1. An Introduction to Six Sigma Quality
Presented by Darlene Mackay, CSQA
Quality Assurance Institute

2. Presentation Agenda 1. What is Six Sigma Quality?
2. Why would a company adopt Six Sigma?
3. Is there a roadmap to Six Sigma?
4. What are the challenges?
5. What are the rewards?

3. 1. What is Six Sigma Quality?
Originated at Motorola in the early 80’s
Helped Motorola win the 1988 MBNQA
Is a methodology for disciplined quality improvement
Juran principles apply
Doesn’t use “Quality” in the name
With the inclusion of Six Sigma into a sound business system, the major ingredients of a Total Quality Management System are usually in place
Uses a modified Deming Wheel (PDCA)
> Juran said that “all quality improvement occurs on a project-by-project basis and in no other way” . This philosophy is considered an essential element in Six Sigma.
By not using “quality” or “statistics” in the name, it is perceived to be a business system that improves bottom line and only brings in technical details as needed; TQM is perceived to be a technical quality system owned by technical specialists rather than all employees.
> Uses a simple but effective management structure and this in truly a strength. By contrast, TQM required a complex and rigid management structure of many levels.

4. JURAN SAID…
“All quality improvement occurs on a project-by-project basis and in no other way.”

5. What is Six Sigma Quality?
Six Sigma’s goal is the near elimination of defects from any process, product, or service.
The numerical goal is defects per million opportunities.
Juran once concluded that in the US, close to 1/3 of the work done consisted of redoing what had already been done.
Depending on the industry, this Cost of Poor Quality (COPQ) could be 20 to 40% of total effort!
Why is this so difficult for software and software services?
Remember, SS started in Motorola’s manufacturing divisions where the concept of Statistical Process Control (SPC) was already adopted. We refuse to adopt SPC for software projects because we continue to believe that it doesn’t apply. However, if we are going to continue to use the term “process” then we should also use SPC in order to measure and improve those same processes. Most IT shops haven’t a clue as to how well they are doing now.

6. Six Sigma Process Capability
SIGMA DPMO COPQ CAPABILITY
6 sigma <10% of sales World Class
5 sigma to 15% of sales
4 sigma to 20% of sales Industry average
3 sigma , to 30% of sales
2 sigma , to 40% of sales Noncompetitive
1 sigma ,000
DPMO – Defects Per Million Opportunities
COPQ – Cost of Poor Quality

7. What is Six Sigma Quality?
Strategy includes:
Measure
Analyze
Improve
Control
Improvement projects must be integrated with the goals of the organization.
Six Sigma uses a “divide and conquer” approach as opposed to Continuous Process Improvement.
Implementation is top-down. CEO drives, and executive management provides the Champion for each project.
GE’s implementation is often the de facto model for implementation.
Uses concept of “belts” for levels of competency in Six Sigma implementation:
MBB = Master Black Belt
BB = Black Belt
GB = Green Belt
Continuous Process Improvement = vague notion of improving everything we do forever
DMAIC = Define Measure Analyze Improve Control
Most often a “Define” step is added before the measure step since most organizations need a baseline to start the improvement effort. There are often times other steps that might include “recognize” and end with “Standardize and integrate”.
Six Sigma divides the quality pie into comprehensive compartments, that form a holistic focus at all levels of the business. This is where top-level support is so crucial.
The Champion is responsible for the success of the projects. The Champion provides the necessary resources and breaks down organizational barriers. It is typical for a large part of a Champion’s bonus to be tied to his or her success in achieving SS goals. At GE this has traditionally been 40%.
Project leader is called a Black Belt. All BB candidates should have a history of accomplishment since employees who are selected for BB training are usually on the fast track.
BB assignments usually last for two years and has eight to twelve projects. Projects are broken down into quarters and often times the people on the team will change from quarter to quarter.
Project team members are called Green Belts and they do not spend all their time on projects. They receive training similar to that of BB’s but for less time.
All “Belts” are considered Agents of Change and it is extremely important to get the right people in these roles. They like new ideas and generally are the leaders of the organization.
In January of 1998, GE would not consider an employee for promotion to any management job without BB or GB training.
There is also a Master Black Belt level. These are experienced BB’s who have worked on many projects. They are the ones who typically know about more advanced tools, the business, and have had leadership training and often times have teaching experience. A primary responsibility is mentoring new Black Belts.

8. Six Sigma Project: Engineering Changes
An Example
Six Sigma Project: Engineering Changes
Define: Large number of changes from client after approving engineering design. Schedule slipping.
Measure: Number of changes, time involved in changes, compliance to critical path schedule.
Analyze: No clear authority on client team to establish scope, any of client team could make changes, verbal communication of changes, conflicting changes by client team members. Language issues between client and engineers.
Improve: Regular engineering/client meetings where topics include: scope for each section and desired objective, known limitations defined, unclear requirements were questioned and options discussed. Written plan signed by client representative and engineering lead. Change requests in writing and signed by client representative. Changes decrease by factor of 4.7 and schedule met.
Control: Change requests all in writing. Shared approach with other disciplines on project.
From:

9. What is Six Sigma Quality?
All Six Sigma projects are evaluated rigorously for financial impact.
Most important is the financial cumulative impact of all projects upon the company’s bottom line.
Usually the CFO or an executive in Finance is directly involved in Six Sigma projects. The expectation is that a project will have at least a $175,000 financial impact. Each Black Belt has a financial impact of about $1M per year from the four to six projects per year he or she leads.
Allied Signal CEO Larry Bossity reported that $1.5 Billion in estimated savings has already been achieved.
GE started SS in 1995 under Jack Welch. They claimed net benefits by In 1998, they claimed $1.2 Billion in benefits and costs of $450 Million for a net benefit of $750 M Annual Report claimed a net benefit of more than $2 Billion.

10. Some Results… Motorola – 10 years; $11 Billion Savings
Allied Signal - $1.5 Billion estimated savings
General Electric – started efforts in 1995
1998: $1.2 Billion less $450 Million in costs… net benefits = $750 Million
1999 Annual Report: more than $2 Billion net benefits
2001: 6,000 projects completed; $3 Billion in savings
Usually the CFO or an executive in Finance is directly involved in Six Sigma projects. The expectation is that a project will have at least a $175,000 financial impact. Each Black Belt has a financial impact of about $1M per year from the four to six projects per year he or she leads.
Allied Signal CEO Larry Bossity reported that $1.5 Billion in estimated savings has already been achieved.
GE started SS in 1995 under Jack Welch. They claimed net benefits by In 1998, they claimed $1.2 Billion in benefits and costs of $450 Million for a net benefit of $750 M Annual Report claimed a net benefit of more than $2 Billion.

11. Six Sigma according to GE
“A highly disciplined process that helps us focus on developing and delivering near-perfect products and services. The word Six Sigma is a statistical term that measures how far a given process deviates from perfection. The central idea behind Six Sigma is that if you can measure how many “defects” you have in a process, you can systematically figure out how to eliminate them and get as close to “zero defects” as possible. Six Sigma has changed the DNA at GE – it is the way we work – in everything we do and in every product we design.”

12. 2. Why would a company adopt Six Sigma?
Concept has been around for 16 years; isn’t just a fad.
Six Sigma is the latest name for a comprehensive set of philosophies, tools, methods, and fundamental concepts.
Continues to evolve at all organizational levels; from CEO and CFO to the Black Belts and Green Belts.
Has shown the most endurance and return on investment of any such “program” till now.

13. The Roadmap to Six Sigma
North
East
West
South
Usually has many twists and turns!

14. A Road Map for Six Sigma Appoint a Champion
Select a Cross-functional team
Develop quantifiable goals
Develop an implementation plan
Establish a training program
Address data collection requirements and issues
Develop a change control and maintenance program
Coordinate your road map
Article by John M. Gross, ASQ, Quality Progress Magazine, November 2001

15. 4. What are the Challenges of Six Sigma?
The perception of “Sick Sigma”
Culture change
Understanding the DFSS (Design For Six Sigma)
It is not a quick fix nor a recipe.
Consultants can’t make it happen.
Training – especially management level
Takes careful preparation and a commitment to the foundational change efforts required.
Statistical analysis is not generally part of the engineering discipline in most IT shops.
Six Sigma is viewed as another “flavor of the month” just like TQM, reengineering, etc. All the failed attempts at Statistical Process Control, measurement, root cause analysis, etc, are lumped into the organization’s view of SS. It’s the “been there, done that” mentality and goes to the heart of any improvement program…culture change.
DFSS is gaining ground as a discipline practiced by design teams of major corporations but is is not an easy or rapid transition to make.
Training – BB training usually lasts four weeks in the classroom, one week per month over four months. The rest of the time is spent working on projects while being mentored by a MBB. They learn statistical tools, data analysis, design of experiments, and quality control. Certification to a MBB usually requires successful implementation of at least 20 projects (including as a BB); BB after 2 successful projects.

16. What are the Challenges of Six Sigma?
Reliability of data from the field.
People must not fear giving “bad news”.
Design is critical and yet many IT organizations continue to go straight from poor requirements into coding without the benefits of even one design review.
Implementation tends to be uneven and lapses occur frequently.
Not everything has to be Six Sigma; this was our downfall on reengineering efforts!
Lack of discipline and accountability.

17. 5. What are the Rewards of Six Sigma?
Improved reliability and predictability of software products and services.
Increased value to the customers and shareholders.
Improvements in organizational morale.
Increased marketplace viability.
Organizational recognition.
Significant reduction in defects.
Institutionalization of a “process” mindset.

18. Some References Joseph M. Juran: Juran’s Quality Handbook
(McGraw-Hill, 1999)
Mikel J. Harry: Six Sigma, A Breakthrough Strategy for Profitability (Quality Progress, May 1998)
William J. Hill: Six Sigma at Allied Signal, Inc. (Presentation at 1999 Q&P Research Conference, May 1999)
Jack Welch: Six Sigma, the GE Way
Six Sigma Forum Magazine:
Your favorite Search Engine: search on “Six Sigma”