Six Sigma Training Material

Six Sigma

March 10, 2010

Six Sigma – Green Belt Training Ver 1.0

eXel Solutions R.T. Nagar, Bangalore – 560032 www.exelsolution.com

Copyright and Confidentiality Notice All rights reserved. These materials are confidential. This document is being submitted with the explicit understanding that no part of these materials would be reproduced or published in any form or through any means whether electronic, mechanical, photocopying or with the aid of any information storage or retrieval system, nor would the materials be disclosed to third parties without the express and prior written authorization of eXel Solutions.

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Understanding Six Sigma

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Table of Contents 1. Introduction .................................................................................................................. 4 2. The Nature of Six Sigma .......................................................................................... 6 3. Six Sigma Organization ............................................................................................ 7 4. Six Sigma – CMM ........................................................................................................ 8 4.1. Indicators of Maturity ..................................................................................... 9 4.2. Reactive Projects Percentage ...................................................................... 9 4.3. Projects ‘Hit Rate’ ............................................................................................. 9 4.4. Cost of Quality ................................................................................................. 11 5. Six Sigma - A Gateway to process capability improvement .................... 11 5.1. What is Six Sigma? ........................................................................................ 12 5.2. Need six times more ..................................................................................... 12 6. What Makes Six Sigma So Powerful?................................................................ 13 6.1. Mathematics for six sigma .......................................................................... 14 7. Six Sigma Application ............................................................................................. 15 7.1. Define and measure ...................................................................................... 16 7.2. Measurement ................................................................................................... 16 7.3. Analysis .............................................................................................................. 17 7.4. Improve .............................................................................................................. 17 7.5. Control ................................................................................................................ 18 8. Basic Tools for Six Sigma ...................................................................................... 19 9. Seven Principles of six sigma............................................................................... 20 9.1. Principle No 1 ................................................................................................... 20 9.2. Principle No 2 ................................................................................................... 20 9.3. Principle No. 3.................................................................................................. 21 9.4. Principle No. 4.................................................................................................. 22 9.5. Principle No. 5.................................................................................................. 23 9.6. Principle No.6 ................................................................................................... 23 9.7. Principle No 7 ................................................................................................... 24 10. Six Sigma .................................................................................................................. 24 11. Concept significance ............................................................................................. 25 12. Statistical significance.......................................................................................... 28 13. Concept of 1.5 sigma shift ................................................................................. 30 14. Quality significance of six sigma...................................................................... 31 15. Key Concepts of Six Sigma ................................................................................ 31 16. Six sigma methodology ....................................................................................... 32 16.1. DMAIC versus DMADV .................................................................................. 32 16.2. The Similarities of DMAIC and DMADV .................................................. 32 16.3. The Differences of DMAIC and DMADV .................................................. 33 17. Six Sigma Organisation ....................................................................................... 35 17.1. Champions ........................................................................................................ 35 17.2. Master Black Belt ............................................................................................ 36 17.3. Black Belt ........................................................................................................... 36 17.4. Green Belt ......................................................................................................... 36 Confidential | Six Sigma 1/87


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18. Six Sigma Requirements..................................................................................... 37 18.1. Management Team Buy-In and Support ............................................... 37 18.2. Education and Training ................................................................................ 37 18.3. Resource Commitment ................................................................................. 38 18.4. Link to Compensation ................................................................................... 38 19. Six Sigma Implementation ................................................................................ 38 19.1. How to Select a Quality Improvement Project ................................... 38 19.2. Linking Quality to Finances ........................................................................ 38 20. Application of Six Sigma to Small Companies............................................ 39 20.1. Management Team Buy-In and Support Easier ............................ 39 20.2. Education and Training Harder ............................................................... 39 20.3. Resource Commitment Slightly Harder ............................................... 40 20.4. Link to Compensation Easier .................................................................. 40 20.5. Selection of Project ........................................................................................ 40 20.6. Linking Quality to Finances ........................................................................ 42 21. CASE STUDY ............................................................................................................ 44 21.1. Six Sigma Implementation in GE ............................................................. 44 21.2. Potential Benefits of 6 sigma program .................................................. 45 21.3. Use of Scorecards........................................................................................... 45 21.4. Statistical Tools ............................................................................................... 47 21.5. Leadership is Key ........................................................................................... 49 21.6. An Example of GE's Success with Six Sigma ...................................... 49 21.7. Conclusion ......................................................................................................... 50 22. Quality Improvement Tools (QC Tools) ........................................................ 51 22.1. Introduction to QC Tools ............................................................................. 51 22.2. Tally sheet ......................................................................................................... 51 Purpose ................................................................................................................................. 51 Procedure ............................................................................................................................. 51 Problem................................................................................................................................. 52 Month..................................................................................................................................... 52 22.3. Graph .................................................................................................................. 53 Purpose ................................................................................................................................. 53 Procedure ............................................................................................................................. 53 22.4. Bar Chart ........................................................................................................... 54 22.5. Block Diagram ................................................................................................. 55 Fig. 5: Block Diagram: Problem Solving Process ................................................. 56 22.6. Histogram .......................................................................................................... 56 Purpose ................................................................................................................................. 56 Procedure ............................................................................................................................. 56 22.7. STRATIFICATION ............................................................................................ 57 Purpose ................................................................................................................................. 57 Procedure ............................................................................................................................. 57 22.8. SCATTER DIAGRAM ....................................................................................... 57 Purpose ................................................................................................................................. 58 Procedure ............................................................................................................................. 58 22.9. CONTROL CHART ............................................................................................ 58 Confidential | Six Sigma 2/87


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Purpose ................................................................................................................................. 59 22.10. CONTROL CONTROL CHART – TALLY EXAMPLE .............................. 60 22.11. CONTROL CHART FOR ATTRIBUTES .................................................... 63 22.12. PROCESS CAPABILITY............................................................................... 64 22.13. PARETO DIAGRAM ...................................................................................... 65 Purpose ................................................................................................................................. 65 Procedure ............................................................................................................................. 65 22.14. Brainstorming ............................................................................................... 67 Purpose ................................................................................................................................. 68 Procedure ............................................................................................................................. 68 22.15. CAUSE AND EFFECT DIAGRAM .............................................................. 70 Purpose ................................................................................................................................. 70 Procedure ............................................................................................................................. 70 22.16. FLOW CHART ................................................................................................ 72 Procedure ............................................................................................................................. 72 22.17. ARROW DIAGRAM ....................................................................................... 73 Purpose ................................................................................................................................. 73 Procedure ............................................................................................................................. 73 Acquire .................................................................................................................................. 75 22.18. RELATIONS DIAGRAM ............................................................................... 76 Procedure Preparation of Relations Diagram consists of the following steps – .............................................................................................................................................. 76 22.19. TREE DIAGRAM ............................................................................................ 77 Purpose ................................................................................................................................. 77 Procedure ............................................................................................................................. 77 22.20. AFFINITY DIAGRAM ................................................................................... 78 Purpose ................................................................................................................................. 79 Procedure ............................................................................................................................. 79 22.21. COST-BENEFIT ANALYSIS ....................................................................... 80 22.22. CUSTOMER - SUPPLIER RELATIONSHIP CHECKLIST .................... 81 22.23. SELECTION OF RIGHT COMBINATION ............................................... 83

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1. Introduction “The quality performance” is the foundation stone of all types of industries. The growth of an industry depends on its performance quality. So checking out of the performance quality of an industry is something which is inevitable. “SIX SIGMA” – The statistical representation, is a process of quality measurement, which helps the organization in the improvement of their quality.

Six Sigma is a systematical process of “quality improvement through the disciplined data-analyzing approach, and by improving the organizational process by eliminating the defects or the obstacles which prevents the organizations to reach the perfection”.

Six sigma points out the total number of the defects that has come across in an organizational performance. Any type of defects, apart from the customer specification, is considered as the defect, according to Six Sigma. With the help of the statistical representation of the Six Sigma, it is easy to find out how a process is performing on quantitatively aspects. A Defect according to Six Sigma is nonconformity of the product or the service of an organization.

Since the fundamental aim of the Six Sigma is the application of the improvement on the specified process, through a measurement-based strategy, Six Sigma is considered as a registered service mark or the trade mark. Six Sigma has its own rules and methodologies to be applied. In

order

to

achieve

this

service

mark,

the

process

should

not

produce defects more than 3.4. These numbers ofdefects are considered as “the rate of the defects in a process should not exceed beyond the

rate

3.4

per

million

opportunities”. Through

the Six



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Sigma calculation the number of defects can be calculated. For this there is a sigma calculator, which helps in the calculation.

In order to attain the fundamental objectives of Six Sigma, there are Six Sigma methodologies to be implemented. This is done through the application of Six Sigma improvement projects, which is accomplished through the two Six Sigma sub-methodologies. Under the improvement projects came the identification, selection and ranking things according to the importance. The major two sub-divisions of the improvement projects are the Six Sigma DMAIC and the Six Sigma DMADV. These sub-divisions are considered as the processes and the execution of these processes are done through three certifications. The three types of certifications used for the execution of the Six SigmaDMAIC and Six sigma DMADV are: “Six Sigma Green Belts and Six Sigma Black Belts, which is overseen by Six SigmaMaster Black Belts”.

The Six Sigma ensures the quality control, total quality management and zero defects. Through the implementation of the Six Sigma it is made sure that the goals are set on the improvement of all processes to reach the level of better quality. “The Six Sigma” shows the organization’s ability of highly capable processing in producing the outputs within the limited specifications. Therefore it can be said that the processes that operates with the Six Sigma quality, is able to produce a quality products at a low rate of defects.

When a process attains the certification of Six Sigma quality, it is clear that the organization has attained the standard deviations form the means of the production till the specific limitations, and so can make sure that there is no room for the items to fail to meet the specifications. Altogether we can consider the Six Sigma as the professionalizing of the quality management functions Confidential | Six Sigma 5/87


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2. The Nature of Six Sigma In mid-80’s, six sigma began as a rigorous and absolute statistical measurement

reflecting

no

more

than

3,4

defects

per

millions

opportunities (DPMO). Since that time, however, six sigma has been perfected as a new science of doing business.

Traditionally, six sigma companies are only focusing on measuring defects and meticulously eliminating them. A typical six sigma definition given by Hill (1999) of Allied Signal, is as follows:

It is a customer focused continuous improvement strategy and discipline that minimizes defects and variation and discipline that minimizes defects and variation towards an achievement level of 3.4 defects per millions opportunities in our product design, production and administrative processes.

Harry (2000) defines six sigma initiative as follows: Six sigma is a long-term forward thinking initiative designed to fundamentally change the way corporations do business, it is first and foremost designed to generate immediate improvements in profit margins.

This definition also does not give complete picture of six sigma. In a recent article Harry (2001) suggests that, all defects or errors represent risk but not all forms of risk can be characterized in terms of defects. He further says that six sigma is about the abatement of risk in everything a business does or delivers. Thus Harry is suggesting that elimination of defects is not the ultimate of six sigma and proactively reducing the business risk is the real goal of six sigma.



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Further, achieving the six sigma performance (3.4 DPMO) once is NOT going to last forever, as changes in the customer requirements will change the sigma level back to three sigma overnight. Today, customer requirements, competition, technology are changing dynamically and even we may not have sufficient time to achieve six sigma performance levels. For example, a CD manufacturing company is working on perfecting a process which is designed for 24 X speed and within 6-8 months time the CD drive manufactures have come out with faster drive not leaving room for achieving the higher levels of performance in the current process.

Another, important aspect of six sigma is, one many not try to achieve six sigma performance in each and every process, it may not be required or may not be economical. In the so-called six sigma companies also, six sigma performance is achieved in a couple of processes. In large number of processes 4 to 4.5 sigma performance may be more than justified in very few critical processes only. In case of airlines, the fatality rate is more than six sigma level and baggage handling process is still at three sigma level.

3. Six Sigma Organization In six-sigma language, an average company operates at three to four sigma. Companies below three sigma performance may not survive for long. Best-in-class companies are at six sigma performance.

One need not wait till we achieve the six sigma performance (3.4 DPMO) to call an organization ‘six sigma organization’, Pande et. Al (2000) suggests the following definition:



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An organization that is actively working to build the themes and practices of six sigma into its daily management activities, and is showing significant

improvements

in

process

performance

and

customer

satisfaction. The authors further add the following notes to this definition: 1. To qualify as six sigma organization, you do not need to have achieved actual six sigma levels of performance on any process. 2. Simply using sigma measures or few tools does not qualify a company to be a ‘six sigma organization’, either. 3. You don’t have to call it six sigma to be six sigma organization

4. Six Sigma – CMM An organization typically becomes true ‘six sigma organization’ by acquiring certain key competencies, which can help it in designing, manufacturing and supplying world-class quality products and services at lowest cost in the most effective and efficient manner, thus ensuring continued growth of the business in the long term. Moreover, the so called key competencies cannot be acquired over night and at different points of time the organization may be at different points of time the organization may be at different maturity levels. Thus this book proposes ‘six sigma competency maturity model’, shortly, six sigma – CMM.

The benchmarking reveals the following three key success factors: • Right Projects • Right People • Right Roadmap & Tools

Based on the above three key success factors, self-assessment guide to six sigma competencies is given in the following table: Detailed discussion on these factors is given in Chapters 8 through 10. Confidential | Six Sigma 8/87


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4.1. Indicators of Maturity Further, the following three parameters can be used as indicators of CMM level of a six sigma organization. •

Reactive Projects Percentage

•

Projects ‘Hit’ rate

•

Cost of Quality

4.2. Reactive Projects Percentage In the initial stages of six sigma deployment all or most of the projects are of reactive type – reducing defects, errors, complaints etc. In this stage the savings are very large and can be measured easily.

As the maturity level improves across the company, reactive projects will reduce drastically, and eventually the number of proactive type projects will increase. These proactive projects will ultimately reduce the business risk. 4.3. Projects ‘Hit Rate’ Project approach to quality improvement is not new to six sigma. Quality initiatives, such as TQM, BPR have the same approach. The data from different surveys established that the failure rate in TQM companies is around 60-75% (Hit rate of 25-40%) and in BPR the hit rate is 50%. However, Lowenthal (2000) reported 83% hit are in six sigma companies, based on a survey conducted in 40 companies.


Understanding Six Sigma Competency Right Projects Maturity Level Uncertainty

• •

Awakening

•

• • Enlightenment

•

•

•

Wisdom

•

•

Certainty

•

•

•

March, 2010 Right People

Right Methodology & Tools

Firefighting is the norm No formal projects

• No formal teams

Project identification is adhoc Projects are NOT well defined Projects NOT aligned to strategy Project identification is structured (Bottom-up) Projects are well defined and scoped properly Projects are aligned to strategy

• Teams are formal • People identification is adhoc • Teams are in forming stage

Projects are identified from business need and flow from strategy (Top-down) Projects are well defined and scoped properly

• Teams are in norming stage • Champion follows a structured review process and extends full support

Structured system such as Balanced Scorecard is used as a source of identifying projects (Top-down) Projects are well defined and scoped properly Projects are identified to reduce the business risk

• Teams are in performing stage • Champion and Team leaders are in coaching and mentoring mode

• Team leaders and members are carefully selected based on well defined criteria • Teams are in storming stage • Champion support to teams is adhoc

• Problems are solved through experience • Tools are NOT applied • Methodology is applied partially • Application of tools is adhoc • Tools are applied with the help of facilitators • Structured methodology such as DMAIC is followed • Right tools are applied • Team leaders have good understanding of the tools • Tollgates are used at all stages in methodology • All members have good application knowledge of the tools

• By incorporating the learning’s the methodology is refined • New application of tools are discovered • New tools are learned and applied



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4.4. Cost of Quality Cost of quality is again not new in six sigma. Traditional concepts suggest that beyond an optimal defect level, improving quality will increase the cost of quality instead of reducing it. This happens because the cost of preventing defects will be very high when compared to damage cost.

5. Six Sigma improvement

A

Gateway

to

process

capability

3.4 Defects in 1 million, if you precision - engineered total quality, that is what you get. Around world, quality obsessed CEO"S are chasing that magic figure as they wield what could turn out to be the sharpest tool to please customers, pump up profits, and eliminate flaws. Invented at Motorola, perfected at GE and now practiced by a large number of corporations in India, six sigma is converting defect prone businesses in to powerhouses of perfection.

Such force flows from a simple, but stunningly sharp objective of 6 sigma design, operate, and control every one of the processes in any company in such a way that none of them yields more than 3.4 defects out of every 1 million units of output. With breath taking clarity, 6 sigma is telling companies in clear, accurate, mathematical terms how good - or, more likely bad-their quality levels are, how much they can improve, and what progress they are making on that journey. And the Sigma strategists are leveraging this knowledge to consummate improvements in quality not just on the shop floor, but also all over their organization.



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5.1. What is Six Sigma? Principles of 6 sigma:

At the strategic level the goal of six sigma is to

align an organization keenly to its market place and deliver real improvements (and dollars) to the bottom line. At the operations level, six sigma's goal is to move business product or service attributes within the zone of customer specifications and to dramatically shrink process variation - the cause of defects that negatively affects customers.

Obviously when market requirements change and a company's processes don’t, the defect level rises while process sigma drops, followed closely by market share and profits. Many things can complicate the process sigma calculations: multiple customer requirements, multiple opportunities of defects within one product or service, fragmented

Market

segments,

multiple

process

levels,

and

non-normal

data

distributions. Fortunately six-sigma deals methods offer just as many ways to deal mathematically with each of these complications.

The real challenge of six-sigma isn't the statistics. It is getting to the point

where

one

can

meaningfully

measure

a

business's

current

performance against dynamic customers requirements while developing the internal organizational abilities to respond to changing market place conditions. Doing this means aligning organizational components inside the company (leadership, strategy, people and technology) to give six sigma efforts the momentum and staying power they need to succeed. 5.2. Need six times more You've got it. For six sigma at its most powerful is tools that can quality levels in every single process in your company not just on the shop floor. In fact, that's precisely where its versatility steams. From your accounts Confidential | Six Sigma 12/87


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to your customer service, from your supply chain management to your advertising, every process can be evolution the basis of its adherence to Critical To Quality (CTQ) parameters. After all, defects can and do occur in an engineering design, in the time it takes to treat a patient or even in a banking transaction. All your processes, therefore, can deviate from the ideal level, and cost you additional time, labour, and material.

But, using the sigma scale from 1 to 6, you can study competing levels of capability and, then, raise yours to those standards. What six sigma does is to allow you an efficient way of finding out where your greatest need is and what your softest point is, and of addressing them in a measurable, analytical, and objective way.

"The

difference

between

approaches is that the

six

sigma

and

the

other

quality

others measure your abilities to meet

some quality. Six sigma actually measures the output of your processes. So, it’s less theoretical and more real world".

6. What Makes Six Sigma So Powerful? The explanation drawing on the original work in statistical process control theorized by the grandfather of quality, Walter Stewart is deceptively simple. The mathematical translation states that process that operates at six sigma allows only 3.40 defects per million parts of output. The six, of course, is the culmination of a progression that starts, for all practical purposes, at Three Sigma (66,807 defects per million), and traverses Four(6210) and Five(233). But there is much more to six sigma than merely lowering the number of defects. The Greek letter, Sigma, is the statistical short hand for standard deviation and what the metric really refers to is the extent to which a process is capable of deviating from preset specifications without causing errors. The higher the sigma rating, Confidential | Six Sigma 13/87


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the greater is this capability, with six sigma-allowing variations of up to 6 times the standard deviation without causing flaws. 6.1. Mathematics for six sigma The mathematical interpretation of Six Sigma is crucial to implementing the tool. The output of any process in your company the products rolling off your assembly lines, the bills created by your accounts people, the pay chouse delivered can be analyzed terms of the number of errors in it. What Six Sigma analysis does is to measure every process on each of the CTQ factors.

Consider, for instances, a process which, every hour, produces 100 units of a particular component which should measure 100mm in length. Measurements may show that while 95 out of the 100 units produced are, indeed, 100mm long, the remaining 5 deviate from that ideal, each to a different extent. This data can be used to calculate the standard deviation, or sigma- the likelihood and extent of deviations from the norm of the process. Assume that the value of sigma for this process turns out to be 0.01. The question, of course, is whether these deviations will be counted as flaws under the given CTQ. This is determined by the upper and lower specification limits of the products. If they allow those deviations that is, if the upper and lower control limits of the process falls beyond the upper and lower specification levels-the customer won't have a problem. What if they don't? That's when the capability of the process has to be changed. Six Sigma offers 2 approaches. One is to change the design of the products in which this component is used so that it can accommodate some of the variations in the length without malfunctioning. Thus, for instance, the so-called design-width could be Three Sigma accounting components with 3 times the standard deviation of the process. Confidential | Six Sigma 14/87


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In other words, components that measure between 99.07mm and 100.03mm will also be acceptable. Of course, that will still mean eliminating those units whose sigma exceeds 3,but this will, at least, lessen the number of defects in every sample.

The second approach is to make improvements in the process itself so that the chances of defects are lowered. That will reduce the value of the standard deviation, or sigma, of the process. If, say, the value of the sigma can be halved through this method to 0.005, the acceptable specification-limits-99.07mm

and

100.03mm

respectively-will

automatically become 6 times and not 3 times-the standard deviation. A Six Sigma process will be yours. The implication? To take a process to Six Sigma level, you must, ideally, adopt both approaches; changing the design to increase the range of acceptability in the CTQ; and improving the process to reduce its chances of variance.

7. Six Sigma Application In conceptual terms, the primary aim is to identify, within each sub process, the opportunities for defects, which can be arrived at through the use of different statistical tools, such as regression analysis, design of experiments, and Chi square testing. Whatever from a quality problem takes a wrongly marked invoice, a defective spare, abnormally high warranty costs the six-sigma strategy is to translate it into a metric named Defect Per Opportunity, or DPO. This is further scaled down to Defects Per Million Opportunities, or DPMO, reducing which becomes aim of six sigma samurai. If a company can tackle its defects on a war footing, the six-sigma exercise can be successful.



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Be prepared to follow a precise sequence of well defined steps in applying six sigma, classified into 4 phases, each of them requiring a specific breakthrough. Before that, of course, you must identify the process that you will apply the tool to. With the target established, the actual implementation gets under way thus: 7.1. Define and measure * Six Sigma overview and the DMIAC road map. * Process mapping. * Quality function deployment. * Failure mode and effects analysis. * Organizational effectiveness concepts, such as team development. * Basic stats using Minitab. * Process capability. * Measurement system analysis.

7.2. Measurement The starting point is the establishment of the metrics that will be improved using six sigma. First, the CTQ characteristics of the process have to be identified in order to focus your six sigma on areas that will have the greatest impact on customer satisfaction. For instance , design must turn out to contain the crucial CTQ in a manufacturing process while speed might be more relevant in processing an order.

The output of the process , measured, measured as multiples of its sigma under each CTQ, has to be recorded so that the DPO and DPMO can then be calculated. These will be used as the starting points for setting new targets,

and

proceeding

with

the

subsequent

steps.

Since

all

measurements are recorded, there is in-built in the system."



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7.3. Analysis This is the stage at which new goals are set, and the route maps created for closing the gap between current and target performance levels. It begins the benchmarking key product performance against the best in class so that the sigma levels attained by comparable process can be ascertained as the basis for new targets. Then , as a GAP analysis is conducted to identify the factors that distinguish the best in class processes from those being analysed so that areas of change can be analysed so that areas of change can be identified.

Other statistical tools as well as other conventional quality techniques like Brainstorming Root Cause Analysis , Fishbone Diagrams , Pareto Charts, and the 5 Why Framework are used frequently . “Analysis is a key component of any defect reduction programme. It’s only after you have understood why and where you are going wrong can you rectify your mistakes.

“The aim is to identify what causes the defects in each sub

process so that they can be rectified, either by redesigning the product or reengineering the process. * Statistical thinking. * Hypothesis testing and confidence intervals (F-tests and t-tests). * Correlation analysis. * Multivariate and regression analysis.

7.4. Improve The objective of this phrase is to confirm, the key process variables, and qualify their effect on the CTQs; identify the maximum ranges of the specifications: and then, tackle the capability of the process on the two fonts required by six sigma: enlarging the design width to accommodate the greater variability in the output, and the use the findings of the Confidential | Six Sigma 17/87


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analysis stage to effect the process improvements. This is the stage where the groundwork is translated into action. Of course, the output must be measured continuously to monitor the extent of improvement along the CTQ parameters. *Analysis of variance. *Design of experiments. *Factorial experiments. *Fractional factorials. *Balanced block design. *Response surface design. 7.5. Control In the fourth and final stage of six sigma implementation, the new process conditions are documented, and frozen into systems sit hat gains are permanent. The process is assessed once more after settling in period in order to check whether the improvements are sustained or not: "If a quality programmed has to achieve meaningful results, the changes have to be put into a formal structure. Otherwise, workers may go back to the earlier process" * Control plans * Mistake proofing * Special applications: discrete parts, continuous processes, administration and design * Final exercise



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SIGMA

DEFECT RATE (PPM)

6σ

3.4

COST OF POOR QUALITY(% OF SALES) < 10%

5σ 4σ 3σ 2σ 1σ

233 6210 66807 308537 690000

10%- 15% 15%- 2% 20%-30% 30%-40% > 40%

COMPETITIVE LEVEL WORLD CLASS INDUSTRY AVERAGE NONCOMPETITIVE

8. Basic Tools for Six Sigma One of the key themes of six sigma is to make decisions on data. This data is reflected by such popular six sigma saying as, “We don't what we don't know (or don't measure)" and "In God we trust - all else being data!”

To ensure we obtain the right data and transform it into actionable information, we deploy statistical tools. These tools and closely related concepts, such as the design of experiments, are key elements of six sigma training and comprise up to half of the standard curriculum. The other half consists various non-statistical tools, such as failure mode effects analysis and quality function deployment, and softer organisation skills, such as team and project leadership, critical to obtaining favorable business results.



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9. Seven Principles of six sigma Here are 7 key principles critical to ensuring companies reap in investment in six sigma business performance development.

9.1. Principle No 1 Successful six sigma implementation efforts area driven by committed leaders with edge. The purpose and energy required to drive the six sigma process in a large organization requires uncommon leadership. Such leaders challenge conventional thinking and sometimes recommend unpopular or unusual ideas as a part of focus organization on needed change.

9.2. Principle No 2 Six sigma efforts must be integrated with existing initiatives, business strategy, and key performance measures. Accompanies successful with six sigma take great pains to integrate six sigma implementations with corporate initiates, business strategy, and performance matrices that end that is being applied to improving product development processes, for example, to get products to market faster. Like leadership, this alignment process

can't

be

delegated;

it

must

be

spearheaded

by

senior

management team to drive home its importance to all employees.



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9.3. Principle No. 3 Successful six sigma efforts are supported with a framework of process thinking. Because it's such a robust approach to quality improvement, six sigma can as noted help a company realize quantum leaps in quality and competitiveness. But getting there remains a highly focused approach. For example, because it is based on quantitative analysis of a business and comparing a company's performance to customer requirements, six sigma can't be implemented effectively in an organisation without rigorous mapping of existing business process. Moreover, there must be agreement as to what those processes are and what kind of output customers expect from them.

It is the intersection of these outputs with critical customer requirements what ultimately defines process sigma as well as long-term business success for any company. Being able to examine (and close) the gap between what a business produces and what customers demand is the essence of six sigma. The width of gap can be used prioritize six sigma efforts, since the lower the process sigma, the larger the gap.

Organizations

that

identify

improvement

projects

not

as

isolated

endeavors but as part of this prioritized framework realize a faster improvement rate. They are nexus of product output and market demand instead of relying on intuition.



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9.4. Principle No. 4 Six

sigma

requires

disciplined

customer

and

market

intelligence

gathering. To make a company's six sigma efforts work, it must have a disciplined process for keeping in touch with existing levels of customer satisfaction and loyalty. It must also have an up-to-the-minute grasp of what the market is doing and where it is going. Anecdotal information about

what

customers

want

is

not

sufficient;

critical

customer

requirements must be know and measured

How does one determine these requirements? First, the company must have a closed-loop process in place to gather customer and market intelligence

data.

Then,

it

must

translate

the

date

into

hard

measurements that can analyse regularly and compared to business process outputs

Gathering data, analyzing them, and acting on them on a regular basis are part of ensuring that the company's feedback loop remains closed and that the company is consistently measuring against current market requirements. Keep in mind that both current customer data and data gathered from competitive customer should be used as the basis analyzing what the market is doing. Doing these things can help companies anticipate changes in customers needs or buying habits, track trends, and see things coming that can negatively impact the bottom line



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9.5. Principle No. 5 Six sigma projects must produce real savings or revenues. "This six sigma thing has to pay its own way!”. This is cry of most business leaders when they first hear about six sigma. The reaction is appropriate. Over the years improvement initiate have promised a lot, but often delivered little. Consequently, any six sigma programme a company implements should be design to pay its way, at least from second year of implementation onwards

9.6. Principle No.6 Six sigma efforts are led in the trenches by thorough trained core of full time team leaders. Because six sigma is such an intense approach to quality improvements, it requires the disciplined training and commitment of dedicated practitioners

Companies considering six sigma should give careful thought to selection and deployment of improvement team members and leaders. The number of

teams

established

should

be

weighed

against

the

number

of

improvement projects the company plans to run simultaneously and amount of change the organization can absorb



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9.7. Principle No 7 Six sigma is sustained reinforcement and reward of leaders who support initiatives and improvement teams that carry them out. Companies get what they measure and reward six sigma business improvement is no exception. Because six sigma is fundamentally different from other quality programmes, new incentives must be devised to organizations moving in the right direction.

10. Six Sigma Six Sigma is a disciplined, data driven approach and methodology for eliminating defects (driving towards six sigma’s between lower and upper specification limits) in any process -- from manufacturing to transactional and from product to service. The Statistical representation of Six Sigma describes quantitatively how a process is performing. To achieve Six Sigma, a process must not produce more than 3.4 defects per million opportunities. A Six Sigma defect is defined as anything outside of customer specifications. A Six Sigma opportunity is then the total quantity of chances for a defect. The fundamental objective of the Six Sigma methodology is the implementation of a measurement-based strategy that focuses on process improvement and variation reduction through the application of six sigma improvements Projects .This is accomplished through the use of two Six Sigma sub-methodologies: DMAIC and DMADV. The Six Sigma DMAIC process (defines, measure, analyze, improve, control) is an improvement system for existing processes falling below specification and looking for incremental improvement. The Six Sigma DMADV process (define, measure, analyze, design, verify) is an improvement system used o develop new processes or products at Six Sigma quality levels. It can also Confidential | Six Sigma 24/87


March, 2010

be employed if a current process requires more than just incremental improvement. Six sigma was adopted in 1987 by Motorola Inc. through the efforts of CEO Robert Galvin. Six Sigma quality is deemed necessary to survive in the high technology industries. Six Sigma quality is not just product quality it also means getting everything right throughout the corporation. Everything

from

the

invoices

through

internal

and

external

communications, information systems, sales support and down to the level of janitorial services must adhere to the quality standards of Six Sigma

11. Concept significance Until recently, a process was judged to be satisfactory with a 3σ capability. This means that if process control limits were placed on a process capability curve, the upper control limit (UCL) would be at 3σ to the right of center and the lower control limit (LCL) would be 3σ to the left of center (see Sigma capability curve). The area under the curve between the two control limits (99.73% of the total area) represents the products or services conforming to specifications. The area outside the control limits (only 0.27% of the total area) represents an out-of-spec product or service. When converted to defects per million (DPM), 0.27% equates to 2,700 DPM. Statisticians have found processes often shift up to 1.5σ from center. When a 3σ process shifts 1.5σ from center, only 93.32% of the area under the curve remains inside the control limits. This equates to 67,000 DPM. When a process obtains 6σ capability and the same 1.5σ shift from center occurs, the process produces only 3.4 DPM (see Sigma capability chart).



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Sigma Significance Sigma numbers

Defects per million

1.5σ

500,000

2.0σ

308,300

2.5σ

158,650

3.0σ

67,000

3.5σ

22,700

4.0σ

6,220

4.5σ

1,350

5.0σ

233

5.5σ

32

6.0σ

3.4

Six Sigma isn't twice as good as three Sigma, it's almost 20,000 times better. Source: Control Engineering

Achieving total customer satisfaction requires a complete process and obtaining 6 capability is proof the process is working. At Motorola it's called Quality Systems Review; AlliedSignal and GE simply call it Six Sigma. Regardless of the name, these are well-developed processes tuned to produce excellent results. In its purest form, 6σ is a measurement and analysis tool, but knowledgeable practitioners know quality can be designed in. Using a structured approach, a robust design can be developed. Robustness is quantified by a capability index (Cp) which is the ratio of the maximum allowable range of a characteristic to the normal ±3 variation. For example, a 6σ design will yield a Cp equal to 2 ((UCL - LCL) / 6σ = 2). Designs having a Cp of 2 or greater are capable of producing extremely reliable products or services.



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Key elements appearing in best practices design methodologies include: •

Understanding

critical

to

quality

(CTQ)

external

customer

requirements. •

Understanding CTQ internal customer requirements;

•

Conducting failure mode and effects analysis (FMEA);

•

Performing

Design

of

Experiments

(DOE)

to

identify

critical

variables; and •

Benchmarking to remove ambiguity.



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12. Statistical significance Six sigma means six standard deviations. One standard deviation is a value such that roughly two-thirds of all values in a set fall within the range from one standard deviation below average to one standard deviation above average. Sets of values which can be characterized by the average and standard deviation may be modeled by the normal distribution. For 6 sigma the total range spans 12 standard deviations. As the sigma value increases, a larger area under the “bell curve” is included: 50% at +- 0.67 sigma, 68.3% at +- 1 sigma, 99.7% at +-3 sigma, greater than 99.999999% at +- 6 sigma.

6σ concept assumes that a process can shift 1.5 standard deviations as a regular matter. If the process shifts that much, they argue, the tails of the process would lap over the tolerance limits if the process width were kept at ±σ equating the tolerance of the process. To avoid that, they set a target for a process where the limits are narrow enough so that a 1.σ shift will not shift the edge of the process beyond the tolerance limit. To do this, they equate the tolerance of the process to ±σ. The tail of the process distribution is not supposed to be closer than 1σ to the edge of Confidential | Six Sigma 28/87


March, 2010

the specification or tolerance limit. That means that the edge of the process distribution should end at ±4σ from the center. The value of 4.5 comes from the value of 6 less the 1.σ shift. Six Sigma at many organizations simply means a measure of quality that strives for near perfection. But the statistical implications of a Six Sigma program

go

well

beyond

the

qualitative

eradication

of

customer

perceptible defects. It’s a methodology that is well rooted in mathematics and statistics. The objective of Six Sigma Quality is to reduce process output variation so that ±six standard deviations lie between the process specification upper and lower limits. This will allow no more than 3.4 defect Parts per Million

(PPM)

opportunities,

also

known

as

Defects

Per

Million

Opportunities (DPMO), to be produced.

As the process sigma value increases from zero to six, the variation of the process around the mean value decreases. With a high enough value of process sigma, the process approaches zero variation and is known as “zero defects.”



March, 2010

Decrease your process variation (remember variance is the square of your process standard deviation) in order to increase your your process sigma. The end result is greater customer satisfaction and lower cost.

13. Concept of 1.5 sigma shift Using the table we will find that 6 sigma actually translates to about 2 defects

per

billion

opportunities,

and

3.4

defects

per

million

opportunities, which we normally define as 6 sigma, really corresponds to a sigma value of 4.5. Where does this 1.5 sigma difference come from? Motorola has determined, through years of process and data collection, that every process varies and drifts over time - what they call the LongTerm Dynamic Mean Variation. This variation typically falls between 1.4 and 1.6. After a process has been improved using the Six Sigma DMAIC methodology, we calculate the process standard deviation and sigma value. These are considered to be short-term values because the data only contains common cause variation -- DMAIC projects and the associated collection of process data occur over a period of months, rather than years. Long-term data, on the other hand, contains common cause variation and special (or assignable) cause variation. Because short-term data does not contain this special cause variation, it will typically be of a higher process capability than the long-term data. This difference is the 1.5 sigma shift. Given adequate process data, you can determine the factor most appropriate for your process. The reporting convention of Six Sigma requires the process capability to be reported in short-term sigma -- without the presence of special cause variation. Long-term sigma is determined by subtracting 1.5 sigma from our short-term sigma calculation to account for the process shift that is known to occur over time.



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14. Quality significance of six sigma Quality, defined traditionally as conformance to internal requirements, has little to do with Six Sigma. Six Sigma is about helping the organization make more money. To link this objective of Six Sigma with quality requires a new definition of quality. For Six Sigma purposes quality can be defined as the value added by a productive endeavor. Quality comes in two flavours,

potential quality and actual quality.

Potential quality is the known maximum possible value added per unit of input. Actual quality is the current value added per unit of input. The difference between potential and actual quality is waste. Six Sigma focuses on improving quality (i.e., reduce waste) by helping organizations produce products and services better, faster and cheaper. In more traditional terms, Six Sigma focuses on defect prevention, cycle time reduction, and cost savings. Unlike mindless cost-cutting programs which reduce value and quality, Six Sigma identifies and eliminates costs which provide no value to customers, waste costs

15. Key Concepts of Six Sigma At its core, Six Sigma revolves around a few key concepts. Critical

to

Attributes most important to the customer

Quality: Defect:

Failing to deliver what the customer wants

Process

What your process can deliver

Capability: Variation:

What the customer sees and feels

Stable

Ensuring

Operations:

improve what the customer sees and feels.

consistent,

predictable

processes

to



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16. Six sigma methodology 16.1. DMAIC versus DMADV What's the Difference Between Six Sigma DMAIC and DMADV? We know that everything in business is a process, right? Sales people have a list of companies and contacts that they work in a certain fashion to produce a sale, production receives an order and schedules the manufacturing, the product is built, packaged, shipped and invoiced. When the packing department has a problem with their process, though, should they fix it with a DMAIC or DMADV (also referred to as DFSS) type project? 16.2. The Similarities of DMAIC and DMADV Let's first look at the DMAIC and DMADV methodologies and talk about how they're alike. DMAIC and DMADV are both: •

Six Sigma methodologies used to drive defects to less than 3.4 per million opportunities.

•

Data intensive solution approaches. Intuition has no place in Six Sigma -- only cold, hard facts.

•

Implemented by Green Belts, Black Belts and Master Black Belts.

•

Ways to help meet the business/financial bottom-line numbers.

•

Implemented with the support of a champion and process owner.



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16.3. The Differences of DMAIC and DMADV DMAIC and DMADV sound very similar,. The acronyms even share the first three letters. But that's about where the similarities stop. DMAIC

Define

•

Define the project goals and customer (internal and external) deliverables

Measure

• •

Analyze

•

Measure the process to determine current Performance Analyze and determine the root cause(s) of the defects

Improve

•

Improve the process by eliminating defects

Control

•

Control future process performance

When To Use DMAIC The DMAIC methodology, instead of the DMADV methodology, should be used when a product or process is in existence at company but is not meeting customer specification or is not performing adequately. DMADV

Define

•

Define the project goals and customer (internal and external) deliverables

Measure

•

Measure and determine customer needs and specifications

Analyze

•

Analyze the process options to meet the customer needs

Design

•

Design (detailed) the process to meet the customer needs

Verify

•

Verify the design performance and ability to meet customer needs



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The DMADV methodology, instead of the DMAIC methodology, should be used when: •

A product or process is not in existence at your company and one needs to be developed

•

The existing product or process exists and has been optimized (using either DMAIC or not) and still doesn't meet the level of customer specification or six sigma level

Occasionally a project is scoped as a DMAIC for incremented process improvement

when

it

really

required

a

DMADV

methodology

improvement. And it was a month into the project that one realized this! Don't be discouraged about the work one put into the DMAIC because 1) it's happened to more businesses than just yours, 2)you understand the process at a much greater detail than you did initially, and 3) you were able to practice not just DMAIC skills but also DMADV. Pick yourself up, dust yourself off and re-craft your define piece of the project so you can begin with a fresh look at the project and solutions. You never know what insights you'll have now that you may not have been aware of before.


Understanding Six Sigma 17.

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Six Sigma Organisation CHAMPIONS

Provide Vision, Lead Review, Business decisions

Evoke behavioral change, Provide required support

MASTER BLACK BELT

Train & Coach, Lead

BLACKBELTS

Monitor, Drive improvement

GREENBELTS

TEAM

FUNCTIONAL CHAMPION

•Helps Implementation •Works with Black Belt on project •Indicate barriers to function Leaders

17.1. Champions Six Sigma champions are high-level individuals who understand Six Sigma and are committed to its success. In larger organizations Six Sigma will be lead by a full time, high-level champion, such as an Executive Vice-President. In all organizations, champions also include informal leaders who use Six Sigma in their day-to-day work and communicate the Six Sigma message at every opportunity. Sponsors are owners of processes and systems who help initiate and co-ordinate Six Sigma improvement activities in their areas of responsibilities.



March, 2010

17.2. Master Black Belt This is the highest level of technical and organizational proficiency. Master Black Belts provide technical leadership of the Six Sigma program. Thus, they must know everything the Black Belts know, as well as understand the mathematical theory on which the statistical methods are based. Master Black Belts must be able to assist Black Belts in applying the methods correctly in unusual situations. 17.3. Black Belt Candidates for Black Belt status are technically oriented individuals held in high regard by their peers. They should be actively involved in the process of organizational change and development. Candidates may come from a wide range of disciplines and need not be formally trained statisticians or engineers. Black Belts receive 160 hours of classroom instruction, plus one-on-one project coaching from Master Black Belts or consultants. 17.4. Green Belt Green Belts are Six Sigma project leaders capable of forming and facilitating Six Sigma teams and managing Six Sigma projects from concept to completion.

Green Belt training consists of five days of

classroom training and is conducted in conjunction with Six Sigma projects. Six Sigma Black Belts help Green Belts define their projects prior to the training, attend training with their Green Belts, and assist them with their projects after the training.



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18. Six Sigma Requirements While many other requirements are applicable, we personally believe that these are the most important: •

Management Team Buy-In and Support

•

Education and Training

•

Resource Commitment

•

Link to Compensation

18.1. Management Team Buy-In and Support If your executive team is not fully supportive and proactive in establishing your Six Sigma Quality initiative, you will be wasting everyone's time. As with any successful initiative implementation, everyone's actions need to be tied to the initiative. A useful exercise in determining buy-in is to list out all the individuals of the management team on a piece of paper. Then assign a positive, neutral or negative to each person signifying what you believe to be their support for the initiative. Your job, before beginning the implementation, is to move every single person to at least a neutral position, if not positive. Education can help with this goal. 18.2. Education and Training What training is necessary? Well, it depends on who is getting trained. Here's a snapshot table identifying the major groups of individuals, the suggested training agenda, approximate cost and duration of the training.



March, 2010

18.3. Resource Commitment As discussed above, Black Belts(BB) &/or Master Black Belt(MBBs) need to be identified and trained. But more importantly, they need to be assigned to your Six Sigma efforts almost 100%; 50% application yields less than a 50% result. In addition to BBs and MBBs, you should be ready to assign 5-15% of key employees' time to specific projects. 18.4. Link to Compensation We all work and perform responsibilities for a paycheck, right? Just as you expect your factory to produce Y widgets per hour and your bank to process Z deposits per day, you should expect projects to be contributed to and successfully completed in a prescribed time period. And employees executing well should be compensated well. The quickest way to initiative success is to tie results to the business bottom line, create performance goals, and compensate employees appropriately.

19. Six Sigma Implementation 19.1. How to Select a Quality Improvement Project The right project can have a tremendous effect on your business. If done properly, processes will function more efficiently in 3 to 6 months, employees will feel satisfied and appreciated for making business improvements and ultimately shareholders will see the benefit. 19.2. Linking Quality to Finances The Quality profession has always been about improving processes, products and services. From TQM to PDCA to Six Sigma, all Quality methodologies are focused on eliminating defects and the root causes of those defects. It involves products that satisfy your customers, running processes at greater efficiencies, producing less waste and increasing



March, 2010

business productivity. All of this, of course, is based on the fact that these processes are driving financial benefits. Now, we'll look at each of these areas with application to small companies. After each major requirement will be a synopsis and discussion around whether it is easier to implement Six Sigma Quality in a small company or a large company.

20. Application of Six Sigma to Small Companies 20.1. Management Team Buy-In and Support

Easier

Compared to large companies, small company management teams are typically closer on a personal basis. Pulling the small company team together for a short meeting can be done in minutes, as opposed to days for a large company. Because smaller companies are more agile, it is typically easier to achieve management team agreement that a standard methodology can help achieve results. Although politics are always present, less may be required in a smaller company to come to agreement and buy-in for implementing Six Sigma Quality. 20.2. Education and Training Harder Although the costs presented on page is somewhat standard, buying in bulk always produces a discount. This is the main reason we believe education and training is harder (costlier) for smaller companies. Time is money -- time away from the office is lost revenue and production for both small and large companies alike. But the return on investment is a function of the potential savings of the business. For a behemoth like GE or Motorola, standardized processes can yield enormous savings -- a large potential exists prior to implementing Six Sigma. For smaller companies, the savings potential may not be as great. The return on investment may not be as quick or as significant. You know your business and processes better than anyone else. How great are the potential savings? Confidential | Six Sigma 39/87


March, 2010

20.3. Resource Commitment Slightly Harder The key issue here is employee time. As mentioned above, time is money for both employees that are partially assigned to teams and project leaders. BUT -- we must remember to see the forest through the trees. Any time dedicated to process improvement will be recouped in process productivity going forward for all time. But it again boils down to the potential savings that are available in your business. 20.4. Link to Compensation

Easier

No brainer being able to link compensation to Six Sigma implementation is much easier in a small company, compared to a larger company. Decisions in general are quicker for small companies that are why they are more agile. The key will be applying the rigor and written procedures that larger companies do well. Formal performance appraisal systems need to identify what is to be accomplished, what success looks and feels like, and how an employee will be compensated. Just be sure to involve your

Human

Resources

representative

to

ensure

that

employee

responsibilities are being modified in the appropriate manner. 20.5. Selection of Project The right project can have a tremendous effect on your business. If done properly, processes will function more efficiently in 3 to 6 months, employees will feel satisfied and appreciated for making business improvements and ultimately shareholders will see the benefit. If done improperly, a project may be selected that doesn't have the full business buy-in, project roadblocks may not be removed due to other business priorities, the team may feel ineffective and the end result may be less than ideal. No one wins in this situation, especially the quality manager who may look to these same people the next time a need arises. So how do we make sure we select projects in-line with business priorities?



March, 2010

Here are five guidelines to keep handy the next time we are evaluating potential quality improvement projects: •

Ask business leader for the three greatest issues facing the business. Make sure project is one of the issues or is directly related. This will ensure that your management team is giving the project the proper attention and quickly removing roadblocks.

•

What are the three greatest issues as seen from the eyes of your customers? Look through customer complaint logs, listen to call center telephone conversations and call customers that have stopped your company service. Create a Pareto Chart to prioritize issues.

•

Is

the

project manageable? Can the

project

realistically

be

completed by a team within six months? If longer, you may lose members as they move to other jobs or the team may feel frustrated that they're not making a difference. •

Will the team have a measurable impact on the business processes or financial bottom line? Don't embark on a project without knowing what the benefits are to the business. This will keep team motivated along the way.

•

What is

process capability? If you haven't been measuring your

process, how do you know it needs improvement? Make sure you know what amount of defects the process is currently producing and define your project desired outcome. Every business is different and you should ensure that your specific priorities are taken into account when evaluating potential projects. Spreadsheets or databases can help you organize potential projects by assigning evaluation categories, values and weightings to create a consistent selection process.



March, 2010

20.6. Linking Quality to Finances The Quality profession has always been about improving processes, products and services. From TQM to PDCA to Six Sigma, all Quality methodologies are focused on eliminating defects and the root causes of those defects. It involves products that satisfy your customers, running processes at greater efficiencies, producing less waste and increasing business productivity. All of this, of course, is based on the fact that these processes are driving financial benefits. If it didn't make sense financially, would you still do it? In some cases you might, but as a rule of thumb you can't sustain a business unless you bring in revenue and produce a profit. The six sigma methodology, in particular, emphasizes the financial results of a project. What does all of this do for your company? 1) Before a project is initiated, a scoping analysis of financial benefits is performed. This allows management to Prioritize along with other business specific factors, potential projects. 2) After or during the completion of a project, a final Financial Analysis is performed based on the actual results of the project. This forces the business to quantify the return on investment for the Quality department. Is it paying off as you would expect any other investment in the business? 3) It opens the eyes of management to what is actually happening on the floor, in the shop and in the cubicles, translating day-to-day activities into terms that they are concerned about - meeting the budget, increasing profits and driving shareholder value. 4) It educates employees about the whole financial picture. Because Six Sigma uses employees to drive projects and improvements, it also modifies their work behaviors to cut costs and increase profits.



March, 2010

Many businesses have found the successful recipe for Quality. When employees are allowed to exit from the intellectual vacuum where they are deprived of business and financial information, they then can see the whole picture. They understand how their actions do make a difference and how they are needed to make business processes successful. You don't need "Six Sigma" necessarily, but you do need to tie process improvements to financial results in order to be successful. There are six fundamental steps that must be achieved before Six Sigma can become a reality within any organization: Step-1: Successful performance improvement must begin with senior leadership. Start by providing senior leadership with training in the principles and tools they need to prepare their organization for success. Using

their

newly

acquired

knowledge,

senior

leaders

direct

the

development of a management infrastructure to support Six Sigma. Step-2: Systems are developed for establishing close communication with customers, employees, and suppliers. This includes developing rigorous methods of obtaining and evaluating customer, employee and supplier input. Step-3: Training needs are rigorously assessed. Remedial basic skills education Is provided to assure that adequate levels of literacy is possessed by all employees. Step-4: A framework for continuous process improvement is developed, along with a system of indicators for monitoring progress and success. Six Sigma metrics focus on the organization's strategic goals, drivers, and key business processes. Step-5: Business processes to be improved are chosen by management, and by people with intimate process knowledge at all levels of the organization. Six Sigma projects are conducted to improve business performance linked to measurable financial results. Step-6: Six Sigma projects are conducted by individual employees and teams lead by Green Belts and assisted by Black Belts. Confidential | Six Sigma 43/87


March, 2010

Although the approach is simple, it is by no means easy. But the results justify the effort expended. Research has shown that firms that successfully implement Six Sigma perform better in virtually every business category, including return on sales, return on investment, employment growth, and share price increase.

21. CASE STUDY 21.1. Six Sigma Implementation in GE GE launched a corporate wide quality improvement strategy in 1995 when Jack Welch, chairman and CEO committed GE's empire to reach 6 quality by year 2000. Operating at about the industry average of 3 sigma in 1995, Mr. Welch's vision is a stretch goal, but GE is making progress to achieve 6 performance and estimates that 6 will contribute an extra $5 billion to net earnings through the end of the century. In 1998 Mr. Welch expects 6 to yield about $750 million in net benefits. Jack Welch, Chief Executive Officer of GE, realized that attaining Six Sigma Quality will require retraining their entire workforce to think and act like engineers an enormous feat with remarkable benefits. When the program began ,GE selected 5 Criteria to measure progress Towards an aggressive Six Sigma Goal Sl No

General Electric

Balanced Score Card

1

Cost of Poor Quality Customer Satisfaction Internal Performance Design for Manufacturing(DFM) Supplier Quality

Financial Customer Internal Innovative & Learning

2 3 4

The above table compares the GE criteria with four traditional Balanced Score Criteria.



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21.2. Potential Benefits of 6 sigma program •

Six Sigma oriented organizations will spend 1% or less of each sales dollar on cost of non-conformance while a 4 Sigma organization will spend as much as 25%.

•

$200 million in documented savings over the cost of training for 1997 at GE

•

Expected annual revenue and cost savings of $10 - 15 billion at GE when Six Sigma is fully realized.

•

GE's 1997 operating margin, a critical measure of business profitability and efficiency, surpassed 15% level for the first time.

•

The entire GE workforce actively involved in quality initiatives and total customer satisfaction

Five Critical to Quality (CTQ) Measures taken by GE Six Sigma Quality at GE starts and ends with the goal of total customer satisfaction. To understand the needs of the customers, GE stresses five "CTQ’s" – 1) Get the customers what they want 2) When they want it 3) On time 4) Undamaged 5) Working. 21.3. Use of Scorecards These five CTQ’s were identified in the early stages of GE's efforts and are continually assessed through the use of "Scorecards". Scorecards allow rapid focus on products and processes that do not meet customer's desires and track implemented solutions until the discrepancy is erased.



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Once a project at GE is identified as meeting at least one of the CTQs, it is then led through the Six Sigma process by a specially trained employee known as a "Black Belt."

GE's Six Sigma Process: Define; Measure, Analyze; Improve; Control Using the techniques of Six Sigma, GE has identified and defined the phases used in optimising processes. These phases, known by the acronym DMAIC, are explicitly followed and with that, successful results are noted. Each step in the cyclical DMAIC Process is required to ensure the best possible results. The DMAIC steps include the following: Step 1: Define •

Define the Customer, their Critical to Quality (CTQ) issues, and the Core Business Process involved.

•

Define who customers are, what their requirements are for products and services, and what their expectations are.

•

Define project boundaries - the stop and start of the process.

•

Define the process to be improved by mapping the process flow.

Step 2: Measure •

Measure the performance of the Core Business Process involved.

•

Develop a data collection plan for the process.

•

Collect data from many sources to determine types of defects and metrics.

•

Compare to customer survey results to determine shortfall.

Step 3: Analyze •

Analyze the data collected and process map to determine root causes of defects and opportunities for improvement.

•

Identify gaps between current performance and goal performance

•

Prioritize opportunities to improve.

•

Identify sources of variation.



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Step 4: Improve •

Improve the target process by designing creative solutions to fix and prevent problems.

•

Create innovative solutions using technology and discipline.

•

Develop and deploy implementation plan

Step 5: Control •

Control the improvements to keep the process on the new course.

•

Prevent reverting back to the "old way".

•

Require the development, documentation and implementation of an ongoing monitoring plan

•

Institutionalize the improvements through the modification of systems and structures (staffing, training, and incentives).

21.4. Statistical Tools In order to optimize any and all processes within GE, a thorough and rigorous analysis of the applicable data is processed using Minitab, an extremely powerful statistical data analysis program. Minitab enables analyses such as:1) Run and Pareto charts 2) Fishbone diagram 3) Control charts: X-Bar, R, S, X-bar-R, X-Bar-S, and Box-Cox Transformation for non-normal data, gage linearity and accuracy. Minitab provides the means to accomplish all of these as well as calculate sigma - the bottom line number needed for achieving success. Training: An Integral Part of GE's Six Sigma Program In order to become a Six Sigma company, GE has undertaken extensive training of all personnel and ensured strong and determined leadership. Since the onset of this massive training effort, excellent results have been achieved.



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The result of this training push is impressive as there are now nearly 4000 full-time quality 'Black Belts' (BB) and 'Master Black Belts' (MBB). Additionally, there are more than 60,000 'Green Belt' (GB) "part-time" project leaders who have completed at least one Six Sigma project. All GB, BB and MBB projects must show a 90% reduction in dpm to be called successful. To become a GE certified Green Belt (GB), the following criteria must be met. •

Complete 2 weeks of DMAIC training within a one year period

•

Complete a total of two (2) Six Sigma Green Belt Projects within each one year period.

To become a GE certified Black Belt (BB), the following criteria must be met: •

Complete 2 full weeks of DMAIC training.

•

Complete a total of eight (8) Six Sigma BB Projects in each oneyear period.

Black Belts are primarily focused on training/guiding/driving all Green Belts under their jurisdiction to complete their 2 projects per year. Black Belts will approve each phase of those projects while getting regional manager concurrence on approving the "Define" & "Closure" phases of each project. However, the individual Green Belt (and their respective managers) will be held responsible for the completion of his/her own GB Project; the purpose of the Black Belts is not to "complete" projects for the GB, but rather to review, analyze, approve, and assist.

Master Black Belts must meet similar requirements to become certified as do Black Belts, with the exception being MBB's must complete 4 weeks of intense DMAIC training. As the BB is the mentor of the GB, the Master Black Belt is the mentor, coordinator, and driver of GE's entire Six Sigma program. Thus, they are vital to the success or failure of the program. A Confidential | Six Sigma 48/87

Understanding Six Sigma "Champion"

is

usually

the

March, 2010 Business

Manager

for

each

particular

component. The champion is the one who sponsors the project as being beneficial to his/her particular business unit and ultimately gives approval. Champions may have many hundreds of projects under their approval. And, before credit is given to management and quality workers, a certified Black Belt must prove that the new process fixes the problem permanently.

21.5. Leadership is Key Since Jack Welch has tied promotions to quality improvement, employees desiring to stay and prosper at GE have opened up to a complete change in their way of thinking. Every employee is trained to think and act like an engineer, i.e. analyze anything and everything; ensure everything functions at an optimum level. 21.6. An Example of GE's Success with Six Sigma One of GE Plastics' subsidiaries, Super abrasives, a leading manufacturer of industrial diamonds, has fully embraced the Six Sigma program and its successes

clearly

indicate

the

approach

works.

The

following

improvements occurred at Super abrasives between Six Sigma's start in 1995 and the end of 1997: •

Operating margins rose from 9.8% to 25.5%

•

Variable manufacturing costs fell 50%.

•

The number of carats per manufacturing run rose 500%.

•

On-time deliveries improved 85%.

•

Product quality improved 87%.

•

Late deliveries to customers declined 85%

•

Billing mistakes fell by 87%

•

Capital expenditures decreased by 40%



March, 2010

21.7. Conclusion An enormous training effort is essential to a program such as GE's Six Sigma Quality. It involves retraining an entire workforce to think and act like engineers. GE has spent hundreds of millions of dollars since 1995 to mold a workforce that lives customer satisfaction through continuous quality improvement. The complexity of a Six Sigma Quality program would be impossible to initiate and sustain without this type of dedicated and thorough approach to training.

Such a training program is the result of nothing less than full dedication from the entire leadership structure, starting at the top.

GE's increasing operating margins are the final proof that the combination of inspired leadership and intensive training are the critical aspects of a successful Six Sigma Quality program.



March, 2010

22. Quality Improvement Tools (QC Tools) 22.1. Introduction to QC Tools There are certain simple tools and techniques which can naturally be positioned within the TQM philosophy. Many of these tools can easily be utilized for everyday problem solving or for realizing opportunities, and can thus be effectively used to support the implementation of the methodology for quality management and improvement.

This section contains a list of such tools, which, although by no means exhaustive, includes the most popular and commonly used techniques; these are briefly described and arranged in such a way as to be easy to access.

22.2. Tally sheet Tally Sheets are forms for recording data in a simple manner. There are three main types of tally sheets; a) Recording Tally Sheets b) Inspection Tally Sheets, and c) Check Lists Purpose To devise a simple form to facilitate collection of data Procedure The steps involved in creating Tally Sheets are a)

Describe clearly the purpose of collecting data.

b)

Decide who will collect the data and when, where and how it will be collected.

c)

Determine how much data will be required. Confidential | Six Sigma 51/87

Understanding Six Sigma d)

March, 2010

Decide the format for collecting and presenting data in suitable classifications.

e)

Prepare a draft form and check if it meets the purpose.

f)

Finalise the form and give it a title.

g)

Collect the data and present for further analysis.

Figure 1: Tally sheet Problem

Month July

August

Septembe r

Total

A

III

II

IIII

09

B

IIII

III

II

10

C

IIII

III

IIII

12

D

II

III

II

07

Total

14

11

13

38

Figure: 2: Tally sheet for Typing mistakes Mistake Type

July

Total

Clerk 1

Clerk 2

Punctuation

IIII

III

07

Wrong Page Numbers

III

IIII

07

Spelling

IIII

III

08

Missed Paragraph

III

IIII

07

Centering

IIII

IIII

09

TOTAL

20

18

38



March, 2010

22.3. Graph

Graphs and Charts are pictorial presentations of data, making it easy to spot trends, ratios, comparisons among different groups of data. The more common types of graphs and charts are Line Graphs, Bar Charts, and Pie Charts. In addition, there are a number of variants and combinations of these. Purpose To present numerical data in an easy-to-spot visual form. Line graphs are used to depict change or variation over time. Bar charts are used for comparing quantities between persons, regions, time intervals etc. Pie charts are used to show percentages or proportions of different components of a specific item. Procedure The essential steps in the preparation of various types of graphs and charts are 1. Select the type of chart or graph most suitable for the type of data to be depicted. 2. Decide the units and scales of items to be shown on X-axis and Yaxis. 3. (In case of Pie chart scale is always the same - 100% = 3600) 4. Fill the information on the graph sheet. 5. Join required points to complete lines or bars. 6. Color or shade the lines or bars to distinguish between different groups or classes. Provide a key to explain the meaning of the colors and shadings. 7. Provide an appropriate title.



March, 2010

Figure: 3: Line Graph

100 Name of student -------------Class: ---------

Roll No. -----------

95 90 85 Marks

Average

Obt. 80 75 70 1

2

3

4

5

6 Subject :

Maths

Phy

Chem.

Eng. Drawing

Mechanics

22.4. Bar Chart A bar chart is a graphical representation of discrete groups or categories of data, shown in such a way that clear comparisons can easily be made.

A bar chart is frequently used to emphasize a point; this will dictate the way in which the chart is drawn. The chart is normally used to emphasize the variation and unevenness in data. Using this information, further investigation could follow to determine why the variation was occurring. The items are usually ranked from high to low, with the lengths of the bars indicating the value or frequency that a bar represents.

A special version of the bar chart is the 100% bar chart which has all its bars of equal lengths; each bar (representing 1000% of the item) is Confidential | Six Sigma 54/87


March, 2010

subdivided according to the size of its components.

When the data are spread across a continuous range of values, a bar chart is equivalent to a histogram. AVERAGE TEMPERATURE DURING WINTER IN MUMBAI 1998

1999

2000

33 31` 29 27 25 October

November

December

January

Figure : 4 : Bar Chart 22.5. Block Diagram If every activity that is part of a process is represented by a block (box), and all blocks are connected by lines representing the interfaces between activities. A macro level view of the process is obtained; this is called a block diagram. The diagram traces the paths that any information, necessary actions or materials can take between the original input and the final output of the process. For each activity in the process, there is a determination of the output it produces, what other activities it feeds into, and, through the identification for particular work activities, there is also a determination of who performs the activity.



SELECTION

PRESENTATION

FOLLOW-UP

March, 2010

DEFINITION

EVALUATIO

ANALYSIS

TRIAL

PREVENTIVE ACTION

SOLUTIONS

RUN

ACTION PLAN

REVIEW

Fig. 5: Block Diagram: Problem Solving Process

22.6. Histogram Histograms or Frequency Distribution Diagrams are bar charts showing the distribution pattern of observations grouped in convenient class intervals and arranged in order of magnitude. Purpose To study the pattern of distribution of observations and draw conclusions based on the distribution. Procedure The steps in preparing histograms are 1. Collect data (a minimum of 50 observations) on a specific item. 2. Arrange all values in an ascending order. 3.

Divide the entire range of values into convenient number (usually ≤ the square root of the number of observations) of groups each representing an equal class interval.

4. Note the frequency of observations in each group. 5. Draw X-axis and Y-axis and decide the scales for class on X-axis and number of readings or frequency on the Y-axis. Confidential | Six Sigma 56/87


March, 2010

6. Plot the points and draw bars. 7. Give the histogram a suitable title. 8. Study the pattern of distribution and draw conclusions regarding normality of distribution and process capability. 22.7. STRATIFICATION Stratification is a technique to present data into different groups or categories to bring out the differences between groups and explain the ‘abnormality’ of histograms. The classification may be based on machines, operators, shifts or any other source of variation. Purpose To ascertain the difference between different categories and to analyse the reasons behind abnormal distribution or too wide dispersion shown by the histogram of the total data. Procedure The steps for stratifying data starts with an ‘abnormal’ histogram of composite data. The further steps are 1. Examine the data for sources of variations. 2. Classify the composite data into different groups. 3. Prepare histograms of the reclassified data. 4. Examine the histograms of each group of data for ‘normality’. 5. Give the new histogram an appropriate title. 22.8. SCATTER DIAGRAM Scatter Diagram is a special type of graph in which two characteristics whose relation is to be studied are taken on the X and Y axes. A dot at an appropriate point is placed on the graph for each observation. The pattern made by the scatter of the dots can indicate if there is a relation between the two and if so whether it is direct or inverse and whether it is strong or mild.



March, 2010

Purpose To test hbypothetical relationship between two sets of variables or characteristics. Procedure The steps in the preparation of a scatter diagram are 1. Tabulate available data. 2. Select the characteristics or variables to study the relationship. 3. Use X-axis for one and Y-axis for the other variable. 4. Decide appropriate scales. 5. For each observation involving the relation between the two variables place a dot on the graph sheet. 6. Observe the pattern of distribution of the dots and infer as follows a.

If the dots are distributed randomly, there is no apparent relationship.

b.

If the dots are distributed closely around a sloping line, there is a strong relationship.

c.

If the dots are scattered loosely around such a line, there is likelihood of a mild relationship.

d.

If the slope of the line is from SW to NE, there is a direct and if the slope is from SE to NW, there is an inverse relationship.

22.9. CONTROL CHART Control Charts are graphical presentations showing if a process is under control. Control charts are of two main types 1. Control Chart for Variables or measurables, and 2. Control Chart for Attributes. Control chart for attributes has a few categories like portion or percent defective (p), number of defectives (pn), number of defects per unit (u) and number of defects per subgroup (c). Control charts are tools to monitor processes.



March, 2010

Purpose The purpose of all control charts is to track a process with a view to take timely corrective action as soon as the process goes out of control. The steps involved in setting up control chart for variables - X & R charts are 1. Determine the size of sample group. 2. Design a suitable Tally sheet. 3. Collect data adjustments)

under

standard

operating

conditions

(without

4. Calculate the average (X) and range (R, the difference between the largest and the smallest value in the group). 5. Calculate the average of averages – X. 6. Calculate the average range - R. 7. Calculate the control limits for X chart using the formula UCL

=

X + A2* × R

LCL

=

X – A2* × R

* Values of A2 for more common group sizes are given in table 1. 8. Calculate the control limits for the R chart using UCL

=

D*4 × R

LCL

=

D*3 × R

* Values of D3 & D4 for common sample group sizes are given in the Table 1 for other group sizes refer to any standard book on SQC or SPC. 9. Divide the graph into two portions for (1) X Chart and (2) R Chart. 10. Periodic observations are taken on X-axis and X & R on Yaxis. 11. Select appropriate scales and draw central lines and control limits. 12. Plot the observations and look out for indications of the process going out of control or other trends.



March, 2010

VALUES OF A2, D3 AND D4 Group Size

A2

D3

D4

4

0.729

0

2.282

5

0.577

0

2.115

6

0.483

0

2.004

8

0.373

0.136

1.864

10

0.308

0.223

1.777

Table 1:

22.10.

Constants to calculate control limits

CONTROL CONTROL CHART – TALLY EXAMPLE

Commuting Times (min.) – A. M. STEP 1 :

1

2

3

4

5

Week 6

55

90

100

70

55

75

120

65

70

100

75 65 80 80

95 60 60 55

75 75 65 65

110 65 60 60

65 95 70 70

85 65 65 65

110 65 85 70

65 90 90 60

85 60 65 75

80 65 60 80

X= 71

72

76

73

71

71

90

74

71

77

R=25

40

35

50

40

20

55

30

25

40

7

8

9

10

STEP 2 : Xavg = 74.6 Ravg = 36.0 n=5 STEP 3 : UCL8 = Xavg + A2 Ravg = 74.6 + (58) (36.0) = 74.6 + 20.88 = 95.48



March, 2010

LCL8 = Xavg - A2 Ravg = 74.6 – 20.88 = 53.72 UCLR = D4 Ravg = (2.11) (36.0) = 75.96 LCLR = D3 Ravg =0 STEP 4:

X Chart 100 95 90 85 80 Xavg = 85.48 75 70 65 60 55

LCL = 53.72

50 1

2

3

4

5

6

7

8

9

10

Fig 6: X CHART Confidential | Six Sigma 61/87


March, 2010

R Chart

80

UCL = 75.86 75 70 65 60 55 50 45 40 Ravg = 36.0 35 30 25 20 15 10 5 LCL = 0 0 1

2

3

4

5

6

7

8

9

Fig 7. R CHART Confidential | Six Sigma 62/87

Understanding Six Sigma 22.11.

March, 2010

CONTROL CHART FOR ATTRIBUTES

The steps for selling up a control chart for attributes are 1. Decide the defect to be tracked. 2. Determine the type of chart (p, pn, u or c) that is applicable. 3. Design a suitable tally sheet and collect data. 4. Calculate the average and control limits. 5. Prepare a graph sheet with successive observations on X-axis and the defect level on Y-axis. Select appropriate scales. 6. Draw the lines for average and control limits. 7. Plot the observations and join the points to get a line graph. 8. Look for signs of process going out of control or other trends to take timely action. Some occurrences that can give indications of the process going out of control or show trends are: 1.

A single observation out of control limits.

2.

A series of seven consecutive observations on the same side of the average.

3.

A series of seven consecutive readings showing an increasing or decreasing trend.

4.

A cyclic, periodic or recurring wavy pattern. Cause must be investigated.

5.

Consecutive very high and unnecessary adjustments

very

low

readings

may

indicate


Understanding Six Sigma 22.12.

March, 2010

PROCESS CAPABILITY

The data collected for control charts can also be used to ascertain process capability. One way to check if the process is capable or not is to draw lines for specification limits on the control chart. If the difference between UCL and LCL is less than specification tolerance, the process is capable of meeting the specification; otherwise it is not capable. From the data one can also directly assess process capability without drawing control charts. The steps involved in this are: 1.

Calculate standard deviation (σ) by using the applicable formula In case of X and R chart (for variables) R σ

= ------

(value of d2 for different group sizes is given

below) d2 Group size d2

4

5

6

8

10

2.06 2.33 2.53 2.85 3.85

In case of a p chart (for fraction defective)

σ

=

√

p × (1 - p) n

2.

Draw a histogram to ensure that the process is under control. If the distribution is not normal, find the causes and eliminate them to get normal histograms, before applying tests to check process capability.

3.

Calculate Process capability index Cp using formula Specification Tolerance Cp = Process Tolerance (= 6σ)

If the value of Cp is greater than or equals 1, the process is capable; if it is less than 1, the process is not capable.



March, 2010

4.

Evaluate the centering of the process by calculating index Cpk using the formula. Upper Spec. limit – X C pk = ––––––––––––––––––––––– or 3σ X – Lower Spec. Limit, = ————————— whichever is lower 3σ

5.

If Cpk is greater than or equals 1, the process is meeting specification requirements. If Cp ≥ 1, but Cpk < 1, the process is capable, but is not meeting the requirements because of poor centering.

22.13.

PARETO DIAGRAM

Pareto Diagrams are a special type of histograms. The bars in Pareto Diagrams are rearranged in descending order of their heights, showing individual contribution of each factor as well as cumulative contributions. Purpose To identify high priority items by separating the ‘vital few’ from the ‘trivial many’ or as they are now known ‘useful many’. Procedure Preparation of a Pareto Diagram has the following steps: 1. Design a suitable Tally Sheet to collect data. : 2. Collect required data. 3. Calculate the contribution of each item. 4. Arrange the items in descending order of their contributions. If there are too many small items, combine them under ‘others’. 5. Draw X and Y axes. Different items (in descending order) are on Xaxis and the frequency of their occurrence on Y-axis. An additional Yaxis is drawn on the right to indicate percentages. Select appropriate scales. 6. Draw bars representing the frequency of the items.



March, 2010

7. Draw bars from the second item onwards at a level where the bar of the previous item ends. This is an optional step not always recommended, but it makes the next step easier. 8. Draw a line graph connecting the diagonals of the new bars drawn as instructed in step 7. 9. Title the diagram suitably.

Fig 8: Pareto Diagram Problem: In a film distribution company, customer complaints last year as follows;

A

Broken Shipping case

Key

Descendin g

Cumulativ e

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

D

40

40

5

B

Damaged Film

-----------15

C

25

65

C

Poor Print

-----------25

B

15

80

D

Wrong Print

-----------40

F

08

88

E

Subject in film not treated well

-----------03

A

05

93

F

Late Shipment

----------08

G

04

97

G

No Leaders Guide

----------04

E

03

100

Total

----------100

Make a pareto diagram for this company and select the most important problem to solve.



March, 2010

100

100%

90 80 70 60

Most Important Problem to solve

50

wrong print

40 30 20 10

D

22.14.

C

B

F

A

G

E

Brainstorming

Brainstorming is a technique to generate a large number of ideas from members of a group in a structured manner. Brainstorming is an activity which promotes group participation and teamwork, encourages creative thinking and stimulates the generation of as many ideas as possible in a short period of lime.

The participants in a brainstorming meeting are invited on the basis of their particular knowledge and experience, and are expected to contribute to the topic under discussion. An atmosphere is created where everybody Confidential | Six Sigma 67/87


March, 2010

feels free to express themselves. The production of random ‘off the top of the head’ ideas is encouraged; the emphasis is on quantity rather than quality. No criticism, expression of doubt or hasty judgment of the ideas is allowed until after the brainstorming session; this is crucial if the barriers to creative thinking (such as the fear of seeming foolish or impractical) are to be overcome.

All ideas, without exception, are recorded and made visible to all the participants. Each input and contribution is recognized as important, and the output of the whole session is seen in context. The continuing involvement of each participant is assured and the group's future is reinforced by mapping out the exact follow up actions (analysis and evaluation of the ideas) and the future progress of the project. Purpose To generate a large number of ideas or options or alternatives. As we shall see in some of the tools to follow, the ideas may be for identifying a problem or finding causes for the selected problem, or devising solutions, or identifying areas of resistance to the implementation of the proposed solution.

Procedure The steps involved in Brainstorming are 1.

The group elects a facilitator.

2.

Facilitator writes the topic and a short purpose of Brainstorming on a flip chart.

3.

He asks the members by turn to suggest one idea at a time. He notes it down on the flip chart briefly.

4.

After every member has had his first turn, he starts another cycle.

5.

A member who has no fresh idea to offer may pass. Ideas are not to be evaluated at this time, however, clarification may be sought if the idea is not clear.

6.

A member can build on an idea suggested by another member. Confidential | Six Sigma 68/87


March, 2010

The process is continued till all members pass.

It is essential to remember some Do’s and Don’ts for idea-generation part of the process of Brainstorming. Do’s a. Encourage everyone to participate, b. Stress quantity rather than quality of ideas,

Don’ts a. Lei some persons dominate others. b. Criticise or ridicule an idea however wild or silly.

c. Encourage humour,

c. Permit interruptions.

d. Keep all ideas posted in a manner all members can see.

d. Tape record proceedings. e. Restrict ideas.

Once the session on idea generation is complete, the group can take up prioritising and selecting ideas for immediate follow-up. The steps involved in this part of Brainstorming are 1.

Check if apparently identical ideas are really same or there is some different angle.

2.

Identify and group together related ideas.

3.

Have a brief discussion in support of ideas (surely not against any ideas) if desired.

4.

Shortlist ideas for follow-up action by consensus or voting.

5.

If voting is used every member gets the same number of votes, say five or 10. One can give all votes to one idea or distribute his votes one each to as many ideas or any other combination. The total votes polled by each idea are counted and a priority list finalised.



22.15.

March, 2010

CAUSE AND EFFECT DIAGRAM

Cause-and-Effect Diagrams, also known as Fishbone Diagrams because of their shape or Ishikawa Diagrams after their founder Dr. Kaoru Ishikawa, depict the relation between an ‘Effect’ and various possible ‘Causes’ for the effect. Purpose

To generate in a structured manner, maximum number of ideas regarding possible causes for a problem by using brainstorming technique.

Procedure Generation of a Cause-and-Effect diagram consists of the following steps 1. Agree on the effect or problem for which causes are to be searched. Display the 'Effect' and draw the backbone or spine. 2. Determine the main categories of causes. 3. Enter them in rectangles and connect them to the spine by the ‘middle bones’. 4. Brainstorm to collect as many ‘causes’ in each category as possible and enter them as sub-categories. 5. Discuss the relative importance of the causes. 6. Shortlist a few causes, by consensus or voting as the important causes and circle them. 7. Test to verify the finding.



March, 2010

Employers Motivate & empower all Safety & Standardization Concern

Materials

Ownership & Involvement

Vendor Development Variety Reduction

Suggestion Schemes

Communication

Optimize Materials Reward & Recognition

How to Achieve Company Objective

Value Engineering

Skill Building

Customer feedback Simplified Systems

Succession Planning

Training Needs Identification

Information Flows Price

Integrated business systems

User friendly Training & Development

Product training

Train & Develop All employees to their full potential

Improve customer Contact

Accurate & timely information

Develop an effective company Business Systems Figure 9: Cause & Effect Diagram Confidential | Six Sigma 71/87

After sales service

Benchmark

Build Database of market & customer Requirements


22.16.

March, 2010

FLOW CHART

Flow Charts are diagrams documenting the steps in a process using standard symbols.

Purpose To document clearly the flow of a process as a series of operational steps as carried out at a given time. The Flow Charts are then used to identify duplication of efforts or missing steps with a view to make the process more efficient. Procedure The steps involved in the preparation of a flow chart of a process are 1.

Gather, from all related individuals, information on each step in the process as it exists at the time.

2.

If information from different sources is not tallying, check back to find the exact situation.

3.

Prepare a flow chart showing starting position and end of the process, various steps, decision points and movement from step to step. Use the following standard symbols. Ellipses to show the start and finish of the process Rectangles for individual steps in the process Diamonds for decision points Line with arrowheads indicates movement from step to step with direction

4.

Discuss with all concerned individuals to confirm that the document actually depicts what happens. Make corrections if necessary. Confidential | Six Sigma 72/87


March, 2010

Study the chart for identifying any duplication, missing steps or loopbacks.

6.

Brainstorm to find ways of eliminating the deficiencies listed in step 5.

7.

Prepare

a

revised

chart

incorporating

the

suggestions

for

improving the efficiency of the process. Get it approved. 8.

Follow-up on the implementation to ensure accrual of gains.

22.17.

ARROW DIAGRAM

Arrow Diagrams are flow charts of processes or projects showing all necessary steps in appropriate order along with the time required for each step, the earliest the step can be completed and the latest time by which it must be completed. This tool is used as CPM (Critical Mean Path) as well as in PERT (Programme Evaluation and Review Technique).

Purpose To plan and schedule projects or processes, monitor their progress.

Procedure The steps in the preparation of an Arrow Diagram are 1.

Identify all the steps or activities in the process or project.

2.

Determine the order of activities and alternate routes.

3.

Prepare a flow chart of the process or project.

4.

Check the time required to perform each step or activity.



March, 2010

Determine the time for reaching various steps in the process. Where a process converges after an earlier bifurcation, indicate the higher of the converging routes’ timings.

6.

For every step calculate the earliest possible time of completion as well as the latest time by which the step must be completed to complete the process on schedule.

7.

On the route on which there is a ‘slack’, check if there is a technical reason to favor early or late completion of the activity. Indicate this as a note to the diagram.



March, 2010

Electrification 6

9

Procure Electric Material

Roofing 3

Estimates Plaster4

Procure building Material

Foundation

7

5

Drawing & Design

Superstructure

8

1

Work

1 Doors & Windows

10 Painting & Finishing

Acquire Land

2

Fig. 11: Arrow Diagram ; Construction of a House


Six Sigma 22.18.

March 10, 2010

RELATIONS DIAGRAM

Relations Diagrams are cause and effect diagrams used in complex situations, particularly when a number of causes are interrelated.

Purpose To generate a diagram showing the relations between cause and effect as well the interrelations between various causes.

Procedure Preparation of Relations Diagram consists of the following steps – 1. Decide the problem or the ‘effect’ for which causes are to be found. Write it in the big rectangle in the centre of the board or flip chart paper. 2. Brainstorm to generate primary causes and write them in different rectangles around the central rectangle with effect. Connect each of the causes to the effect with lines with arrows pointing towards the effect. It would be convenient if causes likely to be related are written adjacent to one another. 3. Keep asking 'why?' to generate secondary and tertiary causes for each of the primary causes. Keep asking 'Why' till a root cause is reached. Follow the same procedure for all the primary causes. 4. Connect secondary, tertiary and root causes to the effect through a series of lines with the arrows always pointing towards the effect. 5. If the primary causes are also related as cause and effect, connect them. Connect the other related causes to show as many interrelations as possible. 6. Identify the root causes to which the effect is connected by a large number of routes. Such root causes are likely to be the causes contributing maximum to the effect. Confidential | Six Sigma 76 /87

Six Sigma

March, 2010

7. Reach a consensus on the main contributory causes for follow-up action. If need be voting can be used as described under brainstorming. 8. Give the diagram a suitable title.

22.19.

TREE DIAGRAM

Tree Diagrams are visual presentations of means of achieving goals in a cascading sequence of goals-means-goals-means. These are arranged as a tree with branches and sub-branches.

Purpose To develop alternative means for solving a problem.

Procedure The steps in the preparation of a Tree Diagram are – 1.

Define the problem and the primary goal or objective. Keep it wide enough so that no possible solution is excluded.

2.

Brainstorm to find the means to achieve the primary goal.

3.

The means identified in step 2 become the secondary goals. Brainstorm again to find the means to achieve the secondary goals.

4.

Continue the process by asking the key question 'How?' every time.

5.

When one reaches the end of the line going down to some basic means, brainstorming is done again to identify a few of the alternative means which are most likely to contribute to the solution of the defined problem.

6.

Title the diagram suitably.

Note: A set of cards for the primary and secondary goals may be used to facilitate collection or ideas before drawing the diagram. Confidential | Six Sigma 77 / 87

Six Sigma

March, 2010

Identify work Reward & Ascertain Recognition

Capability Develop a list

Education

Training needs

Training

Motivation

Good Faculty Skill Developments

Empowerment

Involvement Transport

Better Facilities Fig.12:

22.20.

Housing Tree Diagram

AFFINITY DIAGRAM

This is an organizing tool, useful, for example, in sorting out ideas generated through a brainstorming session. It is particularly necessary when a large amount of information, ideas, opinions or issues have been collected in situations when a process needs defining, or customer requirements need identifying, or when a problem needs solving.

The technique organizes the collected pieces of information into groupings based on the natural relationships that exist among them. The number of groupings is limited to a maximum of 10. A single piece of information can constitute an independent group in its own right. A heading is created for each group, capturing its meaning. Confidential | Six Sigma 78 / 87

Six Sigma

March, 2010

The technique is useful in reducing an otherwise unmanageable amount of information into a smaller number of homogeneous groups which are much easier to handle independently, prioritize in order of significance or allocate to specific projects for further study or investigation.

Affinity Diagrams are visual presentations of ideas arranged in groups of related ones from among a very large number of ideas.

Purpose To group ideas generated by brainstorming into groups of closely related ones. The tool is particularly useful for deciding characteristics and features of new products being developed.

Procedure Preparation of Affinity Diagram consists of the following steps 1.

Decide the topic.

2.

Collect ideas by brainstorming.

3.

Rearrange the ideas into groups of related ideas. Use a card for each group.

4.

Arrange the groups according to the relationship among the groups.

5.

Present the arrangement in the form of an Affinity Diagram.

6.

Title the diagram suitably.

Confidential | Six Sigma 79 / 87

Six Sigma

March, 2010

Technical Details • Floor Plan BUILD UP AREA • No. Of Rooms • Details of Material used Location • Central Gardens • Near to school & Offices • Good Transport, Telegraph, Postal, educational facilities Nearby

Features • Air conditioned • Mosaic designer tiles • Kitchen Garden Lift • High quality fittings

Amenities • Water Park •

Cafeteria

•

Club

•

Library

Economy • Reasonable Pavia • Easy installment • Loan facility

Fig. 13: An Affinity diagram of House

22.21.

COST-BENEFIT ANALYSIS

This is a technique for assessing the viability of an action in monetary terms. The costs of taking a particular action are compared to the benefits achievable from the future outcome. It can also be used to compare, in money terms, a number of problem solutions or plans of action


Six Sigma

March, 2010

A necessary first step should be to decide on the period over which the costbenefit analysis will be performed. All the potential costs in setting up the action or solution should be considered at this stage. The next step is to consider all the factors involved which will either incur costs or provide benefits. Consideration should be given to hidden cost factors such as training, maintenance costs and so on. Costs and benefits should be estimated conservatively.

The final analysis should be based on the calculation of the benefit to cost ratio, and the net benefit, perhaps in conjunction with non-financial aspects. The results can be used to evaluate a number of options.

22.22.

CUSTOMER - SUPPLIER RELATIONSHIP CHECKLIST

This type of checklist can be used to help in the assessment of the relationship between the supplier and the (external or internal) customer. It can help in the identification of customer requirements, in the better definition of the process, and in the unbiased assessment of the process performance and of customer satisfaction or dissatisfaction. The checklist should attempt to answer the following questions, which can be allocated to three main groups: Group 1.

Questions

about

issues

concerning

relationships

with

the

customer: 1.1. What are your primary inputs - in terms of product or service? 1.2. Who are your customers - internal and external recipients of your output? 1.3. What are your customer's requirements? What are the methods you use to determine these requirements?


Six Sigma

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1.4. How satisfied are your customers with your product or service? How do you measure their satisfaction? Group 2. 2.1

Questions about issues concerning the process performance:

What are the characteristics of your process output that can be measured

to

determine

whether

it

meets

your

customer's

requirements? 2.2

What major

quality

problems prevent you from meeting

your

customer's requirements? 2.3

What are the obstacles standing in the way of resolving these quality problems, and what would it take to remove these obstacles?

Group 3.

Questions about issues concerning the relationship with the

supplier: 3.1

Which suppliers or subcontractors affect your capability to meet your customer’s requirements? How do you select them?

3.2

What are your primary supplies and what are your requirements for these supplies?

3.3

How do you communicate your requirements to your suppliers and subcontractors? Do you help them to meet these requirements?

3.4

How satisfied are you with your suppliers or subcontractors? Do you provide feedback to them about their performance?


Six Sigma 22.23.

March, 2010

SELECTION OF RIGHT COMBINATION

In the preceding pages, we have seen numerous tools for achieving, maintaining and improving quality. In theory, all the 17 tools stand on their own and can be used alone. However, in practice, in work life situations, one may need to use a combination of several of them in a series, one after the other. To point this out we have sometimes used data collected for one tool while illustrating the use of another tool. (E.g. in examples of Histogram and Pareto Chart, we used data collected in the examples of Tally Sheets).

Most statistical tools start with collection of data, for which an appropriate Tally Sheet has to be designed as the first step. In most judgmental tools, generating a large number of ideas or alternatives is very important. The technique of Brainstorming will be used for idea generation. This too has been usually mentioned among the steps in the procedure for the tool.

Besides this, for solving a problem, a series of tools may have to be used. For instance, one may use a Cause-and-Effect Diagram to find the causes for a problem, collect data (Tally Sheet), study the relative contributions of various causes and prioritise (Pareto Diagram), analyse the data (using Scatter Diagram of Stratification) and after solving the problem, may monitor the process by using an appropriate Control Chart.

If the problem is more complex, one may use a Relations Diagram to study the causes of the problem and then use a Tree Diagram to search for solutions. For developing a new product, one may use an Affinity Diagram to group customer requirements in convenient categories and then use a Matrix Diagram or Matrix Data Analysis Diagram to assist in designing the new product to meet those requirements. Confidential | Six Sigma 83 / 87

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March, 2010

The tools based on the use of statistics can be employed by an expert working alone, but the judgmental tools can be used to advantage only by teams of trained practitioners of the tools. These tools will require interaction between different functions within the company and teamwork between members of groups making use of the tools. The importance of teamwork

and

active

participation

of

various

functions

cannot

be

overemphasized.

Experience and practice of tools will be the best guides in the selection of the right tool or combination of tools for a given purpose. As mentioned in the introduction, the tools are easy to understand but difficult to master. Only practice will make you perfect. So, make frequent use of the tools and techniques and develop expertise in their use.


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March, 2010

Table 2: SPC TOOLS – SELECTION (SUMMERY) TOOL

OBJECTIVES

METHODOLOGY

WHEN TO USE

TYPICAL USER

1. PDCA (Plan, Do, Check, Act )

Problem solved by trial & error

Plan the work; execute it; take action if there is deviation between desired & actual results. Repeat the cycle time till deviation is reduced to zero.

When powerful tools unknown.

Mostly line workers.

2. Data collection & Analysis

− Assess Quality Control − Control a product − Regulate a process − Accept / Reject a product − Interpret observations

Define specific reason for collecting data. Decide on mes. criteria Attribute vs. Variable vs. Rank; assure accuracy of measuring equipment ( min. 5 times greater than produced requirement ) ; randomise, stratify data collection ( time , material, machine, operator, type & location of defects ) analyse data using several S.P.C. D.O.E. tools.

At all times

Universal.

3. Graph charts

−

Display trends Condense data Explain to other

Select two or more parameters to be displayed; determine method of display (bar, line of circle or graphs are the most common); Select the most appropriate scale of the parameter for maximum visual impact.

At all times

Universal.

In preparation for a Histogram or Frequency Distribution Curve.

Universal.

− −

4. Check sheets

−

Transform raw data into categories

Determine categories into which data into which subdivided ( e.g. types of defects, location of defects, days in the week, etc. ). Enter quantities in each category.

* Tally Sheets

Group cells in semipictorial fashion

* For tally sheets divide variable being recorded into 10 levels or cell. Plot cell boundaries or mid points. Make tally ( with slash marks) of the number of observation in each cell.


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March, 2010

5. Histogram Frequency Distribution

Translate data into a picture of the average & spread of a quality characteristics

Convert tally sheet data into bar graph (Histogram) or line graphs (Frequency Distribution) showing the relationship between various values of a quality characteristics & the number of observations (or percentage of the total) in each value.

For process capability studies in pre production or production

Universal tool for prioritizatio n in mfg. Or white collar work.

6. Brain storming

* Generate as many ideas to solve a problem of improve a process utilizing synergistic power of a group. from the trivial many. Concentrate attention on the former

* Gather a group most concerned with problem; define problem precisely ask each member to write down the cause of problem or improvement ideas; then, open the floor for an outpouring of ideas, rational or irrational; no criticism allowed. Record ideas; narrow down the most worthwhile ideas.

* Initial problem solving “ Process” Improvement

Quality Circles Improveme nt teams

7. Cause & effect (Ishikawa Fish bone Diagram)

* Organise problem causes into main groups & subgroups in order to have total visibility of all causes & determine where to start corrective action

* Define the problem; constructed a “Fishbone” diagram with the major causes (e.g. material, machine, method & man) as the main “branches” & add detail causes within each main causes as “twigs”. Quantify the speed limits established for cause & its effect upon the problem. If relationship between the cause & effect can be shown quantitatively draw a box around the cause. If the relationship is difficult to quantify underline the cause. If there is no proofs that a cause is related to the effect, do not mark the cause with a circle. Experiments with these in PDCA fashion until root cause is located.

Problem Analysis

Universal


Six Sigma 8. Control Charts

March, 2010 Maintain the parameter with minimum variation after major cause causes have been captured & reduced.

Select the control parameter product characteristics study process capability. Set control limits – Monitoring process

•

•

Not for problem solving Production control

Engineers, technicians, workers


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