01' SixSigma Concept

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Six Sigma_at_Ericsson
Operational Excellence in everything we do
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Patrizia Ratto

• Laurea in Scienze dellInformazione (Pisa)
• Lavoro in Marconi/Ericsson dal 1993
• Software Engineer (applicazioni militari)
• Team Leader (Sviluppo NMS per applicazioni
  militari)
• Responsabile sviluppo soluzioni di collaudo
• Operational Development Manager
• Gestione cambiamento/Corsi interni/Migliormamento
  ordinabilita prodotti
• 6s Black Belt
• Nata a Genova il 10/02/1966, sposata, due figli
  Lorenzo (2003) Davide (2006)
• patrizia.ratto_at_ericsson.com

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What brought us here will not keep us here
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Research show that only 16 of change programs
are successfully delivered
Most Transformations Fail
Usually Due To Poor Ownership Building
16 Successful(delivered on time and on budget)
31 Cancelled
Clear statement of requirements

User involvement

Business Case invalid

Exec. Mgmt. support

Funding

Proper training

Prioritization

53 Underperform(late, over budget and/or
deliver less than the requirement)
Incomplete requirements

Lack of Exec Mgmt support and commitment

Poor communications

Lack of consistent follow-through

Lack of implementation capacity

Unclear, unrealistic objectives

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What is Six Sigma?

• A strategy for
• For cutting costs, increasing quality, shortening
  lead-times, boosting efficiency etc in a very
  rapid manner.
• A methodology and a tool-box.
• Well proven quality tools packed in effective
  project models.
• A common vocabulary and language.
• A mindset and cultural change.
• Reveals non-value add costs to operational
  leaders and brings a sense of urgency culture
  to the organization.
• A non-firefighting approach that is focusing on
  critical business areas.

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The history of Six Sigma

• 74 MATSUSHITA takes over loss-making Quasar
  (Television manufacturer) from Motorola (150-180
  defects per 100 TVs)
• 79 Defects reduced to 3 per 100 TVs
• 80 Quasar reports success to ASQC (Hitzelberger
  Report)
• 84 Bill Smith visits Quasar recommends to
  Galvin (CEO) the Six Sigma process
• 88 Motorola wins 1st Malcolm Baldridge Award
• 89 Onwards Six Sigma adopted by other
  companies Allied Signal, GE, Rank Xerox, Kodak,
  ABB, Siebe,

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Why Six-Sigma ?
99.9997 Good (6s) Seven
articles lost per hour Unsafe drinking water
one minute every seven months 1.7
incorrect surgical operations/week One short
or long landing every five years 68 wrong
drug prescriptions/year One hour without
electricity every 34 years
99 Good (3,8s) 20,000 lost
articles of mail per hour Unsafe drinking
water for almost 15 minutes each day
5,000 incorrect surgical operations/week Two
short or long landings at most major airports
each day 200,000 wrong drug
prescriptions/year No electricity for almost
7 hours/month
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Six Sigma Trained People at Ericsson
Green Belt A six to nine day DMAIC or IDDOV
selected tools training for people who apply Six
Sigma in daily operations and drives smaller
project.
Yellow Belt A three to five day DMAIC and
simple Six Sigma tools training for people who
apply Six Sigma in daily operations.
Manager Training A two to three day training in
coaching/managing improvements and efficient
sponsorship
Black Belts Change agents trained 20 days in
change mgmt, statistical tools and qualitative
methods. Requirement 1MSEK saving
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Six Sigma at Ericsson organic growth
2004-05 Problemsolving Cost. reduc. Lead time
reduc. HR, Forcasting Assembly Test
Sourcing RD - HW Logistics RD -
SW Support Black Belt Mngrs training Yellow
Belt Champion White Belt Green Belt 10
MSEK/proj 400 proj
2002-03 Problemsolving Cost. reduc. Lead time
reduc. Product develop. Assembly Test
Sourcing RD - HW Logistics RD - SW Black
Belt Mngrs training Yellow Belt Champion White
Belt 10 MSEK/proj 350 proj
2006-07 Problemsolving Cost. reduc. Lead time
reduc. HR, Forecasting MU Efficiency
C.S Assembly Test Sourcing RD -
HW Logistics RD - SW Support Services Black
Belt Mngrs training Yellow Belt Champion White
Belt Green Belt 10 MSEK/proj 500 proj
1996-97 Problemsolving Assembly Black
Belt Mngrs training 750 Ksek/proj 10 proj
1998-99 Problemsolving Cost. reduc. Assembly T
est Sourcing Black Belt Mngrs
training Yellow Belt 1,2 MSEK/proj 100 proj
2000-01 Problemsolving Cost. reduc. Lead time
reduc. Assembly Test Sourcing RD -
HW Logistics Black Belt Mngrs training Yellow
Belt Champion White Belt 1,2 MSEK/proj 250
proj
Results Trainings
Process Purpose
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Six Sigma Deployment Structure
Champions A Business aligned two day add-on
training to the line managers training. Gives you
deployment strategies, Six Sigma to business
alignment and Six Sigma program support.
Master Black Belts Is a Black Belt trainer,
project- and management team (MT) coach. Runs
typically cross functional projects, is a
methodology coach for 10 Black Belts, helps M.T.
to align the Six Sigma initiatives with the
business strategy.
Six Sigma Line Mgrs A two day training in tools
and project models to coach and drive Six
Sigma work in projects and processes. You learn
what to expect from your Black-, Yellow and
White belts is you do your share of the work.
Black Belts 1-2 of the staff is trained in
20 days in defining and driving business goals
aligned projects selected and sponsored by the
top management.
Yellow- / Green Belts A three or six day DMAIC
and simple Six Sigma tools training is for people
who wants to apply Six Sigma in daily operations
and drive tasks in Black Belt projects.
White Belts Is an universal training for blue
collar workers and everybody who only wants an
introduction. In one day you get an understanding
of COPQ and Variation.
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New Tools Same Behaviours?
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Six Sigma is a systematic, pragmatic and focused
approach to fulfill business objectives
Not an vague philosophy and religion that many
un-trained people tends to think. A statistical
toolbox used to focus on variation, probability
for defects and cost of failures
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A proper definition of the program is critical
for successful performance
Activities from DMAIC - Define
Problem statement

• Why is this change needed?
• Understand where do we stand today?
• What is the financial value of this change?
• Which performance results has to be achieved?
• From whom do we need strong commitment?
• What can go wrong and hinder success?
• How is the change program going to be undertaken?
  
• How can the project easily be summarized?

Baseline analysis
Business case
Goal statement
Stakeholder mgmt
Risk analysis
Project plan
Project charter
A problem well stated is a problem half solved
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Y? (x1, x2, x3xn)
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What is Quality?
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Why measure? We don't know what we don't know
... If we cant put number to it we really do
not know much about it If we don't know much
about it we can not act ... If we can not
act, we are at the mercy of chance ...


Dr Mikel J Harry Six Sigma founder Motorola
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Good quality does not necessarily mean high
quality. It means a predictable degree of
uniformity and dependability at low cost with a
quality suited to the market.
Dr. W. Edwards Deming
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Why do we need to work with quality?

• Customer satisfaction
• Market share
• Revenue
• Operational Efficiency
• Cost reduction
• Higher profitability
• Less claims
• Less rework
• Less material
• Higher ITO (Inventory Turn Over)

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Six Sigma is a systematic way to Operational
Excellence
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I have no time for any salesman. Im going to
war!
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The hidden change barriers
-Formal authority-
-Logic- -Procedures- -Organization charts-
-Budget- -Time schedule-
-Tools/Methods-
Change leaders
-Fear- -Trust- -Informal authority- -Self
esteem- -Previous experiences- -Private
life- -Social networks- -Hierarchy- -Personal
perspective- -Personal Organizational self
confidence- -Insecurity- -Culture and
atmosphere- -Unclear communication- -Conservatism
- -Status- -Disbelief- -Prestige- -Rumors-
-Unspoken consequences-
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Change Management distribution
Terrorists Resistors
Change Leaders
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20
20
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If I absolutely must
I will never!
Ill go!
May I, Can I?
Ill wait and see
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Six Sigma is a systematic way to Operational
Excellence
Change Management
Successful Deployment
Results
Methodology
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Existing Business Goals
Six Sigma
Improvements DMAIC
Design IDDOV
Integrated Tool by tool
Black Belts Line Managers Champions Yellow Belts

• Coaching
• External Benchmark
• Best practice data base

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Six Sigma is a systematic way to Operational
Excellence
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Project models within Ericsson
E
G
A
K
L
J
I
M
B
H
D
C
F
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Design For Six Sigma (IDDOV the concept)
Validate Product Process

Validate product (and process) performance to
CTQs and customer and stakeholder
requirements. Set up appropriate product and
process control mechanisms to establish long
term quality assurance
Understand and quantify Customers needs
and requirements
History Evaluate historical external internal
data to find CTQs
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Design For Six Sigma (IDDOV the tools)
Surveys, VOC Taguchi Loss functions Kano-model
History 7QCT, Capability analysis Regression
analysis
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IDDOV
Identify
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IDDOV
Voice of the Process
Voice of the Customer
Voice of the Business
Define
Key specific goals critical to achieve in the
design work (CTQ). How, when and who must we
assure CTQs trough the design activities?
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IDDOV
DFSS Scorecard
Pugh Concept Selection Matrix
Montecarlo statistical simulations (functions,
Lead-times, Yield, Cost etc)

DOE
P-diagrams
Design
Taguchi Loss functions
Statistical tolerancing
Transfer functions
Q systemization
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IDDOV
DFSS Scorecard

Gauge RR DOE Anova
FMEA Poke-Yoke Hypothesis
testing Power Sample Size
Optimize
Capability analysis
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IDDOV
DFSS Scorecard
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IDDOV Chart

• Identify
• Identify Customers, Stakeholders History.
• Surveys, VOC
• Taguchi Loss functions
• Kano-model
• Stakeholder map
• Business case
• 7QCT
• Capability analysis
• Regression analysis

• Define
• Find Critical To Quality characteristics.
• QFD
• CTQ-tree
• Cause Effect matrix
• Taguchi Loss functions
• Business case
• CTQ scorecard
• Benchmarking
• PCM (yield matrix)
• Capability analysis

• Design
• Build a product Process concept.
• Pugh Concept Selection Matrix
• Process Mapping
• Taguchi Loss Functions
• Simulations (Lead-times, Yield, Cost etc.)
• FMEA (Product, Process, Supply-chain)
• Fishbone diagram
• PCM (yield matrix)

• Optimize
• Optimize Product Process design.
• DOE
• Gauge RR
• Poka-Yoke
• Capability analysis
• Anova
• P-diagram
• Regression analysis
• Fault trees
• PCM (yield matrix)
• DMAIC

• Validate
• Validate Product Process.
• DOE
• Gauge RR
• SPC
• Poka-Yoke
• Capability analysis
• Anova
• P-diagram
• Regression analysis
• Fault trees
• DMAIC
• PCM (yield matrix)

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Merging Behavior Change and Operational Change
into one Improvement Process
Leadingchange
Creating ashared need
Making it last
SuccessfulChange Process
Shapinga vision
Monitoringprogress
Mobilizingcommittment
Modifying systemsand structures
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DMAIC Ericsson Improvement process
DEFINE
MEASURE
ANALYZE
IMPROVE
CONTROL
Understand need of change
Identify root-causes
Understand reality
Make it happen
Make it stick
After phase completion you will have clear
answers on the following questions

• Why do we need to change?
• Whats the goal?
• Who needs to be involved?

• Whats the current way of working?
• How do we measure this?

• What are the root-causes?
• How do they influence the goal fulfillment?

• Has the goal been fulfilled?
• How to secure that the implementation will stick?

• Will you fulfill the goal with selected solution?
• How do you implement this with people commitment?
  
• How do you track progress?

Do the right things the right way
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DEFINE Understand need of change
MEASURE Understand reality
ANALYZE Identify root-causes
IMPROVE Make it happen
CONTROL Make it stick
DEFINE Understand need of change
Create shared need
Mobilize commitment
Define wanted position
Why do we need to change?
Whats the goal?
Who needs to be involved?

• Identify sponsor change leader
• State problem/opportunity
• Calculate business case
• Evaluate change readiness

• Define Goal statement
• Perform risk analysis
• Benchmark similar improvement initiatives

• Perform stakeholder analysis
• Define communication/involvement plan
• Involve key stakeholders to make change happen
• Complete improvement charter

A problem well stated is a problem half solved
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Define Phase - Key Steps
Business case
Stakeholder map
Time resource plan
Change need
Analysisof current base line
Project charter
Risk analysis
Goal statement
SMART
Tools
VoC-tree, Process maps, Sampling, Capability
analysis, SMART, Business Case, Stakeholder map,
Mini-risk brainstorm/FMEA
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MEASURE Understand reality
Understand AS-IS process
Measure AS-IS process
What is the current way of working?
How can we measure this?

• Build AS-IS process map
• Understand barriers to change
• Setup potential cause effect relations
• Benchmark

• Plan and perform data collection
• Validate measurements
• Measure AS IS data

What gets measured gets done
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Measure Phase - Key Steps
Benchmark
Process measurements
Project charter
Process map As Is
Measurement system validation
Tools
Process maps, Sampling, Data collection,
Capability analysis, MSA, Benchmark
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DEFINE Understand need of change
MEASURE Understand reality
ANALYZE Identify root-cause
IMPROVE Make it happen
CONTROL Make it stick
ANALYZE Identify root-causes
Identify key root-causes
Verify influence on goal
What are the key root-causes or contributors?
How do they influence the goal fulfillment?

• Analyze gap to wanted position
• Assess change capabilities

• Verify influence on goal

Study the past, shape the future
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Analyze Phase - Key Steps
Found areas to address
Reliable process measurements
Analysis of causes
Tools
Process maps, Capability analysis, Regression
analysis, Hypothesis testing, Correlation analysis
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DEFINE Understand need of change
MEASURE Understand reality
ANALYZE Identify root-causes
IMPROVE Make it happen
CONTROL Make it stick
IMPROVE Make it happen
Identify To-Be process and test possible
solutions
Plan and implement solution
Monitor progress

• How do you implement thiswith people commitment?

• How do you track progress?

• Will you fulfill the goal with selected solution?

• Mobilize broad commitment
• Plan implementation
• Competence and resource allocation
• Create follow-up Process IT demands
• Execute implementation plan
• Embed changes in management system

• Identify possible solutions to address key
  contributors
• Perform cost/benefit evaluation
• Perform solution risk analyses
• Test solution

• Monitor improvement progress people commitment

Words dont move mountains. People do.
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Improve Phase - Key Steps
Found areas to address
Risk analysis of solutions
Implementation plan
Cost/savingsanalysis of solutions
Implementation fulfilled?
Resource allocation
Tools
Process maps, Cost/benefit template, FMEA
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DEFINE Understand need of change
MEASURE Understand reality
ANALYZE Identify root-causes
IMPROVE Make it happen
CONTROL Make it stick
CONTROL Make it stick
Validate results
Secure sustainability
Transfer good practice
Can someone else benefit from your experiences?
Has the goal been fulfilled?
Will the solution stick?

• Anchor handshake solution ownership
• Ensure competence capability for new way of
  working/solution
• Ensure mechanism for continuous monitoring and
  improvements

• Validate improvement effect
• Evaluate lesson learned

• Communicate results
• Transfer good practices
• Celebrate achievements

When yesterday's future becomes business as
usual.
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Control Phase - Key Steps
Learning's best practice transfer
Implementation fulfilled?
Are solution robust?
Results validated towards goal statement
Responsibility transfer
Celebrate
Tools
SPC, P-diagram
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DMAIC Chart

• Define
• Understand the task and its financial impact.
• Task selection matrix
• SMART review
• Stakeholder map
• Risk Management
• SWOT analysis
• Process map
• VOC and break down to CTQs
• 7MT
• Affinity diagram

• Measure
• Develop and execute an appropriate data
  collection method.
• Process map
• Data collection table
• Pareto diagram
• 7QCT
• Measurement system analysis
• Sampling technique
• SIPOC
• Gauge RR, Gauge attribute
• Capability analysis
• Benchmark
• Tagushi loss functions

• Analyze
• Find the root causes.
• Fishbone diagram
• Correlation analysis
• 7QCT
• Hypothesis testing
• Regression-analysis
• DOE
• Anova
• 7MT
• Data transformations
• Simulations

• Improve
• Generate and implement solutions.
• FMEA risk analysis
• Process map
• Poka-Yoke
• Hypothesis testing
• Loss functions
• Cost/Benefit selection
• Pugh Concept Selection

• Control
• Ensure that the results will last.
• Documentation, standardization and training
• 7QCT
• SPC
• Business case verification

Light
Comprehensive
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Six ways to fail
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Key elements for a DMAIC project

• Has a measurable and verifiable result.
• Cut cost in...
• Reduce lead-time in
• Reduce variation in...
• Improve quality in...
• Able to be defined by Yf (x1, x2, x3.. xn)
• Possible influencing factors is...
• They can be controlled by...
• Or you can make the Y robust to them by
• Has a significant impact.
• Is important to the business, organization etc.

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