Six Sigma Introduction

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Six Sigma Introduction
Supply Chain Leadership Committee Nashville,
TN November 4, 2005
Steve Freudenthal Milliken Company
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Six Sigma Introduction

1. Six Sigma Definition
2. Evolution of Six Sigma
3. The Six Sigma Process Today
4. The DMAIC Process
5. Consultant Selection

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Key Principles of Six Sigma at Xerox
ØEverything starts with the customer.  ØThe
infrastructure for cultural change is the most
powerful contribution of Six Sigma.  ØDecisions
about which projects to pursue must be based at
least in part on the potential impact on net
present value.  ØSustained improvement is
possible only with management engagement.  ØCEO
goals are translated to frontline projects and
coordinated through an organization of people and
technical resources.  ØA standard problem-solving
process and associated tool set provides the
means for basing decisions on data.
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Quality Initiatives
ISO 90002000
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What does Six Sigma mean?  

• Phase I
• Early 1980s
• Pioneered at Motorola
• Statistical approach
• Measured DPMO
• Variation is the enemy
• Focused on
• Elimination of defects
• Improving product and service quality
• Reducing cost
• Continuous process improvement

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What does Six Sigma mean?  

• Phase II
• Mid 1990s
• Revised by Jack Welch at General Electric
• Linked Six Sigma to business strategy and
  customer needs
• Strong measurement on bringing dollars to the
  bottom line
• Strong financial community involvement
• Project driven
• High potentials selected to be Black Belts
• Black Belts expected to deliver 250,000/year to
  bottom line (hard dollars)
• Black Belts promoted up after two years
• All senior leaders trained (Green Belt)
• Projects are sponsored by business leadership
  (Top Down)
• 2 of management committed full-time

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What does Six Sigma mean?  

• Phase III
• 2000s
• Lean Six Sigma
• Caterpillar, Xerox, DuPont
• Combined lean manufacturing techniques and Six
  Sigma
• Benefit High speed, low cost

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Six Sigma Savings Averages by Area
500K
480K
450K
180K
100K
35K
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Roles and Responsibility
Deployment Manager Champions/ Sponsors Black
Belts Master Black Belts Green Belts

• Identification and Prioritization of Projects by
  Division
• Assign and Review Activities of Black Belts
• Facilitate Project Implementation
• Key Stakeholder in Project Success
• Lead 4-6 strategic improvement projects each year
• Expert in Six Sigma techniques
• Help local organization in Six Sigma disciplines
• Full-Time Position
• Mentor/coach Black Belts
• Teach Six Sigma techniques
• Full-time Corporate Position
• Domain Experts
• 20-30 on one Project

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Johnson Controls Inc.
Six Sigma Project Prioritize/ Select Scoring Rules Six Sigma Project Prioritize/ Select Scoring Rules Six Sigma Project Prioritize/ Select Scoring Rules Six Sigma Project Prioritize/ Select Scoring Rules Six Sigma Project Prioritize/ Select Scoring Rules
Score Savings (Hard/Annual Time (Duration) Effort ( people Expense Cap ) Success factor (1 risk)
9 gt250 K (High) lt 4 months (short) lt 3 (Small) High No capital No IT No Suppliers Small work group affected Short Duration Small Project Team
7 100 250 K (Moderate) 4 - 8 months (moderate) 4 6 (Moderate) Moderate No capital No IT Some Suppliers Multiple work groups affected Moderate Duration Small Project Team
3 50 - 100 K (Okay) 8 12 months (long) 6 10 (large) Small Some capital Some IT Numerous Suppliers Many work groups Long Duration Moderate Project Team Size
1 lt50K (Small) gt 12 months (very long) gt 10 (very large) Low Significant capital Significant IT Very many Suppliers Very Many work groups Very Long Duration Large Project Team Size
Example Total Score
Project A 9 7 3 3 22
Project A 300 K 7 months 8 person team Some capital, some IT, many work groups affected, moderate duration Some capital, some IT, many work groups affected, moderate duration
Project B 3 9 9 9 30
Project B 75K 4 months 2 person team No capital, no IT, small project team No capital, no IT, small project team
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Improvements Start with High Value Projects

• Customer Issues / Opportunities
• Business Strategy
• Goals / Objectives
• Priorities

• Project Selection
• Structured Process
• Links Business Strategy Priorities
• Led by Deployment Managers
• Based on Benefit / Effort Analysis
• Leadership Accountable for Prioritization

Prioritized by Management Team
Structured approach to project selection
BENEFIT Low Med High
EFFORT Low Med High
Xerox
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Six Sigma Improvement Model

• DMAIC Process
• Define describe the process,
• problem, opportunity
• Measure gather data
• Analyze listen to the data
• Improve develop solutions,
• design processes
• Control plan for stability

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Six Sigma Design Model

• DMADV Process
• Define describe the process,
• problem, opportunity
• Measure gather data
• Analyze listen to the data
• Develop create the solution
• Verify does the solution work?

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Define
1.0 Define Opportunities
5.0 Control Performance
2.0 Measure Performance
3.0 Analyze Opportunity
4.0 Improve Performance
Main Activities
Potential Tools and Techniques
Objective

• Validate/ Identify Business Opportunity
• Validate/ Develop Team Charter
• Identify and Map Processes
• Identify Quick Win and Refine Process
• Translate VOC
• Develop Team Guidelines Ground Rules

• To identify and/or validate the improvement
  opportunity, develop the business processes,
  define critical customer requirements, and
  prepare themselves to be an effective project
  team.

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Tools are Essential
, but Not Sufficient
Tool array adapted from Lean Six Sigma for
Service by Michael George
Xerox
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Measure
2.0 Measure Performance
1.0 Define Opportunities
5.0 Control Performance
3.0 Analyze Opportunity
4.0 Improve Performance
Objective
Main Activities
Potential Tools and Techniques

• To identify critical measures that are necessary
  to evaluate the success, meeting critical
  customer requirements and begin developing a
  methodology to effectively collect data to
  measure process performance.
• To understand the elements of the six sigma
  calculation and establish baseline sigma for the
  processes the team is analyzing.

• Identify Input, Process, and Output Indicators
• Develop Operational Definition Measurement Plan
• Plot and Analyze Data
• Determine if Special Cause Exists
• Determine Sigma Performance
• Collect Other Baseline Performance Data

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Analyze
3.0 Analyze Opportunity
2.0 Measure Performance
1.0 Define Opportunities
5.0 Control Performance
4.0 Improve Performance
Objective
Main Activities
Potential Tools and Techniques

• To stratify and analyze the opportunity to
  identify a specific problem and define an easily
  understood problem statement.
• To identify and validate the root causes that
  assure the elimination of real root causes and
  thus the problem the team is focused on.
• To determine true sources of variation and
  potential failure modes that lead to customer
  dissatisfaction.

• Stratify Process
• Stratify Data Identify Specific Problem
• Develop Problem Statement
• Identify Root Causes
• Design Root Cause Verification Analysis
• Validate Root Causes
• Comparative Analysis
• Sources of Variation Studies
• Failure Modes Effects Analysis
• Regression Analysis
• Process Control
• Process Capability
• Design of Experiments

Indicators Problem Statement (effect)
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4.0 Improve Performance
4.0 Improve Performance
3.0 Analyze Opportunity
2.0 Measure Performance
5.0 Control Performance
1.0 Define Opportunities
Objective
Main Activities
Potential Tools and Techniques

• Response Surface Methods
• Generate Solution Ideas
• Determine Solution Impacts Benefits
• Evaluate and Select Solutions
• Develop Process Maps High Level Plan
• Develop and Present Storyboard
• Communicate Solutions to all Stakeholders

• To identify, evaluate, and select the right
  improvement solutions. To develop a change
  management approach to assist the organization in
  adapting to the changes introduced through
  solution implementation.

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Control
5.0 Control Performance
1.0 Define Opportunities
2.0 Measure Performance
3.0 Analyze Opportunity
4.0 Improve Performance
Objective
Potential Tools and Techniques
Main Activities

• To understand the importance of planning and
  executing against the plan and determine the
  approach to be taken to assure achievement of the
  targeted results. To understand how to
  disseminate lessons learned, identify replication
  and standardization opportunities/processes, and
  develop related plans.

• Develop Pilot Plan Pilot Solution
• Verify Reduction in Root Cause Sigma Improvement
  Resulted from Solution
• Identify if Additional Solutions are Necessary to
  Achieve Goal
• Identify and Develop Replication
  Standardization Opportunities
• Integrate and Manage Solutions in Daily Work
  Processes
• Integrate Lessons Learned
• Identify Teams Next Steps Plans for Remaining
  Opportunities

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Six Sigma DMAIC Projects
5.0 Control Performance
1.0 Define Opportunities
2.0 Measure Performance
3.0 Analyze Opportunity
4.0 Improve Performance
5.0 Control Performance
5.0 Control Performance
1.0 Define Opportunities
2.0 Measure Performance
3.0 Analyze Opportunity
4.0 Improve Performance
5.0 Control Performance

• Process cannot be improved
• Abort project
• Recharter as Design Project

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Manufacturing Performance is here
Fully Deployed
Room to Inject New Energy
D E P L O Y M E N T
No Major Gaps
Business Processes are here
Build on Energy
Well Deployed
Major Gaps
Nothing

• Nothing

• Buzz (10)
• Push (5)
• Skeptics (50)
• Pilots are Positive (80)

• Some Momentum
• Balance of Push/Pull
• Not at Tipping Point

• More Pull Than Push
• Internal External
• Positioning
• Past the Tipping Point

• Thriving
• PULL!
• Drives the Way
• We Work
• Ubiquitous

ENERGY WILL
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Key Learnings
50 of all companies attempting to implement Six
Sigma failed after the first two years of
implementation.
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Long Term Goal Sustained Commitment Results
Key factors differentiating A curve from F
curve

• Business integration into how we work
• Project selection link to business strategies
• Project selection link to Customer Value
• Ability to change Culture Leadership Behavior
• Full Value-Chain engagement
• Ability to track results
• Integrating DfLSS

Six Sigma Net Business Benefit
0
1
2
3
4
Year
Initial Leadership Commitment

Chart adapted from Strategic Six Sigma Best
Practices from the Executive Suite by Dick Smith
and Jerry Blakeslee
Xerox
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Reasons Six Sigma Deployments Fail

• Apathy from senior leadership
• Training not connected to projects
• Projects not connected to strategy
• Projects only focused internally
• Selecting available people
• Part time Black Belts
• No financial validation to bottom line
• People not recognized for their
• contributions

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A Six Sigma Deployment Cannot Be Done Without
Consultants

• Training Materials
• Testing Materials
• Professional Educators
• Six Sigma Project Management Expertise
• (Master Black Belts)
• Credibility With Top Management
• Can Jump Start The Deployment

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If properly driven by Top Management, Six Sigma
can have a dramatic impact on a companys
culture and how it aligns itself with its
customers
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Thank You!!