A new military program was losing 50% of the product during testing, resulting in almost $1 million USD per month in scrap, and numerous attempts to solve the problem had yielded minimal results. Six Sigma was not well-known, so a project was launched to see if it could address the problem. We collected up every failed part, and categorized every defect found at the end of each day with a cross-functional team. The defect types were defined and standardized, and a Pareto chart was used to prioritize where to focus. In addition, capability analysis was performed, which showed that the failures were considered outliers, and that when the product was built correctly, it can meet the specifications, so there weren’t any issues with variation or incorrect specifications.
This analysis and defect data showed the team that the top issues were related to damage to the product during assembly. A gemba walk and FMEA were completed, which identified non-standard assembly steps and behaviors, such as stacking parts incorrectly, using incorrect tools, resting tools on top of product, and lack of clear standards on how to perform and handle the product. There were also inconsistencies in how the product was being tested, as some test stations had different yields, and certain locations within the test equipment led to higher or lower yields.
The improvements in the assembly and testing processes increased the yield from 50% to 75%. This led to $8 million USD in scrap reduction per year, and a lower standard cost, saving an additional $8 million per year, even with a cost reduction back to the government customer.
The success of the project also launched a Six Sigma program, where a small team was created to develop Green Belt training and roll out the tools across the organization. This program eventually merged with the Lean program to become a Lean Six Sigma program that has endured over 20 years.
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