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Outline What is Six Sigma History of Six Sigma Definition of Six Sigma Key focus of Six Sigma Statistical meaning of Six Sigma DMAIC:  Define phase  Measure phase  Analyze phase  Improve phase  Control phase 7) Benefit of applying Six Sigma 8) Challenges in implementing Six Sigma 9) Case study

What is Six Sigma Six Sigma was develop by Motorola around 1985 and make famous by GE. “Six Sigma is a commited management approach to quantifiably solve problems and optimize critical process”...ASQ “implementing six sigma into your corporate cluture improves processes, maximize business performance and adds to your bottom line”...ASQ “six sigma is a discilpined and data-driven approach for problem solving in any process.” “a quality measure and improvement program developed by motorola that focuses on the control of a process to the point of 3.4 defects per million oppurtunity...”

What is Six Sigma “sigma” Is a measurement scale upon which improvements can be gauged. “six sigma” Is an overall methodology that drives business improvement.

Statistical Quality Control History of Six Sigma Design for Six Sigma (DFSS)/ Six Sigma for Production Development (SSPD) Six Sigma/ Quality Awards Total Quality Control Motorola’s Six Sigma Methodology 1950s 1960s 1970 1980s 1990s 2000 2005 Statistical Quality Control ISO 9000/ Total Quality Management Lean Manufacturing Lean Six Sigma

Definition of Six Sigma There are three different levels that Six Sigma can be defined and understood. Metric It can be defined as metric 3.4 Defects per Million Opportunities (DPMO). That allows taking Complexity of product or process into account. Methodology It could be described as structured problem-solving roadmap and tools. For Example: Define, Measure, Analyse, Improve, and Control (DMAIC) and Design for Six Sigma (DFSS) methodologies. Philosophy It can be used as philosophy in reducing variation in business and take customer-focused and data driven decisions.

Key focus of six sigma Every human activity has variability. Every process has variability. Variation means that a process does not produce consistent, predictable results over time. Variation leads to defects, and defects lead to unhappy customers. Minimizing variation is a key focus of six sigma. Variation is devil.

Statistical Meaning of Six Sigma Table 1: Six Sigma Process Capability, percentage of accuracy and competitive level (Schroeder,2008) Defect per million opportunity % Accuracy Competitive Level 6 3.4 99.99966 World Class 5 233 99.9767 4 6,210 99.956 Industry Average 3 66,807 99.73 2 3,08,537 95.46 Non-Competitive 1 6,90,000 68.26

Define Phase Purposes Output Define Measure Analyze Improvement Control Purposes Define the project’s purpose and scope and get background on the process and customer Output A clear statement of the intended improvement and how it is to be measured A list of what is important to customer

Applicable Method and Tools SIPOC Project Charter VOC

SIPOC A SIPOC diagram is a tool that is used to gather a view of process information. SIPOC stands for Suppliers, Inputs, Process, Outputs and Customers. Benefits: Remove ambiguity. Immediate understanding of project boundaries. Simple to understand by team.

Project Charter A project charter is a statement of the scope, objectives and participants in a project. Also known as a “Terms of References” or “Project Definition Report” Benefits Improved project management process Help define and achieve business objectives Create project monitoring and control.

VOC VOC stands for Voice of the Customers. Customers - Any person or organization that receives a product or service (output) from the work activities (Process) Types of “customers”: External (individuals or organization) Internal (colleagues – marketing, management, stockholders) Regulatory ( government agency – OSHA, EPA) Benefits – improve customer loyalty, ensure continuous business growth, improve product innovation.

Measure Phase Purposes Output Define Measure Analyze Improvement Control Purposes To understand the process and its performance Output Baseline data on current process performance A more focused problem statement

Applicable Statistical Method and Tools Data collection ( What, How, Who, When, Where) Sampling Measurement System Analysis - Gage R&R (repeatability and reproducibility) Variation (mode, mean, median, standard deviation & variance) Process capability (voice of process-control limits, voice of customer – specification limits)

Applicable Statistical Method and Tools F M E A

Applicable Statistical Method and Tools Ishikawa Diagram

Statistical Process Control (SPC)

Pareto Analysis

Analyze Phase Analyze Define Measure Improvement Control Purpose The third stage analyze serves as an outcome of the measure stage. This stage will begin streamlining its focus on a distinct group of project issues and opportunities. In other words, this stage allows the team to further target improvement opportunities by taking a closer look at the data. Outcome/Output The team should have a strong understanding of the factors impacting their project including: Key process input variables ( the vital few Xs that impact the Y) Sources of variation where the greatest degree of variation exists.

The team are able to do this by performing the following specific sequence of tasks: Perform capability analysis: this is a process for establishing the current performance level of the process being. This baseline capability will be used to verify process improvements through the improve and control phases. Select analysis tools: this step will help the team to look at the complete set of graphical analysis tools to determine how each tool may be used to reveal details about process and variation. Apply graphical analysis tools: this refers to the technique of applying a set of basic graphical analysis tools to data to produce a visual indication of performance. Identify sources of variation: this refers to the process of identifying the sources of variation in the process under study, using statistical techniques, so that significant variation is identified and eliminated.

Applicable Statistical Method and Tools Tests for normality (Descriptive Statistics, Histograms): Correlation/Regression Analysis: Analysis of Variances (ANOVA): FMEA (Failure Mode and Effect Analysis): Hypothesis testing methods:. Cause & Effect Matrix: Design of Experiments (DOE) Control Chart Quality Function Deployment (QFD)

Improvement Phase Define Measure Analyze Improvement Control Purpose The fourth stage improves aims to generate idea, design, and pilot and implement improvement and validate the improvement. Outcome/Output The most important items in this stage are the process of brainstorming, the development of the process map, review of the current FMEA, preliminary cost/benefit analysis, a pilot of the recommended action and the preliminary implementation process.

The following steps should be taken at this stage: Generate improvement alternatives. The emphasis here is to generate alternatives to be tested as product or process improvement. The basic tools to be used here are brainstorming and DOE. The process of basic tools: Define improvement criteria by develop CTQ characteristic. Generate possible improvements as the best potential that are evaluated based on the criteria matrix. Evaluate improvements and make the best choice.

Applicable Statistical Method and Tools Process Mapping Process Capability Analysis (Cpk) DOE (Design of Experiment)

Control Phase Purposes Output Define Measure Analyze Improvement To ensure the improvement can be sustained Communicate changes to relevant people Keep monitoring output performance to institutionalize process or product improvement and monitor on going performance Output understand performance expectation what corrective actions should be executed if measurements drop below desired and anticipated levels

Applicable Statistical Method and Tools Operating Flow Chart(s) with Control Points Statistical Process Control (SPC) charts Control Plans Check Sheets

Operating Flow Chart(s) with Control Points Statistical Process Control (SPC) charts

Control Plan Check Sheet

In order to implement control effective there are several factors must be identified and addressed. Mistake proofing: is a way to detect and correct an error where it occurs and avoid passing the error to the next worker or next operation. Appropriate and applicable charts (statistical process control): A control is simply a run chart with upper and lower control limit lines drawn on either side of the process average Reaction plan: a reaction plan provides details on actions to be taken should control charts indicate the revises process is no longer in control.

Documentation Project documentation – workbook What is document? Project documentation – workbook New SOPs, work instruction etc. Reaction plan in order to control performance Establish new visual control chart Why document? Best practice sharing – replicate similar solution to other process To communicate and train people on new process Act as a guide for the person who carry out the task Everyone should have same understanding

Transparent to everyone so that quick action can be taken if any Visual control It is a visual display that is easy to understand and practical to update for everyone Transparent to everyone so that quick action can be taken if any Should be in color to make it easy to read

Type of visual control 5S shadow board Dashbord Takt board Control chart

Visual control tips It should relate to key output measurement Frequency of update should be practical and bring value Reaction plan must be clear if process not in control Easy to update and assign responsibility

Benefit of Applying Six Sigma Search for continued improvement in processes Better understanding of customer requirement Maximisation of profits through improvement in quality Increased productivity Reduction in cycle times Increase production capability and reliability Reduction of defects, costs and loses.

Challenges in Implementing Six Sigma Too much focus on the black belts and green belt training without identifying projects for improvement after the training. Lack of understanding of the strategic intent of Six Sigma. Too many books and talks about Six Sigma cause confusion,. Lack of innovation in problem solving other words no real breakthroughs. Lack of support for small business in implementation of Six Sigma.

Case Study: Summary application in Motorola Introduction Motorola has implemented Six Sigma to reduce cost and improving organizational bottom line. Motorola won the Malcolm Baldrige National Award in 1988. Problem Encountered The problem face by Motorola in 1987 the company was operating in four sigma level. This equal to defect rate of about 6,200 DPMO compare to its Japanese counter parts that were running at 3.4 DPMO. The defect leads to increase cost to sales and reduce the profit as well as contributed to lose market share. At that time Motorola’s customers included many police, fire, and emergency response organizations that relied on radios and communication equipment manufactured by Motorola. Losing these customers will become financial disaster for Motorola.

Continued Action Taken Bob Galvin CEO of Motorola has directed initiative for the company. These directions are: Improve product quality by ten times in two years, Improve product quality by 100 times in four years and reach Six Sigma quality level in five years. The goal of Six Sigma is to reduce defect increase the productivity. Hence, improve customer satisfaction. Result According to McClusky (2000) Motorola focus on reducing defects to the target of 3.4DPMO level was quantified in dollar $2 billion over a four year period. An example of Motorola applied Six Sigma on the redesign and manufacturing of its pages in 1990. Pagers were new technology in 1990 and Motorola’s pages were highly priced about $1500 and it took about 18 month to product. McClusky (2000) has stated that the lead time went from 18months to 72minutes while the cost when from $1500 to $200.

Conclusion Six Sigma is a methodology that can improve the business performance and reduce the process variation. Three different levels that Six Sigma can be defined and understood are: Metric, Methodology and Philosophy  Methodology DMAIC is used.