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