1. Six Sigma Overview
- What is Six Sigma? -6 -4 -2 2 4 6

2. What is Six Sigma? What is it? How does it work?
What are the Benefits?
What are the Main Challenges?
What will it take?

3. What is Six Sigma? What is it? How does it work?
What are the Benefits?
What are the Main Challenges?
What will it take?

4. Six Sigma can seem overwhelming! What IS 6?
Six Sigma Includes…
Master Black Belts, Black Belts, Green Belts
Business Process Council
Training
Teams
Sponsors/Champions
DFSS
Sigma Calcs
DMAIEC
DASHBOARDS that Drive to Achieve Strategy
Change Acceleration
Strategy
Processes
Projects
Rewards, Recognition, Promotions, Bonuses: NOT OPTIONAL!
ACTIVE Leadership
DOE
Lean Sigma
Six Sigma can seem overwhelming! What IS 6?

5. Sigma Is a Measure of Process Capability...
Customer
Requirement 6 5
Sigma 1 2 3 4 5 6
DPMO 4
680,000
298,000
67,000
6,000
400
3.4 3 2 1
DPMO – Defects per Million Opportunities
…that focuses on the average and variation of the output.

6. Importance of Reducing Variation
To increase a process performance, you have to decrease variation
Less variation provides
Greater predictability in the process
Less waste and rework, which lowers costs
Products and services that perform better and last longer
Happier customers
Greater predictability has numerous beneficial side effects, such as making forecasts more reliable, increasing ability to meet schedules, etc.

7. Six Sigma is about satisfying customer needs profitably
What Is the Goal?
Six Sigma is about satisfying customer needs profitably
From GE Capital’s Six Sigma Vision

8. Six Sigma’s Methodologies
Alignment & Linkage to Business Strategy & Transformation Objectives
Design new products and processes that meet
customer needs
Improve existing processes so that their outputs meet
customer requirements
Six Sigma
Design For Six Sigma
DMAIEC
Process Management
Control and Manage cross-functional processes to meet business goals

9. How Can Six Sigma Help Us?
Provides a standard toolkit to improve business processes
Makes processes transparent, manageable
Enables fact-based decision making
Provides a platform for profitable growth
Aligns organizational and process goals
Helps establish customer focus
Establishes a common language

10. What is Six Sigma? What is it? How does it work?
What are the Benefits?
What are the Main Challenges?
What will it take?

11. What Is Sigma?
Sigma is the scale that compares the output of a process to customer or design specifications.
Customer spec
Customer spec
FREQUENCY
FREQUENCY
Dimension
Dimension
Getting better requires reducing the variation and moving the average away from the spec limit.

12. The Sigma Scale provides a common metric for comparison.
Sigma Advantages
Which process is performing best?
PROCESS PERFORMANCE
Call servicing 32 seconds vs goal of 35
Manufacturing Cable 98% defect free
Accounts Receivable 33 days average aging vs goal of 40
Customer Service 82% rated 4 or 5 on responsiveness
The Sigma Scale provides a common metric for comparison.

13. Sigma Advantages DPMO 66,800 22,700 6,210 1,350 3.4 Percent  93% 3.0
93% 3.0
98% 3.5
99% 4.0
99.87% 4.5
% 6.0
99% seems outstanding; but 6,210 DPMO reveals significant room for improvement.

14. Calculating the “Sigma Level”
“Counting Defects” Approach:
A packaging process is required to put at least 5 kg. of fertilizer in each bag. In addition, the fill date must be stamped on the bag.
Last weeks performance:
Bags produced (units) – 10,000
Under-filled bags – 62
Fill dates missing – 21
Number of defect opportunities - 2
Sigma Calculation:
From Sigma Table:
Sigma Level ~ 4.1

15. Sigma Conversion Table
Long-Term Process Yield (%)
Short-Term Sigma
DPMO
6.68
933,193
8.08
0.1
919,243
9.68
0.2
903,199
11.51
0.3
884,930
13.57
0.4
864,334
15.87
0.5
841,345
18.41
0.6
815,940
21.19
0.7
788,145
24.20
0.8
758,036
27.43
0.9
725,747
30.85 1
691,462
34.46
1.1
655,422
38.21
1.2
617,911
42.07
1.3
579,260
46.02
1.4
539,828
50.00
1.5
500,000
53.98
1.6
460,172
57.93
1.7
420,740
61.79
1.8
382,089
65.54
1.9
344,578
69.15 2
308,538
72.57
2.1
274,253
75.80
2.2
241,964
78.81
2.3
211,855
81.59
2.4
184,060
84.13
2.5
158,655
86.43
2.6
135,666
88.49
2.7
115,070
90.32
2.8
96,801
91.92
2.9
80,757
93.32 3
66,807
94.52
3.1
54,799
95.54
3.2
44,565
96.41
3.3
35,930
97.13
3.4
28,716
97.73
3.5
22,750
98.21
3.6
17,864
98.61
3.7
13,903
98.93
3.8
10,724
99.18
3.9
8,198
99.38 4
6,210
99.53
4.1
4,661
99.65
4.2
3,467
99.74
4.3
2,555
99.81
4.4
1,866
99.87
4.5
1,350
99.90
4.6
968
99.93
4.7
687
99.95
4.8
483
99.97
4.9
337
99.98 5
233
5.1
159
99.989
5.2
108
5.3 72
5.4 48
5.5 32
5.6 21
5.7 13
5.8
8.5
5.9 6

16. Calculating the “Sigma Level”
When Process Data is Continuous:
A packaging process is required to put at least 5 kg. of fertilizer in each bag.
Last weeks performance:
Bags produced (units) – 10,000
Mean Fill Weight: 5.1 kg.
Standard Deviation of Fill Weight: 0.03 kg.
Sigma Calculation:
“Short-Term Sigma Level

17. Attacking Problems—Pre-Six Sigma
PRACTICAL PROBLEM
PRACTICAL SOLUTION
NEXT PROBLEM
In some cases, effective But can result in fire fighting and in recurring problems.

18. The Six Sigma Way to Attack Problems
Define
Measure
PRACTICAL PROBLEM
STATISTICAL PROBLEM
Control
Execute
Analyze
PRACTICAL SOLUTION
STATISTICAL SOLUTION
Identify
What Factors Drive Performance?
How Can We Prevent Problem Reoccurrence?
NEXT PROBLEM

19. The Power of the DMAIEC . . . Control Analyze Improve Execute Measure
Not just an assortment of tools, but what to do at each step of the improvement process.
QC Chart
Documentation
Monitoring
Control
DoE
Regression
ANOVA
t-tests
Process Analysis
Analyze
Select Solutions
Risk Analysis
Improve
Planning
Piloting
Implementation
Execute
Charter
VOC
SIPOC
CE Matrix
Define
Data Collection Plan
Gage R&R
Control Chart
Capability Analysis
Measure
Common language and synergy of employing a standard improvement approach

20. The DMAIEC Way to Attack Problems
PRACTICAL PROBLEM
DEFINE: We are not consistently achieving “Ready for Control” (Y).
MEASURE: There was a lot of variation in “Y” - poor performance (RFC = 35%, 1.1). Determined RFC was a function of (1) boiler tube failures, (2) excessive cooldown (previous shutdown), (3) turbine first-stage metal temperature control, and (4) operator errors. The boiler tube failures and temperature control were major contributors
STATISTICAL PROBLEM
ANALYZE: Pareto Analysis & Weibull Analysis of boiler tube failures revealed inadequate water/steam flow in the ends of the waterwall tubesheet
STATISTICAL SOLUTION
IDENTIFY/EXECUTE AND CONTROL: Design changes improving flow distribution were implemented and process is currently achieving RFC 91% of the time (2.7) (other countermeasures also contributing).
PRACTICAL SOLUTION

21. Design For Six Sigma (DFSS)…What is it??
A process - a more structured approach to design
A tool set
An enhancement to our current design process
A tool for assessing and mitigating risk
Teamwork
Customer focused
A culture change
“…a continuation of the six sigma tool set being applied specifically to process, product, or service design.”

22. DFSS – “50,000 foot” View Define Measure Explore Design Validate
Implement
Launch The
Project
Define
Outcomes
Scope Project
Identify Stakeholders
Select Team
Determine Project
Approach
Create Project Plan
Define Project Controls
Identify Customers
Define State of Current Customer Knowledge
Develop & Implement Customer Research Plan
Translate Customer Needs to Product/ Service CTQ’s
Specify Targets, Tolerance Limits & Sigma Targets
Develop Product/ Service Necessary Functions
Develop Conceptual Product/ Service Designs
Develop High-Level Production Processes
Predict Capability & Evaluate Gaps
Develop Detailed Product & Service Designs
Develop Detailed Production Processes
Refine Capability & Gap Evaluation, Perform Tradeoffs
Develop Process Control & Validation Plans
Build Pilot Processes
Validate Pilot Readiness
Perform Pilot Testing
Analyze Gaps, Determine Root Causes
Evaluate Scale-up Potential
Develop Implementation & Transition Plans
Build Full-Scale Processes, Train Staff
Perform Start-up Testing
Analyze Gaps, Determine Root Causes
Transition to Process Owners
Evaluate & Close Design Project
- Design Review

23. What is Six Sigma? What is it? How does it work?
What are the Benefits?
What are the Main Challenges?
What will it take?

24. Six Sigma’s Broad Application
J&J over $1 Billion in 2 years
GE Capital over $1 Billion in value in 1996.
JP Morgan created $510 Million in value in year one
AIG found $38 million in revenue from one of first nine projects
Six
Sigma
Results
Sigma often reveals that less than 10% of total service process time is devoted to value-added work.
Measuring the “soft stuff” becomes not only possible but profitable.
Quality of Deal teams. VOC says experience in industry and size of deal were the decisive factors in which firm to engage for an IPO. Quantified & easily measured.
Quality of Communications in a leasing business. Do you notify me of changes in schedule, do I have a designated rep, do you return calls, s etc within 8 hours? Quantified & easily measured.
Quality of Customer Contact. “10, 5, first and last” teller measures. Quantified & easily measured

25. What is Six Sigma? What is it? How does it work?
What are the Benefits?
What are the Main Challenges?
What will it take?

26. The real Six Sigma advantage… the transformation of the culture.
Six Sigma Challenges
New (?) Ways of Thinking...
Customer Thinking (customer specs)
Process Thinking (leading indicators)
Statistical Thinking (variation)
Causal Thinking [y = (x1, x2, x3 … xn)]
Experimental Thinking (data-driven hypothesis testing)
Control Thinking
Stretch Thinking
Adopting Common language/way of thinking about problems
Accountability Thinking
The real Six Sigma advantage… the transformation of the culture.

27. What is Six Sigma? What is it? How does it work?
What are the Benefits?
What are the Main Challenges?
What will it take?

28. General Electric – The Benchmark!
“Senior leadership, especially Jack Welch, provided unyielding commitment to get the initiative going and ensure its continued success. This will not be easy for other companies to copy.”
Hoerl, Roger (2002), “An Inside Look at Six Sigma at GE,” Six Sigma Forum Magazine, Vol. 1, No. 3, May, pages

29. General Electric – The Benchmark!
“Six Sigma was directed toward specific, tangible objectives, including financial objectives. The culture changed as a result of delivering tangible benefits, not because of a focus on the culture itself.”
Hoerl, Roger (2002), “An Inside Look at Six Sigma at GE,” Six Sigma Forum Magazine, Vol. 1, No. 3, May, pages

30. 500 Black Belts and Master Black Belts “for ever and ever”
Six Sigma At 3M
500 Black Belts and Master Black Belts “for ever and ever”
Each has a two-year assignment.
All 28,000 salaried and technical people trained at least at Green Belt level. Many hourly people selected also for Green Belt training.
Major goal is to have for first time common approach to problem solving, new product development, and measurement across entire company.
W. James McNerney, Jr. CEO, 3M Company, 25 June 2002

31. Twenty Key Lessons Learned
The time is right.
The enthusiastic commitment of top management is critical.
Develop an infrastructure.
Commit top people.
Invest in relevant hands-on training.
Select initial projects to build credibility quickly.
Make it all pervasive, and involve everybody.
Emphasize DFSS.
Don’t forget design for reliability.
Focus on the entire system.
Gerald J. Hahn, “20 Key Lessons Learned,” Six Sigma Forum Magazine, May 2002, pages

32. Twenty Key Lessons Learned
Emphasize customer CTQs (critical to quality).
Include commercial quality improvement.
Recognize all savings.
Customize to meet business needs.
Consider the variability as well as the mean.
Plan to get the right data.
Beware of dogmatism.
Avoid nonessential bureaucracy.
Keep the tool box vital.
Expect Six Sigma to become a more silent partner.
Gerald J. Hahn, “20 Key Lessons Learned,” Six Sigma Forum Magazine, May 2002, pages

33. The Essential Role of Leadership
Shareholder Value
Customer Loyalty/Revenue Growth
Cost/Working Capital Reduction
Business
Dashboards
Six Sigma
Methodologies
& Tools
Voice of
the Customer
Change
Management
Process
Management
The Essential Role of Leadership

34. The Strategic Process-Management Approach
1. Identify Core Business Processes and Strategic Opportunities
2. Define Process Goals that lead to Competitive Advantage
3. Determine the Process Measures needed to evaluate Process Performance
5. Project Selection
4. Process Management
Identify & Prioritize Performance Gaps
Develop Process Goals & Dashboards
Validate Measurement & Causal
Relationships
Identify Priority Projects
Charter, Launch and Support Projects
Assign and Build Accountabilities

35. Six Sigma Companies - Characteristics
Start with a prioritized list of customer and business requirements and specifications
Have a clear sense of process owners
Track performance over time
Analyze causes of process and output variation with statistical and process analysis tools
Think systematically about solutions and determine financial return (the ROI may not be there to move from 4.5 to 6.0 Sigma)
Standardize processes to hold the gains
Six Sigma is prioritized, disciplined problem solving to deliver on-target performance with minimum variation.

36. Six Sigma Summary Six Sigma IS’s: A Framework to Improve Performance
Applicable to Every Function and Business
About Business Performance
Six Sigma NOT’s:
The Solution for Everything
Applicable Only to Manufacturing
It’s Just About Statistics

37. Using 6 to Achieve Your Co’s Objectives
Large Group Discussion: What are the Your Company Business Objectives/Opportunities?
As a small group, discuss how the Six Sigma Approach can help Your Company Achieve the Business Objectives.
What will Six Sigma not achieve, relative to the Objectives?
Summarize your team conclusions on a flipchart and be prepared to discuss your list with the large group.