Introduction to

SIX - SIGMA

Presented by :
http://www.QualityGurus.com
 Agenda

0750 - 0800 Participants introduction

0800 - 0930 Introduction to Six Sigma concept
Key Concepts
0930 - 0945 Tea / Coffee Break
0945 - 1200 Forms of waste
What is Sigma
Components of Six Sigma
1200 - 0100 Lunch Break
0100 - 0200 Selecting a Project
0200- 0300 Open session / Q&A

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Participants Introduction
Your Name
Department
Your job profile
Your exposure to Quality Management/
Six Sigma

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Ground Rules
Program success depends on your participation.
Actively participate.
Please avoid cross-talks.
Observe specified timings.
Please keep your mobile phones switched off.
Feel free to ask question at any point of time.
- Restrict question to specific issue being
discussed, while general
questions can be discussed during Q & A
session.
Enjoy the program !
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Introduction to Six Sigma

Purpose of six sigma :

To make customer happier and increase
profits

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Origin of Six Sigma
1987 Motorola Develops Six Sigma
Raised Quality Standards

Other Companies Adopt Six Sigma

GE
Promotions, Profit Sharing (Stock Options),
etc. directly tied to Six Sigma training.
Dow Chemical, DuPont, Honeywell,
Whirlpool

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 Time Line

Allied Signal
Johnson & Johnson,
Ford, Nissan,
Motorola
General Electric Honeywell

1985 1987 1992 1995 2002

Dr Mikel J Harry wrote a

Paper relating early failures to
quality

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Pilot’s Six-Sigma
Performance
Width of landing
strip 1/2 Width
of landing
strip

If pilot always lands

within 1/2 the landing strip
width, we say that he has
Six-sigma capability.

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Current Leadership Challenges
Delighting Customers.
Reducing Cycle Times.
Keeping up with Technology
Advances.
Retaining People.
Reducing Costs.
Responding More Quickly.
Structuring for Flexibility.
Growing Overseas Markets.

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Six Sigma— Benefits?
Generated sustained success
Project selection tied to
organizational strategy
Customer focused
Profits
Project outcomes / benefits tied to
financial reporting system.
Full-time Black Belts in a rigorous,
project-oriented method.
Recognition and reward system
established to provide motivation.
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Management involvement?
Executives and upper management
drive the effort through:
Understanding Six Sigma
Significant financial commitments
Actively selecting projects tied to
strategy
Setting up formal review process
Selecting Champions
Determining strategic measures

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Management Involvement?
Key issues for Leadership:
How will leadership organize to support
Six Sigma ? (6 σ council, Director 6 σ,
etc)
Transition rate to achieve 6 σ.
Level of resource commitment.
Centralized or decentralized approach.
Integration with current initiatives e.g.
QMS
How will the progress be monitored?
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What can it do?
Motorola:
5-Fold growth in Sales
Profits climbing by 20% pa
Cumulative savings of $14 billion
over 11 years
General Electric:
$2 billion savings in just 3 years
The no.1 company in the USA
Bechtel Corporation:
$200 million savings with
investment of $30 million
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GE Six Sigma Economics

(in millions) 6 Sigma Project Progress

2500

2000

1500
Cost
1000 Benefit

500

0
1996 1998 2000
2002
Source: 1998 GE Annual Report, Jack Welch Letter to Share Owners and Employees - progress based upon
total corporation cost/benefits attributable to Six Sigma.

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Overview of Six
Sigma

CHANGE
6 SIGMA AS A
THE
PHILOSOPHY
WORLD

TRANSFORM THE
ORGANIZATION
6 SIGMA AS
GROWTH
A PROCESS

COSTS OUT
6 SIGMA AS A
STATISTICAL TOOL
PAIN, URGENCY, SURVIVAL

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 Overview of Six
Sigma

It is a Process
To achieve this level of
performance you need
It is a Philosophy to:
Anything less than Define, Measure,
ideal is an opportunity Analyse, Improve and
for improvement Control
Defects costs money
Understanding
processes and It is Statistics
improving them is the
most efficient way to 6 Sigma processes will
achieve lasting results produce less than 3.4
defects per million
opportunities

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Philosophy
Know What’s
Important to the
Customer (CTQ)
Reduce Defects
(DPMO)
Center Around
Target (Mean)
Reduce Variation
(Standard Deviation)

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Critical Elements
Genuine Focus on the Customer
Data and Fact Driven Management
Process Focus
Proactive management
Boundary-less Collaboration
Drive for Perfection; Tolerance for
failure

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Data Driven
Decision
Y= f(X)
• Y • X1 . . . Xn
• Dependent • Independent
• Output • Input-Process
• Effect • Cause
• Problem
• Symptom
• Control
• Monitor

The focus of Six sigma is to identify and control Xs

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Two Processes
DMAIC DMADV

• Existing • New Processes

Processes • DFSS

• Define • Define
• Measure • Measure
• Analyze • Analyze
• Improve • Design
• Verify
• Control

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Key Concepts

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COPQ (Cost of Poor
Quality) - Inspection
- Warranty
- Scrap
- Rework Traditional Quality Costs:
- Rejects - Tangible
- Easy to Measure

- More Setups
- Expediting Costs
Hidden Costs:
- Lost Sales - Intangible
- Late Delivery - Difficult to Measure
- Lost Customer Loyalty - Lost Opportunities
- Excess Inventory
- Long Cycle Times - The Hidden Factory
- Costly Engineering Changes

Average COPQ approximately 15% of Sales

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COPQ v/s Sigma
Level
50%
Cost of Quality % Sales

45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
2 3 4 5 6

Sigma Level

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CTQ (Critical-To-
Quality)
CTQ characteristics for the process,
service or process
Measure of “What is important to
Customer”
6 Sigma projects are designed to
improve CTQ
Examples:
Waiting time in clinic
Spelling mistakes in letter
% of valves leaking in operation
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Defective and Defect
A nonconforming unit is a defective unit
Defect is nonconformance on one of many
possible quality characteristics of a unit
that causes customer dissatisfaction.
A defect does not necessarily make the
unit defective
Examples:
Scratch on water bottle
(However if customer wants a scratch free
bottle, then this will be defective bottle)

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Defect Opportunity
Circumstances in which CTQ can fail
to meet.
Number of defect opportunities relate
to complexity of unit.
Complex units – Greater
opportunities of defect than simple
units
Examples:
A units has 5 parts, and in each part there are 3
opportunities of defects – Total defect
opportunities are 5 x 3 = 15

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DPO (Defect Per
Opportunity)
Number of defects divided by number
of defect opportunities
Examples:
In previous case (15 defect opportunities), if 10
units have 2 defects.
Defects per unit = 2 / 10 = 0.2
DPO = 2 / (15 x 10) = 0.0133333

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DPMO (Defect Per Million
Opportunities)
DPO multiplies by one million
Examples:
In previous case (15 defect opportunities), if 10
units have 2 defects.
Defects per unit = 2 / 10 = 0.2
DPO = 2 / (15 x 10) = 0.0133333
DPMO = 0.013333333 x 1,000,000 = 13,333

Six Sigma performance is 3.4 DPMO

13,333 DPMO is 3.7 Sigma

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Yield
Proportion of units within
specification divided by the total
number of units.
Examples:
If 10 units have 2 defectives
Yield = (10 – 2) x 100 /10 = 80 %
Rolled Through Yield (RTY)
Y1 x Y2 x Y3 x ……. x Yn
E.g 0.90 x 0.99 x 0.76 x 0.80 = 0.54

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Forms of Waste

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What are the forms of
waste?
 Waste of Correction
 Waste of Overproduction
 Waste of processing
 Waste of conveyance (or
transport)
 Waste of inventory
 Waste of motion
 Waste of waiting
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 1. Waste of correction

Repairing a defect wastes time

and resources (Hidden factory)
Hidden
Factory
Rework Rework

Failure Failure
Investigation Investigation

Operation Operation
Test Test Product
1 2

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2. Waste of
Overproduction
Producing more than necessary or
producing at faster rate than required
Excess labor, space, money, handling

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3. Waste of processing
Processing that does not provide
value to the product
Excess level of approvals
Tying memos that could be handwritten
Cosmetic painting on internals of
equipment
Paint thickness more than specific values

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4. Waste of conveyance
Unnecessary movement of material
from one place to other to be
minimized because -
It adds to process time
Goods might get damaged
Convey material and information
ONLY when and where it is needed.

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5. Waste of inventory
Any excess inventory is drain on an
organization.
Impact on cash flow
Increased overheads
Covers Quality and process issues
Examples
Spares, brochures, stationary, …

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6. Waste of Motion
Any movement of people, equipment,
information that does not contribute
value to product or service

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7. Waste of Waiting
Idle time between operations
Period of inactivity in a downstream
process because an upstream activity
does not deliver on time.
Downstream resources are then often
used in activities that do not add
value, or worst result in
overproduction.

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Some more sources of
Waste
Waste of untapped human potential.
Waste of inappropriate systems
Wasted energy and water
Wasted materials
Waste of customer time
Waste of defecting customers

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What is Sigma?

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Have you ever…
Shot a rifle?
Played darts?

What is the point of these sports?

What makes them hard?

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Have you ever…
Shot a rifle?
Played darts?

Jack

Jill

Who is the better shooter?

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Variability
Deviation = distance between
observations and the mean (or
average) 8
7
10
8
Observations Deviations 9
10 - 8.4 =
10 1.6 Jack
9 9 - 8.4 = 0.6
8 8 - 8.4 = -0.4

8 8 - 8.4 = -0.4
7 7 - 8.4 = -1.4
average
s 8.4 0.0
Jill
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Variability
Deviation = distance between
observations and the mean (or
average)

Observations Deviations
Jack
7 7 - 6.6 = 0.4
7 7 - 6.6 = 0.4
7 7 - 6.6 = 0.4
6 - 6.6 = 7
6 -0.6
6 - 6.6 = 6
average 6 -0.6 7
s 6.6 0.0 7
6 Jill
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Variability
Variance = average distance
between observations and
the mean squared 8
7
10
8
9
Observation Squared
s Deviations Deviations
10 - 8.4 = Jack
10 1.6 2.56
9 – 8.4 =
9 0.6 0.36
8 – 8.4 =
8 -0.4 0.16
8 – 8.4 =
8 -0.4 0.16
7 – 8.4 =
7 -1.4 1.96
averag 1.0
es 8.4 0.0 Jill
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Variance
 Variability
Variance = average distance
between observations and
the mean squared

Observation Squared
s Deviations Deviations
Jack
7 7 - 6.6 = 0.4 0.16
7 7 - 6.6 = 0.4 0.16
7 7 - 6.6 = 0.4 0.16
6– 6.6 = 7
6 -0.6 0.36 6
6– 6.6 =
6 -0.6 0.36 7
averag 0.24 7
es 6.6 0.0 6 Jill
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Variance
Variability
Standard deviation
= square root of
variance
Jack

Average Varianc Standard

e Deviation
Jack 8.4 1.0 1.0
Jill 6.6 0.24 0.4898979
Jill

But what good is a standard deviation

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Variability

The world tends to

be bell-shaped

Even very rare Fewer Most Fewer Even very rare

outcomes are in the outcomes in the outcomes are
possible “tails” occur in the “tails” possible
(lower) middle (upper)

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Variability

Here is why: Even outcomes that are equally

likely (like dice), when you add
them up, become bell shaped
Add up the dots on the dice

0.2

0.15
Probability

1 die
0.1 2 dice

0.05 3 dice

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Sum of dots

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“Normal” bell shaped curve

Normal distributions are divide up

into 3 standard deviations on
each side of the mean

Once your that, you

know a lot about
what is going on

And that is what a standard deviation

is good for
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Causes of Variability
Common Causes:
Random variation within predictable range
(usual)
No pattern
Inherent in process
Adjusting the process increases its variation

Special Causes
Non-random variation (unusual)
May exhibit a pattern
Assignable, explainable, controllable
Adjusting the process decreases its variation
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Limits
Process and Control limits:
Statistical
Process limits are used for individual items
Control limits are used with averages
Limits = μ ± 3σ
Define usual (common causes) & unusual
(special causes)
Specification limits:
Engineered
Limits = target ± tolerance
Define acceptable & unacceptable

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Usual v/s Unusual,
Acceptable v/s Defective
Another View
Off-Target Large Variation

LSL USL LSL USL

On-Target

Center Reduce
Process Spread

LSL USL LSL = Lower spec limit

USL = Upper spec limit

The statistical view of a problem

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 More about limits
Poor quality:
defects are
common (Cpk<1)
Good quality:
defects are μ
target
rare (Cpk>1)
μ
target

Cpk measures “Process Capability”

If process limits and control limits are at the same location, Cpk = 1. Cpk ≥ 2 is exceptional.
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Process capability
Good quality: defects are rare (Cpk>1)
Poor quality: defects are common (Cpk<1)

=
USL – x
= 24 – 20 =.667
3σ 3(2)
Cpk = min
=
x - LSL
= 20 – 15 =.833
3σ 3(2)

14 20 26
= = 15 24
3σ = (UPL – x, or x – LPL)
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A Six Sigma Process –
Predictably twice as good as what the
customer wants

LSL −6σ
USL
+6σ
6σ
1σ 1σ 1σ 1σ 1σ 1σ

1 2 3 4 5 6 7 8 9 10 11 12
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 3 σ v/s 6 σ

6 Sigma curve

LSL USL

3 Sigma curve

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

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 Process shift
allowed
1.5 SD 1.5 SD

LSL USL

SD = 1

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
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 Six Sigma
Measurement
Sigma

7
6
5
4 0.02
3 DPMO
3.4
On one condition :
Calculate the defects 233
and estimate the 6210
opportunities in the
same way... 66810

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Six Sigma
Measurement
600,000
Sigma Defects 500,000
numbers per million

# of Defect per Million

400,000

1.5s 500,000 300,000

2.0s 308,300 200,000
2.5s 158,650
100,000
3.0s 67,000
3.5s 22,700 0
1.5 2.5 3.5 4.5 5.5
4.0s 6,220
# of Sigmas
4.5s 1,350
5.0s 233
5.5s 32
6.0s 3.4

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Components of Six Sigma

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 Components

Two components of Six Sigma

1. Process Power

2. People Power

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Process Power

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 P-D-C-A

Act Plan
A P
Act on what Plan the change
was learned

Check C D Do
Check the results Implement the
change on a small
scale.

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Approach
Practical
Problem

Statistical
Problem

Statistical
Solution

Practical
Solution

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DMAIC - simplified
Define
What is important?
Measure
How are we doing?
Analyze
What is wrong?
Improve
Fix what’s wrong
Control
Ensure gains are
maintained to guarantee
performance

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DMAIC approach

D Identify and state the practical problem

Define

Validate the practical problem by collecting data

M
Measure
Convert the practical problem to a statistical one,
A define statistical goal and identify potential statistical
Analyze solution

I Confirm and test the statistical solution

Improve

C Convert the statistical solution to a practical solution

Control
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 Define

D VoC - Who wants the project and why ?

Define

The scope of project / improvement (SMART

M
Objective)
Measure

A Key team members / resources for the project

Analyze

I
Improve Critical milestones and stakeholder review

C
Control Budget allocation
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Measure

D Ensure measurement system reliability

Define
- Is tool used to measure the output variable flawed ?

M
Measure

A Prepare data collection plan

Analyze - How many data points do you need to collect ?
- How many days do you need to collect data for ?
I - What is the sampling strategy ?
Improve - Who will collect data and how will data get stored ?
- What could the potential drivers of variation be ?

C
Control Collect data
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Analyze

D
Define
How well or poorly processes are working
compared with
M - Best possible (Benchmarking)
Measure - Competitor’s

A Shows you maximum possible result

Analyze

I Don’t focus on symptoms, find the root cause

Improve

C
Control
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Improve

Present recommendations to process owner.

D
Define
Pilot run
- Formulate Pilot run.
M
- Test improved process (run pilot).
Measure
- Analyze pilot and results.
A
Analyze Develop implementation plan.

I - Prepare final presentation.

Improve
- Present final recommendation to Management
Team.
C
Control
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Control

D Don’t be too hasty to declare victory.

Define

M
Measure

A
Analyze How will you maintain to gains made?
- Change policy & procedures
I
- Change drawings
Improve
- Change planning
- Revise budget
C
- Training
Control
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Omitting a step in
DMAIC?
Step Consequences if the step is
omitted
1. Define
2. Measure
3. Analyze
4. Improve
5. Control

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 Tools for DMAIC

Define Measure Analyze Improve Control

What is wrong? Data & Process When and where How to get Display
capability are the defects to six sigma key measures

 Benchmark  7 Basic Tools  Cause & Effect  Design of Statistical Controls

 Baseline  Defect Metrics Diagrams Experiments Control Charts
 Contract /  Data Collection,  Failure Models &  Modelling Time Series
Charter Forms, Plan,  Effect Analysis  Tolerancing Methods
 Kano Model Logistics  Decision & Risk  Robust Design Non Statistical
 Voice of the  Sampling Analysis  Process Map Controls
Customer Techniques  Statistical Procedure
 Quality Function Inference adherence
Deployment  Control Charts Performance
 Process Flow Map  Capability Mgmt
 Project  Reliability Preventive activities
Management Analysis
Poke yoke
 “Management by  Root Cause
Analysis
Fact” – 4 What’s
 5 Why’s
 Systems
Thinking
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 Components

Two components of Six Sigma

1. Process Power

2. People Power
Tell me, I forget. Show me , I remember. Involve me, I understand.

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 6 σ Training

Mentor, trainer, and coach of Black Belts and othe

Masterin the organization.
Black
Belt

Leader of teams implementing the six sigma

Black Belts methodology on projects.
Champions

Delivers successful focused projects usin

the six sigma methodology and tools.

Green Belts

Team Members / Participates on and supports

the project teams, typically
Yellow Belts in the context of his or her
existing responsibilities.

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Six Sigma
Organization Master
Black
Belt
Champion

Black Black Black

Belt Belt Belt

Green Green Green Green Green

Belt Belt Belt Belt Belt

Yellow Yellow
Belt Belt

Yellow Yellow
Belt Belt

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 6 σ Training
Position in Six Sigma Expected Role
Typical
Organisation Post Training
Training

Senior Executive overview

2/3 Days Provide Leadership
Executives

Champions Champions
Champions /
Process owners
Training - I + Training –II
Process Mgmt. &
Project
2 days 3 days
champion
(Total 5 days)

Training / Master Black-Belt

Facilitation -As Trainer
Week Week Week Week
Black-Belt skills -Coach teams
1 2 3 4 -Facilitate
improvement projects
Black-Belt Project-work

- Part
of project teams
- Sometime lead the
Green Belt 1 Week Green-Belt Training Project work teams
- Generalprocess
Employees 1 / 2 Days core training on control &
(Yellow-Belt) Six-Sigma improvement
- Project Team
Member

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Champion

Plans improvement projects

Charters or champions chartering
process
Identifies, sponsors and directs Six
Sigma projects
Holds regular project reviews in
accordance with project charters
Includes Six Sigma requirements in
expense and capital budgets
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Champion
Identifies and removes
organizational and cultural barriers
to Six Sigma success.
Rewards and recognizes team and
individual accomplishments
(formally and informally)
Communicates leadership vision
Monitors and reports Six Sigma
progress
Validates Six Sigma project results
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Master Black Belt
Roles Responsibilities
- Enterprise Six Sigma - Highly proficient in using Six
expert Sigma methodology to achieve
- Permanent full-time tangible business results.
change agent - Technical expert beyond Black Belt
- Certified Black Belt with level on one or more aspects of
additional specialized skills process improvement (e.g.,
or experience especially advanced statistical analysis, project
useful in deployment of Six management, communications,
Sigma across the program administration, teaching,
enterprise project coaching)
- Identifies high-leverage
opportunities for applying the Six
Sigma approach across the
enterprise
- Basic Black Belt training
- Green Belt training
- Coach / Mentor Black Belts
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Black Belt
Roles Responsibilities
- Six Sigma technical expert - Leads business process
- Temporary, full-time change improvement projects where Six
agent (will return to other Sigma approach is indicated.
duties after completing a - Successfully completes high-
two to three year tour of impact projects that result in
duty as a Black Belt) tangible benefits to the
enterprise
- Demonstrated mastery of Black
Belt body of knowledge
- Demonstrated proficiency at
achieving results through the
application of the Six Sigma
approach
- Coach / Mentor Green Belts
- Recommends Green Belts for
Certification

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Green Belt

Roles Responsibilities
- Six Sigma Project originator - Recommends Six Sigma projects
- Part-time Six Sigma change - Participates on Six Sigma project
agent. Continues to perform teams
normal duties while - Leads Six Sigma teams in local
participating on Six Sigma improvement projects
project teams
- Six Sigma champion in local
area

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Yellow Belt
Roles Responsibilities
- Learns and applies Six - Actively participates in team
Sigma tools to projects tasks
- Communicates well with other
team members
- Demonstrates basic improvement
tool knowledge
- Accepts and executes
assignments as determined by
team

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Financial Analyst

Validates the baseline status for

each project.
Validates the sustained results /
savings after completion of the
project.
Compiles overall investment vs.
benefits on Six Sigma for
management reporting.
Will usually be the part of Senior
Leadership Team.
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Thought of the day

We don't know what we don't know

We can't act on what we don't know
We won't know until we search
We won't search for what we don't
question
We don't question what we don't
measure
Hence, We just don't know
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Project Selection

The first step to implement Six Sigma

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Sources of Projects

External Sources:
Voice of Customer
What are we falling short of meeting
customer needs?
What are the new needs of customers?
Voice of Market
What are market trends, and are we ready
to adapt?
Voice of Competitors
What are we behind our competitors?

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Sources of Projects

Internal Sources:
Voice of Process
Where are the defects, repairs, reworks?
What are the major delays?
What are the major wastes?
Voice of Employee
What concerns or ideas have employees or
managers raised?
What are we behind our competitors?

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Project Selection
As a team List down at least 20
improvement projects related to your work
areas …….

SpecificStatement
A Problem - It does should
not solve world hunger
be SMART:
Measurable - It has a way to measure
success
Achievable - It is possible to be
successful
Relevant - It has an impact that can be
quantified
Timely - It is near term not off in the
future
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Harvesting the Fruit of Six
Sigma

Sweet Fruit
Design for Repeatability
Process Enhancement

Bulk of Fruit
Process Characterization
and Optimization

------------------------------------

Low Hanging Fruit

Seven Basic Tools

------------------------------------

Ground Fruit
Logic and Intuition

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Types of Savings

Hard Savings:
Cost Reduction
Energy Saving
Raw Material saving
Reduced Rejection, Waste, Repair
Revenue Enhancement
Increased production
Yield Improvement
Quality Improvement

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Types of Savings

Hard Savings:
Cash flow improvement
Reduced cash tied up in inventory
Reduced late receivables, early payables
Reduced cycle time
Cost and Capital avoidance
Optimizing the current system / resources
Reduced maintenance costs

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Types of Savings

Soft Savings:
Customer Satisfaction / Loyalty
Employee Satisfaction

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Cost of implementing
Direct Payroll
Full time (Black Belts, Master Black
Belts)
Indirect Payroll
Time by executives, team members,
data collection
Training and Consulting
Black Belt course, Overview for Mgmt
etc.
Improvement Implementation Costs
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What Qualifies as a
Six Sigma Project
Three basic qualifications:
-There is a gap between current and
desired / needed performance.
The cause of problem is not clearly
understood.
The solution is not pre-determined,
nor is the optimal solution apparent.

How many projects out of 20 now

qualify as Six sigma projects?

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