1
Six Sigma for ManagersTop-Down Six Sigma
ImplementationforAmerican Society of Quality

• Breakfast Meeting
• March 18, 2004

2
Two Key Aspects to Six Sigma

• Initiative
• Improvement
• Breakthrough
• Systematic, Focused Approach
• Right projects
• Linked to business goals
• Right people
• Selected and Trained
• Project Management
• Management Reviews
• Sustain the gains
• New projects
• Results
• Process and Financials

• Methods and Tools
• Process Thinking
• Process Variation
• Facts, Figures and Data
• Define, Measure, Analyze, Improve and Control
• 8 Key Tools
• Sequenced and Linked
• Statistical Tools
• Statistical Software
• Critical FEW Variables

Hoerl, Roger W., and Ronald D. Snee. (2003).
Leading Six Sigma p. 5
3
Six Sigma Project Outlook

• Practical Problem
• Statistical Problem
• Statistical Solution
• Practical Solution

4
Key Inputs for Deployment

• Strategy and Goals for Six Sigma
• Process Performance Measures
• Project Selection Criteria
• Project Identification/Prioritization System
• Deployment Processes for Champions, MBBs, BBs,
  etc
• Roles of Management, Champions, MBBs, BBs and
  Functional Groups
• Curricula and Training System
• Project and Six Sigma Initiative Review Schedule
• Project Reporting and Tracking System
• Audit System for Previously Closed Projects
• Reward and Recognition Plan
• Communication Plan

Hoerl, Roger W., and Ronald D. Snee. (2003).
Leading Six Sigma p. 65
5
Keys to Successful Deployment

• Committed Leadership
• Top Talent
• Supporting Infrastructure

6
The Right People
Six Sigma Leaders
Master Black Belts
Six Sigma Champions
Yellow Belts
Yellow Belts
Yellow Belts
Yellow Belts
Yellow Belts
Yellow Belts
Six Sigma Project Team Members
Each Level Drives the Team to Breakthrough
Project Performance
7
Six Sigma Resource Definitions

• Black Belts
• Full Time Six Sigma Resource
• 4 Weeks Initial training, plus follow-up
  advanced statistical training
• Work 3-4 projects Simultaneously
• Mentor 5-10 Green Belt project
• Train all Yellow Belts and some Green Belts
• Green Belts
• Initially trained Manufacturing or Operations GBs
• 2 Week training -- equivalent Define and Measure
  skills
• Expectation is to complete at least 1 project per
  year, and then workon 2nd project
• Currently 25 of savings is from Green Belts
• Evolved to DFSS, Technical Service,
  Transactional, Analytical and Reliability GBs
• Yellow Belts
• One day of training focusing on Define and
  Measure tools
• Target team members, then future project resources

8
Types of Projects

• Cost Reduction
• Yield and Rate Improvement
• Downtime Reduction/Equipment Utilization
• Raw Material Selection
• Utility Optimization (Gas, Steam, Air and
  Electricity)
• Trailer/Railcar Utilization
• Accounts Payable Process
• Corporate Credit Card Usage
• Cost Avoidance
• Reducing effects of future cost increases
  (disposal/environmental)
• Inventory Control
• Capital Avoidance
• Plant Utilization
• Rate Improvement
• Revenue Enhancement
• Plant Capacity Improvement

9
About Six Sigma at Grace

• What is Six Sigma (at Grace, at Davison)
• Improving business performance by
  improving process performance
• All kinds of processes -- from mfg to corporate
• Leadership, alignment, support
• Objectives, financial and otherwise
• Organization, infrastructure
• Staffing, training (6s staff and everyone else)
• Projects, scoping, tools, review follow-up
• Results at departmental, product line... Grace
  levels
• Individual mind-set, organizational culture

10
Davison Six Sigma Savings

• Hard orEBIT savings
• Revenues up
• Costs down
• Soft savings are
• Cash Flow
• Cost and Capital Avoidance
• EBIT Earnings Before
• Interest Taxes
• A projects savings are tracked
• over a 12 months period.

11
Implementing Six Sigma in a Manufacturing
Environment

• Evolution
• Training
• Resources
• Projects
• Project selection management
• Expansion
• Measurement Systems

12
Six Sigma Evolution at Grace
Sept - Oct. 1999 January 2000 February 2000 June
2000 December 2000 May 2001 June 2001 December
2001 January 2002 April 2002 September
2002 September 2003
Champion training in U.S. and Europe First Black
Belt Wave Training Complete First Green Belt
Training (Admin) Second Black Belt Wave Training
Complete Second Ops Green Belt Wave Training
Complete First Yellow Belt Training Complete Six
Sigma Project Hopper - 100 Utilized First
Catalyst DFSS Green Belt Class Complete First
German Regional Ops GB Class Complete Sales/Tech
Service Green Belt Training Complete Analytical
Green Belt Training Complete Reliability Green
Belt Training Scheduled
13
Trained Belts - Davison
Goal is for each salaried employee to hold an
active, engaged Six Sigma role
14
Project Selection Management Process
BB Project Loading Evaluation (3-4) and Assignment
CpK studies
RTY studies
BB/GB Follow-Up Projects
Champion Inputs
Bus. Leader Inputs
Project Work
Project Reviews Monthly General Manager Reviews
for Black Belts Monthly Plant Manager Reviews
for Green Belts
High Priority Projects
Project Hopper
Hold, Reject,or More Info

• Drive Project Speed
• Instant Business Feedback
• Opportunity to devote more resources
• Understand Barriers
• Opportunity to Kill a Project
• Unearth additional projects

Business Leader Acceptance
15
Some of the tools we use

• Project Charter
• Process Map, Flowchart
• Cause Effect Analysis (CE)
• Failure Modes and Effects Analysis (FMEA)
• Statistics and Data Analysis
• Graphs, plots, etc... Multi-Vari Studies
• Control Charts
• Measurement Systems Analysis (MSA)
• Regression, ANOVA
• DOE (improve, optimize)
• Surface Response (improve, optimize)
• Process Capability
• Control Plan
• procedures, specifications, etc.

Define Measure Analyze Improve Control
16
2003 Six Sigma Savings
More capable savings accountability was used in
2003. Goal was to drive projects more directly
and accurately to the bottom line with the use of
EBIT Metrics.
17
Tracking Cost Reduction Performance using a
Control Chart
Silicas/Adsorbents
Forecast

• May, 2003 Started New Six Sigma Review Format
• Better Six Sigma Alignment to Drive Higher
  Performance

18
Individual Project Savings

• Every project must report savings monthly.
• Savings accounting is reviewed by the Black Belt
  and Champion to insure accuracy. Expenses or
  Capital Investment are subtracted from the
  savings.
• Savings are tracked for 12 months and subject to
  audit after one year. This drives the continuous
  use of the Control Plan.

19
Six Sigma Program Investment

• WR Grace (Total Commitment)
• 44 GBs (2 classes) 25 GBs (1 class)
  1,000,000 ( 15,000/person)
• Davison Catalyst Portion is approximately 25 -
  250,000
• 75,000 per GB Class (External Training)
• 50K fee 25K travel and expense
• 25,000 per GB Class (Internal Training)
• Grace has done 10 externally and 10 internally

• ROI Grace Davison Catalysts (25 of Grace)
• Total Savings 15,000,000/year (60
  times initial investment annually)
• BB Savings (70) 10,500,000/year
• GB Savings (30) 4,500,000/year
• Resources
• Black Belts 20
• Green Belts 230
• Annual Savings per Resource
• Black Belts 525,000 per year
• Green Belts 20,000 per year

20
Where Were going with Six Sigma

• Beyond manufacturing...
• Administrative, Transactional,
  Corporate, Business processes
• Sales and Technical Service
• Maintenance, Reliability
• Lean Manufacturing
• Value Chain
• Factory Physics
• Customized Six Sigma Training

21
What the Six Sigma Project Has Accomplished

• Y f (x1, x2, x3, x4, . . . xn)

We begin with the Y
Process Map

Performance of the Y over Time
Initial Capability Assessment
CE Matrix
Variation of the Y
FMEA
FMEA reduces variation and effects for inputs
gone wrong
x1, x7, x18, x22, x31, x44, x57
Actual variation
Measurement variation
Multi-Vari identifies Noise variables and reduces
the xs for DOE
Repeatability (equipment)
Y f (x7, x22, x57)
DOEs identify the Critical xs and their
relationship to the Y
Reduced measurement error , true capability
assessment !
Controls in place for Critical xs
22
Summary

• Six Sigma
• Grace, and Davison
• Six Sigma at Grace
• Evolution
• Strategic, infrastructure
• Tactical, execution
• Results
• Questions...
• Drawing...