Chapter 7

Objectives:
Define what is Six Sigma, its goal and benefits to an organization. Explain its key concepts. Explore the methodologies used in implementing six sigma and its significant elements. Know the quality tools used, and roles required for its implementation.

What is Six Sigma?

At many organizations, it simply means a measure of quality that strives for near perfection. A disciplined, data-driven approach and methodology for eliminating defects in any process -- from manufacturing to transactional and from product to service.

What is Six Sigma?

Six Sigma is a methodology that provides businesses with the tools to improve the capability of their business processes. This increase in performance and decrease in process variation leads to defect reduction and vast improvement in profits, employee morale and quality of product.

What is Six Sigma?

The statistical representation of Six Sigma describes quantitatively how a process is performing. To achieve Six Sigma, a process must not produce more than 3.4 defects per million opportunities. A Six Sigma defect is defined as anything outside of customer specifications.

Goal of Six Sigma

is to increase profits by eliminating variability, defects and waste that undermine customer loyalty.

Origin of Six Sigma

Six Sigma originated at Motorola in the early 1980s in response to a CEO-driven challenge to achieve tenfold reduction in product-failure levels in five years. Meeting this challenge required swift and accurate root-cause analysis and correction. In the mid-1990s, Motorola divulged the details of their quality improvement framework, which has since been adopted by several large manufacturing companies.

Origin of Six Sigma

The process was pioneered by Bill Smith at Motorola in 1986 and was originally defined as a metric for measuring defects and improving quality, and a methodology to reduce defect levels below 3.4 Defects Per One Million Opportunities (DPMO). Motorola has reported over US$17 billion in savings from Six Sigma as of 2006.

Benefits of Six Sigma

productivity increases cycle time reduction higher throughput reduced defects high levels of outgoing quality standardized improvement methodology across the organization a set of techniques and tools to simplify improvement efforts greater customer satisfaction dramatic improvement in the "bottom-line"

Why is Six Sigma different?

Six Sigma speaks the language of business. In Six Sigma, quality is not pursued independently from business goals. Six Sigma focuses on achieving tangible results. Six Sigma does not include specific integration of ISO900 or Malcolm Baldridge National Quality Award criteria. Six Sigma uses an infrastructure of highly trained employees from many sectors of the company.

List of Six Sigma Companies

Motorola General Electric 3M Bank of America Advanced Micro Devices Caterpillar Inc. Honeywell International The Boeing Company Amazon.com Inc. Littlewoods Shop Direct Group

Key Concepts of Six Sigma

At its core, Six Sigma revolves around a few key concepts: Critical to Quality: Attributes most important to the customer Defect: Failing to deliver what the customer wants Process Capability: What your process can deliver Variation: What the customer sees and feels Stable Operations: Ensuring consistent, predictable processes to improve what the customer sees and feels Design for Six Sigma: Designing to meet customer needs and process capability

Six Sigma Methodology

Six Sigma has two key methodologies: DMAIC and DMADV. DMAIC is used to improve an existing business process. DMADV is used to create new product designs or process designs in such a way that it results in a more predictable, mature and defect free performance.

DMAIC
Define the process improvement goals that are consistent with customer demands and enterprise strategy. Measure the current process and collect relevant data for future comparison. Analyze to verify relationship and causality of factors. Improve or optimize the process based upon the analysis using techniques like Design of Experiments. Control to ensure that any variances are corrected before they result in defects.

Define

Measure

Analyze

Improve

Control

DMADV
Define the goals of the design activity that are consistent with customer demands and enterprise strategy. Measure and identify CTQs (critical to qualities), product capabilities, production process capability, and risk assessments. Analyze to develop and design alternatives, create high-level design and evaluate design capability to select the best design. Design details, optimize the design, and plan for design verification. This phase may require simulations. Verify the design, set up pilot runs, implement production process and handover to process owners.

Significant Elements of the Six Sigma Methodology

Standardized Process Improvement Methodology Use of Descriptive Statistics Measurement Systems Analysis Six Sigma Measures (Metrics) Design of Experiments (DOE) Process Control (SPC) and Capability (Cpk)

The Four Perspectives

Balanced Score Card Perspective

Quality Tools
Control Chart - Monitors variance in a process over time and alerts the business to unexpected variance which may cause defects. Defect Measurement - Accounting for the number or frequency of defects that cause lapses in product or service quality. Statistical Process Control - The application of statistical methods to analyze data, study and monitor process capability and performance.

Quality Tools
Pareto Diagram Focuses efforts on the problems that have the greatest potential for improvement by showing relative frequency and/or size in a descending bar graph. Tree Diagram - Graphically shows any broad goal broken into different levels of detailed actions.

Quality Tools
Process Mapping - Illustrated description of how things get done, which enables participants to visualize an entire process and identify areas of strength and weaknesses. Root Cause Analysis - Study of original reason for nonconformance with a process.

Quality Terms
Master Black Belt --first and foremost teachers --they also review and mentor Black Belts --selection criteria for Master Black Belts are quantitative skills and the ability to teach and mentor Black Belt --leaders of teams responsible for measuring, analyzing, improving and controlling key processes that influence customer satisfaction and/or productivity growth Green Belt --similar to Black Belt but not a full-time position.

Roles Required for Implementation

Six Sigma identifies five key roles for its successful implementation: Executive Leadership Champions Master Black Belts Black Belts Green Belts

Roles Required for Implementation

Executive Leadership (CEO and other key top management team members). --responsible for setting up a vision for Six Sigma implementation. --empower the other role holders with the freedom and resources to explore new ideas for breakthrough improvements.

 Roles Required for Implementation

Champions --responsible for the Six Sigma implementation across the organization in an integrated manner. --act as mentor to Black Belts. Master Black Belts --act as in-house expert coach for the organization on Six Sigma. --devote 100% of their time to Six Sigma. --assist champions and guide Black Belts and Green Belts. --ensure integrated deployment of Six Sigma across various functions and departments.

 Roles Required for Implementation

Black Belts --operate under Master Black Belts to apply Six Sigma methodology to specific projects. --devote 100% of their time to Six Sigma. --focus on Six Sigma project execution, whereas Champions and Master Black Belts focus on identifying projects/functions for Six Sigma. Green Belts --employees who take up Six Sigma implementation along with their other job responsibilities. --operate under the guidance of Black Belts and support them in achieving the overall results.

Summary
Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects in any process that aims to increase profits by eliminating variability, defects and waste that undermine customer loyalty.Six Sigma revolves around a few key concepts and uses two methodologies, the DMAIC for existing business process and the DMADV for new product and process designs.

Thank You!