1. 1 The DMAIC Model v The model that is used to improve a process in Six Sigma management is called the DMAIC model. This stands for: –Define –Measure –Analyze –Improve –Control

2. 2 Define Phase v The define phase involves: –Preparing a business charter (rationale for the project) –SIPOC Understanding the relationships between u Suppliers u Inputs u Process u Outputs u Customers –Gathering and analyzing voice of the customer data to identify the critical-to-quality (CTQ) characteristics important to customers –Developing a project charter (statement of the project)

3. 3 Measure Phase v The measure phase involves –Developing operational definitions for each CTQ characteristic –Performing studies to determine the validity (repeatability and reproducibility) of the measurement procedure for each CTQ –Collecting baseline capabilities for each CTQ –Determining the process capability for each CTQ

4. 4 Analyze Phase v The analyze phase involves –Identifying upstream variables (x’s) for each CTQ –Operationally defining each x –Collecting baseline data for each x –Performing studies to determine the validity (repeatability and reproducibility) of the measurement process for each x –Establishing baseline capabilities for each x –Understanding the effect of each x on each CTQ

5. 5 Improve Phase v The improve phase involves –Designing experiments to understand the relationships between the CTQ’s and the x’s –Determining the optimal levels of critical x’s that optimize the spread, shape and center of the CTQ’s –Developing action plans to implement the optimal level of the x’s into the process under study –Conducting a pilot test of the revised process

6. 6 Control Phase v The control phase involves –Avoiding potential problems with the revised settings of the x’s through risk abatement planning and mistake-proofing –Standardizing successful process revisions in training manuals –Controlling the revised settings of the critical x’s –Turning the revised process over to the process owner for continuous improvement using the PDSA cycle

7. 7 The Focus of Six Sigma - Process Characterization Historically the Y’s, … with 6 Sigma the X’s n Y n Dependent n Output n Effect n Symptom n Monitor n X 1... X n n Independent n Input-Process n Cause n Problem n Control To get results, we should focus our efforts on the X’s, instead of the Y’s f (X) Y= © 1994 Dr. Mikel J. Harry V3.0

8. 8 Define Measure Analyze Improve Control 1.Customer expectations of the process? 2.What is the frequency of defects? 3.Why, when, and where do defects occur? 4.How can we fix the process? 5.How can we make the process stay fixed? DMAIC Methodology For each product or process CTQ Y = f(X) DMAIC Methodology For each product or process CTQ Y = f(X) A Continuous Improvement Process...

9. 9 DMAIC Methodology SIMPLE EXAMPLE : Sales Payment Collection DMAIC Methodology SIMPLE EXAMPLE : Sales Payment Collection DEFINE Luis, Sales from Company ABC, found that a payment collection from Distributor A always late. He then conducts a 6 Sigma Project. Unit/Opportunity to be measured : Days of payment collection from Distributor A Defect : Collection more than 7 days (Company ABC Standard) Data Range : Payment Collection from Jan – June 2002 DEFINE Luis, Sales from Company ABC, found that a payment collection from Distributor A always late. He then conducts a 6 Sigma Project. Unit/Opportunity to be measured : Days of payment collection from Distributor A Defect : Collection more than 7 days (Company ABC Standard) Data Range : Payment Collection from Jan – June 2002

10. 10 DMAIC Methodology SIMPLE EXAMPLE : Sales Payment Collection DMAIC Methodology SIMPLE EXAMPLE : Sales Payment Collection MEASURE Here is the data from 6 months Payment Collection from Dist. A (25 Payment Collection Mean = 10 days Std Dev = 3.7 days Data Normal MEASURE Here is the data from 6 months Payment Collection from Dist. A (25 Payment Collection Mean = 10 days Std Dev = 3.7 days Data Normal

11. 11 DMAIC Methodology SIMPLE EXAMPLE : Sales Payment Collection DMAIC Methodology SIMPLE EXAMPLE : Sales Payment Collection MEASURE Luis then set up current Performance: DPMO = 794877 Sigma = 0.84 He then Set Up the target to achieve more than 4 Sigma MEASURE Luis then set up current Performance: DPMO = 794877 Sigma = 0.84 He then Set Up the target to achieve more than 4 Sigma Baseline Sigma

12. 12 DMAIC Methodology SIMPLE EXAMPLE : Sales Payment Collection DMAIC Methodology SIMPLE EXAMPLE : Sales Payment Collection ANALYSE Luis’s analysis on the main factors (Critical X’s) that make the payment collection defects (more than 7 days) happened because of these reasons: Late Invoice sent out by Company ABC Finance team No follow up from Sales team after the invoice sent out No “punishment” process if distributors pay late No monitoring process for payment collection ANALYSE Luis’s analysis on the main factors (Critical X’s) that make the payment collection defects (more than 7 days) happened because of these reasons: Late Invoice sent out by Company ABC Finance team No follow up from Sales team after the invoice sent out No “punishment” process if distributors pay late No monitoring process for payment collection

13. 13 DMAIC Methodology SIMPLE EXAMPLE : Sales Payment Collection DMAIC Methodology SIMPLE EXAMPLE : Sales Payment Collection IMPROVE Luis then made improvement on those Critical X’s. He does: Create a monitoring systems for ensuring an invoice sent out from Finance 1 day after product sent to distributors Create a data base systems for follow up and monitoring collection Create a “punishment” systems for distributor if they pay more than 7 days IMPROVE Luis then made improvement on those Critical X’s. He does: Create a monitoring systems for ensuring an invoice sent out from Finance 1 day after product sent to distributors Create a data base systems for follow up and monitoring collection Create a “punishment” systems for distributor if they pay more than 7 days Data after improvement collected (15 collections after June’02) SIGMA Improved!

14. 14 DMAIC Methodology SIMPLE EXAMPLE : Sales Payment Collection DMAIC Methodology SIMPLE EXAMPLE : Sales Payment Collection CONTROL To make sure that his improvement continuous, Luis make a control plan, which acknowledge by Sales Directors: A new SOP with standard time for sent out invoice and follow up by sales team The “punishment” systems for distributors included on Distributors agreement Bonus for Sales team and incentive for Distributors based also on the criteria of payment collection CONTROL To make sure that his improvement continuous, Luis make a control plan, which acknowledge by Sales Directors: A new SOP with standard time for sent out invoice and follow up by sales team The “punishment” systems for distributors included on Distributors agreement Bonus for Sales team and incentive for Distributors based also on the criteria of payment collection

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16. 16 Six Sigma Roles and Responsibilities v The Senior Executive provides the impetus, direction and alignment necessary for the ultimate success of Six Sigma management. v Roles and responsibilities of a senior executive –Leads the Executive Committee (EC) –Participates in high-level policy management and cross- functional project teams. –Monitors and balances all Six Sigma activities to avoid local optimization and organizational suboptimization. –Maintains a long-term view of the organization and acts as a liaison to stakeholders –Conducts Presidential reviews of Six Sigma daily management and cross functional management projects.

17. 17 v Top management must be totally committed to the process. v The CEO must allocate substantial resources to Six Sigma management. v Leadership must be willing to engage all levels of the organization through organizational metric tracking systems and daily management and cross-functional Six Sigma and DMAIC projects. v The CEO must have a “burning desire” to create revolutionary change in the enterprise.

18. 18 v Members of the Executive Committee (EC) must operate with the same level of commitment as the senior executive. v The EC must –Create an organizational metric tracking system that cascades, or deploys, key objectives and key indicators throughout the organization via policy management –Empower the Policy Deployment Committee (PDC) to deploy key objective throughout the organization through policy management. –Manage the organizational Six Sigma project portfolio toward optimization of the entire organization’s bottom line

19. 19 –Use catchball to establish a reasonable and equitable project portfolio for each division/department within the organization. –Improve the Six Sigma process through constant iteration of the PDSA cycle. –Provide the resources necessary for Six Sigma management.

20. 20 v The role and responsibilities of a black belt are: –Full time change agent –Master of the change process rather than a master of the process under study –Supervise green belts working on a Six Sigma project –Prepare a draft project charter for the Six Sigma projects under his/her supervision. –Work closely with a project team to keep it functioning and progressing toward a conclusion to its Six Sigma project. –Communicate with the individual responsible for the financial and political well-being of the team –Serve as the team leader for Six Sigma projects –Help team members analyze data and design experiments

21. 21 –Provide training in Six Sigma theory, tools and methods –Help team members prepare for management and presidential reviews –Recommend Six Sigma teams for six Sigma projects –Lead and coach green belts leading simpler Six Sigma projects v A black belt must pass a certification examination and lead at least two successful Six Sigma projects.

22. 22 v Most green belts serve as team members on Six Sigma projects. v If a green belt acts as a team leader for simpler projects he/she: –Prepares a draft charter for the Six Sigma project –Selects the project team members –Communicates with the champion, black belt and process owner concerning the status of the project –Facilitates the project members –Provides training in the basic Six Sigma tools and methods. v A green belt must pass a certification examination and participate in at least one successful Six Sigma project.

23. 23 v A master black belt’s responsibilities are: –To be a proven team leader and technical expert –To be a teacher and mentor of black belts and green belts –Simultaneously supervise several black belts and green belts –To be an ambassador (in conjunction with the senior executive, members of the executive committee, and champions) of Six Sigma management –To work continuously to improve and innovate the Six Sigma management process. v A master black belt must complete a certification examination and successfully supervise at least two black belts in their completion of two successful Six Sigma projects each.

24. 24 v A champion is a member of the EC, or at least an individual who is trusted to report directly to a member of the EC. v A champion takes a very active leadership and sponsorship role in implementing Six Sigma management, and works closely with the EC, black belts and master black belts to: –Translate key objectives and key indicators from his section of the organizational metric tracking system into Six Sigma projects as a part of policy management –Prepares an initial draft of a project charter for each Six Sigma project under his auspices –Assigns green belts and black belts to the Six Sigma projects under his auspices –Removes obstacles to the effective functioning of the Six Sigma project teams under his auspices

25. 25 –Provides a direct line of communication between a Six sigma project team and the EC –Obtains and manages the resources necessary for a Six Sigma project team to meet its project charter –Conducts management review of each Six Sigma project team under his auspices focused by providing direction and guidance on the attainment of its project charter A champion must pass a certification examination.

26. 26 v A process owner is the individual who has the ultimate authority to change a process. v The process owner should be identified for every project or task that is entered onto an organizational metric tracking system. v The process owner: –Monitors the performance of his/her process through key indicators –Empowers the people who work in the process –Works with all Six Sigma project teams in the area to enable them to successfully complete their projects –Manages the process after completion to the Six Sigma project to sustain the gains made.

27. 27 –Continues to improve and/or innovate the process through the application of the PDCA cycle. v A process owner should pass the champion certification examination.

28. 28 Six Sigma Terminology v Unit – A unit is the item (e.g. product or component, service or service step, or time period) to be studied with a Six Sigma project. v Defective – A nonconforming unit is a defective. v Defect – A defect is a nonconformance on one of many possible quality characteristics of a unit that causes customer dissatisfaction. v Defect Opportunity – a defect opportunity is the most fundamental area for a defect. There may be several opportunities for defects within a defined unit.

29. 29 v Defects per Unit (DPU) - Defects per unit refers to the average of all defects for a given number of units, that is, the total number of defects for n units divided by n. v Defects per Opportunity (DPO) – Defects per opportunity refers to the number of defects divided by the number of opportunities. v Defects per Million Opportunities (DPMO) – DPMO equals DPO multiplied by 1,000,000. v Observed Yield – Observed yield is the proportion of units within specification divided by the total number of units.

30. 30 v Rolled Throughput Yield (RTY) – RTY is the product of the observed yield s from each step in a process. It is the probability of a unit passing through all steps of a process and incurring no defects. v Process Sigma – Process sigma is a measure of the process performance determined by using DPMO and a normal distribution table. Process sigma is a metric that allows for process performance comparisons across processes, departments, divisions, companies, and countries. In Six Sigma terminology, the sigma value of a process is a metric used to indicate the number of defects per million opportunities, or how well the process is performing with respect to customer needs and wants.

31. 31 Source : v Pyzdek Thomas, Six Sigma Project Planner, McGraw Hill, New York, 2003. v Gitlow HS, AJ Oppenheim, R Oppenheim, DM Levine, Quality Management, Third Edition, Mc Graw Hill, Boston, 2005 [GIT] v Manggala D, Mengenal Six Sigma secara Sederhana, www. Beranda.net v Satriago H, GE Management Best Practices : v Implementing Six Sigma at GE