Six Sigma
By Daniel Wu
Ford Lio Ho Motor Company
Outline
Quality level
What is Six sigma?
Why we need Six sigma?
Development and Deployment strategy
How Six sigma merges into our daily business?
Overview-Four Quality Gurus
Historically companies have focused on quality issues for customer satisfaction
Prior to six sigma there were four key quality gurus that most companies’ quality programs followed
Deming
Juran
Crosby
Taguchi
Deming
Deming taught:
Importance of understanding variation in work processes
Role of management in leading for quality
Application of statistics
Plan-Do-Check-Act
Deming’s Contribution to Profitability
EXTERNAL
INTERNAL
CUSTOMER
SATISFACTION
MARKET
SHARE
PROFIT
PRODUCTIVITY
QUALITY
-Better products & services
-Improved processes
-Compete with value
PRICE
-Compete with Price
-Decreased cycle time
-Eliminate set-up times
COST
-Opportunity for profit
PRODUCT QUALITY
PROCESS QUALITY
-Reduce rework
-Eliminate in-process inspection
-Reduce scrap
-Increase product life
-Eliminate incoming testing
Plan
Do
Check
Act
Juran
Juran taught:
Breakthrough performance
Pareto effect
Importance of management principles
Quality by design and planning
Juran’s Contribution
Planning
Cost of Poor Quality
(Percent of operating costs)
Production Begins
Original zone of process control
New zone of process control
0
20
40
0
Control
Time
Improvement
Lessons Learned
Sporadic
spike from
observed
problem
Chronic Waste
(an opportunity
for improvement)
Control
Special cause variation
Common cause variation
Crosby
Crosby taught:
Customer requirement is performance standard
Quality maturity is a journey
Preventive action as basic approach
Taguchi
Taguchi taught:
Cost of poor quality is loss to society as a whole
Robust quality is designed for consistent production
Design control is more important than production control
Taguchi’s Contribution
Lower Specification Limit
Upper Specification Limit
Nominal Value
Region of
Customer
Complaints
Region of
Customer
Complaints
Region
of
Questionable
Performance
Region
of
Questionable
Performance
Region of
Specified
Performance
Mean
Lower
Control
Limit
Upper
Control
Limit
Region of
Desired
Performance
Cost
What Are the Limits to Improvement?
2 Sigma
3 Sigma
4 Sigma
5 Sigma
6 Sigma
Basic Quality Tools
Statistical Tools
Design for Six Sigma (DFSS)
Basic Tools Wall
Design Wall
Clean Sheet
Challenge in the millennium
Question confronting business leaders and managers:
It is not: “How do we succeed?”
It’s: “How do we stay successfully?”
Change
“It is not the strongest that survive, nor the fittest,
but those
most able to adapt to change.”
Charles Darwin
The Origin of Species
“People do not resist change, people resist being changed.”
Beckhard
Challenge
Resistance-the universal reaction to change.
Technical resistance
Political resistance
Organizational resistance
Individual resistance
Six Sigma?
Six Sigma is not a business fad tied to a single method or strategy, but rather a flexible system for improved business leadership and performance.
It is not about theory, it’s about action.
Six Sigma Focus
Delighting the customer through flawless execution
Rapid breakthrough improvement
Advanced breakthrough tools that work
Positive and deep culture change
Real financial results that impact the bottom line
Passion + Execution = Fast and Lasting Results
Six Sigma - Goal
Sigma is a statistical unit of measure that reflects process capability. The sigma scale of measure is perfectly correlated to such characteristics as defects-per-unit, parts-per million defective, and the probability of a failure/error
(Distribution Shifted ± )
2
308,537
3
66,807
4
6,210
5
233
6
s
PPM
Process
Capability
Defects per
Million Opp.
Six Sigma corresponds to parts per billion if process is centered
Six Sigma - Performance Target
3 Sigma
6 Sigma
5 Sigma
4 Sigma
%
%
%
%
Historical
Current
Intermediate
Long-term
Sigma
Long-Term Yield
Standard
A Problem Solving Methodology
.... To Produce
Improved Rolled Throughput Yield, Defects Per Unit, & Defects Per Million Opportunity
Reduced Cost of Poor Quality (COPQ)
Improved Capacity and Productivity
Reduced Variation In Our Processes / Products
$$’s
The Strategy
Characterize
Optimize
Breakthrough
USL
T
LSL
USL
T
LSL
T
USL
LSL
USL’
LSL’
Customer Focused - Both Internally & Externally
Which Business Function Needs It?
As long as there is a process that produces an output whether it is
a manufactured product, data, an invoice, etc... we can apply the Six Sigma Breakthrough Strategy. For these processes to perform to a customer standard they require correct inputs!!!
6 Sigma
Methods
MFG..
DESIGN
SERVICE
ENG
MAINT.
ADMIN.
QA
PURCH.
The Foundation of the Six Sigma Tools
Data is derived from objects, situations, or phenomenon in the form of measurements. Data is used to classify, describe, improve, or control objects, situations, or phenomenon.
1. We only use experience, not data.
2. We collect data, but just look at the numbers.
3. We group the data so as to form charts and graphs.
4. We use census data with descriptive statistics.
5. We use sample data with descriptive statistics.
6. We use sample data with inferential statistics.
Levels of Analysis:
What level are we??
The Role of Six Sigma
Six sigma is the best means to realize the philosophy, values, and goals associated with your business initiatives.
Region
BA
6
Linking
Pins
Business Area Initiatives
It unifies the initiatives and provides a common language which all people can understand and speak.
How Do We Improve Capability
Our Outputs (Y’s) are determined by our Inputs (X’s). If we know enough about our X’s we can accurately predict Y without having to measure it.
If we don’t know much about our X’s, then we have to resort to inspection and test (non value added operations).
By knowing and controlling the X’s, we reduce the variability in Y, which decrease the number of defects, improves RTY, cycle time, etc. We can also eliminate or reduce inspection, test, and rework.
The Sources of Six Sigma Quality…
by controlling...
by designing...
Continuously
Reduce
Process
Variability
Tighter Upper
& Lower Limits
Target values
Lower Limits
1. Design best target for performance
2. Design system values to reduce variability of performance
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• ----------------------
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Attractive
Implicit
Waste
Expressed
Q1. If provided would you be...
...indifferent?
...happy?
Q2. If not provided...
...indifferent?
...unhappy?
Q3. If not provided...
...indifferent?
...unhappy?
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• ----------------------
• ----------------------
• ----------------------
• ----------------------
• ----------------------
• ----------------------
• ----------------------
• ----------------------
by listening...
...to what the customer says he/ she wants
...performance tolerant to real world
...process variability, not by inspection of defective output
Developing and Reinforcing Values
Cycle of
Refinement
VALUES
BEHAVIOR
ATTITUDES
CULTURE
The Role of Leadership
New
Questions
New
Values
New
Measures
Leadership
(Humility/Listening)
New
Behaviors
Leadership plays the role
Values are a function of behaviors
Measuring the right things is key
Change must be supported and driven from the top
Will is a key element for a successful deployment
Why are we here?
“There is a recognition that leadership needs to be a key component of Consumer Driven 6-Sigma within any organization trying to undertake 6-Sigma deployment.”
Mikel Harry / Richard Schroeder
What’s In It For Me?
“… the best statistical analysis in the world is useless if those handling the information are paralyzed by corporate fear. When data suggests one direction but corporate culture or convention dictates another, fear can rule and the potential for change is lost. Only strong leadership can eradicate the fear factor and allow an organization to realize its potential. Statistics alone cannot achieve breakthrough.”
Mikel Harry / Richard Schroeder
Leadership in Six Sigma
Define Future State
Orientation
Present State
Future
State
PTS
Leadership Skills
Business
Basics
Project Management
Personal
Development
PTS
PTS
PTS
PTS
DEFINE
MEASURE
ANALYZE
IMPROVE
CONTROL
Define
Plan
Manage
Close
Team Management
Team Development
Meeting Facilitation
Team Management
Develop Transition Plan
Change Management
Analyze Present State
Six sigma structure
Strategy— Consumer-driven, focus on product, process, and service.
Organization—All-function involvement and Personal Development.
Policy—Company-wide engagement, HR,IT,and Finance support.
Management—Project, Team, and Change Management.
Deployment Structure
Master Black Belts (Full-Time)
Project Champions (Part-Time)
Black Belts (Full-Time)
Green Belts (Part-Time)
Executive Leadership (Part-Time)
Deployment Directors (Full/Part-Time)
6s Project
Champions
6s
Deployment
Champion(s) SM
Business Unit Leader
CEO
Corporate 6s Senior ChampionSM
HR Deployment
ChampionSM
IT
Deployment
ChampionSM
Finance
Deployment
ChampionSM
PR
Deployment
ChampionSM
Business
Operations
Leaders
6s
HR Manager
6s Financial Manager
Green BeltsSM
6s
IT
Manager
Training
Deployment
ChampionSM
6s Master
Black BeltsSM
6s
Comm. Manager
6s
Training Manager
6s Project
ChampionsSM
6s Black BeltsSM
6s Deployment Infrastructure
6s Executive Council
Six Sigma Deployment Roles
Phase I—Cascading
Establish deployment structure
Executive, top management, champion awareness training
Black Belt training
Tools implementation training
Leadership training
Phase II—Accelerate development
Deployment structure implementation and disposition in each function.
Every salary is GB.
Begin to implant into current quality system.
ISO14000 and QS9000 integration.
Phase III—Integration
Implant six sigma methodology in other quality tools
Partnership with other quality system.
Six sigma training to supplier and franchise.
Six sigma in daily business.
DFSS(Design for Six Sigma).
BB/MBB in leadership position.
It is All about Value
The Customer Value Proposition
Defines
Business Strategy
Customers choose to buy from us because...
Investors entrust their money to us because...
Employees choose to work for us because...
Three Customer Value Proposition Strategies…
Product differentiation
Operational excellence
Customer partnerships
Competitive advantage!
Consumer . Producer
Customers – higher expectation
Defect-free quality
Product
Service
Producer -planning for changes to meet customer requirements.
Strategic: changing the way every level of a business is managed on a daily basis.
Tactical: six sigma methodology and cross-functional.
Cultural: out of box thinking, everyone involved and common language is data.
Customers want to purchase high quality products and services at the lowest cost, just as companies want to produce high quality goods and services at the lowest possible cost.
Maximizing Customer Value
Deriving value from the Need - Do
Interaction Model
Need
Do
Customers and suppliers exchange value
through the Need-Do interaction.
Customer
Supplier
Interaction
Value-Capturing the voice of Customers
Partial Kano Analysis
Degree of Achievement
Customer Satisfaction
Surprise:
“Ergonomically Delighting”
Desire: “Operate Quietly”
Necessities:
“Doesn’t Fail Mechanically”
“Doesn’t Fail Electrically”
“Is Durable”
Basic
Quality
Performance
Quality
Excitement
Quality
Business initiatives
Delivery
Cost
Customer requirements
Quality
When we say something is a CTQ, can we describe it from
Customer’s perspective?
Our perspective?
Can we demonstrate the relationship?
PRODUCT
QUALITY
SHIPMENT
ACCURACY
CONDITION
FILL RATE/
ON-TIME DELIVERY
ORDER SERVICE/
INFORMATION
PROFITABLE
CUSTOMER
GROWTH
Customer Satisfaction
Building the relationship
Internal
Others
External
Segment
Databases from VOC
Data extraction & transformation
Departmental data mart
Intelligence reports for projects
Correlation
analysis
Data transformation
What should we do to make it easily accessible as information to managers and subordinates?
What sort of analysis can we conduct?
How does that analysis add value?
How can we further extend the value of our data analysis?
Opportunity and alternative
Focus on the best opportunities
Stratify to define target arenas
Define real options
Build a portfolio of opportunities to pursue
Meet customer requirements by running the business as we do?
Or need to change to get prodigious improvement? Six sigma?
Consumer-driven six sigma
Requires consumer strategy, product strategy, and infrastructure strategy and link them inextricably together.
Conducts business through the consumers’ eyes and shares unfiltered insight within the enterprise.
Creates a compelling consumer experience and innovates services as well as products.
Adds value in the eyes of the consumer.
Integrates the product and information.
Transforming Customer Feedback Into SAQ and then Six sigma Projects
Single Agenda for Quality and Customer Satisfaction
Top 25 issues
Develop
Actionable Projects
Identify Generic
Critical X’s
High
Mileage
DFSS
New
Product Content
Measure and Monitor Critical X’s
Identify Critical X’s Out of Specification
Develop Action to Restore Critical X’s
MBB
Action
VRT
(Process owner)
Black Belt
Project Leader
FPS & Plant Operations
QOS
DMAIC
Green Belt Projects
Consumer Driven 6-Sigma
offers a structured problem solving methodology to achieve break-through improvements by systematically identifying root causes and eliminating them using an integrated set of statistical tools, problem solving techniques, data, and disciplines.
Six Sigma in process improvement
Improve
Control
Define
Measure
Analyze
Modify
Design?
No
Yes
Redesign
Six Sigma Mindset
Define
Measure
Analyze
Improve
Control
What does the customer want?
What is the defect we want to reduce?
Are we sure we can trust the data?
What does the data tell us?
What are the main influencing factors?
Does the data confirm this?
What are we going to change?
Is improvement tangible and optimal?
How are we going to maintain the improvement forever?
How to cascade feedback to system?
Jonathan Holbrook
6 Sigma Deployment
DEFINE PROBLEM / ISSUE
Strategy
Prevent defect(s)
Eliminate defect(s)
CHARACTERIZE
DEFINE
OPTIMIZE
VERIFY
MEASURE
ANALYZE
IMPROVE
CONTROL
Black belt project to
improve mfg. capability
Mfg. process cannot
provide sufficient improvement. Need reduced product sensitivity to mfg. noise.
The Overall Perspective: DMAIC and DCOV
Breakthrough Improvement
5 S workplace
Visual Factory
Standardized Work
DMAIC
Quality Tools
Six Sigma Methodology
Phase
World class quality
We can’t sustain a visual factory without 5S
We can’t sustain standardized work without visual factory
We can’t sustain six sigma without standardized work
Quality tool is the engine, Six sigma is Turbo-charge
DFSS
We can’t meet six sigma without six sigma discipline
Top leadership needs clearly and openly confirm its strategic intent
Is 6-Sigma a strategic process for your business or is it just one of several?
Is 6-Sigma a means to transforming our culture or just tool?
Do we want to use 6-Sigma in the same disciplined manner as we use our financial operating system?
Do we want to take steps to drive 6-Sigma accountability deep into the organization through 6-Sigma target setting and incentives for superior performance?
Does the data driven step-by-step process show up in the way we address most issues and discussions?
Required Mgt. Confirmation
6-Sigma viewed as a strategic initiative, driving major cultural changes
Consistent view across management
Accountability for results is enforced by breaking down 6-Sigma targets for each line organization
Rewards and incentives are tied directly to 6-Sigma bottom line results
Adopted by all organizations and functions as the “way we do business” and consistently applied – not an option
Standard problem solving approaches and fact/data driven business decisions – like a disciplined financial operating system
Best Practice
While leadership articulates 6-Sigma as a strategic initiative, does it show a mixed approach to strategic intent, wide variability
Adoption based on interest of individual line managers – implies there is a choice to do it or not
Accountability for 6-Sigma results is not forced either through breaking down to specific targets for line organizations or through incentives for superior 6-Sigma performance
6-Sigma seen as primarily as a tool and not yet as a “way of doing business”
Observed Practice
Ending…..
Q&A
Each Deployment Team member position contains a position profile, roles, responsibilities, issues and actions. The Senior Champion and Deployment Team members should become very familiar with the contents of this section.
Deployment Team Members:
· Senior Champion
· Business Unit Deployment Champions
· Business Operations Leaders (. Engineering, Sales, Marketing, Manufacturing)
· Financial, HR, IT Representatives
· Training & Development Representative
· Corporate Communications Representative
The Need for the Deployment Team:
Once the key principles are accepted, the task of implementation falls on the Deployment Team. They are the ones on the forward edge of the battlefield. They will perform an organizational assessment, benchmark the organization's product and services, conduct a detailed gap analysis, create an operational vision and develop a cross-functional six sigma deployment plan.
All Team Members Must Attend Deployment Champion Training
?? Have you seen people get their suppliers involved earlier?
?? What does a deployment champion really do?
Each Deployment Team member position contains a position profile, roles, responsibilities, issues and actions. The Senior Champion and Deployment Team members should become very familiar with the contents of this section.
Deployment Team Members:
· Senior Champion
· Business Unit Deployment Champions
· Business Operations Leaders (. Engineering, Sales, Marketing, Manufacturing)
· Financial, HR, IT Representatives
· Training & Development Representative
· Corporate Communications Representative
The Need for the Deployment Team:
Once the key principles are accepted, the task of implementation falls on the Deployment Team. They are the ones on the forward edge of the battlefield. They will perform an organizational assessment, benchmark the organization's product and services, conduct a detailed gap analysis, create an operational vision and develop a cross-functional six sigma deployment plan.
All Team Members Must Attend Deployment Champion Training
?? Have you seen people get their suppliers involved earlier?
?? What does a deployment champion really do?
Each Deployment Team member position contains a position profile, roles, responsibilities, issues and actions. The Senior Champion and Deployment Team members should become very familiar with the contents of this section.
Deployment Team Members:
· Senior Champion
· Business Unit Deployment Champions
· Business Operations Leaders (. Engineering, Sales, Marketing, Manufacturing)
· Financial, HR, IT Representatives
· Training & Development Representative
· Corporate Communications Representative
The Need for the Deployment Team:
Once the key principles are accepted, the task of implementation falls on the Deployment Team. They are the ones on the forward edge of the battlefield. They will perform an organizational assessment, benchmark the organization's product and services, conduct a detailed gap analysis, create an operational vision and develop a cross-functional six sigma deployment plan.
All Team Members Must Attend Deployment Champion Training
