Six Sigma on a Budget: Achieving More with Less Using the Principles of Six Sigma (BUSINESS BOOKS) - Softcover

Brussee, Warren

Softcover

ISBN 10: 0071736751 ISBN 13: 9780071736756

Publisher: McGraw Hill, 2010

Synopsis

All the value of six sigma--Immediate resultsnow available without the overhead!

In today's economy, organizations need to improve quality, solve problems, and increase efficiencies on the fly―and Six Sigma has proven its worth to large and small companies around the world in all these areas. Written by a leading Six Sigma expert, Warren Brussee, Six Sigma on a Budget explains how you can use the principles of Six Sigma to see immediate results--all without expensive consultants or disruptive classes.

Exclusive features of Six Sigma on a Budget:

• Written in plain English, it delivers huge benefits toanyone who's learned high school math and Microsoft Excel
• Can be implemented by managers or individuals withoutadditional staff―in virtually any type of business
• Teaches all Six Sigma and Lean Six Sigma skills to giveyou knowledge equivalent to a traditionally trained Six Sigma green belt
• Includes case studies, formulas, glossary, quick tips,and other at-a-glance aids

From the basics to more advanced strategies, the invaluable skills in Six Sigma on a Budget help you get great results with a limited investment of time and money.

Warren Brussee was an engineer and plant manager at General Electric for 33 years. He is the holder of multiple patents for his Six Sigma work and is the authorof numerous Six Sigma books, including Statistics for Six Sigma Made Easy and All About Six Sigma. He lives in Columbia, SC.

About this title

About the Author

Warren Brussee is a Six Sigma Green Belt with decades of experience implementing and training Six Sigma. Brussee spent 33 years at GE, ground zero for Six Sigma, and currently consults and teaches on the topic. He is the author of Statistics for Six Sigma Made Easy.

Excerpt. © Reprinted by permission. All rights reserved.

SIX SIGMA ON A BUDGET

Achieving More with Less Using the Principles of Six Sigma

By WARREN BRUSSEE

The McGraw-Hill Companies, Inc.

Copyright © 2010 McGraw-Hill, Inc.
All rights reserved.

ISBN: 978-0-07-173675-6

Contents

PART 1 OVERVIEW
Chapter 1 General Six Sigma
Chapter 2 Measurements and Problem Solving
PART 2 NONSTATISTICAL SIX SIGMA TOOLS
Chapter 3 Customer-Driven Needs and Concerns
Chapter 4 Visual Assists
PART 3 GETTING GOOD DATA
Chapter 5 Data and Samples
Chapter 6 Simplified Gauge Verification
PART 4 PROBABILITY, PLOTS, AND STATISTICAL TESTS
Chapter 7 Data Overview
Chapter 8 Testing for Statistically Significant Change
PART 5 PROCESS CONTROL, DOEs, AND RSS TOLERANCES
Chapter 9 General and Focused Control
Chapter 10 Design of Experiments and Tolerance Analysis
Appendix: The Six Sigma Statistical Tool Finder Matrix
Glossary
Related Reading
Index

Excerpt

CHAPTER 1

General Six Sigma

INTRODUCTION

In a slow economy, companies no longer have the luxury of business as usual.Organizations must try to prevent quality issues, quickly identify and solveproblems if they do occur, and drive down costs by increasing efficiencies. SixSigma has proven its value in all these areas, and it is already in use at manylarge manufacturing companies.

However, businesses of all sizes and types can benefit from the use of SixSigma. Accounting firms, service companies, stock brokers, grocery stores,charities, government agencies, suppliers of healthcare, and virtually anyorganization making a product or supplying a service can gain from Six Sigmause. The intent of this book is to broaden its use into these other areas.

In the healthcare field, for example, there is much controversy on how tocontrol rising medical costs. Yet there are few hard statistics related to thesuccess of competing medical treatments. The need for good data analysis in thehealthcare field makes Six Sigma a natural fit. As one specific example, in theUnited States, eight billion dollars per year is spent on various prostatecancer treatments. The costs of the various treatment options range from $2,000to well over $50,000. Yet, according to a study by the Agency for HealthcareResearch and Quality (February 4, 2008, U.S. Department of Health and HumanServices Agency for Healthcare Research and Quality), no one treatment has beenproven superior to the others. The agency also noted that there is a lack ofgood comparative studies. Dr. Jim Yong Kim, a physician and the president ofDartmouth College, reiterated this in an interview on Bill MoyersJournal (September 11, 2009). Dr. Kim said that work done at Dartmouthshowed great variation in outcomes between various hospitals and doctors, and hesuggested that healthcare professionals needed to learn from industry and startusing processes like Six Sigma to improve and reduce the costs of healthdelivery.

Six Sigma experts often make Six Sigma complex and intimidating. But the basicSix Sigma concepts are quite simple. Six Sigma on a Budget makes thewhole process of implementing Six Sigma easy. This book walks readers throughdetailed and applicable examples and problems that enable anyone with a highschool level of math ability and access to Microsoft's Excel to quicklybecome proficient in Six Sigma. There is no reason to hire expensive Six Sigmaexperts or spend a large number of hours learning everything related to SixSigma before beginning to apply this methodology. Aspects of Six Sigma can beimplemented after reading just a few chapters of this book.

THE HISTORY OF SIX SIGMA

Motorola developed much of the Six Sigma methodology in the 1980s. Motorola wasputting large numbers of transistors into their electronic devices and everytransistor had to work or the device failed. So Motorola decided they needed atighter quality criteria based on defects per million rather than thetraditional defects-per-thousand measure. The initial quality goal for the SixSigma methodology was no more than three defects per million parts.

Then, in the 1990s, Jack Welch, CEO of General Electric, popularized Six Sigmaby dictating its use across the whole of GE. The resultant profit and qualitygains GE touted caused Six Sigma to be implemented in many large corporations.The Six Sigma-generated savings claimed are $16 billion at Motorola, $800million at Allied Signal, and $12 billion at GE in its first five years of use.

Lean manufacturing, a spin-off of traditional Six Sigma, got its start at Toyotain Japan. In lean Six Sigma, manufacturing costs are reduced by reducing leadtime, reducing work-in-process, minimizing wasted motion, and optimizingmaterial flow.

THE SIX SIGMA GOAL

The Six Sigma methodology uses a specific problem-solving approach and Six Sigmatools to improve processes and products. This methodology is data driven.

The original goal of the Six Sigma methodology was to reduce unacceptableproducts to no more than three defects per million parts. Currently in mostcompanies the Six Sigma goal is to make product that satisfies the customer andminimizes supplier losses to the point that it is not cost effective to pursuetighter quality.

MANAGEMENT'S ROLE

Many Six Sigma books advise that Six Sigma can't be implemented without completemanagement commitment and the addition of dedicated Six Sigma personnel. Thishas been one of the criticisms of Six Sigma: that excessive time and money spenton Six Sigma can pull funds and manpower from other company needs. This bookemphasizes that Six Sigma can be implemented for little cost and with littlefanfare!

SIX SIGMA TITLES

The primary implementers of Six Sigma projects are called green belts. Theseproject leaders are trained in all the common Six Sigma tools and work as teamleaders on Six Sigma projects. Six Sigma black belts generally have a higherlevel of Six Sigma expertise and are proficient in Six Sigma specific software.Master black belts generally have management responsibility for the Six Sigmaorganization, especially if Six Sigma is set up as a separate organization.

Anyone completing Six Sigma on a Budget will have the same level ofexpertise as a traditional Six Sigma green belt. There is no need for blackbelts or master black belts.

SIX SIGMA TEAMS

Six Sigma teams are very fluid, with their composition based on a project'sneeds and the stage of the project. The most important factor on Six Sigma teamsis that every area affected by a project be represented. This could includeengineers, quality inspectors, people assembling or doing a task, people buyingrelated materials or shipping product, and the customer.

WHAT WE HAVE LEARNED IN CHAPTER 1

* Motorola was the first large company to implement Six Sigma in the 1980s.Other large companies, like Allied Signal and GE, soon followed Motorola's lead.

* The Six Sigma methodology uses a specific problem-solving approach and selectSix Sigma tools to improve processes and products.

* The initial Six Sigma quality goal was no more than three defects per millionparts. A more realistic goal is to make a product good enough that it is notcost effective to pursue tighter quality.

* Anyone completing Six Sigma on a Budget will have the same level ofexpertise as a traditional Six Sigma green belt.

CHAPTER 2

Measurements and Problem Solving

METRICS AND KEEPING SCORE

In this section you will learn that when doing a Six Sigma project you mustestablish a performance baseline at the start of the project. This enables youto see where you are, in terms of defects, and to know if you have made animprovement with your Six Sigma work.

Metrics, the term used in quality control, refers to the system ofmeasurement that gauges performance. There are many metrics used in industryrelated to quality. In this text we will use three of the most common metrics:DPM (defects per million), process sigma level, and DPMO (defects per millionopportunities).

Defects per million (DPM) is the most common measurement of defect level, and itis the primary measurement used in this book. This metric closely relates to thebottom-line cost of defects, because it labels a part as being simply good orbad, with no indication as to whether a part is bad due to multiple defects ordue to a single defect.

The process sigma level enables someone to project the DPM by analyzing arepresentative sample of a product. Also it enables some comparison of relativedefect levels between different processes. Defects per million opportunities(DPMO) helps in identifying possible solutions because it identifies key problemareas rather than just labeling a part as bad. For example, defining a defectopportunity on a part requires identifying all the different defectsthat occur on the part, how many places on that part the defects can occur, andevery production step that the product goes through that could cause one or moreof the defects.

Suppose a glass part can have a crack or chip, both considered separate defects,occurring in any of three protrusions on the part. You identify two places inthe process where the crack or chip could have occurred. This would be a totalof 2 defects x 3 protrusions x 2 places = 12 opportunities for a defect. Assumethat at the end of the production line we see protrusion cracks or chips on 10percent of the glass parts. The defects per opportunity would be the 10 percentdefect rate divided by the number of opportunities, or 0.1/12 = .008333. If wewant to convert this to DPMO we must multiply the defects per opportunity by amillion. This gives us a DPMO of 8,333.

The above example involves a manufactured product. However, DPMO applies to manyother areas. For example, on looking at quantity errors made on phone orders, aperson ordering a quantity of an item could make a mistake when stating thenumber he or she wants, the person receiving the information could misunderstandthe caller, the wrong quantity could be mistakenly entered into the ordercomputer, or the person filling the order could misread the order or just sendthe wrong quantity. This is five different opportunities for the error. Ifquantities were entered on two separate items, there would be 10 opportunitiesfor error. If errors occur on 1 percent of orders involving two quantity inputs,the DPMO would be 0.01/10 x 1,000,000, which is a DPMO of 1,000.

THE DMAIC PROBLEM-SOLVING METHOD

What you will learn in this section is the DMAIC problem-solving approach usedby green belts. This is a generic plan that can be used on almost any type ofproblem. Which Six Sigma tools are used and what statistics are needed aredictated by each project. The Appendix has a Six Sigma statistical tool findermatrix that can be used in determining which Six Sigma tool is most helpful foreach DMAIC step. As we learn to use each tool in the following chapters, we willrefer back to its use in the DMAIC process.

DEFINITIONS

DMAIC: Define, Measure, Analyze, Improve, Control This is the Six Sigmaproblem-solving approach used by green belts. It is the roadmap to be used onall projects and process improvements, with the Six Sigma tools applied asneeded.

Define This is the overall problem definition. This should be asspecific and complete as possible.

Measure Accurate and sufficient measurements and data are needed. Dataare the essence of many Six Sigma projects.

Analyze The measurements and data must be analyzed to see if they areconsistent with the problem definition and to see if they identify a root cause.A problem solution is then identified.

Improve Once a solution is identified, it must be implemented. Theresults must then be verified with independent data. Past data are seldomsufficient.

Control A verification of control must be implemented. A robust solution(like a part change) will be easier to keep in control than a qualitativesolution (like instructing an operator to run his process with differentparameters).

Define the Problem

A problem is often initially identified very qualitatively, without much detail:

"The customer is complaining that the quality of the motors has deteriorated."

"The new personnel-attendance software program keeps crashing."

"The losses on grinder 4 seem higher recently."

Before one can even think about possible solutions, the problem must be definedmore specifically. Only then can meaningful measurements or data be collected.Here are the above examples after some additional definition:

"More of the quarter-horsepower motors are failing the loading test beginningMarch 20."

"The personnel-attendance software crashes several times per day when the numberof absences exceeds 50."

"The incidence of grinder 4 product being scrapped for small diameters hasdoubled in the last week."

Getting good problem definition may be as simple as talking to the customer. Inthis text there are several excellent tools for quantifying customer input.Often, however, the improved definition will require more effort. Somepreliminary measurements may have to be taken to be sure that there evenis a problem. It may be necessary to verify measurements and calculatesample sizes to be sure that you have valid and sufficient data.

In tight economic times, it is extremely critical to carefully and fully definea problem before attempting to solve it. Even with massive companywide trainingin Six Sigma, on one large Six Sigma project GE misinterpreted what the customerneeded related to delivery times and spent months solving the wrong problem. GEwent after improving the average delivery time; but the customer's issue was therelatively few deliveries that were extremely late. In this era of tightresources, this kind of misuse of time and manpower chasing the wrong problem isno longer acceptable.

Measure the Problem Process

Once the problem has been defined, it must be decided what additionalmeasurements have to be taken to quantify it. Samples must be sufficient innumber, random, and representative of the process we wish to measure.

Analyze the Data

Now we have to see what the data are telling us. We have to plot the data tounderstand the process character. We must decide if the problem as defined isreal or just a random event without an assignable cause. If the event israndom, we cannot look for a specific process change.

Improve the Process

Once we understand the root cause of the problem and have quantitative data, weidentify solution alternatives. We then implement the chosen solution and verifythe predicted results.

Control

Quality control data samples and measurement verification should be scheduled.Updated tolerances should reflect any change. A simplified control chart can beimplemented if appropriate.

Using DMAIC

It is strongly recommended that all DMAIC steps be followed when problemsolving. Remember, trying to fix a change that was implemented without firstworking through all the applicable steps may cause you to spend more timeresponding to the resultant problems than if you had taken the time to do itright!

The DMAIC roadmap is not only useful for problem troubleshooting; it also workswell as a checklist when doing a project. In addition to any program managementtool that is used to run a project, it is often useful to make a list of SixSigma tools that are planned for each stage of the DMAIC process as the projectprogresses.

WHAT WE HAVE LEARNED IN CHAPTER 2

* When doing a Six Sigma project you have to establish a baseline. In this wayyou will be able to know if you made an improvement.

* Metrics are a system of measurements. In this text we use three metrics:defects per million (DPM), process sigma level, and defects per millionopportunities (DPMO).

* The metric DPM most closely relates to the cost of defects, because it simplylabels a part as being good or bad, with no indication as to whether a part isbad due to a single or multiple defects.

* The DMAIC (define, measure, analyze, improve, and control) process is theprocess roadmap Six Sigma green belts use to solve problems.

CHAPTER 3

Customer-Driven Needs and Concerns

THE SIMPLIFIED QFD

Years ago, when travel money was plentiful and quality organizations were muchlarger, quality engineers were "deployed" to customers to rigorously probe thecustomers' needs. These engineers then created a series of quality functiondeployment (QFD) forms that transitioned those needs into a set of actions forthe supplier.

Although this process worked, it was very expensive and time-consuming.Companies can no longer afford that. The simplified QFD described in this bookaccomplishes the same task in a condensed manner and at far less cost. This isextremely important in our current tight economic times. QFDs are one of theways of hearing the voice of the customer (VOC), which is often referred to inlean Six Sigma.

What you will learn in this section is that what a customer really needs isoften not truly understood during the design or change of a product, process, orservice. Those doing a project often just assume that they understand thecustomer's wants and needs. A simplified QFD will minimize issues arising fromthis potential lack of understanding.

In Chapter 1, I suggested that healthcare costs could be reducedsubstantially with the rigorous application of Six Sigma techniques. Patientsand doctors should have valid comparative-effectiveness data to help them pickthe best treatment options. If we could do a simplified QFD with a large numberof doctors and their patients, I suspect that good data on treatment optionswould come out as a high need.

If you were limited to only one Six Sigma tool, you would use the simplifiedQFD. It is useful for any type of problem and should be used on every problem.It takes a relatively small amount of time and achieves buy-in from customers.

What is presented here is a simplified version of the QFDs likely to bepresented in many Six Sigma books and classes. Some descriptions of thetraditional QFDs and the rationale for the simplification are given later inthis section. The simplified QFD is usually used in the Define or Improve stepsof the DMAIC process. It converts customer needs into prioritized actions, whichcan then be addressed as individual projects. Here are some examples of how aQFD is used:

Manufacturing

Use the simplified QFD to get customer input as to their needs at the start ofevery new design or before any change in process or equipment.

New Product Development

Simplified QFDs are very effective in transitioning and prioritizing customer"wants" into specific items to be incorporated into a new product.

Sales and Marketing

Before any new sales initiative, do a simplified QFD, inviting potentialcustomers, salespeople, advertisement suppliers, and others to give input.

(Continues...)

(Continues...)

Excerpted from SIX SIGMA ON A BUDGET by WARREN BRUSSEE. Copyright © 2010 by McGraw-Hill, Inc.. Excerpted by permission of The McGraw-Hill Companies, Inc..
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Edition details

• Publisher: McGraw Hill
• Publication date: 2010
• Language: English
• ISBN 10: 0071736751
• ISBN 13: 9780071736756
• Binding: Paperback
• Number of pages: 192