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Time versus Cost Your time is more valuable than the cost of your time. We can always get more money: we never get more time.

Overview Six Sigma Defined The Statistical Tools of Six Sigma The Components of Six Sigma Corporations practicing Six Sigma and a specific success story An exercise Summary

What is Six Sigma (6s)? Originated at Motorola in the early 80s 6s is a methodology for quality improvement Doesn’t use “Quality” in the name 6s supports a Total Quality Management (TQM)-orientated company Recognition of elements from Deming Wheel

What is Six Sigma Quality? The numerical goal is 3.4 defects per million opportunities ( %) Six Sigma’s goal is the near elimination of defects from any process, product, or service. Juran once concluded that in the western world, around 1/3 of work is redoing what had already been done. This cost of low quality could be around 30% of total effort!

Six Sigma Process Measurement SIGMA DPMO CAPABILITY 6 sigma 3.4 World Class 5 sigma sigma 6200Industry average 3 sigma 67,000 2 sigma 310,000 Noncompetitive 1 sigma 700,000

EXERCISE - Six Sigma We all use Services every day. Select a Service you use. List 10 ways that the service provision can be measured with actual numbers, facts, and figures.

The Statistical Tools of Six Sigma: Visit to learn where you can purchase more material on Six Sigma.

The Statistical Tools of Six Sigma To find your Sigma Level: Clearly define the customer’s explicit requirements Count the number of defects that occur. Determine the yield—percentage of items without defects. Use the conversion chart to determine DPMO and Sigma Level.

(Simplified) Sigma Conversion Table If your yield is:Your DPMO is:Your Sigma is: 30.9%690, %308, , , The Six Sigma Way How GE, Motorola, and Other Top Companies are Honing their Performance, pg. 29.

The Components of Six Sigma: People Process Technology

People Business Leader Champion Black Belts Master Black Belt Green Belts

Business Leader Roles: Executives committed to Six Sigma. Conceptually knowledgeable in Six Sigma Process. They will determine who will be the Champion.

Sponsors Executive member or senior management. Helps or Assigns projects to Black Belts. Supervises the Black Belts. Provide resources to complete the job. Helps to establish Benchmarks for measurement.

Master Black Belts Experts on the statistical methods. Experts on the Six Sigma process. Helps Champion to select projects.

Black Belts Six Sigma process leaders. Convert “Vision” to “Reality.” Dedicated to Six Sigma Program. Management and technical skills. Supervisors of the Green Belts.

Green Belts Engine Room for activity Six Sigma aware and trained Critical role Process improvers

Process Element - DMAIC Define Measure AnalyzeImprove Control

Define Clearly identify the problem. Can it be measured? Don’t jump to conclusions. No assumptions.

Measure Numbers, not feelings. Capability of a given process. Focus on Customer issues/measurements.

Analyze Review the data collected. Current process results Statistical measurements Can we learn anything from a SWOT analysis?

Improve Now the hard part!!! Generate ideas for improvement. Be creative better ways faster ways safer ways faster ways other ways!

Control Embed Measure Support Start again !!

Is anyone else doing it? Motorola General Electric Allied Signal (Merged With Honeywell in 1999) Polaroid

Some Results… General Electric – began in : $1.2 Billion minus $450 Million in costs… = $750 Million benefits Annual Report in 1999: more than $2 Billion measurable benefits 2001: 6,000 projects finished; reported $3 Billion in savings Motorola – 10 years; $11 Billion Return Allied Signal – Approx. $1.5 Billion savings

Six Sigma according to GE “Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services to our customers. ‘Six Sigma’, a statistical term, describes a process that results in less than 3.4 defects per million operations, a process that is very near perfection. The central idea behind GE's Six Sigma Quality initiative is that customers define quality: a defect is defined as not meeting a customer's requirements. Therefore, the focus of Six Sigma Quality methodology is measuring the number of times a product or service of ours fails to meet our customers' needs and then using that information to systematically eliminate those shortcomings, getting as close to 100% customer satisfaction as possible.”

An Example Six Sigma Project: Retail Display Define: Marketing has designed a "fancy" display unit that they think will outperform the "standard" display unit and they want to put one in every store. "Fancy" display is 10X the cost of a "standard" display and all stores already have "standard" units. Should the new displays be purchased? Measures: Have data for each store on sales of this product for every day. Analyze: The stores identified at least three other factors besides display type that could impact sales. Range for each factor was identified. Design of Experiments was conducted. Improve: "Fancy" display had no significant impact on sales. The "fancy" displays were not ordered for any more stores, with considerable cost savings. Control: Future changes will be tested and evaluated using statistical techniques. From:

Exercise You have just completed all your training sessions for the Black Belt role. Currently, your organization is operating at a 2 sigma level and your Champion wants this to improve using the Six Sigma process. It seems that although production is high, the defect levels are too high for the production of your Pizzas. This has significantly cut into profits almost to the point of putting us out of business. There is a strong demand for Pizzas so you are handed the daunting task of improving this process using the Six Sigma (DMAIC) approach.

Summary: It’s a philosophy of quality improvement. Six sigma is 3.4 defects in one million opportunities (DPMO) Components of Six Sigma are people, process, and technology Business Leader, Champion, Master Black Belt, Black Belt, and Green Belt Define, Measure, Analyze, Improve, Control Customer focus, Customer focus, Customer focus