Six Sigma Primer - Seeking Meaningful Improvments

Six Sigma Primer
Seeking Meaningful Improvements
Presented by: Andy Pattantyus

Prepared for:
APICS Orange County Chapter
by
Strategic Modularity, Inc.
www.strategicmodularity.com
andyp@strategicmodularity.com
Phone: 855-LeanOps FAX: 661-554-0299
May 16, 2012 © Strategic Modularity Inc. 2012 www.strategicmodularity.com Page 1 of 40

Six Sigma Primer
Learning Objectives
• What is six sigma?
• Are my processes six sigma?
• What is process capability?
• Why care about six sigma?
• How can I get a process to six sigma?
• The six sigma goal: improving yield


1. What is Six Sigma?
Overview
• A description of process capability
– Statistical
– Mathematical

• An operational philosophy
– CPI – Continuous Process Improvement
– VR&C – Variability Reduction & Control


What is Six Sigma?
Definitions - ASQ
• Six Sigma is a philosophy
– This perspective views all work as processes that can be defined,
measured, analyzed, improved and controlled. Processes require inputs (x)
and produce outputs (y). If you control the inputs, you will control the
outputs: This is generally expressed as y = f(x).

• Six Sigma is a set of tools
– The Six Sigma expert uses qualitative and quantitative techniques to drive
process improvement. A few such tools include statistical process control
(SPC), control charts, failure mode and effects analysis and flowcharting.

• Six Sigma is a methodology
– This view of Six Sigma recognizes the underlying and rigorous approach
known as DMAIC (define, measure, analyze, improve and control). DMAIC
defines the steps a Six Sigma practitioner is expected to follow, starting
with identifying the problem and ending with the implementation of long-
lasting solutions. While DMAIC is not the only Six Sigma methodology in
use, it is certainly the most widely adopted and recognized.
Source: ASQ [1]

What is Six Sigma?
Definitions – Lean Lexicon
• A quality standard of just 3.4 defects per one million
opportunities; 99.9996% perfect.

• Six sigma methodologies emphasize mathematical and
statistical tools to improve the quality of processes that are
already under control.

• Application follows a five-step process of define, measure,
analyze, improve, and control often referred to as DMAIC.

• The term refers to the number of standard deviations a point is
away from the mean point in a bell curve. It often is
represented as 6 sigma.

Source: Lean Lexicon [2]


What is Six Sigma?
History
• Born at Motorola
– Motorola conceived the six sigma technique in
1986 as a way to achieve the company’s
improvement goals in manufacturing and support
functions.
• Motorola Suppliers – Starting 1991
– Eveready Battery Company Inc. (Energizer)
• Early corporate adopters – Starting 1995
– Allied-Signal (now Honeywell)
– General Electric
– 3M

What is Six Sigma?
Mathematics or Management?
• Mathematics
– Field of statistics known as Process Capability
– Basis for measurements
– Verifiable data is the basis for decisions

• Management
– Continuous improvement efforts
• Reduce process variation
• Achieve stable and predictable results
– Focus on business and manufacturing processes
– Organizational commitment, especially top-level

2. Are my processes six sigma?
Probably Not!
• If your organization knows process
capability, and regularly uses it as a
tool, then you know if your processes
are six sigma.

• Otherwise, most processes which have
not been the object of continuous
process improvement and variability
reduction are likely less than 4 sigma.

3. Process Capability
A qualitative definition
• Capable Process - Predictable
– Stays in control w/o intervention
– Get it right the first time
– Process monitoring: Good Process = Good part
– High yield

• Poor Process - Unpredictable
– Out of control - constant intervention required
– High Scrap and/or Lots of rework
– Checking parts instead of monitoring processes
– Low yield

Process Capability - Cp
A quantitative definition
SpecificationWidth
Cp =
Pr ocessCapab ility

± 4σ ± 6σ
Cp = Cp = 1 .33 Cp = Cp = 2.0
± 3σ ± 3σ

Source: Motorola [4]


Process Capability
Measurement Methods
• Design of Experiments (DOE)
– Don’t know which variables are important

• Statistical Process Control (SPC)
– Stable process
– Measuring the important variables

• Process Capability (Cp)
– Describes the ratio between process variability and the
upper and lower specification limits.
– Based on normal distribution statistics, which is valid only if
there is no assignable cause variation!


4. Process Capability vs. Yield Loss
Why Care About Six Sigma?
• Six Sigma is all about reducing the
cost of waste within the
organization.

• Two primary wastes with high costs
– Yield Loss – translates to high production
costs due to poor efficiency.
– Latent Defects – translates to warranty
costs from defects in the field.

4. Process Capability vs. Yield Loss
Three Quick Stories
• Living with Systemic Waste
– The Dumpster “Hall of Shame”
• Living with latent defects
– Hot House Aging
• Living with defects during development
– The “De-Ringer” Department


Process Capability vs. Yield Loss
Why is Six-Sigma important?



How process shifts affect yield


• At low process capability, a process shift
can produce significant yield losses.
• Six-sigma protects against yield losses

How process shifts affect yield
• Graph shows one
process step

• Process control
– Difficult to keep most
processes centered
– Expect a shift

• Yield Loss = ƒ (Cp)
– For Cp = 1, defect rate
approaches 7%
– For Cp = 2, defect rate is
negligible

Yield measures process efficiency
• Percent Yield: the proportion of useful
output compared to a theoretical
waste-free 100%
• Rolled Yield: the proportion of units
completing a process without defects.
• First Time Yield: The proportion of
units successfully passing an
inspection step the first time.


Causes of Yield Loss
• Process step is not performed correctly on
some parts, due to process shift caused by
the interaction between:
– inadequate equipment, and
– defective raw material.
• Flawed inspection process, where the
inspection process is prone to:
– type I errors - false rejections, where conforming
items may be incorrectly rejected.
– type-II errors - false acceptance, where non-
conforming items may be incorrectly accepted.

The Tyranny of Large Numbers

Source: Feiman [5]

• The Math: 0.9 x 0.9 x 0.9 x 0.9 = 0.656
• Imagine a process with hundreds of
steps: Ex. Semiconductor
Manufacturing
• Yield becomes critically important

Process Capability & Yield Loss
Managing Workflow Complexity

Source: Feiman [5]

• Picture shows a single process step
• Complex material flow paths
• For rejected parts, flow stops while
awaiting a disposition decision

5. Getting to Six Sigma
Process Improvement
• Continuous Process Improvement
– TOC – Theory of Constraints
– Lean
– Six Sigma
– TLS – TOC/Lean/SixSigma

• Improvement Cycles
– Measure
– Develop processes to eliminate assignable cause
variations
– Repeat

Getting to Six Sigma
Tools to Find Assignable Cause

Source: Wordpress [6]


Process Improvement
• Deming formally defined the original
improvement cycle
– PDCA – Plan, Do, Check, Act

• Six Sigma uses two PDCA-based project
methodologies
– DMAIC to improve existing products/processes
• define, measure, analyze, improve, control
– DMADV to develop new products/processes
• define, measure, analyze, design, verify


Plan-Do-Check-Act Improvement Cyclss

Source: Shook [9]


A3 Sheets PDCA Improvement Cycles

The way The better
things way to
happen work.
now.

Do

Plan Check

Act
Source: Sobek [7]


A3 Sheets as a Management Tool
• A3 is the Basis for a results oriented culture

• The point of the A3 is to:
– Communicate
– Gain Consensus
– Solve Problems
– Get Results

• Understanding a new way to work replaces
training a new behavior.
– Existing staff implements a new process
– New staff is oriented to existing process

6. Improving Yield - Six Sigma Goal
Do we really need six sigma?
• Go all the way to six sigma? Maybe

• A clear organizational focus on
achieving measurable and quantifiable
returns from each Six Sigma project.
– Weigh the Cost vs. Benefit
• Cost of improvement project
• Benefits from improved yield = reduced costs
– Yield = ƒ (Capability, Number of Steps)

Improving Yield - Capacity
Capacity Planning and Reporting
• The capacity plan must account for
yield loss throughout the process.
– Material loss - disposition as scrap
– Extra capacity - disposition as rework
• Some ERP systems have provisions
for tracking yield loss and secondary
part flows.
• Some ERP systems have provisions
for producing yield reports

Improving Yield - Workflow
Managing Yield Loss Complexity

Parts Flow

Parts Flow
10% Bad

10% Bad
Source: Feiman [5]

• Picture shows a single process step
• Complex material flow paths
• For rejected parts, flow stops while
awaiting a disposition decision

The Tyranny of Large Numbers
Yield = ƒ (Capability, Number of Steps)
• Yield is the result,
dependent on:
– Process capability
– Number of steps

• To improve yield:
– Redesign product to
decrease part count
and improve process.
– Redesign process to
increase Cpk.

Improving Yield – Making the Case
Defining the Project - System
• Analyze Process – Current State VSM
• Conduct Investigations
– Do the Gemba and create A3 sheets
• Design Lean Process – Future State VSM
• Conceptual Design: Several scenarios
– Redesign the product and process - DFMA
– Financial Analysis and Case – A3 sheets
• Propose Project - A3 Sheets (PDCA story)
– Schedule, resources, cost estimate
• Review with management & refine

Improving Yield - How to Spend?
Product, Process or Capacity?
• Product improvement generates:
– reduced parts count
– simplified manufacturing processes
• Process improvement generates:
– simplified manufacturing processes
– improved process reliability
– predictable capacity plans and schedules
– permanent savings in labor, materials
• Capital Investment in a low yield process
– reduces ROA and ROIC
– “hardtools” inefficiency
– may make sense early in product life cycle or if time to
market is the most important factor

Improving Yield – Design Work
Approaching 100% Yield - Holy Grail
• Redesign the Product - DFMA
– Design for Manufacturability & Assembly
– Reduce the parts count
– Eliminate process steps
• Redesign the Process - DFMA
– Simple Process – Complex Part
• Metal stamping
– Complex Process – Simple Part
• Multi-shot Injection Molding


Improving Yield – Best Process
The Ideal Process Step
• Consumes no labor
• Consumes no material
• Requires no management
• Requires no equipment
• Cycle time = 0
• Yield = 100%

The ideal process step is the one that
does not exist!

Converging on the Ideal Process
• Fewer parts
– Eliminate parts via DFMA for product and
process redesign.
• Fewer process steps
– Eliminate steps via DFMA for product and
process redesign.
• Robust processes tolerate ±1.5σ shift
• Monitor process, not product
• Fewer inspection steps to speed flow

The Robust Process
• Six Sigma Process Characteristics
– Process mean is 6σ away from USL and LSL
– Tolerates a ±1.5σ shift in process centeredness
– 3.4 Defective Parts per Million Opportunities (DPMO)

Source: Cmglee, Wikimedia Commons [8]


Six Sigma Primer
Terminology
• A3 – A single sheet of paper • DPMO – Defects per Million
which tells a PDCA story. Opportunities
• CP – Process Capability • LSL – Lower Spec Limit
• CPI – Continuous Process • PDCA – Plan, Do, Check,
Improvement Act cycle
• DFMA – Design for • PPM – Parts per million
Manufacturability and • SPC – Statistical Process
Assembly Control
• DMADV - define, measure, • TOC – Theory of
analyze, design, verify Constraints
• DMAIC – define, measure, • TLS – TOC/Lean/Six Sigma
analyze, improve, control • USL – Upper Spec Limit
• DOE – Design of • VR&C – Variability
Experiments Reduction and Control

Six Sigma Primer
Bibliography
[1] ASQ, American Society for Quality, http://asq.org
[2] Lean Lexicon, 4th Edition, Lean Enterprise Institute, 2008.
[3] APICS Dictionary, 13th Edition, 2011
[4] ENG 123, “Design for Manufacturability Participant Guide,” Motorola University, 1992
[5] Feiman, Daniel, et.al “THE Book on . . . Business from A to Z: The 260 Most Important
Answers You Need to Know ,” Build It Backwards Publishing, Los Angeles CA, 2011.
[6] Tools for Root Cause Analysis, http://aacesubajou.wordpress.com
[7] Sobek, Durward K. II, and Smalley, Art “Understanding A3 Thinking: A Critical Component
of Toyota’s PDCA Management System,” Productivity Press, www.productivitypress.com ,
2008, ISBN 978-1-56327-360-5
[8] Cmglee, Six Sigma with 1.5 sigma Process shift, Wikimedia Commons
[9] Shook, John, “Managing to Learn,” Lean Enterprise Institute, 2008


About the Speaker
Andy Pattantyus, CPIM
Andy Pattantyus, CPIM, is founder, owner and President of Strategic Modularity, Inc. (SMI), a
management consulting company serving divisions of large corporations and SMB clients with
annual revenues of $3 to $30 million. Andy is passionate about enabling client companies to
reach their greatest potential by setting goals, preparing plans and eliminating waste.

Andy’s 30 years of experience in designing/integrating modular production systems and
flexible processes, developing new products, processes and machinery, provide him with a
wide base of knowledge on how to eliminate process inefficiencies. Andy solves business
problems by combining technical innovation with strategy, system design, facility design,
human resource management, project management and accounting. A streamlined and
efficient business perspective, with a strong mix of technical skills, enables Andy and his team
to improve a company’s health. In Andy’s roles, achieving results always required significant
planning before execution.

Before founding SMI, Andy managed development projects and material flow as a Senior
Engineering Manager at Eveready Battery Co. Inc. and as a Director at Quallion LLC. Andy
holds 6 patents, a B.S. and an M.S. in Mechanical Engineering from Virginia Tech as well as
an MBA from Case Western Reserve University.

Andy authored chapters about Yield and Quality in the recently released book:
© THE Book… on Business from A to Z: The 260 Most Important Answers You Need to Know
copyrighted 2011 by Daniel Feiman.


About the Book
THE Book On… BUSINESS from A to Z
Daniel Feiman, MBA, CMC® Nominated for Global eBook of the Year
http://goo.gl/Gjmz8
Managing Director
Build It Backwards(TM)
Success by Choice; Not Chance(SM)

Office: 310.540.6717 Cell:
818.522.2892
Consulting & Training in:
Strategy * Finance * Process
dsfeiman@BuildItBackwards.com
www.BuildItBackwards.com
http://goo.gl/j6F5b
http://goo.gl/TxRuA


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