factory Really Exists
90 80 70 Actual Defects
60 50 40 30 20 10 0 0 5 10 15 20 25 30 35 40
Official Defects (Reported) In Process Defects (Hidden Factory)
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