Total Quality Management

1. Total Quality Management Week # 12 Six Sigma Prepared by: Khalid Dahleez Faculty of Commerce – the Islamic University of Gaza This material was collected from different sources Total Quality Management - Spring 2010 - IUG

2. WHAT IS Six Sigma? • A highly structured strategy for acquiring, assessing, and applying customer, competitor, and enterprise intelligence for the purposes of product, system or enterprise innovation and design. • “Six Sigma is a business improvement approach that seeks to find and eliminate causes of mistakes or defects in business processes by focusing on process outputs that are of critical importance to customers.” (Snee, 2004). • “Six Sigma is a useful management philosophy and problem-solving methodology but it is not a comprehensive management system. “ (McAdam & Evans, 2004) Total Quality Management - Spring 2010 - IUG

3. Alternative Six Sigma Definitions • “A Six Sigma initiative is designed to change the culture in an organisation by the way of breakthrough improvement in all aspects of the business.” (Breyfogle III et al., 2001) • “Six Sigma is a programme that combines the most effective statistical and non-statistical methods to make overall business.” (Pearson, 2001)

4. Alternative Six Sigma Definitions • “Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services. The central idea behind Six Sigma is that you can measure how many defects you have in a process, you can systematically figure out how to eliminates them and get as close to ‘zero defects’ as possible. Six Sigma has changed the DNA of GE – it is the way we work - in everything we do in every product we design” (General Electric at www.ge.com)

5. More About Six Sigma • Six Sigma Was Developed at Motorola in the 1980’s As a Method to Improve Process Quality. • It Was First Used to Improve Manufacturing Process Capability and Then Migrated to Business Processes Capability • Companies That Have Deployed Six Sigma: Bank of America, Motorola, GE, IBM, Kodak and Many More • The Basic Premise Is, All Processes Have Variation. Variation Is the Enemy.

6. What Is Six Sigma?  • Degree of variation; • Level of performance in terms of defects; • Statistical measurement of process capability; • Benchmark for comparison; • Process improvement methodology; • It is a Goal; • Strategy for change; • A commitment to customers to achieve an acceptable level of performance Sigma is a letter in the Greek Alphabet

7. Six Sigma Definitions • Business Definition • A break through strategy to significantly improve customer satisfaction and shareholder value by reducing variability in every aspect of business. • Technical Definition • A statistical term signifying 3.4 defects per million opportunities.

8. Science Art Magic Six Sigma What is the Six Sigma Philosophy? • We don’t know what we don’t know. • If we can’t measure it, we really don’t know much about it. • If we don’t know much about it, we can’t control it. • If we can’t control it, we are at the mercy of chance. Focus on the Customer!

9. Six Sigma -- Practical Meaning 99.99966% Good (6 Sigma) 99% Good (3.8 Sigma) • Seven articles lost per hour • One unsafe minute every seven months • 1.7 incorrect operations per week • One short or long landing every five years • 68 wrong prescriptions per year • One hour without electricity every 34 years • 20,000 lost articles of mail per hour • Unsafe drinking water for almost 15 minutes each day • 5,000 incorrect surgical operations per week • Two short or long landings at most major airports each day • 200,000 wrong drug prescriptions each year • No electricity for almost seven hours each month

10. Six Sigma Results Six Sigma Savings as % of revenue vary from 1.2 to 4.5 % For $ 30 million/yr sales – Savings potential $ 360,000 to $ 1.35 million. Investment: salary of in house experts, training, process redesign.

11. Six Sigma COPIS Model Process Steps Outputs Inputs Suppliers Customers How does Six Sigma Work? The Voice of the Customer(VOC) is aggressively sought and rigorously evaluated and used to determine needed outputs and hence the optimal process configuration needed to yield those outputs and their necessary inputs for which the best suppliers are identified and allied with. From Concept to Market: the Voice of the Customer

12. Six Sigma Methodologies Six Sigma is divided into methodologies: • DMAIC (Define-Measure-Analyze-Improve-Control), Improvement methodology for existing processes and performance. • DFSS (Design For Six Sigma), A methodology of the design of new products or services, with a six sigma capability and performance.

13. Plan Execute • Strategic Link to Business Plan defined in Project Selection Process • Defined Business Impact with Op Ex Champion support • Structured Brainstorming at all organizational levels • Cause and Effect Diagrams identifying critical factors • Primary and Secondary Metrics defined and charted • Multi-Level Pareto Charts to confirm project focus DEFINE Identify Problem • Develop a focused Problem Statement and Objective • Develop a Process Map and/or FMEA • Develop a Current State Map • Identify the response variable(s) and how to measure them • Analyze measurement system capability • Assess the specification (Is one in place? Is it the right one?) MEASURE Practical Problem • Characterize the response, look at the raw data • Abnormal? Other Clues? Mean or Variance problem? • Time Observation • Spaghetti Diagram • Takt Time • Future State Maps • Percent Loading • Standard Work Combination • Use Graphical Analysis, Multi-Vari, ANOVA and basicstatistical tools to identify the likely families of variability Operational Excellence Methodology ANALYZE Practical Solutions Problem Definition • Identify the likely X’s • 5S • Set Up Time Reduction (SMED) • Material Replenishment Systems • Level Loading / Line Leveling • Cell Design • Visual Controls • Use Design of Experiments to find the critical few X’s • Move the distribution; Shrink the spread; Confirm the results IMPROVE Problem Solution • Mistake Proof the process (Poka-Yoke) • Tolerance the process • Measure the final capability • Place appropriate process controls on the critical X’s • Document the effort and results • Standard Work • TPM Problem Solving CONTROL Problem Control • What do you want to know? • How do you want to see what it is that you needto know? • What type of tool will generate what it is that youneed to see? • What type of data is required of the selected tool? • Where can you get the required type of data? Execute Plan PERFECTION

14. Six Sigma Project Methodology Project Phases Control Define Measure Analyze Improve • Improvement strategy • Develop ideas to remove root causes • Design and carry out experiments, • Optimize the process. • Final solutions • Collect data on size of the selected problem, • identify key customer requirements, • Determine key product and process characteristic. • Analyze data, establish and confirm the “ vital few “ determinants of the performance. • Validate hypothesis • Establish standards to maintain process; • Design the controls, implement and monitor. • Evaluate financial impact of the project • Identify, evaluate and select projects for improvement • Set goals • Form teams.

15. DMAIC (Define) • Define (What is important?) • Base-lining and benchmarking processes • Decomposing processes into sub-processes • Specifying customer satisfaction goals/sub-goals (requirements) • Support tools for Define step: • Benchmarking • Baseline • Voice of Customer (Win Win) • Voice of Business (Win Win) • Quality Function Deployment & etc.

16. DMAIC (Define) Define is the first step in six sigma approach of DMAIC. DMAIC first asks leaders to define core processes. It is important to define the selected project scope, expectations, resources and timelines. The definition step in the six sigma approach identifies specifically what is part of the project and what is not, and explains the scope of the project.  Many times the first passes at process documentation are at a general level. Additional work is often required to adequately understand and correctly document the processes. As the saying goes “The devil is in the details.”

17. DMAIC (Measure) • Measure (How are we doing?) • Identifying relevant metrics based on engineering principles and models • Performance measurement: throughput, quality (statistically, mean and variation) • Cost (currency, time, and resource) • Other example of measurement: response times, cycle times, transaction rates, access frequencies, and user defined thresholds • Support tools for Measure step: • 7 Basic tools : Flow chart, Check Sheets, Pareto diagrams, Cause/Effect diagrams, Histograms, and Statistical Process Control (SPC). • Defect Metrics • Data Collection Forms, Plan, Logistics

18. DMAIC (Measure) • Many think when they start a journey the most important thing to know is where they are going. • While we agree knowing where you want to go is very important, we believe some of the first information you need before starting any journey is your current location. • The six sigma approach asks the Black Belt project manager to quantify and benchmark the process using actual data.  • At a minimum, consider the mean or average performance and some estimate of the dispersion or variation (may be, even calculate the standard deviation).  • Trends and cycles can also be very revealing. • The two data points and extrapolate to infinity is not a six sigma approach. • Process capabilities can be calculated once there is performance data,

19. DMAIC (Analyze) • Analyze (What’s wrong?) • Evaluate the data/information for trends, patterns, causal relationships and “root cause” • Example: Defect analysis, and Analysis of variance • Determine candidate improvements • Support tools for Analyze step: • Cause/Effect diagram • Failure Modes & Effects Analysis • Decision & Risk Analysis • Statistical Inference • Control Charts • Capability Analysis and etc.

20. DMAIC (Analyze) • Once the project is understood and the baseline performance documented and verified that there is real opportunity, it is time with the six sigma approach to do an analysis of the process. • In this step, the six sigma approach applies statistical tools to validate root causes of problems.   • Any number of tools and tests can be used.  • The objective is to understand the process at a level, sufficient to be able to formulate options for improvement. • We should be able to compare the various options with each other to determine the most promising alternatives. • As with many activities, balance (no. of activities vs depth of analysis) must be achieved. • Superficial analysis and understanding will lead to unproductive options being selected, forcing recycle through the process to make improvements. • At the other extreme is the thorough analysis of only a few activities. Striking the appropriate balance is what makes the six sigma Black Belt highly valuable.     

21. DMAIC (Improve) • Improve (What needs to be done?) • Making prototype or initial improvement • Measure and compare the results with the simulation results • Iterations taken between Measure-Analyze-Improve steps to achieve the target level of performance • Support tools for Improve step: • Design of Experiments • Modeling • Tolerancing • Robust Design

22. DMAIC (Improve) • During the improve step of the six sigma approach ideas and solutions are put to work. • The six sigma Black Belt has discovered and validated all known root causes for the existing opportunity. • The six sigma approach requires Black Belts to identify  solutions.  Few ideas or opportunities are so good that all are an instant success. • As part of the six sigma approach there must be checks to assure that the desired results are being achieved. • Some experiments and trials may be required in order to find the best solution. • While making trials and experiments, it is important that all project associates understand that these are trials and really are part of the six sigma approach.

23. DMAIC (Control) • Control (How do we guarantee performance?) • Ensuring measurements are put into place to maintain improvements • Support tools for Control step: • Statistical Controls: Control Charts, Time Series methods • Non-Statistical Controls: Procedural adherence, Performance Mgmt., Preventive activities

24. DMAIC (Control) • Many people believe the best performance you can ever get from a process is at the very beginning. • Over time, there is an expectation that slowly things will get a little worse until finally it is time for another major effort towards improvement.  • Contrasted with this is the Kaizen approach that seeks to make everything incrementally better on a continuous basis.  • The sum of all these incremental improvements can be quite large.  As part of the six sigma approach performance tracking mechanisms and measurements are in place to assure, at a minimum, that the gains made in the project are not lost over a period of time. • As part of the control step we encourage sharing with others in the organization. • With this the six sigma approach really starts to create phenomenal returns, ideas and projects in one part of the organization are translated in a very rapid fashion to implementation in another part of the organization.  

25. DFSS • Design For Six Sigma (DFSS) • A rigorous approach to the design of a new product or service • The goals: • Reduce delivery time and development cost and • Increase the effectiveness of the product or service and hence customer satisfaction. • Key elements: • A customer focus and the ability to measure quality using the six sigma metric and philosophy • Appropriate design that delivers excitement without failure, and does so to budget and expectation • An overarching business strategy and management that brings out the very best for organic growth, through the repeated and regular launch and successful development of new products and services

26. The Six Sigma Roadmap • Five steps to implementing Six Sigma • Identify core processes and key customers • Define customer requirements • Measure current performance • Prioritize, analyze, implement improvements • Expand and integrate the Six Sigma system

27. Basic ImplementationRoadmap Identify Customer Requirements Identify Customer Requirements Understand and Define Entire Value Streams Vision (Strategic Business Plan) Deploy Key Business Objectives - Measure and target (metrics) - Align and involve all employees - Develop and motivate Continuous Improvement (DMAIC) Define, Measure, Analyze, Improve Identify root causes, prioritize, eliminate waste, make things flow and pulled by customers Control -Sustain Improvement -Drive Towards Perfection

28. Organizing Six Sigma • Key Roles • Leadership Team • Champions • Mentors (master black belts) • Experts (black belts) • Participants (green belts)

29. Mentor, trainer, and coach of Black Belts and others in the organization. Master Black Belt Leader of teams implementing the six sigma methodology on projects. Black Belts Champions Delivers successful focused projects using the six sigma methodology and tools. Green Belts Participates on and supports the project teams, typically in the context of his or her existing responsibilities. Team Members Quality Fundamentals/ Kaizen Now Responsible for supporting the Deployment Strategy within Line of Business/Customer Segment or Golden Thread Deployment Champions

30. Key Six Sigma Roles The Leadership Group • Be actively involved from outset • Develop a strategic plan • Establish Roles and Infrastructure • Establish supporting policies • Job descriptions • Reward/Compensation systems • Career paths • Select projects • Prioritize projects and allocate resources • Facilitate, guide, manage

31. Six Sigma Champions • Create the vision of Six Sigma for the company. • Define the path to implement Six Sigma across the organization. • Develop a comprehensive training plan for implementing the Breakthrough Strategy. • Carefully select high-impact projects. • Support development of “statistical thinking”. • Ask Black Belts many questions to ensure that they are properly focused. • Realize the gains by supporting Six Sigma projects through allocation of resources and removal of roadblocks. • Hold the ground by implementing Black Belt recommendations. • Make sure that project opportunities are acted upon by the organization’s leadership and the finance department. • Recognize people for their efforts.

32. Master Black Belts • Understand the big business picture. • Partner with the Champions. • Get certified as Master Black Belts. • Develop and deliver training to various levels of the organization. • Assist in the identification of projects. • Coach and support Black Belts in project work. • Participate in project reviews to offer technical expertise. • Help train and certify Black Belts. • Take on leadership of major programs. • Facilitate sharing of best practices across the corporation.

33. Black Belts • Act as Breakthrough Strategy experts and be Breakthrough Strategy enthusiasts. • Stimulate Champion thinking. • Identify the barriers. • Lead and direct teams in project execution. • Report progress to appropriate leadership levels. • Solicit help from Champions when needed. • Influence without direct authority. • Determine the most effective tools to apply. • Prepare a detailed project assessment during the Measurement phase. • Get input from knowledgeable operators, first-line supervisors, and team leaders. • Teach and coach Breakthrough Strategy methods and tools. • Manage project risk. • Ensure that the results are sustained.

34. Black Belt Activities MENTORS: Cultivates a network of Six Sigma individuals at the local organization or site. TEACH: Provides formal training of local personnel in new strategies and tools. COACH: Provides one-on-one support to local personnel. TRANSFER: Passes on new strategies and tools in the form of training, workshops, case studies, and local symposia. DISCOVER: Finds application opportunities for Six Sigma strategies and tools, both internal and external (e.g. suppliers and customers). IDENTIFY: Highlights / surfaces business opportunities through partnerships with other organizations. INFLUENCE: Sells the organization on the use of Six Sigma strategies and tools.

35. Green Belts • Function as Green Belts on a part-time basis, while performing their regular duties. • Participate on Black Belt project teams in the context of their existing responsibilities. • Learn the Six Sigma methodology as it applies to a particular project. • Continue to learn and practice the Six Sigma methods and tools after project completion.

36. Six Sigma & Leadership Six Sigma only works when Leadership is passionate about excellence and willing to change. • Fundamentals of Leadership • Challenge the process • Inspire a shared vision • Enable others to act • Model the way • Encourage the heart • Six Sigma is a catalyst for leaders

37. Six sigma project: retail display.  Define: Marketing has designed a "fancy" display unit that they think will outperform the "standard" display unit and they want to put one in every store. "Fancy" display is 10X cost of a "standard" display and all stores already have "standard" units. Should the new displays be purchased. Measures: Have data for each store on sales of this product for every day.  Analyze: The stores identified at least three other factors besides display type that could impact sales. Range for each factor was identified. Design of Experiments was conducted. Improve: "Fancy" display had no significant impact on sales. The "fancy" displays were not ordered for any more stores, with considerable cost savings. Control: Future changes will be tested and evaluated using statistical techniques.

38. Six sigma project: water treating. Define: Water treating unit in 15 years had never been able to handle the nameplate capacity. Treatment chemical costs were higher than other types of treatment units. Measure: Confirmed flow rate through the system vs. nameplate. Analyze: Measure system evaluation and found many measurements that were off by over 100%. Hourly operations identified key variables in the operation of the unit and the acceptable range of each. Conducted three different Designed Experiments. Improve: Corrected the measurement problems. Found set of operating variables that produced 107% of nameplate capacity at higher quality with lower chemical use. Chemical use reduced by $180K per year. Control: Hourly operations trained, procedures modified, process to check measurement instituted. Model for changes in inlet water conditions.

39. Six sigma project: parts failing after final machines. Define: Inspection is rejecting a high number of parts after final machines. Measure: Product yield was determined and number of defects in total to establish defect yield and sigma value. Analyze: Machine operators, engineers and vendor identified variables that could impact the production of defects. Range of acceptable levels determined for each variable. Five different Designed Experiments were conducted. Improve: Operating instructions changed to the conditions with the lowest defect production consistent with capacity limits. Final product yield increased 13%. Control:Control charts installed for each machine. Decision tree corrective action plan provided for known defects and known corrective actions. 

40. Six sigma project: out of specification product. Define: Amount of product out of specification (spec) and being automatically removed is high. No recycle or salvage value. Measure: Quantified the amount of out of spec product for each product grade. Analyze: Operations and Engineers identified the variables that impact the production of out of spec material. Several of these are preventive actions performed by operations. Ranges for the levels and frequencies for the variables were determined. Designed Experiments were run and acceptable levels and frequencies determined. Improve: Levels for the variables and frequencies for operator preventive actions established. Out of spec material dropped by 50%. Control: Operating procedures were modified, schedules for operator corrective actions instituted, and control charts for the amount of out spec material are being kept.

41. Six sigma project: web design. Define: Design a web site that ranks in the top  ten (10) on all major search engines and directories. Measure: Enter "six sigma" and check ranking in search engines. Analyze: URL name, title of pages, and other factors are major ranking criteria. Reciprocal links and other routine activities aid in search engine ranking. Improve: Purchase URL with six sigma included, optimize each page, develop reciprocal links, and perform other regular activities required to maintain traffic and ranking. Control: Monitor ranking on search engines weekly.  You can check on the success of this project by entering "six sigma" in the search field of your favorite search engine. The titles and descriptions may vary , the URL link is the performance measure.