Understanding Six Sigma: Achieving Excellence

1. Six Sigma

2. What Is Six Sigma? • Sigma stands for the Greek symbol σ that designates a standard deviation in statistics. • Six refers to the number of standard deviations from a mean specifications should be. • Began at Motorola in 1982 as an effort to reduce costs and improve quality. • It now involves planning, organization, training, human resources planning, and pay-for-knowledge. It requires both organizational and individual cooperation to achieve a goal.

3. Number of Projects, Costs, and Projected Savings, GE’s Six Sigma Quality Initiative, 1995-1999a ($ millions) Number of Projects Projected Savings Year Costs 1995 1996 1997 1998 1999 200 3,000 11,000b 37,000 47,000 N.A. $200 300 450 400-450 N.A. $170 600 1,000+ 1,300 6 個 標準差的效益 GE案例 Source: Robert Slater, Jack Welch and the GE Way (New York: McGraw-Hill, 1999). aBy 1997, the average project was five months in length and yielded an 80% reduction in defects, generating $70,000 to $100,000 in savings. bThis figure compared with 6,000 called for in the business plan for 1997.

4. Definition of Six Sigma “Six Sigma can be defined in several ways. It’s a way of measuring processes; a goal of near-perfection, represented by 3.4 defects per million opportunities (DPMO); an approach to changing the culture of an organization. Most accurately, though, Six Sigma is defined as a broad and comprehensive system for building and sustaining business performance, success, and leadership.”– Pande et al., 2000 六標準差可以有許多不同的定義，它可以是一個衡量流程的方法，也可以是一個接近完美的目標(每百萬中只有3.4個不良)，改變企業文化的手段，更精確無誤地說，它是一個無所不包且可以建立並支撐企業成果和領導者地位的系統。

5. Effects of a 1.5 sigma shift where only 3.4 ppm fail to meet specifications.

6. DMAIC Overview Overview of Six Sigma Process Define Measure Analyze Improve Control • Business Case • Project Desirability Matrix • Problem/Objective Statement • Primary/Secondary Metric • Change Management • VOC/QFD • SIPOC • Process Mapping • Graphical Data Analysis • Multi-Vari Analysis • Inferential Statistics • Hypothesis Tests • Correlation • Regression • Process Modeling and Simulation • Solution Selection • Solution Implementation • Control Plans • Control Charts • Hypothesis Tests • Process Capability Assessment • Best Practice Sharing/Translation • XY Matrix • Process FMEA • Basic Statistics • Decision-Making • Non-Normal Data Graphical Analysis • Measurement System Analysis • Process Capability • Hypothesis Tests • Design of Experiments (DOE) • Advanced Regression • Process Modeling and Simulation • Pilot and Test

7. Optional Six Sigma Roles and Structure Oversee/Guide Project(s) Sponsor/ Champion 盟 主 Coach/Support Project Leader 黑帶大師 Master Black Belt Lead Project To Success Black Belt or Green Belt 黑帶或綠帶 Analyze and Implement Improvement 改善團隊 Improvement Team

8. Define PhaseSlide 1 of 7 • Define Phase • Projects are identified and selected. • Project selection is performed under the direction and with the participation of the champion • Master black belts and black belts or green belts are also involved in selection. • Phases of the Define Phase • Developing the business case. • Project evaluation • Pareto analysis • Project definition

9. Define PhaseSlide 2 of 7 • Developing the Business Case includes: • Identifying a group of possible projects • Writing the business case • Stratifying the business case into problem statement and objective statement.

10. Define PhaseSlide 3 of 7 • The mnemonic device “RUMBA” is used to check the efficacy of a business case. • Realistic - Are the goals attainable, is the time line feasible? • Understandable - Do I understand the case? • Measurable - Do we show the measures? • Believable - That is a lot of money. Can it be done? • Actionable - Can it be implemented? • If the business case meets all of these requirements, it probably will be a good project.

11. Define PhaseSlide 4 of 7 • Project Evaluation • There are several methods for evaluating a project including risk and return assessment. • Risk and Return Assessment • Risk assessment evaluates a potential project across several dimensions to establish an overall risk factor for the project which will be used to determine the attractiveness of the project. • Project return assessment evaluates a potential project on 3 dimensions - growth, urgency, and impact. • The risk and return scores are placed on a grid to determine the attractiveness of the potential project.

12. Define PhaseSlide 5 of 7 Project Risk and Return 100 90 80 ? Stars 70 Return Factor 60 50 40 Low hangingfruit 30 Dogs 20 10 0 0 10 20 30 40 50 60 70 80 90 100 Risk Factor

13. Define PhaseSlide 6 of 7 • Pareto Analysis • Part of the responsibility of the champion is to perform a cost of poor quality (COPQ) analysis. • Performing a study of internal and external failure costs will help to determine where the most benefit can be found. • Problem Definition • Project definition consists of a problem statement, project goals/objectives, primary metrics, secondary metrics, and team member identification.

14. Problem Definition Define PhaseSlide 7 of 7 Problem Statement: In 2002, plant A lost $5.6 million on COPQ. Of this, almost $3.5 million occurred in operation 2. This has resulted in a loss of profitability for the firm. Project Goals/Objective:Reduce COPQ for operation 2 by 30% by year-end. Primary Metrics: - COPQ - Rework (% of sales) - Scrap (% of sales) Secondary Metrics: - Downtime for process - Plant sales - Labor productivity Team Members: Pat Shannon Phillip Fry Lyman Gallup Jerry LaCava Figure 14.9

15. Measure PhaseSlide 1 of 4 • Two Major Steps in the Measure Phase • Selecting process outcomes • Verifying measurements • Measure Phase Tools • Process Map • XY Matrix • FMEA • Gage R&R • Capability Assessment

16. Measure Phase Slide 2 of 4 • Selecting Process Outcomes • To define process outcomes, you first need to understand the process. This involves process mapping. A process map is a flowchart with responsibility. The goal with a process map is to identify non-value added activities. • Two important measures that are monitored are defects per unit (DPU) and defects per million opportunities (DPMO). • The XY matrix is used to identify inputs (X’s) and outputs (Y’s) from a project you have mapped and are desiring to pursue.

17. Measure Phase Slide 3 of 4 • Verifying Measurements • It is necessary to use gauges, calipers and other tools when measuring critical characteristics of processes. • Measurement system analysis (MSA) is used to determine if measurements are consistent. • Product and process capability analysis is another approach for verifying measurements. • Gage Repeatability and Reproducibility Analysis (Gage R&R) is the most commonly used MSA.

18. Measure Phase Slide 4 of 4 • Verifying Measurements (continued) • Reasons for problems in measurement • The measurement gauges are faulty. • Operators are using gauges improperly. • Training in measurement procedures is lacking. • The gauge is calibrated incorrectly. • Statistical experiments using analysis of variance (ANOVA) are useful in performing Gage R&R. • Two-way ANOVA is used to determine whether variation comes from the part being measured, differences in operator measurements, or from the measurement instrument.

19. Analyze PhaseSlide 1 of 4 • Analyze Phase • Involves gathering and analyzing data relative to a particular Black belt project. • Steps in the Analyze Phase • Define your performance objectives. • Identify independent variables (X’s). • Analyze sources of variability.

20. Analyze Phase Slide 2 of 4 • Defining Objectives • Attempting to determine what characteristics of the process need to be changed to achieve improvement. • Capability analysis is reviewed to determine where the processes are incapable and prioritized in order of importance.

21. Analyze Phase Slide 3 of 4 • Identifying X’s • This involves identifying independent variables where data will be gathered. • These variables significantly contribute to process or product variation. • Primary tools used in identifying X’s • Process maps • XY matrices • Brainstorming • FMEA

22. Analyze Phase Slide 4 of 4 • Analyzing Sources of Variation • The goal of this step is to use visual and statistical tools to better understand the relationships between dependent and independent variables (X’s and Y’s) for use in future experimentation. • Tools for Analyzing Sources of Variation • Histograms • Box plots • Scatter plots • Regression analysis • Hypothesis tests

23. Improve Phase • Improve Phase of the DMAIC Process • Involves off-line experimentation. • Off-Line Experimentation • Involves studying the variables we have identified and using analysis of variance to determine whether these independent variables significantly affect variation in our dependent variables. • The Taguchi method is an important method for performing off-line experiments.

24. Control Phase • Control Phase of the DMAIC Process • Involves managing the improved process using process charts. • Process charts were covered in Chapters 12 and 13

25. Six Themes of Six Sigma • Genuine focus on the customer (專注於客戶) • Data-driven management (數據導向管理) • Process focus, management, and improvement (專注在流程、管理、與改善) • Proactive management (主動管理) • Boundaryless collaboration (跨部門合作) • Drive for perfection; tolerance for failure (追求完美、容忍失敗)

26. Essential Six Sigma Methods and Tools • Process design/redesign (程序設計/再造) • Analysis of variance (變異數分析) • Balanced scorecard (平衡計分卡) • Voice of the customer (傾聽顧客聲音) • Creative thinking (創造性思考) • Design of experiments (實驗設計) • Process management (流程管理) • Statistical process control (統計程序管制) • Continuous improvement (持續增進)

27. The Benefits of 6-Sigma • Generates sustained success (產生持久性的成功) • Sets a performance goal for everyone (設立目標) • Enhances value to customers (提高顧客的價值) • Accelerates the rate of improvement (加速改進速率) • Promotes learning and “cross-pollination” (水平展開學習) • Executes strategic change (實行策略性的變革)

28. What is a Six Sigma Organization? “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.” Pande et al., 2000 一個組織若能將這些六標準差作法實際應用於每天的管理實務上，它將在工作流程和顧客滿意度的表現上有重大的進展。

29. What is a Six Sigma Organization? (續) • To qualify, you do not need to have achieved actual Six Sigma levels of performance. (不需要達到百分百的六標準差程度才配稱為六標準差的組織) • Simply using Six Sigma measures or a few tools does not qualify a company to be a “Six Sigma Organization,” either. (僅僅使用一些六標準差法的工具當然也不具資格成為六標準差組織的) • You don’t have to call it Six Sigma to be a Six Sigma Organization.(不是一定要用六標準差法才配稱為六標準差的組織)

30. The Six Sigma Roadmap • Identify core processes and key customers (確認核心流程與主要客戶) • Define customer requirements (定義顧客需求) • Measure current performance (衡量現況) • Prioritize, analyze, and implement improvements (按優先順序處理,分析並實施改進的計畫) • Expand and integrate the six sigma system (擴展並結合六標準差系統)

31. How to Training the Six Sigma Organization “Where you should place the emphasis, in your company’s Six Sigma training, is the skills and methods your people most need to fulfill their roles in the early phases of their efforts – and to plan continued learning that will both reinforce early knowledge and add more advanced (or basic) knowledge later on.”- Pande et al. 2000 在公司的六標準差訓練計畫中，你最應該重視的就是你的員工必須擁有足夠的能力去全力扮演好他們在公司內的腳色—有計畫的持續學習不但能夠讓員工在早期能擁有足夠的能力，在將來的日子裡還能夠增加更多進階的知識。

32. Essentials of Effective Six Sigma Training • Emphasize “hands-on” learning (強調實務學習) • Provide relevant examples and links to the “real world” (提供相關案例並與現實世界做連接) • Build knowledge (建立知識) • Cater to a variety of learning styles (迎合各種學習方式) • Make training something more than learning (訓練過程不單只是學習而已) • Make training an ongoing effort (在訓練上不斷努力)