SIXSIGMA An Introduction LSSU - IAB 30 January 2002 creating value for our customers

SIXSIGMA What is it? creating value for our customers

SIXSIGMA “Six Sigma”: What is it? “A comprehensive and flexible system for achieving, sustaining and maximizing business success. Six Sigma is uniquely driven by close understanding of customer needs, disciplined use of facts, data and statistical analysis, and diligent attention to managing, improving and reinventing business processes.” -- The Six Sigma Way, by Pande, Newman and Cavanaugh creating value for our customers

SIXSIGMA Six Sigma: What is it? Specifically – Customer-focused, fact and data-based decision making driving out waste and defects which creates value for our customers. It is just NOT Supply Chain or Manufacturing creating value for our customers

SIXSIGMA A culture that rapidly drives our key activities* to be defect free 999,997 times out of 1,000,000. A culture that rapidly drives our key activities* to be defect free 999,997 times out of 1,000,000. < 3.4 defects per million opportunities. < 3.4 defects per million opportunities. * Valued by or critical to our customer. Six Sigma: What is it? creating value for our customers

SIXSIGMA Sigma - the lower case Greek letter that denotes a statistical unit of measurement used to define the standard deviation of a population. It measures the variability or spread of the data. What is Sigma? 

SIXSIGMA Cure Time of Silicone Sealant Number of Samples Lower Specification Limit (LSL) Upper Specification Limit (USL)

SIXSIGMA Upper Specification Limit (USL) Lower Specification Limit (LSL) x x Lower Specification Limit (LSL) Upper Specification Limit (USL)

SIXSIGMA Upper Specification Limit (USL) Lower Specification Limit (LSL) x

SIXSIGMA Putting Six Sigma in Perspective! creating value for our customers If you played 100 rounds of golf per year, and played at: 2 sigma - you'd miss 6 putts per round 3 sigma - you'd miss 1 putt per round 4 sigma - you'd miss 1 putt every 9 rounds 5 sigma - you'd miss 1 putt every 2.33 years 6 sigma - you'd miss 1 putt every 163 years!

SIXSIGMA Putting Six Sigma in Perspective! 20,000 lost articles of mail every hour. 20,000 lost articles of mail every hour. Power outages seven hours each month.. Power outages seven hours each month.. 5,000 incorrect surgical procedures each week for a major healthcare provider. 5,000 incorrect surgical procedures each week for a major healthcare provider. Unsafe drinking water nine minutes every day. Unsafe drinking water nine minutes every day. Two long / short airport landings every day. Two long / short airport landings every day. Four Sigma quality (6210 DPMO) means… % right…but….. creating value for our customers

SIXSIGMA Putting Six Sigma in Perspective! Airline passenger safety ~ 8.2  Airline passenger safety ~ 8.2  –Currently at 2.6 DPMO (incidents per million takeoffs and landings). Airline baggage handling ~ 3  Airline baggage handling ~ 3  Six Sigma quality (< 3.4 DPMO). creating value for our customers

SIXSIGMA Impact of Six Sigma creating value for our customers

SIXSIGMA 1987 Motorola introduced Quality Program now known as Six Sigma Motorola introduced Quality Program now known as Six Sigma. Allied Signal picked it up. Allied Signal picked it up. G.E. Success…. G.E. Success…. –Capital Services –Medical Systems (CAT Scan) Dozens of others…... Dozens of others…... –Learned the highest quality producer is also the lowest cost producer. –Learned customer loyalty of a Six Sigma company is ~3X that of the average company. It all began at…..Motorola…not G.E. creating value for our customers

SIXSIGMA Who else is doing Six Sigma? Avery Dennison Avery Dennison Dow Dow DuPont DuPont Foxboro Foxboro Sony Sony Deere & Co. (John Deere) Deere & Co. (John Deere) Delphi Delphi Allied Signal Allied Signal Ford Ford Johnson & Johnson Johnson & Johnson Caterpillar Caterpillar Lockheed Martin Lockheed Martin IBM IBM CitiGroup (Visa/MasterCard) CitiGroup (Visa/MasterCard) G.E. G.E. J.P. Morgan J.P. Morgan ServiceMaster ServiceMaster creating value for our customers

SIXSIGMA How does Six Sigma work? Why is it different? Top down, executive led. Customer focused (VOC). Project oriented Led by “Black Belts”. 3-5 months long. Ave. yearly impact $ K/project. Consistent methodology. creating value for our customers Process Controls X4, X5, X6… X1 X2 X3 Output Y Critical to Customer Six Sigma

SIXSIGMA What is the “Methodology”? D efine M easure A nalyze I mprove C ontrol D M A I CD M A I C creating value for our customers

SIXSIGMA What are the “The Tools”? What are the “The Tools”? Six Sigma is a discipline using these tools: – 7 Tools of Quality – Advanced analysis tools (Design of Experiment, Linear Regression, etc.) – Re-engineering – Lean manufacturing – Supply chain improvements – Design for Six Sigma (DFSS) – For development of new products, new services, new processes, and new workflows. creating value for our customers

SIXSIGMA Who are the other “Key Players”? Senior Champion – Owns Six Sigma for the Business. Senior Champion – Owns Six Sigma for the Business. Champion – Identifies and resources projects. Champion – Identifies and resources projects. Master Black Belt – Serves as coach to the Black Belt and project team. Master Black Belt – Serves as coach to the Black Belt and project team. Black Belt – Leads the project team, full time. Black Belt – Leads the project team, full time. Green Belts – Team members (part-time) from the organization sponsoring the project Green Belts – Team members (part-time) from the organization sponsoring the project Project Sponsors – Team leaders. Project Sponsors – Team leaders. Process Owners – Owns the process / workflow. Process Owners – Owns the process / workflow. Executive Six Sigma Steering Committee – Oversees progress, resolves issues, ensures success enterprise- wide. Executive Six Sigma Steering Committee – Oversees progress, resolves issues, ensures success enterprise- wide. creating value for our customers

SIXSIGMA Summary “take aways” Summary “take aways” Customer focused….Driven by the Voice of the Customer. Customer focused….Driven by the Voice of the Customer. Strong top management leadership, commitment, and involvement. Very Key! Strong top management leadership, commitment, and involvement. Very Key! Project orientation with measurable financial results. Project orientation with measurable financial results. Consistent methodology for all work. Time driven. Consistent methodology for all work. Time driven. Time driven….more accountable. Time driven….more accountable. Six Sigma - is a discipline not an “add on” or “program”. Six Sigma - is a discipline not an “add on” or “program”. - NOT a supply chain/manufacturing activity. - No new tools….new ways to apply them! Goals Goals –Value for the Customer (i.e. no defects or waste & low cost) – Improved productivity = profitability. –Customer success and satisfaction + Profitability = Growth creating value for our customers

SIXSIGMA creating value for our customers References…… The Six Sigma Way (ISBN ) by Pande, Neuman, and Cavanaugh The Power of Six Sigma (ISBN ) by Subir Chowdhury Six Sigma (ISBN ) by Harry and Schroeder. The Six Sigma Handbook (ISBN ) by Pyzdek is more technical and becoming the 'handbook' for Black Belts. You can get them through Amazon, in a couple of days.

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