Introduction to Six Sigma

Topics (Session 1)
Understanding Six Sigma

History of Six Sigma

Six Sigma Methodologies & Tools

Roles & Responsibilities

How YOU can use Six Sigma

Six Sigma is. . .
A performance goal, representing 3.4 defects for
every million opportunities to make one.

A series of tools and methods used to improve or

design products, processes, and/or services.

A statistical measure indicating the number of

standard deviations within customer expectations.

A disciplined, fact-based approach to managing a

business and its processes.
Whats in a name?
Sigma is the Greek letter representing the standard
deviation of a population of data.

Sigma is a measure
of variation
(the data spread)

What does variation mean?
20

Variation means that a 15

process does not produce 10

the same result (the Y) 5

every time. 0

-5
Some variation will exist in
-10
all processes.
Variation directly affects customer experiences.

Customers do not feel averages!

Measuring Process Performance
The pizza delivery example. . .
Customers want their pizza
delivered fast!

Guarantee = 30 minutes or less

What if we measured performance and found an

average delivery time of 23.5 minutes?
On-time performance is great, right?
Our customers must be happy with us, right?
How often are we delivering on
time?
Answer: Look at 30 min. or less

the variation!
s

0 10 20 x 30 40 50

Managing by the average doesnt tell the whole story. The

average and the variation together show whats happening.
Reduce Variation to Improve
Performance
How many standard 30 min. or less
deviations can you
fit within
s
customer
expectations?

0 10 20 x 30 40 50

Sigma level measures how often we meet (or fail to meet)

the requirement(s) of our customer(s).
Managing Up the Sigma Scale
Sigma % Good % Bad DPMO
1 30.9% 69.1% 691,462
2 69.1% 30.9% 308,538
3 93.3% 6.7% 66,807
4 99.38% 0.62% 6,210
5 99.977% 0.023% 233
6 99.9997% 0.00034% 3.4
Examples of the Sigma Scale
In a world at 3 sigma. . . In a world at 6 sigma. . .

There are 964 U.S. flight 1 U.S. flight is cancelled every

cancellations per day. 3 weeks.

The police make 7 false arrests There are fewer than 4 false
every 4 minutes. arrests per month.

In MA, 5,390 newborns are 1 newborn is dropped every 4

dropped each year. years in MA.

In one hour, 47,283 It would take more than

international long distance calls 2 years to see the same number
are accidentally disconnected. of dropped international calls.
Topics
Understanding Six Sigma

History of Six Sigma

Six Sigma Methodologies & Tools

Roles & Responsibilities

How YOU can use Six Sigma

 The Six Sigma Evolutionary Timeline

1818: Gauss uses the normal curve 1924: Walter A. Shewhart introduces
to explore the mathematics of error the control chart and the distinction of
analysis for measurement, probability special vs. common cause variation as
analysis, and hypothesis testing. contributors to process problems.

1736: French 1896: Italian sociologist Vilfredo

mathematician Alfredo Pareto introduces the 80/20
Abraham de rule and the Pareto distribution in
Moivre publishes Cours dEconomie Politique.
an article
introducing the
normal curve.
1949: U. S. DOD issues Military
Procedure MIL-P-1629, Procedures
1960: Kaoru Ishikawa
for Performing a Failure Mode Effects
introduces his now famous
and Criticality Analysis.
cause-and-effect diagram.

1941: Alex Osborn, head of 1970s: Dr. Noriaki Kano

BBDO Advertising, fathers a introduces his two-dimensional
widely-adopted set of rules for quality model and the three
brainstorming. types of quality.

1986: Bill Smith, a senior

engineer and scientist introduces 1995: Jack Welch
the concept of Six Sigma at launches Six Sigma at GE.
Motorola

1994: Larry Bossidy launches

Six Sigma at Allied Signal.
Six Sigma Companies
Six Sigma and Financial Services
Topics
Understanding Six Sigma

History of Six Sigma

Six Sigma Methodologies & Tools

Roles & Responsibilities

How YOU can use Six Sigma

 DMAIC The Improvement
Methodology
Define Measure Analyze Improve Control
Objective: Objective: Objective: Objective: Objective:
DEFINE the MEASURE current ANALYZE the IMPROVE the CONTROL the
opportunity performance root causes of process to process
problems eliminate root to sustain the gains.
causes

Key Define Tools: Key Measure Key Analyze Key Improve Key Control
Cost of Poor Tools: Tools: Tools: Tools:
Quality (COPQ) Critical to Quality Histograms, Solution Control Charts
Voice of the Requirements Boxplots, Multi- Selection Matrix Contingency
Stakeholder (CTQs) Vari Charts, etc. To-Be Process and/or Action
(VOS) Sample Plan Hypothesis Tests Map(s) Plan(s)
Project Charter Capability Regression
As-Is Process Analysis Analysis
Map(s) Failure Modes
Primary Metric and Effect
(Y) Analysis (FMEA)
Define DMAIC Project
What is the project?
$

Project Cost of
Poor Voice of
Charter Quality S ta k e h o ld e r s the
Stakeholde
r

Six Sigma

What is the problem? The problem is the Output (a Y

in a math equation Y=f(x1,x2,x3) etc).
What is the cost of this problem
Who are the stake holders / decision makers
Align resources and expectations
Define As-Is Process
How does our existing process work?
Move-It! Courier Package Handling
Process
Accounts Accounts
Courier Mail Clerk In-SortClerk In-SortSupervisor DistanceFeeClerk WeightFeeClerk Out-SortClerk Out-SortSupervisor
ReceivableClerk Supervisor

Observ e package
weight (1 or 2) on
back of package

Look up
appropriate
Weight Fee and
write in top middle
box on package
back

Add Distance &

Take packages
Weight Fees
f rom Weight Fee
together and write
Clerk Outbox to
in top right box on
A/R Clerk Inbox.
package back

Circle Total Fee

Does EVERYONE and Draw Arrow

f rom total to
sender code

agree how the current

Accounting

Take packages Write Total Fee

f rom A/R Clerk f rom package in

process works?
Outbox to appropriate
Accounts Sender column on
Superv isorInbox. Accts. Supv .s log

Take packages
Draw 5-point Star
f rom Accounts
in upper right
Superv isor
corner of package
Outbox to Out-
f ront
Sort Clerk Inbox.

Define the Non Value Sort packages in

order of Sender
Code bef ore

Add steps
placing in outbox

Take packages Add up Total # of Observ e sender

Finalizing

f rom Out-Sort Packages and and receiv er

Clerk Outbox to Total Fees f rom codes and make
Out-Sort log and create entry in Out-Sort
Superv isorInbox. client inv oice Superv isors log

Deliv erPackages
Delivery

to customers
according to N, S,
E, W route

Deliv er inv oiceto

client

Submit log to
Submit log to Submit log to
General Manager
General Manager General Manager
at conclusion of
at end of round at end of round
round.
 Define Customer Requirements
What are the CTQs? What motivates the customer?
Voice of the Customer Key Customer Issue Critical to Quality
SECONDARY RESEARCH
Industry
Intel

Market
Data Industry
Benchmarking
Listening
Posts

Customer
Correspondence
Customer
Service

PRIMARY RESEARCH

Survey
s Survey
s

OTM

Obser-
Focus Groups vations
 Measure Baselines and
Capability
What is our current level of performance?
Descriptive Statistics
Sample some data / not all data Variable: 2003 Output

Current Process actuals measured against Anderson-Darling Normality Test

A-Squared: 0.211

the Customer expectation

P-Value: 0.854

Mean 23.1692
StDev 10.2152

What is the chance that we will succeed

Variance 104.349
Skewness 0.238483
Kurtosis 0.240771
N 100

at this level every time?

0 10 20 30 40 50
Minimum 0.2156
1st Quartile 16.4134
Median 23.1475
3rd Quartile 29.6100
Maximum 55.2907
Pareto Chart for Txfr Defects 95% Confidence Interval for Mu
95% Confidence Interval for Mu
21.1423 25.1961
19.5 20.5 21.5 22.5 23.5 24.5 25.5 26.5 95% Confidence Interval for Sigma
100 100 8.9690 11.8667
95% Confidence Interval for Median
95% Confidence Interval for Median
80 19.7313 26.0572

60 Percent
Count

50
40

20

0 0
t
un er s
Defect La
te
A mo Oth

Count 79 17 4
Percent 79.0 17.0 4.0
Cum % 79.0 96.0 100.0
Measure Failures and Risks
Where does our process fail and why?
Subjective opinion mapped into an objective risk profile number

X1
X2
X3
X4
etc
Analyze Potential Root Causes
What affects our process?
Ishikawa Diagram
(Fishbone)

Six Sigma

y = f (x1, x2, x3 . . . xn)

Analyze Validated Root Causes
What are the key root causes?
Pareto Chart for Txfr Defects

100 100

80

Percent
60
Count

50
40

20

0 0

E x p e r im e n ta l D e s ig n
Defect
Count 79 17 4
Percent 79.0 17.0 4.0
Cum % 79.0 96.0 100.0

Data Regression
Stratification Analysis
Pareto Chart for Amt Defects

15
100

80
Process
Simulatio
Percent

10 60
Count

40
5
20 n
0 0

Defect
Count 12 3 2
Percent 70.6 17.6 11.8
Cum % 70.6 88.2 100.0

Six Sigma

y = f (x1, x2, x3 . . . xn)

Critical Xs
 Improve Potential Solutions
How can we address the root causes we identified?
Address the causes, not the symptoms.

Generat

Clarify

Evaluat
Decision
e

e
y = f (x1, x2, x3 . . . xn)
Critical Xs

Divergent | Convergent
Improve Solution Selection
How do we choose the best solution?
Solution Selection Matrix
Qualit
Solution Sigma Time CBA Other Score
y

Time Cost

Six Sigma
Solution
Right Wrong
Implementation

Nice

Good

Solution
Try
Implementatio
Bad

Nice n Plan
Idea X
Control Sustainable Benefits
How do we hold the gains of our new process?
Some variation is normal and OK
How High and Low can an X go yet not materially impact the Y
Pre-plan approach for control exceptions

35
UCL=33.48

Individual Value
25
Mean=24.35

15 LCL=15.21

0 10 20 30
Observation Number
 DFSS The Design Methodology
Design for Six Sigma

Define Measure Analyze Develop Verify

Uses
Design new processes, products, and/or services from scratch
Replace old processes where improvement will not suffice
Differences between DFSS and DMAIC
Projects typically longer than 4-6 months
Extensive definition of Customer Requirements (CTQs)
Heavy emphasis on benchmarking and simulation; less emphasis
on baselining
Key Tools
Multi-Generational Planning (MGP)
Quality Function Deployment (QFD)
Topics
Understanding Six Sigma

History of Six Sigma

Six Sigma Methodologies & Tools

Roles & Responsibilities

How YOU can use Six Sigma

Champions
Promote awareness and execution of Six Sigma
within lines of business and/or functions

Identify potential Six Sigma projects to be

executed by Black Belts and Green Belts

Identify, select, and support Black Belt and

Green Belt candidates

Participate in 2-3 days of workshop training

Black Belts
Use Six Sigma methodologies and advanced tools
(to execute business improvement projects

Are dedicated full-time (100%) to Six Sigma

Serve as Six Sigma knowledge leaders within

Business Unit(s)

Undergo 5 weeks of training over 5-10 months

Green Belts
Use Six Sigma DMAIC methodology and basic
tools to execute improvements within their
existing job function(s)

May lead smaller improvement projects within

Business Unit(s)

Bring knowledge of Six Sigma concepts & tools

to their respective job function(s)

Undergo 8-11 days of training over 3-6 months

Other Roles

Subject Matter Experts

Provide specific process knowledge to Six Sigma teams
Ad hoc members of Six Sigma project teams

Financial Controllers
Ensure validity and reliability of financial figures used
by Six Sigma project teams
Assist in development of financial components of
initial business case and final cost-benefit analysis
Topics
Understanding Six Sigma

History of Six Sigma

Six Sigma Methodologies & Tools

Roles & Responsibilities

How YOU can use Six Sigma

Questions?
Topics for Detailed Discussion
Problem Identification
Cost of Poor Quality
Problem Refinement
Process Understanding
Potential X to Critical X
Improvement
Problem Identification
If it aint broke, why fix it
This is the way weve always done it
Problem Identification
First Pass Yield
Roll Throughput Yield
Histogram
Pareto
 Problem Identification
First Pass Yield (FPY):
The probability that 100 Units
any given unit can go
Step 1 Outputs / Inputs
through a system
100 / 100 = 1
defect-free without
rework. 100

Scrap 10 Units Step 2

90 / 100 = .90

90

Scrap 3 Units Step 3

87 / 90 = .96

87

Scrap 2 Units Step 4 85 / 87 = .97

At first glance, the yield would seem to be When in fact the FPY is (1 x .90 x .96 x .97 = .
85% (85/100 but.) 838)
85
Problem Identification
Rolled
100 Units Outputs / Inputs
Throughput
Yield (RTY): Step 1 90 / 100 = .90
The yield of
individual Re-Work
process steps 10 Units 100 Units
multiplied 97 / 100 = .97
Step 2
together.
Reflects the
Re-Work
hidden factory 100 Units
3 Units
rework issues
associated with Step 3 98 / 100 = .98
a process.
Re-Work
2 Units 100 Units
Step 4 .90 x .97 x .98 = .855

100 Units
Problem Identification
RTY Examples - Widgets
50

Roll Throughput Yield

Function 1 50/50 = 1
(50-5)/50 = .90
50
(50-10)/50 = .80
Function 2
5 (50-5)/50 = .90

50

Function 3 1 x .90 x .80 x .90 = .65

10

50

Function 4
5
Put another way, this process is operating
50 a 65% efficiency
Problem Identification
RTY Example - Loan Underwriting
50

Roll Throughput Yield

Application 50/50 = 1
(50-7-2)/50 = .82
2 50 7
(43-6)/43 = .86
Fails
Underwrite
Underwriting
(43-1-2)/43 = .93
6 43

Complete Full
Paperwork
1 x .82 x .86 x .93 = .66

2 1
43
Decide not to
Close
borrow

42 Put another way, this process is operating

a 66% efficiency
Problem Identification
Histogram A histogram is a basic graphing tool that displays the
relative frequency or occurrence of continuous data values showing
which values occur most and least frequently. A histogram illustrates the
shape, centering, and spread of data distribution and indicates whether
there are any outliers.

Histogram of Cycle Time

40

30
Frequency

20

10

0 100 200 300 400 500

C8
Problem Identification
Histogram Can also help us graphically understand the data

Descriptive Statistics
Variable: CT

Anderson-Darling Normality Test

A-Squared: 6.261
P-Value: 0.000

Mean 80.1824
StDev 67.6003
Variance 4569.81
Skewness 2.31712
Kurtosis 8.26356
N 170
25 100 175 250 325 400
Minimum 1.000
1st Quartile 31.000
Median 66.000
3rd Quartile 105.000
95% Confidence Interval for Mu Maximum 444.000
95% Confidence Interval for Mu
69.947 90.417
54 64 74 84 94 95% Confidence Interval for Sigma
61.098 75.664
95% Confidence Interval for Median
95% Confidence Interval for Median
55.753 84.494
Problem Identification
Pareto The Pareto principle states that 80% of the impact of the
problem will show up in 20% of the causes. A bar chart that displays by
frequency, in descending order, the most important defects.
Pareto Chart for WEB

100
100
80

Percent
60
Count

50
40

20

0 0

Defect
Count 96 15
Percent 86.5 13.5
Cum % 86.5 100.0
Topics (Session 2)
Problem Identification
Cost of Poor Quality
Problem Refinement
Process Understanding
Potential X to Critical X
Improvement
Cost of Poor Quality
COPQ - The cost involved in fulfilling the gap between the desired and
actual product/service quality. It also includes the cost of lost opportunity
due to the loss of resources used in rectifying the defect.

Hard Savings - Six Sigma project benefits that allow you to do the same
amount of business with less employees (cost savings) or handle more
business without adding people (cost avoidance).
Soft Savings - Six Sigma project benefits such as reduced time to market,
cost avoidance, lost profit avoidance, improved employee morale,
enhanced image for the organization and other intangibles may result in
additional savings to your organization, but are harder to quantify.

Examples / Buckets
Roll Throughput Yield Inefficiencies (GAP between desired result and
current result multiplied by direct costs AND indirect costs in the process).
Cycle Time GAP (stated as a percentage between current results and
desired results) multiplied by direct and indirect costs in the process.
Square Footage opportunity cost, advertising costs, overhead costs, etc
Topics (Session 2)
Problem Identification
Cost of Poor Quality
Problem Refinement
Process Understanding
Potential X to Critical X
Improvement
 Problem Refinement
Multi Level Pareto Logically Break down initial Pareto data into sub-
sets (to help refine area of focus)

Pareto Chart for WEB

100
100
80

Percent
60
Count

50
40

20

0 0 Pareto Chart for Type

Defect
100
Count 96 15 100
Percent 86.5 13.5
80
Cum % 86.5 100.0

Percent
60

Count
50
40

20

0 0

Defect
Count 45 35 13 16
Percent 41.3 32.1 11.9 14.7
Cum % 41.3 73.4 85.3 100.0
Problem Refinement
Problem Statement A crisp description of what we are trying to solve.
Primary Metric An objective measurement of what we are attempting
to solve (the y in the y = f(x1, x2, x3.) calculation).
Secondary Metric An objective measurement that ensures that a Six
Sigma Project does not create a new problem as it fixes the primary
problem. For example, a quality metric would be a good secondary
metric for an improve cycle time primary metric.
Problem Refinement
Fish Bone Diagram - A tool used to solve quality problems by
brainstorming causes and logically organizing them by branches. Also
called the Cause & Effect diagram and Ishikawa diagram

Provides tool for exploring cause / effect and 5 whys

Topics (Session 2)
Problem Identification
Cost of Poor Quality
Problem Refinement
Process Understanding
Potential X to Critical X
Improvement
Process Understanding
SIPOC Suppliers, Inputs, Process, Outputs, Customers
You obtain inputs from suppliers, add value through your process, and provide
an output that meets or exceeds your customer's requirements.
Process Understanding
Process Map should allow people unfamiliar with the process to understand
the interaction of causes during the work-flow. Should outline Value Added
(VA) steps and non-value add (NVA) steps.

Full Form
Control Open
Start Size Sorts Pull & Sort
Receipt / Docs
Extract
Ck / Vouch
Verify

Perfection
Requal Group

No

Yes Prep cks,

Remit
Rulrs route Prep cks Ship to IP
Pass 1 Pass 2
vouch

Vouchers

Key from
Balance
Data Cap image

No
Vouch
OK

Inventory Yes
Prep
Folders / Full Form Ship to
Box QCReview Cust
 Process Understanding

Create daily peak Action

staff need plan Plan
No

Yes Can they Call employee

Add 30% to To Floor
the required make it? (3x)
no.
Operations No Need OJT Yes Make No
Compare to OJT
Re-Tng it?
Check off original Billet rpt
desired
Manually Review
returnee Yes
Update HR Staff
staff & "need No Yes
Billet Request Billet Need re
to retrain" To Floor
-train
list

Add 40% to Call (3x)

Stop!
staff needed
Create Update
Staff No IPS
No
Billet Rev
Do they original Do they No
Send Letters Yes Yes Have we No Yes Have we No Yes Interview / Meet Fleet
Do they want to billet & want to Call Wait Rank as
to desired hired hired New hiring
respond? work this call work this List pre-hire "1 2 3"
staff enough? enough? criteria
peak? uncheck peak?
ed
What if the
HR sends Hire in 1- Yes
returnee is Yes Yes
req for No No 2 order
Start already
staffing (3's are
HR / working here show up No
nos. not Place into Call
Recruit on another Do they Do they orienta
No No placed) dept 3X
program? want to want to tion
Stop! Stop!
Currently stay on the stay on the
send the ltr list list
anyways Wait List Yes

Yes Yes

New &
Other Take off Set 14
Take off Set 14
People IPS month
IPS month
call in system flag (on
system flag (on
IPS?)
IPS?)

schedule Yes No Gen Event Roster

for Reach
rpt in IPS
training

Show No Call Notify

up? 1X HR

Yes
Training Gen rpt for
Ops Kronos
Recruit
Train

No Yes Update
Pass?
IPS
Topics (Session 2)
Problem Identification
Cost of Poor Quality
Problem Refinement
Process Understanding
Potential X to Critical X
Improvement
Potential X to Critical X
Y is the dependent output of a variable process. In other
words, output is a function of input variables (Y=f(x1, x2,
x3).
Through hypothesis testing, Six Sigma allows one to
determine which attributes (basic descriptor (generally
limited or binary in nature) for data we gather ie. day of
the week, shift, supervisor, site location, machine type,
work type, affect the output. For example, statistically,
does one shift make more errors or have a longer cycle
time than another? Do we make more errors on Fridays
than on Mondays? Is one site faster than another? Once we
determine which attributes affect our output, we determine
the degree of impact using Design of Experiment (DOE).
Potential X to Critical X
A Design of Experiment (DOE) is a structured, organized
method for determining the relationship between factors
(Xs) affecting a process and the output of that process (Y).
Not only is the direct affect of an X1 gauged against Y but
also the affect of X1 on X2 against Y is also gauged. In
other words, DOE allows us to determine - does one input
(x1) affect another input (x2) as well as Output (Y).
Potential X to Critical X
DOE Example
Main Effects Plot (data means) for Elapsed
Main Effects Plot
1.4
Lo
w
Hig
h
Lo
w
Hig
h
Lo
w
Hig
h
Lo
w
Hig
h
Direct impact to Y
1.3
Elapsed

1.2

1.1

1.0
Jams DCDEL SK P2Jam

Interaction Plot (data means) for Elapsed

1.50
Jams
1 1.25
3 1.00

1.50
DCDEL
3 1.25

Interaction Plot
1 1.00

1.50
SK
Impacts of Xs on 3

1
1.25

1.00

each other P2Jam 1.50

3 1.25

1 1.00
Potential X to Critical X
DOE Optimizer
Allows us to
statistically predict the
Output (Y) based on
optimizing the inputs
(X) from the Design of
experiment data.
Topics (Session 2)
Problem Identification
Cost of Poor Quality
Problem Refinement
Process Understanding
Potential X to Critical X
Improvement
Improvement
Once we know the degree to which inputs (X) affect our
output (Y), we can explore improvement ideas, focusing
on the cost benefit of a given improvement as it relates
to the degree it will affect the output. In other words, we
generally will not attempt to fix every X, only those that
give us the greatest impact and are financially or
customer justified.
Control
Once improvements are made, the question becomes, are the
improvement consistent with predicted Design of Experiment
results (ie are they what we expected) and, are they statistically
different than pre-improvement results.

Process Capability Analysis for Sept

LSL USL
Process Data
USL 0.23000
Within
Target *
LSL -1.00000 Overall
Mean -0.02391
Sample N 23
StDev (Within) 0.166425
StDev (Overall) 0.221880

Potential (Within) Capability

Z.Bench 1.53
Z.USL 1.53
Z.LSL 5.87
Cpk 0.51

-1.0 -0.5 0.0 0.5 1.0

Cpm *

Overall Capability Observed Performance Exp. "Within" Performance Exp. "Overall" Performance
Z.Bench 1.14 % < LSL 0.00 % < LSL 0.00 % < LSL 0.00
Z.USL 1.14 % > USL 13.04 % > USL 6.35 % > USL 12.62
Z.LSL 4.40 % Total 13.04 % Total 6.35 % Total 12.62
Ppk 0.38
Control
Control Chart - A graphical tool for monitoring changes that occur
within a process, by distinguishing variation that is inherent in the
process(common cause) from variation that yields a change to the
process(special cause). This change may be a single point or a series
of points in time - each is a signal that something is different from
what was previously observed and measured.
I and MR Chart for Sept

1
Individual Value

0.5 UCL=0.5293

0.0 Mean=0.03
2

-0.5 LCL=-0.4693

Subgroup Sept 13 Sept 20

Date 9/13 9/25
0.7 1
0.6 UCL=0.6134
Moving Range

0.5
0.4
0.3
0.2 R=0.1877
0.1
0.0 LCL=0
Wrap Up