LEAN SIX SIGMA DEFINED,

LEAN SIX SIGMA PART…. 10 MARATHON STUDY

In my last article, I talked about LEAN CONSTRUCTION”

Please read along as we attain another height in PART..10..

We progress by defining SIX SIGMA,

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Six Sigma is a defined and disciplined business methodology to increase customer satisfaction and profitability by streamlining operations, improving quality and eliminating defects in every organization-wide process.

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What is Six Sigma?

Six Sigma is:

Six Sigma and DMAIC Methodology Overview

?Wondering what DMAIC is?

Here you have it.

DMAIC is an acronym that stands for Define, Measure, Analyze, Improve, and Control. It represents the five phases that make up the process: Define the problem, improvement activity, opportunity for improvement, the project goals, and customer (internal and external) requirements

?????A Business Strategy: Using Six Sigma Methodology, a business can strategize its plan of action and drive revenue increase, cost reduction and process improvements in all parts of the organization.

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??? A Vision: Six Sigma Methodology helps the Senior Management create a vision to provide defect free, positive environment to the organization.

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????A Benchmark: Six Sigma Methodology helps in improving process metrics. Once the improved process metrics achieve stability; we can use Six Sigma methodology again to improve the newly stabilized process metrics. For example: The Cycle Time of Pizza Delivery is improved from 60 minutes to 45 minutes in a Pizza Delivery process by using Six Sigma methodology. Once the Pizza Delivery process stabilizes at 45 minutes, we could carry out another Six Sigma project to improve its cycle time from 45 minutes to 30 minutes. Thus, it is a benchmark.

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????A Goal: Using Six Sigma methodology, organizations can keep a stringent goal for themselves and work towards achieving them during the course of the year. Right use of the methodology often leads these organizations to achieve these goals.

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????A Statistical Measure: Six Sigma is a data driven methodology. Statistical Analysis is used to identify root-causes of the problem. Additionally, Six Sigma methodology calculates the process performance using its own unit known as Sigma unit.

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????A Robust Methodology: Six Sigma is the only methodology available in the market today which is a documented methodology for problem solving. If used in the right manner, Six Sigma improvements are bullet-proof and they give high yielding returns.

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What is Quality?

Different individuals and organizations have given different definitions for Quality. Let’s study some of those definitions:

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????Deming: "Quality is defined from the customer’s point of view as anything that enhances their satisfaction".

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??? Juran: "Fitness for use. Those product features which meet the needs of customers and thereby provide product satisfaction. Freedom from deficiencies".

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??? ASQC: "The totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs".

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??? COPC: "Quality is defined as knowledge of agents that would enable them to provide accurate an consistent solution to the customer at the very first attempt”.

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??? ISO: " D e g re e to w h i c h a s e t o f i n h e re n t characteristics, of a product or service, fulfill requirements”.

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Simply stated, quality comes from meeting customer expectations. This occurs as a result of four activities:

????? Understanding customer requirements.

???? Designing products and services that satisfy those requirements.

??????Developing processes that are capable of producing those products and services.

?????Controlling and managing those processes so they consistently deliver to their capabilities.

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What is the Hidden Factory?

The Hidden Factory is the set of activity (or activities) in the process that result in reduction of quality or efficiency of a business process or manufacturing department, and is not known to managers or others seeking to improve the process. Six Sigma focuses on identifying "hidden factory" activities to eliminate the root-causes.

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One of the examples of Hidden Factory will be creating multiple versions of a status update presentation by the Project Management team because all of the requested information was not received by the due date from all the departments.

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Six Sigma works effectively to identify the hidden factory situations, questions the status quo, removes it and thus it improves business profits and reduces wastes.

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Six Sigma Process Excellence Disciplines

Process Excellence/Process Documentation:

Process Excellence and Process Documentation helps the project team to define, measure and control the business processes. Six Sigma and Lean tools are used for both Process Excellence and Process Documentation.

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Process Excellence and Process Documentation ensures:

???? Standardization across different processes in the same organization/department.

???? Allows business continuity in case of non-availability of

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Key Subject Matter Experts (SME’s).

???? Helps to understand the current state of the process and also to measure the performance of the future state of the project.

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Six Sigma Process Excellence Disciplines

Process Improvement (DMAIC):

Process Improvement is an effort to identify high priority problems in business processes and to train teams to tackle those problems. The methodology used is called DMAIC. It is an acronym for Define-Measure-Analyze- Improve-Control.

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In the Define phase, the project is defined. In Measure phase, data is collected, Measurement System is validated and current performance is identified. In Analyze phase, root causes are identified. In Improve, solutions are created and implemented and in Control phase, new performance is sustained).

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Lean tools such as Value Stream Map (VSM), Pull and Kaizen are leveraged too.

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Process Improvement (Lean):

"Lean" is the set of management practices based on the Toyota Production System (TPS). This methodology is deployed in selected processes to identify and eliminate Non-value added activities and hence increase the operational efficiency. Lean is quick and avoids rigorous data analysis.

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There are two critical factors of Lean – Value Added and Non-Value Added. Value is what the customer cares for. It is doing the right things the first time. When we say Value Added, our product or service should add value to the process. Similarly, we should focus on removing non- value added activities from the process.

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History of Six Sigma

?? Developed by Mikel Harry and Bill Smith, Motorola.

?? Motorola was amongst the first recipients of the Malcolm Baldrige Award.

?? National Quality Award in 1988.

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Six Sigma History

Throughout its history and evolution, Six Sigma turned into a business driven, multi-dimensional structured approach to reinforce Business Strategies into various aspects such as:

1.????? Improving Processes

2.????? Lowering Defects

3.????? Reducing Process Variability

4.????? Reducing Costs

5.????? Increasing Customer Satisfaction

6.????? Increasing Profit

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How does Six Sigma work?

Identify Business Problem

At the beginning of a Six Sigma project, the Business Problem is defined. Questions such as What, When, Where are addressed in a problem statement. Magnitude and Consequence of the problem is also discussed. Project Scope is identified.

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Identify Statistical Problem

Root causes for the business problems are identified. Those root causes are converted into statistical problems using Hypothesis testing methods.

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Trivial Many Causes: These are all the possible causes of the given problem. They may cause impact to the problem.

Vital Few Causes: These are the few critical causes which cause maximum impact over the problem.

Identify Statistical Solution

Identification of only 3-4 vital root causes using statistical analysis is achieved. These root causes are vital because they have maximum impact on the problem. Any given problem follows a Pareto principle which states that 80% of the problems are caused due to 20% of the root-causes. Solutions to these root causes are studied and an optimal value for each solution is identified.

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Identify Business Solution

These statistical solutions are then converted to implementable practical solutions. Implementation of these business solutions is carried out in the process. Improvements are observed and sustained.

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What is Sigma and Why is it Six Sigma?

Mean is the arithmetic average of a process data set. Central tendency is the tendency of data to be around this mean.

Standard Deviation (also known as Sigma or σ) determines the spread around this mean/central tendency.

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The more number of standard deviations between process average and acceptable process limits fits, the less likely that the process performs beyond the acceptable process limits, and it causes a defect. This is the reason why a 6σ (Six Sigma) process performs better than 1σ, 2σ, 3σ, 4σ, 5σ processes.

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Obviously 7 or more σ processes are even better than a 6σ (Six Sigma) process, and yet throughout the evaluation and history of Six Sigma process, the practitioners gained the belief that a 6σ process is good enough to be reliable in almost all major situations except some systems whose defects can cause unrepairable consequences.

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LSL and USL stand for “Lower Specification Limit” and “Upper Specification Limit” respectively. Specification Limits are derived from the customer requirements, and they specify the minimum and maximum acceptable limits of a process.

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meter. To reach a 6σ quality level in such a process, the standard deviation of car door length must be at most 0.00001 meter around the mean length.

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Sigma is also the capability of the process to produce defect free work. Higher the capability, lower the defects.

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Six Sigma stands for 6 standard deviations (6σ) between average and acceptable limits

For instance in a car manufacturing system the desired average length (Mean length) of car door can be 1.37185 meter. In order to smoothly assemble the door into the car, LSL can be 1.37179 meter, and USL can be 1.37191

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Processes in various Sigma Levels In the above figure, the red curve indicates a 2σ level of performance where we observe that its peak is very low (fewer outputs are around the desired average) and the variation is from extreme left to extreme right of the figure. If the process improves from 2σ to 3σ (green curve), you will observe that the process variation reduces and the process has a larger peak (more outputs are around the desired average, but a different average than red curve). As the process performance increases from 3σ to 6σ (blue curve), the process becomes centered between the upper and lower specification limits and does not have much variation. Here with blue curve the majority of process outputs are around the desired average. This is why it is good and it causes less defects beyond the lower and upper specification limits.

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In the above table, you will observe that as the Sigma level increase the Defects decrease. For example, for a 2σ process the Defects are as high as 308,537 in one million opportunities. Similarly, for a 6σ process the

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Defects is as low as 3.4 in one million opportunities. The 2σ performance level will have more defects than a system in 6σ performance level as the standard deviation for a 2σ process is much larger than the standard deviation for a 6σ process.

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Sigma Level vs DPMO Defects per Million Opportunities Can we have any process which has 6σ level of performance?

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The answer is yes. Pharmaceutical Companies, Airline

Manufacturing Organizations , Automobile Manufacturers, among others are bound to work at a sigma level which is either 6σ or more than that. If they are not able to perform at this efficiency, the organization cannot exist. Think about it, you are in the air, 5000 feet above the ground, flying in a Boeing 777 Aircraft and suddenly a nut-bolt in the wing of the plane loosens (probably due to manufacturing defect) making it difficult for the pilot to steer the flight! This is the only reason why defects are not welcome and organizations try to achieve higher Sigma levels.

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Six Sigma vs DPMO Examples

In the above examples,

???????? Sigma indicates the Sigma level.

???????? Spelling indicates the total spelling errors.

???????? Money indicates the amount of fine/indebtedness that can occur due to the misspellings.

???????? Time indicates the total time it takes to correct those misspellings.

???????? DPMO indicates the total Defects in One Million Opportunities.

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We can clearly observe that as the Sigma Level increase, the defects (misspellings) decrease, the indebtedness reduce and the time for rework also reduces, thus it reduces the DPMO-Defects per Million Opportunities.

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What is the Focus of Six Sigma?

Focus of Six Sigma

???????? Y is outcome(s) or result(s) you desire and need from a process. This is a dependent factor and it depends on the X’s.

???????? X represents the input factors that could result in Y. There could be multiple X’s. These are independent factors.

???????? ? represents the presence of error, or uncertainty surrounding how accurately the X’s are transformed to create the outcome.

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In other words, the input variable(s) are transformed by a function (or process) and combined with error to form the output. The Y results from, or is a function of the Xs. To determine a desired outcome, you apply a transformation process or function, f, on the inputs.

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For example, the formation of a thin sheet of iron undergoes several processes. The input variables are Iron Ore (Wrought Iron), charcoal, other chemicals and a furnace. This wrought iron is transformed through use of all of the input raw materials in the right proportion and heating in the furnace into a desired outcome. The raw materials and furnace is the X’s, the mixing of raw materials and heating are the transformation process function f, and the resulting Iron sheet is the Y. ? can be the varying degree of temperature throughout the furnace resulting in non-uniform sheet of metal (errors in the process).

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In the Pizza delivery example, some of the reasons for not meeting the pizza delivery time of 30 minutes could be Heavy Traffic, Delivery Driver did not know the delivery address, Pizza was not prepared in-time, among others. Thus, in this example, Delivery time of Pizza is “Y” and the reasons for not delivering the pizza on-time are “X’s”.

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After understanding the two examples described above, in order to get results, should we focus on “Y” or “X”?

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Focus the Causes (X) and NOT the Result (Y): Whenever you do a Six Sigma project, the focus of the project team needs to be on identifying of causes and mitigating them. The Result will automatically improve if the causes are dealt correctly. In the above example, formation of an iron sheet is the result and all the input materials are the causes. Thus, focus on the Causes and NOT the Result.

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Stay close for part ,,,,11,,,,,

Nest we shall study How Six Sigma DMAIC Process work.

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