Six Sigma By Daniel WuFord Lio Ho Motor Company1OutlineqQuality levelqWhat is Six sigma?qWhy we need Six sigma?qDevelopment and Deployment strategyqHow Six sigma merges into our daily business?2Overview-Four Quality GurusuHistorically companies have focused on quality issues for customer satisfaction uPrior to six sigma there were four key quality gurus that most companies quality programs followeduDeminguJuranuCrosbyuTaguchi3DemingDeming taught:Importance of understanding variation in work processesRole of management in leading for qualityApplication of statistics Plan-Do-Check-Act4Demings Contribution to ProfitabilityEXTERNALINTERNALCUSTOMERSATISFACTIONMARKETSHAREPROFITPRODUCTIVITYQUALITY-Better products & services-Improved processes-Compete with valuePRICE-Compete with Price-Decreased cycle time-Eliminate set-up timesCOST-Opportunity for profitPRODUCT QUALITYPROCESS QUALITY-Reduce rework-Eliminate in-process inspection-Reduce scrap-Increase product life-Eliminate incoming testingPlanDoCheckAct5Juran Juran taught:Breakthrough performancePareto effectImportance of management principlesQuality by design and planning6Jurans ContributionPlanningCost of Poor Quality(Percent of operating costs)Production BeginsOriginal zone of process controlNew zone of process control020400ControlTimeImprovementLessons LearnedSporadicspike fromobservedproblemChronic Waste(an opportunityfor improvement)ControlSpecial cause variationCommon cause variation7CrosbyCrosby taught:Customer requirement is performance standardQuality maturity is a journeyPreventive action as basic approach8TaguchiTaguchi taught:Cost of poor quality is loss to society as a wholeRobust quality is designed for consistent productionDesign control is more important than production control9Taguchis ContributionLower Specification LimitUpper Specification LimitNominal ValueRegion ofCustomerComplaintsRegion ofCustomerComplaintsRegionofQuestionablePerformanceRegionofQuestionablePerformanceRegion ofSpecifiedPerformanceMeanLowerControlLimitUpperControlLimitRegion ofDesiredPerformanceCost10What Are the Limits to Improvement?2 Sigma3 Sigma4 Sigma5 Sigma6 SigmaBasic Quality ToolsStatistical ToolsDesign for Six Sigma (DFSS)Basic Tools WallDesign WallClean Sheet11Challenge in the millenniumQuestion confronting business leaders and managers:It is not: “How do we succeed?” Its: “How do we stay successfully?”12Change“It is not the strongest that survive, nor the fittest, but thosemost able to adapt to change.”Charles DarwinThe Origin of Species “People do not resist change, people resist being changed.” Beckhard13ChallengeuResistance-the universal reaction to change.uTechnical resistanceuPolitical resistanceuOrganizational resistanceuIndividual resistance14Six Sigma?uSix Sigma is not a business fad tied to a single method or strategy, but rather a flexible system for improved business leadership and performance.uIt is not about theory, its about action.15Passion + Execution = Fast and Lasting ResultsSix Sigma FocusuDelighting the customer through flawless executionuRapid breakthrough improvementuAdvanced breakthrough tools that workuPositive and deep culture changeuReal financial results that impact the bottom lineSigma 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 1.5s)2308,537366,80746,210523363.4 PPMProcessCapabilityDefects per Million Opp.Six Sigma corresponds to parts per billion if process is centeredSix Sigma - Goal3 Sigma 6 Sigma5 Sigma4 Sigma 93.32 %99.379 %99.9767 %99.99966 %HistoricalCurrentIntermediateLong-termSigmaLong-Term YieldStandardSix Sigma - Performance Target. To ProduceImproved Rolled Throughput Yield, Defects Per Unit, & Defects Per Million OpportunityReduced Cost of Poor Quality (COPQ)Improved Capacity and ProductivityReduced Variation In Our Processes / Products$sA Problem Solving MethodologyCharacterizeOptimizeBreakthroughUSLTLSLUSLTLSLTUSLLSLUSLLSLThe StrategyCustomer Focused - Both Internally & ExternallyWhich Business Function Needs It?As long as there is a process that produces an output whether it isa 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 SigmaMethodsMFG.DESIGNSERVICEENGMAINT.ADMIN.QAPURCH.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 Foundation of the Six Sigma ToolsThe Role of Six Sigma Six sigma is the best means to realize the philosophy, values, and goals associated with your business initiatives. Region BA6 LinkingPinsBusiness Area InitiativesIt unifies the initiatives and provides a common language which all people can understand and speak.23How Do We Improve CapabilityOur Outputs (Ys) are determined by our Inputs (Xs). If we know enough about our Xs we can accurately predict Y without having to measure it. If we dont know much about our Xs, then we have to resort to inspection and test (non value added operations).By knowing and controlling the Xs, 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 Qualityby controlling.by designing.ContinuouslyReduceProcessVariabilityTighter Upper& Lower LimitsTarget valuesLower Limits1. Design best target for performance2. Design system values to reduce variability of performance - - -AttractiveImplicitWasteExpressedQ1. If provided would you be.indifferent?.happy?Q2. If not provided.indifferent?.unhappy?Q3. If not provided.indifferent?.unhappy? - - - - - - - - -by listening.to what the customer says he/ she wants.performance tolerant to real world.process variability, not by inspection of defective output25Developing and Reinforcing ValuesCycle ofRefinementVALUESVALUESBEHAVIORBEHAVIORATTITUDESCULTURE26The Role of LeadershipNewQuestionsNewValuesNewMeasuresLeadership(Humility/Listening)NewBehaviors27Leadership plays the roleuValues are a function of behaviorsuMeasuring the right things is key uChange must be supported and driven from the topuWill is a key element for a successful deployment28Why 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 29Whats 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 30Define Future StateLeadership in Six SigmaOrientationPresent StateFuture StatePTSLeadership SkillsBusiness BasicsProject ManagementPersonal DevelopmentPTSPTSPTSPTSDEFINEMEASUREANALYZEIMPROVECONTROLDefinePlanManageCloseTeam ManagementTeam DevelopmentMeeting FacilitationTeam ManagementDevelop Transition PlanChange ManagementAnalyze Present State31Six sigma structureuStrategy Consumer-driven, focus on product, process, and service.uOrganizationAll-function involvement and Personal Development.uPolicyCompany-wide engagement, HR,IT,and Finance support.uManagementProject, Team, and Change Management.32Deployment StructureMaster 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)336 Project Champions6 Deployment Champion(s) SMBusiness Unit LeaderCEO Corporate 6 Senior ChampionSMHR DeploymentChampionSMIT DeploymentChampionSMFinance DeploymentChampionSMPRDeploymentChampionSMBusiness OperationsLeaders6 HR Manager6 Financial ManagerGreen BeltsSM6 IT ManagerTrainingDeploymentChampionSM6 MasterBlack BeltsSM6 Comm. Manager6 Training Manager6 Project ChampionsSM 6 Black BeltsSM6 Deployment Infrastructure6 Executive CouncilSix Sigma Deployment Roles34Phase ICascadinguEstablish deployment structureuExecutive, top management, champion awareness traininguBlack Belt traininguTools implementation traininguLeadership training35Phase IIAccelerate developmentuDeployment structure implementation and disposition in each function. uEvery salary is GB.uBegin to implant into current quality system.uISO14000 and QS9000 integration. 36Phase IIIIntegrationuImplant six sigma methodology in other quality toolsuPartnership with other quality system. uSix sigma training to supplier and franchise.uSix sigma in daily business.uDFSS(Design for Six Sigma).uBB/MBB in leadership position.37It is All about ValueThe Customer Value PropositionDefinesBusiness StrategyuCustomers choose to buy from us because.uInvestors entrust their money to us because.uEmployees choose to work for us because.38Three Customer Value Proposition StrategiesuProduct differentiationuOperational excellenceuCustomer partnershipsCompetitive advantage!39Consumer v.s. ProduceruCustomers higher expectationuDefect-free qualityuProductuServiceuProducer -planning for changes to meet customer requirements.uStrategic: changing the way every level of a business is managed on a daily basis.uTactical: six sigma methodology and cross-functional.uCultural: 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.40Maximizing Customer ValueDeriving value from the Need - DoInteraction ModelNeedDoCustomers and suppliers exchange valuethrough the Need-Do interaction.CustomerSupplierInteraction41Value-Capturing the voice of CustomersuPartial Kano AnalysisDegree of AchievementCustomer Satisfaction Surprise: “Ergonomically Delighting”Desire: “Operate Quietly”Necessities: “Doesnt Fail Mechanically”“Doesnt Fail Electrically”“Is Durable”BasicQualityPerformanceQualityExcitementQuality42Business initiativesDeliveryCostCustomer requirementsQualityWhen we say something is a CTQ, can we describe it fromCustomers perspective?Our perspective?Can we demonstrate the relationship?PRODUCTQUALITYSHIPMENTACCURACYCONDITIONFILL RATE/ON-TIME DELIVERYORDER SERVICE/INFORMATIONPROFITABLECUSTOMERGROWTHCustomer Satisfaction43Building the relationshipInternalOthersExternalSegmentDatabases from VOCData extraction & transformation Departmental data martIntelligence reports for projectsCorrelationanalysis44Data transformationuWhat should we do to make it easily accessible as information to managers and subordinates?uWhat sort of analysis can we conduct?uHow does that analysis add value?uHow can we further extend the value of our data analysis?45Opportunity and alternativeuFocus on the best opportunitiesuStratify to define target arenasuDefine real optionsuBuild a portfolio of opportunities to pursueuMeet customer requirements by running the business as we do?uOr need to change to get prodigious improvement? Six sigma?46Consumer-driven six sigmauRequires consumer strategy, product strategy, and infrastructure strategy and link them inextricably together.uConducts business through the consumers eyes and shares unfiltered insight within the enterprise.uCreates a compelling consumer experience and innovates services as well as products.uAdds value in the eyes of the consumer.uIntegrates the product and information.47Transforming Customer Feedback Into SAQ and then Six sigma ProjectsSingle Agenda for Quality and Customer SatisfactionTop 25 issuesDevelopActionable ProjectsIdentify GenericCritical XsHigh MileageDFSSNew Product ContentMeasure and Monitor Critical XsIdentify Critical Xs Out of SpecificationDevelop Action to Restore Critical Xs MBB ActionVRT(Process owner)Black Belt Project LeaderFPS & Plant OperationsFPS & Plant OperationsQOSDMAICGreen Belt Projects48Consumer 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 improvementImproveControlDefineMeasureAnalyzeModifyDesign?NoYesRedesign49Six Sigma MindsetDefineMeasureAnalyzeImproveControlWhat 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 Holbrook6 Sigma Deployment50DEFINE PROBLEM / ISSUEStrategyPrevent defect(s) Eliminate defect(s)CHARACTERIZEDEFINEOPTIMIZEVERIFYMEASUREANALYZEIMPROVECONTROLBlack belt project toimprove mfg. capabilityMfg. process cannot provide sufficient improvement. Need reduced product sensitivity to mfg. noise.The Overall Perspective: DMAIC and DCOV51Breakthrough Improvement5 S workplaceVisual FactoryStandardized WorkDMAICQuality ToolsSix Sigma MethodologyPhaseWorld class qualityWe cant sustain a visual factory without 5SWe cant sustain standardized work without visual factory We cant sustain six sigma without standardized workQuality tool is the engine, Six sigma is Turbo-chargeDFSSWe cant meet six sigma without six sigma discipline 52Is 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. Confirmation6-Sigma viewed as a strategic initiative, driving major cultural changesConsistent view across managementAccountability 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 optionStandard problem solving approaches and fact/data driven business decisions like a disciplined financial operating systemBest PracticeWhile leadership articulates 6-Sigma as a strategic initiative, does it show a mixed approach to strategic intent, wide variabilityAdoption based on interest of individual line managers implies there is a choice to do it or notAccountability for 6-Sigma results is not forced either through breaking down to specific targets for line organizations or through incentives for superior 6-Sigma performance6-Sigma seen as primarily as a tool and not yet as a “way of doing business”Observed PracticeTop leadership needs clearly and openly confirm its strategic intent53Ending. Q&A54