Principles of Six Sigma Chapter 10 Principles of Six Sigma MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

Key Idea Although 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, 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 MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

Six-Sigma Quality Ensuring that process variation is half the design tolerance (Cp = 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

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

k-Sigma Quality Levels MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

Problem Solving Problem: any deviation between what “should be” and what “is” that is important enough to need correcting Structured Semistructured Ill-structured Problem Solving: the activity associated with changing the state of what “is” to what “should be”

Quality Problem Types Conformance problems Unstructured performance problems Efficiency problems Product design problems Process design problems 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 Redefining and analyzing the problem Generating ideas Evaluating and selecting ideas 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 DMAIC Define Measure Analyze Improve 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

Measure Key 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 cause 5-Why technique Experimentation and verification MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

Improve Idea generation Brainstorming Evaluation and selection Implementation planning MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

Control 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

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 Cycle time Cost Customer satisfaction MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

Lean Production and Six Sigma The 5S’s: seiri (sort), seiton (set in order), seiso (shine), seiketsu (standardize), and shitsuke (sustain). Visual controls Efficient layout and standardized work Pull production Single minute exchange of dies (SMED) Total productive maintenance Source inspection Continuous improvement MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

Traditional Economic Model of Quality of Conformance Total cost Cost due to nonconformance Cost of quality assurance 100% “optimal level” of quality MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

Modern Economic Model of Quality of Conformance Total cost Cost due to nonconformance Cost of quality assurance 100% MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing