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
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