Introduction to Kaizen & Basics of Six Sigma

8/10/2019 Introduction to Kaizen & Basics of Six Sigma

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INTRODUCTION TO SIX SIGMA

1

WHY TO ATTAIN THIS WORKSHOP?

Organization is considering implementing Six Sigma

and you want to understand what is it and how it

works?

You are responsible in some way for Six Sigma

initiatives.

You have heard about six sigma and you are curious

about how it works and what result you can expect

from putting it to work for our organization.

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PURPOSE OF SIX SIGMA

3

To make customer happier and

increase profits

WHAT RESULTS HAVE BEEN ACHIEVED WITH SIX SIGMA?

Effect of Quality

Benefits for customers

Financial Benefits.

Benefits for employees

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SIX SIGMA : FROM WHERE IT CAME?

1985 : Dr. Mikel J Harry wrote a paper relating early failures to quality.

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SIX SIGMA AND FORTUNE 500 COMPANIES

6


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WHAT IS SIX SIGMA

7

SIX SIGMA : AN AGGRESSIVE GOAL

8


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PILOTS SIX SIGM PERFORM NCE

9

Width of landing

strip 1/2 Width

of landing

strip

If pilot always lands

within 1/2 the landing strip

width, we say that he has Six

Sigma capability.

WHAT CAN IT DO? SUCCESS STORIES )

Motorola: 5-Fold growth in Sales

Profits climbing by 20% pa Cumulative savings of $14 billion over 11 years

General Electric: $2 billion savings in just 3 years

The no.1 company in the USA

Bechtel Corporation: $200 million savings with investment of $30 million

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GE SIX SIGMA ECONOMICS

11

1996 1998 2000 20020

500

1000

1500

2000

2500

1996

Cost

Benefit

(in millions)

Source: GE Annual Report, Jack Welch Letter to Share Owners and Employees - progress

based upon total corporation cost/benefits attributable to Six Sigma.

OVERVIEW OF SIX SIGMA

13

PAIN, URGENCY, SURVIVAL

COSTS

OUT

GROWTH

TRANSFORM THE

ORGANIZATION

CHANGE

THE

WORLD

6 SIGMA AS

A

STATISTICAL

TOOL

6 SIGMA AS

APHILOSOPH

Y

6 SIGMA AS

A PROCESS


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OVERVIEW OF SIX SIGMA

14

It is a Philosophy

Anythinglessthanidealisanopportunityforimprovement

Defectscostsmoney

Understandingprocessesandimprovingthemis

themostefficientwaytoachievelastingresults

It is a Process

Toachievethislevelofperformanceyouneedto:

Define,Measure,nalyse,ImproveandControl

It is

Statistics

6Sigmaprocesseswill

producelessthan3.4

defectspermillion

opportunities

1 . PHILOSOPHY

Know Whats Important to the Customer

(CTQ)

Reduce Defects (DPMO)

Centre Around Target (Mean)

Reduce Variation (Standard Deviation)

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DATA DRIVEN DECISION

Y X1 . . . Xn

Dependent Independent

Output Input-Process

Effect Cause

Symptom Problem

Monitor Control16

f(X)Y=

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2. PROCESS

18

Define

Measure

Analyze

Improve

Control

Define

Measure

Analyze

Design Verify

DMAIC DMADV

Existing

Processes

NewProcesses

COPQ (COST OF POOR QUALITY)

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- Lost Opportunities

- The Hidden Factory

- More Setups

- Expediting Costs

- Lost Sales

- Late Delivery

- Lost Customer Loyalty

- Excess Inventory

- Long Cycle Times- Costly Engineering

Changes

Average COPQ

approximately 15% of Sales

Hidden Costs:

- Intangible

- Difficult to Measure

Traditional Quality Costs:

- Tangible

- Easy to Measure

- Inspection

- Warranty

- Scrap

- Rework

- Rejects


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COPQ VS. SIGMA LEVEL

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2 3 4 5 6

20

C

ostofQuality%Sales

Sigma Level

DEFECTS VS. DEFECTIVES

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CLASSICAL YIELD,% DEFECTIVE & DPU

22

IN PROCESS YIELD

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ROLLED THROUGHPUT YIELD

24

EXERCISE

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DPMO: DEFECTS PER MILLION OPPORTUNITY

Opportunities for defects focus on:

noncompliance to design intent

noncompliance to customer expectations

Defects Per Million Opportunities (DPMO)Normalizes forComplexity

DPMO Allows comparison of dissimilar products.

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3. IT IS STATISTICS?

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VARIATION- SOME FACTS

WHAT IS STATISTICS?

Six Sigma Belt- Common Tasks

- To predict behavior of the process- To compare the behavior with the target

- To identify the causes and link with the process

behavior

A lot of information are needed about the

process


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WHAT IS STATISTICS?

The set of information derived from the

Sample data to estimate the process

(Population) are called Statistics

POPULATION VS SAMPLE

Population

- Set of all possible outcomes of the process

Samples

- Subsets of populations:

Data is obtained using samples because

- we seldom know the entire population

- Population statistics are desired, but often not available

- Samples approximate the population

Descriptive statistics apply to samples


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STATISTICS PRACTICALLY

IMPORTANT BASIC STATISTICS


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PROCESS CAN BE DIFFER IN

STATISTICS FOR LOCATION


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STATICS FOR SPREAD

STATISTICS FOR SHAPE


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POPULATION VS SAMPLE STATISTICS

MEAN


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MEAN : EXAMPLE

Calculate the mean of following dataset

MEDIAN


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MODE

RANGE


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STANDARD DEVIATION

VARIANCE


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STANDARD DEVIATION :EXAMPLE


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EXERCISE

HISTOGRAM


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NORMAL DISTRIBUTION CURVE ( BELL CURVE)

Normal distribution issymmetrical about itsmean

In normal distribution ,themean, the median and themode are equal.

Normal distributions are

divide up into 3 standarddeviations on each side ofthe mean

CAUSES OF VARIABILITY

Common Causes:

Random variation within predictable range (usual)

No pattern Inherent in process

Adjusting the process increases its variation

Special Causes

Non-random variation (unusual)

May exhibit a pattern

Assignable, explainable, controllable

Adjusting the process decreases its variation

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LIMITS

Process Control limits: Statistical

Process limits are used for individual items

Control limits are used with averages

Limits = 3

Define usual (common causes) & unusual (special causes)

Specification limits: Engineered

Limits = target tolerance

Define acceptable & unacceptable

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USUAL VS. UNUSUAL, ACCEPTABLE VS. DEFECTIVE

53

Another View

LSL USL

Off-Target

USLLSL

Large

Variation

CenterProcess

ReduceSpread

The statistical view of a

problem

On-

Target

USLLSL

LSL = Lower spec

limit

USL = Upper spec

limit


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MORE ABOUT LIMITS

54

Good quality:defects are rare (Cpk>1)

Poor quality:defects are common

(Cpk


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PROCESS SHIFT ALLOWED

56

2 3 4 5 6 7 8 9 1210 111

LSL USL

SD = 1

1.5 SD 1.5 SD

SIX SIGMA MEASUREMENT

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4

5

6

7

66810

6210

233

3 4

0.02

Sigma

DPMO


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SIX SIGMA MEASUREMENT

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0

100,000

200,000

300,000

400,000

500,000

600,000

1.5 2.5 3.5 4.5 5.5

# of Sigmas

#ofDefectperMillion

Sigma Defects

numbers

per million

1.5 500,000

2.0 308,300

2.5 158,650

3.0

67,000

3.5 22,700

4.0 6,220

4.5 1,3505.0 233

5.5 32

6.0 3.4

EXAMPLE

Process A Process B

3.7 4.7

6.5 5.3

3.2 4.7

3.2 5.4

5.7 4.7

7.4 4.4

5.7 4.7

7.7 5.8

4.2 4.2

2.9 5.7


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COMPONENTS OF SIX SIGMA

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COMPONENTS OF SIX SIGMA

Two components of Six Sigma

Process Power

People Power

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PROCESS POWER

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APPROACH

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Practical

Problem

Statistical

Problem

Statistical

Solution

Practical

Solution

DMAIC - SIMPLIFIED

Define What is important?

Measure How are we doing?

Analyze What is wrong?

Improve Fix whats wrong

Control Ensure gains are maintained to guarantee performance

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DMAIC APPROACH

66

D

Define

M

Measure

A

Analyze

I

Improve

C

Control

Identify and state the practical problem

Validate the practical problem by collecting data

Convert the practical problem to a statistical one, definestatistical goal and identify potential statistical solution

Confirm and test the statistical solution

Convert the statistical solution to a practical solution

DEFINE

67

D

Define

M

Measure

A

Analyze

I

Improve

C

Control

VoC- Who wants the project and why ?

The scope of project / improvement (SMART

Objective)

Key team members / resources for theproject

Critical milestones and stakeholderreview

Budget allocation


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MEASURE

68

D

Define

M

Measure

A

Analyze

I

Improve

C

Control

Ensure measurement system reliability

Prepare data collection plan

Collect data

- Is tool used to measure the output variable

flawed ?

- How many data points do you need to

collect ?

- How many days do you need to collect

data for ?

- What is the sampling strategy ?

- Who will collect data and how will data

get stored ?

- What could the potential drivers of

variation be ?

ANALYZE

69

D

Define

M

Measure

A

Analyze

I

Improve

C

Control

How well or poorly processes are workingcompared with- Best possible (Benchmarking)

- Competitors

Shows you maximum possible result

Dont focus on symptoms, find the rootcause


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IMPROVE

70

D

Define

M

Measure

A

Analyze

I

Improve

C

Control

Present recommendations to process owner.

Pilot run- Formulate Pilot run.

- Test improved process (run pilot).

- Analyze pilot and results.

Develop implementation plan.

- Prepare final presentation.

- Present final recommendation to ManagementTeam.

CONTROL

71

D

Define

M

Measure

A

Analyze

I

Improve

C

Control

Dont be too hasty to declare victory.

How will you maintain to gains

made?

- Change policy &

procedures

- Change drawings

- Change planning

- Revise budget

- Training


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PEOPLE POWER

72

Tell me, I forget.Show me , I remember.

Involve me, I understand.

6 S TRAINING

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Master

BlackBelt

Black

Belts

Green Belts

Team Members /

Yellow Belts

Champions

Mentor, trainer, and coach of Black Belts and others

in the organization.

Leader of teams implementing the six sigma

methodology on projects.

Delivers successful focused projects using

the six sigma methodology and tools.

Participates on and supports the project

teams, typically in the context of his or her

existing responsibilities.


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CHAMPION

Plans improvement projects

Charters or champions chartering process

Identifies, sponsors and directs Six Sigma projects

Holds regular project reviews in accordance withproject charters

Includes Six Sigma requirements in expense andcapital budgets

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Champions

CHAMPION

Identifies and removes organizational and culturalbarriers to Six Sigma success.

Rewards and recognizes team and individualaccomplishments (formally and informally)

Communicates leadership vision

Monitors and reports Six Sigma progress

Validates Six Sigma project results

Nominates highly qualified Black Belt and/or Green Beltcandidates

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Champions


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MASTER BLACK BELT

Enterprise Six Sigma expert

Permanent full-time change agent

Certified Black Belt with additional specialized skills or

experience especially useful in deployment of Six

Sigma across the enterprise

76

Master

Black Belt

MASTER BLACK BELT

Highly proficient in using Six Sigmamethodology (e.g., advanced statistical analysis,

project management, communications, programadministration, teaching, project coaching)

Identifies high-leverage opportunities for applyingthe Six Sigma

Basic Black Belt training

Green Belt training

Coach / Mentor Black Belts

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Master

Black Belt


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BLACK BELT

Six Sigma technical expert

Temporary, full-time change agent (will return toother duties after completing a two to three yeartour of duty as a Black Belt)

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BlackBelts

BLACK BELT

Leads business process improvement projects whereSix Sigma approach is indicated.

Successfully completes high-impact projects that result

in tangible benefits to the enterprise Demonstrated mastery of Black Belt body of knowledge

Demonstrated proficiency at achieving results throughthe application of the Six Sigma approach

Coach / Mentor Green Belts

Recommends Green Belts for Certification

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BlackBelts


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GREEN BELT

Six Sigma Project originator

Part-time Six Sigma change agent. Continues to performnormal duties while participating on Six Sigma projectteams

Six Sigma champion in local area

Recommends Six Sigma projects

Participates on Six Sigma project teams

Leads Six Sigma teams in local improvement projects

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Green Belts

YELLOW BELT

Learns and applies Six Sigma tools toprojects

Actively participates in team tasks Communicates well with other team

members

Demonstrates basic improvement toolknowledge

Accepts and executes assignments asdetermined by team

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Team Members /

Yellow Belts


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FINANCIAL ANALYST

Validates the baseline status for each

project.

Validates the sustained results / savings

after completion of the project.

Compiles overall investment vs. benefits on

Six Sigma for management reporting. Will usually be the part of Senior Leadership

Team.

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PROJECT SELECTION

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SOURCES OF PROJECTS

External Sources:

Voice of Customer

What are we falling short of meeting customer needs?

What are the new needs of customers?

Voice of Market

What are market trends, and are we ready to adapt?

Voice of Competitors What are we behind our competitors?

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SOURCES OF PROJECTS

Internal Sources:

Voice of Process

Where are the defects, repairs, reworks? What are the major delays?

What are the major wastes?

Voice of Employee What concerns or ideas have employees or managers raised?

What are we behind our competitors?

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HARVESTING THE FRUIT OF SIX SIGMA

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- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Sweet Fruit

Design for RepeatabilityProcess Enhancement

Bulk of Fruit

Process

Characterization

and Optimization

Low Hanging Fruit

Seven Basic Tools

Ground Fruit

Logic and Intuition

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

WHAT QUALIFIES AS A SIX SIGMA PROJECT ?

Three basic qualifications:

There is a gap between current and desired / needed

performance. The cause of problem is not clearly understood.

The solution is not pre-determined, nor is the optimal solution

apparent.

Introduction to Kaizen & Basics of Six Sigma

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