sixsigma cases

7/30/2019 SixSigma Cases

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Six Sigma

Experience sharing

&Cases

Six Sigma is a Performance Target

Six Sigma is aPERFORMANCE TARGETthat appliesto a single Critical-to-Quality (CTQ) characteristic notto the total product.

What is Six Sigma? Six Sigmais a business process that allows companies to drastically

improve their bottom line by designing and monitoring everyday businessactivities in ways that minimize waste and resource use while increasingcustomer satisfaction.

Six Sigmaguides companies into making fewer mistakes in everything theydo and eliminating lapses in quality at the earliest possible occurrence.

Quality Controlprograms have focused on detecting and correctingcommercial, industrial, and design defects and on confo rmance to standards.

Six Sigmaencompasses something broader: It provides specific methods tore-create the process so that defects and errors do not arise in the first place .

Some companies using Six Sigma: Motorola, AlliedSignal, General

Electric, American Express, Sony, Honda, Maytag, Raytheon, TexasInstruments, Bombardier, Canon, Hitachi, Lockheed Martin, and Polaroid.

CASE 1

Motorola

Six Sigma Origins The real problem at Motorola is that our quality

stinks!(Motorola Executive, Art Sundry in 1979)

Led to discovery of the crucial correlation betweenhigher quality and lower development costs inmanufacturing products of all kinds.

This pre-dates the rediscovery by America of Dr. W.Edwards Deming that occurred in the 1980 WhitePaper,If Japan Can, Why Cant We?

Six Sigma Origins At a time when most American companies believed that quality

cost money, Motorola realized that done right improvingquality would actually reduce costs and that the highest-qualityproducer could and should be the lowest-cost producer.

Motorola was then generally spending 5%-10% (sometimes asmuch as 20%) of annual revenues correcting poor qualitythat is -- $800 million to $900 million. With higher-qualityprocesses this money could be returned to the bottom line.Within the first four years MOTOROLA SAVED $2.2 BILLION.

Ultimately, this led to a focus onPROCESS(design &production), rather than simplyPRODUCTquality. That is, aPROACTIVE,rather than simplyREACTIVEapproach toualit .


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SIX SIGMA QUALITY

DEFINITION

Qualityis a state in which value ent itlement is realized for thecustomer and provider in every aspect of the business relationship.

Business Qualityis highest when the costs are at the absolutelowest for both the producer & consumer.

Six Sigmaprovides maximum value to companies in the forms ofincreased profits and maximum value to consumers with high-quality products and services at the lowest possible cost.

At the beginning of 80s, In the Japanesemarket, Motorolas beeper lost its name

value because of the quality difference

compared to Japans

In 1981 they tried to meet a challenge to

improve quality 5 times in 5 years and they

couldnt.

They developed a consistent process base

on statistical knowledge.

In 1987, they established 6 goal

as a key initiative.

Quality Cost Down by$3.2billion

Origin of 6

(Quality level elevated 100

times in 4 years)

Culture harmony Western &

Oriental

4. 6s Case Study. Why 6s?

Start : Motorola OUTCOME

Start & Prosperity

Motorola reached 5.5 level in 1992.Outcome is $3.2billion from1987 to 1992.

Motorola

Robert W. Galvin,former Motorola CEO

Failing to implement Six Sigma incommercial areas with the same forcethat the company implemented it in itsindustrial sectorscost Motorola $5billionover a four-year period.

How Big is the

Service Sector Anyway? MISTAKEN BELIEFS:

Some companies still believe that improving commercial processes is lessimportant than improving industrial processes

or that seemingly intangible commercial processes cant be controlled.

BOTH ARE WRONG:

Customers are more likely to take their business elsewhere because o f poorservice than poor products.

Companies like GE have shown that improving internal and externalcommercial processes adds to the bottom line and to customer satisfactionsignificantly

Case 2: Six Sigma and General

Electric

General Electric CEO, Jack Welch, describes Six Sigma as the mostimportant initiative GE has ever undertaken. GEs operating income, acritical measure of business efficiency and profitability, hovered around10% for decades.

In 1995 Welch mandated that each GE operation from credit card servicesto aircraft engine plants to NBC-TV work toward achieving Six Sigma. GEwas averaging about 3.5s when it introduced the program.

Case 2: Six Sigma and General

Electric

With Six Sigma embedding itself deeper into GEs processes, theyachieved the previously impossible operating margin of 16.7% in 1998 up from 13.6% in 1995.

In dollar amounts, Six Sigma delivered more than $300 million to GEs1997 operating income and more than $600 million in 1998.


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Quality Cost Downby $3.8 billion

Adopt to all Biz.

Train and do

projects

4. 6s Case Study. Why 6s?

Prosperity :GE OUTCOME

Start & Prosperity

In 1995 GE launched 6 processto overcome a difficult business

environment and to challenge

World Class Quality.

They made new processes such as

Productivity,Inventory Return etc,

but i mprovement was delayed

because of defects in processes.

GE thinks World Class Quality is

big challenge. GE now focuses on

6 process for next generation .

G E

Case 3: AlliedSignal 70,000 Employees

Chemicals, Fibers, Plastics, Aerospace Products,

Automotive Products. Larry Bossidy came from GE to become CEO in 1991

Market Value = $4 billion in 1991

Market Value = $29 billion by the end of 1998

Market Value = $38 billion by 2000.

AlliedSignal 1996 GOALS:

6% productivity increase

Reduced Inventory

Full-Capacity Utilization

Little or no Overtime

Reliable Products

5s Manufacturing

5s Designs

Predictable Cash Flow 5s Suppliers

BY END OF 1998:

Total Impact of SixSigma Within

AlliedSignal Reached $2Billion.

Six Sigma Profits inService Areas including: Order Processing

Shipping

Procurement Product Innovation

We cant tell other organizations how to do Six Sigma, but we can tellthem how not to do it. Allied has made mistakes along the way and, in

the process, learned some tremendous lessons.

LESSON 1: The OrganizationsLeadership Must Own Six Sigma

Upper management supported SixSigma, managers below those atthe top saw it as a flavor of themonth.

Black Belts seen as a nuisance.

Black Belts were using Six Sigmajargon while managers were usingbusiness vocabulary. This led to

confusion. SOLUTION: Introduce ALL levels

of management to Six Sigma.

Management had weeklong trainingsessions to understand themethods of the BreakthroughStrategy and how Black Belttraining and experience could beleveraged. ALSO how variousinitiatives fit together.

BEGAN TO FOCUS ONPROCESSES NOT PEOPLE asthe source of problems. Also,understanding of the Breakthrough

Strategy provided a plan of action,rather than just a command tomake something happen.

Six Sigma Changed the Company Cultureand

One of the flaws at Allied is that we hadtoo much vertical mobility.Managers inch up the same smokestack, learning more and more

about less and less.But companies that train promising individualsas Black Belts circumvent the vertical flow and move peoplearound horizontally, having them serve time in as many majorbusinesses or divisions as possible to give them a kaleidoscopicview of the organization and the benefit of being mentored by avariety of new blood.

Linked AlliedSignals

Goals, Vision & Activities.

Lesson Two: A Beginning Without an End

Having recognized the need to trainmanagers in the Six SigmaBreakthrough Strategy, Allied dedicatedthe next year to training 1,000 leaders inthe organization in how Six Sigma

worked, and in its potential financialimpact.

Training sessions lasted 3.5 days andemphasized Six Sigmas impact on:

Profitability through improvedprocesses;

The Crucial role of Black Belts,RATHER THAN teaching statisticalprocesses involved in achieving SixSigma.

Initially trained top managers at eachof Allieds 11 Strategic BusinessUnits and gradually worked their waydown the organization to middlemanagement, line supervisors, andso on.

COMPLAINTS FROM BLACKBELTS WITHIN SIX MONTHS:Management turnover and too muchpromotion of Black Belts intomanagement before benefit from thetraining and skills could be realized.SO training had to be ongoing.

Allied is not in the business of measuring activity. We are in the business of measuring results.IF something doesnt have a positive impact on customer satisfaction, our shareholders, and employees,

and in the process makes a lots of money, THENwe just flat out arent going to do it.RICHARD A. JOHNSON, Director of Six Sigma at AlliedSignal


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Lesson Three: Black Belt Retention AlliedSignals goal: send Black Belts with a minimum of 18-24 months

experience mastering the Breakthrough Strategy back into theorganization to create Six Sigma behavior & thinking.

40% of Black Belts were promoted to departmental or plant managers.Others left AlliedSignal for higher-paying jobs at suppliers. Otherscompleted only one or two projects before they were pulled back intotheir previous assignments with leadership not properly reviewingprojects and properly acting upon financial opportunities created byBlack Belts so that managers felt that Six Sigma wasnt particularlyimportant.

50% of Black Belts were absorbed back into the organization within sixmonths.

NOW BLACK BELTS must work at least 18-24 months on a series ofSix Sigma projects prior to a change of roles. TIME & EXPERIENCEARE VIEWED AS CRITICAL TO SIX SIGMA SUCCESS AND THEMATURITY OF THE BLACK BELT.

Lesson Three - Continued AlliedSignals Champions & Master

Black Belts

3.5 Day Executive Overview followedby the traditional Four-Month BlackBelt training process.

MASTER BLACK BELTS are selectedfrom the best of the Black Belts.

Each of these trains and mentors 10Black Belts

Each Black Belt trains and mentors 10Green Belts.

NOW: All Salaried Employees areExpected to Undergo the 26 Hours ofTraining Required for Green BeltCertification by 2000.

CHAMPIONS 20

Master Black Belts 70

Black Belts 2000+

Green Belts 18,000 Total # of Employees 70,000

Lesson Four: Supplier Capability is Critical to theSuccess of the Breakthrough Strategy

The Majority of AlliedSignalsSuppliers were operating atabout three sigma.

This prevented the companyfrom realizing the full benefits ofSix Sigma.

AlliedSignal recognized thatthey needed to view suppliersas their partners.

AlliedSignal began TRAINING

its suppliers and offering othertechnical assistance.

To achieve Six Sigma it isimportant to minimize the numberof suppliers, limiting these tothose that have been trained inthe Breakthrough Strategy.

Not only does AlliedSignalprovide training, BUT thenfollows up by dedicating ITSOWN BLACK BELTS to mentorand work with critical suppliers.AlliedSignal estimates that forevery 300 Black Belts it trains,

100 are either customers orsuppliers.

Deming: End the Practice of Awarding Business on Price Tag Alone.

Lesson Five:There is No Such Thing as Operator Error

It is PROCESSES notPEOPLEthat Fail.

This maps to one ofDemings 14 Points forManagement: DRIVEOUT FEAR.

Focus on Processesimplies that people are notaccused, but rather, thatthey are able to investigateprocesses and be part ofthe solution.

Lesson Six:Focus on Bottom-Line Improvement

The number one source of failure in deploying Six Sigma is the result ofLACK OF COMMITMENT FROM THEORGANIZATIONS LEADERSHIP.

The FINANCE DEPARTMENT must be involved so that the impact of SixSigma Projects on the Bottom-Line is apparent.

Black Belts, the Finance Department, and Executive Leadership mustwork in tandem.

While BLACK BELTS create opportunities for cost reduction andincreased profitability, the companys LEADERSHIP must make sure thatBlack Belts focus on the right projects and take action on the savingsopportunities they generate. FINANCE provides closure to the effort byensuring that the savings are returned to the organizations bottom line.

Lesson Seven: Initiative Overload LARRY BOSSIDY, CEO:

One of the things I have trouble with is nonfinancial objectives. Often

theyre just as obscure and vacuous as

they sound.

FIVE ACTIONS TO PERPETUATESIX SIGMA:

1. TRAINING: Allieds employee basechanges enough every nine to tenmonths that maintenance of Six Sigmaculture requires that new employeesbe trained in the BreakthroughStrategy.

2. Senior managementinvolvement.

3. Continued on-site leadershiptraining, and alignment of goalsamong divisions to reinforceBreakthrough Strategy thinkingand goals.

4. Requiring Black Belts todedicate a minimum of two yearsto working on Six Sigmaprojects.

5. Supplier involvement andimprovement in Six Sigmainitiatives.

Products and services should be improved ONLY to the degree that customer value is increased.Six Sigma is a program designed to generate money for the company, either through savingsresulting from reduced costs, or from boosting sales by increasing customer satisfaction.


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AlliedSignal:Hindrances to Six Sigma Success

Working on too many improvements at the same time.

Not having someone accountable for the problem.

Not being a process-based company.

A lack of trained and experienced people.

Middle managers who fear uncertainty about future roles.

Lack of metrics focused on customer value-added processes.

Lack of integrated information and financial systems.

Fragmented, staff-driven approaches.

Six Sigma

Six Sigma is a way

of achieving world class

performance by focusing on

customers' needs andeliminating defects

Six Sigma is a quantitative

statistical measurement

that means not more than

3.4 defects

per million opportunities

Case Study :Tata Chemical

Failure Mode & EffectsAnalysis

Process Mapping & Failure Mode

and Effects Analysis

Agenda Introduction to TCL

Context and Need for FMEA

Introduction to FMEA

Definition of terms

Steps in performing an FMEA

Introduction to the FMEA & S-O-D Tables

Methodology Adopted

Deliverables from FMEA

Action Plan


6/17

GEOGROPHICAL LOCATION

OF MITHAPURGEOGROPHYCAL MAP

Where

We are

PROFILE One of the major units of TATA Group

Started in 1939

Largest Inorganic Chemical Complex in ASIA

Largest manufacturer of Soda Ash in INDIA

Other products areSodium Bicarbonate, Vacuum Iodised Edible Salt, Caustic Soda Lye,Liquid Chlorine, Hydrochloric Acid, Liquid Bromine, InorganicBromides, Portland & Pozzolana Cement

Gas based fertilizer complex at Babrala U.P.

Extensive rail siding within Mithapur works.

Produces wealth from waste

Acquired Certification of

ISO - 9001 : 2000 ; ISO - 14001

Commendation for NQ Award

The New

EconomyCompetitive Environment

Gradual evolutionarychange

Stability

Clearly definedindustry boundaries

Power fromincumbency

Domestic markets Employee loyalty

Competitive Environment

Frequent,discontinuous change

Creative destruction

Competitiveadvantage hard tosustain

Global markets

Instant access tounlimited employmentopportunities

The Old Economy

Winds of Change in Tata Chemicals

Winds of Change in TataChemicals

Customised demands

on product specs

More players crowd

the marketplace

Environment lawsBecome more stringent

ANSAC targets India

Chinese start dumping SA

Import dutieskeep dropping

Customer doesbackward integration

Competitorenhances capacity

Govt. committed to

deregulate Urea inthe next five years

Unstable national policy/environment - Urea

Intense price competition

Our

Cultural

PillarsSpeedyExecution

Collaborative

Responsiveness

RelentlessCostFocus

CompetitiveExcellence

TATACHEMICALS LIMITED

Cost of Poor Quality

Hidden

Failure

Costs

Commonly

measured

failure costs

Scrap,

Rework

Warranty

Engineering Time

Management Time

Shop & Field Downtime

Increased Inventory

Decreased Capacity

Delivery problems

Lost orders


7/17

6s8-D Problem Solving Tech.

S P C

F M E AD O E

(Statistical Process Control)

Process MappingBench Marking

Failure Mode and Effects Analysis(FMEA) Structured analysis for identifying ways & methods inwhich the product or processes can fail and then plan

to prevent those failures.

FMEA is a proactive tool for reducing defects and non-

conformities.

A before-the-event action, not an after-the-fact

exercise.

Advantages of FMEA1. Identifies process deficiencies

2. Identifies the critical characteristics and helpsin developing control plans

3. Establishes a priority of corrective actions

4. Assists in the analysis of the process

5. Documents the rationale for changes

IntroductionFMEA is a structured approach in :-

Identifying ways in which a product / process can fail

to meet critical customer requirements.

Estimating the risk of causes with regard to these

failures.

Preparing control plan for preventing these failures.

Prioritizing the actions for improving the process.

FMEA is an extremely important tool for each phase of

Six Sigma strategy viz. Measure, Analyze, Improve,Control.

Definition of terms

Failure Mode : It is a manner in which a part or a

process can fail to meet specifications. It is usually

associated with defect or non-conformities.

Examples : Missing part, Off specification parts

(Oversized, Undersized) etc.

Definition of terms

Cause : Causes are sources of variation which are

associated with key process inputs. Cause can be best

defined as a deficiency which results in a failure mode.

Examples : Instructions not followed, Lack of

experience, incorrect documentation, Poor handling

etc.


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Definition of terms

Effect : Effect is the impact on the customer (both

internal & external) if the failure mode is not prevented

or corrected.

Examples : Customer dissatisfaction, Frequent product

breakdowns, Customer downtime.

Relationship of Cause, Failure mode

& Effect

CauseFailureMode Effect

(Failure)

FailureMode

Causes Causes Causes

Causes CausesCauses

Effect(Failure)

Preventor Detect

Steps in FMEA process Develop a process map & identify process steps.

List key process inputs for each process.

List key process outputs for satisfying processrequirements.

List ways the process inputs can vary (causes) andidentify associated failure modes & effects.

Assign severity occurrence and detection rating foreach cause.

Steps in FMEA process Calculate risk priority number ( RPN) for each

potential failure mode.

Determine recommended actions to reduce RPNs.

Establish time frame for corrective actions.

Take corrective actions.

Put all controls in place.

Ranking Parametersemployed Severity (SEV) : Severity indicates how severe is the

impact of the effect on the customer.

Occurrence (OCC) : This indicates the likelihood ofthe cause of the failure mode to occur.

Detection (DET) : This indicates the likelihood of thecurrent system to detect the cause or failure mode if itoccurs.

Risk priority number : This number is used to placepriority to items for better quality planning.RPN = SEV X OCC X DET


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Severity-Occurrence-Detection TablesRating Degree of Severity Likelihood of Occurrence Ability to detect

1 Customer will not a t all observe Very remote possibility Sure that the potentia l failure

the adverse effect will be detected & prevented

before reaching next customer

2 Custo mer will experience Low failure with supp orting Almost sure that the potent ialslight discomfort documents failure will be detected before

reachig the next customer

3 Customer will experience Low failure without supporting Less chances that the

annoyance because of s light documents potentia l failure will reach the

degradation of performance next customer undetected

4 Customer dissatisfied due to Occasional failures Some controls may detect

reduced performance the potential from reaching the

next customer

5 Customer is uncomfortable Moderate failure rate with Moderate chances potential

supporting documents failure reach next customer

Rating Degr ee of Sever ity Likelihood of Occur rence Ability to detec t

6 Warranty repairs Modearate failure rate without Controls are not likely to detect

supporting documents or prevent the potential failure

from reaching the next

customer

7 High degree of customer High failure rate with supporting Less chances that the potential

dissatisfaction documents failure will be detected or

prevented before reachingthe next customer

8 Vey high degree of customer High failure rate with supporting Very less chances that the

dissatisfaction documents potential failure will be detected

or prevented before reaching

the next customer

9 Negative impact on the Failure is almost certainRemote chances of Existing

controls will not detect

customer the potential failure

10 Negative impact on the Assured failureIt is certain Existing controls will

not detect

customer, people & society the potential failure

1 2 3 4 5 6 7 8 9

ProcessPotential

failure mode

Potential

failure effectSEV

Potential

causesOCC

Current

ControlsDET RPN

Part No.

1

2

3

4

5

List failure

modes for each

step

List effects

of each

failure mode

List causes

for each failure

mode

Rank severity

on 1 to 10scale

Rank occurrence

on a 1 to 10scale

List how the cause

is presently

being controlled

RPN=

SEV*OCC*DET

Rank how well

cause/failure

can be detected

on 1 to 10 scale

FMEA Table: ( Column 1 to 9 )

10 11 12 13 14 15

Actions

Recommended

Responsib

ilitySEV OCC DET RPN

List actions

recommended

on RPN pareto

Designates people

responsible for

corrective action

RPN is recalculated

on completion of

corrective action

MethodologyAdopted Step-1

Identification of processes.

Step-2 Walking the process.

Step-3 Generation of Process Flow Diagram.

PROCESS FLOW DIAGRAM

Step-4 Validation of Process Flow Diagram.

MethodologyAdoptedStep-5

Listing the Potential Failure Modes, Effects, Causes and

Current Controls.

Step-6

Determining the ratings for Severity, Occurrence and

Detection.
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PROCESS

FUNCTION

REQUIRE

MENTS

POTENTIAL

FAILURE

MODES

POTENTIAL

EFFECTS OF

FAILURES

SE

V

POTENTIAL

CAUSES OF

FAILURES

O

CC

CURRENT

PROCESS

CONTROLS

DE

T

RP

N

POTENTIAL FAILURE MODE AND EFFECT ANALYSIS

Kiln

Operation

Refractory

lining

failure

-Improperfiring;

-Abnormal

flame

propagation

4 2 64

Shell temp.scanning,

Pyrometer

& visual

inspection

8

KilnShutdown;

Process

failure

Improper

air

supply

excessive

CO

formation

7Low air flow

rate & hence

low O23

monitoring

of air flow

rate in DCS

2 42

Improper

clinker

formation

6

Low ID Fan

Step &

Damper

Position

3monitoring

of air flow

rate in DCS2 36

PROCESS

FUNCTION

REQUIRE

MENTS

POTENTIAL

FAILURE MODES

POTENTIAL EFFECTS

OF FAILURES

SEVE

RITY

POTENTIAL

CAUSES OF

FAILURES

OCC

URE

NCE

CURRENT

PROCESS

CONTROLS

DE

TE

CTI

ON

RPN

Refractory lining

failureplant shutdown 8

improper firing,

abnormal flame

propagation

4

Shell temp.

scanner, visual

and pyrometer

inspection

2 64

excessive CO formation 7 Low air flow rateand hence low O2

3 DCS monitoringair flow rate

2 42

Improper clinker

formation6

Low ID Fan Step &

Damper Position3

DCS monitoring

air flow rate2 36

Mai n drive hang up Plant shutdown 8electrical/mechanic

al/instrumental3 DCS Monitoring 2 48

Pier support

malfunctionPlant shutdown 8 Mechanical 3

Creep

measurement

every shift

3 72

Limited fuel stoc k plant shutdown 7 Improper planning 4Daily inspection &

stock checking1 28

ESP failure

Environmental hazards

leading to plant shut

down

10Mechanical /

electrical3

DCS monitoring &

interlocking, PM

schedule

2 60

Improper air

supply

Kiln operation

POTENTIAL FAILURE MODE AND EFFECT ANALYSIS

MethodologyAdoptedStep-7

Find out Critical Tasks on the basis of RPN.

FMEA Table

Step-8Preparing the critical task table and identification of KPMs for the

Critical Tasks.

CRITICAL TASK TABLE

Departments Covered Cement Plant (10)

Salt Vacuum (5)

Power Plant (4)

Soda Ash (9)

Analytical Lab (5)

Marine (7)

SAMG (5)

CCG* (6)

SCM* (5)*Processes are mapped,FMEA to be performed

Deliverables of FMEA-A list of potential failure modes ranked by the RPN.

-A list of critical and/or significant parameters to track.

-A list of recommended actions to address the critical

tasks and failure modes.

-A potential list to eliminate the cause of failure modes,

reduce their occurrence, and improve defect detection.

Action Plan Critical tasks that have been identified for each process

should be targeted for improvement.

Recommendation & implementation of actions toreduce the occurrence of the cause of failure and/orimproving the current controls for detection of cause orfailure mode

Track the Key Performance Indicators (KPIs) of thecritical tasks.
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Action Plan

Identify causes creating disturbances in the process

based on the analysis of the charts.

Once the actions implemented yield satisfactory results,

the next iteration of the FMEA is to be performed.

Case: Shipping logistics

Situation: GE Appliance products, such as microwave ovens and air

conditioners, are being produced in Asia and shipped to UScustomers, such as Wal-Mart

Delivery performance is very erratic and the average on-timedelivery is about 85%

Source: Yan Wang, University of Iowa

Shipping logistics (cont.)

Situation: Product arrives in the US

at Los Angeles

From the port, theproduct is taken either toa GE distribution centeror to a customerdesignated forwarder

Product is then crossdocked and sent on tofinal distribution centersvia rail, truck-on-rail, or

truck


Process map


DMAIC steps

Define

Phase

A team is assembled to attack this problem. The

team includes suppliers, 3rd party vendors, GElogistics people, finance, sales, and customers

The supply chain process is mapped from thesupplier to the end customer

Measure

Phase

The current performance is measured by looking at

data from the previous 6 months. Capability of this

process is 1.5 sigma currently

Analyze

Phase

All of the many inputs are examined and it appears

that 2 areas are the vital inputs, the shipping

decision by the supplier and getting the productthrough the port of LA

Improve

Phase Further investigation by the team yields some

changes in procedure that reduces the problem

ControlPhase

Documentation and procedures are updated


Process improvement

Old Procedure New Procedure

GE specifies when products

produced and shipped

GE specifies when products

produced and delivered to US

Supplier would comply by selecting

first ship going to the US

Supplier complies by selecting

the right ship

Shipping time 8 to 18 days Shipping time 8 days

Supplier notifies GE system (often

delayed) and freight forwarder with

paperwork

Supplier notifies freight

forwarder with paperwork, and

freight forwarder communicates

through GE system


12/17


Results:

On time delivery increased to

97% Transportation costs reduced

by $300,000

Inventory (cash flow) reducedby $1,000,000

Capability Raised to 3.5sigma

Whats the point? There are two aspects to six sigma the

statistical aspect and the business aspect. Both are important

and complementary.

Typical costs/benefits w.r.t. 6s

So what is 6s? Fundamentally, it is an old idea

consistent with TQM.

It is a culmination of

Continuous improvement (noorganization is 6s); Get it right the firsttime; Share and learn and do thattransparently and collectively; It isusually the next step in quality;Customer focused (remember defects?);Very well packaged; No particularcertification process (if you looking for anormative framework, you may end up

being disappointed)

I like it because it covers the entiregamut of

Philosophy, methodology, technique andtool

A measure ofcapability of a process

A goal forimprovement

A system ofmanagement toachieve lastingbusiness leadershipand top performance

Six sigma is

Six Sigma Applies to Products & Services,

Not the Companies Who Create Them

A company with six sigma is notassured financial success.

We must distinguish between sixsigma products and processes, andsix sigma companies.

The six sigma strategy createsspecific improvement goals forevery process within anorganization, allowing them tounderstand and incorporatetechnological advances lurking onthe horizon.

Six Sigma forces organizations toreexamine the way in which workgets done, rather than tweakingexisting systems.

It simplifies systems and processes,improves capability, and ultimately finds away to control systems and processespermanently.

Even a six sigma product will fail if brought

to market too late or into a market with nodemand.

THIS IS WHY companies must achieve SixSigma in everything they do.

Quality Function Deployment Is a structured method that is intended to

transmit and translate customer requirements,

that is, the Voice of the Customer

through each stage of the product development

and production process.

These requirements are the collection of

customer needs, including all satisfiers,

exciters/delighters, and dissatisfiers.

The House

of QualityQuality Function Deployments

House of Quality

Customer

PerceptionsRelationships

betweenCustomer Needs

andDesign Attributes

ImportanceRankings

CustomerNeeds

Design

Attributes

Costs/Feasibility

Engineering Measures

Correlation

Matrix

12

3

4

5

6

7

8


13/17

Building the House of Quality

1. Identify Customer Attributes

2. Identify Design Attributes / Requirements

3. Relate the customer attributes to the design attributes.4. Conduct an Evaluation of Competing Products.

5. Evaluate Design Attributes and Develop Targets.

6. Determine which Design Attributes to Deploy in the

Remainder of the Process.

1. Identify Customer Attributes These are product or service requirementsIN THE

CUSTOMERS TERMS.

Market Research;

Surveys;

Focus Groups.

What does the customer expect from the product?

Why does the customer buy the product?

Salespeople and Technicians can be important sources of

informationboth in terms of these two questions and in

terms of product failure and repair.

OFTEN THESE ARE EXPANDED INTO Secondary and

Tertiary Needs / Requirements.

2. Identify Design Attributes.Design Attributes are Expressed in the Language of

the Designer / Engineer and Represent theTECHNICAL Characteristics (Attributes) that mustbe Deployed throughout the DESIGN,MANUFACTURING, and SERVICE PROCESSES.

These must be MEASURABLE since the Output willbe Controlled and Compared to Objective Targets.

The ROOF of the HOUSE OF QUALITY shows,

symbolically, the Interrelationships between DesignAttributes.

3.Relating Customer & Design Attributes

Symbolically we determine whether there is NO relationship, a

WEAK one, MODERATE one, or STRONG relationship

between each Customer Attribute and each Design Attribute.

The PURPOSE it to determine whether the final Design

Attributes adequately cover Customer Attributes.

LACK of a strong relationship betweenA customer attribute

and any design attribute shows that the attribute is not

adequately addressed or that the final product will have

difficulty in meeting the expressed customer need.

Similarly, if a design attribute DOES NOT affect any customer

attribute, then it may be redundant or the designers may have

missed some important customer attribute.

4. Add Market Evaluation & Key Selling Points

This step includes identifying importance ratings for

each customer attribute AND evaluating existing

products / services for each of the attributes.

Customer importance ratings represent the areas ofgreatest interest and highest expectations AS

EXPRESSED BY THE CUSTOMER.

Competitive evaluation helps to highlight the absolute

strengths and weaknesses in competing products.

This step enables designers to seek opportunities for

improvement and links QFD to a companys strategic

vision and allows priorities to be set in the design

process.

5. Evaluate Design Attributes of

Competitive Products & Set Targets. This is USUALLY accomplished through in-house testing and

then translated into MEASURABLE TERMS.

The evaluations are compared with the competitive evaluation ofcustomer attributes to determine inconsistency between customer

evaluations and technical evaluations.

For example, if a competing product is found to best satisfy a

customer attribute, but the evaluation of the related design

attribute indicates otherwise, then EITHER the measures used are

faulty, OR else the product has an image difference that is

affecting customer perceptions.

On the basis of customer importance ratings and existing product

strengths and weaknesses, TARGETS and DIRECTIONS for each

design attribute are set.


14/17

6. Select Design Attributes to be Deployed

in the Remainder of the Process

This means identifying the design attributes that:

have a strong relationship to customer needs,

have poor competitive performance,or are strong selling points.

These attributes will need to be DEPLOYED orTRANSLATED into the language of each function inthe design and production process so that proper actionsand controls are taken to ensure that the voice of thecustomer is maintained.

Those attributes not identified as critical do not needsuch rigorous attention.

Using the House of QualityThe voice of the customer MUST be carriedTHROUGHOUTthe production process.

Three other houses of quality are used to do this and,together with the first, these carry the customers voicefrom its initial expression, through design attributes,on to component attributes, to process operations, andeventually to a quality control and improvement plans.

In Japan, all four are used.

The tendency in the Westis to use only the first two.

1

C

ustomerAttributes

Design Attributes

2

DesignAttributes

Component Attributes

3Component

Attributes

Process Operations

4

Quality Control Plan


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The Cascading Voice of the Customer

Product or Service

StartDate

BusinessAreas of

Emphasis

Metrics SupplierInvolvement

TrainingEmphasis

RewardSystem

Amount ofCulturalChange

Return onInvestment

Motorola 1987 Production Defects Intimidation Six SigmaBasics andStatistics

Black Belt

Recognition

Low 1.4 Billion

in 7 Years

DSEG(Raytheon/TI)

1990 Production Defects and

Cycle TimeTrainingSuppliers

in the Tools

Low Not

Published

AlliedSignal 1992 Productionand Design

Training

Suppliers

Black

Belts

Six Sigma

Basics,

Statistics,

KISS for

Suppliers

GeneralElectric

1995 Production,

Design,

R&D, and

Transactional,i.e., the whole

organisation

Training

Suppliers

Black Belts

Black Belt,

Green Belt,

and

ManagementPromotions,

Bonuses,

and

Stock

Options

High

Black Belt

Recognition

Black Belt

Recognition

Monetary

Rewards

Six Sigma

Basics,

Statistics,

and Soft

Skills

Defects,

Cycle Time,

COPQ,

Cost

Reduction

Six Sigma

Basics,

Statistics,

Soft Skills,Finance

Skills,

Defects,

Cycle Time,

Cost Reduction,

StableOperations,

Annual

Operating ROI

(Intellectual

Capital)

Medium 1.4

Billion in

4 Years

Evolution of Six Sigma

3 +

Billion in

4 Years

(Taken

from

1999

Annual

Report)

What Six Sigma Tells Us We dont know what we dont know.

We cant do what we dont know.

We wont know until we measure.

We dont measure what we dont value.

We dont value what we dont measure.

TYPICAL RESULTS:companies that properly implement Six Sigmahave seen profit margins grow 20% year after year for each sigmashift (up to about 4.8s to 5.0s. Since most companies start at about3s, virtually each employee trained in Six Sigma will return onaverage $230,000 per project to the bottom line until the companyreaches 4.7s. After that, the cost savings are not as dramatic.

HOWEVER,improved profit margins allow companies to createproducts & services with added features and functions that result ingreater market share.

TQM Focus vs. Six Sigma Focus

Total Quality Management

TQM programs often focus onimprovements in individualoperations with unrelatedprocesses.

The consequence is that withmany quality programs,regardless of howcomprehensive they are, it

takes many years before allthe operations within a givenprocess are improved.

Six Sigma Six Sigma architects focus on

making improvements inalloperations within a process,producing results more rapidlyand effectively.

A process is any activity or group of activities that:* takes an input, * adds value to it,and* provides an output to an internal or external customer.

An industrial processis any process that depends on machinery for its

creation and comes into physical contact with materials that will bedelivered to an external customer. It does not include shipping,distribution, or billing processes.

A commercial process,such as ordering materials, payroll, or processingcustomer orders, supports industrial processes, or may stand on its own as aseparate and unique business.

When at least 80% or more of a process depends on human activity, weconsider this a commercial process.

What is a Process?

Roles of Six Sigma Champions Create the vision of Six Sigma for the company.

Define the path to implement Six Sigma across the organization.

Develop a comprehensive training plan for implementing the Breakthrough

Strategy. Carefully select high-impact projects.

Support development of statistical thinking.

Ask Black Belts many questions to ensure that they are properly focused.

Realize the gains by supporting Six Sigma projects through allocation ofresources and removal of roadblocks.

Hold the ground by implementing Black Belt recommendations.

Make sure that project opportunities are acted upon by the organizationsleadership and the finance department.

Recognize people for their efforts.

Champion training is one week.


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Roles of Master Black BeltsUnderstand the big business picture.

Partner with the Champions.

Get certified as Master Black Belts.

Develop and deliver training to various levels of the organization.

Assist in the identification of projects.

Coach and support Black Belts in project work.

Participate in project reviews to offer technical expertise.

Help train and certify Black Belts.

Take on leadership of major programs.

Facilitate sharing of best practices across the corporation.

Master Black Belt training consists of two one-week sessions.

Roles of Black Belts Act as Breakthrough Strategy experts and be Breakthrough Strategy

enthusiasts.

Stimulate Champion thinking.

Identify the barriers.

Lead and direct teams in project execution. Report progress to appropriate leadership levels.

Solicit help from Champions when needed.

Influence without direct authority.

Determine the most effective tools to apply.

Prepare a detailed project assessment during the Measurement phase.

Get input from knowledgeable operators, first-line supervisors, and teamleaders.

Teach and coach Breakthrough Strategy methods and tools.

Manage project risk.

Ensure that the results are sustained.

Black Belts Perform the Following Tasks

MENTORS: Cultivate a network of Six Sigma individuals at the localorganization or site.

TEACH: Provide formal training of local personnel in new strategiesand tools.

COACH: Provide one-on-one support to local personnel.

TRANSFER: Pass on new strategies and tools in the form oftraining, workshops, case studies, and local symposia.

DISCOVER: Find application opportunities for Six Sigma strategiesand tools, both internal and external (e.g. suppliers and customers).

IDENTIFY: Highlight / surface business opportunities through

partnerships with other organizations. INFLUENCE: Sell the organization on the use of Six Sigma

strategies and tools.

Characteristics of Six Sigma Black Belts

Highly respected by superiors, peers, and subordinates.

Understands the big picture of the business.

Focuses on results and understands the importance of the bottom line.

Speaks the language of management (money, time, organizational dynamics, etc.)

Committed to doing whatever it takes to excel.

Sponsored by a vice president, director, or business unit manager.

Is an expert in his or her specific field.

Possesses excellent communication skills, both written and verbal.

Inspires others to excel.

Challenges others to be creative.

Capable of consulting, mentoring, and coaching.

Drives change by challenging conventional wisdom, developing and applying new

methodologies, and creating innovative strategies. Possesses a creative, critical, out-of-the-box intellect.

Allows room for failures and mistakes with a recovery plan.


Accepts responsibility for choices.

Views criticism as a kick in the caboose that moves you a step forward.

Encourages commitment, dedication, and teamwork.

Unites and inspires a team to a core purpose.

Able to communicate all sides of an issue.

Solicits diverse ideas and viewpoints.

Empathizes.

Promotes win-win solutions.

Disagrees tactfully and does not overreact.

Acts decisively under pressure.

Anticipates and confronts problems early and corrects causes..

Effectively identifies priorities from a business standpoint.

Manages limited resources in a highly efficient and effective manner.

Careful not to assign an unrealistic number of tasks to any team member.


Understands and respects that people have limitations.

Displays a genuine concern and sensitivity toward others.

More concerned about business success than personal gain.Does not lord her or his expertise over others.

Recognizes that results count more than fancy titles.

How Many Black Belts Does an Organization Need?

Revenues/(1 million) = Number of Black Belts

Number of Black Belts/(10) = Number of Master Black Belts


17/17

A Black Belts Course of StudyThe Twelve M-A-I-C Objectives

MEASURE Select CTQ Characteristics;

the frequency Define Performance Standards; of

defects Validate Measurement Systems.

ANALYZEEstablish Product Capability; when and

where Define Performance Objectives; defects

occur Identify Variation Sources.

IMPROVE Screen Potential Causes;

the process Discover Variable Relationship;

Establish Operating Tolerances.

CONTROL the Validate the Measurement System;

process so that Determine Process Capability;

it stays fixed Implement Process Controls.

Roles of Green Belts

Function as Green Belts on a part-time basis, whileperforming their regular duties.

Participate on Black Belt project teams in the context oftheir existing responsibilities.

Learn the Six Sigma methodology as it applies to aparticular project.

Continue to learn and practice the Six Sigma methods andtools after project completion.

Green Belt training consists of two three-day sessions withthree weeks in between.

Thank You !