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Six Sigma By: Tim Bauman April 2, 2007. Overview What is Six Sigma? Key Concepts Methodologies Roles Examples of Six Sigma Benefits Criticisms.

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Presentation on theme: "Six Sigma By: Tim Bauman April 2, 2007. Overview What is Six Sigma? Key Concepts Methodologies Roles Examples of Six Sigma Benefits Criticisms."— Presentation transcript:

1 Six Sigma By: Tim Bauman April 2, 2007

2 Overview What is Six Sigma? Key Concepts Methodologies Roles Examples of Six Sigma Benefits Criticisms

3 What is Six Sigma? Improve customer satisfaction by producing virtually free processes and products To achieve Six Sigma a process must not produce more than 3.4 defects per million opportunities 6 standard deviations between the mean and the nearest specification limit Developed by Bill Smith at Motorola in 1986 as a way to standardize the way defects are counted

4 Key Concepts Critical to Quality: Attributes most important to the customer Defect: Failing to deliver what the customer wants Process Capability: What your process can deliver Variation: What the customer sees and feels Stable Operations: Ensuring consistent, predictable processes to improve what the customer sees and feels Design for Six Sigma: Designing to meet customer needs and process capability

5 Methodologies DMAIC Improvement system for existing processes DMADV Improvement system for developing new processes or products

6 Methodologies: DMAIC Define – “the project goals and deliverables for both internal and external customers” Measure – “the process to determine current performance” Analyze – “and determine the root cause(s) of the defects” Improve – “the process by eliminating defects” Control – “future process performance”

7 Methodologies: DMAIC Define Identify the Critical To Quality characteristics Create a map of the process to be improved with defined and measurable, deliverables, and goals Tools: Benchmark, Baseline, Voice of the Customer and Business, Quality Function Deployment, Process Flow Map

8 Methodologies: DMAIC Measure Establish valid and reliable metrics to monitor the progress of the project Input, process, and output indicators are identified Determine the impact of defects from each input on the CTQs Once reasons for input failure are determined, preventative actions are put into place Tools: Defect Metrics, Data Collection, Sampling Techniques

9 Methodologies: DMAIC Measure Defects Per Million Opportunities (DPMO) = (Total Defects / Total Opportunities) * 1,000,000 Defects (%) = (Total Defects / Total Opportunities)* 100% Yield (%) = 100 - %Defects Process Sigma (type this formula into Excel): =NORMSINV(1-(total defects / total opportunities))+1.5 a/six_sigma_calculator.asp

10 Methodologies: DMAIC Analyze Identify the gap between existing performance and desired performance Root Cause Analysis – finding the causes of defects Process Improvement Scenarios Tools: Cause and Effect diagrams, Decision and Risk Analysis, Control Charts

11 Methodologies: DMAIC Improve Create new improvement solutions for each root cause Cost/Benefit Analysis What happens if improvements are not made or improvements take too long to implement Process experimentation and simulation Implement and adapt to these solutions and the results from these changes

12 Methodologies: DMAIC Control A monitoring plan with proper change management methods Implement the lesson learned Put tools in place to maintain process improvement gains Training Document the project New procedures and lessons learned are maintained and give a solid example Identify future Six Sigma improvement opportunities

13 Methodologies: DMAIC Extra Step: Synergize Integrate and institutionalize the improvements throughout the whole organization Create a learning organization Multiply the gains achieved by Six Sigma

14 Methodologies: DMAIC Checklists ml?identifier=3039772

15 Methodologies: DMADV First three steps are the same Define – “the project goals and deliverables for both internal and external customers” Measure – “and determine customer needs and specifications” Analyze – “the process options to meet the customer needs” Design – “the process to meet the customer needs” Verify – “the design performance and ability to meet customer needs”

16 Methodologies: DMADV Design Specification Limits Simulation model Test Plan Measurement and Control Plan

17 Methodologies: DMADV Verify Pilot runs Training Implementing the processes Document the processes

18 Roles Yellow Belt or Team Member Professional who works on project Awareness of Six Sigma, but no training

19 Roles Green Belt Part time professional Receives direction from Black Belts Works with a Black Belt’s project or leads smaller projects Two weeks of training in methods and basic statistical tools

20 Roles Black Belt Full time professional Team Leader on Six Sigma projects Four to Five weeks of training in: Methods Statistical tools Team skills

21 Roles Master Black Belt Expert in Six Sigma methods and tools Mentors other belts on complex issues Responsible for training others to the Green and Black belt levels Assists the Champion with deployment

22 Roles Champion Middle or Senior level executive who helps a specific Six Sigma project In charge of making sure resources are available Resolves cross-functional issues

23 Roles Leader Senior level executive responsible for implementing Six Sigma throughout the business Sponsor Senior executive in charge of the overall Six Sigma Initiative

24 Examples of Six Sigma Current average industry runs at 4 sigma Domestic airline flights run at a rate higher than 6 sigma Non competitive companies typically run at a sigma level of 2

25 Examples of Six Sigma Companies currently using Six Sigma Motorola General Electric Allied Signal Citibank Microsoft Many others

26 Benefits Save Money Black Belts save companies approximately $230,000 per project General Electric has estimated benefits of $10 billion in the first five years of its implementation Raise customer satisfaction

27 Benefits Save lives Health Care Intensive care results from 53 minutes to 22 minutes Reduce error rates for patient controlled pumps to administer pain medication Airplane Industry

28 Criticism Cost of training at Motorola Green Belt Certification: $2,950 Black Belt Certification: $12,950 Cost of infrastructure Creating the roles and responsibilities

29 Criticism Six Sigma does not always work Need active leadership Align with organizational strategy Need aggressive performance tracking and accountability for results Green and Black belts need to be process oriented and willing to learn and use statistical tools Pay more attention to steps than the actual result

30 Sources [1] Functional Methods. “DMADV (Define, Measure, Analyze, Design, Verify) Roadmap.” 2004. Retrieved 25 March 2007. [2] General Electric. “What is Six Sigma?” 2007. Retrieved 23 March 2007. htm [3] ISixSigma LLC. “Six Sigma – What is Six Sigma.” 2007. Retrieved 24 March 2007. [4] Motorola, Inc. “Motorola Univerisity, Six Sigma in Action.” 2007. Retrieved 22 March 2007.

31 Sources [5] Peterka, Peter. “The DMAIC Method in Six Sigma.” 25 October 2007. Retrieved 25 March 2007.. [6] “Roles.” 2007. Retrieved 25 March 2007. [7] Siviy, Jenannine. “Six Sigma.” 11 January 2007. Retrieved 22 March 2007.

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