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Why is it called Six Sigma?Why is it called Six Sigma? Sigma ( ) is the symbol used to denote Standard
Deviation which is a metric to define dispersion of data,(measurements, occurrences ,etc.) in a given set ofobservations (population);
Data is distributed around a central tendency (meanor mode or median) and to define this spread ofdata (deviations from central tendency), the rootmean square of the sum of all deviations iscalculated to give an unique value.
Generally, data is assumed to be normallydistributed i.e.: the central tendency is such that mean/mode/ median
are the same value Almost all data are contained within the values defined
by the interval: Mean +/- 3 .
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Why is it called SixWhy is it called SixSigma?Sigma?
Graphically Normal Distribution is represented in a histogram
If we can achieve a +/- 3 spread with our output,within the range of specs.,we are on target !
Thus the name six sigma.
Upper .SpecifLimit
Lower.Specif
Limit
- 3 + 3
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What is 6 sigma?What is 6 sigma?
6 sigma is a management methodology of whichthe goal is to improve dramatically the performanceand the quality of all your processes, services andproducts. It is:
Customer centric
Based on data/measurements/statistics
A pragmatic & disciplined approach
Business oriented, providing high returns
Focused on reducing variability & defects
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6 sigm a Basics6 sigm a BasicsqIf there is an output, there is a process!
qIf there is a process there isaperformance variation
qIf there is variation there is a probability ofdefect
qThe customer always feels the output process variation.
qA 6 sigma processproduces only3.4 defects per million ofopportunities (operations)
qA process operating at 3 sigma produces66807defects per million of opportunities
qA 3 sigma process cost you up to 20 % of your salesrevenue
qA 6 sigma process cost you less than 1% of your salesrevenue
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2 3 4 5 6 7 8 9 1210 16151413111
Upper.Specif
Limit
Sigma curveSigma curve
In a 3 sigma process the values are widely spread,along the center line showing the higher
.variation of the process,In a 6 Sigma process the values are closer to the
.center line showing less variation in the process
6 sigma Basics6 sigma BasicsResult of variationResult of variation
SpreadSpread
Lower.Specif
Limit
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process shiftprocess shift
2 3 4 5 6 7 8 9 1210 16151413111
LSL USL
1.5 1.5
6 sigma Basics6 sigma BasicsResult of variationResult of variation
: 3 +/- .5 = .5 x2 = 9 ; =ince R 12 +/- .ther 2 x 1 5 ( ) or shift in spread
R
6
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Cost of quality at various levels of SigmaCost of quality at various levels of Sigma
Sigma ( )Defect rate PPM Cost of quality Competitive level
3.4 40%
WorldClass
Industry
Average
NonCompetitive
6
5
4
3
2
1
6 sigma Basics6 sigma BasicsResult of variationResult of variation
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Six Sigma MethodologySix Sigma Methodology(DMAIC)(DMAIC)
Define
Measure
Analyse
Control
Improve
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DMAIC StepsDMAIC Steps1. Define1. Define
Identify projects that are measurable
Define projects including the demands ofthe customer and the content of theinternal process. (CTQ)
Develop team charterDefine process map
1. Define2.
Measure
3. Analyze 4. Improve 5. Control
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DMAIC StepsDMAIC Steps3. Analyse3. Analyse
Establish process capabilityDefine performance objectives
Identify variation sources
Tools for analysisl Process Mappingl &Failure Mode Effect Analysis
l Statistical Testsl Design of Experimentsl Control chartsl Quality Function Deployment
( )QFD
3. Analyse1. Define 2.Measure
4. Improve 5. Control
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14
DMAIC StepsDMAIC Steps4. Improve4. Improve
Screen potential causes
Discover variable relationships among causes and
effectsEstablish operating tolerances
Pursue a method to resolve and ultimately eliminateproblems. It is also a phase to explore the solution howto change, fix and modify the process.
Carryout a trial run for a planned period of time toensure the revisions and improvements implementedin the process result in achieving the targeted values.
4.
Improve
1. Define
2.
Measure
3.
Analyse
5.
Control
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15
DMAIC StepsDMAIC Steps5. Control5. Control
Monitor the improved process continuously toensure long term sustainability of the newdevelopments.
Share the lessons learnt
Document the results and accomplishments ofall the improvement activities for futurereference.
5. Control1. Define 2. Measure 3. Analyse 4. Improve
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An example:The cycle time of a distribution company, from
customer order to customer delivery should notexceed 3 days (contractual terms & conditions)
Customers complain delays; competitors arebetter: they never exceed 3 days
Management says We are loosing money
Team in place says We dispatch on average the
same day we receive the order and we alwaysuse a 24 hours delivery carrier
6 sigma Basics6 sigma Basics
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6 sigma steps (DMAIC)6 sigma steps (DMAIC)
DDefine the business problem
MMeasure the process (Y) performance
Find the root causes (Xs) of the problem (AAnalyse)
IImprove, iimplement new solution
Deliver (Y) performance over time (Control)
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process as felt by the customer
eceiptforderromCustomerInputOrder
Outputnit delivery
u p p l i e r=yC o m p a n y
yC u s t o m er
DefinitionpecificationPerformanceTargets*TQ ead time days . %
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MeasureMeasure
Measurethe :problem and defects( )Lead time distribution
ime fromrder to deliveryn days
No ofoccurrences
0
defectefects
/ontractual CustomerSpecificationLimit
3 days
10
1 day 2 days
50
Histogram
bservedprobabilityf=efects . %2 03/26 216
Variation
Trend
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Measure conclusionMeasure conclusion . %!observed a probability of defect of 12 03
. ( ) !performance is 2 67 Z value We have a problem . %6 sigma goal is to reach 0 00034 of probability of!defect
value*
2
3
4
5
6
Defects per million ofopportunities
308537
66807
6210
233
3.4
% defects
30.8537%
6.6807%
0.6210%
0.0233%
0.00034%
12.03%2.67
*For short term data
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AnalyzeAnalyzenalysis finding the root causes
( )!Xs> Pareto chart of the 26 defects
iss 3pmcarrieforoutsidePuneregion
=0 %7
Incompleteshippingaddress
4= 15%
Other2= 8%
> %2 causes represent 92 of defects
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ImproveImprove
actionstaken :> Process
OutsidePune region
orders first& organizean earlier
transfer toshipping
department> Change address
format andcontrol atorder taking
time ime fromrder to deliveryn days
no ofoccurences
0
defects
/ontractual CustomerSpecificationLimit
3 days
10
1 day 2 days
50
Histogram
bserved probability=f defects %xpected performance:6 is between
.and the spec limit andthe distribution is
!normal
6x
ew Cycle time from order to delivery dist
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ControlControlelivery time performance for the year
Month
DeliveryP99indays
121110987654321
3,4
3,2
3,0
2,8
2,6
2,4
2,2
2,0
3 days
Control chart of Delivery P99 over one year
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6 sigma financial impact6 sigma financial impact
40%
35%
30%
20%
15%
10%
5%
.4 233 6210 66807 308537 500000 5 4 3 2
Rs.!!
/Business Case : .Sales Rs 10 every unit : %Operating margin 25 : .Every defect costs Rs 24 .t 2 67 oss was 38 paisaor every sale
=DPMO Defective per Million Opportunities
i x S i g m aR o u t e
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Six Sigma business contributionSix Sigma business contribution
Contribution to growth through:Customer satisfaction increase
Introduction of quality products &services
Productivity gains:
Product quality improvementHigher service performanceProcess efficiency
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