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“ Payroll – Always on My Mind ”. Six Sigma Strategies. Presenter: Kathy D. Pack, CPP Payroll Manager, National Federation of Independent Business. Six Sigma.
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“Payroll – Always on My Mind” Six Sigma Strategies Presenter: Kathy D. Pack, CPP Payroll Manager, National Federation of Independent Business Tennessee Statewide Payroll Conference
Six Sigma “To apply Six Sigma to your business and produce the best results, you need to understand what Six Sigma is, the principles of Six Sigma and DMAIC problem solving method. The correct tools and use of Six Sigma methods will keep your data dependable and reusable.” Six Sigma For Dummies, 2nd Edition; Craig Gygi, Bruce Williams, Stephen R. Covey
Agenda • The Basics: What is Six Sigma • The History of Six Sigma • Six Sigma Principles • Six Sigma Methodology • Six Sigma Tools • Key Roles for Six Sigma
What is Six Sigma? • A problem solving methodology for reducing mistakes and maximizing value. Six sigma has become a symbol of quality. • Statistical term for 3.4 defects per a million opportunities, which translates to 99.9997% error free. • Sigma represents the variation around the mean. • The mean of a process is the average outcome of a number of repetitions. • Variation is when a process is reapeated many times and the outcome differs with each repetition.
What is Six Sigma? • The Sigma level of a company or department indicates the percentage of defects in a product or service or the number of defects per one million opportunities. • The goal of Six Sigma stratedgy is to reduce variation so that the opportunity for error is reduced, increasing quality and productivity; to be as perfect as practically possible. • Once a precise narrowly defined term that has evolved over the years to represent a number of concepts:
What is Six Sigma? • Six Sigma Improvement: Key outcomes of a business or work processes are improved drastically, usually 70% or greater. • Six Sigma Performance: A statistical term for a process that produces fewer than 3-4 defects per million opportunities. • Six Sigma Development: The rollout of Six Sigma methodology across an organization, with assigned pratices, roles and procedures according to generally accepted standards. • The Six Sigma Tool Set: The collection of methods and tools including statistics and analytics that practitioners use to consistently achieve break through levels of improvement. • A data-driven, problem solving methodology of Define-Measure-Analyze-Improve-Control (DMAIC).
The History of Six Sigma • The Six Sigma methodology was formalized in the mid-1980’s at Motorola. • This organization combined new theories and ideas with basic principles and statistical methods that had existed in the quality engineering domain for decades. • They enhanced these building blocks using business and leadership principles to form the basis for a complete management system. • This resulted in staggering increases in quality levels for many of Motorola products. • Then president Robert Gavin began to share Motorola’s Six Sigma stradogies and by the mid -1990’s corporations like Texas Instruments, Allied Signal, General Electric, Ford, and Sony; began to have similiar results. • The root of Six Sigma can be tracted back to early quality concepts and even earlier statistical theories. • Dr Joseph Juran: • Developed the Quality Trilogy: 1. Quality planning- provide a system that is capable of meetin quality standards. 2. Quality control- Used to determine when corrective action is required. 3. Quality improvements- improvements lead to better control and quality. (a better way of doing things)
The History of Six Sigma The Six Sigma Scale • The engineers at Motorola set up a scale to evaluate the quality of a process based on the number of defects.
The History of Six Sigma • The root of Six Sigma can be tracked back to early quality concepts and even earlier statistical theories. Forefather’s of Six Sigma: • Dr Joseph Juran: • Developed the Quality Trilogy: 1. Quality planning- provide a system that is capable of meeting quality standards. 2. Quality control- Used to determine when corrective action is required. 3. Quality improvements- improvements lead to better control and quality. (a better way of doing things) • 80/20 rule; 80% of problems are caused by 20% of potential causes. (few, 20% are vital, many, 80% are trivial). • Dr. W. Edward Deming: • Wrote 14 Points and Seven Deadly Sins of Top Management which describes the 7 most common barriers that management faces to improve effectiveness and continued improvement. (all efforts on a single goal). • Created the PSDA Cycle: Plan, Do, Study, Act.
The History of Six Sigma • Dr. Walter Shewhart: • Developed the Statistical Control Process (SCP): In order for a process to be most economical it must be brought into a state of control where the only variation is random. • Differentiated between assignable and chance cause variation: Assignable cause variation is a variation that can be traced to a root cause. Chance cause variation can’t traced back to a cause and connot be controlled. • Dr. Genichi Taguchi: • First person to equate qualtiy with cost. • Described processes in terms of “noise” and “signal”: processes are influenced by external factors called “noise”. You must Identify and eliminate “noise” from the process or “signal”. Systems and processes should be designed to withstand “noise” and still produce a quality product. • Developed the quality loss function: how money is lost because of variability in a process.
The History of Six Sigma • Dr. Kaoru Ishikawa: • Developed the Company Wide Quality Control method (CWQC): continued customer service, customer should receive continued customer service even after receiving the product. • Developed the cause-and-effect diagram for process improvement (Ishikawa or fishbone diagram) used to find the root of process imperfections. • Dr. Armand Feigenbaum: • Promoted the performance goal of zero defects. • Believed in the concept of a “hidden plant”; so much work is done correcting mistakes that there is a “hidden plant” within a factory.
The History of Six Sigma • Philip Crosby: • Made Six Sigma concepts accessible to ordinary managers. Key role in spreading Six Sigma and it’s methodology. • Developed the four absolutes of quality management: DIRFT; doing it right the first time. 1. quality means conformance to requirements. 2. quality comes from error prevention. 3. standard must be zero defects. 4. should be measured in terms of price of nonconformance (cost of failure)
Six Sigma Principles • Six Sigma is based on a handful of fundamental principles: • Y=f(X) + ε: All outcomes and results (the Y) are determined by inputs (the Xs) with some degree of uncertainty (ε)
Six Sigma Principles • To change or improve results (the Y), you have to focus on the inputs (the Xs), modify and control them. • Variation is everywhere, and it degrades consistent good performance. Your job is to first find it and then minimize it. • Valid measurements and data are required foundations for consistent breakthrough improvement. • Only a critical few inputs have signicant effect on the output. Concentrate on the critical few. • Every decision and conclusion has a risk (ε), which must be weighed against the context of the decision.
Methodology • DMAIC: Define, Measure, Analyze, Improve, Control • Six Sigma Improvement Methodology • DMADV: Define, Measure, Analyze, Design, Verify • Creating new processes which will perform at Six Sigma
Methodology • DMAIC: Define, Measure, Analyze, Improve, Control • Define: Set the context and objectives for your improvement project. Consistent with customer demands and business strategy. • Measure: Determine the baseline performance and capability of the process or system you are improving. • Analyze: Use data and tools to understand the cause-and –effect relationships in your process or system. Are you meeting customer demands. • Control: Establish plans and procedures to ensure that your improvements are sustainable.
Methodology • DMADV: Define, Measure, Analyze, Design, Verify • Define: Set the context and objectives for the NEW project. What is being designed and why. Consistent with customer demands and business strategy. Create a project team. • Measure: Translate customer requirements into project goals. Set performance goals for the project. Develop risk assessment. • Analyze: Develop CTQ’s (Critical to Quality Tree) Review risk assessment. Set project schedule. • Design: Develop models and project plans, set system parameters, create processes around your project design. • Verify: Compare product to internal specifications. Document, Document, Document. Review documentation to ensure your project meets the needs of the customer.
Six Sigma Tools • Having the right tools and knowing how to apply them to your project will help you produce accurate, acceptable and reusable outcomes. • Below is an overview of the Six Sigma Landscape: Project Selection Problem Statement Objective Statement QTC Tree (Critical to Quality) VOC Data (voice of the customer) Data Audit Attribute Measurement Analysis Gauge Repeatability & Reproducibility (R&R) As Is Performance Baseline Process Flowcharting/Mapping Define Measure
Six Sigma Tools Input (X) Identification SIPOC Diagram – Suppliers, Inputs, Process, Outputs, Customers Affinity Diagram – Brainstorming Fishbone Diagram – (Ishikawa Diagram) Value Add/Non Value Add Analysis Input (X)Funneling Cause-Effect (C-E)/X-Y Matric Analysis Failure Mode Effects Analysis (FMEA) Basic Statistics Mean (average), Mode (most frequent) Median (mid range) Range (R), Standard Deviation (σ) Graphical Analysis Dot Plots/Histograms Box & Whisker Plots Scatter (X-Y) Plots Capability Analysis Sigma Score Defect Rate Metrics (DPU, DPO, DPMO, DPPM) Yield Metrics Analyze
Six Sigma Tools Analyze Analyze problem Cause & Effect Identify Root Causes of Defects Verify Root Causes Quantify Root Causes Process Management Summary Process Control Plan Quantify Financial Results Present Final Project Results Close Project Control
Six Sigma Tools DMADV- Define, Measure, Analyze, Design, Verify Six Sigma design for new projects.
Key Roles for Six Sigma • Executive Leadership- Senior executive who sponsors the overall Six Sigma initiative. • Champions-Middle or senior-level executive who sponsors a specific Six Sigma project, ensuring that resources are available and cross-functional issues are resolved. • Black Belt-Full-time professional who acts as a team leader on Six Sigma projects. Typically has four to five weeks of classroom training in methods, statistical tools and sometimes team skill
Key Roles for Six Sigma • Master Black Belt- Highly experienced and successful Black Belt who has managed several projects and is an expert in Six Sigma methods/tools. Responsible for coaching/mentoring/training Black Belts and for helping the Six Sigma leader and Champions keep the initiative on track. • Green Belt-Part-time professional who participates on a Black Belt project team or leads smaller projects. Typically has two weeks of classroom training in methods and basic statistical tools. • Team Member-Professional who has general awareness of Six Sigma (through no formal training) and who brings relevant experience or expertise to a particular project.
