6 Sigma Presented by : Galing Priyatna Franky Mangihut Tua Bernadine Niken Bambang Wijarnako

Historical Development of Process Improvement Source : www.isixsigma.com

Quality Management Development Quality Planning Quality Assurance Quality Control Sources : www.alison.com

TQM vs 6 Sigma TQM 6 Sigma Based on worker empowerment and teams Owned by business leader champion Department and Workplace focus Cross functional project Simple improvement tools Rigorous and Advance statistical tools Little financial accountability Requires verifiable return on investment

What is 6 Sigma ? 6 Sigma is Quality management methodology that uses different theories and tools to improve upon the process of a certain business Seeks to find and eliminate cause of defects and errors in manufacturing and service processes

What is 6 Sigma ? ‘Sigma’ (σ) is a Greek letter used to represent the statistical term ‘standard deviation’ which measures the deviations from average in a particular business process. Focuses on output that are critical to customers and clear financial return to the organization.

Pioneered by Motorola in the Mid- 1980s What is 6 Sigma ? Pioneered by Motorola in the Mid- 1980s Popularized by the success of General Electric Aims at producing no more than 3.4 ppm defects.

The Sigma Scale Source : (Craig Gygi et al, 2005 : 3)

6 Sigma Philosophy The application of the scientific method to the design and operation of management systems and business processes which enable employees to deliver the greatest value to customers and owners

D M A I C 6 Sigma Methodology Set the context and objectives for the project efine M Get the baseline performance and capability of the process or system being improved easure A Use data and tools to understand the cause-and-effect relationship in process or system nalyze I mprove Develop the modifications that lead to a validated C Establish plans and procedures to ensure the improvements are sustained. ontrol

6 Sigma Breakthrough Strategy Write the problem statement, the objective statement, priorities and launch the project Define Measure Understand the process, validate the data accuracy, and determine process capability. Analyze Determine the relationship of Y = ƒ(X) + σ, and screen for the potential causes Improve Determine, validate, and implement solutions to achieve the objective Statement. Control Implement process control methods and monitor performance to sustain result.

6 Sigma Role and Responsibility

6 Sigma Role and Responsibility Six Sigma Champion senior or middle level executive choosing and sponsoring specific projects. ensures the availability of resources. knows the business at hand inside and out as well as the Six Sigma Methodology Six Sigma Master Black Belt has been able to gain experience in managing several project has a deep expertise and knowledge base in the tools and methods of Six Sigma

6 Sigma Role and Responsibility Six Sigma Black Belt thorough knowledge of Six Sigma philosophies and principles (including supporting systems and tools). exhibits team leadership understands team dynamics assigns their team members with roles and responsibilities. Six Sigma Green Belt helps an employee serve as a trained team member within his or her function-specific area of the organization. work on small, carefully defined Six Sigma projects requiring less than a Black Belt's full-time commitment

6 Sigma Role and Responsibility Six Sigma Yellow Belt integrate Six Sigma methodologies for the improvement of production and transactional systems to better meet customer expectations and bottom-line objectives of their organization. has a basic knowledge of Six Sigma not lead projects on their own.

6 Sigma Tools – Technical The Critical to Quality (CTQ) Tree The Process Map (SIPOC Diagram) The Histogram The Pareto Chart The Process Summary Worksheet The Cause-Effect Diagram The Scatter Diagram The Affinity Diagram The Run Chart The Control Chart

6 Sigma Tools – Technical The Stakeholder Analysis Chart Planning for Influence Chart The Threat/Opportunity Matrix The Pay-Off Matrix The Solution Vision Statement The Team Meeting Agenda Ground Rules The Parking Lot The Plus Delta Review of Each Team Meeting Activity Reports

6 Sigma Success Story General Electric profited between $7 to $10 billion from 6 sigma in about 5 years Dupont added $1 billion to its bottom line within two years of initiating its 6 sigma program , and that number increased to about $2.4 billion within four years. Bank of America saved hundreds of million of dollar within three years launching of 6 sigma, cut cycle times by more than half, and reduced the number of processing errors by an order of magnitude. Honeywell achieved record operating margins and savings of more than $2 billion in direct cost Motorola, the place where six sigma began, saved $ 2.2 billion in four year time frame. (Craig Gygi et al, 2005 : 12)

6 Sigma Case Study The Planning of Six Sigma Implementation in PT ”X” (Mining Contracting Company)

About the Company

6 Sigma Deployment Timeline Source : Thomas Pyzdex & Paul Keller, 2010 : 14

Project Candidates Variation in Mining Operation

Project Candidates Variation in Mining Operation Individual Production

Project Candidates Variation in Plant Department

Project Candidates Variation in Plant Department

Project Candidates Variation in Plant Department

Project Selection Process Cost and Benefit Analysis Pareto Priority Index (PPI) (Juran and Gryna) 𝐏𝐏𝐈 = 𝑆𝑎𝑣𝑖𝑛𝑔 𝑥 𝑃𝑟𝑜𝑏𝑎𝑏𝑖𝑙𝑖𝑡𝑦 𝑜𝑓 𝑠𝑢𝑐𝑐𝑒𝑠𝑠 𝐶𝑜𝑠𝑡 𝑥 𝑡𝑖𝑚𝑒 𝑡𝑜 𝑐𝑜𝑚𝑝𝑙𝑒𝑡𝑖𝑜𝑛 (𝑦𝑒𝑎𝑟𝑠) Sample of PPI

6 Sigma Framework

DEFINE Define the goals of the improvement activity, and incorporate into a Project Charter. Obtain sponsorship and assemble team. Define project Scope, Objective & Schedule Define Process (top level) and Stakeholder Select Team Members Obtain Authorization from Sponsor Assemble and Train Team … Project charter … VOC tools (surveys, focus groups, letters, comment cards) … Process map … QFD … SIPOC … Benchmarking … Project planning and management tools … Pareto analysis

MEASURE Measure the existing system. Establish valid and reliable metrics to help monitor progress toward the goal(s) defined at the previous step. Establish current process baseline performance using metric. Define Process Define Metric Establish Process Baseline Evaluate Measurement System Measurement systems analysis … Process behavior charts (SPC) … Exploratory data analysis … Descriptive statistics … Data mining … Run charts … Pareto analysis

ANALYZE Analyze the system to identify ways to eliminate the gap between the current performance of the system or process and the desired goal. Use exploratory and descriptive data analysis to help you understand the data. Use statistical tools to guide the analysis. Benchmark against best in class Determine Process Drivers Analyze Sources of Variation Analyze Value Stream … Cause-and-effect diagrams … Tree diagrams … Brainstorming … Process behavior charts (SPC) … Process maps … Design of experiments … Enumerative statistics (hypothesis tests) … Inferential statistics (Xs and Ys) … Simulation

IMPROVE Improve the system. Be creative in finding new ways to do things better, cheaper, or faster. Use project management and other planning and management tools to implement the new approach. Use statistical methods to validate the improvement. Evaluate for Risks and Failure Modes Optimize Process Define New Process Priorities Improvement Opportunities … … Force field diagrams … FMEA … 7M tools … Project planning and management tools … Prototype and pilot studies … Simulations

CONTROL Control the new system. Institutionalize the improved system by modifying compensation and incentive systems, policies, procedures, MRP, budgets, operating instructions and other management systems. You may wish to utilize standardization such as ISO 9000 to ensure that documentation is correct. Use statistical tools to monitor stability of the new systems. Evaluate for Risks and Failure Modes Optimize Process Define New Process Priorities Improvement Opportunities … … … SPC … FMEA … ISO 900 × … Change budgets, bid models, cost estimating models … Reporting system

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