six sigma primer - apics san gabriel valley · pdf filesix sigma primer learning objectives...

April 18, 2012 of 40© Strategic Modularity Inc. 2012 www.strategicmodularity.com

Six Sigma PrimerSeeking Meaningful Improvements

Presented by: Andy Pattantyus

Prepared for: APICS San Gabriel Valley Chapter

by

Strategic Modularity, Inc.www.strategicmodularity.com

[email protected]: 855-LeanOps FAX: 661-554-0299

Six Sigma PrimerLearning Objectives

• What is six sigma?

• Are my processes six sigma?

• What is process capability?

• Why care about six sigma?

• How can I get a process to six sigma?

• The six sigma goal: improving yield

April 18, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com of 40

1. What is Six Sigma?Overview

• A description of process capability

– Statistical

– Mathematical

• An operational philosophy

– CPI – Continuous Process Improvement

– VR&C – Variability Reduction & Control


What is Six Sigma?Definitions - ASQ• Six Sigma is a philosophy

– This perspective views all work as processes that can be defined, measured, analyzed, improved and controlled. Processes require inputs (x) and produce outputs (y). If you control the inputs, you will control the outputs: This is generally expressed as y = f(x).

• Six Sigma is a set of tools– The Six Sigma expert uses qualitative and quantitative techniques to drive

process improvement. A few such tools include statistical process control (SPC), control charts, failure mode and effects analysis and flowcharting.

• Six Sigma is a methodology– This view of Six Sigma recognizes the underlying and rigorous approach

known as DMAIC (define, measure, analyze, improve and control). DMAIC defines the steps a Six Sigma practitioner is expected to follow, starting with identifying the problem and ending with the implementation of long-lasting solutions. While DMAIC is not the only Six Sigma methodology in

use, it is certainly the most widely adopted and recognized.


Source: ASQ [1]

What is Six Sigma?Definitions – Lean Lexicon• A quality standard of just 3.4 defects per one million

opportunities; 99.9996% perfect.

• Six sigma methodologies emphasize mathematical and statistical tools to improve the quality of processes that are already under control.

• Application follows a five-step process of define, measure, analyze, improve, and control often referred to as DMAIC.

• The term refers to the number of standard deviations a point is away from the mean point in a bell curve. It often is represented as 6 sigma.


Source: Lean Lexicon [2]

What is Six Sigma?History• Born at Motorola

– Motorola conceived the six sigma technique in 1986 as a way to achieve the company’s improvement goals in manufacturing and support functions.

• Motorola Suppliers – Starting 1991

– Eveready Battery Company Inc. (Energizer)

• Early corporate adopters – Starting 1995

– Allied-Signal (now Honeywell)

– General Electric

– 3M


What is Six Sigma?Mathematics or Management?• Mathematics

– Field of statistics known as Process Capability

– Basis for measurements

– Verifiable data is the basis for decisions

• Management

– Continuous improvement efforts

• Reduce process variation

• Achieve stable and predictable results

– Focus on business and manufacturing processes

– Organizational commitment, especially top-level


2. Are my processes six sigma?Probably Not!

• If your organization knows process capability, and regularly uses it as a tool, then you know if your processes are six sigma.

• Otherwise, most processes which have not been the object of continuous process improvement and variability reduction are likely less than 4 sigma.


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3. Process CapabilityA qualitative definition• Capable Process - Predictable

– Stays in control w/o intervention

– Get it right the first time

– Process monitoring: Good Process = Good part

– High yield

• Poor Process - Unpredictable

– Out of control - constant intervention required

– High Scrap and/or Lots of rework

– Checking parts instead of monitoring processes

– Low yield

© Strategic Modularity Inc. 2012 www.strategicmodularity.com

April 18, 2012 of 40

Process Capability - CpA quantitative definition


ilityocessCapab

ionWidthSpecificatCp

Pr=

σ

σ

3

4

±

±=Cp 33.1=Cp

σ

σ

3

6

±

±=Cp 0.2=Cp

Source: Motorola [4]

Process CapabilityMeasurement Methods• Design of Experiments (DOE)

– Don’t know which variables are important

• Statistical Process Control (SPC)

– Stable process

– Measuring the important variables

• Process Capability (Cp)

– Describes the ratio between process variability and the upper and lower specification limits.

– Based on normal distribution statistics, which is valid only if there is no assignable cause variation!


4. Process Capability vs. Yield Loss

Why Care About Six Sigma?

• Six Sigma is all about reducing the

cost of waste within the

organization.

• Two primary wastes with high costs

– Yield Loss – translates to high production costs due to poor efficiency.

– Latent Defects – translates to warranty costs from defects in the field.



4. Process Capability vs. Yield LossThree Quick Stories

• Living with Systemic Waste

– The Dumpster “Hall of Shame”

• Living with latent defects

– Hot House Aging

• Living with defects during development

– The “De-Ringer” Department

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Process Capability vs. Yield Loss

Why is Six-Sigma important?



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How process shifts affect yield

• At low process capability, a process shift can produce significant yield losses.

• Six-sigma protects against yield losses



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How process shifts affect yield• Graph shows one

process step

• Process control

– Difficult to keep most processes centered

– Expect a shift

• Yield Loss = ƒ (Cp)

– For Cp = 1, defect rate approaches 7%

– For Cp = 2, defect rate is negligible




Process Capability vs. Yield LossYield measures process efficiency

• Percent Yield: the proportion of useful output compared to a theoretical waste-free 100%

• Rolled Yield: the proportion of units completing a process without defects.

• First Time Yield: The proportion of units successfully passing an inspection step the first time.


Process Capability vs. Yield LossCauses of Yield Loss

• Process step is not performed correctly on some parts, due to process shift caused by the interaction between:

– inadequate equipment, and

– defective raw material.

• Flawed inspection process, where the inspection process is prone to:

– type I errors - false rejections, where conforming items may be incorrectly rejected.

– type-II errors - false acceptance, where non-conforming items may be incorrectly accepted.


Process Capability vs. Yield LossThe Tyranny of Large Numbers

• The Math: 0.9 x 0.9 x 0.9 x 0.9 = 0.656

• Imagine a process with hundreds of steps: Ex. Semiconductor Manufacturing

• Yield becomes critically important

Source: Feiman [5]

April 18, 2012 of 40

Process Capability & Yield LossManaging Workflow Complexity

• Picture shows a single process step

• Complex material flow paths

• For rejected parts, flow stops while awaiting a disposition decision


Source: Feiman [5]

5. Getting to Six SigmaProcess Improvement

• Continuous Process Improvement

– TOC – Theory of Constraints

– Lean

– Six Sigma

– TLS – TOC/Lean/SixSigma

• Improvement Cycles

– Measure

– Develop processes to eliminate assignable cause variations

– RepeatApril 18, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com of 40

Getting to Six SigmaTools to Find Assignable Cause


Source: Wordpress [6]

Getting to Six SigmaProcess Improvement

• Deming formally defined the original improvement cycle

– PDCA – Plan, Do, Check, Act

• Six Sigma uses two PDCA-based project methodologies

– DMAIC to improve existing products/processes

• define, measure, analyze, improve, control

– DMADV to develop new products/processes

• define, measure, analyze, design, verify



Getting to Six SigmaPlan-Do-Check-Act Improvement Cyclss

Source: Shook [9]


Getting to Six SigmaA3 Sheets PDCA Improvement Cycles

Plan

Do

Check

Act

The way things happen now.

The better way to work.

Source: Sobek [7]


Getting to Six SigmaA3 Sheets as a Management Tool

• A3 is the Basis for a results oriented culture

• The point of the A3 is to:– Communicate

– Gain Consensus

– Solve Problems

– Get Results

• Understanding a new way to work replacestraining a new behavior.– Existing staff implements a new process

– New staff is oriented to existing process

6. Improving Yield - Six Sigma Goal

Do we really need six sigma?

• Go all the way to six sigma? Maybe

• A clear organizational focus on achieving measurable and quantifiable returns from each Six Sigma project.

– Weigh the Cost vs. Benefit

• Cost of improvement project

• Benefits from improved yield = reduced costs

– Yield = ƒ (Capability, Number of Steps)


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Improving Yield - CapacityCapacity Planning and Reporting

• The capacity plan must account for yield loss throughout the process.

– Material loss - disposition as scrap

– Extra capacity - disposition as rework

• Some ERP systems have provisions for tracking yield loss and secondary part flows.

• Some ERP systems have provisions for producing yield reports


April 18, 2012 of 40

Improving Yield - WorkflowManaging Yield Loss Complexity

• Picture shows a single process step

• Complex material flow paths

• For rejected parts, flow stops while awaiting a disposition decision


10

% B

ad

Part

s F

low

10

% B

ad

Part

s F

low

Source: Feiman [5]

April 18, 2012 of 40

The Tyranny of Large NumbersYield = ƒ (Capability, Number of Steps)

• Yield is the result, dependent on:

– Process capability

– Number of steps

• To improve yield:

– Redesign product to decrease part count and improve process.

– Redesign process to increase Cpk.



April 18, 2012 of 40

Improving Yield – Making the CaseDefining the Project - System

• Analyze Process – Current State VSM

• Conduct Investigations

– Do the Gemba and create A3 sheets

• Design Lean Process – Future State VSM

• Conceptual Design: Several scenarios

– Redesign the product and process - DFMA

– Financial Analysis and Case – A3 sheets

• Propose Project - A3 Sheets (PDCA story)

– Schedule, resources, cost estimate

• Review with management & refine


April 18, 2012 of 40

Improving Yield - How to Spend?Product, Process or Capacity?• Product improvement generates:

– reduced parts count

– simplified manufacturing processes

• Process improvement generates:

– simplified manufacturing processes

– improved process reliability

– predictable capacity plans and schedules

– permanent savings in labor, materials

• Capital Investment in a low yield process

– reduces ROA and ROIC

– “hardtools” inefficiency

– may make sense early in product life cycle or if time to market is the most important factor



Improving Yield – Design WorkApproaching 100% Yield - Holy Grail

• Redesign the Product - DFMA

– Design for Manufacturability & Assembly

– Reduce the parts count

– Eliminate process steps

• Redesign the Process - DFMA

– Simple Process – Complex Part

• Metal stamping

– Complex Process – Simple Part

• Multi-shot Injection Molding


Improving Yield – Best ProcessThe Ideal Process Step

• Consumes no labor

• Consumes no material

• Requires no management

• Requires no equipment

• Cycle time = 0

• Yield = 100%

The ideal process step is the one that

does not exist!

April 18, 2012 of 40

Improving Yield – Best ProcessConverging on the Ideal Process

• Fewer parts

– Eliminate parts via DFMA for product and process redesign.

• Fewer process steps

– Eliminate steps via DFMA for product and process redesign.

• Robust processes tolerate ±1.5σ shift

• Monitor process, not product

• Fewer inspection steps to speed flow© Strategic Modularity Inc. 2012 www.strategicmodularity.com

Improving Yield – Best ProcessThe Robust Process


• Six Sigma Process Characteristics

– Process mean is 6σ away from USL and LSL

– Tolerates a ±1.5σ shift in process centeredness

– 3.4 Defective Parts per Million Opportunities (DPMO)

Source: Cmglee, Wikimedia Commons [8]

Six Sigma PrimerTerminology• A3 – A single sheet of paper

which tells a PDCA story.

• CP – Process Capability

• CPI – Continuous Process Improvement

• DFMA – Design for Manufacturability and Assembly

• DMADV - define, measure, analyze, design, verify

• DMAIC – define, measure, analyze, improve, control

• DOE – Design of Experiments

• DPMO – Defects per Million Opportunities

• LSL – Lower Spec Limit

• PDCA – Plan, Do, Check, Act cycle

• PPM – Parts per million

• SPC – Statistical Process Control

• TOC – Theory of Constraints

• TLS – TOC/Lean/Six Sigma

• USL – Upper Spec Limit

• VR&C – Variability Reduction and Control



Six Sigma PrimerBibliography

[1] ASQ, American Society for Quality, http://asq.org

[2] Lean Lexicon, 4th Edition, Lean Enterprise Institute, 2008.

[3] APICS Dictionary, 13th Edition, 2011

[4] ENG 123, “Design for Manufacturability Participant Guide,” Motorola University, 1992

[5] Feiman, Daniel, et.al “THE Book on . . . Business from A to Z: The 260 Most Important Answers You Need to Know ,” Build It Backwards Publishing, Los Angeles CA, 2011.

[6] Tools for Root Cause Analysis, http://aacesubajou.wordpress.com

[7] Sobek, Durward K. II, and Smalley, Art “Understanding A3 Thinking: A Critical Component of Toyota’s PDCA Management System,” Productivity Press, www.productivitypress.com , 2008, ISBN 978-1-56327-360-5

[8] Cmglee, Six Sigma with 1.5 sigma Process shift, Wikimedia Commons

[9] Shook, John, “Managing to Learn,” Lean Enterprise Institute, 2008

About the SpeakerAndy Pattantyus, CPIMAndy Pattantyus, CPIM, is founder, owner and President of Strategic Modularity, Inc. (SMI), a management consulting company serving divisions of large corporations and SMB clients with annual revenues of $3 to $30 million. Andy is passionate about enabling client companies to reach their greatest potential by setting goals, preparing plans and eliminating waste.

Andy’s 30 years of experience in designing/integrating modular production systems and flexible processes, developing new products, processes and machinery, provide him with a wide base of knowledge on how to eliminate process inefficiencies. Andy solves business problems by combining technical innovation with strategy, system design, facility design, human resource management, project management and accounting. A streamlined and efficient business perspective, with a strong mix of technical skills, enables Andy and his team to improve a company’s health. In Andy’s roles, achieving results always required significant planning before execution.

Before founding SMI, Andy managed development projects and material flow as a Senior Engineering Manager at Eveready Battery Co. Inc. and as a Director at Quallion LLC. Andy holds 6 patents, a B.S. and an M.S. in Mechanical Engineering from Virginia Tech as well as an MBA from Case Western Reserve University.

Andy authored chapters about Yield and Quality in the recently released book:

© THE Book… on Business from A to Z: The 260 Most Important Answers You Need to Know copyrighted 2011 by Daniel Feiman.


About the BookTHE Book On… BUSINESS from A to Z

Daniel Feiman, MBA, CMC®

Managing Director

Build It Backwards(TM)

Success by Choice; Not Chance(SM)

Office: 310.540.6717 Cell: 818.522.2892

Consulting & Training in:

Strategy * Finance * Process

[email protected]

www.BuildItBackwards.com

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