Lean Six Sigma Green Belt

Certification Course
Six Sigma and Organizational Goals
 Learning Objectives

By the end of this lesson, you will be able to:

Identify the Six Sigma process and tools

Explain the impact of Six Sigma in an organization

Measure organizational performance

 Introduction

The glass is half The glass is bigger

Pessimist than it needs to be. Six Sigma
empty.
Practitioner

The glass is full with

The glass is half full.
water and air.
Realist
Optimist
Value of Sigma
 Introduction to Quality

Quality is defined as meeting the requirements of the customer.

Q
?

Making changes to meet Meeting customer’s

Customer’s expectations
the expectations expectations
 The Journey of Quality

1930s
Statistical Process 1960s
Control Quality Circles 1987
• ISO 9000
• Baldrige
Award Criteria

1988
1990s 1996
Benchmarking
Balanced Re-engineering
Milestones in the Scorecard (BSC)
history of Quality
 Quality Management Gurus

Leaders and quality management consultants who set the foundation of modern quality
improvement and strategic change are:

• 14 key principles for • Statistical Process Control • Quality trilogy

management charts • Top management involvement
• Seven wastes • Assignable cause vs. chance
• Plan-Do-Study-Act cycle cause
• System improvement • Statistics for quality
management

W. Edwards Deming Walter A. Shewhart Joseph M. Juran

• Ishikawa’s cause-and-effect • Quality loss function concepts • Crosby’s 14 steps to quality

diagram • Signal-to-noise ratio improvement
• Company-wide quality control • Robust design • Do It Right First Time
• Quality circle • Experimental design methods • Zero Defect

Kaoru Ishikawa Genichi Taguchi Philip Crosby

 Meaning of Six Sigma

Sigma (σ) is a Greek letter Six Sigma is a business

used in the statistical world strategy to change company
to represent a measure of culture with top
variability. management support.

The Six Sigma process is an 5

Sigma level is a measure of
improvement method of 4
performance for a business
quality principles and 3
processes or service.
techniques. 3
1
 Six Sigma and Quality

How Six Sigma impacts the quality of products and services.

Quality

Six Sigma process Increased profits

 Milestones in the Six Sigma Journey

Bill Smith and Mikel Motorola saved $16

Allied Signal saved
Harry at Motorola billion cumulatively
$0.5 billion with the
started the Six Sigma with the use of Six
use of Six Sigma
initiative Sigma

1986 1995 1998 2000 2001

Jack Welch initiated Six

Sigma at General GE saved $2 billion
Electric (GE) to annually with the use of
improve the entire Six Sigma
business system
 Purpose of Six Sigma

Business Customer
methodology satisfaction

Customer-
centric
$ Shareholder
value

Fact-based Employee
approach commitment
 Organizational Benefits of Six Sigma

Eliminates the root cause of Reduces rework by getting it

problems and defects in a process right the first time

Creates robust products and

services Addresses the key business
requirement

Reduces process variation and

waste
Helps gain competitive
advantage
Ensures customer satisfaction

Achieves the organizational

goals
Achieves process standardization
 Benefits to an Organization

Organizations successful with Six Sigma:

1 2
Have proven systematic problem-solving
methodology
5 3
4

Focus on the customer

Achieve long-term improvements

 The Six Sigma Process

Each phase has

• An over-arching objective
• Specific deliverables that need to be completed

Define Measure Analyze Improve Control

 The Six Sigma Process

Document the problem and the desired outcome

Define Measure Analyze Improve Control

 The Six Sigma Process

Obtain baseline process performance levels

Define Measure Analyze Improve Control

 The Six Sigma Process

Identify key root causes for process variation

Define Measure Analyze Improve Control

 The Six Sigma Process

Develop, test, and implement solutions

Define Measure Analyze Improve Control

 The Six Sigma Process

Monitor key factors and maintain the gains

Define Measure Analyze Improve Control

 The Six Sigma Tools

Define Measure Analyze Improve Control

• SIPOC • Measurement • Simple linear • Brainstorming • Control charts

• Voice of Customer System Analysis regression (SLR) • Piloting • Control plan
(VOC) (MSA) • Pareto charts • Failure Modes and • Measurement
• Critical to Quality • Control charts • Fishbone diagram Effects Analysis System Analysis
(CTQ) • Process capability • Failure Modes and (FMEA) (MSA)
• Quality Function • Normality plots Effects Analysis • Design of
Deployment (QFD) (FMEA) Experiments
• Failure Modes and • Multi-vari charts (DOE)
Effects Analysis • Hypothesis testing
(FMEA)
• Cause and Effect
(C&E) matrix

 Some of the tools are not required in every Six Sigma Green Belt (GB) project.
 Applying the Six Sigma DMAIC Process

The problem

Ideal temperature for a cup

A cup of coffee is either too of coffee should be
hot or too cold. between 160F (71C) to 180F
(82C).

Customers’ feedback Java House Coffee Management’s feedback

 Applying the Six Sigma DMAIC Process

The solution

DMAIC
process Average
Average USL
LSL USL and tools LSL 170F
170F 180F
160F 180F 160F
Poor process capability Excellent process capability
Key Terms Used in Six Sigma

Specification limits

Opportunity

Defect

Defective

Rolled Throughput Yield (RTY)

Defects per Million Opportunity (DPMO)

 Key Terms Used in Six Sigma

Specification Limits Meaning

Opportunity Limits set by a customer representing the range of variation the customer can
tolerate or accept

Defect
Explanation with regard to the Java House coffee example

Defective
The Java House Coffee customers had an acceptable coffee temperature range
of 160F to 180F
Rolled Throughput Yield
(RTY)

Defects per Million

Opportunity (DPMO)
 Key Terms Used in Six Sigma

Specification Limits Meaning

Opportunity Every chance for a process to deliver an output characteristic that is either “right”
or “wrong” as per the customer specifications

Defect
Explanation with regard to the Java House coffee example

Defective
The coffee temperature was the only output characteristic identified from the
customer, which would represent one opportunity per cup of coffee
Rolled Throughput Yield
(RTY)

Defects per Million

Opportunity (DPMO)
 Key Terms Used in Six Sigma

Specification Limits Meaning

Every result of an opportunity that does not meet customer specifications and
Opportunity does not fall within Upper Specification Limit (USL) and Lower Specification Limit
(LSL)
Defect
Explanation with regard to the Java House coffee example

Defective
When a cup of coffee does not fall within the specified temperature limit
(<160F or >180F)
Rolled Throughput Yield
(RTY)

Defects per Million

Opportunity (DPMO)
 Key Terms Used in Six Sigma

Specification Limits Meaning

Results when the entire unit is identified has a nonconforming product

Opportunity
regardless of the number of defects observed

Defect
Explanation with regard to the Java House coffee example

Defective
Every cup of coffee fails to meet the customer requirements
Example: Temperature and taste
Rolled Throughput Yield
(RTY)

Defects per Million

Opportunity (DPMO)
 Key Terms Used in Six Sigma

Specification Limits Meaning

Opportunity Measure of process efficiency expressed and indicates percentage of units that
are defect free. Also referred to as Yield value

Defect
Explanation with regard to the Java House coffee example

Defective
The percentage of cups of coffee that meet customers expectations
Rolled Throughput Yield
(RTY)

Defects per Million

Opportunity (DPMO)
 Key Terms Used in Six Sigma

Specification Limits Meaning

Opportunity Also known as Non-Conformities per Million Opportunities (NPMO), it is a

measure of process performance

Defect
Explanation with regard to the Java House coffee example

Defective
For 100 cups of coffee measured, the ratio of defects observed to total number
of opportunities is multiplied by one million.
Rolled Throughput Yield
(RTY)
Defects observed
Defects per Million DPMO= *1,000,000
Opportunity (DPMO) total number of opportunities
 Sigma Conversion Table

The Six Sigma Level is a measure of quality performance for a business process or service.

Sigma Level DPMO Yield/Accuracy (%)

Virtual perfection
6 3.4 99.99966%

5 230 99.977%

Good 4 6,210 99.38%

3 66,800 93.32%

2 308,000 69.15%
Improvement needed
1 690,000 30.85%
 Quality Measures and Real-World Impact

What would be the consequence in the U.S. if a quality goal of 4.5 Sigma Level or 99.90% yield is accepted?

4.5 Sigma
Level
Or
99.90 Yield
 Quality Measures and Real-World Impact

1 hour of unsafe drinking 2 unsafe plane landings per

water every month day at O’Hare International
500 incorrect surgical Airport in Chicago
operations each week

50 new born babies dropped

at birth by doctors each day

16,000 pieces of mail

lost by the U.S. postal
service every hour
22,000 checks deducted
from the wrong bank
accounts each hour
32,000 missed heartbeats
per person, per year
Goals and Six Sigma Projects
 Meaning of Process

A process is a series of steps designed to produce a product and/or service as required by the customer.

Input (x)

Process f(x)
Feedback

Output (y)

Focussing on the inputs is like driving a car. It transforms organizations from a pattern of driving
forward by looking in the rear view mirror to driving forward by looking ahead on the road.
 Components of a Business Process

$
Input (x)
1

Process f(x)
Feedback
3 2

Output (y)

A process will have inputs (x) and delivers outputs (y). Therefore, y = f(x). Any change in the
inputs causes change in the output
 Six Sigma and the Business System

1 2

5 3 Implement a process or a set of processes

Business system 4
design

Process inputs must be at the right place and

at the right time
How Six Sigma Impacts a Business System Design

A business system design:

Six Sigma improves the
● Collects and analyzes
business system by:
data to ensure
• Continuously removing
continuous
defects in processes
improvement
• Sustaining the changes
● Includes processes or
procedures
 Structure of a Six Sigma Team

Top
executives
Six Sigma
champions
Six Sigma
Master Black
Six Sigma Belts (MBB)
Black Belts
Six Sigma (BB)
Green Belts
(GB)
 Structure of a Six Sigma Team

Top
executives
Six Sigma
champions
Six Sigma
Master Black
Six Sigma Belts (MBB)
Black Belts
Six Sigma (BB)
Green Belts
(GB)

Six Sigma green belts support the black belts by working on the project and performing day-to-day jobs.
 Structure of a Six Sigma Team

Top
executives
Six Sigma
champions
Six Sigma
Master Black
Six Sigma Belts (MBB)
Black Belts
Six Sigma (BB)
Green Belts
(GB)

Six Sigma black belts apply strategies to specific projects, and lead and direct teams to execute projects.
 Structure of a Six Sigma Team

Top
executives
Six Sigma
champions
Six Sigma
Master Black
Six Sigma Belts (MBB)
Black Belts
Six Sigma (BB)
Green Belts
(GB)

Six Sigma master black belts train and coach black belts, green belts, and various functional leaders of
the organization.
 Structure of a Six Sigma Team

Top
executives
Six Sigma
champions
Six Sigma
Master Black
Six Sigma Belts (MBB)
Black Belts
Six Sigma (BB)
Green Belts
(GB)

Six Sigma Champions:

• Identify and scope projects and develop strategy
• Identify and coach master black belts
 Structure of a Six Sigma Team

Top
executives
Six Sigma
champions
Six Sigma
Master Black
Six Sigma Belts (MBB)
Black Belts
Six Sigma (BB)
Green Belts
(GB)

Top Executives:
• Lead change and provide direction
• Own the Six Sigma initiatives
Organizational Drivers and Metrics
 Key Business Drivers

Financial accounting

1 2

5 3

Physical assets Internal or business Customer satisfaction Learning and growth

processes

BSC (Balanced Scorecard)

 Benefits of BSC

Actionable
objectives

Prioritizes Framework for

projects and performance
initiatives measurement

Internal
Financials
processes

Clarifies
Integrates
Customer Learning vision and
strategies
satisfaction and growth mission

Aids
Provides
continuous
feedback
improvement
 Four Perspectives in BSC

By using BSC, an organization maps its strategic objectives to the specific metrics of performance.

Financial
• Financial objectives
• Tracking financial
success

Customer Vision and Internal business process

Customer-facing objectives Strategy Operational goals for
internal processes

Learning and growth

• Intangible factors of
success
• Learning from
experience
 Developing a BSC

Interactions between perspectives or business units are considered to prevent uneven optimization.

1 2 3 4
Strategic
Measures
Objectives Targets Initiatives
to achieve each
Long-term for each measure to achieve each target
objective
organizational goals

Not every initiative identified should be worked as a Six Sigma project, but
some could be.
 Four-box Model vs. Strategy Maps

Alternatives to BSC

Financial Financial Increase Increase

Lower cost
profitability revenue

Improve
Lower wait
Customer customer
Vision time
Internal business retention
Customer and
Strategy process
Increase
Internal Lower cycle
process
Process time
efficiency

Learning and growth Improve Improve tools

Learning knowledge and and
and Growth skills technology

Four-box model of BSC Strategy maps

Impact to the Organization

Needs Goals

Organization
 Impact to the Organization

Personal goals

Timelines

Work goals Resources

 Impact to the Organization

How the use of BSC strategy maps affect an organization?

Cause

Effect

BSC
Strategy
Maps
 Benefits of BSC Strategy Maps

The BSC enables the organization to improve in the following ways:

Allows each business unit to work

toward a common organizational
Easy communication goal

Transparent and meaningful

Facilitates understanding at all communication of performance
levels of the organization

Effective creation of performance

report against a balanced scorecard
Better management of information in an
organization
 Key Takeaways

Quality is defined as the degree of excellence of a product or

service and conformance to customer requirements

Six Sigma is a business methodology that employs a customer

centric and fact-based approach to reduce process variation
and waste

There are five phases in the DMAIC process: Define, Measure,

Analyze, Improve, and Control

The five levels in the Six Sigma team are: Six Sigma Green
Belts, Six Sigma Black Belts, Six Sigma Master Black Belts, Six
Sigma Champions, and Top Executives
 Key Takeaways

Apart from financial accounting, the BSC also considers

internal processes, customer satisfaction, and learning and
growth

Strategy map depicts a chain of cause and effect relationships

between the perspectives and the relationships that are
represented by interlinked objectives
Knowledge Check
Knowledge
Check Customers have asked for products from an IT company to be delivered within two
weeks. In this case, a product delivery that takes longer than two weeks would be
1 considered as:

A. An opportunity

B. A defect

C. A specification limit

D. Defective
 Knowledge
Check Customers have asked for products from an IT company to be delivered within two
weeks. In this case, a product delivery that takes longer than two weeks would be
1 considered as:

A. An opportunity

B. A defect

C. A specification limit

D. Defective

The correct answer is D

A product delivery is a unit that could be right or wrong.

Knowledge
Check
Which of the following phase is not included in the Six Sigma process?
2

A. Define

B. Analyze

C. Control

D. Implement
 Knowledge
Check
Which of the following phase is not included in the Six Sigma process?
2

A. Define

B. Analyze

C. Control

D. Implement

The correct answer is D

The Six Sigma Process is known as DMAIC, which consists of Define, Measure, Analyze, Improve, and Control.
Knowledge
Check
What is a defect?
3

A. When there is a limit to the customer specification

B. When an output meets the customer’s expectations

C. When an opportunity does not meet customer expectations

D. When there is a non-conforming part or unit

 Knowledge
Check
What is a defect?
3

A. When there is a limit to the customer specification

B. When an output meets the customer’s expectations

C. When an opportunity does not meet customer expectations

D. When there is a non-conforming part or unit

The correct answer is C

A defect is defined as an opportunity that does not meet customer requirements or expectations.
Knowledge
Check
Which of the following perspectives belong to the BSC approach?
4

A. Customer, supplier, input, and output

B. Process, people, technology, and policies

C. Financial, customer, internal processes, and learning and growth

D. Internal processes, customer, financial, and objectives

 Knowledge
Check
Which of the following perspectives belong to the BSC approach?
4

A. Customer, supplier, input, and output

B. Process, people, technology, and policies

C. Financial, customer, internal processes, and learning and growth

D. Internal processes, customer, financial, and objectives

The correct answer is C

The four perspectives in a Balanced Score Card are financial, customer, internal processes, and learning and growth.