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E What Is Six Sigma?.

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Presentation on theme: "E What Is Six Sigma?."— Presentation transcript:

1 e What Is Six Sigma?

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

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

4 Sometimes 99% is just not good enough
Measure of Quality Process Capability needs to be Better than you think ! Activity 99% % ( 3.8 Sigma ) ( 6 Sigma ) Mail ,000 lost articles 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 Hospital incorrect incorrect Surgery procedures per week procedures per week Air abnormal landings abnormal landing Travel at most airports each day every 5 years Sometimes 99% is just not good enough

5 6 Sigma provides a process based approach to continuous improvement.
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 On Average the Process is great - the Issues lie with the Variation
Process for Improvement Three Routes to choose from : 1) Improved Control D M A I C Define Measure Analyze Improve Control On Average the Process is great - the Issues lie with the Variation

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

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

9 Six Sigma Project Methodology
Improving an Existing Process Define Measure Analyze Improve Control DMAIC Designing and Implementing a New Process Define Measure Analyze Design Verify DMADV/DFSS The Six Sigma methodology is data based - data regarding the outcome of a process is collected and analyzed to determine the process capability, opportunities for improvement and the best solution to achieve six sigma. Most Greenbelt Projects are DMAIC projects. DFSS = Design For Six Sigma. DMADV/DFSS is used where a process does not exist or when a process is deemed to be broken beyond repair and must be replaced.

10 Business Leadership and 6 Sigma can together transform a company
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

11 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 Tough to achieve long-term sustainable improvement 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 Sustainable via In-process Control - no Product Inspection Fundamentally Different Approach

12 Leadership for Quality
Six Sigma Leadership Leadership for Quality Champions: Fully-trained business leaders who lead the deployment of Six Sigma in a significant area of the business 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 MBB & BB Roles are Key Leadership Development Positions Team Members: Individuals who receive specific Six Sigma training and who support projects in their areas Champions are the managers at every level who have been fully Six Sigma trained, completed a project and are now leading the deployment of Six Sigma in significant areas of our business. Master Black Belts are quality leaders who have responsibility for deploying the Six Sigma strategy in their divisions and sites. Master Black Belts are also assigned to each of our Core Processes and have responsibility for delivering Six Sigma results. They play a key role in mentoring Black Belts and Certified Green Belts and in selecting and reviewing projects. Black Belts are full-time Six Sigma project leaders who receive extensive training in Six Sigma tools and methodology. In addition to conducting their own projects, Black Belts train, mentor and lead clustered Green Belt teams in critical areas. Green Belts are trained in Six Sigma tools and work on Six Sigma improvement projects as they perform their normal duties. Green Belts are mentored by Black Belts and are “clustered” to impact our priority areas. By the end of the year, all exempts will have started six sigma training. As we approach the year 2000 and beyond, those who lead the business will have played a significant role in the the Six Sigma initiative, whether as a Master Black Belt or Black Belt, or as an outstanding Green Belt.

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

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

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

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

17 Evolution in GE 1997 1997 Headlines
Six Sigma Evolution 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 1997 Timeline

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

19 Evolution in GE 1999 1999 Headlines
Six Sigma Evolution Fulfillment Processes get Six Sigma Focus Focus : Meeting Customer Request Objective : e-Enabling our Business Transaction Processes 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 1999 Timeline

20 Evolution in GE 2000 Headlines
1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION 2000 Headlines Digitization at GE needs Six Sigma Execution Focus : Automating Business Processes Objective : Speed & Reliability on the Far Lower Cost Timeline

21 $3.4 Billion in 2001 … Customers & Shareholders Love It!
Results from 6 Sigma 6 Sigma Cost $3.5B $3.4B 6 Sigma Productivity $500 $900 Delighting Customers $3.0B $2.5B $2.5B $1.2B $700 $600 $600 $500 $380 $450 $200 $170 Cost Benefit 1996 1997 1998 1999 2000 Cost Benefit 2001 $3.4 Billion in 2001 … Customers & Shareholders Love It!

22 Tying Six Sigma to the Bottom Line
Summary Customer Contact Binder Defect Data Impact on Customers Surveys Scorecards Dashboards Project Selection Price Volume CTQs Results Impact on Operations Reduce variation in processes, products & services Six Sigma Projects Cycletime Cash Flow DPMO # Binders Suppliers Certs/$$ Data Productivity Ultimately, the success of ERCs’ quality strategy will be measured by its impact on our customers as reflected in the financial results of the business. As products and capabilities improve, customers become more satisfied, and the company is better able to meet financial targets. This chart summarizes that process. - Customers tell us what they value most in our products and Capabilities (the Critical to Quality characteristics or CTQs) through our Scorecards and surveys. - We then determine the key business processes in our operations which can impact those CTQs. - Next, we identify and launch Six Sigma projects to drive out variation and improve those key businesses processes. - Ultimately, we begin to see a payoff from our improvements: - Customers are more satisfied and this translates into increased price or volume. - Our productivity improves, positively impacting areas such as cost of failure, premium dollars and investment capital. Project Selection Impact on Performance Cost of Failure Premium Dollars Investment Capital Dollars

23 Six Sigma Infrastructure:
Results from 6 Sigma Six Sigma Evolution Six Sigma Infrastructure: 1995 PRODUCTIVITY 1997 PRODUCT DESIGN Resources integrated in the Businesses Global Database & Best Practice Sharing Common Approach / Tools Training & Certification on 6 Sigma skills On-line Self Tutoring & Reference Technical & Financial Sign off on Quality All Projects Measured with the same Rigor 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION 2001 CERTIFICATION Institutionalized Process Delivering Quality Earnings

24 Abdomen: liver, spine, kidney GEMS LightSpeed CT Scanner
Products from 6 Sigma 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION Abdomen: liver, spine, kidney Head: skull, brain GEMS LightSpeed CT Scanner

25 GEMS LightSpeed CT Scanner
Products from 6 Sigma 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION GEMS LightSpeed CT Scanner Head: skull, brain HEAD SPINE CHEST ABDOMEN PELVIS LIVER 1 minute 19 seconds 9 million 2 minutes 15 seconds 1 million 3 minutes 17 seconds 4 million 20 seconds 06 seconds 6 million Exam Time Before After Procedures per Year Abdomen: liver, spine, kidney Before After Image Speeds Unparalleled Resolution in a Fraction of the Time

26 Products from 6 Sigma GEMS LightSpeed CT Scanner
1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION GEMS LightSpeed CT Scanner Hospitals Love It Better Quality x more reliable Higher Revenues more throughput New technology first - better image quality Patients Love It More Reliable & Earlier diagnosis Improved comfort shorter exam time GE Shareholders Love It Higher Revenues up more than 50% Exceeding All of the Customers’ Expectations

27 Products from 6 Sigma All of GE Products Designed for Six Sigma
1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION 1997 Performix™ X-ray Tube 1998 LightSpeed™ CT Small Motor products Ultem 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

28 Helping Customers feel 6 Sigma….A Win-Win Strategy
6 the Customer 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION 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

29 Focused on Continuous Improvement
The Customer Customer CTQ Cycle Miss-labeling from Bloomington Poor packaging for resale Damaged Goods from Mebane Small Pack Damaged Goods from LA Warehouse Customer visits • Issues collected from all levels of customer organization Issues prioritized • Mapped to current projects • Ranked by customer impact and ease of implementation The basic Six Sigma philosophy requires us to be customer focused. The best way to understand what a customer wants -- and how well we are doing in delivering on their needs -- is to ask. Since Six Sigma is also data-driven, we developed a data-based process for collecting that information from customers. We call the tool used in this process a scorecard... named because it provides a snapshot of how we are performing at any given moment (like the dashboard in your car). This chart explains what a customer scorecard is and how they are being used to improve communication between ERCI and our key customer market segments. Each scorecard is customized to include dials which track the items a particular customer believes are most important. Customer Business Teams are assigned to monitor each scorecard, identify improvement needs and launch and implement improvement plans for specific customers. Often, dials on scorecards are similar across customers and across markets. These families of dials are referred to as “gauges” and functional managers are assigned to identify opportunities for gauge improvement that will result in dial improvement across scorecards. Data from these gauges will be stored in an electronic data warehouse, making it easier for teams around the company to identify trends and pinpoint root causes and improvement opportunities. Fix issues with Work-Outs • Relay customer feedback to ERC employees & improve process together Communicate successes • Monitor the fixes/process changes for effectiveness Focused on Continuous Improvement

30 Floor Care Manufacturer – Plastics
6 the Customer 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION Builders – Appliances OEMs – Vendor – CEF Airlines – Engines Hospitals – Medical Floor Care Manufacturer – Plastics Utilities – Power Sys. – Industrial Sys. Retailers – Lighting – Appliances

31 Floor Care Manufacturer – Plastics
6 the Customer 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION Builders – Appliances OEMs – Vendor – CEF Hospitals – Medical Retailers – Lighting – Appliances Airlines – Engines Floor Care Manufacturer – Plastics Utilities – Power Sys. – Industrial Sys. Customer Issue Assembly Line Efficiency

32 Floor Care Manufacturer – Plastics
6 the Customer 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION Builders – Appliances OEMs – Vendor – CEF Hospitals – Medical Retailers – Lighting – Appliances Airlines – Engines Floor Care Manufacturer – Plastics Utilities – Power Sys. – Industrial Sys. Customer Issue Assembly Line Efficiency Six the Customer Six Sigma Approach identifies Factors impacting Work Flow

33 Floor Care Manufacturer – Plastics
6 the Customer 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION Builders – Appliances OEMs – Vendor – CEF Hospitals – Medical Retailers – Lighting – Appliances Airlines – Engines Floor Care Manufacturer – Plastics Utilities – Power Sys. – Industrial Sys. Customer Issue Assembly Line Efficiency Six the Customer Six Sigma Approach identifies Factors impacting Work Flow Customer Results Output from 450 è 800 Units/Day WIP ê 85% $1MM Cost Out

34 Floor Care Manufacturer – Plastics
6 the Customer 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION Builders – Appliances OEMs – Vendor – CEF Hospitals – Medical Retailers – Lighting – Appliances Airlines – Engines Floor Care Manufacturer – Plastics Utilities – Power Sys. – Industrial Sys. Customer Issue Assembly Line Efficiency Six the Customer Six Sigma Approach identifies Factors impacting Work Flow Customer Results Output from 450 è 800 Units/Day WIP ê 85% $1MM Cost Out GE Results 2MM lb. Share Shift $1.5MM Growth Program

35 6 Sigma @ the Customer Customer Results GE Results
1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION Builders – Appliances OEMs – Vendor – CEF Hospitals – Medical Retailers – Lighting – Appliances Airlines – Engines Floor Care Manufacturer – Plastics Utilities – Power Sys. – Industrial Sys. Customer Results GE Results Output from 450 è 800 Units/Day WIP ê 85% $1MM Cost Out 2MM lb. Share Shift $1.5MM Growth Program Customers Gain Productivity….GE Rewarded with Share

36 Give CUSTOMERS What They Want
6 Sigma Fulfillment Six Sigma Evolution Give CUSTOMERS What They Want When They Want It 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION 2001 CERTIFICATION “The fact that we’ve done Six Sigma for seven years is irrelevant to the customer, but if we can bring Six Sigma to life at a customer, it’s the whole game. “ Chairman and CEO, Jeff Immelt THIS TYPE OF FULFILLMENT IS WHAT WE NEED IN ORDER TO MAKE CUSTOMERS FEEL SIX SIGMA. WE HAVE TO BREAK THE PARADIGM THAT WE CAN ONLY BE CUSTOMER-FOCUSED TO THE EXTENT THAT THE BOUNDARIES OF OUR INTERNAL METRICS PERMIT US. I BELIEVE THAT, IN THE END, CUSTOMERS GET WHAT THEY WANT ANYHOW. IT IS JUST OUR PARADIGM THAT THE COST OF RESISTING IT AS LONG AS WE CAN IS LOWER THAN THE COST OF FULFILLING RIGHT THE FIRST TIME. SO SUCCESS DOESN'T LIE IN FINDING OUT WHAT WE CAN AFFROD TO GIVE CUSTOMERS BUT IN OUR ABILITY TO CONSTANTLY RETHINK OUR BUSINESS MODEL WITH THE AIM TO GIVE CUSTOMERS WHAT THEY WANT WHEN THEY WANT IT. THIS IS OUR BIGGEST CHALLENGE IN BECOMING CUSTOMER CENTRIC .

37 Delivery to Customer Want Date
6 Sigma Fulfillment 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION But how early? h But how early ? And how late? On Time LET ME TAKE YOU THROUGH AN EXAMPLE OF ON-TIME DELIVERY. IT'S NOT THE ONLY THING CUSTOMER WANT, BUT IT IS CLEARLY THE THING THEY WANT US TO GET RIGHT FAST. THE BEST CASE IS ZERO … NOTHING SUPPLIED EARLIER THAN REQUESTED AND NOTHING LATER THAN REQUESTED. THE IDEAL CASE. THE REALITY IS THAT WE SOMETIMES DELIVER A LITTLE EARLY , IF IT WAS ONLY TO MEET THE QUARTER END. DO NOW AND ASK FORGIVENESS LATER. SAME FOR LATE DELIVERY. IT HAPPENS. IT IS JUST A MATTER OF… HOW EARLY AND HOW LATE! Early Late Delivery to Customer Want Date

38 Reducing Variation to Meet Customer Request
6 Sigma Fulfillment 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION h On Time LET ME TAKE YOU THROUGH AN EXAMPLE OF ON-TIME DELIVERY. IT'S NOT THE ONLY THING CUSTOMER WANT, BUT IT IS CLEARLY THE THING THEY WANT US TO GET RIGHT FAST. THE BEST CASE IS ZERO … NOTHING SUPPLIED EARLIER THAN REQUESTED AND NOTHING LATER THAN REQUESTED. THE IDEAL CASE. THE REALITY IS THAT WE SOMETIMES DELIVER A LITTLE EARLY , IF IT WAS ONLY TO MEET THE QUARTER END. DO NOW AND ASK FORGIVENESS LATER. SAME FOR LATE DELIVERY. IT HAPPENS. IT IS JUST A MATTER OF… HOW EARLY AND HOW LATE! Early Late Reducing Variation to Meet Customer Request

39 GE Silicones - Delivery to Request
6 Sigma Fulfillment 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION GE Silicones - Delivery to Request Variation from Request 2/ /99 Today 17 Days Days Days Sales Double Digit Volume Growth Internet Web Sales Booming Sales Force More Time to Sell vs. Chasing Order Status Op Margin Up 20+%

40 GE Power Systems - Delivery to Request
6 Sigma Fulfillment 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION GE Power Systems - Delivery to Request Customer Power Plant On-Time Operation Date '98 Baseline 2Q'99 3Q'99 4Q'99 2000 Target 350 Days 302 Day Variation Reduction 230 133 Customers’ Revenue Impacted By Variation 5 Days 48 On-time Reliability gives Customer 100 days more Electricity Sales

41 Transactional Business Processes
6 Sigma Fulfillment 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION Before Internet Internet World Transactional Business Processes Sell Make Service Order Deliver No Visibility to Business Processes Lots of Buffers – Salespeople, Order Service Cost of Poor Fulfillment – Inventory/ Expediting Internet Provides Visibility Differentiates Those Who Can and Those Who Can’t Highlights Internal Waste (Buffers) Cost of Failure – Fatal Variation Reduction Key To Success In e-World

42 Six Sigma Fulfillment : Enormous Rewards for 6 Sigma Fulfillment
1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION Six Sigma Fulfillment : 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 Enormous Rewards for 6 Sigma Fulfillment

43 Digitizing GE Digitization at GE
1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION 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

44 What Does Six Sigma Do For GE? Six Sigma - Changing the Company DNA
Evolution in GE 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Six Sigma Evolution 2001 CERTIFICATION What Does Six Sigma Do For GE? Drives Customer Centricity Improves Product/Service Capability Reduces Costs Improves Performance Reliability Foundation for e-Business/Digitization Six Sigma - Changing the Company DNA

45 e Six Sigma


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