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E What Is Six Sigma?. GE Six Sigma What Is Six Sigma? Measure of Quality Process For Continuous Improvement Enabler for Culture Change.

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Presentation on theme: "E What Is Six Sigma?. GE Six Sigma What Is Six Sigma? Measure of Quality Process For Continuous Improvement Enabler for Culture Change."— Presentation transcript:

1 e What Is Six Sigma?

2 GE Six Sigma What Is Six Sigma? Measure of Quality Process For Continuous Improvement Enabler for Culture Change

3 GE Six Sigma Measure of Quality 6 Sigma is a Statistically based Quality Program. It is a rigorous methodology to improve process control. 6 Sigma is a Statistically based Quality Program. It is a rigorous methodology to improve process control. What Is Six Sigma?

4 GE Six Sigma Process Capability needs to be Better than you think ! Activity 99% % ( 3.8 Sigma ) ( 6 Sigma ) Activity 99% % ( 3.8 Sigma ) ( 6 Sigma ) Mail 20,000 lost articles 7 lost articles Delivery of mail per hour of mail per hour Mail 20,000 lost articles 7 lost articles Delivery of mail per hour of mail per hour Drinking Unsafe drinking water Unsafe drinking water Water for 15 mins per day for 2 mins per year Drinking Unsafe drinking water Unsafe drinking water Water for 15 mins per day for 2 mins per year Hospital 5000 incorrect 2 incorrect Surgery procedures per week procedures per week Hospital 5000 incorrect 2 incorrect Surgery procedures per week procedures per week Air 2 abnormal landings 1 abnormal landing Travel at most airports each day every 5 years Air 2 abnormal landings 1 abnormal landing Travel at most airports each day every 5 years Sometimes 99% is just not good enough Measure of Quality

5 GE Six Sigma What Is Six Sigma? Process For Continuous Improvement 6 Sigma provides a process based approach to continuous improvement. It is independent of the measurement involved & can be used to improve any business process 6 Sigma provides a process based approach to continuous improvement. It is independent of the measurement involved & can be used to improve any business process

6 GE Six Sigma Three Routes to choose from : 1) Improved Control Define D Measure M Analyze A Improve I Control C Process for Improvement On Average the Process is great - the Issues lie with the Variation

7 GE Six Sigma Three Routes to choose from : Define D Measure M Analyze A re-Design D Verify V The Average needs to Improve - Structural Problem with the Process 2) Process Redesign Process for Improvement

8 GE Six Sigma Design For Six Sigma Three Routes to choose from : New Process Development - Creating 6 Sigma Process Capability DFSS 3) New Process Process for Improvement

9 GE Six Sigma Improving an Existing Process Define Measure Analyze Improve Control DMAIC Six Sigma Project Methodology Designing and Implementing a New Process Define Measure Analyze Design Verify DMADV/DFSS

10 GE Six Sigma What Is Six Sigma? Enabler For Cultural Change To be successful, 6 Sigma requires a radical change in the way an organization works. Business Leadership and 6 Sigma can together transform a company To be successful, 6 Sigma requires a radical change in the way an organization works. Business Leadership and 6 Sigma can together transform a company

11 GE Six Sigma Fundamentally Different Approach Enabler for Change Before 6 Sigma: 1) Inspect the product 2) Pareto the symptoms perceived as being the cause of out of spec material 3) Initiate action to mitigate / eliminate the symptoms With 6 Sigma : 1) Measure the process output & analyze the data 2) Discover quantitative relationships between the output & in-process variables 3) Develop & implement control plan Tough to achieve long-term sustainable improvement Sustainable via In-process Control - no Product Inspection

12 GE Six Sigma Six Sigma Leadership Team Members: Individuals who receive specific Six Sigma training and who support projects in their areas Champions: Fully-trained business leaders who lead the deployment of Six Sigma in a significant area of the business 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 Master Black Belts: Fully-trained quality leaders responsible for Six Sigma strategy, training, mentoring, deployment and results Leadership for Quality MBB & BB Roles are Key Leadership Development Positions

13 GE Six Sigma Champions (Part-Time) All Business Leaders Master Black Belts (MBB) 500 Black Belts (BB) 5,000 Green Belts (GB) 100,000 Six Sigma Associates 100% Huge Resource shift - Only the Best chosen Its like a MBA - Vital to your Career! Six Sigma Functions Resource GE ( # employees ) Enabler for Change

14 GE Six Sigma Significantly Higher Net Income Simpler Processes - Speed everywhere True Focus on What the Customer Wants Improved Employee Satisfaction What is 6 Sigma Its all about Getting Results So Whats it Done for GE?

15 GE Six Sigma Six Sigma - Evolution in GE Six Sigma - Results & Examples in GE Six Sigma - Enabling GE e-Business What Does Six Sigma Do For GE?

16 GE Six Sigma Evolution in GE 1995 Headlines Six Sigma Evolution 1995 PRODUCTIVITY Timelin e GE Launches Six Sigma Throughout Company Focus : Core Activities Objective : Productivity & Asset Utilization

17 GE Six Sigma GE Turns to Six Sigma For New Products Focus : New Product Design Objective : World Class Capability in the Market Place 1995 PRODUCTIVITY 1997 PRODUCT DESIGN Timelin e 1997 Evolution in GE 1997 Headlines Six Sigma Evolution

18 GE Six Sigma GE Turns Six Sigma Loose at the Customer Focus : Customer Productivity & Value Add Services Objective : Revenue Growth & Share Shift 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER Timelin e 1998 Evolution in GE 1998 Headlines Six Sigma Evolution

19 GE Six Sigma Fulfillment Processes get Six Sigma Focus Focus : Meeting Customer Request Focus : Meeting Customer Request Objective : e-Enabling our Business Transaction Processes 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT Timelin e 1999 Evolution in GE 1999 Headlines Six Sigma Evolution

20 GE Six Sigma Timelin e Digitization at GE needs Six Sigma Execution Focus : Automating Business Processes Objective : Speed & Reliability on the Far Lower Cost Evolution in GE 2000 Headlines 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

21 GE Six Sigma $600 $500 $450 $380 $200 $2.5B $1.2B $700 $170 CostBenefit 1996 CostBenefit 1997 CostBenefit 1998 CostBenefit 1999 CostBenefit Sigma Cost 6 Sigma Productivity Delighting Customers Results from 6 Sigma $3.4 Billion in 2001 … Customers & Shareholders Love It! $3.5B $500 $3.0B $600 $2.5B $900 $3.4B Cost Benefit 2001

22 GE Six Sigma Tying Six Sigma to the Bottom Line Six Sigma Projects Impact on Operations Data Impact on Performance Cost of Failure Premium Dollars Investment Capital Dollars Customer Contact Binder Defect Data Impact on Customers Surveys Scorecards Dashboards Reduce variation in processes, products & services Project Selection Volume Pric e Productivity CTQs Results Cycletime Cash Flow DPMO # Binders Suppliers Certs/$$ Summary

23 GE Six Sigma Resources integrated in the Businesses Global Database & Best Practice Sharing Global Database & Best Practice Sharing Common Approach / Tools Common Approach / Tools Training & Certification on 6 Sigma skills Training & Certification on 6 Sigma skills On-line Self Tutoring & Reference On-line Self Tutoring & Reference Technical & Financial Sign off on Quality Technical & Financial Sign off on Quality All Projects Measured with the same Rigor All Projects Measured with the same Rigor Institutionalized Process Delivering Quality Earnings Six Sigma Infrastructure: Results from 6 Sigma 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

24 GE Six Sigma Products from 6 Sigma Abdomen: liver, spine, kidneyHead: skull, brain GEMS LightSpeed CT Scanner 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

25 GE Six Sigma Unparalleled Resolution in a Fraction of the Time Abdomen: liver, spine, kidney Head: skull, brain Image Speeds HEAD SPINE CHEST ABDOMEN PELVIS LIVER 1 minute19 seconds 9 million 2 minutes15 seconds 1 million 3 minutes17 seconds 4 million 20 seconds06 seconds 6 million Exam Time Before Exam Time After Procedures per Year Products from 6 Sigma GEMS LightSpeed CT Scanner BeforeBefore AfterAfter 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

26 GE Six Sigma Hospitals Love It Better Quality Higher Revenues New technology firstHospitals Love It Better Quality - 10x more reliable Higher Revenues - more throughput New technology first - better image quality Patients Love It More Reliable & Earlier diagnosis Improved comfortPatients Love It More Reliable & Earlier diagnosis Improved comfort - shorter exam time GE ShareholdersLove It Higher RevenuesGE Shareholders Love It Higher Revenues - up more than 50% GEMS LightSpeed CT Scanner Exceeding All of the Customers Expectations Products from 6 Sigma 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

27 GE Six Sigma 1997 Performix X-ray Tube 1998 LightSpeed CT Small Motor products Ultem 1285 Spectra Gas Range 1999 Spectra Electric Range Advantium Speed Oven Triton Dishwasher Ceramic Metal Halide Lamps T5 Fluorescent Lamp Signa OpenSpeed MR OQ 1050C for Compact Disc AC6000 Locomotive 2001 or later New Designs 5000 Projects focused on New 6 Sigma Technology & New Processes to the GE Businesses All of GE Products Designed for Six Sigma Products from 6 Sigma 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

28 GE Six Sigma 6 the Customer 200+ Black Belts Co-located at the Customer Customer Determines Project Scope Customer Determines & Verifies $ Benefits Learn future needs ahead of Competition 6000 projects already completed GE Customer grows as a result Six Sigma Process : Helping Customers feel 6 Sigma….A Win-Win Strategy 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

29 GE Six Sigma Customer CTQ Cycle Customer visits Issues collected from all levels of customer organization Miss-labeling from Bloomington Poor packaging for resale Damaged Goods from Mebane Small Pack Damaged Goods from LA Warehouse Issues prioritized Mapped to current projects Ranked by customer impact and ease of implementation Fix issues with Work-Outs Relay customer feedback to ERC employees & improve process together Communicate successes Monitor the fixes/process changes for effectiveness The Customer Focused on Continuous Improvement

30 GE Six Sigma Floor Care Manufacturer –Plastics Airlines –Engines Builders –Appliances Hospitals –Medical Retailers –Lighting –Appliances OEMs –Vendor –CEF Utilities –Power Sys.. –Industrial Sys. 6 the Customer 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

31 GE Six Sigma Customer Issue Assembly Line Efficiency Floor Care Manufacturer Floor Care Manufacturer –Plastics Airlines –Engines Builders –Appliances Hospitals –Medical Retailers –Lighting –Appliances OEMs –Vendor –CEF Utilities –Power Sys.. –Industrial Sys. 6 the Customer 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

32 GE Six Sigma Customer Issue Assembly Line Efficiency Floor Care Manufacturer Floor Care Manufacturer –Plastics Airlines –Engines Builders –Appliances Hospitals –Medical Retailers –Lighting –Appliances OEMs –Vendor –CEF Utilities –Power Sys.. –Industrial Sys. Six the Customer Six Sigma Approach identifies Factors impacting Work Flow 6 the Customer 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

33 GE Six Sigma Customer Issue Assembly Line Efficiency Floor Care Manufacturer Floor Care Manufacturer –Plastics Airlines –Engines Builders –Appliances Hospitals –Medical Retailers –Lighting –Appliances OEMs –Vendor –CEF Utilities –Power Sys.. –Industrial Sys. Customer Results Output from Units/Day WIP 85% $1MM Cost Out Six the Customer Six Sigma Approach identifies Factors impacting Work Flow 6 the Customer 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

34 GE Six Sigma Customer Issue Assembly Line Efficiency Customer Results Output from Units/Day WIP 85% $1MM Cost Out Floor Care Manufacturer Floor Care Manufacturer –Plastics Airlines –Engines Builders –Appliances Hospitals –Medical Retailers –Lighting –Appliances OEMs –Vendor –CEF Utilities –Power Sys.. –Industrial Sys. Six the Customer Six Sigma Approach identifies Factors impacting Work Flow GE Results 2MM lb. Share Shift $1.5MM Growth Program 6 the Customer 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

35 GE Six Sigma Customer Results GE Results Output from Units/Day WIP 85% $1MM Cost Out Floor Care Manufacturer Floor Care Manufacturer –Plastics Airlines –Engines Builders –Appliances Hospitals –Medical Retailers –Lighting –Appliances OEMs –Vendor –CEF Utilities –Power Sys.. –Industrial Sys. 2MM lb. Share Shift $1.5MM Growth Program Customers Gain Productivity….GE Rewarded with Share 6 the Customer 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

36 GE Six Sigma Give CUSTOMERS What They Want When They Want It 6 Sigma Fulfillment The fact that weve done Six Sigma for seven years is irrelevant to the customer, but if we can bring Six Sigma to life at a customer, its the whole game. Chairman and CEO, Jeff Immelt 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

37 GE Six Sigma Delivery to Customer Want Date But how early? h And how late? On Time 6 Sigma Fulfillment 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

38 GE Six Sigma On Time Reducing Variation to Meet Customer Request h 6 Sigma Fulfillment 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

39 GE Six Sigma Variation from Request 2/99 10/99Today 17 Days 4 Days 2 Days GE Silicones GE Silicones - Delivery to Request Sales Double Digit Volume Growth Internet Web Sales Booming Sales Force More Time to Sell vs. Chasing Order Status Op Margin Up 20+% Sales Double Digit Volume Growth Internet Web Sales Booming Sales Force More Time to Sell vs. Chasing Order Status Op Margin Up 20+% 6 Sigma Fulfillment 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

40 GE Six Sigma Customer Power Plant On-Time Operation Date '98 Baseline 2Q'993Q'994Q' Target On-time Reliability gives Customer 100 days more Electricity Sales GE Power Systems GE Power Systems - Delivery to Request Customers Revenue Impacted By Variation Days 5 Days 302 Day Variation Reduction 6 Sigma Fulfillment 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

41 GE Six Sigma No Visibility to Business Processes Lots of Buffers –Salespeople, Order Service Cost of Poor Fulfillment – Inventory/ Expediting Before Internet Internet Provides Visibility Differentiates Those Who Can and Those Who Cant Highlights Internal Waste (Buffers) Cost of Failure – Fatal SellMakeServiceOrderDeliver Internet World Transactional Business Processes Variation Reduction Key To Success In e-World 6 Sigma Fulfillment 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

42 GE Six Sigma Meet Customer Request - Never be outdone No Variation - Must have in e-World Company Wide Goal - Always within 5 days Drives Customer Satisfaction & Growth Customer focused Internal Processes Drives Speed & Simplicity Six Sigma Fulfillment : Enormous Rewards for 6 Sigma Fulfillment 6 Sigma Fulfillment 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

43 GE Six Sigma Digitizing GE Digitization at GE Focus : Automating all Business Processes Objective : Speed, Reliability & Service on the Web at Much Lower Cost Digitization - The Next Step In Customer Centricity & Productivity 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

44 GE Six Sigma Six Sigma What Does Six Sigma Do For GE? Six Sigma - Changing the Company DNA Drives Customer Centricity Improves Product/Service Capability Reduces Costs Improves Performance Reliability Foundation for e-Business/Digitization Evolution in GE 1995 PRODUCTIVITY 1997 PRODUCT DESIGN THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION

45 e Six Sigma


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