Six Sigma and Continuous Improvement

Continuous Improvement and Change Management

Quality Improvement

• Improving performance within the current system (typically accounts for 5-15% improvement).
• Improving the system itself (addresses the remaining 85-95% of potential improvement).

System Variation

• Systems always exhibit variable levels of performance.
• Common Cause: System is statistically "in control."
• Special Cause: System exhibits nonrandom variation.

Addressing System Variation

• If a special cause of variation is identified, investigate it.
• Otherwise, leave the variation to chance if the system is in control.

Changing Processes/Products

• Changing the fundamentals of a process or product can be:
  • Difficult
  • Disruptive
  • Expensive
  • A major cause of error

Why Change?

• Leadership demands it.
• Competition necessitates it.
• Technological advances require it.
• Training requirements dictate it.
• Rules and regulations enforce it.
• Customer demands drive it.

Change Roles

• Official Change Agent: Person formally designated to lead the change.
• Sponsors: Individuals who authorize and support the change.
• Advocates: People who actively promote the change.
• Informal Change Agent: Individuals who support the change without formal authority.

Factors Impacting Stakeholder Buy-In

• Unclear goals
• No personal benefit for stakeholders
• Predetermined solutions
• Lack of communication
• Too many priorities
• Short-term focus
• No accountability
• Disagreement on who the customer is
• Low probability of implementation
• Insufficient resources
• Midstream changes

Change Management

• A structured approach to help people and processes transition smoothly during improvements, ensuring sustained adoption and minimizing resistance.

Key Questions for Change Management

• WHAT (The Change Itself/Outcomes):
  • What exactly is changing?
  • What will success look like?
• WHY (Purpose/Reason for Change):
  • Why is this change necessary?
  • What problem or opportunity are we addressing?
• HOW (Process/Approach to Change):
  • How will we make this change happen?
  • What is the roadmap?

History of Six Sigma Methodology

• 1978: Motorola faced significant quality challenges.
• 1981: Motorola decided to reduce defects tenfold within 5 years.
• 1987: Motorola met their goal; management then raised the bar to a tenfold improvement within 2 years. This effort was named Six Sigma.
• Late 1980s: Motorola realized that reducing defects and cycle time increased customer satisfaction and decreased warranty costs.
• 1988: Motorola awarded Malcolm Baldrige National Quality Award.
• 1989-1993: Texas Instruments, ABB, and Kodak adopted Six Sigma.
• Mid-1990s: GE and Allied Signal popularized Six Sigma.

Benefits of Six Sigma Management

• Improved process flow
• Decreased inventory
• Reduced total defects
• Improved capacity and output
• Improved communication (common language established)
• Increased quality and reliability
• Reduced cycle time
• Decreased unit costs
• Enhanced knowledge management
• Increased price flexibility
• Higher customer and employee satisfaction
• Decreased time to market
• Increased productivity
• Faster delivery time
• Decreased Work In Progress (WIP)
• Conversion of improvements into hard currency

Roles and Responsibilities in Six Sigma Management

• Senior Executive
• Executive Committee Member
• Champion
• Master Black Belt
• Black Belt
• Green Belt
• Process Owner

Senior Executive Role

• Provides the impetus, direction, and alignment necessary for Six Sigma's ultimate success.
• Responsibilities:
  • Study Six Sigma.
  • Lead the executive committee in linking objectives to Six Sigma projects.
  • Participate on appropriate Six Sigma project teams.
  • Maintain an overview of the system to avoid sub-optimization.
  • Maintain a long-term view.
  • Act as a liaison, explaining the long-term advantages of Six Sigma management.
  • Champion Six Sigma Management consistently.
  • Conduct presidential tollgate reviews of Six Sigma projects.

Executive Committee Member Role

• Top management of an organization committed to Six Sigma management.
• Responsibilities:
  • Study Six Sigma.
  • Deploy Six Sigma throughout the organization.
  • Prioritize and manage the Six Sigma project portfolio.
  • Assign champions, black belts, and green belts to projects.
  • Conduct reviews of Six Sigma projects.
  • Improve the Six Sigma process.
  • Remove barriers to Six Sigma management.
  • Provide resources for Six Sigma management.

Champion Role

• Takes a very active sponsorship and leadership role; member of the executive committee or a trusted direct report.
• Responsibilities:
  • Identify the project on the organizational dashboard.
  • Develop and negotiate the project objective with the executive summary.
  • Select a Black Belt/Green Belt to lead the project.
  • Remove potential barriers or resource constraints.
  • Provide a communication link between the project team and the executive committee.
  • Help team members manage resources and stay within budget.
  • Review project progress with respect to the project timetable.
  • Keep the team focused by providing directions and guidance.
  • Ensure Six Sigma methods and tools are used.
  • Participate in the tollgate review process.

Master Black Belt Role

• Takes a leadership role as keeper of the Six Sigma process and advisor to executive or business unit manager.
• Responsibilities:
  • Counsel senior executives and business unit managers on Six Sigma management.
  • Identify, prioritize, and coordinate Six Sigma projects on a dashboard.
  • Continually improve and innovate the organization’s Six Sigma process.
  • Apply Six Sigma across operations and transactions-based processes.
  • Teach Black Belts and Green Belts Six Sigma theory, tools, and methods.
  • Mentor Black Belts and Green Belts.

Black Belt Role

• A full-time agent and improvement leader who may not be an expert in the process under study.
• Skills:
  • Technical and managerial process improvement/innovation skills.
  • Passion for statistics and systems theory.
  • Understanding of the psychology of individuals and teams.
  • Understanding of the PDSA cycle and learning.
  • Excellent communication and writing skills.
  • Ability to work well in a team format.
  • Ability to manage meetings.
  • Pleasant personality and fun to work with.
  • Communicates in the language of the client and avoids technical jargon.
  • Is not intimidated by upper management.
  • Customer-focused.
• Responsibilities:
  • Help prepare a project objective.
  • Communicate with the champion and process owner about project progress.
  • Lead the Six Sigma project team.
  • Schedule meetings and coordinate logistics.
  • Help team members design and analyze experiments.
  • Provide training in tools and team functions.
  • Help team members prepare for reviews.
  • Recommend additional Six Sigma Projects.
  • Coach green belts leading projects limited in scope.

Green Belt Role

• Works on projects part-time (25%), either as a team member for complex projects or as a project leader for simpler projects.
• Responsibilities:
  • Define the project objective.
  • Review the project objective with the project’s champion.
  • Select the team members for the project.
  • Communicate with the champion, master black belt, black belt, and process owner throughout all stages of the project.
  • Facilitate the team through all phases of the project.
  • Schedule meetings and coordinate logistics.
  • Analyze data through all phases of the project.
  • Train team members in the use of Six Sigma tools and methods.

Process Owner Role

• A manager of a process with the authority to change the process.
• Responsibilities:
  • Be accountable for the best practice methods and output of his or her process.
  • Empower employees to follow and improve best practice methods.
  • Focus the project team on the project objectives.
  • Assist the project team in remaining on schedule.
  • Allocate the resources necessary for the project (people, space, etc.).
  • Accept and manage the improved process after completion of the Six Sigma project.
  • Turn the PDSA cycle for the revised process.
  • Ensure that the process objectives and indicators are linked to the organization's mission through the dashboard.
  • Understand how the process works, the capability of the process, and the relationship of the process to other processes in the organization.
  • Participate in the tollgate review process for their Six Sigma project.

Six Sigma Terminology

• Unit: The item to be studied (e.g., product, service, time period).
• CTQ (Critical to Quality): A critical-to-quality characteristic for a product, service, or process; a measure of what is important to the customer. Six Sigma projects are designed to improve CTQs.
• Defect: A nonconformance on one of many possible quality characteristics of a unit that causes customer dissatisfaction.
• Defective: A unit that does not meet specification limits; a nonconforming unit.
• Defect Opportunity: Each circumstance in which a CTQ can fail to be met. There may be many opportunities for defects within a defined unit.
• Defect per Unit (DPU): The average of all the defects for a given number of units, calculated as total defects divided by the number of units (DPU = \frac{Total \ Defects}{Number \ of \ Units}).
• Defect per Opportunity (DPO): The number of defects divided by the number of defect opportunities (DPO = \frac{Number \ of \ Defects}{Number \ of \ Defect \ Opportunities}).
• Defect per Million Opportunities (DPMO): DPO multiplied by 1 million (DPMO = DPO \times 1,000,000).
• Yield: The proportion of units within a specification divided by the total number of units.
• Rolled Throughput Yield (RTY): The product of the yields from each step in a process, assuming all steps are independent (RTY = Y1 \times Y2 \times … \times Y_k where k is the number of independent steps).
  *It represents the probability of a unit passing through all k steps without incurring a defect.
• Process Sigma: A measure of process performance determined by using DPMO and a stable normal distribution.

Comparison between Sigma Level, DPMO, and Yield

Rolled Throughput Yield (RTY)

RTY = Y1 * Y2 …Y_k
k= number \ of \ independent \ steps \ in \ a \ process
Y =e^{-DPU}

DMAIC Model

• The DMAIC (Define, Measure, Analyze, Improve, Control) model is utilized in Six Sigma management to move from an existing system to a revised system.

DMAIC Phases

• Define: Prepare an initial project charter and conduct SIPOC and VOC analyses.
• Measure
• Analyze
• Improve
• Control

Project Charter

• Background for the Business Case
• Goal Statement
• Project Scope
• A Schedule with Milestones
• Benefits and Costs
• Roles and Responsibilities
• Preparing a Draft Project Objective

SIPOC Analysis

• A diagram that summarizes the inputs and outputs of one or more processes.
• SIPOC: Suppliers → Inputs (Xs) → Process (Xs) → Outputs (CTQs) → Customer Segments

Operational Definition

• Promotes understanding between people by putting communicable meaning into words.

Components

• Criteria: Operational definitions establish "Voice of the Process" (VOP) language for each CTQ and "Voice of the Customer" (VOC) specifications for each CTQ.
• Test: A test involves comparing VOP data with VOC specifications for each CTQ for a given unit of Output.
• Decision: A decision involves making a determination whether a given unit of output meets VOC specifications.

Components of Measurement Variation

• Repeatability
• Calibration
• Stability Bias Over Time
• R & R over time Linearity Bias over domain R & R over domain
• Variation within a sample (part- to-part variation)
• Variation due to operators (reproducibility)
• Variation due to gages

Accuracy vs. Precision

• Poor precision, good accuracy
• Poor accuracy, good precision
• Good precision, good mean accuracy
• Poor accuracy, poor precision

Part-to-Part Variation

• Variability created by measuring multiple parts under identical conditions (same operator, same lab).
• The ideal measurement system has 100% of variability due to part-to-part variation.

Reproducibility

• Variation due to operators.
• Variability created by multiple conditions, such as multiple operators or labs.

Variation due to Gages - Repeatability

• Also called precision or within-group variation or common variation.
• Variability created by multiple measurements of the same unit under identical conditions (same operator, same lab).

Variation due to Gages - Calibration

• Adjustment of a measurement instrument to eliminate bias.

Variation due to Gages - Stability

• Also called drift.
• A change in accuracy (bias) OR Repeatability (precision) OR Reproducibility of a measurement system when measuring the same part for a single characteristic over time.
• Bias over time is the difference between the observed process average and a reference value over time.

Variation due to Gages - Linearity

• The difference (bias) between the part reference value and the part average over the different values of the domain of the gage.
• Bias over domain (accuracy) is the difference between the observed process average and a reference value over the domain of a gage.

Analyze Phase

Steps to Identify Xs

1. Identify process boundaries (starting and ending point).
2. Create the actual flow chart for the current process.
3. Highlight the linkages between the current process and “other” processes.
4. Identify the Xs for each step in the process on the flow chart.
5. Hypothesize the relationship between the Xs and each CTQ.
   • CTQa[Center,Spread,Shape]=f(X1a[Ceneter,Spread,Shape]…Xna[Center,spread,shape])
   • CTQb[Center,Spread,Shape]=f(X1b[Ceneter,Spread,Shape]…Xnb[Center,spread,shape])

Payoff Matrix

Action Planning

Control Plan