6 – Sigma Training

Review
 Outline
Topic 1 - Six Sigma Overview
Topic 2 – Team process and logistics
Topic 3 – Intro to Project Charter
Topic 4 – Project Charter Continued
Topic 5 – Think Measurement
Topic 6 – Pre-Project Planning - WBS
Topic 7 – Data Analysis

Ing. Juan Carlos Gebhardt Lucic

Ex – National Coordinator of UNIDO - Bolivia
 Topic 1 - Six Sigma Overview

What is Six Sigma?

• In statistics, sigma (s) refers to
“standard deviation” which is a
measure of variation.

• You will come to learn that variation is

the enemy of any quality process.
• We need to understand, manage and
minimize process variation.

• Six Sigma is actually an aspiration or

goal of process performance.

• A Six Sigma process only yields 3.4

defects for every million opportunities!
In other words, 99.9997% of the
products are defect-free!
 Six Sigma Levels

Six Sigma Levels

• Higher sigma level means lower defect rate. Let’s take a look at the defect rates of processes at different sigma levels.

• A 3 Sigma processes has a defect rate of approximately 7%. What would happen if processes operate at 3
sigma?
• Virtually no modern computer would function*.
• 10,800,000 health care claims would be mishandled each year.
• 18,900 US Savings bonds would be lost every month.
• 54,000 checks would be lost each night by a single large bank.
• 4,050 invoices would be sent out incorrectly each month by a modest-sized telecommunications company.
• 540,000 erroneous call details would be recorded each day from a regional telecommunications company.
• 270,000,000 (270 million) erroneous credit card transactions would be recorded each year in the United States.

• Sigma level is the measure - Six is the goal!

 Six Sigma - Fundamentally
Fundamentally….

Six Sigma is a set of techniques and tools for process improvement.

Six Sigma seeks to improve the quality of process outputs by identifying

and removing the causes of defects (errors)

Six Sigma tries to focus improvements from a customer’s need

perspective.
Customer is someone, group or process who receives an output. Customers can
be both internal and external.

Six Sigma incorporates measurements (statistics) as a way to both identify

areas to work on and results of improvement efforts.
 Y=f(x) Approach
Six Sigma Approach X3
X2
Y=f(x) is the relational transfer function that is used by all Six Sigma
practitioners.  X7 X5

Y refers to the measure or output of a process. X8

X1
• The “Y” is the measure of process performance that you're
trying to improve.  X6

f(x) means “function of x”.

• x’s are factors or inputs that affect the “Y”

In simple terms: “My process performance is Y=f(x)

dependent on certain x’s”.
D-M-A-I-C
• Define and quantify
Define the Problem &
Objective

• Baseline process, validate

Measur measures & Identify all possible x’s
e and dependent y’s

• Analyze & Validate Causes

Analyze identifying critical factors

• Develop
Improve Solutions

• Implement &
sustain
Control solutions
 Expectations from You

Develop Skills
• Gain insight into tools and techniques that can help you do your jobs
more effectively.
• Develop a “Problem-Solving” toolbox.

Develop Process and Customer-centric Approach to Problem-Solving

• Understanding dependencies of tasks and processes
• Solving the Customer’s problem completely
• Use a consistent and disciplined approach on projects

Work more collaboratively

• Work with each other, both internal to TS and the rest of the College,
solving complex, cross-functional issues.
 VOC – Review
• VOC stands for Voice of the Customer.
• The 4 primary forms are...
• VOC: Voice of the Customer
• VOB: Voice of the Business
• VOA: Voice of the Associate
• VOP: Voice of the Process
• VOC is gathered via
• Direct Methods
• Indirect Methods

• Discussion point
• How did you gather your Pain point?
D-M-A-I-C
Lets spend the day here
• Define and quantify
- Define f(x)’s
Define the Problem &
Objective - Affinity modeling
- Process mapping
• Baseline process, validate
Measur measures & Identify all possible
e x’s and dependent y’s

• Analyze & Validate Causes

Analyze identifying critical factors

• Develop
Improve Solutions

• Implement &
sustain
Control solutions
 P4ME Affinity Model
• P4ME – Affinity Categories P
• People: People who are involved in the process; M
• Methods: How the process is completed (e.g. M M
procedures, policies, regulations, laws);
M
• Machines: Equipment or tools needed to perform E
the process;
• Materials: Raw materials or information needed
to do the job;
• Measurements: Data collected from the process
for inspection or evaluation;
• Environment: Surroundings of the process (e.g. Y=f(x)
location, time, culture)
 Team Identification
• Self-awareness is key
• Understanding yourself helps you explain who you are and how you
work
• Key to comprehending team dynamics
• Understanding your team members helps you better interact with them
and understand their motivations, perspective, needs and wants
• Personality is only one basis of guiding interaction, not the only basis
• No one is black or white – everyone is nuanced
• Practical applications for forming teams
 Project Charter
The purpose of the project charter is to get the project approved
Secure a Sponsor
High level timeline agreement
ROI agreement
High level deliverable agreement
Setting expectations

Lets Spend 20 Minutes putting a first draft of our charters

together
See template
 Pareto Principle
• The Pareto Principle is commonly known as the “law of the vital few” or “80:20 rule”.

• It means that the majority (approximately 80%) of effects come from a few
(approximately 20%) of the causes.

• Example of applying Pareto Principle:

• 80% of the defects of a process come from 20% of the causes.
• 80% of sales come from 20% of customers.

• Since this 80:20 rule was originally based upon the works of Wilfried Fritz Pareto
(aka. Vilfredo Pareto), the Pareto principle and references to it should be capitalized
because Pareto refers to a person (proper noun).
• Mr. Pareto is also credited for many works associated with the 80:20 some more loosely than others:
• Pareto’s Law
• Pareto efficiency
• Pareto distribution etc.
 What is FMEA?
• FMEA (Failure Modes & Effects Analysis) is an analysis
technique to identify, evaluate and prioritize a potential
deficiency in a process so that the project team can
design action plans to reduce the probability of the
failure/deficiency occurring.

• FMEA activity follows the process mapping and is

followed by a Pareto Analysis.

• FMEA is completed in cross-functional brainstorming

sessions in which attendees have a good understanding
of the entire process or a segment of it.
 Cost of Poor Quality
• There are seven (7) common forms of waste that are often
referred to as the Seven Deadly Muda.
• Technically there are more than seven forms of waste but if
you can remember these seven you'll capture 90+% of your
waste.
1. Defects
2. Over Production
3. Over Processing
4. Inventory
5. Motion
6. Transportation
7. Waiting
 Six Sigma Metrics
• There are many Six Sigma metrics and/or measures of
performance used by Six Sigma practitioners.
• In addition to the ones we’ll cover here, several others
(Sigma level, Cp, Cpk, Pp, Ppk, takt time, cycle time, utilization etc.)
will be covered in other modules throughout this
training.
• The Six Sigma metrics of interest here in the Define
Phase are:
• Defects per Unit (DPU)
• Defects per Million Opportunities (DPMO)
• Yield (Y)
• Rolled Throughput Yield (RTY)
 What is SIPOC?
• SIPOC (Suppliers-Input-Process-Output-Customers) is a
high-level visualization tool to help identify and link
the different components in the process.
• It is usually applied in the Measure phase in order to
better understand the current state of the process and
define the scope of the project.
 Activities

 Element of project work that requires an action to produce a deliverable.

 Have an expected duration.
 Consume budget and/or human resources.
 Are named in verb-noun format.

Example: Activities in a company project. Verb (Action) Noun (Deliverable)

 Revise user manual.

 Make a sales presentation. Revise user manual
Expected duration determined by (whatever)
 Reserve conference room.
 Work Package
 Planned work or deliverables.
 Lowest-level component of the work breakdown structure.
 Cost and schedule can be easily estimated.

A work breakdown structure showing the work packages

 The 8/80 Rule

 A general guideline regarding work packages: they require more

than 8, but fewer than 80, hours of effort to complete.
 Helps project managers create work package lists.
 The Sequence Activities Process
 A planning process that involves identifying and documenting interactivity
dependencies among project activities for the purpose of creating the
project schedule.
 Types of Activity Dependencies

Dependency Description

Mandatory Inherent to the work itself and are usually affected by physical constraints.

Discretionary Defined by the project and project management team at their discretion.

External Contingent on inputs from outside the project activities.

 Precedence Relationship Types

Relationship Description

Finish-to-Start (FS) Activity A must finish before activity B can start.

Finish-to-Finish (FF) Activity A must finish before activity B can finish.

Start-to-Start (SS) Activity A must start before activity B can start.

Start-to-Finish (SF) Activity A must start before activity B can finish.

 The Critical Path
 Path with the longest total duration.
 Has no scheduling flexibility.

1[6W] + 2[4W] + 4[3w] + 6[1W] = 14 Weeks

1[6W] + 3[5W] + 5[4w] + 6[1W] = 16 Weeks Critical
Path

A network diagram showing the critical path of activities

 Schedule Compression
• The shortening of the project schedule without affecting the
project scope.
• Two methods:
• Fast-tracking
• Crashing

Example: Schedule compression for building and installing

cabinets.
• Involves carpenter and sub-contractor.
• Sub-contractor installs cabinets while carpenter builds.
• Changes precedence.
 How do you collect and analyze
data?
1. Implement the observational system you’ve planned.

2. Organize the data you’ve collected.

3. Conduct data graphing, visual inspection, statistical analysis, or

other operations on the data as appropriate.

4. Take note of any significant or interesting results.

5. Interpret the results.

 What is Sampling
• Sampling is the process of selecting objects or
observations from a population of interest about
which we wish to make statistical inference.
• It is extensively used to collect information about a
population which can be physical or intangible objects.

Population Sampling Sample

 Basic Sampling Steps
• Determine the population of interest
• Determine the sampling frame
• Determine the sampling strategy
• Calculate the sample size
• Conduct sampling
 What is SPC
• Statistical process control (SPC) is a statistical method
to monitor the performance of a process using control
charts in order to keep the process in statistical
control.
• Statistical process control can be used to distinguish
between the special cause variation and the common
cause variation in the process.
• It presents the voice of the process.
 What is Measurement System Analysis

• Measurement System Analysis (MSA) is a systematic

method to identify and analyze the variation
components in the measurement.
• It is a mandatory step in Six Sigma project to ensure
the data are reliable and trustworthy before making
any data-based decisions.
• It is the check point of data quality before we start any
further analysis and draw any conclusions from the
data.
 Accuracy vs. Precision
• Accuracy
• The level of closeness between the average observed value and
the true value
• How well the observed value reflects the true value
• Precision
• The spread of measurement values
• How consistent the repeated measurements deliver the same
values under the same circumstances