introduction to six sigma - pinnacle sourcing introduction to lean six sigma. what is six sigma? six...
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An Introduction to
Lean Six Sigma
What is Six Sigma?
Six Sigma - The Initiative
Process
Systematic Approach to Reducing Defects which
Affect What is Important to the Customer
Tools
Qualitative, Statistical and Instructional Devices for
“Observing” Process Variables & Their Relationships as
well as “Managing” their Character
Vision
Goal
Philosophy
Metric
Method
Tool
Symbol
Benchmark
Value
s A level of performance that
reflects significantly reduced
defects in our products
A statistical measurement of our
process capability, as well as a
benchmark for comparison
A set of statistical “tools” to help
us measure, analyze, improve,
and control our processes
A commitment to our customers
to achieve an acceptable level
of performance
.... A means to stretch our
thinking with respect to quality
Sigma is a letter
in the Greek Alphabet
What is Six Sigma?
Define Measure Analyze Improve Control
Six Sigma-DMAIC Methodology
99% Good (3.8s) 99.9997% Good (6s)
5,000 incorrect surgical operationsper week
1.7 incorrect operations per week
Two short or long landings at mostmajor airports each day
One short or long landing everyfive years
200,000 wrong drug prescriptionseach year
68 wrong prescriptions per year
General Rating Sigma Score % Accuracy DPMO(Defects per Million Opportunity)
Virtual Perfection
6 99.9997% 3.8
Good
5 99.98% 233
4 99.40% 6210
3.5 97.70% 22700
ImprovementNeeded
3 93.30% 66807
2 69.10% 308537
Six Sigma – Literally Speaking
Sigma Scores Against Defects (per Million)-
For Your Reference
% Achievement Defects Sigma Score
Defects per Million
Opportunities
(DPMO)
100.00% 0.00% 6.01 3.30
99.99% 0.01% 5.35 60
99.98% 0.02% 5.04 200
99.95% 0.05% 4.79 500
99.90% 0.10% 4.59 1000
99.80% 0.20% 4.38 2000
99.70% 0.30% 4.25 3000
99.50% 0.50% 4.08 5000
99.00% 1.00% 3.83 10000
98.50% 1.50% 3.67 15000
98.00% 2.00% 3.55 20000
97.50% 2.50% 3.46 25000
97.00% 3.00% 3.38 30000
96.50% 3.50% 3.31 35000
96.00% 4.00% 3.25 40000
95.50% 4.50% 3.20 45000
95.00% 5.00% 3.14 50000
94.50% 5.50% 3.10 55000
94.00% 6.00% 3.05 60000
93.50% 6.50% 3.01 65000
93.00% 7.00% 2.98 70000
92.50% 7.50% 2.94 75000
92.00% 8.00% 2.91 80000
91.50% 8.50% 2.87 85000
91.00% 9.00% 2.84 90000
90.50% 9.50% 2.81 95000
90.00% 10.00% 2.78 100000
What’s it Based On ?
Customer .....Anyone Who Receives
Product, Service, or Information
Opportunity .....Every Chance to Do Something
Either “Right” or “Wrong”
Successes Vs. Defects .....Every Result of an Opportunity Either Meets
the Customer Specification or it Doesn’t
Lean is a documentation of the key attributes
of the Toyota Production System
Set of principles for efficient operations
having focus on
-- Process improvement by
reducing waste and cycle time
-- Improving process flow
Lean
IWEIGHING
468Kg
BLENDING COMPRESSION COATINGI I I
3
days
MBR REVIEW
I
4 hours65 hours
11.5 hrs4 hrs 40 mins44 hours
13 hours6 hours 15 hours
10 hours
2-3 day lead time 18 month
rolling forecast
Average # of Lots per
month= 200
ManufacturingDaily Schedules
4-5 days
Daily ShipSchedule
BPX
300mg
Building 5 PHILI
Yield = 99%Setup = 150 mins
VA = 9 hrs1 Shift
2 operators
Yield = 98%Setup = 290 mins
VA = 8 hrs 10 mins1 Shift
2 operators
Yield = 99%Setup = 195 mins
VA = 705 mins2 Shifts
2 operators
464.7Kg 454.4Kg457.74 Kg
Building 2Planning
Provide 3 week projections to Mfg
WAREHOUSE
Time spent in Bldg 2 warehouse = 4hrs 40
mins
Yield = 100%Setup = 60 mins
Wghing = 180 min1 Shift
2 operators
Number of reviews = 5
Average Days = 5-11
68 hours
I I I468Kg
PlanningSetup Batch
RecordReview
Cycle Time
Total = 289 hrs
VA = 29 hours
Value Stream Map Can Help Identify
Key Areas to Target for Improvement
Specify value by specific product
Identify the value stream for each product
Make value flow without interruptions
Let the customer pull value from the product
Pursue perfection
Lean Principle
Overproduction-- More than is needed and higher quality than is needed
Waiting (hang time) for machines, operators, raw materials,
etc.
Transportation of materials
-- Wasted time due to unneeded product and material movement
Process inefficiencies and waste:
-- Inspection, NVA Work, duplication of effort
(Inventory):
-- Work in progress and finished product used to cover for process
problems
Motion
-- Unnecessary movement, multiple handoffs, continually searching for
materials, tools, supplies, etc
Defects:
-- Rework, missing information, not meeting specs
Waste in Lean Principle
Key Lean Tools
Process Mapping
Value Stream
Spaghetti
Kaizen Event
5S (Sort, Store, Shine,
Standardize, Sustain)
Mistake Proofing
Standard Work
Work Cell Design
Line Balancing
Videotaping
Rapid Changeover:
Single Minute
Exchange of Dies
(SMED)
Kanban (just in time)
Shift Process Average
Reduce Process
Variation
Robust Products and
Processes
Six Sigma Objectives Lean Objectives
Improve
Process Flow
Reduce Process
Complexity
Reduce:
Waste
Non-Value
Added Work
Cycle Time
Lean Six Sigma Improves Quality, Cost, and Delivery
Improvement Objectives
Strategy
• Know What’s Important to the
Customer
• Reduce Defects
• Center Around Target
• Reduce Variation
Breakthrough Improvement Not Incremental!
Six Sigma . . . the Practical Sense
A Different approach for the Business
THE GOALS OF SIX SIGMA
Defect Reduction
Yield Improvement
Improved Customer Satisfaction
Higher Net Income
• Leadership Commitment, Competence & Involvement
• Methodology & Tools
•Data Driven
•Statistically Validated
• Best People 100% Dedicated to Defect Reduction
• Project Focused
What Makes Six Sigma Different?
Old Philosophy of Quality New Philosophy of Quality
LSL USL LSL USL
Area outside the specification
limits represent
quality losses.
Conformance to Specifications
“Goal Post Mentality”
Deviation from the target
represents quality losses.
“Variation is Evil”
-Some Production Guy
No Losses @ the Target
The Changing Quality Philosophy
LSL-Lower Specification Limit
USL- Upper Specification Limit
The Cost of Poor Quality (COPQ) “Iceberg”
Engineering change orders
Traditional Quality Costs
Lost Opportunity
Hidden Factory
Lost sales
Late delivery
Long cycle times
Expediting costs
Excess inventory
Additional Costs of Poor Quality
(intangible)
(tangible)
(Difficult or impossible to measure)Lost Customer Loyalty
More Setups
Scrap
Rework
Inspection
Warranty
Rejects
Administration /
Disposition
Concessions
Average COPQ approximately 15% of Sales
Getting to Six Sigma
How far can inspection get us ?
(Distribution Shifted ± 1.5s)
s PPM
2 308,5373 66,8074 6,2105 2336 3.4
PPM –Parts per
million(normally for defects)
1
10
100
1000
10000
100000
1000000
1 2 3 4 5 6 7 8 9 10 11
The Impact of Added Inspection
Escaping
PPM
Number of Consecutive
The Y axis represents the undetected defects-per-million defects. Each curve represents the inspection efficiency per inspector.
99% 90% 80% 70%
Note: All sigma values reflect a 1.5s shift
Example: If the likelihood of detecting the defect is
80% and we have 8 consecutive inspectors with this
level of capability, we would expect about 4
escaping defects out of every 1,000,000 defects
produced.
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
1 2 3 4 5 6 7 8 9 10
Sigma
Number of Consecutive
The Y axis represents the inspection efficiency “sigma.” Each curve represents the inspection efficiency per inspector.
99% 90% 80% 70%
Example: If the likelihood of
detecting a defect is 80%, it
would require about 8
consecutive inspectors to have
a Six Sigma level of
confidence that the defect will
be detected.
BreakthroughStrategy
Characterization Define
Phase 1:
MeasurePhase 2:
Optimization
Analyze
Phase 3:
Control
Phase 5:
1
10
100
1000
10000
100000
1000000
3 4 5 6 7
1,000,000
100,000
10,000
1,000
100
10
1
2
Sigma Scale of Measure
PPM
Average
Company
Best-in-Class
The Basic Objective
The Breakthrough Methodology
Define the problem...
DMAIC to the Rescue!
Improve
Phase 4:
The Nature Of The Problem
Six Sigma methodology identifies processes that are off-target,
and/or have a high degree of variation, and corrects the process
Off-Target Variation
On-Target
Center
Process
Reduce
Spread
XX
XX
XXX
XX
X
X
XX
X
X
X
XX
X
X
XXX
X
XXXX
X
XXXXX
XXX
Another View
Off-Target Large Variation
On-Target
Center
Process
Reduce
Spread
The statistical view of a
problem
USLLSL
LSL = Lower spec limit
USL = Upper spec limit
The Nature Of The Problem - A Statistical Look
LSL USL
LSL USL
Insufficient
Process
Capability
Unstable
Parts and
Material
Region of Six Sigma Synergy
Inadequate
Design
Margin USLT
LSL
Primary Sources of Variation
What Makes Six Sigma Different?
Process
KPIV
KPIV
KPIV
KPOV CTQ
Manage “Correct”
(In-Spec.)Defect-
Free!
KPIV
1. Statistically Proven Relationships
Between Inputs and Outputs
2. Systematic
Control
Control
Control
Manage the INPUTS and good OUTPUTS will follow
KPIV-Key process input variables
KPOV- Key process output variables
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Harvesting the Fruit of Six Sigma
Sweet FruitDesign for Manufacturability
Bulk of FruitProcess Characterization
and Optimization
Low Hanging FruitSeven Basic Tools
Ground FruitLogic and Intuition
Process Entitlement
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
We don't know what we don't know
We can't act on what we don't know
We won't know until we search
We won't search for what we don't question
We don't question what we don't measure
Hence, We just don't know
If Quality Leadership is to consist of… The Company must embrace…
Superior Quality of Conformance Six Sigma Process Control - DMAIC
Superior Quality of Design Design for Six Sigma
Availability Design for Reliability
The Many Facets of Six Sigma
IRS - Tax Advice
(phone-in)
(140,000 PPM)
7
Sigma Scale of Measure
1,000,000
100,000
10,000
1,000
100
10
1
PPM
•
Restaurant BillsDoctor Prescription Writing
Payroll Processing
Order Write-upJournal Vouchers
Wire TransfersAirline Baggage Handling
Purchased Material
Lot Reject Rate
Domestic Airline Flight
Fatality Rate (0.43 PPM)
(with ± 1.5 s shift)
Best-in-Class
AverageCompany
3 4 5 621
© 1994 Dr. Mikel J. Harry - V4.0
© 1994 Six Sigma Academy
Where does industry stand ?
What It Is & What It Isn’t
It Will:
Reduce Defects
Reduce Variation
. . . from existing processes
Process Driven........ NOT Event Driven
It Won’t:
Create a New Marketing
Strategy
Run a Conference
Invent a New Product
Find a New Supplier
Hire a New Employee
DMAIC Problem Solving & Fixing Method
• Who is my Customer ?
• What matters ? (CTQ-Critical to Quality) ?
• What’s the Scope ?
• What Defect am I trying to Reduce ?
• By how much (Realistic/Appropriate Goal) ?
• What’s the current Cost of defects (Poor Quality) ?
(What Benefits will we get by reducing defects ?)
Project Definition
• What’s my Process ? How does it function ?
• Which Outputs affect CTQ’s most
• Which Inputs seem to affect Outputs (CTQ’s) most ?
• Is my ability to Measure/Detect “Good Enough?”
• How’s my process doing today ?
• How good could my (current) process be when everything
is running “smoothly”?
• What’s the best that my process was “Designed” to do ?
Measure
Define and Measure
Process
KPIV
KPIV
KPIVKPOV CTQ
Manage“Correct”
(In-Spec.)
Defect-
Free!
KPIV
Define: Clearly State the Problem
in terms of “Defects” or “Variation”
which Upset the Customer
Measure: Describe the Performance of
the Process Quantitatively
Measured Units
Counted Unitsthen,
Identify Key Inputs
KPIV-Key process input variables
KPOV- Key process output variables
• Which Inputs actually (For Sure) affect my CTQ’s most ?
• By how much ?
• Do combinations of variables affect outputs?
• If I change an input, do I really change the output ?
• If I observe results (outputs) from the same process, different
locations, and results appear to be different..... are they really ?
• How many observations do I need to draw conclusions ?
• What level of confidence do I have regarding my conclusions ?
Analyze
Process
KPIVKPIV
KPIV KPOVCTQ
Manage “Correct”
(In-Spec.) Defect-
Free!
KPIV
Statistically Describe the Relationship Between
Inputs and the Output . . . to
Find the Inputs with the Biggest Impact on the Output
Analyze
Improve
Process
KPIV
KPIV
KPIV
KPOV CTQ
Manage “Correct”
(In-Spec.)Defect-
Free!
KPIV
High
Low
Medium
High
????????
Systematically Experimentwith the Inputs to Find the Combination
Which Delivers the Optimal Output
• Once I’ve reduced the Defects, how do the
functional team and I keep them there ?
• How does the functional team keep it going (routinely) ?
• What do I set up to keep it going even when things
change ...... People, Technology, and Customers
Control
Control Control Control
ProcessKPIVKPIVKPIV
KPOV CTQ
Manage “Correct”
(In-Spec.)Defect-
Free!
KPIV
High
Low
Medium
High
Lock In the Inputs to Routinely Generate
the Optimal Output!
Control
Project Name: To decrease the exiting lead time of Kingsley range from Vestal by June’ 13Project Code: VM/01/14 Black Belt: Ratish MProject Lead: Shan Owner: Shan Sponsor: Dan Thomas
Business Case:
The existing lead time of 90 days for Kinsley range (against 45 days) is hitting CSI badly due to which CSI is unable to serve their customer on time. The accrued monetary losses to CSI on account of this is 0.4 Mn US$ per annum.
Problem Statement:
The low cost sourcing advantage is nullified by additional cost incurred by CSI with vestal because of high lead time.
Goal Statement:To reduce lead time of 90 days to 45 days by Jun‘13.
Annual Savings: 0.4 Million US$
Project Scope
Part lead time for Kingsley range only
Schedule: Team Members:Phase Start Date End Date Name FunctionDefine 28-Mar- 13 5-Apr-13 Shan Production
Shan Shan Dan ThomasMeasure 6-Apr-13 15-Apr-13 Pushpender QualityAnalyze 16-Apr-13 30-Apr13 Abhishek Supply Chain
Improve 1-May-10 10-Jun-13
Control 11-Jun-13 30-Jun-13Project Lead
Owner Sponsor
Typical Project Charter-Example
Thanks !!