Professional Documents
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Topics (Session 1)
♦ Understanding Six Sigma
♦ Sigma is a measure
of variation
(the data spread)
σ
μ
What does variation mean?
20
every time. 0
-5
all processes.
♦ Variation directly affects customer experiences.
the variation!
s
♦ Managing
0 by10
the average x tell
20doesn’t 30the whole40
story. The 50
average
and the variation together show what’s 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. . .
♦ The police make 7 false arrests ♦ There are fewer than 4 false
every 4 minutes. arrests per month.
Key Define Tools: Key Measure Key Analyze Tools: Key Improve Key Control Tools:
• Cost of Poor Tools: • Histograms, Tools: • Control Charts
Quality (COPQ) • Critical to Quality Boxplots, Multi- • Solution Selection • Contingency
• Voice of the Requirements Vari Charts, etc. Matrix and/or Action
Stakeholder (VOS) (CTQs) • Hypothesis Tests • To-Be Process Plan(s)
• Project Charter • Sample Plan • Regression Map(s)
• As-Is Process • Capability Analysis
Map(s) Analysis
• Primary Metric (Y) • Failure Modes and
Effect Analysis
(FMEA)
Define – DMAIC Project
What is the project?
$
Project Cost of
Charter Poor Voice of
Quality 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
S t a k
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
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.
Take packages
Add steps Add up Total # of Observ e sender
Finalizing
Deliv erPackages
Delivery
to customers
according to N, S,
E, W route
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
Market
l et nI
Data Industry
yrt s udnI
Benchmarking
Customer
Correspondence
st s oP
Customer
gni net si L
Service
PRIMARY RESEARCH
Surve
ysSurve
ys
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
♦
Variance 104.349
Percent
60
Count
50
40
20
0 0
nt er s
Defect La
te ou
Am 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
Process/Product
Process or
Prepared by: Page ____ of ____
Product Name:
Process S O D R S O D R
Step/Part E C E P Actions E C E P
Number Potential Failure Mode Potential Failure Effects V Potential Causes C Current Controls T N Recommended Resp. Actions Taken V C T N
X1 0
0
0
X2
0 0
0 0
X3
0 0
0 0
X4
0 0
0 0
0 0
etc 0
0
0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
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
unt ers
Defect La
te
A mo Oth
Count 79 17 4
Percent 79.0 17.0 4.0
Cum % 79.0 96.0 100.0
Data Regression
Stratificatio Analysis
n Pareto Chart for Amt Defects
15
100
80
Process
Simulatio
Percent
60
Count
10
40
5
20 n
0 0
y l
Defect Cur
renc
Cle
rica
Oth
er
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.
Generate
Evaluate
Clarify
Decision
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
Nice
☺ Try Solution
Implementatio
Nice
X n Plan
da B
Idea
oi t at ne mel p mI
doo G
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
R e v ie w
a p p li a t io n f o r
P2 - # of
c o m p le t e n e s s
incomplete
1.1
Individual Value
loan
applications
C o m p le t e
A p p lic a t i o n
m e e t i nN g o
C o m p le t e ?
in f o r m a t io n 25
Mean=24.35
Processing
1.2
Credit review
15 LCL=15.21
1.3
0 10 20 30
Review
1.4
Observation Number
Disclosure
1.5
DFSS – The Design Methodology
Design for Six Sigma
♦ 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
♦ 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
rework. 100
90
87
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 Step 2 97 / 100 = .97
together.
Reflects the
Re-Work
hidden factory 3 Units 100 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
Function 3
10
1 x .90 x .80 x .90 = .65
50
Function 4
5
Put another way, this process is operating
50 a 65% efficiency
Problem Identification
RTY Example - Loan Underwriting
50
Complete Full
Paperwork
1 x .82 x .86 x .93 = .66
2 1
43
Decide not to
Close
borrow
40
30
Frequency
20
10
Descriptive Statistics
Variable: CT
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
EB ers
Defect No
n-W Oth eb)
(W
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)
100
100
80
Percent
60
Count
50
40
20
Percent
60
Count
50
40
20
0 0
i ng
Go
al ime On
d ers
Defect An
nu
On
eT
im
e an Oth
eT
On
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
Full Form
Control Open
Start Size Sorts Pull & Sort
Receipt / Docs
Extract
Ck / Vouch
Verify
Perfection
Requal Group
No
Vouchers
Key from
Balance
Data Cap image
No
Vouch
OK
Inventory Yes
Prep
Folders / Full Form Ship to
Box QCReview Cust
Process Understanding
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?)
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
Hi g
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
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 X’s on 3
1
1.25
1.00
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.
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
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
0.5
0.4
0.3
0.2 R=0.1877
0.1
0.0 LCL=0
Wrap Up