chapter 10
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MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 1
Chapter 10Chapter 10
Principles of
Six Sigma
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Key IdeaAlthough we view quality improvement tools and techniques from the perspective of Six Sigma, it is important to understand that they are simply a collection of methods that have been used successfully in all types of quality management and improvement initiatives, from generic TQM efforts, to ISO 9000, to Lean Production, and in Baldrige processes.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Six-Sigma Metrics
Defect – any mistake or error that is passed on to a customer
Defects per unit (DPU) = number of defects discovered number of units produced
Defects per million opportunities (dpmo) = DPU 1,000,000 opportunities for error
Defective – a product or service that is unacceptable to a customer due to one or more defects
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Is 99.9% Good Enough?Is 99.9% Good Enough?
20,000 incorrect drug prescriptions will be 20,000 incorrect drug prescriptions will be written in the next 12 months.written in the next 12 months.
22,000 checks will be deducted from the 22,000 checks will be deducted from the wrong bank accounts in the next 60 wrong bank accounts in the next 60 minutes.minutes.
12 babies will be given to the wrong 12 babies will be given to the wrong parents each day.parents each day.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Key Idea
Although originally developed for manufacturing in the context of tolerance-based specifications, the Six Sigma concept has been operationalized to apply to any process and has come to signify a generic quality level of at most 3.4 defects per million opportunities.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Six-Sigma Quality Ensuring that process variation is half the
design tolerance (Cpk = 2.0) while allowing the mean to shift as much as 1.5 standard deviations, resulting in at most 3.4 dpmo.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Motorola’s Motorola’s Corporate Quality GoalCorporate Quality Goal
(January 1987)(January 1987)
10 times by 198910 times by 1989
100 times by 1991100 times by 1991
Six Sigma by 1992Six Sigma by 1992
(In Everything We Do)(In Everything We Do)
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Motorola’s Initial Six SigmaMotorola’s Initial Six SigmaMeasurement ProcessMeasurement Process
Cycle time; e.g., 81 minutes Cycle time; e.g., 81 minutes 27 minutes 27 minutes 9 9 minutes minutes 3 minutes 3 minutes 1 minute 1 minute 20 seconds 20 seconds
Defects; e.g., 81 defects Defects; e.g., 81 defects 27 defects 27 defects 9 9 defects defects 3 defects 1 defect 3 defects 1 defect 0.3 defects 0.3 defects
REDUCE BOTH SIMULTANEOUSLY!REDUCE BOTH SIMULTANEOUSLY!
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
k-Sigma Quality Levels
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
But is Six Sigma Realistic?But is Six Sigma Realistic?
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765432
(66810 ppm)· IRS – Tax Advice (phone-in)
Best in Class
(3.4 ppm)
Domestic AirlineFlight Fatality Rate
(0.43 ppm)
·(233 ppm)
AverageCompany
Purchased MaterialLot Reject Rate
Air Line Baggage Handling
Wire Transfers
Journal VouchersOrder Write-up
Payroll Processing
Doctor Prescription WritingRestaurant Bills
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SIGMA
11
Problem Solving Focus
Problem: any deviation between what “should be” and what “is” that is important enough to need correcting
Problem Solving: the activity associated with changing the state of what “is” to what “should be”
Question: should we be focused on studying problems or on best in class processes?
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Key Factors in Six Sigma Project Selection Financial return, as measured by costs
associated with quality and process performance, and impacts on revenues and market share
Impacts on customers and organizational effectiveness
Probability of success Impact on employees Fit to strategy and competitive advantage
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Problem Solving Process
1. Redefining and analyzing the problem/opportunity
2. Generating ideas
3. Evaluating and selecting ideas
4. Implementing ideas
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Key Idea
A structured problem-solving process provides all employees with a common language and a set of tools to communicate with each other, particularly as members of cross-functional teams.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
DMAIC Methodology
1. Define
2. Measure
3. Analyze
4. Improve
5. Control
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Common Six Sigma Tools
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Define
Describe the problem in operational terms
Drill down to a specific problem statement (project scoping)
Identify customers and CTQs, performance metrics, and cost/revenue implications
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
MeasureKey data collection questions
What questions are we trying to answer? What type of data will we need to answer
the question? Where can we find the data? Who can provide the data? How can we collect the data with minimum
effort and with minimum chance of error?
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Analyze
Focus on why defects, errors, or excessive variation occur
Seek the root cause5-Why techniqueExperimentation and verification
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Improve
Idea generationBrainstormingEvaluation and selectionPiloting Implementation planning
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Control
Process ownership Certification of project benefits Maintain improvements Standard operating procedures Training Checklist or reviews Statistical process control charts
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Tools for Six-Sigma and Quality Improvement
Elementary statistics Advanced statistics Product design and reliability Measurement Process control Process improvement Implementation and teamwork
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
The Six Sigma Process: The Six Sigma Process: DMAIC vs. DMADVDMAIC vs. DMADV
Define
Measure
Analyze
Design
Validate
Improve
Control
Continuous Improvement Reengineering
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Design for Six Sigma Focus on optimizing product and process
performance Features
A high-level architectural view of the design Use of CTQs with well-defined technical
requirements Application of statistical modeling and simulation
approaches Predicting defects, avoiding defects, and
performance prediction using analysis methods Examining the full range of product performance
using variation analysis of subsystems and components
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Key Idea
All Six Sigma projects have three key characteristics: a problem to be solved, a process in which the problem exists, and one or more measures that quantify the gap to be closed and can be used to monitor progress.
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Key Six Sigma Metrics in Services Accuracy (Validity) Reliability (Consistency) Cycle time Cost Customer satisfaction
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
TQM vs. Six SigmaTQM vs. Six Sigma
In general, Six Sigma:In general, Six Sigma: Is more structured (DMAIC, “tollgates”)Is more structured (DMAIC, “tollgates”) Has more management involvementHas more management involvement Is more statistically basedIs more statistically based Is based on cost-benefit analysisIs based on cost-benefit analysis Has dedicated resources/certificationHas dedicated resources/certification
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Lean + Six SigmaLean + Six SigmaThe perfect complement!The perfect complement! Six Sigma is about Quality; Lean is about speedSix Sigma is about Quality; Lean is about speed Lean is about eliminating delays and other waste Lean is about eliminating delays and other waste
(“muda”); Six Sigma is about improving the work (“muda”); Six Sigma is about improving the work through eliminating variationthrough eliminating variation
Lean works on obvious problems (and solutions); Lean works on obvious problems (and solutions); Six Sigma is needed to find root causes when Six Sigma is needed to find root causes when solutions are not obvioussolutions are not obvious
Lean involves everyone, while Six Sigma relies on Lean involves everyone, while Six Sigma relies on highly trained “belts”highly trained “belts”
Lean methods are very useful in creating “Six Lean methods are very useful in creating “Six Sigma ready” environmentsSigma ready” environments
Parts of Lean projects may become Six Sigma Parts of Lean projects may become Six Sigma opportunities, and vice-versaopportunities, and vice-versa
Many leading companies are implementing Lean Many leading companies are implementing Lean Six SigmaSix Sigma
MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing
Lean Production Concepts and Tools The 5S’s: seiri (sort), seiton (set in order), seiso
(shine), seiketsu (standardize), and shitsuke (sustain)
Continuous flow/takt time Visual controls Efficient layout and standardized work Pull production Single minute exchange of dies (SMED) Total productive maintenance Continuous improvement