Six sigma
- 1. Information United System Consulting Group (Member of Tariq Alghanim Holding) Six Sigma – An Introduction Program : 6th September 2007 By: Ravi Kalimuthu Specially Designed for Tamilnadu Engineers Forum Venue: Caesars Restaurant. Fahaheel copyrights- IC Group 2007
- 2. About the Tutor. Business Development Manager & Management Consultant 20 Years experience in Industrial & Management Sector Certified Si Si C tifi d Six Sigma Green belt & ISO G b lt 9001:2000 Lead Auditor Conducted More than 40 Training Ravi K li th R i Kalimuthu Programs in Several titles in Management & Technical
- 3. About Information United System Consulting Group. (IUSC Group) (A Member of Tariq Al Ghanim Holdings) Provides Management Consultancy Services One stop solution for any business needs Consultancy provided >40 clients
- 4. Services offered… Certification related services Value added services Trainings / seminars
- 5. Certification related services ISO 9001:2000 – Quality Management System ISO 14001:2004 – Environmental Management System OHSAS 18001:2002 – Safety Management System ISO 22000:2005 – Food Safety Management System ISO 27001:2005 – Information Security Management System and more…… d
- 6. Value added services Training & Implementation of Six Sigma Establishing KPIs Performance KPIs, measurement system & Balanced Scorecard Development of vision & values Business Plan l Business Process Re-engineering
- 7. Value added services Support services for effective implementation of ISO systems p y Implementing total quality management Implementing cost management concepts like activity based costing and quality costing etc., Implementing 5 ‘S’ Consultancy on CE marking
- 8. Training services Support for sustaining International standards certification Tailor made in-house programs Knowledge reach to 175 topics specially g p p y designed for improving business
- 9. Before we start !!! Your participation is key to success… If any doubts, stop & clarify… Share your thoughts… Get involved… Switch off / Silent your mobile phones… Participate, and Contribute to make this program successful
- 10. Six Sigma - A Breakthrough Strategy
- 11. Contents What is Six Sigma? Why Six Sigma? Comparison of various management initiatives Overview of six sigma and lean principles Role of Green Belt Project Management Idea Process Mapping & Process Management Team Dynamics and Techniques y q Appreciating the use of QFD
- 12. What is Sigma (σ) The Th term ‘Si ‘Sigma’ taken f ’ k from the G k alphabet, i h Greek l h b is used to designate the distribution or spread about the mean (average) of any parameter of product, process or ( g ) y p p , p procedure. Six Sigma is a system of practices originally developed by Motorola to systematically improve processes by eliminating defects The process was defects. pioneered by Bill Smith at Motorola in 1986 and was originally defined as a metric for measuring defects and improving quality, and a methodology t reduce d f t i i lit d th d l to d defect levels below 3.4 defects per one million opportunities ( (DPMO). )
- 13. What is Six Sigma (6σ) Level of process performance equivalent to producing only 3.4 parts per million defects or has a yield of 99.9997%.
- 14. What is Six Sigma (6σ) Six Sigma is a long-term, forward-thinking initiative designed to fundamentally change the way corporations do business. It is first and foremost "a business process that enables companies to increase profits dramatically by streamlining operations, improving quality, and eliminating defects or mistakes in everything a company does. While traditional quality programs have focused on detecting and correcting defects, Six Sigma encompasses something broader: It provides specific methods to re re- create the process itself so that defects are never produced in the first place."
- 15. What is Six Sigma (6σ) Six Sigma has evolved over the last two decades and so has its definition. Six definition Sigma has literal, conceptual, and practical definitions. definitions Six Sigma can be taken at three different levels: As a metric As a methodology As a management system Essentially, Six Sigma is all three at the same time.
- 16. Six Sigma as a Metric The term "Sigma" is often used as a scale for levels of "goodness" or quality. Using this scale, "Six Sigma" equates to 3 4 scale 3.4 defects per one million opportunities (DPMO). Therefore (DPMO) Therefore, Six Sigma started as a defect reduction effort in manufacturing and was then applied to other business processes for the same purpose.
- 17. Six Sigma as a Methodology As Six Sigma has evolved, there has been less emphasis on the literal definition of 3.4 DPMO, or counting defects in products and processes. Six Sigma is a business improvement methodology that focuses an organization on: Understanding and managing customer requirements Aligning key business processes to achieve those requirements Utilizing rigorous data analysis to minimize variation in those processes Driving rapid and sustainable improvement to business processes
- 18. Six Sigma as a Methodology 2 At the heart of the methodology is the DMAIC model f process i d l for improvement. DMAIC i is commonly used by Six Sigma project teams and is an acronym for: y -Define opportunity -Measure performance -Analyze opportunity A l t it -Improve p p performance -Control performance
- 19. Six Sigma Management When practiced as a management system, Six Sigma is a high performance system for executing business strategy Six Sigma is a top down solution strategy. top-down to help organizations: •Align their business strategy to critical improvement efforts •Mobilize teams to attack high impact projects •Accelerate improved business results •Govern efforts to ensure improvements are sustained The Six Sigma Management System drives clarity around the business strategy and the metrics that most reflect success with that strategy. It provides the framework to prioritize resources f projects h f k for that will improve the metrics, and it leverages leaders who will manage the efforts for rapid, g p , sustainable, and improved business results.
- 20. Determining Sigma Level g g Determining sigma levels of processes (1 sigma, 6 Sigma etc) allows process performance to compared throughout the organization. Sigma is a statistical term that measures how i ti Si i t ti ti l t th t h much a process varies from perfection, based on the number of defects per million units. p 1 Sigma = 690,000 DPMO = 30.9% Final yield 2 Sigma = 308,000 DPMO = 69.2% 3 Sigma = 66,800 DPMO = 93.3% 4 Sigma = 6,210 DPMO = 99.4% 5 Sigma = 320 Si DPMO = 99.8% 99 8% 6 Sigma = 3.4 DPMO = 99.9997
- 21. The Cost of Quality Sigma level DPMO Cost of Quality 2 308,507(non , ( NA competitive companies) 3 66,807 25 – 40% of Sales 4 6,210 (Industry 15 -25% of Average) Sales 5 233 5 – 15 % of sales 6 3.4 ( 3 4 (world class) ld l ) <1% of sales 1% f l Each sigma shift provides a 10% net income improvement.
- 22. Impact of six sigma implementation at GE (results achieved over first 2 years 1996-1998) ( lt hi d fi t 1996 1998) - R Revenues have risen to $100 billion, up 11% h i t billi - Earnings have increased to $9.3 billion, up 13% - Earnings per share have grown to $2.80, up 14% - Operating margin has risen to a record 16.7% - Working capital turns have risen sharply to 9.2%, up from 1997's record of 7.4
- 23. Why Six Sigma? Is it necessary to go for zero defects? Why isn’t 99.9% defect-free good enough? Here are some examples of what life would be like if 99.9% were "good enough:" -1 HOUR OF UNSAFE DRINKING WATER EVERY MONTH - 2 LONG OR SHORT LANDINGS AT EVERY AMERICAN AIRPORTS EACH DAY - 400 LETTERS PER HOUR WHICH NEVER ARRIVE AT THEIR DESTINATION - 500 INCORRECT SURGICAL OPERATIONS EACH WEEK - 3,000 NEWBORNS ACCIDENTALLY FALLING FROM THE HANDS OF NURSES OR DOCTORS EACH YEAR - 4,000 INCORRECT DRUG PRESCRIPTIONS PER YEAR - 22,000 CHECKS DEDUCTED FROM THE WRONG BANK ACCOUNT EACH HOUR - 32,000 MISSED HEARTBEATS PER PERSON PER YEAR
- 24. Why Six Sigma? Is it necessary to go for zero defects? Here are some examples of what life would be like at Six Sigma -13 WRONG DRUG PRESCRIPTIONS PER YEAR 13 -10 NEWBORNS ACCIDENTALLY FALLING FROM THE HANDS OF NURSES OR DOCTORS EACH YEAR - 1 LOST ARTICLE OF MAIL PER HOUR
- 25. Various Management Initiatives TOTAL PRODUCTIVE MAINTENANCE SIX SIGMA ISO 9001:2000 TOTAL QUALITY MANAGEMENT
- 26. Various Management Initiatives THE FOCUS IN TOTAL PRODUCTIVE MAINTENANCE (TPM) IS MINIMISATION OF LOSSES
- 27. Various Management Initiatives THE FOCUS IN SIX SIGMA IS MEASUREMENT
- 28. Various Management Initiatives THE FOCUS IN ISO 9001 IS SYSTEMS
- 29. Various Management Initiatives THE FOCUS IN TOTAL QUALITY MANAGEMENT (TQM) IS PEOPLE
- 30. Various Management Initiatives CAN ONE INITIATIVE WORK WITHOUT THE OTHER 1. For Losses (TPM), Measurements 1 F L (TPM) M t (Six Sigma) are essential 2. For Measurement (Six Sigma), Systems (QMS) are essential 3. For Systems (QMS), People (TQM) are essential
- 31. Summary y All the initiatives are complementary to each other. .The continued focus is the key factor. It is prudent to integrate each initiative with the fundamental QMS like ISO 9001:2000 The ff 9001 2000 Th effort should b to take the people along h ld be k h l l the process
- 32. Five Pillars of TQM Q PRODUCT EFFECTIVENESS WASTE ELIMINATION PROCESS SYSTEM RE-ENGINEERING PEOPLE SUITABILITY CULTURE & MATURITY LEADERSHIP
- 33. Six Sigma Process standard Vs Performance Standard Six Sigma Vs ISO 9001 Is I process and performance related d f l t d What is important in business Performance should consider both internal and external needs Measurement is the key. Measure what is important or what is needed M h ti i t t h ti d d Measurement without a target is meaning less Deviation from target is defect Defect is more important to customer than reject
- 34. DPMO Vs PPM Six Sigma demands 3.4 Defects per Million Opportunity
- 35. Why the name “Green Belts”? The name Green belts comes from the sport of Karate. Both Karate and Six Sigma depend on mental discipline and systematic, intensive training. Just as black belts in Karate depend on power, speed and decisiveness, Six Sigma green belts should also depend on the same qualities. Six Sigma Green belts also must be able to reposition themselves as they move from one project to another.
- 36. Characteristics of Six Sigma Green Belt Proper understanding of Deliverable & CTQ. Proper Understanding of DMAIC steps Speaks the language of money time organizational money, time, objectives. Understands Project Charter and base line performance An expert in SPC and continuous improvement tools. Capable of i l C bl f implementing standardization methods ti t d di ti th d Drives change by challenging conventional wisdom. Anticipates and confronts problems proactively and solves them.
- 37. What is DMAIC ?
- 38. Define phase This h Thi phase d fi defines th project. It id tifi critical the j t identifies iti l customer requirements and links them to business needs. It also defines a project charter and the business processes to be undertaken for Six Sigma. Note: This phase is extensively covered in a separate chapter “Define phase”.
- 39. Measurement phase This phase involves selecting product characteristic characteristic, mapping respective process, making necessary measurements and recording the results of the process. This is essentially a data collection phase. Note: This phase is extensively covered in a separate chapter “Measurement phase”.
- 40. Analysis phase In this phase an action plan is created to close the p p “gap” between how things currently work and how the organization would like them to work in order to meet the goals for a particular product or service This phase service. also requires organizations to estimate their short term and long term process capabilities. Note: This phase is extensively covered in a separate chapter “Analysis phase . Analysis phase”
- 41. Improvement phase This phase involves improving processes/product p p g p /p performance characteristics for achieving desired results and goals. This phase involves application of scientific tools and techniques for making tangible improvements in profitability and customer satisfaction. Note: This phase is extensively covered in a separate chapter “Improvement phase”.
- 42. Control phase This phase requires the process conditions to be properly documented and monitored through statistical process control methods. After a “settling in” period, the process capability should be reassessed. Depending upon the results of such a follow-up analysis, it may be sometimes necessary to revisit one or more of the preceding phases phases. Note: This phase is extensively covered in a separate chapter “Control phase”.
- 43. Key steps of the define phase A. A Identify project which are critical to customers. B. B Develop team charter / action plan. plan C. Define process map. Each t E h step is discussed i detail in the following i di d in d t il i th f ll i slide.
- 44. Deliverable & CTQ Department/ Function : Accounts 1 S.no Deliverables CTQ Measurement method Acceptable criteria Remarks Agreement with 1 Customer reconcilations Correct statement of accounts customer book Timely updation Every month Respective date for various submission as 2 Fili of various returns Filing f i s t s Timely s b issi Ti l submission per matrix i Accuracy y No penalty Late fees p y Interest to the company Branch and profit-centre wise 3 profitability fit bilit Timely submission of statements By 25th of every month Accuracy of report
- 45. Deliverable & CTQ S.no Deliverables CTQ Measurement method Acceptable criteria Remarks Delivery challan 1 Receipt of material Correct inwarding of quantity Zero Variance 30% reduction from Visual Reduction in unloading time present condition Documentation flow to SAP 2 excise department Timely issue of documents 1 Day SAP Accuracy of information y Zero Variance warranty claim 3 Cost Optimization 1.Re use warranty material To be decided 2. Reduction of cost through material 30% reduction in Visual handling equipments present situation Improve 50% floor Store Layout 3. Use of floor space space VSM 4. Recycling of cotton waste 10% cost savings SAP 5. 5 Reduction of non moving material non-moving To b d id d T be decided
- 46. Operations related :- Marketing 1. Accuracy of forecast assumptions. 2. Number of incorrect order entries. 3. O 3 Overstocked field supplies. t k d fi ld li 4. Contract errors. 5. Late deliveries. 6. 6 Customer complaints. complaints 7. Warranty cost as a percentage of sales.
- 47. Operations related :- Purchase 1. Premium freight cost/ demurrage charges. 2. Down - time because of parts shortages. 3. Number of Off specification parts used to keep line going. 4. Cycle time from start of purchase request until items in house. 5. Excess inventory. 6. Percentage of purchased material rejected on receipt.
- 48. Operations related :- Manufacturing 1. Yield per ton of raw materials. 2. Percentage of parts scrapped. 3. Percentage of parts reworked. 4. Percentage of parts accepted on concession. 5. Percentage of final p g product g graded as seconds. 6. Production per man / machine. p
- 49. Operations related :- Product engineering 1. Number of engineering changes per document. 2. Number of errors found during design review. 3. N 3 Number of errors found in design evaluation test. b f f di d i l ti t t 4. Percentage of time over- run compared to planned ti l d time for development. f d l t 5. Percentage of cost over - run over estimated cost of d f development. l t 6. Number of tooling redesign after trial production.
- 50. Operations related :- Quality Assurance 1. Percentage of lots rejected due to errors. 2. Percentage of products having defects detected by customers. 3. Number of engineering changes that should have been detected in design review. 4. Errors in inspection / test reports. 5. Cycle time t get corrective actions. 5 C l ti to t ti ti 6. Percentage of appraisal cost compared to production cost. d ti t
- 51. Operations related :- Product reliability Mean time to failure. Failure rate rate. Probability of failure occurrence during given time interval. interval Probability of failure non-occurrence during given time interval. i e ti e i te l Mean life time. Mean time to first generate overhaul. Mean time to repair. repair
- 52. Ope at o s e ated Operations related :- Accounting ccou t g 1. Percentage of late payments. 2. Time to respond to customer request for information. 3. Billing errors. 4. Incorrect accounting entries. 5. Payroll errors. 6. E 6 Errors in cost estimates. i t ti t
- 53. Customer related Market share Market penetration New markets identified Overall customer satisfaction Customer complaints Customer retention R&D expenditure as a percentage of sales New products and services introduced p Sales per employee
- 54. Six Sigma – Tools and Techniques Quality Q li Functioni Analysis f A l i of variance i Deployment Correlation and Regression Design of experiments Chi-Square q 7 QC tools Control charts New 7 tools Control plans Measurement system Robust design analysis Cost of quality Process mapping Reliability Engineering Project Management Quality Q lit systems t FMEA Fault tree analysis SPC T–T t Test
- 55. Certification of Six Sigma Option I – Certification as Six Sigma Green Belt Becoming certified as a Six Sigma Green Belt confirms your commitment to quality and the positive impact it will have on your organization. The Six Sigma Green Belt operates in support of or under the supervision of a Six Sigma Black Belt, analyzes and solves quality problems and is involved in quality improvement projects. Option II – Certification as Six Sigma Black Belt Becoming certified Six Sigma Black Belt leads the quality or core process team involve in the data analysis. The Six Sigma Black belt guides the green belt in taking the decisions with respect to quality problems and direct quality improvement projects Certification procedure: ASQ (American Society for Quality) offers the certification programmes in various field of discipline. In today’s world, where competition is a fact of life and the need for a work force proficient in the principles and practices of quality is a central concern of many companies, certification is a mark of excellence. It demonstrates that the q y y p , certified individual has the knowledge to ensure the quality of products and services. Certification is an investment in your career and in the future of your employer. Training procedure: The Information United System Consulting Group offers extensive training for management staffs in order to achieve the certification for Six Sigma black belt and Six Sigma green belt. The training avenues could be as follows: •In-house training can be conducted within the premises of any Company •External training
- 56. Sigma Conversion Table SIGMA VALUE DPMO SIGMA VALUE DPMO SIGMA VALUE DPMO 0.00 933193 2.50 158655 3.25 40059 0.20 903199 2.55 146859 3.30 35930 0.50 841345 2.60 135666 3.35 32157 1.00 697700 2.65 125072 3.40 28717 1.50 500000 2.70 115070 3.45 25588 2.00 308537 2.75 105650 3.50 22750 2.05 291160 2.80 96800 3.55 20182 2.10 274253 2.85 88505 3.60 17865 2.15 257846 2.90 80757 3.65 15778 2.20 241964 2.95 73529 3.70 13904 2.25 226627 3.00 66807 3.75 12225 2.30 211856 3.05 60571 3.80 10724 2.35 2 35 197663 3.10 3 10 54799 3.85 3 85 9387 2.40 184060 3.15 49471 3.90 8198 2.45 171056 3.20 44565 3.95 7143
- 57. Sigma Conversion Table SIGMA VALUE DPMO SIGMA VALUE DPMO SIGMA VALUE DPMO 4.00 6210 4.65 816 5.30 72 4.05 4 05 5386 4.70 4 70 687 5.35 5 35 59 4.10 4661 4.75 577 5.40 48 4.15 4024 4.80 483 5.45 39 4.20 3467 4.85 404 5.50 32 4.25 2980 4.90 337 5.55 26 4.30 2555 4.95 280 5.60 21 4.35 2186 5.00 233 5.65 17 4.40 4 40 1866 5.05 5 05 193 5.70 5 70 13 4.45 1589 5.10 159 5.75 11 4.50 1350 5.15 131 5.80 9 4.55 1144 5.20 108 5.90 5 4.60 968 5.25 89 6.00 3
- 58. Sigma Conversion Table SIGMA VALUE DPMO SIGMA VALUE DPMO SIGMA VALUE DPMO 4.00 6210 4.65 816 5.30 72 4.05 4 05 5386 4.70 4 70 687 5.35 5 35 59 4.10 4661 4.75 577 5.40 48 4.15 4024 4.80 483 5.45 39 4.20 3467 4.85 404 5.50 32 4.25 2980 4.90 337 5.55 26 4.30 2555 4.95 280 5.60 21 4.35 2186 5.00 233 5.65 17 4.40 4 40 1866 5.05 5 05 193 5.70 5 70 13 4.45 1589 5.10 159 5.75 11 4.50 1350 5.15 131 5.80 9 4.55 1144 5.20 108 5.90 5 4.60 968 5.25 89 6.00 3
- 59. Project Charter
- 60. Our Training Programs *October 3rd Week 2007 – Six Sigma Green Belt Certification Program ( A 3 Day Program) *November 3rd Week 2007 – ISO 9001:2000 Lead Auditor Certification Course (A 5 Day program) Please enroll in our training programs to attain career development and call us for any of your training & Management consultancy needs… needs * Tentative Schedule
- 61. Thank you for your Time & Involvement If need any clarifications or for assistance, please feel f f l free to conduct me on M bil +965 9529846 t d t Mobile: or write to me in email: Ravi.km@usa.net