1 Chapter 10 Principles of Six Sigma

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.

Six-Sigma Metrics Defect – any mistake or error that is passed on to a customer 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 unit (DPU) = number of defects discovered  number of units produced Defects per million opportunities (dpmo) = DPU  1,000,000  opportunities for error Defects per million opportunities (dpmo) = DPU  1,000,000  opportunities for error

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. 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.

Key Idea Although originally developed for manufacturing in the context of tolerance-based specifications, the Six Sigma concept has been operationalized to any process and has come to signify a generic quality level of at most 3.4 defects per million opportunities.

k-Sigma Quality Levels

7 Problem Solving Problem: any deviation between what “should be” and what “is” that is important enough to need correcting 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” 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

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

Problem Solving Process 1. Redefining and analyzing the problem 2. Generating ideas 3. Evaluating and selecting ideas 4. Implementing ideas

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.

DMAIC Methodology 1. Define 2. Measure 3. Analyze 4. Improve 5. Control

Define Describe the problem in operational terms Describe the problem in operational terms Drill down to a specific problem statement (project scoping) Drill down to a specific problem statement (project scoping) Identify customers and CTQs, performance metrics, and cost/revenue implications Identify customers and CTQs, performance metrics, and cost/revenue implications

Measure Key data collection questions 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?

Analyze Focus on why defects, errors, or excessive variation occur Focus on why defects, errors, or excessive variation occur Seek the root cause Seek the root cause 5-Why technique 5-Why technique Experimentation and verification Experimentation and verification

Improve Idea generation Idea generation Brainstorming Brainstorming Evaluation and selection Evaluation and selection Implementation planning Implementation planning

Control Maintain improvements Maintain improvements Standard operating procedures Standard operating procedures Training Training Checklist or reviews Checklist or reviews Statistical process control charts Statistical process control charts

Tools for Six-Sigma and Quality Improvement Elementary statistics Elementary statistics Advanced statistics Advanced statistics Product design and reliability Product design and reliability Measurement Measurement Process control Process control Process improvement Process improvement Implementation and teamwork Implementation and teamwork

Design for Six Sigma Focus on optimizing product and process performance Focus on optimizing product and process performance Features 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

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.

Key Six Sigma Metrics in Services Accuracy Accuracy Cycle time Cycle time Cost Cost Customer satisfaction Customer satisfaction

Lean Production and Six Sigma The 5S’s: seiri (sort), seiton (set in order), seiso (shine), seiketsu (standardize), and shitsuke (sustain). The 5S’s: seiri (sort), seiton (set in order), seiso (shine), seiketsu (standardize), and shitsuke (sustain). Visual controls Visual controls Efficient layout and standardized work Efficient layout and standardized work Pull production Pull production Single minute exchange of dies (SMED) Single minute exchange of dies (SMED) Total productive maintenance Total productive maintenance Source inspection Source inspection Continuous improvement Continuous improvement

Traditional Economic Model of Quality of Conformance Total cost Cost due to nonconformance Cost of quality assurance “optimal level” of quality 100%

Modern Economic Model of Quality of Conformance Total cost Cost due to nonconformance Cost of quality assurance 100%