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
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
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
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