• 1. Six Sigma By Daniel Wu Ford Lio Ho Motor Company1
    • 2. OutlineQuality level What is Six sigma? Why we need Six sigma? Development and Deployment strategy How Six sigma merges into our daily business?2
    • 3. Overview-Four Quality GurusHistorically 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 Taguchi3
    • 4. DemingDeming taught: Importance of understanding variation in work processes Role of management in leading for quality Application of statistics Plan-Do-Check-Act 4
    • 5. Deming’s Contribution to ProfitabilityEXTERNALINTERNALCUSTOMER SATISFACTIONMARKET SHAREPROFITPRODUCTIVITYQUALITY-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 testingPlanDoCheckAct5
    • 6. Juran Juran taught: Breakthrough performance Pareto effect Importance of management principles Quality by design and planning6
    • 7. Juran’s ContributionPlanningCost of Poor Quality (Percent of operating costs)Production BeginsOriginal zone of process controlNew zone of process control020400ControlTimeImprovementLessons LearnedSporadic spike from observed problemChronic Waste (an opportunity for improvement)ControlSpecial cause variation Common cause variation7
    • 8. CrosbyCrosby taught: Customer requirement is performance standard Quality maturity is a journey Preventive action as basic approach8
    • 9. TaguchiTaguchi 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 9
    • 10. Taguchi’s ContributionLower Specification LimitUpper Specification LimitNominal ValueRegion of Customer ComplaintsRegion of Customer ComplaintsRegion of Questionable PerformanceRegion of Questionable PerformanceRegion of Specified PerformanceMeanLower Control LimitUpper Control LimitRegion of Desired PerformanceCost10
    • 11. What Are the Limits to Improvement?2 Sigma3 Sigma4 Sigma5 Sigma6 SigmaBasic Quality ToolsStatistical ToolsDesign for Six Sigma (DFSS)Basic Tools WallDesign WallClean Sheet11
    • 12. Challenge in the millenniumQuestion confronting business leaders and managers: It is not: “How do we succeed?” It’s: “How do we stay successfully?”12
    • 13. 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.” Beckhard13
    • 14. ChallengeResistance-the universal reaction to change. Technical resistance Political resistance Organizational resistance Individual resistance14
    • 15. 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.15
    • 16. Passion + Execution = Fast and Lasting ResultsSix Sigma FocusDelighting 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
    • 17. 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 ± 1.5s)2308,537366,80746,210523363.4sPPMProcess CapabilityDefects per Million Opp.Six Sigma corresponds to parts per billion if process is centeredSix Sigma - Goal
    • 18. 3 Sigma 6 Sigma5 Sigma4 Sigma 93.32 %99.379 %99.9767 %99.99966 %HistoricalCurrentIntermediateLong-termSigmaLong-Term YieldStandardSix Sigma - Performance Target
    • 19. .... To ProduceImproved Rolled Throughput Yield, Defects Per Unit, & Defects Per Million Opportunity Reduced Cost of Poor Quality (COPQ) Improved Capacity and ProductivityReduced Variation In Our Processes / Products$$’sA Problem Solving Methodology
    • 20. Characterize Optimize BreakthroughUSLTLSLUSLTLSLTUSLLSLUSL’LSL’The StrategyCustomer Focused - Both Internally & Externally
    • 21. 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 MethodsMFG..DESIGNSERVICEENGMAINT.ADMIN.QAPURCH.
    • 22. 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 Tools
    • 23. The Role of Six Sigma Six sigma is the best means to realize the philosophy, values, and goals associated with your business initiatives. Region BA6 Linking PinsBusiness Area InitiativesIt unifies the initiatives and provides a common language which all people can understand and speak.23
    • 24. How Do We Improve CapabilityOur 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.
    • 25. The Sources of Six Sigma Quality…by controlling...by designing...Continuously Reduce Process VariabilityTighter 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 output25
    • 26. Developing and Reinforcing ValuesCycle of RefinementVALUESBEHAVIORATTITUDESCULTURE26
    • 27. The Role of LeadershipNewQuestionsNewValuesNewMeasuresLeadership(Humility/Listening)NewBehaviors27
    • 28. Leadership plays the roleValues 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 deployment28
    • 29. 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 29
    • 30. 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 30
    • 31. Define Future StateLeadership in Six SigmaOrientationPresent StateFuture StatePTSLeadership SkillsBusiness BasicsProject ManagementPersonal DevelopmentPTSPTSPTSPTSDEFINEMEASUREANALYZEIMPROVECONTROLDefinePlanManageCloseTeam ManagementTeam DevelopmentMeeting FacilitationTeam ManagementDevelop Transition PlanChange ManagementAnalyze Present State31
    • 32. Six sigma structureStrategy— 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.32
    • 33. Deployment 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)33
    • 34. 6s Project Champions6s Deployment Champion(s) SMBusiness Unit Leader CEO Corporate 6s Senior ChampionSMHR Deployment ChampionSMIT Deployment ChampionSMFinance Deployment ChampionSMPR Deployment ChampionSMBusiness Operations Leaders6s HR Manager6s Financial ManagerGreen BeltsSM6s IT ManagerTraining Deployment ChampionSM6s Master Black BeltsSM6s Comm. Manager6s Training Manager6s Project ChampionsSM6s Black BeltsSM6s Deployment Infrastructure6s Executive CouncilSix Sigma Deployment Roles34
    • 35. Phase I—CascadingEstablish deployment structure Executive, top management, champion awareness training Black Belt training Tools implementation training Leadership training35
    • 36. Phase II—Accelerate developmentDeployment structure implementation and disposition in each function. Every salary is GB. Begin to implant into current quality system. ISO14000 and QS9000 integration. 36
    • 37. Phase III—IntegrationImplant 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.37
    • 38. It is All about ValueThe Customer Value Proposition Defines Business StrategyCustomers choose to buy from us because... Investors entrust their money to us because... Employees choose to work for us because...38
    • 39. Three Customer Value Proposition Strategies…Product differentiation Operational excellence Customer partnershipsCompetitive advantage!39
    • 40. Consumer v.s. ProducerCustomers – 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.40
    • 41. Maximizing Customer ValueDeriving value from the Need - Do Interaction ModelNeedDoCustomers and suppliers exchange value through the Need-Do interaction.CustomerSupplierInteraction41
    • 42. Value-Capturing the voice of CustomersPartial Kano AnalysisDegree of AchievementCustomer Satisfaction Surprise: “Ergonomically Delighting”Desire: “Operate Quietly”Necessities: “Doesn’t Fail Mechanically” “Doesn’t Fail Electrically” “Is Durable”Basic QualityPerformance QualityExcitement Quality42
    • 43. Business initiativesDeliveryCostCustomer requirementsQualityWhen we say something is a CTQ, can we describe it from Customer’s perspective? Our perspective? Can we demonstrate the relationship? PRODUCT QUALITYSHIPMENT ACCURACY CONDITIONFILL RATE/ ON-TIME DELIVERYORDER SERVICE/ INFORMATIONPROFITABLE CUSTOMER GROWTHCustomer Satisfaction43
    • 44. Building the relationshipInternalOthersExternalSegmentDatabases from VOCData extraction & transformation Departmental data martIntelligence reports for projectsCorrelation analysis44
    • 45. Data transformationWhat 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?45
    • 46. Opportunity and alternativeFocus 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?46
    • 47. Consumer-driven six sigmaRequires 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.47
    • 48. Transforming Customer Feedback Into SAQ and then Six sigma ProjectsSingle Agenda for Quality and Customer SatisfactionTop 25 issuesDevelop Actionable ProjectsIdentify Generic Critical X’sHigh MileageDFSSNew Product ContentMeasure and Monitor Critical X’sIdentify Critical X’s Out of SpecificationDevelop Action to Restore Critical X’s MBB ActionVRT (Process owner)Black Belt Project LeaderFPS & Plant OperationsQOSDMAICGreen Belt Projects48
    • 49. 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 improvementImproveControlDefineMeasureAnalyzeModify Design?NoYesRedesign49
    • 50. Six 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 Holbrook 6 Sigma Deployment50
    • 51. DEFINE PROBLEM / ISSUEStrategyPrevent defect(s) Eliminate defect(s)CHARACTERIZEDEFINEOPTIMIZEVERIFYMEASUREANALYZEIMPROVECONTROLBlack belt project to improve mfg. capabilityMfg. process cannot provide sufficient improvement. Need reduced product sensitivity to mfg. noise.The Overall Perspective: DMAIC and DCOV51
    • 52. Breakthrough Improvement5 S workplaceVisual FactoryStandardized WorkDMAICQuality ToolsSix Sigma MethodologyPhaseWorld class qualityWe can’t sustain a visual factory without 5SWe can’t sustain standardized work without visual factory We can’t sustain six sigma without standardized workQuality tool is the engine, Six sigma is Turbo-chargeDFSSWe can’t meet six sigma without six sigma discipline 52
    • 53. 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 systemBest 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 PracticeTop leadership needs clearly and openly confirm its strategic intent53
    • 54. Ending….. Q&A54