Practical application of Six Sigma in solving real business problems.

1. The University of Akron
Uni ersit
College of Business Administration
Six Sigma: Solving Problems
Practical Application of DMAIC
6500:333 Supply Chain & Operations Analysis
Guest Lecture
Akron, OH
November 10, 2009
This document is confidential and is intended solely for the
use and information of the client to whom it is addressed
addressed.
Michael Ryan
Michael_Ryan@Goodyear.com
http://www.linkedin.com/in/isolveproblems
htt // li k di /i /i l bl
NOT FOR DISTRIBUTION - MAY NOT BE REPRODUCED WITHOUT PERMISSION

2. What is Six Sigma?
A Statistical Measure
Sigma Spelling Errors Time Keeping Errors DPMO Yield (%)
6σ 1 Misspelled word in a small library
1 Mi ll d di ll lib 6 Seconds per century
6S d t 3.4
34 99.9997
99 9997
Process & Method for Continuous Improvement
Process & Method for Continuous Improvement
Inspecting and Fixing products Fixing processes
Enabler for Culture Change
F th C t
•Focus on the Customer
Align People, Process and Systems on Agreed Metrics
Ali P l P dS t A dM t i
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 1

3. What’s In It For Me?
Where it Started:
• Focus on cost and
Focus on cost and
Internal productivity
…To Where it s Evolved
To Where it’s Evolved
• Delighting Customers
and Driving Revenue
Solving Problems to Create a Win‐Win Scenario
S l i P bl t C t Wi Wi S i
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 2

4. It’s All About the Customer
When it’s too anything
(hot/cold, light/dark, small/big, etc…)
is the
ENEMY it’s not acceptable to
of the customer
the customer
QUALITY
Customers Feel th V i
C t F l the Variance, Not the Mean
N t th M
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 3

5. The Recipe For Six Sigma
Define: What is the Problem Your Trying to Solve?
Measure: If it Can’t Be Measured, It Can’t be Fixed
Analyze: How & Why do Defects Occur?
Improve: Reduce Process Variation
Control: Maintain The Gain & Keep it Fixed!
Solving Problems to Create a Win‐Win Scenario
S l i P bl t C t Wi Wi S i
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 4

6. Three Keys To A Successful Project
What’s The Problem Is it a Process? Can it Be
You re Trying to Solve
You’re Measured?
Three Keys are Critical to Project Success
Th K C iti l t P j t S
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 5

7. What is The Problem You’re Solving?
Understanding Customer Needs
Understanding Customer Needs
• Customers Can’t Always Tell You
Translate Emotion to Data
y
• Customers Can’t Always Tell You
Customer: “Your Service Stinks”
Real Problem: “Of the 23 shipments we received
from you last year, 2 were received on the
requested date, but 14 were at least 2 days late.”
Translate the Voice of the Customer Into “Language Data”
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 6

8. What is a Process?
Beginning Middle End
Input Transformation Output
Start And Then Some Magic Happens
g pp Finish
Definable: Can draw a picture of it…
f p f
Predictable: Know what result will be…
Repeatable: Outcome is assured & repeated…
Must Be: Definable, Predictable and Repeatable
M t B D fi bl P di t bl dR t bl
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 7

9. Customer Needs Must Be Measurable
Critical to Satisfaction (CTS)
• “I want a good cup of coffee”
Critical to Quality (CTQ)
• Identify measurable characteristics
The Challenge:
• Qualitative to Quantitative
How Does the Customer Measure Your Process?*
How Does the Customer Measure Your Process?
*Customer Has to Like It, Value It and Be Willing to Pay for It!
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 8

10. Practical Application of Six Sigma
External Customer: Process Variation Impacting Delivery
Measurable Impact on Customer Satisfaction
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 9

11. Six Sigma In Review
Know What Is Important to The Customer (CTQ)
h h ( )
What is the customer willing to pay for?
Reduce Defects (DPMO)
Identify when & why defects occur 4 3 2 1 0
Center Around Target (Mean) Target
Xbar
Build quality into the process
LSL USL
Reduce Variation (Standard Deviation)
Improve process capability to maintain the gain
A Strategy to Drive Change & Deliver Results
A St t t D i Ch & D li R lt
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 10

12. Ryanisms / Guiding Thoughts
“What’s the problem you’re trying to solve?”
What s the problem you re trying to solve?
and it's corollary…
"What's the question you're trying to answer?”
q y y g
…Some favorites:
“If it can’t be measured, it can’t be fixed”
If it can t be measured, it can t be fixed
“A Process is: Definable, Predictable and Repeatable”
“What’s the business case ($) to fix this problem?”
($) p
"You don't know if you don't ask”
And remember:
And remember:
“The measure of success is not whether you have a
tough problem to deal with, but whether it’s the same
problem you had last year.”
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 11

13. APPENDIX
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 12

14. It’s All About the Customer!
Customers Value Consistency and Quality
C t V l C it d Q lit
• Expect performance, reliability, competitive prices, and on‐time delivery.
• When expectations are not met, it creates the opportunity for someone else.
Sigma Spelling Errors Time Keeping Errors DPMO Yield (%)
3σ 1.5 Misspelled words per page in a book
1 5 Misspelled words per page in a book 3.5 Months per century
3 5 Months per century 66,800
66 800 93.32
93 32
4σ 1 Misspelled words per 30 pages in a book 2.5 Days per century 6,200 99.379
5σ 1 Misspelled word in set of encyclopedias 30 Minutes per century 233 99.9767
6σ 1 Misspelled word in a small library 6 Seconds per century 3.4 99.9997
The Secret of Success is to Do Common Things Uncommonly Well.
The Secret of Success is to Do Common Things Uncommonly Well.
‐ John Rockefeller
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 13

15. A Process of Continuous Improvement
DMAIC: It’s All About Process
DMAIC: It’s All About Process
Six Sigma is a highly disciplined process that helps us focus on
developing and delivering near‐perfect products and services.
A. Identify Project CTQ’s
Define Customer expectations of the process? B. Develop Team Charter
C. Define Process Map
1. Select CTQ Characteristics
Select CTQ Characteristics
Measure What is the frequency of defects? 2. Define Performance Standards
3. Measurement System Analysis on Y
4. Establish Process Capability
Analyze
y Why, when, and where do defects occur? 5. Define Performance Objectives
6. Identify Variation Sources
7. Screen Potential Causes
Improve How can we fix the process? 8. Discover Variable Relationships
9. Establish Operating Tolerances
10. Define & Validate Measurement System
Control How can we make the process stay fixed? 11. Determine Process Capability
12. Implement Process Control
Six Sigma Becomes “The Way You Work”
Si Si B “Th W Y W k”
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 14

16. Variation is the Enemy of Quality
Fundamental Objective of Six Sigma
Fundamental Objective of Six Sigma
Reduce variation and eliminate defects
Accurate,
Accurate Accurate AND Precise Precise,
Precise
Not Precise Not Accurate
4 3 2 1 0
4 3 2 1 0 4 3 2 1 0
Target Target Target
Xbar Xbar Xbar
LSL USL LSL USL LSL USL
Customers Feel the Variance, Not the Mean
C t F l th V i N t th M
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 15

17. Practical Application of Six Sigma
Black Belt Projects: Full Time Job to Focus & Deliver
l k l j ll i b & li
Black Belt Projects Lead (7)
Finance: Four process improvement projects, including:
Fi F i t j t i l di
Removed 1 day from monthly closing cycle for largest business unit
GE Superabrasives EDM Cut Wire Dies
Closing Process Timeline
Lapping Process EDM Process
Historical Target: Between 1997 and 2005 the Closing Transmission Target = 12pm +6WD Place parts on lapper Place parts on EDM
Finished Part Finished Part
Process Evolution: In 2006, the Closing Transmission Target was moved up to = 12pm +5WD
Days to Close
Cut to Near
Net Shape Quick Finish
2006 - 2007
Lap (<12 hrs)
1997 - 2005
1996
Add Diamond
1995 Lapper removes
640 g/gal
@ 14 ml/min Material
/
709.6 ct/hr 49 Hours
Ho rs
+1 WD +2 WD +3 WD +4 WD +5 WD +6 WD +8 WD +10 WD
9:30 am Noon Noon Noon Noon Noon Noon Noon Process Issues Project Resolution
0 hrs 26.5 hrs 50.5 hrs 74.5 hrs 98.5 hrs 122.5 hrs 170.5 hrs 218.5 hrs •Consumes a great deal of lap feed • EDM cutting produces near-net shape
elapsed elapsed elapsed elapsed elapsed elapsed elapsed •$2.28 per hour, per piece to lap • Leaves 0.050” on each side for clean up
•Average of $111.72 in lap feed for 5208 • Reduces lapping to <12 hrs
•On average 49 hours needed to lap 5208
5 Day Close Project is First Major Effort Since 1997
Eliminated 75% of Lap Feed to Finish 5211/08 Wire Dies
Monthly Financial Close Process Improvement Generated Annual Savings of $96m
Global Finance Quality & Process Improvement CIS 4
MCR / March 8, 2002
Wire Cut Summary.ppt
Slide 1/2
Manufacturing Productivity: Three projects, $430k in productivity including:
Wire die scrap reduction, control of sonic velocity, and near‐net shape finishing
Leverage 6σ A
L 6 Across the Business to Drive Results
th B i t D i R lt
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 16

18. Practical Application of Six Sigma
Internal Customer: Digitization (Process Automation) Project
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 17

19. Practical Application of Six Sigma
Green Belt Projects: Integrate Into Daily Role
l j il l
aka “Divide & Conquer”
Green Belt Projects Mentored (20)
Green Belt Projects Mentored (20)
Finance: 13 reporting, digitization, and process improvement projects, including:
Monthly Closing, Monthly AR, Material Handling, and P&E Status
Environmental, Health, and Safety (EHS): One project focused on
Reduced non‐occupational lost‐time days 24%, saving $334k in first full year
Commercial Opportunity: One project focused on excess inventory utilization
Commercial Opportunity: One project focused on excess inventory utilization
Identified market to sell excess inventory, generating $400k sales1
Manufacturing Productivity: Five projects delivering $459k including:
New vendor qualification2, setup time reduction, inventory utilization
N d lifi ti t ti d ti i t tili ti
1. Won 1Q 2002 GE Superabrasives Award for Six Sigma Productivity for inventory reduction program
2. Won 3Q 2001 GE Superabrasives Award for Six Sigma Leadership for new vendor qualification
Green Belts: 6σ B
G B lt 6 Becomes A Force Multiplier
AF M lti li
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 18

20. Sample Financial Benefit of 6σ : EHS Project
Internal Customer(s): Hourly Associates & Business Leadership
Reactive Case Management Pro-Active Intervention
(96 cases @ avg. 70.1 days/case) (64 cases @ avg. 54.5 days/case)
6725 Days Lost in ’01 3491 Days Lost in ‘02
Employee Informs
Disability Center
y GESW Shoulders Disability Center Informs
y
of Injury/Illness Burden in Lost
B d i L t Onsite Care Nurse
Time Days Regularly of New Cases
Frequency and
Duration of Injury
/ Illness reduced
Identify Opportunities
For early
Disability Center Informs
y
Return to Work
Onsite Care Nurse
of Projected Lost Time
Pro-Active Intervention
• Onsite Care Nurse Works with Disability
Reactive Case Management
Center and Operations Management team
•Employee set expectation of return to work date
• Each Monday, all open cases are reviewed
•Onsite Care Nurse notified after the fact
after-the-fact
• Opportunities for early return to work
•No structure for early return to work
identified and communicated to employee
48% Reduction in Lost Time Days, Saving $356k
48% R d ti i L t Ti D S i $356k
DMAIC | November 10, 2009 University of Akron • College of Business Administration • Fall 2009
6500:333 Supply Chain & Operations Analysis • Guest Speaker: Michael Ryan 19