sixsigma cases
TRANSCRIPT
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Six Sigma
Experience sharing
&Cases
Six Sigma is a Performance Target
Six Sigma is aPERFORMANCE TARGETthat appliesto a single Critical-to-Quality (CTQ) characteristic notto the total product.
What is Six Sigma? Six Sigmais a business process that allows companies to drastically
improve their bottom line by designing and monitoring everyday businessactivities in ways that minimize waste and resource use while increasingcustomer satisfaction.
Six Sigmaguides companies into making fewer mistakes in everything theydo and eliminating lapses in quality at the earliest possible occurrence.
Quality Controlprograms have focused on detecting and correctingcommercial, industrial, and design defects and on confo rmance to standards.
Six Sigmaencompasses something broader: It provides specific methods tore-create the process so that defects and errors do not arise in the first place .
Some companies using Six Sigma: Motorola, AlliedSignal, General
Electric, American Express, Sony, Honda, Maytag, Raytheon, TexasInstruments, Bombardier, Canon, Hitachi, Lockheed Martin, and Polaroid.
CASE 1
Motorola
Six Sigma Origins The real problem at Motorola is that our quality
stinks!(Motorola Executive, Art Sundry in 1979)
Led to discovery of the crucial correlation betweenhigher quality and lower development costs inmanufacturing products of all kinds.
This pre-dates the rediscovery by America of Dr. W.Edwards Deming that occurred in the 1980 WhitePaper,If Japan Can, Why Cant We?
Six Sigma Origins At a time when most American companies believed that quality
cost money, Motorola realized that done right improvingquality would actually reduce costs and that the highest-qualityproducer could and should be the lowest-cost producer.
Motorola was then generally spending 5%-10% (sometimes asmuch as 20%) of annual revenues correcting poor qualitythat is -- $800 million to $900 million. With higher-qualityprocesses this money could be returned to the bottom line.Within the first four years MOTOROLA SAVED $2.2 BILLION.
Ultimately, this led to a focus onPROCESS(design &production), rather than simplyPRODUCTquality. That is, aPROACTIVE,rather than simplyREACTIVEapproach toualit .
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SIX SIGMA QUALITY
DEFINITION
Qualityis a state in which value ent itlement is realized for thecustomer and provider in every aspect of the business relationship.
Business Qualityis highest when the costs are at the absolutelowest for both the producer & consumer.
Six Sigmaprovides maximum value to companies in the forms ofincreased profits and maximum value to consumers with high-quality products and services at the lowest possible cost.
At the beginning of 80s, In the Japanesemarket, Motorolas beeper lost its name
value because of the quality difference
compared to Japans
In 1981 they tried to meet a challenge to
improve quality 5 times in 5 years and they
couldnt.
They developed a consistent process base
on statistical knowledge.
In 1987, they established 6 goal
as a key initiative.
Quality Cost Down by$3.2billion
Origin of 6
(Quality level elevated 100
times in 4 years)
Culture harmony Western &
Oriental
4. 6s Case Study. Why 6s?
Start : Motorola OUTCOME
Start & Prosperity
Motorola reached 5.5 level in 1992.Outcome is $3.2billion from1987 to 1992.
Motorola
Robert W. Galvin,former Motorola CEO
Failing to implement Six Sigma incommercial areas with the same forcethat the company implemented it in itsindustrial sectorscost Motorola $5billionover a four-year period.
How Big is the
Service Sector Anyway? MISTAKEN BELIEFS:
Some companies still believe that improving commercial processes is lessimportant than improving industrial processes
or that seemingly intangible commercial processes cant be controlled.
BOTH ARE WRONG:
Customers are more likely to take their business elsewhere because o f poorservice than poor products.
Companies like GE have shown that improving internal and externalcommercial processes adds to the bottom line and to customer satisfactionsignificantly
Case 2: Six Sigma and General
Electric
General Electric CEO, Jack Welch, describes Six Sigma as the mostimportant initiative GE has ever undertaken. GEs operating income, acritical measure of business efficiency and profitability, hovered around10% for decades.
In 1995 Welch mandated that each GE operation from credit card servicesto aircraft engine plants to NBC-TV work toward achieving Six Sigma. GEwas averaging about 3.5s when it introduced the program.
Case 2: Six Sigma and General
Electric
With Six Sigma embedding itself deeper into GEs processes, theyachieved the previously impossible operating margin of 16.7% in 1998 up from 13.6% in 1995.
In dollar amounts, Six Sigma delivered more than $300 million to GEs1997 operating income and more than $600 million in 1998.
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Quality Cost Downby $3.8 billion
Adopt to all Biz.
Train and do
projects
4. 6s Case Study. Why 6s?
Prosperity :GE OUTCOME
Start & Prosperity
In 1995 GE launched 6 processto overcome a difficult business
environment and to challenge
World Class Quality.
They made new processes such as
Productivity,Inventory Return etc,
but i mprovement was delayed
because of defects in processes.
GE thinks World Class Quality is
big challenge. GE now focuses on
6 process for next generation .
G E
Case 3: AlliedSignal 70,000 Employees
Chemicals, Fibers, Plastics, Aerospace Products,
Automotive Products. Larry Bossidy came from GE to become CEO in 1991
Market Value = $4 billion in 1991
Market Value = $29 billion by the end of 1998
Market Value = $38 billion by 2000.
AlliedSignal 1996 GOALS:
6% productivity increase
Reduced Inventory
Full-Capacity Utilization
Little or no Overtime
Reliable Products
5s Manufacturing
5s Designs
Predictable Cash Flow 5s Suppliers
BY END OF 1998:
Total Impact of SixSigma Within
AlliedSignal Reached $2Billion.
Six Sigma Profits inService Areas including: Order Processing
Shipping
Procurement Product Innovation
We cant tell other organizations how to do Six Sigma, but we can tellthem how not to do it. Allied has made mistakes along the way and, in
the process, learned some tremendous lessons.
LESSON 1: The OrganizationsLeadership Must Own Six Sigma
Upper management supported SixSigma, managers below those atthe top saw it as a flavor of themonth.
Black Belts seen as a nuisance.
Black Belts were using Six Sigmajargon while managers were usingbusiness vocabulary. This led to
confusion. SOLUTION: Introduce ALL levels
of management to Six Sigma.
Management had weeklong trainingsessions to understand themethods of the BreakthroughStrategy and how Black Belttraining and experience could beleveraged. ALSO how variousinitiatives fit together.
BEGAN TO FOCUS ONPROCESSES NOT PEOPLE asthe source of problems. Also,understanding of the Breakthrough
Strategy provided a plan of action,rather than just a command tomake something happen.
Six Sigma Changed the Company Cultureand
One of the flaws at Allied is that we hadtoo much vertical mobility.Managers inch up the same smokestack, learning more and more
about less and less.But companies that train promising individualsas Black Belts circumvent the vertical flow and move peoplearound horizontally, having them serve time in as many majorbusinesses or divisions as possible to give them a kaleidoscopicview of the organization and the benefit of being mentored by avariety of new blood.
Linked AlliedSignals
Goals, Vision & Activities.
Lesson Two: A Beginning Without an End
Having recognized the need to trainmanagers in the Six SigmaBreakthrough Strategy, Allied dedicatedthe next year to training 1,000 leaders inthe organization in how Six Sigma
worked, and in its potential financialimpact.
Training sessions lasted 3.5 days andemphasized Six Sigmas impact on:
Profitability through improvedprocesses;
The Crucial role of Black Belts,RATHER THAN teaching statisticalprocesses involved in achieving SixSigma.
Initially trained top managers at eachof Allieds 11 Strategic BusinessUnits and gradually worked their waydown the organization to middlemanagement, line supervisors, andso on.
COMPLAINTS FROM BLACKBELTS WITHIN SIX MONTHS:Management turnover and too muchpromotion of Black Belts intomanagement before benefit from thetraining and skills could be realized.SO training had to be ongoing.
Allied is not in the business of measuring activity. We are in the business of measuring results.IF something doesnt have a positive impact on customer satisfaction, our shareholders, and employees,
and in the process makes a lots of money, THENwe just flat out arent going to do it.RICHARD A. JOHNSON, Director of Six Sigma at AlliedSignal
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Lesson Three: Black Belt Retention AlliedSignals goal: send Black Belts with a minimum of 18-24 months
experience mastering the Breakthrough Strategy back into theorganization to create Six Sigma behavior & thinking.
40% of Black Belts were promoted to departmental or plant managers.Others left AlliedSignal for higher-paying jobs at suppliers. Otherscompleted only one or two projects before they were pulled back intotheir previous assignments with leadership not properly reviewingprojects and properly acting upon financial opportunities created byBlack Belts so that managers felt that Six Sigma wasnt particularlyimportant.
50% of Black Belts were absorbed back into the organization within sixmonths.
NOW BLACK BELTS must work at least 18-24 months on a series ofSix Sigma projects prior to a change of roles. TIME & EXPERIENCEARE VIEWED AS CRITICAL TO SIX SIGMA SUCCESS AND THEMATURITY OF THE BLACK BELT.
Lesson Three - Continued AlliedSignals Champions & Master
Black Belts
3.5 Day Executive Overview followedby the traditional Four-Month BlackBelt training process.
MASTER BLACK BELTS are selectedfrom the best of the Black Belts.
Each of these trains and mentors 10Black Belts
Each Black Belt trains and mentors 10Green Belts.
NOW: All Salaried Employees areExpected to Undergo the 26 Hours ofTraining Required for Green BeltCertification by 2000.
CHAMPIONS 20
Master Black Belts 70
Black Belts 2000+
Green Belts 18,000 Total # of Employees 70,000
Lesson Four: Supplier Capability is Critical to theSuccess of the Breakthrough Strategy
The Majority of AlliedSignalsSuppliers were operating atabout three sigma.
This prevented the companyfrom realizing the full benefits ofSix Sigma.
AlliedSignal recognized thatthey needed to view suppliersas their partners.
AlliedSignal began TRAINING
its suppliers and offering othertechnical assistance.
To achieve Six Sigma it isimportant to minimize the numberof suppliers, limiting these tothose that have been trained inthe Breakthrough Strategy.
Not only does AlliedSignalprovide training, BUT thenfollows up by dedicating ITSOWN BLACK BELTS to mentorand work with critical suppliers.AlliedSignal estimates that forevery 300 Black Belts it trains,
100 are either customers orsuppliers.
Deming: End the Practice of Awarding Business on Price Tag Alone.
Lesson Five:There is No Such Thing as Operator Error
It is PROCESSES notPEOPLEthat Fail.
This maps to one ofDemings 14 Points forManagement: DRIVEOUT FEAR.
Focus on Processesimplies that people are notaccused, but rather, thatthey are able to investigateprocesses and be part ofthe solution.
Lesson Six:Focus on Bottom-Line Improvement
The number one source of failure in deploying Six Sigma is the result ofLACK OF COMMITMENT FROM THEORGANIZATIONS LEADERSHIP.
The FINANCE DEPARTMENT must be involved so that the impact of SixSigma Projects on the Bottom-Line is apparent.
Black Belts, the Finance Department, and Executive Leadership mustwork in tandem.
While BLACK BELTS create opportunities for cost reduction andincreased profitability, the companys LEADERSHIP must make sure thatBlack Belts focus on the right projects and take action on the savingsopportunities they generate. FINANCE provides closure to the effort byensuring that the savings are returned to the organizations bottom line.
Lesson Seven: Initiative Overload LARRY BOSSIDY, CEO:
One of the things I have trouble with is nonfinancial objectives. Often
theyre just as obscure and vacuous as
they sound.
FIVE ACTIONS TO PERPETUATESIX SIGMA:
1. TRAINING: Allieds employee basechanges enough every nine to tenmonths that maintenance of Six Sigmaculture requires that new employeesbe trained in the BreakthroughStrategy.
2. Senior managementinvolvement.
3. Continued on-site leadershiptraining, and alignment of goalsamong divisions to reinforceBreakthrough Strategy thinkingand goals.
4. Requiring Black Belts todedicate a minimum of two yearsto working on Six Sigmaprojects.
5. Supplier involvement andimprovement in Six Sigmainitiatives.
Products and services should be improved ONLY to the degree that customer value is increased.Six Sigma is a program designed to generate money for the company, either through savingsresulting from reduced costs, or from boosting sales by increasing customer satisfaction.
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AlliedSignal:Hindrances to Six Sigma Success
Working on too many improvements at the same time.
Not having someone accountable for the problem.
Not being a process-based company.
A lack of trained and experienced people.
Middle managers who fear uncertainty about future roles.
Lack of metrics focused on customer value-added processes.
Lack of integrated information and financial systems.
Fragmented, staff-driven approaches.
Six Sigma
Six Sigma is a way
of achieving world class
performance by focusing on
customers' needs andeliminating defects
Six Sigma is a quantitative
statistical measurement
that means not more than
3.4 defects
per million opportunities
Case Study :Tata Chemical
Failure Mode & EffectsAnalysis
Process Mapping & Failure Mode
and Effects Analysis
Agenda Introduction to TCL
Context and Need for FMEA
Introduction to FMEA
Definition of terms
Steps in performing an FMEA
Introduction to the FMEA & S-O-D Tables
Methodology Adopted
Deliverables from FMEA
Action Plan
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GEOGROPHICAL LOCATION
OF MITHAPURGEOGROPHYCAL MAP
Where
We are
PROFILE One of the major units of TATA Group
Started in 1939
Largest Inorganic Chemical Complex in ASIA
Largest manufacturer of Soda Ash in INDIA
Other products areSodium Bicarbonate, Vacuum Iodised Edible Salt, Caustic Soda Lye,Liquid Chlorine, Hydrochloric Acid, Liquid Bromine, InorganicBromides, Portland & Pozzolana Cement
Gas based fertilizer complex at Babrala U.P.
Extensive rail siding within Mithapur works.
Produces wealth from waste
Acquired Certification of
ISO - 9001 : 2000 ; ISO - 14001
Commendation for NQ Award
The New
EconomyCompetitive Environment
Gradual evolutionarychange
Stability
Clearly definedindustry boundaries
Power fromincumbency
Domestic markets Employee loyalty
Competitive Environment
Frequent,discontinuous change
Creative destruction
Competitiveadvantage hard tosustain
Global markets
Instant access tounlimited employmentopportunities
The Old Economy
Winds of Change in Tata Chemicals
Winds of Change in TataChemicals
Customised demands
on product specs
More players crowd
the marketplace
Environment lawsBecome more stringent
ANSAC targets India
Chinese start dumping SA
Import dutieskeep dropping
Customer doesbackward integration
Competitorenhances capacity
Govt. committed to
deregulate Urea inthe next five years
Unstable national policy/environment - Urea
Intense price competition
Our
Cultural
PillarsSpeedyExecution
Collaborative
Responsiveness
RelentlessCostFocus
CompetitiveExcellence
TATACHEMICALS LIMITED
Cost of Poor Quality
Hidden
Failure
Costs
Commonly
measured
failure costs
Scrap,
Rework
Warranty
Engineering Time
Management Time
Shop & Field Downtime
Increased Inventory
Decreased Capacity
Delivery problems
Lost orders
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6s8-D Problem Solving Tech.
S P C
F M E AD O E
(Statistical Process Control)
Process MappingBench Marking
Failure Mode and Effects Analysis(FMEA) Structured analysis for identifying ways & methods inwhich the product or processes can fail and then plan
to prevent those failures.
FMEA is a proactive tool for reducing defects and non-
conformities.
A before-the-event action, not an after-the-fact
exercise.
Advantages of FMEA1. Identifies process deficiencies
2. Identifies the critical characteristics and helpsin developing control plans
3. Establishes a priority of corrective actions
4. Assists in the analysis of the process
5. Documents the rationale for changes
IntroductionFMEA is a structured approach in :-
Identifying ways in which a product / process can fail
to meet critical customer requirements.
Estimating the risk of causes with regard to these
failures.
Preparing control plan for preventing these failures.
Prioritizing the actions for improving the process.
FMEA is an extremely important tool for each phase of
Six Sigma strategy viz. Measure, Analyze, Improve,Control.
Definition of terms
Failure Mode : It is a manner in which a part or a
process can fail to meet specifications. It is usually
associated with defect or non-conformities.
Examples : Missing part, Off specification parts
(Oversized, Undersized) etc.
Definition of terms
Cause : Causes are sources of variation which are
associated with key process inputs. Cause can be best
defined as a deficiency which results in a failure mode.
Examples : Instructions not followed, Lack of
experience, incorrect documentation, Poor handling
etc.
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Definition of terms
Effect : Effect is the impact on the customer (both
internal & external) if the failure mode is not prevented
or corrected.
Examples : Customer dissatisfaction, Frequent product
breakdowns, Customer downtime.
Relationship of Cause, Failure mode
& Effect
CauseFailureMode Effect
(Failure)
FailureMode
Causes Causes Causes
Causes CausesCauses
Effect(Failure)
Preventor Detect
Steps in FMEA process Develop a process map & identify process steps.
List key process inputs for each process.
List key process outputs for satisfying processrequirements.
List ways the process inputs can vary (causes) andidentify associated failure modes & effects.
Assign severity occurrence and detection rating foreach cause.
Steps in FMEA process Calculate risk priority number ( RPN) for each
potential failure mode.
Determine recommended actions to reduce RPNs.
Establish time frame for corrective actions.
Take corrective actions.
Put all controls in place.
Ranking Parametersemployed Severity (SEV) : Severity indicates how severe is the
impact of the effect on the customer.
Occurrence (OCC) : This indicates the likelihood ofthe cause of the failure mode to occur.
Detection (DET) : This indicates the likelihood of thecurrent system to detect the cause or failure mode if itoccurs.
Risk priority number : This number is used to placepriority to items for better quality planning.RPN = SEV X OCC X DET
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Severity-Occurrence-Detection TablesRating Degree of Severity Likelihood of Occurrence Ability to detect
1 Customer will not a t all observe Very remote possibility Sure that the potentia l failure
the adverse effect will be detected & prevented
before reaching next customer
2 Custo mer will experience Low failure with supp orting Almost sure that the potent ialslight discomfort documents failure will be detected before
reachig the next customer
3 Customer will experience Low failure without supporting Less chances that the
annoyance because of s light documents potentia l failure will reach the
degradation of performance next customer undetected
4 Customer dissatisfied due to Occasional failures Some controls may detect
reduced performance the potential from reaching the
next customer
5 Customer is uncomfortable Moderate failure rate with Moderate chances potential
supporting documents failure reach next customer
Rating Degr ee of Sever ity Likelihood of Occur rence Ability to detec t
6 Warranty repairs Modearate failure rate without Controls are not likely to detect
supporting documents or prevent the potential failure
from reaching the next
customer
7 High degree of customer High failure rate with supporting Less chances that the potential
dissatisfaction documents failure will be detected or
prevented before reachingthe next customer
8 Vey high degree of customer High failure rate with supporting Very less chances that the
dissatisfaction documents potential failure will be detected
or prevented before reaching
the next customer
9 Negative impact on the Failure is almost certainRemote chances of Existing
controls will not detect
customer the potential failure
10 Negative impact on the Assured failureIt is certain Existing controls will
not detect
customer, people & society the potential failure
1 2 3 4 5 6 7 8 9
ProcessPotential
failure mode
Potential
failure effectSEV
Potential
causesOCC
Current
ControlsDET RPN
Part No.
1
2
3
4
5
List failure
modes for each
step
List effects
of each
failure mode
List causes
for each failure
mode
Rank severity
on 1 to 10scale
Rank occurrence
on a 1 to 10scale
List how the cause
is presently
being controlled
RPN=
SEV*OCC*DET
Rank how well
cause/failure
can be detected
on 1 to 10 scale
FMEA Table: ( Column 1 to 9 )
10 11 12 13 14 15
Actions
Recommended
Responsib
ilitySEV OCC DET RPN
List actions
recommended
on RPN pareto
Designates people
responsible for
corrective action
RPN is recalculated
on completion of
corrective action
MethodologyAdopted Step-1
Identification of processes.
Step-2 Walking the process.
Step-3 Generation of Process Flow Diagram.
PROCESS FLOW DIAGRAM
Step-4 Validation of Process Flow Diagram.
MethodologyAdoptedStep-5
Listing the Potential Failure Modes, Effects, Causes and
Current Controls.
Step-6
Determining the ratings for Severity, Occurrence and
Detection.
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PROCESS
FUNCTION
REQUIRE
MENTS
POTENTIAL
FAILURE
MODES
POTENTIAL
EFFECTS OF
FAILURES
SE
V
POTENTIAL
CAUSES OF
FAILURES
O
CC
CURRENT
PROCESS
CONTROLS
DE
T
RP
N
POTENTIAL FAILURE MODE AND EFFECT ANALYSIS
Kiln
Operation
Refractory
lining
failure
-Improperfiring;
-Abnormal
flame
propagation
4 2 64
Shell temp.scanning,
Pyrometer
& visual
inspection
8
KilnShutdown;
Process
failure
Improper
air
supply
excessive
CO
formation
7Low air flow
rate & hence
low O23
monitoring
of air flow
rate in DCS
2 42
Improper
clinker
formation
6
Low ID Fan
Step &
Damper
Position
3monitoring
of air flow
rate in DCS2 36
PROCESS
FUNCTION
REQUIRE
MENTS
POTENTIAL
FAILURE MODES
POTENTIAL EFFECTS
OF FAILURES
SEVE
RITY
POTENTIAL
CAUSES OF
FAILURES
OCC
URE
NCE
CURRENT
PROCESS
CONTROLS
DE
TE
CTI
ON
RPN
Refractory lining
failureplant shutdown 8
improper firing,
abnormal flame
propagation
4
Shell temp.
scanner, visual
and pyrometer
inspection
2 64
excessive CO formation 7 Low air flow rateand hence low O2
3 DCS monitoringair flow rate
2 42
Improper clinker
formation6
Low ID Fan Step &
Damper Position3
DCS monitoring
air flow rate2 36
Mai n drive hang up Plant shutdown 8electrical/mechanic
al/instrumental3 DCS Monitoring 2 48
Pier support
malfunctionPlant shutdown 8 Mechanical 3
Creep
measurement
every shift
3 72
Limited fuel stoc k plant shutdown 7 Improper planning 4Daily inspection &
stock checking1 28
ESP failure
Environmental hazards
leading to plant shut
down
10Mechanical /
electrical3
DCS monitoring &
interlocking, PM
schedule
2 60
Improper air
supply
Kiln operation
POTENTIAL FAILURE MODE AND EFFECT ANALYSIS
MethodologyAdoptedStep-7
Find out Critical Tasks on the basis of RPN.
FMEA Table
Step-8Preparing the critical task table and identification of KPMs for the
Critical Tasks.
CRITICAL TASK TABLE
Departments Covered Cement Plant (10)
Salt Vacuum (5)
Power Plant (4)
Soda Ash (9)
Analytical Lab (5)
Marine (7)
SAMG (5)
CCG* (6)
SCM* (5)*Processes are mapped,FMEA to be performed
Deliverables of FMEA-A list of potential failure modes ranked by the RPN.
-A list of critical and/or significant parameters to track.
-A list of recommended actions to address the critical
tasks and failure modes.
-A potential list to eliminate the cause of failure modes,
reduce their occurrence, and improve defect detection.
Action Plan Critical tasks that have been identified for each process
should be targeted for improvement.
Recommendation & implementation of actions toreduce the occurrence of the cause of failure and/orimproving the current controls for detection of cause orfailure mode
Track the Key Performance Indicators (KPIs) of thecritical tasks.
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Action Plan
Identify causes creating disturbances in the process
based on the analysis of the charts.
Once the actions implemented yield satisfactory results,
the next iteration of the FMEA is to be performed.
Case: Shipping logistics
Situation: GE Appliance products, such as microwave ovens and air
conditioners, are being produced in Asia and shipped to UScustomers, such as Wal-Mart
Delivery performance is very erratic and the average on-timedelivery is about 85%
Source: Yan Wang, University of Iowa
Shipping logistics (cont.)
Situation: Product arrives in the US
at Los Angeles
From the port, theproduct is taken either toa GE distribution centeror to a customerdesignated forwarder
Product is then crossdocked and sent on tofinal distribution centersvia rail, truck-on-rail, or
truck
Shipping logistics (cont.)
Process map
Shipping logistics (cont.)
DMAIC steps
Define
Phase
A team is assembled to attack this problem. The
team includes suppliers, 3rd party vendors, GElogistics people, finance, sales, and customers
The supply chain process is mapped from thesupplier to the end customer
Measure
Phase
The current performance is measured by looking at
data from the previous 6 months. Capability of this
process is 1.5 sigma currently
Analyze
Phase
All of the many inputs are examined and it appears
that 2 areas are the vital inputs, the shipping
decision by the supplier and getting the productthrough the port of LA
Improve
Phase Further investigation by the team yields some
changes in procedure that reduces the problem
ControlPhase
Documentation and procedures are updated
Shipping logistics (cont.)
Process improvement
Old Procedure New Procedure
GE specifies when products
produced and shipped
GE specifies when products
produced and delivered to US
Supplier would comply by selecting
first ship going to the US
Supplier complies by selecting
the right ship
Shipping time 8 to 18 days Shipping time 8 days
Supplier notifies GE system (often
delayed) and freight forwarder with
paperwork
Supplier notifies freight
forwarder with paperwork, and
freight forwarder communicates
through GE system
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Shipping logistics (cont.)
Results:
On time delivery increased to
97% Transportation costs reduced
by $300,000
Inventory (cash flow) reducedby $1,000,000
Capability Raised to 3.5sigma
Whats the point? There are two aspects to six sigma the
statistical aspect and the business aspect. Both are important
and complementary.
Typical costs/benefits w.r.t. 6s
So what is 6s? Fundamentally, it is an old idea
consistent with TQM.
It is a culmination of
Continuous improvement (noorganization is 6s); Get it right the firsttime; Share and learn and do thattransparently and collectively; It isusually the next step in quality;Customer focused (remember defects?);Very well packaged; No particularcertification process (if you looking for anormative framework, you may end up
being disappointed)
I like it because it covers the entiregamut of
Philosophy, methodology, technique andtool
A measure ofcapability of a process
A goal forimprovement
A system ofmanagement toachieve lastingbusiness leadershipand top performance
Six sigma is
Six Sigma Applies to Products & Services,
Not the Companies Who Create Them
A company with six sigma is notassured financial success.
We must distinguish between sixsigma products and processes, andsix sigma companies.
The six sigma strategy createsspecific improvement goals forevery process within anorganization, allowing them tounderstand and incorporatetechnological advances lurking onthe horizon.
Six Sigma forces organizations toreexamine the way in which workgets done, rather than tweakingexisting systems.
It simplifies systems and processes,improves capability, and ultimately finds away to control systems and processespermanently.
Even a six sigma product will fail if brought
to market too late or into a market with nodemand.
THIS IS WHY companies must achieve SixSigma in everything they do.
Quality Function Deployment Is a structured method that is intended to
transmit and translate customer requirements,
that is, the Voice of the Customer
through each stage of the product development
and production process.
These requirements are the collection of
customer needs, including all satisfiers,
exciters/delighters, and dissatisfiers.
The House
of QualityQuality Function Deployments
House of Quality
Customer
PerceptionsRelationships
betweenCustomer Needs
andDesign Attributes
ImportanceRankings
CustomerNeeds
Design
Attributes
Costs/Feasibility
Engineering Measures
Correlation
Matrix
12
3
4
5
6
7
8
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Building the House of Quality
1. Identify Customer Attributes
2. Identify Design Attributes / Requirements
3. Relate the customer attributes to the design attributes.4. Conduct an Evaluation of Competing Products.
5. Evaluate Design Attributes and Develop Targets.
6. Determine which Design Attributes to Deploy in the
Remainder of the Process.
1. Identify Customer Attributes These are product or service requirementsIN THE
CUSTOMERS TERMS.
Market Research;
Surveys;
Focus Groups.
What does the customer expect from the product?
Why does the customer buy the product?
Salespeople and Technicians can be important sources of
informationboth in terms of these two questions and in
terms of product failure and repair.
OFTEN THESE ARE EXPANDED INTO Secondary and
Tertiary Needs / Requirements.
2. Identify Design Attributes.Design Attributes are Expressed in the Language of
the Designer / Engineer and Represent theTECHNICAL Characteristics (Attributes) that mustbe Deployed throughout the DESIGN,MANUFACTURING, and SERVICE PROCESSES.
These must be MEASURABLE since the Output willbe Controlled and Compared to Objective Targets.
The ROOF of the HOUSE OF QUALITY shows,
symbolically, the Interrelationships between DesignAttributes.
3.Relating Customer & Design Attributes
Symbolically we determine whether there is NO relationship, a
WEAK one, MODERATE one, or STRONG relationship
between each Customer Attribute and each Design Attribute.
The PURPOSE it to determine whether the final Design
Attributes adequately cover Customer Attributes.
LACK of a strong relationship betweenA customer attribute
and any design attribute shows that the attribute is not
adequately addressed or that the final product will have
difficulty in meeting the expressed customer need.
Similarly, if a design attribute DOES NOT affect any customer
attribute, then it may be redundant or the designers may have
missed some important customer attribute.
4. Add Market Evaluation & Key Selling Points
This step includes identifying importance ratings for
each customer attribute AND evaluating existing
products / services for each of the attributes.
Customer importance ratings represent the areas ofgreatest interest and highest expectations AS
EXPRESSED BY THE CUSTOMER.
Competitive evaluation helps to highlight the absolute
strengths and weaknesses in competing products.
This step enables designers to seek opportunities for
improvement and links QFD to a companys strategic
vision and allows priorities to be set in the design
process.
5. Evaluate Design Attributes of
Competitive Products & Set Targets. This is USUALLY accomplished through in-house testing and
then translated into MEASURABLE TERMS.
The evaluations are compared with the competitive evaluation ofcustomer attributes to determine inconsistency between customer
evaluations and technical evaluations.
For example, if a competing product is found to best satisfy a
customer attribute, but the evaluation of the related design
attribute indicates otherwise, then EITHER the measures used are
faulty, OR else the product has an image difference that is
affecting customer perceptions.
On the basis of customer importance ratings and existing product
strengths and weaknesses, TARGETS and DIRECTIONS for each
design attribute are set.
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6. Select Design Attributes to be Deployed
in the Remainder of the Process
This means identifying the design attributes that:
have a strong relationship to customer needs,
have poor competitive performance,or are strong selling points.
These attributes will need to be DEPLOYED orTRANSLATED into the language of each function inthe design and production process so that proper actionsand controls are taken to ensure that the voice of thecustomer is maintained.
Those attributes not identified as critical do not needsuch rigorous attention.
Using the House of QualityThe voice of the customer MUST be carriedTHROUGHOUTthe production process.
Three other houses of quality are used to do this and,together with the first, these carry the customers voicefrom its initial expression, through design attributes,on to component attributes, to process operations, andeventually to a quality control and improvement plans.
In Japan, all four are used.
The tendency in the Westis to use only the first two.
1
C
ustomerAttributes
Design Attributes
2
DesignAttributes
Component Attributes
3Component
Attributes
Process Operations
4
Quality Control Plan
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The Cascading Voice of the Customer
Product or Service
StartDate
BusinessAreas of
Emphasis
Metrics SupplierInvolvement
TrainingEmphasis
RewardSystem
Amount ofCulturalChange
Return onInvestment
Motorola 1987 Production Defects Intimidation Six SigmaBasics andStatistics
Black Belt
Recognition
Low 1.4 Billion
in 7 Years
DSEG(Raytheon/TI)
1990 Production Defects and
Cycle TimeTrainingSuppliers
in the Tools
Low Not
Published
AlliedSignal 1992 Productionand Design
Training
Suppliers
Black
Belts
Six Sigma
Basics,
Statistics,
KISS for
Suppliers
GeneralElectric
1995 Production,
Design,
R&D, and
Transactional,i.e., the whole
organisation
Training
Suppliers
Black Belts
Black Belt,
Green Belt,
and
ManagementPromotions,
Bonuses,
and
Stock
Options
High
Black Belt
Recognition
Black Belt
Recognition
Monetary
Rewards
Six Sigma
Basics,
Statistics,
and Soft
Skills
Defects,
Cycle Time,
COPQ,
Cost
Reduction
Six Sigma
Basics,
Statistics,
Soft Skills,Finance
Skills,
Defects,
Cycle Time,
Cost Reduction,
StableOperations,
Annual
Operating ROI
(Intellectual
Capital)
Medium 1.4
Billion in
4 Years
Evolution of Six Sigma
3 +
Billion in
4 Years
(Taken
from
1999
Annual
Report)
What Six Sigma Tells Us We dont know what we dont know.
We cant do what we dont know.
We wont know until we measure.
We dont measure what we dont value.
We dont value what we dont measure.
TYPICAL RESULTS:companies that properly implement Six Sigmahave seen profit margins grow 20% year after year for each sigmashift (up to about 4.8s to 5.0s. Since most companies start at about3s, virtually each employee trained in Six Sigma will return onaverage $230,000 per project to the bottom line until the companyreaches 4.7s. After that, the cost savings are not as dramatic.
HOWEVER,improved profit margins allow companies to createproducts & services with added features and functions that result ingreater market share.
TQM Focus vs. Six Sigma Focus
Total Quality Management
TQM programs often focus onimprovements in individualoperations with unrelatedprocesses.
The consequence is that withmany quality programs,regardless of howcomprehensive they are, it
takes many years before allthe operations within a givenprocess are improved.
Six Sigma Six Sigma architects focus on
making improvements inalloperations within a process,producing results more rapidlyand effectively.
A process is any activity or group of activities that:* takes an input, * adds value to it,and* provides an output to an internal or external customer.
An industrial processis any process that depends on machinery for its
creation and comes into physical contact with materials that will bedelivered to an external customer. It does not include shipping,distribution, or billing processes.
A commercial process,such as ordering materials, payroll, or processingcustomer orders, supports industrial processes, or may stand on its own as aseparate and unique business.
When at least 80% or more of a process depends on human activity, weconsider this a commercial process.
What is a Process?
Roles of Six Sigma 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 ofresources and removal of roadblocks.
Hold the ground by implementing Black Belt recommendations.
Make sure that project opportunities are acted upon by the organizationsleadership and the finance department.
Recognize people for their efforts.
Champion training is one week.
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Roles of Master Black BeltsUnderstand 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.
Master Black Belt training consists of two one-week sessions.
Roles of Black Belts 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 teamleaders.
Teach and coach Breakthrough Strategy methods and tools.
Manage project risk.
Ensure that the results are sustained.
Black Belts Perform the Following Tasks
MENTORS: Cultivate a network of Six Sigma individuals at the localorganization or site.
TEACH: Provide formal training of local personnel in new strategiesand tools.
COACH: Provide one-on-one support to local personnel.
TRANSFER: Pass on new strategies and tools in the form oftraining, workshops, case studies, and local symposia.
DISCOVER: Find application opportunities for Six Sigma strategiesand tools, both internal and external (e.g. suppliers and customers).
IDENTIFY: Highlight / surface business opportunities through
partnerships with other organizations. INFLUENCE: Sell the organization on the use of Six Sigma
strategies and tools.
Characteristics of Six Sigma Black Belts
Highly respected by superiors, peers, and subordinates.
Understands the big picture of the business.
Focuses on results and understands the importance of the bottom line.
Speaks the language of management (money, time, organizational dynamics, etc.)
Committed to doing whatever it takes to excel.
Sponsored by a vice president, director, or business unit manager.
Is an expert in his or her specific field.
Possesses excellent communication skills, both written and verbal.
Inspires others to excel.
Challenges others to be creative.
Capable of consulting, mentoring, and coaching.
Drives change by challenging conventional wisdom, developing and applying new
methodologies, and creating innovative strategies. Possesses a creative, critical, out-of-the-box intellect.
Allows room for failures and mistakes with a recovery plan.
Characteristics of Six Sigma Black Belts
Accepts responsibility for choices.
Views criticism as a kick in the caboose that moves you a step forward.
Encourages commitment, dedication, and teamwork.
Unites and inspires a team to a core purpose.
Able to communicate all sides of an issue.
Solicits diverse ideas and viewpoints.
Empathizes.
Promotes win-win solutions.
Disagrees tactfully and does not overreact.
Acts decisively under pressure.
Anticipates and confronts problems early and corrects causes..
Effectively identifies priorities from a business standpoint.
Manages limited resources in a highly efficient and effective manner.
Careful not to assign an unrealistic number of tasks to any team member.
Characteristics of Six Sigma Black Belts
Understands and respects that people have limitations.
Displays a genuine concern and sensitivity toward others.
More concerned about business success than personal gain.Does not lord her or his expertise over others.
Recognizes that results count more than fancy titles.
How Many Black Belts Does an Organization Need?
Revenues/(1 million) = Number of Black Belts
Number of Black Belts/(10) = Number of Master Black Belts
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A Black Belts Course of StudyThe Twelve M-A-I-C Objectives
MEASURE Select CTQ Characteristics;
the frequency Define Performance Standards; of
defects Validate Measurement Systems.
ANALYZEEstablish Product Capability; when and
where Define Performance Objectives; defects
occur Identify Variation Sources.
IMPROVE Screen Potential Causes;
the process Discover Variable Relationship;
Establish Operating Tolerances.
CONTROL the Validate the Measurement System;
process so that Determine Process Capability;
it stays fixed Implement Process Controls.
Roles of Green Belts
Function as Green Belts on a part-time basis, whileperforming their regular duties.
Participate on Black Belt project teams in the context oftheir existing responsibilities.
Learn the Six Sigma methodology as it applies to aparticular project.
Continue to learn and practice the Six Sigma methods andtools after project completion.
Green Belt training consists of two three-day sessions withthree weeks in between.
Thank You !