MASTER’S THESIS 2004:070 CIV Evaluation of possible SIX SIGMA implementation including a DMAIC project A case study at the Cage Factory, SKF Sverige AB MASTER OF SCIENCE PROGRAMME Department of Business Administration and Social Science Division of Quality & Environmental Management 2004:070 CIV • ISSN: 1402 - 1617 • ISRN: LTU - EX - - 04/70 - - SE MARTIN LENNARTSSON ERIK VANHATALO -TITLES- Evaluation of possible SIX SIGMA implementation including a DMAIC project - A CASE STUDY AT THE CAGE FACTORY, SKF SVERIGE AB Utvärdering av möjlig SEX SIGMA implementering samt ett DMAIC-projekt - EN FALLSTUDIE PÅ HÅLLAREFABRIKEN, SKF SVERIGE AB This Master Thesis was carried out within the area of Quality Management at Luleå University of Technology and SKF Sverige AB. By: Martin Lennartsson Erik Vanhatalo Luleå 2004-02-29 Supervisors: Lars Palmqvist, SKF Sverige AB in Gothenburg Karin Schön, Luleå University of Technology -ABSTRACT- ABSTRACT Six Sigma is an initiative launched by Motorola in 1987, focusing on reducing variation and continuously improving processes (Barney, 2002). This thesis was carried out at the Cage Factory in Gothenburg, a smaller unit within SKF Sverige AB with 124 employees. The factory manufactures the cage component in the bearing, which will keep the rollers in place in the complete bearing. The purpose of this thesis is to investigate and make comparisons between Six Sigma and the existing way of working with improvements and the organization in the Cage Factory and to give recommendations on what actions are needed to efficiently implement Six Sigma. To aid in the fulfillment of the purpose a practical DMAIC (Define- Measure-Analyze-Improve-Control) project was conducted. The project aims to reduce customer complaints and downtime caused by the turning activity in one of the production channels at the Cage Factory. Furthermore, several interviews with strategically selected individuals were conducted. The authors argue that Six Sigma could be implemented and integrated with the existing improvement approach, Total Process Management, TPMG. Six Sigma can be used to attack the most complex problems, while TPMG handles the many day-to-day issues. At the moment the implementation strategy "Strategically selected individuals and projects" is the most applicable at the Cage Factory. The authors argue that Six Sigma will provide a structure (DMAIC) and training in tools, thereby ensuring that the tools are used at the right time and in the right way at the Cage Factory. In the future, there has to be a strategy for generating possible Six Sigma projects at the Cage Factory. Also, it is important that a way for steering different problems to different problem solving activities is developed. However, some issues need to be considered if Six Sigma should work efficiently at the Cage Factory. A training venture is needed to enable the introduction of different roles in the organization. Also, all training should be connected to practical experience. It is important that the Cage Factory receives resource support from SKF Sverige and/or the SKF Group. Further, a reliable measurement system must be implemented. The authors believe that improved scrap reporting and improved use of SPC are important actions that need to be taken. -SAMMANFATTNING- SAMMANFATTNING Sex Sigma fokuserar på att reducera variation samt att kontinuerligt förbättra företagets processer och introducerades av Motorola 1987 (Barney, 2002). Detta examensarbete har utförts på Hållarefabriken i Göteborg som är en mindre enhet inom SKF Sverige AB med 124 anställda. Fabriken producerar hållarkomponenten i lagret som har till uppgift att hålla rullar på plats i det färdiga lagret. Syftet med examensarbetet är att utvärdera och jämföra Sex Sigma med det rådande förbättringsarbetet och organisationen på Hållarefabriken samt att ge rekommendationer på vad som bör åtgärdas för att effektivt kunna införa Sex Sigma. För att uppfylla syftet har bland annat ett DMAIC-projekt utförts. Projektets syfte är att reducera antalet kundreklamationer och minska stopptid orsakade av svarvning i en av produktionskanalerna på Hållarefabriken. Vidare har ett antal intervjuer genomförts med strategiskt utvalda individer. Författarna menar att Sex Sigma kan implementeras och integreras i det nuvarande förbättringsarbetet, Total Process Management (TPMG). Sex Sigma kan användas för att attackera de mest komplexa problemen inom verksamheten, medan TPMG hanterar de vardagliga åtgärderna som krävs för att utveckla verksamheten på lång sikt. För tillfället är implementeringsstrategin "strategiskt utvalda individer och projekt" den mest lämpliga för Hållarefabriken. Författarna anser att Sex Sigma kommer att ge en struktur (DMAIC) och träning i verktyg, vilket i sin tur innebär att verktygen används vid rätt tillfälle och på rätt sätt på Hållarefabriken. I framtiden måste det finnas en strategi för att generera möjliga Sex Sigma- projekt på Hållarefabriken. Dessutom är det viktigt att det utvecklas ett sätt att styra olika problem till olika problemlösningsalternativ. Det finns dock en del åtgärder som måste vidtas för att Sex Sigma ska kunna fungera effektivt på Hållarefabriken. En utbildningssatsning krävs för att möjliggöra en introduktion av roller i organisationen. All utbildning bör dessutom ske i samband med deltagandet i ett praktiskt projekt. Det är viktigt att Hållarefabriken får stöd, i form av resurser, från SKF Sverige och SKF-koncernen. Författarna anser att en förbättrad kassationsrapportering och förbättrad användning av programvaran för SPS är viktiga åtgärder för att skapa ett väl fungerande mätsystem. -ACKNOWLEDGEMENTS- ACKNOWLEDGEMENTS This Master Thesis was carried out during the period from late September 2003 to early February 2004 at the Cage Factory, SKF Sverige AB in Gothenburg, Sweden. We would like to take the opportunity to thank SKF Sverige AB and especially the Cage Factory's entire staff for giving us the opportunity to write our Master Thesis by studying their organization. Furthermore, we also wish to thank our supervisor at Luleå University of Technology, Luleå, LTU, Karin Schön as well as our supervisor at the Cage Factory Lars Palmqvist for their valuable support during the completion of this Thesis. Moreover, the authors would like to express a special thanks to the members of the improvement group taking part in the DMAIC project presented in this Thesis. Without their committed participation this Thesis' completion wouldn't have been possible. Also, we thank all the different individuals that gave us some of their valuable time taking part in the interviews made in this Thesis. Last but not least, we would like to thank the Division of Quality and Environmental Management at LTU for the opportunity to complete our Master's study at their Division and for support during this and earlier courses. Especially we would like to thank Görgen Edenhagen, Master Thesis Coordinator and fellow course mates giving us feedback at Master Student's seminars. Gothenburg, February 2004 Martin Lennartsson Erik Vanhatalo -CONTENTS- CONTENTS LIST OF FIGURES, PICTURES AND TABLES 1 FIGURES 1 PICTURES 2 TABLES 2 LIST OF ABBREVIATIONS 3 1. INTRODUCTION 4 1.1. BACKGROUND 4 1.1.1. The development of quality engineering 4 1.1.2. Company presentation 6 1.2. PROBLEM DISCUSSION 8 1.3. PURPOSE AND DELIMITATIONS 10 1.3.1. Purpose of the thesis 10 1.3.2. Delimitations 10 1.4. THE OUTLINE OF THE THESIS 11 2. METHODOLOGY 12 2.1. RESEARCH APPROACH 12 2.1.1. Positivism or Hermeneutics 12 2.1.2. Induction or Deduction 13 2.1.3. Quantitative or Qualitative method 14 2.2. RESEARCH STRATEGY 14 2.3. LITERATURE STUDY 15 2.4. CHOICE OF DATA COLLECTION METHOD 16 2.4.1. Primary data 16 2.4.2. Secondary data 18 2.5. METHODOLOGY AND CHOSEN TOOLS IN THE DMAIC PROJECT 18 2.6. RELIABILITY AND VALIDITY 19 2.6.1. Validity 19 2.6.2. Reliability 20 3. THEORETICAL FRAME OF REFERENCE 21 3.1. SIX SIGMA 21 3.1.1. The Six Sigma Framework 23 3.1.2. The Six Sigma Infrastructure 24 3.1.3. Strategies for Six Sigma Implementation 25 3.1.4. Critique to Six Sigma 27 3.2. THE DMAIC IMPROVEMENT CYCLE 28 -CONTENTS- 3.2.1. How to choose a Six Sigma project 29 3.2.2. The Define Phase 29 3.2.3. The Measure Phase 30 3.2.4. The Analyze Phase 31 3.2.5. The Improve Phase 31 3.2.6. The Control Phase 31 3.2.7. Examples of tools in the different phases 32 3.2.8. Tools Chosen in the DMAIC project 33 3.3. OTHER QUALITY INITIATIVES 34 3.3.1. Total Quality Management, TQM 34 3.3.2. Total Process Management and TPM, the SKF way 35 3.4. TURNING 37 4. THE EMPIRICAL STUDY 38 4.1. THE DMAIC PROJECT 38 4.1.1. The Define Phase 38 4.1.2. The Measure Phase 41 4.1.3. The Analyze Phase 47 4.1.4. The Improve Phase 49 4.1.5. The Control Phase 52 4.1.6. Evaluation of the DMAIC project 53 4.2. INTERVIEWS 54 4.2.1. Lars Arrenäs, TPMG Manager, SKF 55 4.2.2. Cecilia Lack, TPMG Coordinator at the Cage Factory 56 4.2.3. Folke Höglund, Quality Assurance Manager, SKF Group 57 4.2.4. Bo Bergman, Professor, Chalmers University of Technology, CTH 59 4.2.5. Laszlo Persson, Master Black Belt at Volvo Cars Engine in Skövde 61 4.3. FOCUS GROUP AT THE CAGE FACTORY 68 5. ANALYSIS AND RESULTS 72 5.1. EXPERIENCE FROM THE DMAIC PROJECT 72 5.1.1. The scope of the project 72 5.1.2. The cost issue 73 5.1.3. Collection and evaluation of data 73 5.1.4. DMAIC methodology, tools and results 74 5.2. ANALYSIS OF SIX SIGMA IMPLEMENTATION AT THE CAGE FACTORY 76 5.2.1. Why adopt Six Sigma? 76 5.2.2. The Six Sigma Framework at the Cage Factory 77 5.2.3. Organization and Six Sigma Roles 80 5.2.4. Methodology and Tools 81 -CONTENTS- 6. CONCLUSIONS AND DISCUSSION 82 6.1. CONCLUSIONS 82 6.2. DISCUSSION 83 6.2.1. Thesis generalization 83 6.2.2. Criticism to sources and methodology 83 6.2.3. Problems with the purpose of the thesis 85 6.2.4. Future work 85 REFERENCES 86 BIBLIOGRAPHIC REFERENCES 86 ELECTRONIC REFERENCES 87 PAPER REFERENCES 88 ORAL REFERENCES 88 OTHER REFERENCES 89 SUPPLEMENTS 90 APPENDICES 102 GLOSSARY 110 INDEX 111 -CONTENTS- LIST OF FIGURES, PICTURES AND TABLES Figures Page FIGURE 1.1 DEVELOPMENT OF THE QUALITY CONCEPT 5 FIGURE 1.2 THE SKF BUSINESS CONCEPT 6 FIGURE 1.3 THE SKF QUALITY POLICY 7 FIGURE 1.4 SKETCH OF THE WORKFLOW IN CHANNEL 13 AT THE CAGE FACTORY 9 FIGURE 2.1 INDUCTIVE AND DEDUCTIVE APPROACH IN RESEARCH 13 FIGURE 3.1 NORMALLY DISTRIBUTED PROCESS PERFORMING AT SIX SIGMA LEVEL 22 FIGURE 3.2 COSTS, IN PER CENT OF TURNOVER, DEPENDING ON SIGMA LEVEL 22 FIGURE 3.3 THE CORPORATE FRAMEWORK OF SIX SIGMA 23 FIGURE 3.4 STRUCTURE OF A GENERAL SIX SIGMA PROJECT 25 FIGURE 3.5 STRATEGIES FOR SIX SIGMA IMPLEMENTATION 26 FIGURE 3.6 THE DMAIC METHODOLOGY 28 FIGURE 3.7 COMMONLY USED SOURCES FOR PROJECT GENERATION 29 FIGURE 3.8 VARIATION IN INPUT VARIABLES ARE TRANSFERRED TO THE OUTPUT 30 FIGURE 3.9 COMMONLY USED TOOLS IN A DMAIC PROJECT 33 FIGURE 3.10 QUALITY TOOLS IN THE DMAIC PROJECT 33 FIGURE 3.11 LINK BETWEEN VALUES, METHODOLOGIES AND TOOLS 35 FIGURE 3.12 THE OPERATOR MAINTENANCE STAIRCASE 36 FIGURE 3.13 THE CONCEPT OF LONGITUDINAL AND FACE TURNING 37 FIGURE 4.1 PARETO CHART OVER CUSTOMER COMPLAINTS 39 FIGURE 4.2 HISTORICAL DEVELOPMENT OF COMPLAINTS IN CHANNEL 13 39 FIGURE 4.3 PARETO CHART FOR IDENTIFIED COMPLAINT CAUSES IN CHANNEL 13 39 FIGURE 4.4 PROCESS MAP OF THE TURNING ACTIVITY 41 FIGURE 4.5 PIE CHART OF DOWNTIME IN DIFFERENT MACHINES IN CHANNEL 13 42 FIGURE 4.6 PARETO CHART OF DURATIONS FOR DIFFERENT CAUSES 43 FIGURE 4.7 RESULT OF THE FREQUENCY STUDY IN THE TURNING PROCESS 44 FIGURE 4.8 THE OUT OF CONTROL SITUATION FOR ONE OF THE STUDIED CAGES 49 FIGURE 4.9 THE KANO MODEL 60 FIGURE 4.10 SKETCH OF THE SIX SIGMA ORGANIZATIONAL STRUCTURE AT VCES 64 FIGURE 4.11 PROJECT LIFE AND RESPONSIBILITIES AT VCES 65 FIGURE 4.12 PROBLEM SOLVING ACTIVITIES AT VCES 65 FIGURE 5.1 HOW SIX SIGMA AND TPMG DEALS WITH PROBLEMS 77 FIGURE 5.2 TPMG AND SIX SIGMA AT THE CAGE FACTORY 79 FIGURE S.1 PROJECT CHARTER USED IN THE DMAIC PROJECT 92 FIGURE S.2 FREQUENCY STUDY FORM USED IN THE DMAIC PROJECT 93 FIGURE S.3 CAUSE-AND-EFFECT DIAGRAM FROM THE DMAIC PROJECT 95 -1- -CONTENTS- FIGURE S.4 PROCESS-FMEA DEVELOPED IN THE DMAIC PROJECT 98 FIGURE S.5 TREE DIAGRAM DEVELOPED IN THE DMAIC PROJECT 100 FIGURE S.6 MATRIX DIAGRAM DEVELOPED IN THE DMAIC PROJECT 101 FIGURE A.1 CONVERTING DPMO TO SIGMA VALUES 103 FIGURE A.2 THE SEVEN-TIMES-SEVEN TOOLBOX 104 Pictures PICTURE 1.1 CAGE AND RADIAL BEARING 7 PICTURE 4.1 THE IMPROVEMENT GROUP 42 PICTURE 4.2 DEFECTS IN THE TURNING ACTIVITY 44 Tables TABLE 4.1 CUSTOMER COMPLAINTS PER PRODUCTION CHANNEL 38 TABLE 4.2 POTENTIAL FAILURE CAUSES WITH THE HIGHEST RPN 48 TABLE 4.3 MEASURES FROM THE TREE DIAGRAM WITH 18 POINTS 50 TABLE 4.4 MEASURES CORRELATED TO PROBLEMS DETECTED IN THE FMEA 51 TABLE S.1 THE CUSTOMER COMPLAINT PROCESS 96 TABLE A.1 TRAINING CONTENT FOR DIFFERENT ROLES 103 -2- [...]... Therefore an evaluation of Six Sigma implementation in the Cage Factory is valuable In a traditional organization the structure is designed to carry out routine tasks In Six Sigma most activities and problems are unique (Pyzdek, 2003) What is this demanding of the Six Sigma Company? A company that aims for an implementation of Six Sigma also has to consider ongoing improvement activities and systems Management... interpretations and analysis of these sources of data, founded upon interpretations of existing theories, are examples of a hermeneutic approach -12- -METHODOLOGYHowever, there are also elements of Positivism The DMAIC project concerning the turning related problems also includes quantitative data and logical and factbased decisions, a positivistic approach In fact, the evaluation of a possible Six Sigma implementation. .. deal with quality problems in a manufacturing company The past 15-20 years many new methods, strategies and tools have emerged in the quality area, for example Total Quality Management, TQM, has been a popular approach that many companies have adopted (Pande et al., 2000) In recent years Six Sigma has grown in popularity especially in the US and companies like General Electric and Motorola have obtained... qualitative and quantitative methods because advantages and drawbacks with each method complement each other In this thesis there are elements of both qualitative and quantitative data or information The majority of the data or information gathered is of a qualitative nature, in the form of interviews, focus groups and the use of qualitative tools in the improvement project However, quantitative data... implementation of Six Sigma and the use of Six Sigma methodology it is necessary to present relevant theory about Six Sigma This section treats theory about the Framework, infrastructure, and implementation strategies in Six Sigma Also, critique to Six Sigma is presented Pande et al (2000) give a definition of Six Sigma as follows: "A comprehensive and flexible system for achieving, sustaining and maximizing... companies traditionally have accepted that their processes perform at a level of three to four sigma, which translates to 6,200 to 67,000 dpmo According to Six Sigma a manufacturing process with a normally distributed output and a standard deviation6, , has to display a distance of six standard deviations between process target and the closest tolerance limit and corresponds to a Process Capability Ratio... variation (Barney, 2002) In 1988 Motorola won the Malcolm Baldridge National Quality Award, MBNQA1 and the interest for Six Sigma increased (Pyzdek, 2001) Since Motorola launched Six Sigma in 1987 and particularly from 1995, a growing number of global companies have followed, developing Six Sigma programs of their own (Magnusson, Kroslid & Bergman, 2003) Today, Six Sigma is well established in the automotive,... strategies for Six Sigma: "The Six Sigma Organization", "The Six Sigma Engineering Organization" and "Strategic selection of individuals and projects" The differences between these three strategies and their strengths and weaknesses are illustrated in Figure 3.5 -25- -THEORETICAL FRAME OF REFERENCESix Sigma Organization Six Sigma Engineering Organization Strategically selected projects and individuals Personnel... types are cages for radial bearings3, which constitute about 95 per cent of the production (ibid) A cage for a radial bearing and a complete radial bearing can be viewed in Picture 1.1 (a) (b) Picture 1.1 (a) Cage for a radial bearing (b) Complete radial bearing 3 The radial bearings are designed to carry load in radial direction of the shaft -7- -INTRODUCTION- 1.2 Problem discussion There are many ways... within the Six Sigma organization are emphasized In European Six Sigma Programs the importance of a single individual is toned down and instead the participation of everyone is emphasized (Bergman & Klefsjö, 2001) 3.1.4 Critique to Six Sigma Companies in Europe have been more skeptical to Six Sigma, than companies in the USA, although there are successful examples like ABB and Volvo (Magnusson et al., 2003) . SE MARTIN LENNARTSSON ERIK VANHATALO -TITLES- Evaluation of possible SIX SIGMA implementation including a DMAIC project - A CASE STUDY AT THE CAGE. -ABBREVIATIONS- LIST OF ABBREVIATIONS ABB Asea Brown Bovery ANOVA Analysis of Variance ANOM Analysis of Means C p Process Capability Ratio