SSBB Exec Summary to understand basics of Six sigma

Six sigma basics

1. Section I Section I Six Sigma Introduction What is Six Sigma? Three elements of Six Sigma DMAIC roadmap Expected benefits of Six Sigma Corporate results of Six Sigma

2. - 6s -5s -4s -3 s -2s -1s 0 +1s +2s +3s +4s +5s +6s 6 s to LSL 6 s to USL Cp=2 Cpk =1.5 Cp=2 Cpk =1.5 Cp= Cpk = 2 ± 1.5 s LSL 12.5% 12.5% 75% 3.4 DPMO 3.4 DPMO USL Technical Definition of Six Sigma Technical Definition (Motorola) Evolution to: A Management driven, scientific methodology for product and process improvement which creates breakthroughs in financial performance and Customer satisfaction

3. What is Six-Sigma? Management mandated and directed improvement program focused on breakthroughs in financial performance and customer satisfaction Uses Champions, Black Belts and Green Belts to facilitate change Focused on core business and Customer needs A systematic method for process and product improvement A Greek symbol for measuring performance variation A metric for evaluating performance quality A standard of excellence (3.4 defects per million opportunities)

4. Customer Satisfaction + Efficient Systems = Improved Profitability Two types of projects to improve financial performance: Increase Revenue “Grow the Business” Improve Customer satisfaction, sales, capacity and market position Decrease the Cost of Goods Sold Reduce variation and defects Improve yields Understand root cause of issues and eliminate the source of problems Automate process “workflow” Improve process performance and reduce waste using lean principles

5. Center Process Reduce Spread Off-Target Too Much Variation Centered On-Target The objective is to understand customer requirements and reduce process variation and defects Reduce Process Variation & Defect Rates

6. Breakthrough and Continuous Improvement 1 2 3 4 5 Breakthrough Strategy

7. Three Emphasis Areas for Six Sigma Focused on product design excellence, design for manufacturability, Customer satisfaction and cost reduction within all components of the development and new product introduction process. Focused on operational excellence, Customer satisfaction and cost reduction within all components of the operation. Areas of focus include Sales, HR, Finance, Materials, etc. Focused on product production excellence, variation and defect reduction, lean production techniques, Customer satisfaction and cost reduction within all components of the production and delivery process. Six Sigma touches on all aspects of the Business Enterprise

8. Past Improvement Activity Failure Modes Unsuccessful Projects No clear Management mandate No roadmap for the project… not sure where we are going No dedicated resources No Management and performance review No ability to measure performance and examine effectiveness… not sure if we accomplished anything No financial ROI during project definition and measurement at completion No clear answer as to “ why are we doing this project?”

9. Six Sigma 3 Critical Elements Defining and using business objectives and metrics that focus our attention on performance and defects that are most important to the customer and have the greatest potential for impacting the bottom line Dedicated resources and focused infrastructure , trained in the use of the 6 Sigma problem solving and process improvement methodology Systematic Approach to improving performance and reducing defects which are important to the customer (qualitative & statistical)

10. Six Sigma DMAIC Road Map Define Identify Project, Champion and Project Owner Determine Customer Requirements and CTQs Define Problem, Objective, Goals and Benefits Define Stakeholder/Resource Analysis Map the Process Develop Project Plan Measure Determine Critical Xs and Ys Determine Operational Definitions Establish Performance Standards Develop Data Collection and Sampling Plan Validate the Measurements Measurement Systems Analysis Determine Process Capability and Baseline Analyze Benchmark the Process or Product Establish Causal Relationships Using Data Analysis of the Process Map Determine Root Cause(s) Using Data Improve Design of Experiments Develop Solution Alternatives Assess Risks and Benefits of Solution Alternatives Validate Solution using a Pilot Implement Solution Determine Solution Effectiveness using Data Control Statistical Process Control Determine Needed Controls (measurement, design, etc.) Implement and Validate Controls Develop Transfer Plan Realize Benefits of Implementing Solution Close Project and Communicate Results Key Analytical Tools Process Mapping and Modeling Measurement Systems Analysis & Process Capability Statistical Tests, Modeling & Root Cause Analysis Brainstorming Design of Experiments, FMEA, & Validation Statistical Process Control

11. Process Flow for achieving 70%+ Improvement Champion Black Belt Process or Product Select project that is considered critical to operational success Form team and follow DMAIC for project management Review performance and assure results Understand root cause of problem Develop alternative solutions and complete benefit and risk assessment Review and approve solutions Validate Solution Implement and standardize process changes Authorize process change Determine financial benefit Communicate and celebrate results For a breakthrough to occur… everything is on the table

12. Six Sigma Results Improved Customer satisfaction Assure products and services meet customer requirements Improved quality, efficiency and cost of goods sold Waste, defect and variation reduction Financial savings (hard and soft) Self-sustaining infrastructure Defined roles and responsibilities Empower Champions, Black Belts and all employees to make meaningful improvements in performance Communication Commonality Language, training materials, tools & software Methodology Expectations Solutions Financial tracking (establish, maintain metrics)

13. "We expect Six Sigma to elevate our company to an entirely new level of operational performance, delivering $1.5 billion in EBIT cumulatively by 2003 from the combined impact of revenue growth, cost reductions and asset utilization." - Dow 1999 Annual Report http://www.dow.com/financial/99ann/letter03.htm "We achieved $600 million in Six Sigma cost savings in 1999, but cost savings are only one part of the story. Delighting customers and accelerating growth completes the picture. When we are more efficient and improve work flow throughout every function in the company, we provide tremendous added value to our customers–through higher quality solutions that are more competitively priced, delivered on time and invoiced correctly. That makes us a more desirable business partner." - Honeywell 1999 Annual Report http://www-a.honeywell.com/investor/ar99_intro_smarter.html Honeywell & DOW Results

14. "Six Sigma implementation continues to gain momentum.  At the end of the year 2000, there were about 1,100 trained Black Belts and over 3,400 active projects.  The potential pretax benefit from active projects was $700 million." - DuPont Fourth Quarter and Full Year 2000 Earnings Report http://www.dupont.com/corp/whats-new/releases/01/010124.html GE & DuPont Results                                                                                                 "The Six Sigma initiative is in its fifth year — its fifth trip through the operating system. From a standing start in 1996, with no financial benefit to the Company, it has flourished to the point where it produced more than $2 billion in benefits in 1999, with much more to come this decade." - GE 1999 Annual Report http://www.ge.com/annual99/letter/letter_three.html

15. Section II Section II Management Infrastructure for Six Sigma Site Champion and Executive Staff Hands on Champions Master Black Belt Black Belts / Green Belts All Employees

16. Section III Section III DMAIC Breakthrough Methodology Define Measure Analyze Improve Control

17. DMAIC Process Improvement Methodology

18. DMAIC Process Metrics (Ys) linked to CTQs Define the Problem Project Objective Project Goal PROCESS X 1 X 2 X 3 X 4 Y 1 Y 2 Y 3 Establish Control s on the critical Xs so the improvements will be maintained Identify ways to improve the process and validate the solution Measure and Analyze data and process performance to determine the critical variables and root cause of the problem

19. Six Sigma DMAIC Define Define Activities Identify Project, Champion and Project Owner Determine Customer Requirements and CTQs Define Problem, Objective, Goals and Benefits Define Stakeholder/Resource Analysis Map the Process Develop Project Plan Define Quality Tools Project Charter and Plan Effort/Impact Analysis Process Mapping Tree Diagram

20. Performance to Schedule Deviation from schedule in completed units < 3.4 DPMO Customer Needs Product arrives on-time Response (Y) Measure Specification Limit(s) Allowable defect Rate Target 100% of committed ships prior to 5:00 pm as received on Customer receiving dock LSL = 0 hours late USL = 6 hours early Critical to Quality (CTQ) Characteristics DMAIC Methodology Define Customer Requirement Detailed Specifications Use the tree diagram to define Customer CTQs

21. Moving to Specific Candidate Projects Candidate Six Sigma Project(s ) With financial impact!!! Interview Customers (Internal and External), on core business issues and opportunities for improvement Use Voice of the Customer when collecting and analyzing data Complete CTQ gap analysis and prioritization Determine a candidate project list Estimate project benefits in financial and measurable terms & rank projects by their impact Determine the effort required for each project Conduct effort to impact analysis and prioritize the project list Select the top projects and determine the Champion and Owner DMAIC Methodology Define Critically examine Business Objectives and select projects aligned to them with financial impact and benefits Champions drive the project selection as they own the business objectives aligned to the Executive Staff

22. Potential Projects Candidate Six Sigma Project(s) Project Champion and Owner Determine a candidate project list and potential benefits: Manufacturing Materials Management NPI Finance Design HR Conduct effort to impact analysis and prioritize the project list Projects with high impact are preferred DMAIC Methodology Define

23. Detailed Project Selection Criteria Achieving breakthroughs requires prioritization of opportunities. There are many more opportunities than there is time and resources to work on them. When selecting a process, we are trying to prioritize exactly which problem to solve. If the problem is clear we move on to define the problem. In selecting a project, consider these issues: Financial and strategic benefits Improved customer satisfaction, CSI Compatible with current goals and objectives Translatable to other areas of the business Probability of success Level of effort, amount of resources needed to complete project DMAIC Methodology Define

24. Example: Prioritizing Projects Are your projects the things you like to do, easy to do or important to do? DMAIC Methodology Define

25. Develop Charter Problem Objective & Scope Goal/target Resource requirements Financial benefits Strategic benefits Team resources Project approval In this step you will establish direction for the project by documenting DMAIC Methodology Define

26. Develop Charter – Problem Statement DMAIC Methodology Define A clear description of the problem to communicate to other people in the process and rally support to improve it A description of the issue or problem What, when, where and how the problem occurs What is critical to quality (CTQ) from the customer perspective? What is nonconforming to specifications? Define the boundaries of the problem, how big is the problem? What are the consequences of the problem to the Company and or Customer? Do not state a solution when describing a problem Description of the “Pain”

27. Goal Statement: Reduce late shipment costs (Express Mail) to all customers by 70% from $1.5M to $45K by January 200x. Where When How Much Goal Statement Describe, in measurable terms, what success will look like when you’ve solved the problem Include a statement of the performance level that will satisfy your CTQ and the time frame in which you plan to implement the improvement. State targets and tolerances where appropriate. DMAIC Methodology Define

28. Financial Benefits Example DMAIC Methodology Define

29. Begin Mapping the Process with a SIPOC DMAIC Methodology Define

30. Move to a detailed Process Map DMAIC Methodology Define

31. Model and Automate Workflow Database Discrete Transactions Performance Monitoring and Improvement JMP for analysis and root cause determination Workflow Automation

32. Six Sigma DMAIC Measure Measure Activities Determine Project Critical Xs and Ys Determine Operational Definitions Establish Performance Standards Develop Data Collection and Sampling Plan Validate the Measurements Measurement Systems Analysis Determine Process Capability and Baseline Measure Quality Tools Quality Function Deployment (QFD) Measurement Systems Analysis (MSA) Check sheet Process Capability DMAIC Methodology Measure

33. “Measure” Flow Data Collection Plan & Sample Size List Of Measures (Xs and Ys) Add Specifications and Compute Sigma and Capability Restate Improvement Goals MSA, GR&R, Inspector Effectiveness Baseline Goal Data Collection, Process Baseline and Capability Determination