1. By Cathy Hiatt Boise State University October 9, 2001
Six Sigma By
Cathy Hiatt
Boise State University
October 9, 2001

2. 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 opportunity
Summary

3. Six Sigma Defined: GOAL: Reach Six Sigma Quality
Quality management program developed by Motorola in the 1980s.
Management philosophy focused on business process improvements to:
Eliminate waste, rework, and mistakes
Increase customer satisfaction
Increase profitability and competitiveness
Statistical measure to objectively evaluate processes.
Six Sigma is a management philosophy aimed at customer satisfaction. If a corporation is producing a product or service which does not meet the customer’s needs, then they will not be competitive or profitable. Reworking a product or service as a result of inefficient processes results not only in cost of material, labor and time but also in lost customers and poor reputation. It is key to involve the customer to determine what is important to them. It is not only important to gain a customer but also to retain the customer.
From here the corporation should go backwards and look at their processes to improve the product based on the customers requirements. Once these processes are identified, then there must be a numerical, objective approach to evaluate current practices and future goals.
Six Sigma is not only the processes involved to improve practices but also the statistical measurement to do this. The goal is to improve processes to achieve only 3.4 defects in one million opportunities.
GOAL: Reach Six Sigma Quality

4. Six Sigma
List some ways this program can be used in your organization.

5. The Statistical Tools of Six Sigma:
A defect is any incident or event which fails to meet the customers expectations.
Standard deviation is the measure of variation within a process. It is indicated by the symbol, sigma (s). A review of the normal distribution bell curve shows that:
68% of defects fall within 1s of the mean
95% of defects fall within 2s of the mean
% of defects fall within 6s of the mean
By aiming processes at Six Sigma, then, there would only be 3.4 defects per one million opportunities.
The Normal Distribution of C.F. Gauss reproduced from: Six Sigma IT Concepts Kurt Haubner HomePage:

6. The Statistical Tools of Six Sigma:
With the Six Sigma defects as a goal, that is 3.4 defects in one million opportunities, then processes can be evaluated to reach a target level with upper and lower limits. In order to reach these limits then the process variation will have to be reduced. As a result the bell curve will become more peaked as illustrated with the green bell curve.
Graph reproduced from: iSixSigma HomePage

7. The Statistical Tools of Six Sigma
Another way to look at it:
Clearly define the customer’s explicit requirements--CTQ
Count the number of defects that occur.
Determine the yield-- percentage of items without defects.
Use the conversion chart to determine DPMO and Sigma.
The CTQ is “Critical to Quality” which is determined by involving the customer. If defects occurred it is based on the CTQs. Once the number of defects are determined, a yield can be determined by dividing the total defects by the total products produced. Therefore, the yield is the percentage of items without defects.
From here DPMO or “Defects Per Million Opportunities” is determined. The DPMO can also by thought of as the capability of the process. The more capable the process the less the DPMO. Finally, this can be converted into a Sigma or standard deviation. The higher the standard deviation the lower the DPMO, which indicates a more capable process.
Refer to the next slide for the conversion chart.

8. Sigma Conversion Table:
If your yield is:
Your DPMO is:
Your Sigma is:
30.9%
690,000
1.0
62.9%
308,000
2.0
93.3
66,800
3.0
99.4
6,210
4.0
99.98
320
5.0
3.4
6.0
Conversion table from: The Six Sigma Way How GE, Motorola, and Other Top Companies are Honing their Performance, pg 29.

9. The Components of Six Sigma:
People Power
Process Power
In order to develop an effective Six Sigma approach key individuals must be selected to specific duties. Once the key people are selected and assigned to specific roles, a systematic process must be followed to improve processes.

10. People Power: Executive Leader Champion/Sponsor Master Black Belt
In order for Six Sigma to be successful within an organization, there must be commitment from the high level management positions. It is not enough to execute this program without top level support. The Executive Leader must be knowledgeable about the program and provide the resources to institute the program. They are the driving force for the the Six Sigma philosophy within the corporation. From there it flows from the Champion, Master Black Belt, Black Belt and Green Belts.
Black Belt
Green Belt
Green Belt
Green Belt

11. Executive Leader Roles:
High Level Executive committed to Six Sigma Success
Knowledgeable in Six Sigma Process
Assign key individuals to the Champion/Sponsor Position.
The key to a successful Six Sigma program is to break down the boundaries within the organization. The Executive Leader must be committed to this program and provide the leadership both to promote team work and collaboration among all the players in the program. In order to do this, they must be knowledgeable in the Six Sigma process and assign valued, committed individuals into the Champion/Sponsor positions.

12. Champion/Sponsor Roles:
High Level Executive
Oversee the Black Belt positions
Provide resources to complete the job
Assist Black Belts to select projects
Benchmark with other organizations
Again, this is another high level executive position to ensure management commitment to this program. This position decides what needs to be done and provides the assistance to the Black Belts both with monetary resources as well as dedicated staff. In addition, this position benchmarks with other organizations in order to gain key information in processes they may need to improve.

13. Master Black Belt Roles:
Resource for the Black Belts-experts on the mathematical theory of statistical methods
Experts on the Six Sigma process
Works with the Champion/Sponsor to select projects.
The Master Black Belt has technical expertise in the Six Sigma process as well as statistical methods. Initially the Master Black Belt is an individual from a Six Sigma consulting firm who instructs the Black Belts on the Six Sigma process. Eventually this individual is replaced by a Black Belt in the organization who has become an expert. They are responsible for the in-depth training involved for the Black Belts and Green Belts. In addition, they play a key role in overseeing the statistical calculations of the processes as well as assisting with project selection.

14. Black Belt Roles: Leaders of the Six Sigma process
Management and technical skills
Bring the project vision to reality
Solely dedicated to Six Sigma Program
Oversee Green Belts
The Black Belts of the Six Sigma process are the true leaders of process change. Where the executive level may decide what needs to be done, the Black Belts decide how to do it. They must have both management skills and technical skill to work with the Green Belts and others to bring the projects to fruition. Because of the importance of this position and the details involved, Six Sigma is their only responsibility.

15. Green Belt Roles: Project Leaders
Support the Black Belt to complete the project
The Green Belt position works closely with the Black Belts to decide how to complete the project. They are individual who are trained in Six Sigma but are also “close to the action” so they can provide the necessary constructive input to improve the process.

16. Process Power: DMAIC—Five Step Process
Define
Control
Measure
The five step process the Black Belts follow when overseeing a project is DMAIC. Define, Measure, Analyze, Improve, and Control.
“You Define the problem, Measure where you stand, Analyze where the problem starts, Improve the situation, and Control the new process to confirm that it’s fixed.” (The Power of Six Sigma, pg. 92)
The Black Belts attend four training sessions taught by the Master Black Belts to clearly understand these steps. The training sessions are broken up so that the Black Belts can take what they learned and apply it to their initial project. The theory behind this is that they are not overwhelmed with too much information all at once.
A good way to remember DMAIC is “Dumb Managers Always Ignore Customers”. (The Power of Six Sigma, pg.92)
Improve
Analyze

17. Define: Clearly identify the problem Utilize numerical definition
Focus on process that creates the problem not on the outcome
To define the problem a numerical parameter must be used. There must be an objective way to measure the problem. In addition, the goal is not to manage the problem but to solve the problem. Therefore, there must be a focus on the problem not on the outcome

18. Measure: Benchmark Capability of a given process Focus on CTQ
Again, a numerical measurement of the current process is necessary in order to change the process. What is the results of the current process? What are the competitor’s processes? A focus must be on the critical to quality issues that the customer finds important.

19. Analyze: Current process results
What is possible compared to what the competition is doing
Once measurements are available, it is necessary to analyze this data. This will eliminate the gap between the current practice and the desired goal.

20. Improve: Implement changes
Be creative to find new ways to do things better, cheaper, or faster
The whole goal in the Six Sigma program is to improve processes to achieve 3.4 defects in one million opportunities. After analysis, changes need to be implemented to achieve this goal.
Everyone should be involved in suggesting ways to improve the process, especially those that work directly with the process. The Green Belts and Black Belts act on these suggestions.

21. Control: Lock in successes
Implement measures to keep variables within the new operating limits
Once changes have been made to the process to achieve new operating limits then the Black Belt must oversee measures to keep these operating limits in place.
And then on to the next project in order to achieve the six sigma goal. This project is only one in several to incrementally achieve the six sigma goal.

22. Corporations Practicing Six Sigma:
General Electric
Motorola
Allied Signal
Sony
Polaroid
Here are just a few corporations who have successfully instituted a Six Sigma program.

23. Specific Success Story: GE
1995 Operating margin—13.5%
1998 Operating margin—16.7%
Result: $600million bonus
“The most important initiative GE has ever undertaken”
--Jack Welch, CEO General Electric
With these results Jack Welch is a clear proponent of the Six Sigma program. He is a good example of how it is essential that the corporation have leadership and commitment at the executive level to make this program a success. As a matter of fact, in order for someone within GE to be promoted they must be a Black Belt!

24. Exercise
You have just completed all your training sessions for the valued 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 leading line of products, Sticky Buns. This has significantly cut into profits almost to the point of dropping the line. Customer surveys indicate there is a demand for Sticky Buns so you are handed the challenging task of improving this process using the Six Sigma DMAIC approach.
One Scenario Might Be:
Define: The problem is that the production of Sticky Buns has a 69.2% yield rate. We want to focus on a % yield rate or 3.4 defects in one million opportunities. To do this we need to define the problem of why there is such a high defect rate. We will say it is the amount and timing of the syrup topping being drizzled over the dough. Some of the Sticky Buns have too much syrup.
Measure: Based on the customer’s needs obtain a measurement of the production of Sticky Buns and the defect rate. Your current defect rate (DPMO) is 308,000 in one million.
Analyze: What is it that is causing the high defect rate of Sticky Buns. Remember to focus on CTQ based on the customer’s demand. Perhaps there is a process in the production of Sticky Buns, such as extra syrup, that is not important to the customer. This may be causing the Sticky Bun to be unacceptable to the customer and therefore defective.
Improve: Involve the employees directly responsible for the specific process of regulating the syrup on the Sticky Bun. This is obviously an important process and the mechanization of this process involves the design of a new machine to correctly deliver the syrup at the right time. One dedicated employee must oversee this machine rather that run several machines.
Control: Once the new machinery is designed and employees are trained, follow-up is necessary to ensure the measures are in place and the defect rate on this particular process is reduced.

25. Summary: Management philosophy of quality
Statistical target of six sigma or 3.4 defects in one million opportunities
Components of Six Sigma are people power and process power
Executive Leader, Champion, Master Black Belt, Black Belt, and Green Belt
Define, Measure, Analyze, Improve, Control
Customer focus
Six Sigma is not just a statistical measurement. It is a whole program aimed at reducing defects within an organization, ultimately to a six sigma level.
By reducing defects, whether in products or services, costs are reduced and customer satisfaction is increased. It is key to involve the customer to determine those items that are Critical To Quality.
The Six Sigma program must start with the high level executives. This program will not survive without the commitment of management both with leadership and provision of resources. There must be dedicated staff to oversee the projects.
Not only does Six Sigma involve people, it provides a systematic approach for examining processes through the uses of DMAIC.

26. Bibliography
Chowdhury, S. The Power of Six Sigma. Chicago: Dearborn Trade, 2001
Pande, P. S., Neuman, R. P., Cavanaugh, R. R. The Six Sigma Way How GE, Motorola, and Other Top Companies Are Honing Their Performance. New York: McGraw-Hill, 2000
Normal Distribution Bell Curve:
Six Sigma IT Concepts Kurt Haubner HomePage:
Six Sigma Process Graph: