Who is Using Six Sigma in the Twin Cities Seagate, Medtronic, Donalson, Honeywell, American Express, Ceridian, 3M

What is Six Sigma? Six Sigma - The Initiative Process Systematic approach to reducing defects which affect what is important to the customer Tools Qualitative, statistical and instructional Devices for “observing” process variables and their relationships as well as “managing” their character

Six Sigma - Aggressive Goal  PPM Process Capability Defects per Million Opp. Sigma is a statistical unit of measure that reflects process capability. The sigma scale of measure is perfectly correlated to such characteristics as defects-per-unit, parts-per-million defective, and the probability of a failure/error.

Six Sigma -- Practical Meaning 99.99966% Good (6 Sigma) 20,000 lost articles of mail per hour Unsafe drinking water for almost 15 minutes each day 5,000 incorrect surgical operations per week Two short or long landings at most major airports each day 200,000 wrong drug prescriptions each year No electricity for almost seven hours each month Seven articles lost per hour One unsafe minute every seven months 1.7 incorrect operations per week One short or long landing every five years 68 wrong prescriptions per year One hour without electricity every 34 years 99% Good (3.8 Sigma)

How Does Six Sigma Make the Difference? Vision Philosophy Aggressive goal Breakthrough improvement Focus Customer focus Problem focus Process focus Metric (standard of measurement) Method

Improved Customer Satisfaction The Goals of Six Sigma Defect Reduction Yield Improvement Improved Customer Satisfaction Higher Net Income

What’s the Strategy Know what’s important to the Customer Reduce defects Center around target Reduce Variation

Six Sigma Vision The Vision of Six Sigma is to delight customers by delivering world-class quality products through the achievement of Six Sigma levels of performance in everything we do.

Six Sigma Philosophy The Philosophy of Six Sigma is to apply a structured, systematic approach to achieve breakthrough improvement across all areas of our business.

Where Does Industry Stand? 1,000,000 100,000 10,000 1,000 100 10 1 PPM IRS - Tax Advice (phone-in) (140,000 PPM) Restaurant Bills Doctor Prescription Writing Payroll Processing • Order Write-up Journal Vouchers Wire Transfers Airline Baggage Handling Purchased Material Lot Reject Rate Best-in-Class Average Domestic Airline Flight Company Fatality Rate (0.43 PPM) 3 4 5 6 2 1 7 Sigma Scale of Measure

Six Sigma - Performance Target Long-Term Yield Standard 3 Sigma 93.32 % Historical 4 Sigma 99.379 % Current 5 Sigma 99.9767 % Intermediate 6 Sigma 99.99966 % Long-Run

Six Sigma - Why? To deal with a world of declining product prices To compete successfully with the best companies in the world To establish standard language and approaches across functions and across businesses To develop our next generation of leaders To accelerate our rate of quality and productivity improvement faster than our competitors

Six Sigma Basics ...What If...? That Is Six Sigma ! You Could Select One of Your Most Highly Leveraged Problems . . . ? Identify One of Your Best People to Work on It . . . ? Provide That Person With All of the Training, Tools, and Resources They Need to Fix It . . . ? Guarantee Them Uninterrupted Time and Focus to Work on It . . . ? And Get a Well Thought Out, Data Driven Solution . . . ?

The People Who Make it Happen DFSS Employees Green Belts & All Employees Business Champions Hands on Champions Six Sigma Directors & Six Sigma Executive Finance Reps Master Black Belts Black Belts

Six Sigma - Approaches to Improvement Breakthrough Strategy Continuous Improvement -Trained & Dedicated Individuals -Analytical Expertise ->70% Improvement per Project -Current Tools -Kaizen -Lean Manufacturing -Reengineering -Typical TQM Time in Years 1 2 3 4 5 The problem with continuous improvement as the only goal…. Organization sees improvement BUT loses the game. Six Sigma Enables Breakthrough Level Improvement!

Focus on X rather than Y, as done historically The Focus of Six Sigma KPIV(s) Y= f (X) KPOV(s) Focus on X rather than Y, as done historically Metrics KPOV = Key Process Output Variable KPIV = Key Process Input Variable Defect (Gap) Critical To The Customer *

Six Sigma as a Problem Solving System Six Sigma employs the Breakthrough Strategy, which is a multi-step problem solving and process improvement methodology. 1. Measure 2. Analyze 3. Improve 4. Control 0. Define 5. Realize

FMEA Fishbone; other methods Rolled Throughput Yield Six Sigma Road Map - Define & Measure Problem Statement Cause and Effect FMEA Fishbone; other methods MSA Process Map CTQs COPQ est. Identify: process inputs process outputs Link KPIV & KPOV prioritize inputs to attack Is Measurement good enough to detect process variation? (see improvement!) Define the Situation Generates/Determines Create with Team with team . . . Root Causes Strong Links Check Gauges & Data Collection Devices & Procedures Define/Measure Rolled Throughput Yield Determine: opportunities for improvement Defect Rate per Step

Six Sigma Road Map - Measure & Analyze Generates/Determines Gather Historical Data or Sample (Size & Subgroup) Indicators: Performance & Entitlement DPMO; Sigma Score Cp Pp Cpk Ppk Process Capability Study Measure Determine Cost of Quality Review Internal & External Costs Potential Benefits Analytical Tools Trends & Behaviors in KPIV/KPOV relationships Minitab Analyze Confidence Intervals Applies throughout

Six Sigma Road Map - Analyze Generates/Determines Answers: Difference in Means? One Pop. to Another; Before/After; to Spec Hypothesis for Variables - Means (t-tests) Variables Data Hypotheses for Variables - Std. Dev. (Chi Sq., F-Test, Homogeneity of Variance) Answers: Difference in Spread? One Pop. to another; to baseline; multiple Pops. Variables Data Analyze Answers: Differences in % Def. Between pop.; Diff. in % Def. from overall mean Hypotheses for Attributes (Contingency Tables, Non-parametric study) Proportion Defects Proportion Defectives Collecting data on several variables at the same time Points to variables warranting further analyses Multi-Vari Studies

Six Sigma Road Map - Analyze Generates/Determines Variables Data Answers: Difference in Means? One Variable (Factor) Multiple Types ANOVA Analyze For pairs of continuous Data Variables Correlation & Regression Answers: If know X; Predict Y Strength & Direction This completes the Characterize phase confirming which Input Variables most directly affect the Output Variables: Move on to Optimize - Settings or Procedures

Six Sigma Road Map - Improve Generates/Determines Known Relationships between KPIVs & KPOVs Design of Experiment Answers: How to Set “X” to get Best “Y” Answers: What’s the Best Combination of the “Xs’ for producing the Best “Y” Testing Variables at 2 Levels (High/Low) Full Factorial Simple 2K Improve Tests Multiple Variables, at Various Levels (High/Low) Answers: What’s the Best Combination of ALL Variables (X) to give the Best Output (Y) Full Factorial Multiple Variables Answers: Same as Above - But . .. Less Information; More Risk - but, requires less experimentation Tests Multiple Variables But Not All; Not All Levels Conserves Resources Fractional Factorial

Six Sigma Road Map - Improve Generates/Determines Isolates Parts of Data from other Parts Clarifies Results when Interacting Variables “Confound” the Results DOE- Blocking Improve Improves Current EHS Situation and/or Identifies Issues to be Managed Up-Front Reviews Affects on the Environment, Health & Safety EHS Review Now . . . We have established the parameters and procedures for operating the improved process . . . Keep it in Control !

“Process” Control Plans Instructions & Training Six Sigma Road Map - Control Generates/Determines Real-time Process Results; Trends; Control Limits SPC Indicates if Process is Operating as Expected (In-Control); If Not, What Corrections to Make Outlines: Parameters of Operations, Responsibilities, Actions, Measurements, etc. CTQs, Specs, Measurements, Actions “Process” Control Plans Control Outlines: Checking, Maintenance, Care & Periodic Review of Data Collection Devices & Methods Gauge/Measurement Stability & Control Gauges, Forms & Data Collection Methods Outlines: How Employees “Do” Procedures - Standard & Consistent, Opportunity for Understanding & Verification of Understanding Employees, Documented Proc. Learning Events Instructions & Training Spare Parts; System Back-Ups; Scheduled Downtime, etc. Preventive Maintenance Plan Outlines: Indicators to Monitor; Actions to Prevent Failures, Resources Needed On-Hand

Six Sigma Road Map - Control & DFSS Generates/Determines Inputs Affecting Project; Others Affected by Project Outlines: Procedures for Making Changes; Predictions of Change Affects Change Control Cost to Control vs CTQ Attainment & Benefits Achieved Checks: Project Controls Appropriate for Achieving CTQs and Benefits Control Cost Review Sustained Process Will Meet Customers Expectations All Agree and Commit to the Control Strategy as the Means of sustaining the Defect Reductions DFSS DFSS = Design for Six Sigma Yes Functional Team Sign-Off & Celebrate! No Re-Design

Provide Intense Training Six Sigma - How Does It Work? Select the Right People Provide Intense Training Select Key Problem Areas Assign Projects to Black Belts Obtain Results Champions Master BB’s Black Belts Brown Belts Strong Analytical Skills Strong Problem Solving Skills People & Leadership Skills Critical to Success Chronic or Systemic Fastest or Largest Return Lead Focused Effort Apply Skills and Tools Determine Causes and Solutions Reduce Variability Preventative & Proactive Vs Appraisal & Reaction Fewer Trials Faster Accurate Solutions

Six Sigma Basics Six Sigma Provides a Disciplined Method for Reducing Defects. Customers Define Their Critical to Satisfaction Measures (CTS’s). Champions Define Key Outputs of a Process Whose Defects Most Significantly Impact the CTS’s & Assign Projects to Black/Green Belts. Black/Green Belts Identify the Process Inputs That Most Significantly Influence the Outputs. They Then Eliminate the Root Causes of Variation in the Inputs and Put in Controls to Prevent Reoccurrence of the Problem. Design For Six Sigma Engineers Identify and Exploit Areas of Decreased Sensitivity to the Input Variables in Order to “Design In” Quality.

Six Sigma Reference www.isixsigma.com The Six Sigma Way: How GE, Motorola, and Other Top Companies are Honing Their Performance by Peter S. Pande et al, Robert P. Neuman, Roland R. Cavanagh. The Six Sigma Handbook: A Complete Guide for Greenbelts, Blackbelts, & Managers at All Levels by Thomas Pyzdek