Principles of Six Sigma

Six-Sigma metrics
• Defect – any mistake or error that is passed on to a customer
• Defects per unit (DPU)

# of defects discovered
DPU 
# of units produced

• Defects per million opportunities (dpmo)

DPU *1,000,000
dpmo 
Opportunities for error

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 Definition: Six-Sigma Quality

Ensuring that process variation is half the design tolerance

(Cp = 2.0) while allowing the mean to shift as much as 1.5
standard deviations, resulting in at most 3.4 dpmo.

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k-Sigma quality levels

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 Examples of different quality levels
• For a cell-phone network operator, at 4-sigma level, there
won’t be any service for more than four hours each month.
Whereas at 6-sigma it would be only 6 seconds a month.

• For a logistics organization, 4-sigma process would result in 1

nonconforming package in every three truckload. 6-sigma
limit, on the other hand, would mean 1 nonconforming
package in more than 5,000 truckloads.

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 Key factors in Six Sigma project
selection
• Financial return, as measured by costs associated with
quality and process performance, and impacts on revenues
and market share
• Impacts on customers and organizational effectiveness
• Probability of success
• Impact on employees
• Fit to strategy and competitive advantage

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 DMAIC methodology

1. Define
2. Measure
3. Analyze
4. Improve
5. Control

Very similar to the Juran’s breakthrough sequence!

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 Define
• Describe the problem in operational terms
• Drill down to a specific problem statement (project scoping)
• Identify customers and CTQs, performance metrics, and
cost/revenue implications

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 Measure
• Key data collection questions
– What questions are we trying to answer?
– What type of data will we need to answer the question?
– Where can we find the data?
– Who can provide the data?
– How can we collect the data with minimum effort and with
minimum chance of error?

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 Analyze
• Focus on why defects, errors, or excessive variation occur
• Seek the root cause
• 5-Why technique
• Experimentation and verification

• This is similar to the diagnostic journey.

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 Improve
• Idea generation
• Brainstorming
• Evaluation and selection
• Implementation planning

• This is the classical remedial journey!

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 Control
• Maintain improvements
• Standard operating procedures
• Training
• Checklist or reviews
• Statistical process control charts

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 Tools for Six-Sigma and Quality
Improvement
• Elementary statistics
• Advanced statistics
• Product design and reliability
• Measurement
• Process control
• Process improvement
• Implementation and teamwork

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 Key Six Sigma metrics in services
• Industry term for application of Six Sigma methodologies to
service industry – “transactional Six Sigma.”

• Metrics for service industry:

1. Accuracy
2. Cycle time
3. Cost
4. Customer satisfaction

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 Lean Production and Six Sigma
• The 5S’s: seiri (sort), seiton (set in order), seiso (shine),
seiketsu (standardize), and shitsuke (sustain).
• Visual controls
• Efficient layout and standardized work
• Pull production
• Single minute exchange of dies (SMED)
• Total productive maintenance
• Source inspection
• Continuous improvement

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 Lean Production and Six Sigma
A cycle time reduction project example to illustrate the
complementary relation between SS and Lean.
• We can apply lean production tool to streamline the process of
entering an order in the system.
• Through careful analysis of the order entering process, we see that
the orders are reworked because of defects like incorrect addresses,
customer needs, shipping charges. This may result in large
variation in processing time.
• Six sigma tools can, now, be applied to get to the root cause and
identify the solution using statistical tools and methods.
• “Lean Six Sigma” approach, thus, draws upon the best practices of
both individual approaches.
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 Lean Production and Six Sigma

Differences between Lean and Six Sigma approach –

• Typically lean production addresses more visible problems
like inventory, cleanliness, safety etc. Six Sigma is more
applicable for less visible problems like process variation.
• Lean approaches are more intuitive and easier to understand
and apply than those in the Six Sigma. A 5S program against
the Design of Experiments.

• Its advisable for organizations to start with basic lean

principles and evolve toward more sophisticated Six Sigma
approaches.
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Design for Six Sigma
 DFSS Activities
• Concept development, determining product functionality
based upon customer requirements, technological capabilities,
and economic realities
• Design development, focusing on product and process
performance issues necessary to fulfill the product and service
requirements in manufacturing or delivery
• Design optimization, seeking to minimize the impact of
variation in production and use, creating a “robust” design
• Design verification, ensuring that the capability of the
production system meets the appropriate sigma level

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 Tools for Concept Development
• Concept development – the process of applying scientific,
engineering, and business knowledge to produce a basic
functional design that meets both customer needs and
manufacturing or service delivery requirements.
– Quality function deployment (QFD)
– Concept engineering

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 House of Quality

Interrelationships Customer
requirement
priorities
Technical requirements

Voice of Relationship
the matrix
customer

Technical requirement Competitive

priorities evaluation
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 Quality Function Deployment

technical
requirements
component
characteristics
process
operations quality plan
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 Building the House of Quality
1. Identify customer requirements.
2. Identify technical requirements.
3. Relate the customer requirements to the technical
requirements.
4. Conduct an evaluation of competing products or services.
5. Evaluate technical requirements and develop targets.
6. Determine which technical requirements to deploy in the
remainder of the production/delivery process.

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 Concept Engineering
• Understanding the customer’s environment.
• Converting understanding into requirements.
• Operationalizing what has been learned.
• Concept generation.
• Concept selection.

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 Tools for Design Development
• Tolerance design
Determining permissible variation in a dimension
Understand tradeoffs between costs and performance

• Design failure mode and effects analysis

• Reliability prediction

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 DFMEA
• Design failure mode and effects analysis (DFMEA) –
identification of all the ways in which a failure can
occur, to estimate the effect and seriousness of the
failure, and to recommend corrective design actions.

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 Reliability Prediction

Reliability
Generally defined as the ability of a product to perform as
expected over time.
Formally defined as the probability that a product, piece of
equipment, or system performs its intended function for a
stated period of time under specified operating conditions.

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 Types of Failures
• Functional failure – failure that occurs at the start of product
life due to manufacturing or material detects.
• Reliability failure – failure after some period of use.

Types of reliability
• Inherent reliability – predicted by product design
• Achieved reliability – observed during use

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 Tools for Design Optimization
• Taguchi loss function
• Optimizing reliability

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 Loss Functions

Traditional
loss no loss loss
View
nominal
tolerance

Taguchi’s
View loss loss

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 Taguchi Loss Function Calculations

Loss function: L(x) = k(x - T)2

Example: Specification: .500  .020. Failure outside of the
tolerance range costs $50 to repair. Thus, 50 = k(.020)2.
Solving for k yields k = 125,000. The loss function is:
L(x) = 125,000(x - .500)2

Expected loss = k(2 + D2)

where D is the deviation from the target.

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 Tools for Design Verification
• Reliability testing
• Measurement systems evaluation
• Process capability evaluation

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 Metrology - Science of
Measurement
• Accuracy - closeness of agreement between an observed
value and a standard
• Precision - closeness of agreement between randomly
selected individual measurements

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 Repeatability and Reproducibility
• Repeatability (equipment variation) – variation in multiple
measurements by an individual using the same instrument.
• Reproducibility (operator variation) - variation in the same
measuring instrument used by different individuals

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Repeatability & Reproducibility Studies
• Quantify and evaluate the capability of a measurement system
– Select m operators and n parts
– Calibrate the measuring instrument
– Randomly measure each part by each operator for r trials
– Compute key statistics to quantify repeatability and
reproducibility

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