Lean Six Sigma Overview

Lean Six Sigma Overview of CBEPLwww.sixsigmaconcept.com1

Father of Six SigmaBill SmithSix Sigma Was Born 0n 15 January 1987 of CBEPLwww.sixsigmaconcept.com2

Field FailuresDiscovery of bill smithNumber of repairs in factory of CBEPL

Realization at Motorola To reduce field failures, much higher level of internal quality isrequired. Done right, improving quality will reduce cost. Cost of correcting poor quality ranged 800- 900 million peryear. of CBEPL www.sixsigmaconcept.com4

Desire of Bob Galvin100 times4 years of CBEPLwww.sixsigmaconcept.com5

Results of Six Sigma at Motorola Five fold growth in sales Annual increase of profit 20% Cumulative saving 14 Billion Annual stock price gain 21.3 % of CBEPLwww.sixsigmaconcept.com6

Philosophy of Six SigmaMake customer extremely happyAndImprove Bottom Line of CBEPLwww.sixsigmaconcept.com7

What is Six Sigma (6 )? Six Sigma is a philosophy for managing process improvement. Six Sigma is a way to integrate quality into day-to-day activities. Six Sigma is a means of continuously improving to meetcustomer needs. Six Sigma is a measurement of defects and variation. of CBEPLwww.sixsigmaconcept.com8

Basic DefinitionsSigma A mathematical term used to designate the distribution or spread of anyprocess around the average (mean) as expressed in “standarddeviations”. For a business or a manufacturing process, the sigma value is a metricused to indicate how well the process is performing. of CBEPLwww.sixsigmaconcept.com9

Six Sigma Is a methodology an initiative Improvement Breakthrough Right Projects– Linked to Business Goals Right People– Selected & Trained Project Management– Management Reviews Right Results– Process & Financial ( ) Sustaining Gains Process ThinkingProcess VariationFacts, Figures, DataDefine, Measure, Analyze Improve,Control (DMAIC) Statistical Tools Critical Few Variables a measurement Quantifies our Process Capability of CBEPLwww.sixsigmaconcept.com10

Six Sigma Is a simple, unique, proven and lasting approach for improving ourbusiness performance based on: Alignment of the customer, strategy, processes and people Big, measurable business results Selective but broad deployment of advanced quality and statistical tools of CBEPLwww.sixsigmaconcept.com11

Six Sigma Is Emerging Into AllAspects Of BusinessValue (products, services, information)CashOrder EntryPurchasingSchedulingOperationsHuman ResourcesFinance & AccountingInformation TechnologyMarketing, SalesManagement & LeadershipNew Product / ServiceDevelopment of CBEPLwww.sixsigmaconcept.comInvoicing/Collection12

DMAIC Approach Once Projects are identified, the Six Sigma Methodology is applied toprovide a structure to problem solving.The Methodology: Define the Process / Problem Measure the Process / Problem Analyze the Process / Problem Improve the Process / Problem Control the Process / Problem of CBEPLwww.sixsigmaconcept.com13

Another View : The RoadmapDefineMeasure Initiate the Project Define theProcess DetermineCustomerRequirements Define KeyProcess OutputVariables Understand theProcess Evaluate Risks onProcess Inputs Develop andEvaluateMeasurementSystems Measure CurrentProcessPerformanceAnalyze Analyze Data toPrioritize KeyInput Variables Identify Waste of CBEPLImprove Verify CriticalInputs UsingPlannedExperiments DesignImprovements Pilot New Processwww.sixsigmaconcept.comControl Finalize theControl System Verify Long TermCapability14

DMAIC Is A Filter ProcessDefineAll X’s30 InputsMeasure10 - 151st “Hit List”8 - 10Screened ListAnalyzeImprove4-8ControlFound Critical X’s3 - 6 Controlling Critical X’sCritical Input Variables of CBEPLWww.Sixsigmaconcept.Com15

Level of CompetitionSigma6Cost of poorDPMOquality(% of sales)3.4 10% OKCompetitive level99.999%5432336,21066,80710 – 1515 – 2020 – 3099.97%99%93%2308,53730 – 4063%1690,000World classIndustry averageNon competitive 40Why is 99% not good enough? of CBEPLwww.sixsigmaconcept.com16

What Does 6 Mean In Your Daily Life?PPM Tax Advice Prescription WritingRestaurant BillsPayroll ProcessingBaggage Handling1,000,000100,00010,0001,00010010Airline Safety Rate11234567Sigma Level of CBEPLwww.sixsigmaconcept.com17

Benefits Financial GE – 2 Billion to bottom line. (1999)Honey Well – 1.4 Billion (1996)DuPont – 1.6 Billion (1998)Wipro – 21 Million (2003)VSNL – 16.6 Million (2005) Customers Employees Quality of CBEPLwww.sixsigmaconcept.com18

Lean Six Sigma of CBEPLwww.sixsigmaconcept.com19

Design for Six Sigma RoadmapRecognizeProblemYIs Is SolutionKnown?YJust Do ItAre SolutionObvious?YIs newProduction/ Process? of CBEPLIs it CycleTimeRelated?YYWork OutNDFSSDMADVLeanwww.sixsigmaconcept.com20

Harvesting the Fruits of Six SigmaSweet FruitDesign for Six Sigma (DMADV)5Wall, Improve DesignsBulk of FruitProcess Characterization & --------4Wall, Improve ProcessesLow Hanging FruitSeven Basic Tools---------------------------------------3Wall, Beat Up SuppliersGround FruitLogic and IntuitionQuick hits - KAIZEN of CBEPLwww.sixsigmaconcept.com21

When Do You Call A Company A Six SigmaCompany? 20-30% of Bottom line coming from Six Sigma Projects5-10% of the Population are BB & MBB40-50% of the Population are GBAll the HOD are ChampionsA Stream of Projects are in pipe lineHR Policies are aligned with Six Sigma deploymentThe Six Sigma Performance is reported to all the stake holdersSix Sigma efforts self sustaining without external helpIt has the expertise to spread 6 Sigma culture to its Suppliers andCustomers and insist on them being 6 Sigma Companies of CBEPLwww.sixsigmaconcept.com22

Ways to select the projectsKey Business Plan / Operating PlanTop-Down approachOpportunities toreach the goalsBottom-Up approachIssues needingattentionProblems, Errors, Dissatisfied Customers, Inefficiency of CBEPLwww.sixsigmaconcept.com23

Objectives Of Six Sigma Project Reduce Variability Improve Rolled Throughput Yield. Reduce Defects Shorten Lead Time Improve Customer Satisfaction Optimize Process Performance Reduce Cost. Optimize Supply Chain. Reduce Lead Time Improve First Pass Yield. of CBEPLwww.sixsigmaconcept.com24

Six Sigma Project Identification Usually, Six Sigma projects are undertaken at the process level. However,all such projects should tie to the strategic business level goals. Key Performance Indicators (KPI) are metrics that reflect strategic valuedrivers, specify organizational goals and are key to organizationalsuccess.Business LevelKPI 1KPI 2KPI 3KPI 4Function LevelKPI 1KPI 2KPI 3KPI 4KPI 5KPI 6Process LevelKPI 1KPI 2Project 1Project 2Project 3KPI nEach project should address at least one KPI at the business level of CBEPLwww.sixsigmaconcept.com25

Linking Projects to the Big Ys – The DecisionTree Show how each project rolls up to the Big Ys Indicate the amount of impact of each project. The Big YsClientSatisfactionEBITDA 5%– %– Reduce timeto deliverLittle Ys– Number (e.g. days) 60 days Indicate the direction of impact if applicable– Increase 1.5 mmThe XsReduce costs 1.5 mmPlanningProcess 40 days– DecreaseThe VitalFew Projects of CBEPLIncreaserevenueImplement newrequirements formManufacturingLaboratory 20 daysReduce total waittime26

Six Sigma - Define of CBEPLwww.sixsigmaconcept.com27

DEFINE : What is the Problem? Goals––––Define Project PurposeDetermine Scope And GoalsIdentify Voice Of The Customer And Define ValueCreate The Project Charter And Plan Deliverables––––––Approved Project CharterTimeline chartCritical To Quality (CTQ) CharacteristicsVOC (Voice of Customer)Kano ModelDefine phase toll gate reviewDMAICDEFINE:Define the problem/reason for theproject, and map the value stream stepsMEASURE:Populate the value stream map withdata, measure and baseline current stateperformanceANALYZE:Identify and confirm root causesIMPROVE:Generate and implement solutions andevaluate resultsCONTROL:Maintain the gains of CBEPLwww.sixsigmaconcept.com28

Six Sigma – Measure of CBEPLwww.sixsigmaconcept.com29

MEASURE : What is the Problem? Goals– Gather relevant data– Determine magnitude of problem– Understand waste, cycle time, defects,and variation within the process Deliverables– Baseline data and control charts, SigmaLevel, Process Capability (yield, trends,etc.)– Focused problem statement.DMAICDEFINE:Define the problem/reason for theproject, and map the value stream stepsMEASURE:Populate the value stream map withdata, measure and baseline current stateperformanceANALYZE:Identify and confirm root causesIMPROVE:Generate and implement solutions andevaluate resultsCONTROL:Maintain the gains of CBEPLwww.sixsigmaconcept.com30

Six Sigma – Analyse of CBEPLwww.sixsigmaconcept.com31

Analyze : What is Causing the Problem? GoalsDMAIC– Identify Potential Root CausesDEFINE:– Conduct Data AnalysisDefine the problem/reason for the project, andmap the value stream steps– Validate Critical Root CausesMEASURE:Populate the value stream map with data,measure and baseline current state performance DeliverablesANALYZE:– List of Root Causes (Critical X’s) and how they were validatedIdentify and confirm root causes– Determination of how much of the Problem is accounted for by theCritical x’sIMPROVE:Generate and implement solutions and evaluateresultsCONTROL:Maintain the gains of CBEPLwww.sixsigmaconcept.com32

Analyze : Common Tools Data and Graphical Analysis from Measure,– Control Chart– Histogram– Boxplot– Graphical SummaryPareto Chart of Department10050080400Count Successive Pareto6030040Percent– Pareto Pareto Chartof Cause code0100803006020040100200Cause codeCountPercentCum % of 3.2100.0Percent0DepartmentCountPercentCum %Count– Can the 80/20 rule help narrow the focus on the key drivers bydiving deeper into the big bars?20100033

Analyze : Common Tools, cont. Brainstorming– What factors might be causing the problem? 5 Whys– What are the deeper causes of problems?– Can you peel away the layers of symptoms to identifythe root Because of CBEPLwww.sixsigmaconcept.com34

Analyze : Common ToolsLack of focus onrefreshLack of decision making– Which are the deeper causes?Changingenvironment andCoke and NielsenBusyschedNo one’s top priorityWhy so muchwaste incurrent state?Lack of tools to accomplishNever looked at wholeprocessLack of standardizationRefresh notviewed asvalue-addLack of ability topredict futureneedsLack of trainingLikeide clie to trou nt d eatiffe ears“c elve ren chus sttom on lybe”ingPeople get burned outAttrition/lack ofsuccessionNot sure if have rightpeople involvedToo many competingprioritiesTendpla tonn doing duor ringho brlid anay dsVerun y c ode mprta lekin xg– What are the relationships between identified causes?Not formalauthorityNo one’s top priorityNova t selue end w aso rkn't /do ow tole d h s inop an t fit ePe erst an turw icdun t we er pa iggwh bLack ofsuccessionplanningNot in jobdescriptionDon’t know who isresponsibletgeo iont t isan dectw rn ’ foDo medleblasibonspreeonulesLack of timePeople don’tunderstand / use data– What are all the potential causes?No compliance withstated deadlinesNo Cause-and-Effect DiagramLack of effectivecommunicationPeople don'tunderstanddefinition of termsLots of people involvedVery complexundertakingPrLack of understandingof Nielsen process– What other data should we collect to validate what the root causes?– Does the suspected cause have a correlation to the problem?Strong Positive CorrelationStrong Negative CorrelationLarge values of one set are associatedwith large values of the other25Small values of one set are associatedwith large values of the other25202015151010Y Scatter Plot550– Could there be another factor contributing to the correlation?005101520250XNo Correlation510152025XValuesin both data sets are unrelated2520Y1510500510152025X of CBEPLwww.sixsigmaconcept.com35