SIX SIGMA-AN OVERVIEW

History & Early Pioneers

Six Sigma coined at

in the 1980s

Adopted by Allied Signal (Honeywell) with great success Later adopted by Jack Welch (GE) and further developed into a true management system

What is Six Sigma?

A philosophy that underlies efforts to improve business performance and customer satisfaction
Using facts and data to eliminate waste (muda) and variation
Eliminating activities that dont add value!

What is Six Sigma?

1. The term Sigma is a measurement of how far a given process deviates from perfection a measure of number of defects. Six Sigma implies near zero defects. A quality improvement methodology that applies statistics to measure and reduce variation in processes.

2.

3. A management system that is comprehensive and

flexible for achieving, sustaining, and maximizing business success.

What is Six Sigma

Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects in any process -- from manufacturing to transactional and from product to service.
To achieve Six Sigma, a process must not produce more than 3.4 defects per million opportunities. A Six Sigma opportunity is then the total quantity of chances for a defect.

Measurement: Variance is the Enemy

Mean Mean

Time Intervals

Time Intervals

W I D E Variation

Slim Variation

Ex: MRI TAT Project

Target Customer Upper Limit DEFECTS

Target

Customer Upper Limit ZERO DEFECTS

Time (Min.).

Time (Min.).

Measurement: Six Sigma as a Quality Goal

The higher the sigma, the 3 fewer the defects. A increase from 3 to 6 Sigma represents a 20,000 fold improvement in quality.
1 2 3 4 5 6

Defects Per Million Opportunities 697,672.15 308,770.21 66,810.63 6,209.70 232.67 3.40

99% Good (3.8 Sigma) No electricity for 7 hours per month 5,000 incorrect operations per week 20,000 wrong prescriptions per year

99.99966% Good (6 Sigma) No electricity for 1 hour every 34 years 1.7 incorrect operations per week 68 wrong prescriptions per year

World Class Performance

With 99 % Quality
For every 300000 letters delivered For every week of TV broadcasting per channel Out of every 500,000 computer restarts 3,000 misdeliveries

With Six Sigma Quality

1 misdelivery

1.68 hours of dead air 1.8 seconds of dead air 4100 crashes Less than 2 crashes

Source: The Six Sigma Way by Peter Pande and Others 8

Improvement Methodology: DMAIC Backbone

Control Tools

Performance Improvement

Devise solution(s) and implement Benchmarking and validate root cause(s)

the current process capability (get the data!) the problem in a measurable way

Project Timeline

Return on Investment (ROI)

Sustain improvement

Six Sigma DMAIC

DMAIC
Define the project goals and customer (internal and external) deliverables Measure the process to determine current performance Analyze and determine the root cause(s) of the defects Improve the process by eliminating defects Control future process performance

When To Use DMAIC

The DMAIC methodology, should be used when a product or process is in existence at your company but is not meeting customer specification or is not performing adequately.

Six Sigma DMAIC Roadmap

D - Define Phase:
Define Customers and Requirements (CTQs) Develop Problem Statement, Goals and Benefits Identify Champion, Process Owner and Team Define Resources Evaluate Key Organizational Support Develop Project Plan and Milestones Develop High Level Process Map

Six Sigma DMAIC Roadmap

M - Measure Phase:
Define Defect, Opportunity, Unit and Metrics Detailed Process Map of Appropriate Areas Develop Data Collection Plan Validate the Measurement System Collect the Data Begin Developing Y=f(x) Relationship Determine Process Capability and Sigma Baseline

Six Sigma DMAIC Roadmap

A - Analyze Phase:
Define Performance Objectives Identify Value/Non-Value Added Process Steps Identify Sources of Variation Determine Root Cause(s) Determine Vital Few x's, Y=f(x) Relationship

Six Sigma DMAIC Roadmap

I - Improve Phase:
Perform Design of Experiments Develop Potential Solutions Define Operating Tolerances of Potential System Assess Failure Modes of Potential Solutions Validate Potential Improvement by Pilot Studies Correct/Re-Evaluate Potential Solution

Six Sigma DMAIC Roadmap

C - Control Phase:
Define and Validate Monitoring and Control System Develop Standards and Procedures Implement Statistical Process Control Determine Process Capability Develop Transfer Plan, Handoff to Process Owner Verify Benefits, Cost Savings/Avoidance, Profit Growth Close Project, Finalize Documentation Communicate to Business, Celebrate

Six Sigma DMADV

DMADV Define the project goals and customer (internal and external) deliverables Measure and determine customer needs and specifications Analyze the process options to meet the customer needs Design (detailed) the process to meet the customer needs Verify the design performance and ability to meet customer needs When To Use DMADV A product or process is not in existence at your company and one needs to be developed The existing product or process exists and has been optimized (using either DMAIC or not) and still doesn't meet the level of customer specification or six sigma level

DMAIC Versus DMADV

The Similarities of DMAIC and DMADV
Six Sigma methodologies used to drive defects to less than 3.4 per million opportunities. Data intensive solution approaches. Intuition has no place in Six Sigma -- only cold, hard facts. Implemented by Green Belts, Black Belts and Master Black Belts. Ways to help meet the business/financial bottom-line numbers. Implemented with the support of a champion and process owner

Improvement Methodology: Key Players

Champions/Sponsors: Trained business leaders who lead the deployment of Six Sigma in a significant business area

Master Black Belts: Fully-trained quality leaders responsible for Six Sigma strategy, training, mentoring, deployment and results
Black Belts: Fully-trained Six Sigma experts who lead improvement teams, work projects across the business and mentor Green Belts Green Belts: Fully-trained individuals who apply Six Sigma skills to projects in their job areas Team Members: Individuals who receive specific Six Sigma training and who support projects in their areas

Key Success Factors

CEO must own it and must have a clear vision for the initiative Invest in resources and make a long term commitment Dedicate best and brightest

Measure and hold people accountable

Change the systems and structures to support the effort Establish early, ongoing and clear communications Be flexible and patient Select and scope projects carefully: Focus on critical issues tied to business priorities, with measurable and manageable parameters Use change management tools to identify cultural barriers, gain acceptance and build momentum Establish shared need, values and vision Recognize, reward and celebrate successes

How is Six Sigma Different?

Other Quality Programs
Driven internally
Looks at averages Focuses on outcomes

Six Sigma
Driven by the customer
Targets variation Focuses on processes

Retrospective; fixes defects

Focuses on quality Attentive to production Training is separate from management system

Prospective; prevents defects

Focuses on quality & ROI Attentive to total business Training is integral to management system

Industry $uccess!
In a study of Motorola, Allied Signal, GE, and Honeywell - companies with mature Six Sigma deployments and associated culture changes -savings as a percentage of revenue were observed to vary between 1.2% and 4.5%.
Charles Waxer (2003), Six Sigma Costs And Savings

Industry Success Quality & Innovation

General Electric
Reduced invoice defects and disputes with a key customer by 98%

Improved a key call center performance measure from 76% to 99%

Reduced vibrations in Power System rotors by 300% Developed breakthrough technology that reduced medical scan times from 3 minutes to 30 seconds

Allied Signal (Honeywell)

Reduced defects by 68% in 4 months

Texas Instruments
Improved yield from 84.3% to 99.8% since 1998