Six Sigma

1. A Real World Case Study Six Sigma

2. 2 Outline Six Sigma introduction and review What is Six Sigma? Defects, Wastes, Variation Real World Case Study

3. What is Six Sigma? The Six Sigma concept is an investment in quality which allows companies to systematically analyze processes and capabilities. The goal is to attain near-perfect results in a precise, accurate, and consistent manner. This is accomplished through focusing on root causes and implementing specific control measures. The end result reduces unwanted wastes and streamlines efficiency, thereby leveraging your position in the marketplace.

4. 4 What is Six Sigma? (continued) Six Sigma integrates tools and methods of: Customer excellence Technical excellence Operational excellence Six Sigma applies them to business processes such as: Risk management New product development Sales Order management Purchasing Manufacturing Distribution Maintenance Finance Human resources and communications Information systems Legal

5. 5 Success stories General Electric profited between $7 to $10 billion in about 5 years DuPont added $1 billion to its bottom line within 2 years, $2.4 billion within 4 years Bank of America saved hundreds of millions of dollars within 3 years: reduced cycle times by more than half and process errors by order of magnitude Honeywell achieved record operation margins and savings of more than $2 billion in direct costs Motorola, where Six Sigma began, saved $2.2 billion in 4 year timeframe

6. 6 Where you are today� Six Sigma 3.4 defects/million 99.9997 percent error-free Five Sigma 233 defects/million 99.977 percent error-free Four Sigma 6,210 defects/million 99.4 percent error-free Three Sigma 66,810 defects/million 93 percent error-free

7. 7 It�s all about undesired outcomes The seven wastes Defects Overproduction Transportation Waiting Inventory Motion Processing What is a defect? Who determines a defect? What are some HSE defects?

8. 8 Food for thought Is a worker safety rate of 99.9 percent acceptable for your company? 5.3 Sigma/72 DPMO

9. 9 Process improvement drives Six Sigma performance Understand cause and effect relationships Focus on ends and means Critical outputs and related inputs Reduce variation Prevent problems

10. 10 The improvement roadmap DMAIC Define, Measure, Analyze, Improve, Control These tools are not new Define: Charter, IPO Map, RTY Measure: Detailed maps, C&E matrix, bar/pareto charts Analyze: FMEA, RCA, capability studies, control charts Improve: Hypothesis testing, corrective actions Control: Sustained improvements, work instructions

11. 11 Six Sigma summary You now have a basic understanding of Six Sigma Next let�s talk about a Real World Case Study

12. 12 Six Sigma Case Study

13. 13 Specification: Larry wants to shoot between 80 and 100 this season, with a target average score of 90.

14. 14 What is his process capability? Goal: Reduce the variation and move the average in Larry�s game.

15. 15 Map the process

16. 16 Breaking down the game

17. 17 Drill down short game

18. 18 Cause & Effect diagram

19. 19 Is putting really a significant source of variation in the overall golf score?

20. 20 Let�s figure out what is causing the variation in his putting game

21. Analyze inputs

22. Analyze skills

23. Design of experiment

24. DOE results

25. DOE conclusions

29. 29 Is Six Sigma right for you? Point of diminishing returns Implementation strategy, success & failure with belt levels The Six Sigma journey begins by gaining insight into your current business processes: What are your measuring (KPI�s)? How good are they? How good could they be? What is limiting them from getting better? How can they be improved?

30. 30 Top 10 six sigma candidate pitfalls 10: Not Exploring All the Educational Resources- candidates often seem unwilling to expend any effort beyond class attendance in understanding the concepts and tools of Six Sigma. Most candidates appear unaware of additional resources or are unwilling to dig into these materials to obtain a more solid grasp of the information. 9: Denial of Application in the Participant�s Workplace- participants are often told or forced to attend Six Sigma training and then state that it does not apply to their own situations. For those who continue with coaching are amazed at how valuable these concepts are in their everyday lives; they begin telling other colleagues and pull them into the world of Six Sigma users. 8: Wanting to Move into Measure and Analyze Phases Before Define Is Solid- candidates who ignore, hate, or do not precisely understand their project in the Define phase, are doomed to significant rework or project failure. 7: Thinking the Data Is Not Sufficient to Do the Project- Data is nearly always available, but it may not be in the desired formats or packaging. Once again, some real work and digging is often necessary.

31. 31 Top 10 six sigma candidate pitfalls (cont�d) 6: Reluctance to Think in Quantitative Terms- improvement goals must be stated in quantitative terms � that is, improve customer satisfaction by reducing complaints by 20 percent, improve quality by reducing released defects by 50 percent, or reduce the cost of quality by reducing the cost of poor quality by 50 percent. 5: Not Evaluating the 10 Percent Improvement Goal- for candidates who have crossed the line into quantitative thinking, many state the magical 10 percent improvement as the goal or business case. When asked where this number came from, most participants shrug their shoulders. They do not ask: Is 10 percent enough? Could 10 percent be too much or unattainable? Candidates must understand the reasons behind the improvement percentage they choose. 4: Determining the Project�s Solutions Before the Project Starts- This mistake is another carryover from the way general projects are run within organizations. In some organizations, it is a sign of weakness to not know the solution to everything immediately. In Six Sigma, the idea is to thoroughly understand, measure and analyze a problem before thinking of solutions. This is an ongoing battle for coaches.

32. 32 Top 10 six sigma candidate pitfalls (cont�d) 3: Worrying Too Much About the Tools- The tools, the tools, the tools! Most initial coaching sessions bring Green Belt teams that are overwrought about the tools. Don�t worry, Black Belts are available. 2: Not Planning for Enough Time or Resources for the Project- candidates often arrive with detailed milestone schedules, but have not considered the needed time and resources. Although some organizations set guidelines like, �Twenty-five percent of the time will be dedicated to the Green Belt project,� this often ends up being a 150-175 percent allocation of the participant�s weekly 40 hours. 1: Starting with a �Boil the Ocean� Sized Scope- If candidates could only complete the projects they bring into their first coaching session, most companies would see quantum improvement. However, this is not reality, especially when combined with mistake No. 2. It is an absolute must to re-scope the projects based on calendar time and resource allocations. Otherwise, the projects are doomed to failure and Green Belts cannot be completed.