Introduction to Six Sigma

Presented by:
Khaled Aboul-ata
Deputy Audit Director
Orascom Construction
 Instructor Biography
2
 Academic Degrees
1. Bachelor of Science in Civil Engineering
2. Diploma in Land & Photogrammetric Survey
3. Diploma in Total Quality Management
4. Master of Business Administration in Quality Management
5. Master of Science in Construction Management
6. Philosophy Degree in Engineering Management (in progress)

 Professional Certificates
Khaled Aboul-ata
1. Lean Six Sigma Black Belt
2. Six Sigma Master Black Belt
3. Certified Internal Auditor (CIA)
4. Lead Auditor of ISO 9001
5. Lead Auditor of ISO 14001
6. Project Management Professional (PMP)
7. Risk Management Professional (RMP)
8. Professional Business Analysis (PBA)
9. Contractual & Legal Matters in Construction Industry (CLAC)
 Course Overview
3

 5 Lectures

 Every Tuesday

 From 7 to 9 PM

 Zoom online event through computer or mobile.

 Please put your Microphone on silence mode.

 What is Quality?
4

1 2
 Quality Terminologies
5

 Quality: Degree to which a set of inherent characteristics

of an object fulfils requirements.

 Grade: Category or rank given to different requirements

for an object having the same functional use.

 Defect: Nonconformity related to an intended or specified

use.
 Customer
6

 Customer
 External
 Internal

 Customer requirements include:

 Function
 Delivery time
 Location
 Price
 Quality Cost
7

Conformance Cost Nonconformance Cost

Prevention Cost Internal Failure Cost

• Rework
 Documented Procedure
• Scrap
 Training
 Equipment

Appraisal Cost External Failure Cost

 Inspection • Warranty
 Testing • Liability
• Lost Business
 Process Improvement
8

 Process

A repetitive and systematic series of steps or activities

where inputs are modified to achieve a value-added output

 Process Measures

 Effectiveness: Extent to which planned activities are realized and

planned results are achieved.

 Efficiency: Relationship between the result achieved and the

resources used.
Why we Need Process Improvement?
9

Deming
 6 Sigma
11

 Japanese firm took over a Motorola factory

 Under Japanese management, the factory produced

TV sets with 1/20 of earlier management defects.

 Six Sigma revolution started after Motorola won the

Malcolm Baldrige National Quality Award in 1988

 6 Sigma
12

Six Sigma aims to reduce variation to minimize

defects to be:

 3 defects per million

MBB
 3 PPM
Black Belts
 0.0003 % Green Belts
Yellow Belts
 Sigma Level
13

 Relationship between sigma level and defects

Sigma Level Defects yield

1 Sigma 69% 31%

2 Sigma 30.8% 69.2%

3 Sigma 6.68% 93.32%

4 Sigma 0.62% 99.38%

5 Sigma 0.023% 99.977%

6 Sigma 0.0003% 99.9997%

 Why we need more?
14

4 sigma means

 0.62% Defects

 99.38% yield
 Why we need more?
15

4 sigma means:

 Several Airplane crash

 Hundreds of patients loss

 Thousands of wrong credit card transactions

 Throughput Yield
16

90% 95% 85% 73%

Sigma level versus Quality Cost
17
 Do you need more than 6 Sigma?
18

Optimum Total Quality Cost

Defect level
Quality
Cost
Minimum Total
Quality Cost
Failure Cost
Conformance
Cost

Low Defect High

DMAIC Approach
19
 DMADV Approach
20

Define

Verify Measure

Design Analyze
Define Phase
21
 Define Phase
22

 Identify

 Problem

 Objectives

 Objectives should be aligned with

 Company’s business strategy

 Customer’s requirements
 Focus on Voices
23

Six Sigma requires Focus on:

 Voices of Customer

 Voices of Process

 Voices of Business
 Special Causes Vs. Common Causes
24

• Common Cause: Variation caused by unknown factors

resulting in a steady but random distribution of output around
the average of the data. It is the variation left over after Special
Cause variation has been removed and typically (not always)
follows a Normal Distribution.

• Special Cause: Variation is caused by known factors that

result in a non-random distribution of output. Also referred to
as “Assignable Cause”.
 Project Nomination
25

1. Cycle time
2. Defects
3. Cost
4. Revenue
5. Complaints
6. Compliance
7. Safety
8. Waste
 Problem Statement
26

 If I had one hour to save the world, I would spend

59 minutes defining the problem and 1 minute

finding solutions.

Albert Einstein
 Problem Statement
27

1. Number of defects per unit (DPU)

2. Percentage of defective units

3. Part per million (PPM)

4. Defects per million opportunities (DPMO)

DPMO = Actual number of defects / Total opportunities of defect

5. Percentage of material waste

6. Productivity of labor or equipment

 Business Case
28

During 2019, the defective percentage of product X was 2% .

This represents a gap of 1.5% from the industry standard of 0.5%

that amounts to US 200,000 of annual cost impact.
 Project Charter
29

1. Project Title
2. Team
3. Process owner
4. Sponsor
5. Problem/Opportunity Statement
6. Scope
7. Business Case / Impact
8. Primary & Secondary Metrics
9. Schedule & Budget
 Exercise
30

A. Look for frequent problems with unknown reason

B. Create your own business case
1. Current Performance
2. Datum
3. Gap
4. Financial Impact
C. Develop project charter
D. Send it to my email: Khaled.Aboulata@Orascom.com
Measure Phase
31
 Measure Phase
32

 How to measure current performance

 Identify and measure:

 Process performance

 Source of variation

y = f (x)
 Flow Chart
33

 Graphic symbols to depict the nature and flow of

the steps in a process

Flow Start/End

Storage Process Step

Document Decision
 34
Cash Withdrawal Flowchart
 35

Swim Lane Flowchart

 Cause & Effect Diagrams
36

 Identify potential causes

 Types of Data
37

 Attributes

 (name, day, …)

 Variable

 Continuous (weight, time, …)

 Discrete (Number of Labor, equipment, …)

 Tally Sheet / Check Sheet
38

 A check sheet is a structured, prepared form for

collecting and analyzing data
Analyze Phase
39
 Analyze Phase
40

 Analyze the collected measurements

 Identify root causes of variations

 Descriptive Statistics
41

 Location
 Mean: average of measurements in the sample
 Median: value that is in the middle of a sorted list of data
 Mode: value that appears most frequently in the sample
 Variation
 Range (R) = Min. – Max.
 Standard Deviation (s)
 Variance (V) = S2
 Interquartile Range (IQR) = Q3 – Q1
 Supplier Selection
42

Delivery Duration of each lot after Purchase Order

Supplier (A) Supplier (B)
8.5 13.3 16.1 9.3 14.6 16.4
9.5 13.4 16.2 11.5 15.1 16.7
9.8 13.6 16.4 11.9 15.3 16.9
10.3 13.8 17.1 Delivery Req. 12.6 15.3 17.5
11.2 14.1 17.6 13.1 15.5 18.1
11.5 14.5 18.1 10 - 20 13.3 15.6 18.3
11.8 14.6 18.5 13.4 15.8 18.6
12.1 15.3 19.6 13.5 15.9 18.8
12.5 15.4 20.1 14.2 16.1 19.5
13.1 15.7 21.5 14.3 16.1 20.4
Average = 14.5 Average = 15.5
 How to build a Histogram
43

 Determine largest & smallest values

 Define the range

 Divide the range into a convenient number of class intervals

having the same size (between 5 & 10)

 K=1+3.3 log n where K = no. of intervals & n = no of data

(n, K) = (10, 4.3) (100, 7.6) (1000, 10.9)

 Determine the number of observations falling into each class

to find the class frequency.

 How to build a Histogram
44

 Class boundaries: upper and lower limits of the class.

 Class mark: It is the class midpoint.

 Class interval: Difference between any two adjacent

class marks.
 Histogram
45

 The shape of the histogram provides insight into the

pattern of variation in the data.
 Histogram Drawing
46

Supplier (A) Supplier (B)

Class Class Frequency Frequency Supplier (A) Supplier (B)

Start End (F) (F)
8.5 13.3 16.1 9.3 14.6 16.4
7 9 1 9.5 13.4 16.2 11.5 15.1 16.7
9.8 13.6 16.4 11.9 15.3 16.9
9 11 3 1
10.3 13.8 17.1 12.6 15.3 17.5
11 13 5 3 11.2 14.1 17.6 13.1 15.5 18.1
13 15 11.5 14.5 18.1 13.3 15.6 18.3
8 7
11.8 14.6 18.5 13.4 15.8 18.6
15 17 6 12 12.1 15.3 19.6 13.5 15.9 18.8
17 19 4 5 12.5 15.4 20.1 14.2 16.1 19.5
13.1 15.7 21.5 14.3 16.1 20.4
19 21 2 2
21 23 1
 Histogram Drawing
47

His togr am of S upplie r A, S upplie r B

Var iab le
0.16 Lower Upper S u p p lier A
Specification Specification S u p p lier B
0.14
Limit Limit M ean S tD ev N
LSL 14.51 3.256 30
0.12 USL 15.45 2.514 30

0.10
Density

0.08

0.06

0.04

0.02

0.00
8 10 12 14 16 18 20 22
Da t a
 Supplier Selection
48

Supplier (2)

Lower Specification Limit Upper Specification Limit

LSL USL

Supplier (1)

10 15 20
 Supplier Selection
49

Supplier (2)

Lower Specification Limit Upper Specification Limit

LSL Supplier (3) USL

Supplier (1)

Supplier (4)

10 15 20
 Sigma level
50

Distance from the Mean to the nearest specification limit

divided by standard deviation
LSL Average USL

Sigma Level = Min (D1 or D2)

S

D1

D2
 Sigma level
51

 Calculate sigma level for all suppliers

Standard
Supplier Average Sigma Level
Deviation

1 14.53 3.61 1.25

2 14.97 1.19 4.17

3 17.12 0.67 4.30

4 13.25 1.35 2.4

 Histogram
52

Bell shape
 This is the classic normal distribution,
Bimodal shape
 Two distinct peaks, indicating two
distinct processes at work (two shifts)
Skewed shape
 Positive (skewed to the right)
 Negative (skewed to the left)
 Lower or upper target to the data
 (working hours or overtime)
 Box Plot
53

 Graphical tool used to identify outliers

 Pareto Chart
54

In any population that contributes to a common effect, a relative few of

the contributors (the vital few) account for the bulk of the effect.
220 100

80
165
Vital Few Useful Many

Cumulative Ratio
60
Defects

110
40

55 40
33 31 20
26 21 18 17 15 12 7
0 0
1 2 3 4 5 6 7 8 9 10
Process
 Scatter Diagram
55

Determine if there is a relationship between 2 variables & Find the trend

Improve Phase
56
 Improve Phase
57

 Improve phase focuses on developing ideas to

remove root causes of variation, testing and

standardizing those solutions

Poka Yoke
58
Jidoka
59
5S - Workplace Organization
60
5S - Workplace Organization
61
Visual Management
62
 Standardization (SOP)
63

Procedures describes WHO is responsible for doing

WHAT, WHEN & WHERE?

Contents:

1. Purpose of procedure

2. Scope of procedure implementation

3. Operational definitions.
 Standardization (SOP)
64

4. Responsibilities of participants in procedure execution.

5. Flowchart (main steps required to execute procedure).

6. Measurements required to evaluate the effectiveness

7. Records required to provide evidence that procedure

results are achieved

8. List of relevant external documents

 Validate the selected solution
65

Compare original & New Process:

 Defects or yield percentage

 Cost – Benefits analysis

 Sigma Level

 Productivity

 Cost of Quality
Control Phase
66
 Control Phase
67

 Establish standard measures to maintain

performance and to correct problems as needed

 Control Plan
68

Control Target Who How When Where Action

Subject

Defective
Quality Notify
Defective Quality units / Every
0.5% inspection Production
percentage Engineer Sample Hour
store Engineer
inspected

Measure
Temperatu Production Every Production Adjust
60 temperature
re Engineer Hour line temperature
of heater
Failure Mode & Effect Analysis
69
Thank You

70