Define Phase Understanding Six Sigma

1. Define PhaseUnderstanding Six Sigma

2. Understanding Six Sigma Definitions History Strategy Problem Solving Roles & Responsibilities Six Sigma Fundamentals Selecting Projects Elements of Waste Wrap Up & Action Items What is Six Sigma?

3. Sigma - a Greek letter assigned to represent the amount of variation or inconsistency exhibited by a measurable outcome. Six Sigma System- An enterprise-wide strategy that recognizes problematic areas of the business, defines improvement efforts and projects, determines and implements data-driven, breakthrough-level solutions---in a predictable and repeatable manner that improves business results. Variable - A naming for a group of items that are used as part of an equation, system or situation. As the name implies, the value or amount can be varied for the item. For example, salt is a variable or ingredient in soup. It is also called an input, which is the terminology we will use in this course. Y=f(x) Problem - When something does not work as well as expected, is insufficient or creates yet another problem. Something we would prefer to avoid. Data -Factual information used as a basis for analysis, reasoning, discussions and decisions. Data comes from some form of measurement and is most useful when it is numerically quantified. Vocabulary Six Sigma Vocabulary

4. Definition of Six Sigma Six Sigma Process Measurement and Management Philosophy of Operational Excellence Six Sigma is a lot of things….. Methodology Tools and Tactics Business Strategy

5. What is Six Sigma…as a Methodology? Six Sigma as a Methodology provides an organized, specific, repeatable means of assessing and resolving challenges through a process titled…. D M A I C Define Analyze Improve Measure Control This approach yields a focus on cause and effect with analytical problem solving tools within a management structure to assure results.

6. -6 +6 -5 -4 -3 -2 +1 -1 +2 +3 +4 +5 What is Six Sigma…as a Business Strategy? Six Sigma as a Business Strategy links the outputs of the processes conducted within a company to the expectations of the customers…… *LSL – Lower Spec Limit *USL – Upper Spec Limit By reducing waste and variation expenses are reduced and customer satisfaction increases thus improving operating margins by as much as 50%.

7. What is Six Sigma…as a Philosophy? Six Sigma as a Philosophyis based on the theory that reducing variation in process output to stay within limits defined by the customer will yield great returns. Defects are expensive. Competitive Advantage is gained by meeting customer expectations…Six Sigma has been proven to accomplish just that objective. Six Sigma Program & Process Performance have a Positive Correlation The Six Sigma philosophy is that of Continuous Improvement through the use of data and specific variation reduction techniques.

8. What is Six Sigma…as Process Measurement? Six Sigma as a Process Measurement system uses accurate data to analyze process performance and find Root Causes of defects…. • Defects • Defects per unit (DPU) • Parts per million (PPM) • Defects per million opportunities (DPMO) • Rolled Throughput yield (RTY) • First Time Yield (FTY) • Sigma value A process oriented approach where the metrics for significant inputs and outputs are measured, monitored and managed.

9. Yield PPMO COPQ Sigma 99.9997% 3.4 <10% 6 5 99.976% 233 10-15% World Class Benchmarks 4 99.4% 6,210 15-20% 10% GAP 93% 66,807 20-30% 3 Industry Average 2 65% 308,537 30-40% 10% GAP 50% 500,000 >40% 1 Source: Journal for Quality and Participation, Strategy and Planning Analysis Non Competitive What is Six Sigma…as a Benchmark? A Sigma value allows us to Benchmark performance against other processes. What does 20 - 40% of Revenue represent to your Organization?

10. High Variability A What is Six Sigma…as a Tool? Six Sigma utilizes specific Tools for business problem solving. Six Sigma tools are used to scope and select projects, modify and/or design new processes, improve current processes, decrease downtime and improve customer response time. Fishbone Control Chart FMEA SPC Histogram Data Analysis

11. Generally a systemic or chronic problem which impacts the success of a process or function. Practical Problem Characteristics of a project: Has an impact on profitability or a significant strategic value The problem is not easily or quickly solvable using traditional methods It is targeted to reduce the problem by >70% over existing performance levels A well-defined effort states the problem and output expectations in quantifiable terms. Six Sigma Project A data-oriented problem that is addressed with facts and data analysis. Statistical Problem Finding the solution of Y = f(X) Data driven solution with known confidence/risk levels versus an “I think” solution. Statistical Solution Focus is to solve a business problem that is: Hampering success Adding costs Decreasing employee or customer satisfaction Impacting a customer (external and/or internal) Developed method to assure the long-term sustainability of the solution. Control Plan Practical solutions are not complex, expensive or irrational, and are readily implement-able. Practical Solution Tangible results have measurable, quantifiable financial or strategic value. Results What is Six Sigma…as a Project?

12. What is Six Sigma…as a Goal? Goal highest level of process performance possible. Sweet Fruit Design for Six Sigma 5+ Sigma Bulk of Fruit Process Characterization and Optimization 3 - 5 Sigma Low Hanging Fruit Basic Tools of Problem Solving 3 Sigma Ground Fruit Simplify and Standardize 1 - 2 Sigma

13. History of Six Sigma And so it begins….. • 1984 Bob Galvin of Motorola articulated the first objectives of a Process Improvement Program • 10x levels of improvement in service and quality by 1989 • 100x improvement by 1991 • Six Sigma capability by 1992 • Bill Smith, an engineer from Motorola, is the person credited as the father of Six Sigma • 1984 Texas Instruments and ABB Work closely with Motorola to further develop Six Sigma It continues…..

14. History of Six Sigma • 1994 Application experts leave Motorola • 1995 AlliedSignal begins Six Sigma initiative as directed by Larry Bossidy • Captured the interest of Wall Street • 1995 General Electric, led by Jack Welch, began the most widespread undertaking of Six Sigma even attempted • 1997 to Present: Six Sigma spans industries worldwide Keeps getting better!

15. The Phase Approach of Six Sigma • Six Sigma created a realistic and quantifiable goal in terms of its target of 3.4 defects per million operations. It was also accompanied by a methodology to attain that goal. • That methodology was a problem solving strategy made up of four steps: measure, analyze, improve and control. • When GE launched Six Sigma they improved the methodology to include the Define Phase. Control Analyze Improve Define Measure MOTOROLA GENERAL ELECTRIC

16. Champion/Process Owner Identify Problem Area Determine Appropriate Project Focus Define Estimate COPQ Charter Project Assess Stability, Capability, and Measurement Systems Measure Identify and Prioritize All X’s Analyze Prove/Disprove Impact X’s Have On Problem Identify, Prioritize, Select Solutions Control or Eliminate X’s Causing Problems Improve Implement Solutions to Control or Eliminate X’s Causing Problems Implement Control Plan to Ensure Problem Does Not Return Control Verify Financial Impact DMAIC Phases Roadmap

17. Business Case Selected Notify Belts and Stakeholders Create High-Level Process Map Determine Appropriate Project Focus (Pareto, Project Desirability) Define & Charter Project (Problem Statement, Objective, Primary Metric, Secondary Metric) N Estimate COPQ Approved Project Focus Recommend Project Focus Y Create Team Charter Team Ready for Measure Define Phase Deployment

18. Define Phase Deliverables • Deliverables: • Charter Benefits Analysis • Team Members (Team Meeting Attendance) • Process Map – high level • Primary Metric • Secondary Metric(s) • Lean Opportunities • Stakeholder Analysis • Project Plan • Issues and Barriers

19. Six Sigma places the emphasis on the Process Using a structured, data driven approach centered on the customer Six Sigma can resolve business problems where they are rooted, for example: Month end reports Capital expenditure approval New hire recruiting Six Sigma is a Breakthrough Strategy Widened the scope of the definition of quality includes the value and the utility of the product/service to both the company and the customer. Six Sigma Strategy Success of Six Sigma depends on the extent of transformation achieved in each of these levels.

20. Conventional definitions of quality focused on conformance to standards. Conventional strategy was to create a product or service that met certain specifications. Assumed that if products and services were of good quality. then their performance standards were correct. Rework was required to ensure final quality. Efforts were overlooked and unquantified (time, money, equipment usage, etc). Requirement or USL Requirement or LSL Target Bad Bad Good Conventional Strategy

21. Problem Solving Strategy • The Problem Solving Methodology focuses on: • Understanding the relationship between independent variables and the dependant variable. • Identifying the vital few independent variables that effect the dependant variable. • Optimizing the independent variables so as to control our dependant variable(s). • Monitoring the optimized independent variable(s). • There are many examples to describe dependant and independent relationships. • We describe this concept in terms of the equation: Y=f (Xi) This simply states that Y is a function of the X’s. In other words Y is dictated by the X’s.

22. Y=f (Xi) • Which process variables (causes) have critical impact on the output (effect)? =f( ) , , , , Tool Wear Material Type Crusher Yield Feed Lubricant Speed =f( ) , , , , Correct Accounts Applied , Trial Balance Sub Accounts Credit Memos Entry Mistakes Time to Close Xn Example If we are so good at the X’s why are we constantly testing and inspecting the Y?

23. Exercise: Consider establishing a Y = f(X) equation for a simple everyday activity such as producing a cup of espresso. In this case our output, or Y, is espresso. =f( ) , , , , Espresso X1 Xn X2 X3 X4 Y=f(X) Exercise

24. Six Sigma Strategy We use a variety of Six Sigma tools to help separate the “vital few” variables effecting our Y from the “trivial many.” Some processes contain many, many variables. However, our Y is not effected equally by all of them. By focusing on the vital few we instantly gain leverage. (X1) (X10) (X4) (X8) (X7) (X3) (X5) (X9) Archimedes said: “ Give me a lever big enough and fulcrum on which to place it and I shall move the world.” (X6) (X2) Archimedes not shown actual size!

25. 6-Sigma Breakthrough Bad UCL Old Standard LCL Performance UCL New Standard LCL Good Time Juran’s Quality Handbook by Joseph Juran Breakthrough Strategy By utilizing the DMAIC problem solving methodology to identify and optimize the vital few variables we will realize sustainable breakthrough performance as opposed to incremental improvements or, even worse, temporary and non-sustainable improvement.

26. The foundation of Six Sigma requires Focus on the voices of the Customer, the Business and the Employee which provides: Awareness of the needs that are Critical to the Quality (CTQ) of our products and services Identification of the gaps between “what is” and “what should be” Identification of the process defects that contribute to the “gap” Knowledge of which processes are “most broken” Enlightenment as to the unacceptable Costs of Poor Quality (COPQ) VOC, VOB, VOE VOC is Customer Driven VOB is Profit Driven VOE is Process Driven

27. Six Sigma Roles and Responsibilities • There are many Roles and Responsibilities for successful implementation of Six Sigma. • Executive Leadership • Champion/Process Owner • Master Black Belt • Black Belt • Green Belt • Yellow Belt MBB Black Belts Green Belts Yellow Belts Eventually there should be a big base of support internal to the organization.

28. Executive Leadership Not all Six Sigma deployments are driven from the top by Executive Leadership. The data is clear, however, that those deployments that are driven by executive management are much more successful than those that aren’t. • Makes decision to implement the Six Sigma initiative and develop accountability method • Sets meaningful goals and objectives for the corporation • Sets performance expectations for the corporation • Ensures continuous improvement in the process • Eliminates barriers

29. Champion/Process Owner Champions identify and select the most meaningful projects to work on, they provide guidance to the Six Sigma belt and open the doors for the belts to apply the process improvement technologies. • Own project selection, execution control, implementation and realization of gains • Own Project selection • Obtain needed project resources and eliminates roadblocks • Participate in all project reviews • Ask good questions… • One to three hours per week commitment

30. Master Black Belt MBB should be well versed with all aspects of Six Sigma, from technical applications to Project Management. MBBs need to have the ability to influence change and motivate others. • Provide advice and counsel to Executive Staff • Provide training and support • In class training • On site mentoring • Develop sustainability for the business • Facilitate cultural change

31. Project team leader Facilitates DMAIC teams in applying Six Sigma methods to solve problems Works cross-functionally Contributes to the accomplishment of organizational goals Provides technical support to improvement efforts Black Belt Black Belts are application experts and work projects within the business. They should be well versed with The Six Sigma Technologies and have the ability to drive results.

32. Well versed in the definition & measurement of critical processes Creating Process Control Systems Typically works project in existing functional area Involved in identifying improvement opportunities Involved in continuous improvement efforts Applying basic tools and PDCA Team members on DMAIC teams Supporting projects with process knowledge & data collection Green Belt Green Belts are practitioners of Six Sigma Methodology and typically work within their functional areas or support larger Black Belt Projects.

33. Yellow Belt Yellow Belts apply the Six Sigma Methodology to their own work responsibilities and serve on project teams. • Provide support to Black Belts and Green Belts as needed • May be team members on DMAIC teams • Supporting projects with process knowledge and data collection

34. Training as a Six Sigma Belt can be one of the most rewarding undertakings of your career and one of the most difficult. You can expect to experience: Hard work (becoming a Six Sigma Belt is not easy) Long hours of training Be a change agent for your organization Work effectively as a team leader Prepare and present reports on progress Receive mentoring from your Master Black Belt Perform mentoring for your team members ACHIEVE RESULTS! The Life of a Six Sigma Belt You’re going places!

35. To achieve certification, Belts typically must: Complete all course work: Be familiar with tools and their application Practice using tools in theoretical situations Discuss how tools will apply to actual projects Demonstrate application of learning to training project: Use the tools to effect a financially measurable and significant business impact through their projects Show ability to use tools beyond the training environment Must complete two projects within one year from beginning of training Achieve results and make a difference Submit a final report which documents tool understanding and application as well as process changes and financial impact for each project Black & Green Belt Certification

36. Organizational Behaviors All players in the Six Sigma process must be willing to step up and act according to the Six Sigma set of behaviors. • Leadership by example: “walk the talk” • Encourage and reward individual initiative • Align incentive systems to support desired behaviors • Eliminate functional barriers • Embrace “systems” thinking • Balance standardization with flexibility

37. At this point, you should be able to: Describe the objectives of Six Sigma Describe the relationship between variation and sigma Recognize some Six Sigma concepts Recognize the Six Sigma implementation model Describe the general roles and responsibilities in Six Sigma Summary

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