Download Six Sigma - Alex J. Ruiz

Six Sigma
Compiled by:
Alex J. Ruiz-Torres, Ph.D.
From information developed by many.
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Outline
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Lean Sigma
Basics of Six Sigma
Principles of improvement
DMAIC
Design for Six Sigma
Six Sigma people
Six sigma and suppliers
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Lean Sigma
• Lean techniques eliminate much of the noise from a process
– Using a variety of simple tools
• Six Sigma offers a sequential problem-solving procedure: DMAIC
– Statistical tools so that potential causes are not overlooked, and viable
solutions to chronic problems can be discovered
• Lean Sigma is the combination of both CI methodologies in
order to maximize profitability
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Lean Sigma
LEAN
SIX SIGMA
Create flow and eliminate waste
Improve process capability and eliminate
variation
Application
Primarily manufacturing processes
All business processes
Approach
Teaching principles and "cookbook style"
implementation based on best practice
Teaching a generic problem-solving
approach relying on statistics
Project Selection
Driven by Value Stream Map
Various approaches
Length Of Projects
1 week to 3 months
2 to 6 months
Mostly ad-hoc, no or little formal training
Dedicated resources, broad-based
training
Learning by doing
Learning by doing
Goal
Infrastructure
Training
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Lean Sigma
• An integrated improvement strategy has to take into
consideration the differences and use them effectively:
– Lean projects are very tangible, visible, and can oftentimes be
completed within a few days.
– Six Sigma projects typically require a few months.
• An integrated approach should emphasize Lean projects
during the initial phase of the deployment to increase
momentum.
– Lean emphasizes broad principles with practical
recommendations to achieve improvements, inadequate to
solve complicated problems that require advanced analysis.
– Six Sigma needs to be introduced in the first year to ensure that
the improvement roadmap includes a generic problem-solving
approach.
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Basics of Six Sigma
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•
•
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Focus on ROI
Top management commitment and accountability
Customer focus (VOC)
Connected business metrics (financial and customer
focused)
– Visible across the organization
– Linked across the organization
• Project focus
• Extensive use of tools and technology
• The objective is to ensure high quality and reliability of
products, services, and transactions
• Applicable to any type of organization
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Basics of Six Sigma
• Term CTXs = Critical to X. CTQ = Critical to Quality.
– Must be based on some measurable criteria.
– Objective is to be as close as possible in every opportunity to
the target of a CTX
• The existence of variation in systems is a fundamental
assumption of 6s
• Target cannot be achieved every time for many reasons.
• There is a distribution of performance, the traditional
bell curve.
• CTX have limits of performance: Upper Spec Limit and
Lower Spec Limit.
• 6s is 3.4 defects (not within specs) per million
opportunities.
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Basics of Six Sigma
• System behavior dictated by:
y = f(x) + e
x = the inputs, the independent variable
y = the output, the dependent variable
f(x) = The transformation function
e = The uncontrollable error
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Six Sigma – principles of improvement
• Changes in x will have an effect on y
• Principle of Cause and Effect
– Percentage of humidity in the plastic material will determine the break
point in the part
• x = % humidity
• y = break point
• The principle of determinism = change in x will result in a
change in y. Without this, there is no control
Inputs
Output
Process
Inputs
Output
Process
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Six Sigma – principles of improvement
• Variation
– Multiple causes
– Cumulative
– Common versus special causes
• Common: Inherent to the system/process due to equipment
limitations/ environmental conditions
• Special: caused by something special (but could repeat itself). For
example changes in voltage, changes in operator (training,
attitude)
– Short term versus long term effect (short term is smaller
than long term)
– Address special variation first: control for equipment
malfunctions, train all personnel for consistent
performance, …
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Six Sigma – principles of improvement
• Measures are the basis of improvement
– Measurement provides benchmarks and
understanding
– Sometimes very hard to come with measures for
perception type criteria.
• But without it, hard to understand the effect of
changing x’s in the y.
• Specially designed surveys
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Six Sigma – principles of improvement
• A vital few variables determine the quality of a given
outcome.
• Pareto Principle (80-20) is well known, but often
ignored by the most intelligent people
– Perfectionists suffer from this.
– Trying to fix everything …
• The key is using a structured process to identify the
critical x’s
• By understanding how your x’s affect your y, changes
can be implemented to improve your y
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Six Sigma - DMAIC
Define, Measure, Analyze, Improve, and
Control (DMAIC)
• Developed by General Electric as a means of focusing effort
on quality using a methodological approach
• Overall focus of the methodology is to understand and
achieve what the customer wants
• Problem Solving Process
– Define the project goals and customer (internal and external)
deliverables
– Measure the process to determine current performance
– Analyze and determine the root cause(s) of the defects
– Improve the process by eliminating defects
– Control future process performance
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Six Sigma - DMAIC
Practical
Problem
Phases of a DMAIC Project
Six Sigma
Problem
Statistical
Problem
Statistical/ Process
Solution
Implementation and
Control
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Six Sigma – DMAIC
Project Definition
• Projects must
– Have a financial impact or significant strategic value (e.g.
solidify relationships with key customers)
– Results significantly exceed effort and investment
– Addresses a complex problem
– Aims at an improvement change of at least 70%
• Project must solve a business problem that hurts a
key performance related to:
– Costs, Cycle time
– Customer satisfaction, Revenue Potential
– Process Capability/ Capacity
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Six Sigma – DMAIC
Define
• Use of case writing tools for project justification
– As a company, our _____________ performance for the
____________ area is not meeting _______. Overall this is
causing _______ problems., which are costing as much as
$_____ per ________.
Example
– As a company, our on time delivery performance for the
health product area is not meeting the goal of 95% on
time delivery. Overall this is causing customer satisfaction
problems, which are costing as much as $2Milion in lost
orders and revenue per year.
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Six Sigma – DMAIC
Define
1.1 Determine what needs to be improved.
a.
b.
c.
d.
What is the problem ( a high level effect); e.g. high inventory
levels consuming space and assets.
Where is the problem occurring; e.g. the Westland Warehouse
Timeframe of the problem; e.g. Since Product Family ds was
introduced in 2001.
Customers or business are affected by this problem; Production
planning, sales given higher costs.
1.2 Determine the outputs (CTQs = y’s)
a.
b.
c.
Characteristics or process outputs affected (the specific y’s); e.g.
inventory levels.
Identify the primary metric for each y; e.g. inventory days
Identify tradeoff metrics to monitor for negative impact; e.g.
orders filled.
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Six Sigma – DMAIC
Define
2. Determine associated processes and location
a. List the major process steps and location (top level processes);
e.g. PO generation, order replenishment, inventory reconciliation,
production planning.
b. Develop a top level flowchart
3. Determine the baseline performance of the y’s
a. Estimate the magnitude of the problem using the primary metric;
e.g. between 31.2 to 40.5 days of inventory with a mean of 37.4
days.
4. ID the cost and impact of the problem
a. Identify the cost centers affected by problem
b. Based on a baseline improvement level, what is the financial
impact of the project.
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Six Sigma – DMAIC
Define
• Goal of a project is create financial or strategic benefit
– Reduce waste
– Provide flexibility
– Increase customer perceived value
• Soft versus Hard Savings
– Soft: increased customer satisfaction > this increases loyalty and
customer orders. Estimates included but hard to trace
– Hard: reduced inventory in warehouse = reduced assets and
increased cash available.
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Six Sigma – DMAIC
Define
5. The problem Statement
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–
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A description of the problem and the metrics
Where its occurring and in what processes
Timeframe and Magnitude
Should not simplify it: audience will not know the problem and
the processes.
Inventory levels are too high.
Inventory levels at the Westland warehouse are consuming space, taking
up management time, and creating cash flow issues. Inventory levels are
averaging 31.2 days with a high of 45 days. These levels exceed the 20 day
target on 99% of the days since October 2003. We could save $400,000 if
at the target level.
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Six Sigma – DMAIC
Define
• The level of improvement
– Based on current performance, entitled performance, and
the team leader goals
– Entitled performance: the best performance that a
process as currently designed has demonstrated in
operation.
– Long term performance of a line: 90% on time delivery
• Mar 4 – Mar 23, 98% on time performance.
– 98% is the entitled performance
– So what x’s caused the 98% performance level.
– Breakthrough improvement: 70% change
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Six Sigma – DMAIC
Define
6. The Objective Statement
– Based on the Problem Statement
– Improve some metric from baseline in t amount of time with an
impact towards a corporate goal or strategy.
Reduce Inventory levels
Reduce inventory levels from an average of 31.2 days to an average of
20 days with a maximum of 25 days. This will be completed by August
2006. This project will save $400,000 per year in interest, space, and
management effort. These savings are in support of our corporate goal
of improving asset management and ROI.
7. ID and recruit the team
8. Obtain approvals and launch
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Six Sigma – DMAIC
Measure
• The Gaps: Goal to Actual
– Sometimes difficult to develop measures (experience
based - services)
– Time consuming to get data
• Maybe not a lot of data available at start but data collection and
its accuracy must improve quickly
– Analysis of the gap is based on statistical analysis
– Statistics is the key to understand variability.
• The scientific method to describe performance
• Takes you from guessing and intuition to “hard facts”
• Be careful, statistics can be manipulated and can mislead.
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Six Sigma – DMAIC
Measure
Process/ Product Measurement
• Identification of error opportunities (for the product)
– Possible missing or wrong parts, information, delays in
completing a task, …
• Defects per Opportunity
• Opportunities are the critical dimensions / characteristics of the
product (unit)
– Directly related to the complexity
– Issue: overestimating the ops. with trivial elements. This will lead to over
assessing the process capabilities
• Six sigma lingo: Defects per million opportunities (DPMO)
– DMPO = (# errors / (possible errors x units processed) ) x 1M
– Six Sigma objective: 3.4 DPMO
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Six Sigma – DMAIC
Measure
Process/ Product Measurement Examples
– Processing of a home loan application: 44 possible errors for
missing or wrong information, misclassification, …
– Processing of a personal banking application: 11 possible …
– 94 loans reviewed this month, 3 had errors, one had 12
errors, the other 2 had 8 errors each (28 total errors). Overall
pass rate: 97%. Process worked at : 28 / (94 x 44) x 1M =
6,770 DPMO
– 180 personal banking applications: 9 had errors, one had 3
the other had one each (total 10 errors). Overall pass rate:
95%. Process . Process worked at: 10 / (180 x 11) x 1M =
5,050 DPMO
– Thus relative pass rate performance is not the same as DPMO
performance
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Six Sigma – DMAIC
Measure - Process capability
• Need to understand the current specifications
– Specs: performance values of a process or product
characteristic that are acceptable to the customer.
• SL: Acceptable versus unacceptable
• One Sided Spec: Only one transition point
• Two sided Spec: Pair of transition points: USL, LSL: Upper and Lower Spec levels
• Target: Desired value
• Specifications should not be arbitrary: unless they have a real
reason (separate the good from the bad) they are a stumbling
block to progress
• Too tight: spend more resources/ effort than necessary, too
loose: customer will not be satisfied
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Six Sigma – DMAIC
• Capability Indexes
– How well can your process meet the range
– How well it can meet the target
specification
specification
natural variation
natural variation
specification
natural variation
specification
natural variation
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Six Sigma – DMAIC
Measure
• Short Term Capability Index (Cp)
Cp = (USL – LSL ) / 6sST
– However, this implies only 99.7% is included
– If Cp = 1 then VOC = VOP, if less, then process problems.
• Adjusted Short Term Capability Index (Cpk)
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Cp does not include the mean of the process
CPU = (USL – xave ) / 3sST
CPL = (xave – LSL ) / 3sST
CPk = min. (CPU, CPL)
If xave is centered about USL and LSL, then Cpk = Cp, else Cpk
< C p.
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Six Sigma – DMAIC
• Capability indexes relate to short time
performance (theory).
• Sigma scores consider similar data elements
but
– Assume that the process mean will shift by 1.5
deviations.
http://www.isixsigma.com/new-to-six-sigma/dmaic/15-sigma-process-shift/
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Six Sigma – DMAIC
Measure
• The sigma score
– Basically, how many standard deviations can you fit within
the specification levels
– Z = | SL – xave | / s
s
xave
SL
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DMAIC - Measure
A process with an upper
specification of 6 days to
complete, current average is 3
days and s = 0.9.
3
0.9
0.9
sigma score
= |(6 – 3) | / 0.9
= 3.33
about 3.35% defective
33,624 DPMO
0.9
This assumes a 1.5 shift
xave
=3
SL = 6
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DMAIC Measure
A process with specification
of 24 to 28 chips and
currently averages 26.5chips
with a s = 0.65.
1.5
2.5
0.65
LSL = 24
xave
0.65 0.65
= 26.5
sigma score
= |(28 – 26.5) | / 0.65
= 2.3
about 21% defective
211,855 DPMO
USL = 28
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Six Sigma – DMAIC
Measure
• A Sigma scores changes if:
– The standard deviation changes
– The mean shifts
– The specs change
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DMAIC - Measure
After some changes to the
personnel, the current average
is now 2 days (used to be 3),
although the deviation is still
0.9.
4
0.9
xave
=2
0.9
0.9
0.9
sigma score
= |(6 – 2) | / 0.9
= 4.44
About 0.16%
defective (from 3.35%)
1,641 DPMO
SL = 6
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DMAIC - Measure
After some technology
changes, the process
currently averages 25.8 and
has s = 0.4.
2.2
1.8
0.4 0.4 0.4 0.4
LSL = 24
xave
= 25.8
sigma score
= |(24 – 25.8) | / 0.4
= 4.5
about 0.13%
defective (from 21%)
USL = 28 1,349 DPMO.
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Six Sigma – DMAIC
Measure
• Measurement systems need to have higher resolution
than the specs.
• Specs 0.001 to 0.004, then the measurement system must measure at
this level 0.0001 or more (0.00001)
• Measurement System must be Precise
– Repeated measurements of the same thing should result in the
same value, regardless of other conditions.
• Measurement System Audits
– Used to determine how the MS is working
– Select several items, run them through the process several
times. Measurement should be the same.
– Create standards and have parallel elements measure them
– Audits are very important in human measurement systems
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Six Sigma – DMAIC
Analysis (related to Define)
SIPOC: Suppliers- Inputs-Process-Outputs-Customers
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–
–
–
–
S: Sources of materials and information
I:The materials and information
P: Main steps to create the Output
O: Product or Service
C: Who wants/uses the product
suppliers
-Supplier 1
-Supplier 2
inputs
process
-Output 1
-Output 2
-Output 3
-Input 1
-Input 2
-Input 3
Step 1
outputs
Step 2
Step 3
customers
-Customer 1
-Customer 2
metrics
-metric 1
-metric 2
Step 4
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Six Sigma – DMAIC
Analysis
Cause and Effect Matrix
• Use to relate two sets of information for example: a)
inputs to process, b) process to outputs, c) outputs to
customer requirements.
Process
Assy Cost
Part Rel.
Rework
Transp. Cost
Base Assy
H
L
L
--
Electronic Assy
H
H
H
--
Seal & Epoxy
L
L
L
--
Test and Verify
L
H
L
--
Packaging
--
--
--
H
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Six Sigma – DMAIC
Analysis/Improve
Failure Modes Effect Analysis (FMEA)
• What can fail? What is the probability? Can we know the
failure is about to occur? When do we know? What is the
effect?
• In a process or product the following must be identified.
–
–
–
–
Possible failures
Probability of the failure (codes for likelihood)
Impact of the failure (codes for severity)
Likelihood of detection [causes that lead to the failure] (codes for
higher likelihood)
– RISK PRIORITY NUMBER : Pr x Im x Det
http://en.wikipedia.org/wiki/Failure_mode_and_effects_analysis
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Six Sigma – DMAIC
Analysis/Improve - FMEA
• Prioritize high probability, high impact, highly
detectable failures, then:
– Reduce probability
– Mitigate impact
– Plans for quick reaction when causes detected
• For failures, also quantify potential impacts ($ lost,
customers lost, cost of rework)
• Consider “Worst case scenarios”
• For non-detectable but high impact, high risk – work
on how to detect
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Six Sigma – DMAIC
Analysis – Multiple other tools
– Design of Experiments
– Discrete event simulation
– Pareto – Cause and effect analysis
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Six Sigma – DMAIC
Improve
• This phase deals with developing a solution to the
problem ID in order to reduce variability and meet
desired targets
• Could include evaluation investments in technology,
training or human resources
• This involves brainstorming potential solutions,
selection solutions to test and evaluating the results of
the implemented solutions. Often a pilot
implementation is conducted prior to a full-scale
rollout of improvements.
http://www.brighthub.com/office/project-management/
articles/25328.aspx#ixzz1SJD0JIfJ
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Six Sigma – DMAIC
Improve-Brainstorming ideas
• Important to include the people who are involved in
performing the process.
• A variety of techniques are used to brainstorm
potential solutions to counter the root cause(s)
identified in Analyze. Encouraging participants to
challenge rules and assumptions, ban excuses and
think like small children can be very effective.
• Ideas should not be eliminated prematurely. Even an
outlandish idea that couldn't possibly be implemented
as first suggested may lead to a related idea that is an
ideal solution.
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Six Sigma – DMAIC
Improve – selection of solution
• Good idea to involve the people who work on the
process that is being improved, be included in the
decisions regarding which potential
improvements to implement.
• Need to establish criteria for evaluating the
proposed improvements in an objective manner.
• Criteria usually include time line for
implementation, financial cost, the extent to
which root causes are likely to be countered and
the overall ease of implementation.
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Six Sigma – DMAIC
Improve – selection of solution
• Not all criteria are created equal, so the team may want to
assign weights to each criterion prior to evaluating the
proposed solutions against each one.
• Tools to assist with the evaluation include a priority matrix
and a Pugh matrix, both of which use basic calculations and
ratings to compare the solutions against each other or
against a standard.
• Computer simulation can be beneficial in the evaluation
process.
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Six Sigma – DMAIC
Control
• The primary objective of the DMAIC Control phase is to
ensure that the gains obtained during Improve are
maintained long after the project has ended.
• Focus is to standardize and document procedures,
make sure all employees are trained and communicate
the project’s results.
• The project team needs to create a plan for ongoing
monitoring of the process and for reacting to any
problems that arise.
http://www.brighthub.com/office/projectmanagement/articles/27134.aspx#ixzz1SJGhPqDW
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Six Sigma – DMAIC
Control
• Review and update process maps.
• Important process map developed in Improve is
widely distributed and training offered about the
new process.
• Development of a user guide which spells out the
steps of the process and provides rationale.
• Establish a plan to monitor the new process and act
when results are not up to spec, so that the project
gains will be maintained.
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Six Sigma – DMAIC
Control
• Monitoring plan specifies the metrics that will be tracked to
summarize process performance, as well as specifying how
and how often they will be tracked. Also be sure to clarify
who is responsible for doing it
• This will be directly related to the Critical To Quality (CTQ)
measures determined during the Define phase
• The monitoring plan also indicates what constitutes
satisfactory performance and what should be considered a
red flag indicating possible problems.
• Control charts are used by the process owner can watch for
process shifts or other signs that there may be a problem
with process performance.
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Design for Six Sigma
• Applications of Six Sigma that focus on the design or
redesign of products and services and their enabling
processes so that from the beginning customer needs
and expectations are fulfilled are known as Design for
Six Sigma or DFSS.
• The aim of DFSS is to create designs that are resource
efficient, capable of exceptionally high yields, and are
robust to process variations. This aim produces a
recasting of DMAIC that can be characterized as:
Define-Measure-Analyze-Design-Verify (DMADV) or as
Invention-Innovation-Design-Optimize-Verify (I2DOV)
From: DR. RICK EDGEMAN, PROFESSOR & CHAIR – SIX SIGMA BLACK BELT
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Design for Six Sigma
• DFSS is the change in the product design organization from a
deterministic to a probabilistic culture. Our people were trained to
incorporate statistical analysis of failure modes, both in products
and processes. Then they began to incorporate design changes that
modify and eliminate design features with a probability of failure
within a predefined range of operating environments and
conditions. The design organization changed from a “factor-ofsafety” mentality to one in which there was a quantitative
assessment of design risk.
• Four elements of design are most critical to the effort:
–
–
–
–
Design for Producibility (design for manufacturing and assembly);
Design for Reliability;
Design for Performance (technical requirements); and
Design for Maintainability.
“Design for Six Sigma: 15 Lessons Learned”, Quality Progress, Vol. 35, No. 1, pp.
33-42, January 2002.
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Six Sigma – Design for ….
Define-Measure-Analyze-Design-Verify
(DMADV)
• Define customer requirements and goals for the process,
• product or service.
• Measure and match performance to customer
requirements.
• Analyze and assess the design for the process, product or
service.
• Design and implement the array of new processes required
for the new process, product or service.
• Verify results and maintain performance
From: DR. RICK EDGEMAN, PROFESSOR & CHAIR – SIX SIGMA BLACK BELT
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Six Sigma People
Champions
• Create the vision of Six Sigma for the company.
• Define the path to implement Six Sigma across the organization.
• Develop a comprehensive training plan for implementing the
Breakthrough Strategy.
• Carefully select high-impact projects.
• Support development of “statistical thinking”.
• Ask Black Belts many questions to ensure that they are properly
focused.
• Realize the gains by supporting Six Sigma projects through
allocation of resources and removal of roadblocks.
• Make sure that project opportunities are acted upon by the
organization’s leadership and the finance department.
• Recognize people for their efforts
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Six Sigma People
Master Black Belts
•
•
•
•
•
•
•
•
•
•
Understand the big business picture.
Partner with the Champions.
Get certified as Master Black Belts.
Develop and deliver training to various levels of the
organization.
Assist in the identification of projects.
Coach and support Black Belts in project work.
Participate in project reviews to offer technical expertise.
Help train and certify Black Belts.
Take on leadership of major programs.
Facilitate sharing of best practices across the corporation.
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Six Sigma People
Black Belts
•
•
•
•
•
•
•
•
•
•
•
•
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Act as Breakthrough Strategy experts and be Breakthrough Strategy enthusiasts.
Stimulate Champion thinking.
Identify the barriers.
Lead and direct teams in project execution.
Report progress to appropriate leadership levels.
Solicit help from Champions when needed.
Influence without direct authority.
Determine the most effective tools to apply.
Prepare a detailed project assessment during the Measurement phase.
Get input from knowledgeable operators, first-line supervisors, and team leaders.
Teach and coach Breakthrough Strategy methods and tools.
Manage project risk.
Ensure that the results are sustained.
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Six Sigma People
Green Belts
• Function as Green Belts on a part-time basis, while performing their
regular duties.
• Participate on Black Belt project teams in the context of their
existing responsibilities.
• Learn the Six Sigma methodology as it applies to a particular
project.
• Continue to learn and practice the Six Sigma methods and tools
after project completion.
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