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Development of Six Sigma

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1 Development of Six Sigma
Motorola launched the Six Sigma program in the 1980s General Electric initiated the implementation of Six Sigma in the mid-1990s Organizations in all industries have applied Six Sigma in recent years Six Sigma has replaced TQM and BPR as the key strategy for quality improvement

2 s – Standard Deviation, a measure of variability
Definitions s – Standard Deviation, a measure of variability Six Sigma – A quality improvement philosophy that focuses on eliminating defects through reduction of variation in a process Defect – A measurable outcome that is not within acceptable (specification) limits

3 TQM Versus Six Sigma TQM Six Sigma
A management philosophy of quality improvement A philosophy that focuses on defect reduction and cost reduction Encourages involvement of all employees Relies on a selected group of highly-trained employees Senior management provides direct support Senior management is held accountable for results

4 Key Success Factors for Six Sigma
Committed leadership from top management Integration with existing initiatives, business strategy, and performance measurement Process thinking Disciplined customer and market intelligence gathering A bottom-line orientation and continuous reinforcement and rewards Training

5 Six-Sigma Metrics – Measuring Defect Rate
Defects per unit (DPU) = number of defects discovered  number of units produced Defects per million opportunities (DPMO) = number of defects discovered  opportunities for error  1,000,000

6 Estimating Defect Rate – Process Capability Index (Cp)
USL/LSL : Upper & Lower Specification Limit Cp = (USL –LSL) / (6s) Example : Time to process a student loan application (Standard = 26 working days) Specification Limits : 20 to 32 working days s : 2 working days Cp = (32 – 20)/ (6*2) = 1.00 (Three Sigma)

7 Cp Index and DPMO Cp Index DPMO 1 2,700 1.33 63 1.5 6.8 2 0.002

8 Estimating Process Capability Index from A Sample - Cpk Index
XBAR : average outcome from a sample S : standard deviation from a sample Cpk = min { (USL-XBAR) / (3S), (XBAR-LSL) / (3S) } Example : XBAR = 25 days, S = 3 days Cpk = min { (32-25)/(3*3), (25-20)/(3*3)} = min {0.77, 0.55} = 0.55

9 Six-Sigma Quality (Cp =2 with Mean Shifting from the Center)
Ensuring that process variation is half the design tolerance (Cp = 2.0) while allowing the mean to shift as much as 1.5 standard deviations.

10 k-Sigma Quality Levels
Six sigma results in at most 3.4 defects per million opportunities

11 GE’s Six-Sigma Problem Solving Approach
Define Measure Analyze Improve Control DMAIC

12 DMAIC - Define Identify customers and their priorities
Identify business objectives Select a six sigma project team Define the Critical-to-Quality (CTQ’s) characteristics that the customers consider to have the most impact on quality

13 DMAIC - Measure Determine how to measure the processes
Identify key internal processes that influence CTQ’s Measure the defect rates currently generated relative to those processes

14 DMAIC - Analyze Determine the most likely causes of defects.
Identify key factors that are most likely to create process variation.

15 DMAIC - Improve Identify means to remove causes of the defects.
Confirm the key variables and quantify the effects on CTQ’s Identify maximum acceptable ranges for the key variables and a system to measure deviations of the variable Modify the process to stay within the acceptable ranges

16 DMAIC - Control Determine how to maintain the improvement
Put tools in place to ensure that the key variables remain within the maximum acceptable ranges under the modified process

17 Tools for Six-Sigma and Quality Improvement
Elementary and advanced statistics Product design and reliability analysis Measurement Process control & Process improvement Implementation and teamwork Customer survey and feedback Lean thinking

18 Organization for Six Sigma
Project Champions – project selection and management, knowledge sharing Master Black Belts – instructors, coaches, technical leaders Black Belts – project team leaders and team members Green Belts – project team members, temporary team members

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