Six Sigma

What is Six Sigma??

A statistical concept that represents amount of variation in a process relative to a specification

99.9997% defect free A business philosophy focused on

continuous improvement of key processes through the use of thorough process analysis to achieve operational excellence

What’s So Bad About Variation?

In world-class organizations, working to improve quality is not an extracurricular activity. It is a minimum requirement.

- Chang, Labovitz, and Rosansky

DPMO

1 sigma = 68.27% = 697,700 dpmo 3 sigma = 99.73% = 66,810 dpmo 5 sigma = 99.977% = 233 dpmo 6 sigma = 99.9997% = 3.4 dpmo

Note: estimates of long-term sigma values

-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6

STANDARD DEVIATIONS

Where did Six Sigma Come From?

Motorola started it GE made Six Sigma famous Based on the QI tools learned in this

course, plus other tools Need for companies to become

more competitive

www.motorola.com

Motorola has been implementing Six Sigma throughout the organization now for over 15 years, extending the practice beyond manufacturing into transactional, support, and service functions. As a result, we have documented over $16 billion in savings to our own organization!

SS is not Continuous QI

SS has an increased focus on quality as defined by the customer and uses a “sigma score”

SS uses rigorous statistical techniques SS prioritizes improvement projects and

resources based on the company’s strategic initiatives

It is TQM with a stats focus – quantitative and qualitative

How to Do SS

Management commitment Focus on the Customer Structured Training Encourage open discussion about

processes and defects Gather data, analyze it, make

improvements (DMAIC) on a project basis

Create a team-based, cooperative environment

The Training

Black Belt Green Belt (Yellow Belt) Master Black Belt Champion Executive Sponsors

Typical Structure for SS at GECEO

CIO

Division CEO

Champion SS

Director

SS Manager

Master Black

Belt

Black Belts

Green Belts

Quality Team

SS DIrector

Black Belt

Green Belts

SS Deployment (from B&W)

Business alignment planning First wave of BB training Second wave of BB and GB training Infrastructure development to

deliver results and sustain culture (a QMS is always best)

SS Method

1 Define

2 Measure

3 Analyze4 Improve

5 Control

Financial Tool: COPQ

Cost of Poor Quality Internal Failure External Failure Appraisal Prevention (Lost Opportunity)

Internal Failure Costs

Design corrective action Production rework Material losses (scrap) Machine down time Overtime

Appraisal Costs

Measuring/inspecting product Receiving inspection Testing External and internal auditors

External Failure Costs

Cost of recall/warranty Liability claims Customer complaint investigations Loss of customer loyalty Effects on reputation/marketplace

perception

Prevention Costs

Customer satisfaction surveys Supplier reviews and ratings Process validation SPC Education/training

Lost Opportunity Costs

Lost sales Lost customers Delayed market entry Environmental and safety issues

Total Cost of Quality

Add up all costs

COPQ Ratio = Total Cost of Quality $ Monthly Cost of Sales $

Examples