CSUN Engineering Management Six Sigma Quality Engineering Week 2 Introduction to Six Sigma Macro model of Six Sigma Management

Chapters 1,2 & 3 Outline Values of Six Sigma Development & Timeline of Six Sigma Management Benefits of Six Sigma Management Voice Of the Process (VOP) Variation in a Process Voice Of the Customer (VOC) Roles and responsibilities in Six Sigma Management Technical terminology of Six Sigma Management Six Sigma Methodology (DMAIC) Six Sigma Macro Model (Dashboards)\ Six Sigma BB project presentation

Six Sigma is a process that enables companies to increase profits dramatically by streamlining operations, improving quality, and eliminating defects or mistakes in everything a company does, from raw materials to finish goods. A Six Sigma process generates a defect probability of 3.4 parts per million (PPM).  Key activities in Six Sigma are: 1.Understanding customer needs (in quantifiable terms) 2.Translating the needs into the measurable outcomes  Key objectives in Six Sigma are: 1.Understanding & measuring the process inputs 2.Looking at the root causes of variation Values of Six Sigma

If we are so good at X, why do we constantly test and inspect Y? n X 1... X N n Independent n Input-Process n Cause n Problem n Control f (X)Y= The Focus of Six Sigma Y Dependent Output Effect Symptom Monitor

Allied Signal Boeing Caterpillar General Electric John Deere & Co Lockheed Martin Motorola Polaroid Sony Six Sigma Companies Process Capability Process Capability Nonconformities PMO 2 308, , ,   Parts per Million Opportunities The sigma scale of measure is perfectly correlated to such characteristics as defects-per- unit, parts-per million defective, and the probability of a failure/error.

1978 Poor Quality!!! Motorola sells it TV business. When asked why, VP states “QUALITY STINKS!” Did not co-operate across division Ignored customer requirements Diluted culture with new employees without training Did not realize that Sigma had limitations Was an internally focused program Timeline of Six Sigma Management

1980 Corporate Quality Officer appointed 1981 Training Center established 1985 Began to measure total defects/unit 1987 Corporation adopts Six Sigma program, Six Sigma goal to be achieved by Motorola wins Malcolm Baldridge Award at the corporate level 1990 Six Sigma Research Institute formed Blackbelt infrastructure developed and implemented at Motorola, Kodak, TI, IBM, and Digital Motorola hires 40,000 new employees and removes the 40 hour quality training program. Revenue growth averages 27% growth. Timeline of Six Sigma Management

1994 Motorola owns 60% of the wireless phone market. Six Sigma Academy formed Motorola owns 34% of the wireless phone market. Revenue growth is 5%. Shareholder value is 1%; it had averaged 54% in previous 3 years. Timeline of Six Sigma Management Six Sigma Companies Produce superior, reliable, and customer-satisfying products… Are faster, better, cheaper, and more efficient than their competitors…

Benefits of Six Sigma Management Improve process flows Reduce total defects Reduce process cycle time Enhance Customer and Employee satisfaction Help reduce inventory Help improve capacity and output Help increase quality and reliability Help decrease product costs Help improve product delivery to custumer

Voice Of the Process (VOP) A process is a collection of interacting components that transform inputs into outputs toward a common aim. Components Machines Operators Assembly Test Final Inspection Ship to Customer Customer receives product InputsProcessOutputs

Variation in a Process What is Variation? The enemy of certainty The enemy of customer satisfaction Drives the unknown Adds to customer (and employee) disbelief Adds to lack of confidence in the ability of processes Increases risk that a result will not meet expectations Variation is a driver of defects For any process, variation is the main reason for poor performance... Variation is the key focus of Six Sigma

Variation in a Process Feedback Loops A feedback loop relates information about outputs from any stage or stages back to another stage or stages to make an analysis of the process. InputsProcessOutputs Feedback Loop

It is vital that we understand and are able to quantify what is critical to the customer's satisfaction. Voice Of the Customer (VOC) No Good Loss Unhappy Customer No Good Loss Unhappy Customer Good No Loss LSLUSL Nominal Value

Critical to Customer’s satisfactions: High quality Lowest possible price Products deliver on time Therefore Producers should bring forth these products in a manner that minimizes cost and cycle time and maximizes profit Voice Of the Customer (VOC)

We need to ask ourselves... How easy it is for our customers to do business with us? Are we making assumptions about what customers need? How often do we ask our customers (internal and external) what they need? Is this information properly communicated throughout our organization. Voice Of the Customer (VOC) We must place a value and emphasis on the customer, take measurements and measure inputs, not just outputs

Historically 1 in 25 unsatisfied customers express their dissatisfaction Do you have dissatisfied customers? 1 unsatisfied customer typically tells 7-16 others. It cost about five times more to attract a new customer as it does to keep an old one. Customer Satisfaction?

Roles and responsibilities in Six Sigma Management Senior Executive Provides the impetus, direction & alignment necessary for Six Sigma ultimate success. Senior Executive should: 1.Study Six Sigma management 2.Link company’s objectives to Six Sigma projects 3.Champion Six Sigma projects 4.Constantly review Six Sigma projects progress Executive Committee Member They are the top management of an organization. Executive Committee Members should: 1.Deploy Six Sigma throughout the organization 2.Prioritize and manage Six Sigma portfolio 3.Assign champion, BB and GB to Six Sigma projects 4.Remove barriers to Six Sigma management 5.Provide resources for Six Sigma management

Roles and responsibilities in Six Sigma Management Champion Take a very active sponsorship and leadership role in conducting and implementing Six Sigma projects. Champions should: 1.Identify the project on the organizational dashboard 2.Provide an ongoing communication link between the project team and Executive committee 3.Keep the team focused on the project by providing direction and guidance 4.Assure that Six Sigma methods and tools are being used in the project Master Black Belt Takes a leadership role as keeper of the Six Sigma process and advisor to executives or business unit managers. Master Black Belt should: 1.Counsel senior executives and business unit managers on Six Sigma management 2.Continually improve and innovate the organization’s Six Sigma process 3.Apply Six Sigma across across both operations and transactions-based process 4.Mentor Green Belts and Black Belts

Roles and responsibilities in Six Sigma Management Black Belt Is a full time change agent and improvement leader. Black Belts should have the following characteristics: 1.Technical and managerial process improvement/innovation skills 2.Understand the psychology of individuals and teams 3.Not intimidated by upper management 4.Has a customer focus The responsibilities of a Black Belt include: 1.Communicate with the champion and process owner about progress of the project 2.Help team members design and analyze experiments 3.Provide training in tools and team functions to project team members 4.Coach Green belts leading projects limited in scope

Roles and responsibilities in Six Sigma Management Green Belt Is an individual who works on projects part time, either as a team member for complex projects or as a project leader for simpler projects. Green Belts have the following responsibilities: 1.Define & review project objective with project’s champion 2.Facilitate the team through all phases of the project 3.Analyze data through all phases of the project 4.Train team members in the use of Six Sigma tools and methods through all phases of the project Process Owner Is the manager of a process. The process owner should be identified and involved in all Six Sigma projects relating to the process owner area. A process owner has the following responsibilities: 1.Empower employees to follow and improve best practice methods 2.Accept and manage the improved process after completion of the Six Sigma project 3.Understand how the process works, the capability of the process, and the relationship of the process to other processes in the organization

Technical terminology of Six Sigma Management Critical-To-Quality (CTQ): Is a measure of what is important to a customer. Defect: Is a nonconformance on one of many possible quality characteristics of a unit that causes customer dissatisfaction Defects per Million opportunities (DPMO): A quality metric often used in the Six Sigma process. It is calculated by the number of defects observed divided by the number of opportunities for defects compared to 1 million units. Yield: Is the proportion of units within specification divided by the total number of units. Rolled Throughput Yield (RTY): Is the product of the yields from each step in a process.

Six Sigma Methodology (DMAIC)

Six Sigma Macro Model (Dashboards) A dashboard is a tool used by management to clarify and assign accountability for the “critical few” key objectives, key indicators, and project tasks needed to steer an organization toward its mission statement. There are four basic categories of dashboard key objectives: Financial Key Objectives Process Improvement Key Objectives Innovation/Customer Satisfaction Key Objectives Employee Growth and Development Key Objectives

Six Sigma Macro Model (Dashboards)

Plant Performance Dashboard

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