Six Sigma Overview

1
Six Sigma Overview

• Lynn Cavanaugh, Black Belt
• September 2005

2
Sigma as a Measure

• Six Sigma is a disciplined, data-driven
  methodology to eliminate defects in a process
• A way to assess performance of a process
• Devised at Motorola in 1987
• Higher the process sigma, the fewer the defects
• Focused on customer requirements
• Internal, but especially external customers
• Track Defects (aka CTQs) that affect
  satisfaction, loyalty, revenue, market share
• Allows comparison of differing processes
• Marketing, Accounting, Manufacturing, Finance,
  Order Fulfillment, etc. in common terms
• Adjust for complexity of the work, product,
  service

3
Six Sigma
4
Six Sigma as a Goal
Examples of what Six Sigma means in business
5
Deployment

• Six Sigma is deployed by individuals certified in
  the methodology including
• Green Belt - certified to participate in the
  process
• Black Belt - certified to
• lead Six Sigma projects
• Master Black Belt - certified
• to train and certify others

6
Six Sigma Methods

• DMAIC
• Define, Measure, Analyze, Improve, Control
• Used to improve existing processes
• DMADV / DFSS
• Define, Measure, Analyze, Design, Verify
• Used to develop new processes or implement new
  technologies
• May be referred to as DFSS
• Process Management
• Reviewing and analyzing an entire work process
  from end to end

7
Methodology Integration
The matrix below defines how various
methodologies align
8
Process Design Flow
Recognize
Define
Measure
Analyze
Improve
Control
9
DMAIC Cycle - Define

• Select specific problem/opportunity
• An appropriate DMAIC project
• Meaningful and Manageable
• Create a Project Charter
• Validated by leadership
• Identifying key contributors
• Define the process and
• customer(s)

10
Definition Stage Activities

• Define Critical Customer Requirements
• Develop Team Charter
• Map As Is Business Process
• Complete SIPOC
• Develop the Business Case including high level
  project plan

11
SIPOC

• A document that defines the context, specifics
  and plans of an improvement or design project
• Define (and narrow) the projects focus
• Clarify the results being sought
• Confirm value to the business
• Establish boundaries and resources for the team
• Communicate goals and plans

12
Example - SIPOC

• A SIPOC will allow your project team to put
  parameters around the process being reviewed and
  identify the areas impacted both up and down
  stream

• Suppliers who feeds the process
• Inputs what do they feed
• Process steps in the process
• Outputs outputs of the process
• Customer who pulls from the process

13
DMAIC Cycle - Measure

• Determine what to measure and why
• Prepare plans to collect output, process and/or
  input data
• Construct forms and test data collection
  procedures
• Refine data collection
• Refine DMAIC Charter

14
Measure Stage Activities

• Identify Key Measurements
• Data Collection Plan
• Data Collection Execution
• Document Process Variations
• Establish Performance Baseline

15
Input Process Output Measures

• A DMAIC team must get Output measure(s) upfront
  to baseline the process/problem
• Focus on your Goal target or Project Y
• Output measures can be taken before or after the
  product is delivered to the customer
• E.g., defects caught in-house prior to shipment
  vs. upon delivery
• There are usually more options for Process
  measures than Output or Input measures
• Use your SIPOC diagram and sub-process maps to
  help select measures and ensure balance
• Consider possible X measures early in the
  project to help get some initial data for the
  Analyze phase

16
Review Y and X Measures
17
Process Measurement Example
18
DMAIC Cycle - Analyze

• Current state analysis
• Is the current state as good as the process can
  do?
• Who will help make the changes?
• Resource requirements
• What could cause this change effort to fail?
• What major obstacles do I face in completing the
  project?

19
Analysis Stage Activities

• Validate As Is Process Map
• Complete Root Cause Analysis
• Fishbone Diagram
• House of Quality
• Develop To Be Process Map
• Complete Gap Analysis

20
Process Analysis
Look for points in the process where work may be
disrupted or delayed, or where defects may be
created.

• Disconnects
• Bottlenecks
• Redundancies
• Rework loops
• Decisions/Inspections
• Moves

21
Analyze Current Process
Use symbols and colors to help you analyze the
current state
22
DMAIC Cycle - Improve

• Create innovative ideas for improvement
• Narrow, screen and select best solution
  possibilities
• Understand best practices for process workflow
• Develop pilot and define implementation
  strategies
• What is the work breakdown structure?
• What specific activities are necessary to meet
  the project goals?
• How will I re-integrate the various subprojects?

23
Improve Stage Activities

• Define Solution
• Include IT when defining technical solutions
• Develop Work Breakdown Structure
• Develop Implementation Plan
• Complete FMEA

24
Generate and Select Solutions
25
FMEA

• Failure Modes Effects Analysis
• Method to assess and plan for problems which
  could impact safety, reliability, customer
  satisfaction, profits, etc.
• Failure Modes types of possible error or defect
• Looks at common or rare events and relative risk
• Also a tool for process owners to allocate
  measurement and prevention resources (Control)

26
Example - FMEA
27
DMAIC Cycle - Control

• How will I control risk, quality, cost, schedule,
  scope and changes to the plan?
• What types of progress reports should I create?
• How will I assure that the business goals of the
  project were accomplished?
• How will I keep the gains made?

28
Control Stage Activities

• Complete Process Standardization
• Validate Process Map
• Develop Process Documentation
• Develop Monitoring Plan
• Develop Response Plan
• Complete Transfer of Ownership

29
Control Plan
Control Plan FMEA Monitoring Response
From Improve Phase
New!
Dashboard/Control Chart VOC Systems
30
Summary

• Six Sigma
• 3.4 Defects per Million Opportunities
• DMAIC
• Define
• Measure
• Analyze
• Improve
• Control

31
DMAIC Cycle
32
Closing

• Questions and Answers
• Lynn Cavanaugh
• Vice President
• Wells Fargo Home Mortgage
• Cell [phone]
• eMail lynn.c.cavanaugh_at_wellsfargo.com