Transcript Introduction to Six Sigma

Introduction to
SIX - SIGMA
Presented by :
http://www.QualityGurus.com
Agenda
0750 - 0800
Participants introduction
0800 - 0930
Introduction to Six Sigma concept
Key Concepts
Tea / Coffee Break
0930 - 0945
0945 - 1200
1200 - 0100
Forms of waste
What is Sigma
Components of Six Sigma
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
Motorola
1985
1987
General Electric
1992
1995
Johnson & Johnson,
Ford, Nissan,
Honeywell
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
1/2 Width
strip
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  council, Director 6 , etc)
Transition rate to achieve 6 .
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
6 SIGMA AS A
PHILOSOPHY
CHANGE
THE
WORLD
TRANSFORM THE
ORGANIZATION
6 SIGMA AS
A PROCESS
GROWTH
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 to:
Define, Measure, Analyse,
Improve and Control
It is a Philosophy
Anything less than ideal is
an opportunity for
improvement
Defects costs money
Understanding processes
and improving them is the It is Statistics
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=
•
•
•
•
•
•
Y
Dependent
Output
Effect
Symptom
Monitor
f(X)
•
•
•
•
•
•
X1 . . . Xn
Independent
Input-Process
Cause
Problem
Control
The focus of Six sigma is to identify and control Xs
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Two Processes
DMAIC
DMADV
• Existing Processes
•
•
•
•
•
Define
Measure
Analyze
Improve
Control
• New Processes
• DFSS
•
•
•
•
•
Define
Measure
Analyze
Design
Verify
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Key Concepts
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COPQ (Cost of Poor
Quality)
- Inspection
- Warranty
- Scrap
- Rework
- Rejects
- More Setups
- Expediting Costs
- Lost Sales
- Late Delivery
- Lost Customer Loyalty
- Excess Inventory
- Long Cycle Times
- Costly Engineering Changes
Traditional Quality Costs:
- Tangible
- Easy to Measure
Lost Opportunities
Hidden Costs:
- Intangible
- Difficult to Measure
The Hidden Factory
Average COPQ approximately 15% of Sales
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Cost of Quality % Sales
COPQ v/s Sigma
Level
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
2
3
4
5
6
Sigma Level
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CTQ (Critical-ToQuality)
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?
1.
2.
3.
4.
5.
6.
7.
Waste
Waste
Waste
Waste
Waste
Waste
Waste
of
of
of
of
of
of
of
Correction
Overproduction
processing
conveyance (or transport)
inventory
motion
waiting
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1. Waste of correction
Repairing a defect wastes time and
resources (Hidden factory)
Hidden
Factory
Rework
Rework
Failure
Investigation
Operation
1
Test
Failure
Investigation
Operation
2
Test
Product
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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)
Observations
averages
Deviations
10
10 - 8.4 = 1.6
9
9 - 8.4 = 0.6
8
8 - 8.4 = -0.4
8
8 - 8.4 = -0.4
7
7 - 8.4 = -1.4
8.4
0.0
8
7
10
8
9
Jack
Jill
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Variability
Deviation = distance between
observations and the mean (or
average)
Observations
averages
Deviations
7
7 - 6.6 = 0.4
7
7 - 6.6 = 0.4
7
7 - 6.6 = 0.4
6
6 - 6.6 = -0.6
6
6 - 6.6 = -0.6
6.6
0.0
Jack
7
6
7
7
6
Jill
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Variability
Variance = average distance
between observations and the
mean squared
Deviations
Squared Deviations
10 10 - 8.4 = 1.6
2.56
Observations
9 – 8.4 = 0.6
0.36
8 8 – 8.4 = -0.4
0.16
8 8 – 8.4 = -0.4
0.16
7 7 – 8.4 = -1.4
1.96
9
average
s
8.4
0.0
8
7
10
8
9
Jack
1.0
Jill
Variance
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Variability
Variance = average distance
between observations and the
mean squared
Observations
average
s
Deviations
Squared Deviations
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 – 6.6 = -0.6
0.36
6 6 – 6.6 = -0.6
0.36
6.6
0.0
0.24
Jack
7
6
7
7
6
Jill
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Variance
Variability
Standard deviation =
square root of
variance
Jack
Average
Jack
Jill
8.4
6.6
Variance
1.0
0.24
Standard
Deviation
1.0
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
outcomes are
possible
Fewer
in the
“tails”
(lower)
Most
outcomes
occur in the
middle
Fewer Even very rare
in the
outcomes are
“tails”
possible
(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
Probability
0.2
0.15
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
LSL
Large Variation
LSL
USL
USL
On-Target
Center
Process
Reduce
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
rare (Cpk>1)
μ
target
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)
Cpk = min
=
USL – x
= 24 – 20 =.667
3σ
3(2)
=
x - LSL
= 20 – 15 =.833
3σ
3(2)
=
=
3σ = (UPL – x, or x – LPL)
14
15
20
24
26
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A Six Sigma Process –
Predictably twice as good as what the
customer wants
LSL
-6
USL
+6
6
1
1
2
3
4
1
5
1
6
1
7
1
1
8
9
10
11
12
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3  v/s 6 
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
and estimate the
opportunities in the
same way...
233
6210
66810
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Six Sigma
Measurement
Sigma
numbers
1.5s
2.0s
2.5s
3.0s
3.5s
4.0s
4.5s
5.0s
5.5s
6.0s
Defects
per million
500,000
308,300
158,650
67,000
22,700
6,220
1,350
233
32
3.4
# of Defect per Million
600,000
500,000
400,000
300,000
200,000
100,000
0
1.5
2.5
3.5
4.5
5.5
# of Sigmas
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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
A
P
C
D
Act on what
was learned
Check
Check the results
Plan
Plan the change
Do
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
Define
M
Measure
A
Analyze
Identify and state the practical problem
Validate the practical problem by collecting data
Convert the practical problem to a statistical one, define
statistical goal and identify potential statistical solution
I
Improve
Confirm and test the statistical solution
C
Control
Convert the statistical solution to a practical solution
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Define
D
Define
VoC - Who wants the project and why ?
M
Measure
The scope of project / improvement (SMART Objective)
A
Analyze
Key team members / resources for the project
I
Improve
Critical milestones and stakeholder review
C
Control
Budget allocation
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Measure
D
Define
Ensure measurement system reliability
- Is tool used to measure the output variable flawed ?
M
Measure
A
Analyze
I
Improve
C
Control
Prepare data collection plan
-
How many data points do you need to collect ?
How many days do you need to collect data for ?
What is the sampling strategy ?
Who will collect data and how will data get stored ?
What could the potential drivers of variation be ?
Collect data
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Analyze
D
Define
M
Measure
A
Analyze
I
Improve
C
Control
How well or poorly processes are working compared with
- Best possible (Benchmarking)
- Competitor’s
Shows you maximum possible result
Don’t focus on symptoms, find the root cause
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Improve
D
Define
M
Measure
Present recommendations to process owner.
Pilot run
- Formulate Pilot run.
- Test improved process (run pilot).
A
Analyze
- Analyze pilot and results.
I
Improve
- Prepare final presentation.
Develop implementation plan.
- Present final recommendation to Management Team.
C
Control
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Control
D
Define
Don’t be too hasty to declare victory.
M
Measure
A
Analyze
I
Improve
C
Control
How will you maintain to gains made?
- Change policy & procedures
- Change drawings
- Change planning
- Revise budget
- Training
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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
capability
When and where
are the defects
How to get
to six sigma
Display
key measures
 Benchmark
 Baseline
 Contract / Charter
 Kano Model
 Voice of the
Customer
 Quality Function
Deployment
 Process Flow Map
 Project
Management
 “Management by
Fact” – 4 What’s
 7 Basic Tools
 Defect Metrics
 Data Collection,
Forms, Plan,
Logistics
 Sampling
Techniques
 Cause & Effect
Diagrams
 Failure Models &
 Effect Analysis
 Decision & Risk
Analysis
 Statistical Inference
 Control Charts
 Capability
 Reliability Analysis
 Root Cause
Analysis
 5 Why’s
 Systems Thinking
 Design of
Experiments
 Modelling
 Tolerancing
 Robust Design
 Process Map
Statistical Controls
 Control Charts
 Time Series
Methods
Non Statistical
Controls
 Procedure
adherence
 Performance
Mgmt
 Preventive activities
 Poke yoke
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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  Training
Champions
Master
Black
Belt
Black Belts
Mentor, trainer, and coach of Black Belts and others
in the organization.
Leader of teams implementing the six sigma
methodology on projects.
Delivers successful focused projects using
the six sigma methodology and tools.
Green Belts
Team Members /
Yellow Belts
Participates on and supports the
project teams, typically in the
context of his or her existing
responsibilities.
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Six Sigma
Organization
Master
Black
Belt
Champion
Black
Belt
Green
Belt
Black
Belt
Green
Belt
Green
Belt
Black
Belt
Green
Belt
Green
Belt
Yellow
Belt
Yellow
Belt
Yellow
Belt
Yellow
Belt
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6  Training
Position in Six Sigma
Organisation
Expected Role
Post Training
Typical Training
Executive overview
2/3 Days
Senior
Executives
Champions
Training - I
2 days
Champions /
Process owners
+
Provide Leadership
Champions
Training –II
3 days
Process Mgmt. &
Project
champion
(Total 5 days)
Black-Belt
Week
1
Week
2
Week
3
Week
4
Black-Belt
Training /
Facilitation
skills
Project-work
Master Black-Belt
-As Trainer
-Coach teams
-Facilitate
improvement projects
- Part
Green Belt
1 Week Green-Belt Training
Employees
(Yellow-Belt)
1 / 2 Days core training on
Six-Sigma
Project work
of project teams
- Sometime lead the
teams
- General process
control &
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
Nominates highly qualified Black Belt
and/or Green Belt candidates
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Master Black Belt
Roles
Responsibilities
- Enterprise Six Sigma expert
- Highly
proficient
in
using
Six
- Permanent full-time change Sigma methodology to achieve tangible
business results.
agent
- Certified Black Belt with - Technical expert beyond Black Belt level
additional specialized skills or on one or more aspects of process
experience especially useful in improvement (e.g., advanced statistical
project
management,
deployment of Six Sigma analysis,
communications, program administration,
across the enterprise
teaching, 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 improvement
projects where Six Sigma approach is
- Temporary, full-time change
indicated.
agent (will return to other duties
after completing a two to three - Successfully completes high-impact
year tour of duty as a Black
projects that result in tangible benefits
Belt)
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 participating - Leads Six Sigma teams in local
on Six Sigma project teams
improvement projects
- Six Sigma champion in local
area
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Yellow Belt
Roles
Responsibilities
- Learns and applies Six Sigma - Actively participates in team tasks
tools to projects
- 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 …….
A Problem Statement should be SMART:
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Specific - It does not solve world hunger
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
Installing new solution, IT driven solutions
etc.
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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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Way forward
Get Started
Look for low hanging fruits
Even poor usage of these tools will get
results
Learn more about Six Sigma
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