2. Six Sigma Fundamentals...............

• Understand 6 sigma in general
• DMAIC overview roadmap
• Overview Of Lean
By the end of this module, the
participant should be able to:
Module Objective

y
Sigma (s) represents standard deviation
- a measure of variability
Days
2 3 4 5 6 7 8 9 10 11 12
1
0
1
Average
-3 +3
Six Sigma : As a Measure
of Variation


6
1 1 1 1 1 1
“Six Sigma process”:
A process that is so well understood and controlled that six standard
deviations will fit between the average output and the spec limit.
Days
Average
2 3 4 5 6 7 8 9 10 11 12
1
0 13 14 15 16 17
17
“Spec”
Limit
Thus the higher the sigma level , the lesser the
STANDARD DEVIATION
As a Performance
Metrics

-3 -2 -1 0 1 2 3
-4
-5
-6 4 5 6
Shift the average 1.5
6 Sigma Process
Average = 0
St.Dev. = 1
Tolerance = +/- 6
In a Six Sigma process, Customer Satisfaction and Business
Objectives are robust to process shifts.
By shifting a 6 Sigma process
1.5  we create 3.4 Defects per
Million Opportunities on the right
-3 -2 -1 0 1 2 3
3 Sigma Process
Average = 0
St.Dev. = 2
Tolerance = +/- 6
Shift the average 1.5
-4
-5
-6 4 5 6
LSL USL
By shifting a 3 Sigma process
1.5  we create 66,807 Defects
per Million Opportunities on the
right
How Good is 6 Sigma Process

GOAL
Process
Capability
σst
Defects per
Million
Opportunities
st
Long Term Yield
(Success Yield)
2 308,537 69.15%
3 66,807 93.32%
4 6,210 99.38%
5 233 99.98%
6 3.4 99.99966%
Long Term (Success Yield) = 100% - (DPMO / 10000)
Failure rate
Or
Defect Yield
Relation of Sigma and DPMO

99% Good (3.8 Sigma) 99.99966% Good (6 Sigma)
20,000 lost articles of mail per
hour (based on 2,000,000/hr)
Seven articles lost per hour
Unsafe drinking water for almost
15 minutes each day
One unsafe minute every seven
months
5,000 incorrect surgical
operations per week
1.7 incorrect operations per
week
Two short or long landings daily
at an airport with 200
flights/day
One short or long landing every
five years
2,000,000 wrong drug
prescriptions each year
680 wrong prescriptions per
year
No electricity for almost seven
hours each month
One hour without electricity
every 34 years
Is 99% Good Enough?

• 1979 “Our Quality Stinks” (Art Sundry)
• 1981 Motorola initiative*: 5 yr, 10 times improvement in quality
• 1987 Motorola adopts “Six Sigma Quality”
Every 2 year: 10x quality improvement; Goal: Six Sigma by
1992
• 1988 Malcolm Baldrige National Quality Award
Motorola shared its “Six Sigma” approach with other
companies
• 1989 Motorola Chairman, Bob Galvin asks Mikel Harry to head the
Six Sigma Research Institute Organisation funded by a number
of Fortune 500 companies
• 1993 Mikel Harry left Motorola and went to ABB Ltd. Strategy
changed from “Quality First” to “Business First”
• 1994 AlliedSignal implemented Six Sigma, Claimed savings of $1.2
Billion by 1998
• 1995 Larry Bossidy, CEO of AlliedSignal, convinced General Electric’s
Jack Welch to try Six Sigma
* In the 1980 NBC White Paper “If Japan Can, Why Can’t We?” Motorola
Television Sets Were Cited As Produced With 120+ Defects per 100 Units.
Genesis of Six Sigma (1)

Mr. Jack Welch, GE:
Six Sigma is the most
important concept
we ever adopted,
and it will bring 70 to
110 in saving MUSD
in
5 years time
1987 1989 1991 1993 1995 1997 1999
Motorola IBM
ABB
Kodak
TI
Allied Signal
General Electric
Air Products
American Express
Ford Motor
Johnson Control
Johnson & Johnson
J.P. Morgan
LG Group
Ericsson
Maytag
Navistar
NCR
Nokia
Philips
Raytheon
Praxair
Samsung Electronics
Solectron
Sumitomo
United Technologies
US Postal Service
Compaq
Dow Chemical
DuPont
Deere
Lockheed Martin
NEC
PACCAR
Seagate Tech.
Siemens
Sony
Toshiba
Whirlpool
DEC
Ref: "Six Sigma - The Pragmatic Approach" by Magnusson, Kroslid, Bergman.
• Many Fortune 500 companies have begun Six Sigma initiatives
• Requiring / requesting that first tier suppliers adopt Six
Sigma
• Product and service advertisements now mention Six Sigma
Genesis of Six Sigma (2)

• The basic premise of Six Sigma is that sources of
variation can be:
– Identified
– Quantified
– Eliminated or Controlled
• Focused on strategic or core processes
• Data-driven
– Measurements focused on the right things
• Customer-driven
Variation that cannot be tolerate is the enemy!
Premise (BASE) of Six Sigma

Time
Defects
and
Waste
D M A I C
Current State
Catalyst State
Improvement Period
The Goal : Shift the mean , minimize variation
Breakthrough
improvement
( 70% above )
or 90:50 rules
The Goal Breakthrough Performance

90:50 rules
Current Process
Capability
Z Bench
90% Improvement 50% Improvement
Z < 3 Z ≥ 3
The Goal Breakthrough Performance

Z Bench < 3
Go For 90% Improvement Target
Z Bench ≥ 3
Go For 50% Improvement Target
Z Bench = Sigma Level
90:50 Rule Example

After project
completion , the
mean (process
accuracy) & the
spread (process
precision)
significantly improve.
The Goal Breakthrough Performance Example

Center Process on Target
Eliminate Defects
Customer target
Meet Customer Target
and Specifications
Customer target
Reduce Variation
Eliminate Defects
Customer target
Defects Defects
GOAL
USL
LSL
LSL
LSL USL USL
Defects
Process is center ( accurate )
But bigger spread ( Not Precise )
Process Spread Small ( Precise )
But off center ( Not Accurate )
Improve Process
Accuracy
Improve Process
Precision
The Goal Of
Six Sigma
Goals of Six Sigma

• There will always be variability present in any process
• We can tolerate variability if:
– The process is on target AND
– The total variability is relatively small compared to the process
specifications AND
– The process is stable over time
Source of variation :
Special Cause ( Not inherit by the system : Eliminate)
Common Cause ( Inherit by the system : Minimize )
The variation in the process reflect to Voice Of Process
Can We Tolerate Variability?

Defects
Voice of the Process
Inadequate
Design Margin
Operating
Procedure Not
Standardize Unstable Parts &
Materials
Defects Acceptable
LSL USL
Voice of the Customer
Improvement on VOP is needed to satisfy VOC
Using 6 sigma tools is a WAY of satisfying VOC
“Voice of the Process” vs “Voice of the Customer”

Some Six Sigma Tools Example :
•CT Tree
•Process Mapping
•Graphical Techniques, e.g., Pareto Analysis
•Measurement Systems Analysis
•Rational Sub-grouping
•Capability Analysis
•Hypothesis Testing
•ANOVA (Analysis of Variance)
•Regression
•DOE (Design of Experiments)
•Response Surface Design
•SPC (Statistical Process Control)
Conceptual Tools
(Qualitative Tools)
Statistical Tools
(Quantitative Tools)
Using Minitab Statistical
Software
Six Sigma Tools : Conceptual & Statistical

Key Business Plan / Operating Plan
Opportunities to
reach the goals
Top-Down
approach
Problems, Errors, Dissatisfied Customers,
Inefficiency
Issues need
attention
Bottom-Up
approach
How Projects Are Selected?

Data Mining
(Historical Data Study)
Project Generated
(Documentation)
Bottom-Up Approach Example

Practical Problem Statistical Problem
Statistical Solution
Practical Solution
)
,...,
,
( 2
1 k
x
x
x
f
y 
Define / Measure Analyze
Improve
Control
Overall Problem Solving Approach in 6 Sigma way

• Key Process Inputs
(X1, X2………Xn)
• Independent
• Predictor
• Cause
• Control
• Key Process Output
• Dependent on Input
• Response
• Effect
• Monitor
Process
Y = f(x)
X Y
Determining the critical Xs and controlling the Xs to guarantee the Ys.
“X” can be multiple “Y” can be multiple
Process Focus of Six Sigma

• Enables success in a world of intensified
competition and declining margins
• Ensures the quality to satisfy increasingly
demanding customers
• Provides the action or system to become the best
in the world
• Establishes a standard language (Z-bench etc)
and approach (DMAIC) across all functions and
lines of business
Directly linked with business objectives.
Six Sigma Benefits

2. Six Sigma Fundamentals...............

 Initiate the
Project
 Define the
Process
 Determine
Customer
Requirements
 Define Key
Process
Output
Variables
 Verify Critical
Inputs Using
Planned
Experiments
 Design
Improvements
 Pilot New
Process
 Analyze Data
to Prioritize
Key Input
Variables
through
hypothesis
test
 Finalize the
Control
System
 Verify Long
Term
Capability
 Understand
the Process
 Evaluate Risks
on Process
Inputs
 Develop and
Evaluate
Measurement
Systems
 Measure
Current
Process
Performance
Define Measure Analyze Improve Control
The Roadmap

Optimized
Process
10-15 PIVs
8-10 PIVs
1-6 KPIVs
1-6 KPIVs
30-50 Inputs (X or PIV)
Define Phase
Measure Phase
Analyze Phase
Improve Phase
Control Phase
PIV = Process Input variable
KPIV = Key Process Input Variable
Dynamics of Execution Strategy -The Funnel
Effect

Define
Define
Initiate the Project
Define the Process
Determine
Customer
Requirements
 Project Charter
 Meeting Effectiveness
 SIPOC Map
 Value Stream Map
 Brainstorming
 Affinity Diagramming
 Murphy’s Analysis
 Interviews
 Surveys
 Customer Requirements
Trees
 Project
Project
charter
charter
 Project team
Project team
formed
formed
 Clear
Clear
customer
customer
requirements
requirements
Tools
Tools
Steps
Steps Outputs
Outputs
Define Key Process
Output Variables
 Project Charter
 KPOV’s
Define

Understand the
Process
Develop and
Evaluate
Measurement
Systems
 Data Collection Plans
 Data Integrity Audits
 Continuous MSA (Gage
R&R)
 Attribute MSA (Kappa
Studies)
Evaluate Risks on
Process Inputs
 FMEA
 Current State
Process Maps
 Identified and
measured X’s
(KPIV’s)
 Measurement
system verified
 Current
capability of
Y’s (KPOV’s)
Measure Current
Process Performance
 SIPOC / VSM
 Input/output Analysis
 C&E Matrix
 Process Maps
Measure
Measure
Tools
Tools
Steps
Steps
 Process Capability
Outputs
Outputs
Measure

Analyze Data to
Prioritize Key Input
Variables
Identify Waste
 Basic Statistics
 Basic Graphs
 Statistical Process
Control
 T-Tests
 ANOVA
 Non-parametrics
 Chi-Square
 Regression
 Multi-vari Studies
 Spaghetti Diagrams
 VA/NVA Analysis
 Takt Time
 5S
 Root causes of
defects
identified and
reduced to
vital few
 Prioritized list of
potential key
inputs
 Waste
identified
Analyze
Analyze
Tools
Tools
Steps
Steps Outputs
Outputs
Analyze

Verify Critical Inputs
Using Planned
Experiments
Design
Improvements
Pilot New Process
 Design of Experiments
- BB
 Kanban / Pull
 Mistake Proofing
 Quick Changeover
 Workplace
Organization
 Process Mapping
 Process
Documentation
 Training Plans
 SPC
 FMEA
 Control Plans
 Finalized List of
KPIV’s
 Action plan for
improvement
 Future state
process maps,
FMEA, Control
Plans
 New process
design /
documentation
 Pilot study plan
Improve
Improve
Tools
Tools
Steps
Steps Outputs
Outputs
Improve

Finalize the Control
System
Verify Long Term
Capability
 Control Plans
 Process
Documentation
 Training Plans
 Communication Plans
Control
 Documentation
Control
 Process Capability
 Control system
Control system
in place
in place
 Improvements
Improvements
validated long
validated long
term
term
 Continuous
Continuous
improvement
improvement
opportunities
opportunities
identified
identified
 New process
New process
handed off
handed off
 Team
Team
recognition
recognition
Control
Control
Tools
Tools
Steps
Steps Outputs
Outputs
Control

• Not all variation is bad
 New products
 New services
• All variation degrades performance
• Variation buffers include:
 Inventory
 Time
 Extra Capacity
• Six Sigma focuses on
 Variation due to process
 Variation due to flow
Identified
Quantified and
prioritized
Eliminated or
greatly reduced
Sources of variation
can be:
Six Sigma Focuses on Variation

• There are 7 Primary
Sources of Waste:
Correction
Over production
Over Processing
Waiting
Transport
Inventory
Motion
• Another Waste often
considered:
 Unused Creativity
Lean Tools are used within the
Six Sigma Roadmap to reduce
sources of waste.
Identified
Quantified and
prioritized
Eliminated or
greatly reduced
Sources of waste
can be:
Lean Focus on Speed & Flexibility

What Does Lean Do?
• Increase Productivity by producing or servicing more
with the same resources
• Improve On-Time delivery
• Reduce Lead Time - From Months to Days
• Reduce Inventory
• Increase Sales by using freed up resources and
capacities to increase production and invest in new
products or services
• Improve Quality
Lean is the elimination of anything not absolutely required to
deliver a quality product or service, on time, to our customers.
The right part at the right time, at the right size, at the right quality, at
the right quantity, at the right size, at the right price, at the right…
What Is Lean?

• Six Sigma projects often consider flow and capacity
• Lean gives Belts additional tools to use in DMAIC roadmap
 Baseline analysis
 Process
observation
 Value Stream
Map
 Spaghetti diagrams
 Time Value Chart
 TAKT time / Cycle time
 5S Analysis
 Cell Design
 Kanban / Pull
 Mistake Proofing
 Improvement Events
 5S Improvement
 Performance to
TAKT
 5S Discipline
 Standard Work
Measure
easure Analyze
nalyze Improve
mprove Control
ontrol
Define
efine
Using Lean Tools within Six Sigma Project

• Traditional Six Sigma deals with Variation:
“How can we eliminate process variation and defects?”
• Lean strategies look at Speed:
“How can we do the work faster and more efficiently?”
• Not all projects need both.
Golden
Triangle
Quality
Cycle
Time
Cost
The Measure step in DMAIC will lead you to
a good balance. To have the data to decide,
measure the golden triangle:
 Quality
 Cycle time (with % Value Added )
 Cost
Why Six Sigma + Lean?

Six Sigma
 Variation Reduction
 Scrap / Rework Elimination
 Process Optimization
 Process Control
Lean
 Waste Elimination
 Standard Work
 Flow
 Customer PULL
SPEED &
FLEXIBILITY
STABILITY &
ACCURACY
SIX SIGMA + LEAN = A POWERFUL UNION
Why Six Sigma + Lean?

2. Six Sigma Fundamentals...............

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