satyam - six sigma awareness program module 1.1
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Satyam - Six Sigma Awareness Program Module 1.1TRANSCRIPT
WHAT IS SIX SIGMA?
What Does “Six” and “Sigma” signify?
Why DO I Need it?
What Would I gain from it?
The Many Facets of Six Sigma
Metric Benchmark Vision Philosophy Method Tool Symbol Goal Value
Metric Benchmark Vision Philosophy Method Tool Symbol Goal Value
66
What is Six Sigma
A Structured Methodology to
Reduce Variation & Defects & Waste in any Process.
Customer Focused - Both Internally & Externally
Tools Qualitative, Statistical Methods
for observing and managing Critical Process Variables & their Relationship
Six Sigma is a wayof achieving world class
performance by focusing on customers' needs and
eliminating defects
Six Sigma is a quantitative statistical
measurement that means not more than 3.4 defects per million opportunities
What is 6
Always listen to the Customer
99.99966% Good (6 Sigma)
• 20,000 lost articles of mail per hour
• Unsafe drinking water for almost 15 minutes each day
• 5,000 incorrect surgical operations per week
• Two short or long landings at most major airports each day
• 200,000 wrong drug prescriptions each year
• No electricity for almost seven hours each month
• Seven articles lost per hour
• One unsafe minute every seven months
• 1.7 incorrect operations per week
• One short or long landing every five years
• 68 wrong prescriptions per year
• One hour without electricity every 34 years
99% Good (3.8 Sigma)
What is the Practical Meaning?
Users don‘t like bugs
Access
denied
O.k., and now you‘ll doexactly what I‘m telling you !
Defect
Ten to fifty percent of a typical company’s costs are wasted on inspection, scrap, rework, warranty issues, crisis firefighting, and recurring corrective actions. In addition, untold losses are incurred when customers are lost.
The Impact on Costs...
Profit
Overhead
Material and Labor Costs
Price to CustomerCost to Business
EVA
EVA
HIGHER QUALITY & INCREASED MARGINMARKET ADVANTAGE AS THE LOW COST PROVIDER
HIGHER QUALITY & INCREASED MARGINMARKET ADVANTAGE AS THE LOW COST PROVIDER
Profit
Total Cost to manufactureand deliver
products
Profit
TheoreticalCosts
Cost ofPoor Quality
COPQ
Price Erosion
TheoreticalCosts
Cost ofPoor Quality
COPQ
Profit
TheoreticalCosts
COPQ
TIME
Choosing a Business Strategy
OPPORTUNITY
PROFITABILITYPROFITABILITY
COST OF SALESCOST OF SALESSALESSALES
• Capacity• Quality• Demand• Reputation• Customer Enthusiasm
• Scrap• Rework• Cycle Time• Inefficiencies• Processes• Material• Support
Opportunity
Variation
TargetX XXX X XX XX
XXX
XX
XXXX
XX
XX
XX
X
XXX
XX
XX XXX
XXXX X
X
X
X
Every Human Activity Has Variability...Customer
Specification
defectsdefects
Understanding Variability & Customer Specification is The Essence of Six Sigma
Understanding Variability & Customer Specification is The Essence of Six Sigma
The need...
Target
CustomerSpecification
Target CustomerSpecification
1
2
3
A 3 process because 3 standard deviationsfit between target and spec
3
6.6% Defects
Before
After6
~ No Defects!
Reducing Variability Is The Key To Six Sigma Reducing Variability Is The Key To Six Sigma
Six Sigma - Graphical view
spec = 12 +/- 1/2
11 12/16 11 13/16 11 14/16 11 15/16 12 12 1/16 12 2/16 12 3/16 12 4/16
COLLECTDATA
Meaning of Six Sigma
99.99966% Probability-1-2-3 +2 +3X +1
LowerSpecLimits
UpperSpecLimits
-4-5-6 +5 +6+4
68%
95.4%
99.7%
Six Sigma = 3.4 Defects Per Million Opportunities
# of occurren
ces
Process Observations
Maths is not everything
Customer: The person(s) downstream of your process. Could be internal or external.
EX: Internal Customer - the Project Team Member is a customer for the Quality Initiatives .
External Customer - businesses/functions that receive developed application - may not use it themselves ( Software Distribution Centers, etc.)
Consumer: The end user of the product. Usually considered external; i.e., the homeowner.
Examples of Consumer/Customer Cues:– Renovated Code must reach at specified time– Response time as given by application should be
at a specified level– Complaints must be answered promptly
Philosophy of Six Sigma
Six Sigma Focus: The End User (Customer or Consumer)
What is a Customer need or Consumer “Cue”?
CTQ
CTQs and Technical Requirements are the foundation for all Six Sigma Projects. They must be defined UP FRONT!
Before a Six Sigma Project can begin, the “Voice of the Consumer” (Consumer Cue)must be translated into the “Voice of the Engineer” (Technical Requirement).
schedules should be adhered to. A call-taker must answer all incoming calls
(Telephone promptness)
Translate the customer/consumer cue into “Critical to Quality” requirements (dimensions/ parameters that need to bemeasured and/or controlled)
Schedule Adherence - 99% Answer rate (% of incoming calls answered) - 100%
Technical Requirement
CTQ/System of CTQs
Translation process
(“Cues” to “CTQs” or Critical to Quality
requirements)
Renovated Code must reach at specified time Call-takers must be available to answer calls
Consumer Cue
Translation of Customer “Cues into CTQs
CustomerValue
ProcessThroughput
ZeroDefect
Quality
Delivery&
Service
Drive outConstraints!
Drive out Variation! Flawless Reliability!
Drive down cycletimes and leadtimes!
Respond faster-better!
Focus of Six Sigma…
Y= f (X)
Y Dependent Output Effect Symptom Monitor
X1 . . . XN
Independent Input-Process Cause Problem Control
To get results, should we focus our behavior on the Y or X?
Y = f (X)
Focus of Six Sigma
The Goals of Six Sigma
DEFECT REDUCTION
PROCESS YIELD IMPROVEMENT
IMPROVED CUSTOMER DELIGHT
BUSINESS SUCCCESS
Are you satisfied with 99 % ok
in your life ???
Are you satisfied with 99 % ok
in your life ???
Six sigma is about getting at the root causes of our defectsAnd eliminating them through process improvement
Six sigma is NOT about putting in more checks and re-checks
Inaccurate Billing
Late DeliveriesPartialShipments
Disappointed Customer
I’ve Got to Getto the Bottom of This!!!
Why 6
What makes it Different ...
• LEADERSHIP• COMMITMENT• COMPETENCE• INVOLVEMENT
• METHODOLOGY & TOOLS• DRIVEN BY THE DATA• STATISTICALLY VALIDATED
• FOCUS ON THE CUSTOMER
• PROJECTS • KEYED TO DEFECT REDUCTION• SCOPED FOR SUCCESS
Applicable Across Functions
As long as there is a process that produces an output…… we can apply Six Sigma
6 Sigma
Methods
MFG.
DESIGNSERVICESERVICE
PURCH.
MAINT.
ADMIN.
QA
Data Driven
Data allows us to establish a common language throughout the organization:
• Communicate in an objective manner• Collecting quantifiable facts about an object or process• Establish baseline information regarding a problem, part or
process• Facilitate cost-benefit analysis of proposed solutions and
improvements• Quantify the lasting impact of a solution through comparison• Allow an extention of a specific solution across many areas
First-pass-yield Up-time Efficiency
• Quality issues• Rework• Retest requirements• Scrap• Customer defects• Cost of operation• Supplier quality
• Machine run time• Maintenance• Replacement• Repair• Capital issues• Constraint
• Training needs• Process Flow• Maintenance• Hidden rework• ROA issues
Performance Metric(First-pass-yield) x (Up-time) x (Efficiency)
Quality = Performance = CustomerQuality = Performance = Customer Quality = Performance = CustomerQuality = Performance = Customer
Use 6 Sigma tools to solve problems across the board……use the right metrics to measure progress!
Use 6 Sigma tools to solve problems across the board……use the right metrics to measure progress!
Establish Meaningful Metrics
LSL USLT
SERVICE REQUIREMENTS
0
2
4
6
8
10
12
14
16
A B C D E F G H I J
ANALYZE THEFALL - OUT
SERVICE WATERFALL CHART • COLLECT FAILURE DATA• ANALYZE THE FAILURES• DETERMINE ROOT CAUSE• IMPLEMENT PROCESS CONTROLS OR DESIGN CHANGES• DETERMINE IMPACT TO COST• LEVERAGE LESSONS LEARNED
BEFORE
AFTERSIX SIGMATARGET
Be Deliberate with Analysis
3Capability Historical Standard
4Capability Current Standard
6Capability New Standard
93.32%
99.38%
99.99966%
Long-Term Yield
Performance Based
2 308,537
3 66,807
4 6,210
5 233
6 3.4
PPMPPM
Process
Capability
Process
Capability
Defects per
Million Opp.
Bridging the Real World
Practical ProblemPractical Problem
Statistical ProblemStatistical Problem
Statistical SolutionStatistical Solution
Practical SolutionPractical Solution
Need
Do
Do
Do
Need
Need
ProblemSolving
Flow
Practical Problem: Low Yield
Statistical Problem: Mean Off Target
Statistical Solution: Isolate Key Variables
Practical Solution: Install Automatic Controller
Need
All functional areas of the business must contribute ifWorld Class Performance is to be Achieved!
All functional areas of the business must contribute ifWorld Class Performance is to be Achieved!
ValueDelivery
Quality &Reliability
Availability
Responsivenessand
Accuracy
SupportServices
NewProducts
ExistingProducts
ProductDelivery
Product Quality Service and Commercial Quality
DesignProduction
SIX SIGMA
MAIC DFSS CONSTRAINTS AND INFORMATION QUALITY
CriticalDeliverables
Quality in Product and Service
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
Hence, We just don't know
Bulk of FruitProcess Characterization and Optimization
Low Hanging FruitSeven Basic Tools
Ground FruitLogic and Intuition
Sweet fruitDFSS
Harvesting the fruits of Six Sigma
A TargetA Target3.4 Defects per 3.4 Defects per
MillionMillion
A Problem A Problem Solving Solving
ApproachApproach
Statistical Statistical
MethodsMethods
Involves Involves EveryoneEveryone
Data DrivenData DrivenDecisionsDecisions
A BusinessA BusinessStrategyStrategyA CultureA Culture
All functions All functions
Voice ofVoice ofCustomerCustomer
Six Sigma
In Short ..
Success stories
Education and training
Stretch goals
Establishing meaningful, focused metrics
Top-down Approach
Success Factors
Recognizing ENTITLEMENT
Six Sigma only works when Leadership is passionate about excellence and willing to change.
Six Sigma only works when Leadership is passionate about excellence and willing to change.
“Everyone has the will to win, few have the will to work to win.”
Fundamentals of Leadership Challenge the process Inspire a shared vision Enable others to act Model the way Encourage the heart
Six Sigma is a catalyst for leaders
Leadership Drives Performance
• Owns vision, • Leads change
• Owns process• Implements solutions• Leads change
• Full time• Trains and coaches Agents
and Six Sigma Analysts
• Full time• Facilitates problem solving• Trains and coaches Green
Belts, Project Teams
• Part-time• Project-specific
All employees
• Understand vision• Apply concepts to
their job and work area
• Part-time• Helps BBs
Master BBs BBs
Six Sigma GBs
Project Team Members
Process Owner
Champion
Six Sigma Deployment
Roles and Responsibilities
Champion / Sponsor Black Belt / Green Belt
Master Black Belt Six Sigma Team
•Select MBB, BB and teammembers•Determine needed resources•Orient teams•Review Progress•Provide strategic direction for the project team
Project Initiation and Coordination Project Completion as per schedule Ownership of Project Track the project progress Anticipate and respond to needed changes
•Sign off on the project start up and completion•Mentor/Coach the project teams•Observe team performance•Participate in all Six Sigma project reviews
•Participate in the meeting•Help with administrative tasks•Meet with Champion for reviews•Make recommendations or changes
6
Think it Talk it
Do it
Motorola ROI … 1987-1994
Reduced in-process defect levels by a factor of 200. Reduced manufacturing costs by $1.4 billion. Increased employee production on a dollar basis by 26%. Increased stockholders share value fourfold.
Allied Signal ROI … 1992-1996
$1.4 Billion cost reduction. 14% growth per quarter. 520% price/share growth. Reduced new product introduction time by 16%. 4% bill/cycle reduction.
General Electric ROI ...1995-1998 Company wide savings of over $1 Billion.
Estimated annual savings to be $6.6 Billion by the year 2000.
Return on Investment...
Other 6 Stars ...
• Allied Signal Reported more than 2 billion dollars in cost savings & waste management through Six Sigma in just a
few years.
• Raytheon Estimated to burn away over $1 billion in Costs
annually.
• Honeywell Realized over $3 billion in cumulative savings from
Six Sigma - related activities
• Posco Steel Major plans to achieve $600 million in financial earnings from the completion of the 1680 6 projects by 2005.
• Ford Saved $650 million in last two years in Waste Elimination and plans to save $200 million in next
two years.
• Motorola
• Texas Instruments
• ABB
• AlliedSignal
• GE
• Bombardier
• Nokia
• Toshiba
• DuPont
• American Express
Companies Implementing Six Sigma
• Ford
• Dow Chemical
• Johnson Controls
• Lear Corporation
• Satyam Computers
• Maruti Udyog
• Wipro
• Reliance Group
• Tata Steel
• Visteon
• TCS
• ICICI
• Delphi Automotive
• Cummins India
• Godrej Appliances
• A V Birla Group
• Taj Group
• Telco
• Asian Paints
• Bajaj Auto