1. Six Sigma 6

2. What is Six Sigma?
Number of Defects
Six Sigma is a reference to a particular goal of reducing defects to near zero.
Sigma is the Greek letter “” that represents the “standard deviation” or variability of a group of items from their average value.
A Six Sigma program is therefore a variability reducing program.
The key objectives include improved processes, product performance, and reliability

3. What Else is Six Sigma?
A concept that provides a relatively new way to measure how good a product is. It relates to a manufacturing or service failure rate of only 3.4 rejects per million operations, or a yield of %.
When a product is six sigma, it tells us that the quality level is excellent.

4. Why Six Sigma?
Why spend money to achieve six sigma quality when perhaps 99% or 98% perfect would be totally adequate?
The inadequacy of 99.9% accuracy can be illustrated as follows:
22,000 checks will be deducted from the wrong bank accounts in the next 60 minutes
880,000 credit cards in circulation will have incorrect cardholder information on their magnetic strips
268,500 defective tires will be shipped this year
18,322 pieces of mail will be mishandled the next hour
14,208 defective computers will be shipped this year

5. But With Six Sigma Quality -
Drug prescriptions
One incorrect drug prescriptions every 25 years.
Surgical operations
One incorrect surgical operation every 20 years
Mail Delivery
Only one article of mail lost every 35 years

6. The Bathtub Curve
Shows reliability of a product in terms of failure rate per month
The curve presents two shaded areas
Latent defect rate
Causes early failure after a product is delivered
Inherent failure rate
Function of product design, materials, processes, and technologies used in manufacturing.
Defects in manufacturing are caused by:
Narrow design margins for the product
Insufficient manufacturing process controls
Poor incoming materials/parts quality

7. The Bathtub Curve Time Time I Infant Mortality II Useful Life III
Failure Rate I
Infant
Mortality II
Useful
Life
III
Wear out
Overall Life Characteristic curve
Latent
Defects
Inherent Failure Area
Time
Design-Related (Inherent) Failures
Quality Failures due to
Process & Material
Wear out
Failures
Time
Failure Rate

8. 6 Sigma Versus 4 Sigma
Why attempt to achieve 6 sigma when 4 sigma ( %) may be adequate?
Even well controlled processes experience shifts in the mean as great as ± 1-1/2 standard deviations.
A normal 4 sigma process plus a 1-1/2 sigma shift in the process average would result in 4 sigma variations of 6,210 defects per million operations.

9. Yield Rates of Six Sigma Products
It is possible to build a product in which each component is a six sigma component and yet have the product exhibit yields of only 90%, 80%, 70%, 60% etc.
What we are talking about is rolled-throughput yield or the probability that all product, process and material characteristics will simultaneously conform to their respective standards.

10. Improvement Efforts Required to Reach Six Sigma4 3
10 X Improvement
66,810 dpm
6,210 dpm 5
30 X Improvement
223 dpm 6
70 X Improvement
3.4 dpm
Dpm = defects per million

11. Where are Average Companies in Quality?
Approximately 2 Sigma
IRS – Tax advice over the phone
Approximately 4 Sigma (Average)
Restaurant bills
Doctor prescription writing
Payroll processing
Order write-ups
Approximately 6 Sigma
Best in class – Seiko, HP Inc., etc.
6.5 Sigma
Domestic flight fatality rate (0.43 ppm) 2 4 6
6.5

12. Relationship of Defects to Other Factors
The 6 sigma concept indicates there are strong relationships between product “defects” and such factors as:
Reliability
Product yields
Cycle times
Inventories
Schedules
The higher the sigma value, the more reliable the process being monitored and the higher the improvement in all areas.

13. Financial Implications of Low Sigma
The lower the sigma level, the higher the repair costs
A 4 sigma company spends more than % of its sales dollars for internal and external repairs
A 6 sigma company spends about 1%
Over the long run, a 4 sigma company will not be able to compete with a 6 sigma company.

14. What is the Cost of Quality? Defects Per Million Opportunities
Goal: Improve cost, quality, and schedule performance via process improvement and reduction of process variations.
Sigma Level
Defects Per Million Opportunities
Cost of Quality 2
308,537 (Noncompetitive companies)
N/A 3
66,807
25-40% of sales 4
6,210 (Industry average)
15-25% of sales 5
233
5-15% of sales 6
3.4 (World Class)
1% of sales
Note: Each sigma improvement represents a 10% net improvement in income.

15. The Tools of Six Sigma Region of Six Sigma Synergy Design Process
Design to standard parts/ materials
Design to standard processes
Design to known capabilities
Design for assembly
Design for simplicity
Design
Process
Material
Parts standardization
Supplier
Supplier certification
ERP
Process optimization
Process characterization
Process standardization
Short-cycle manufacturing
Statistical process control
Region of
Six Sigma Synergy

16. Overcome Process Variation: First Strategy
Anticipate problems – develop controls during the design cycle for both the product and the manufacturing process steps to include the following:
Define 6 sigma tolerances on all critical product and process parameters
Minimize the total number of parts in the product
Minimize the number of process steps
Standardize on parts and procedures
Use spc during initial design and prototype design phases

17. Overcome Process Variation: Second Strategy
Use statistical process control (SPC) on the process to continually isolate, control and eliminate variation resulting from people, machines and the environment.

18. Overcome Process Variation: Third Strategy
The third strategy addresses suppliers
Institute a supplier qualification program using different techniques
Require suppliers to provide process control plans and process control charts
Minimize the number of suppliers used
Work towards a long term “win-win” partnership with all selected suppliers

19. Five Steps to Six Sigma for Manufacturing
Identify product characteristics necessary to satisfy customers
Determine if characteristics are controlled by part, process or both
Decide max allowed tolerance for correct performance
Determine existing process variations
Change product design, process, or both to attain the correct characteristics

20. What Are Some Possible Applications for Six Sigma?
In the stockroom
Used to reduce parts counts that are found to be inaccurate
In personnel
Used to reduce the number of requisitions unfilled after 30 days
In customer service
Used to measure number of calls unanswered on the 2nd or 3rd ring
In sales
Used to track errors in completing order forms
In order fulfillment
Used to eliminate returns because of wrong product being shipped
In finance
Used to reduce the instances of accounts being paid after a specified time limit has elapsed

21. Tools and Techniques for Quality Control
Pareto Analysis
Steps to identify the important causes using Pareto analysis
Step 1: Form a table listing the causes and their frequency as a percentage.
Step 2: Arrange the rows in the decreasing order of importance of the causes i.e. the most important cause first
Step 3: Add a cumulative percentage column to the table
Step 4: Plot with causes on x- and cumulative percentage on y-axis
Step 5: Join the above points to form a curve
Step 6: Draw line at 80% on y-axis parallel to x-axis. Then drop the line at the point of intersection with the curve on x-axis. This point on the x-axis separates the important causes and trivial causes.

22. Pareto Analysis Sample