SIXSIGMA

An Introduction
An Introduction
LSSU
LSSU
-
-
IAB
IAB
30 January 2002
30 January 2002
creating value for our customers
creating value for our customers
SIXSIGMA
What is it?
What is it?
creating value for our customers
SIXSIGMA

Six Sigma
Six Sigma
: What is it?
: What is it?

A comprehensive and flexible system for

A comprehensive and flexible system for
achieving, sustaining and maximizing business
achieving, sustaining and maximizing business
success. Six Sigma is uniquely driven by close
success. Six Sigma is uniquely driven by close
understanding of customer needs, disciplined use
understanding of customer needs, disciplined use
of facts, data and statistical analysis, and diligent
of facts, data and statistical analysis, and diligent
attention to managing, improving and reinventing
attention to managing, improving and reinventing
business processes.
business processes.
-- The Six Sigma Way, by Pande, Newman and Cavanaugh
creating value for our customers
SIXSIGMA
Six Sigma
Six Sigma
: What is it?
: What is it?
Specifically
Customer-focused, fact and data-based
decision making driving out waste and
defects which creates value for our
customers.
It is just NOT Supply Chain or Manufacturing
creating value for our customers
SIXSIGMA

A
A
culture
culture
that rapidly drives our key activities* to
that rapidly drives our key activities* to
be defect free 999,997 times out of 1,000,000.
be defect free 999,997 times out of 1,000,000.

< 3.4 defects per million opportunities.

< 3.4 defects per million opportunities.
* Valued by or critical to our customer.
Six Sigma
Six Sigma
: What is it?
: What is it?
creating value for our customers
SIXSIGMA
Sigma - the lower case Greek letter that
denotes a statistical unit of measurement
used to define the standard deviation of a
population. It measures the variability or
spread of the data.
What is Sigma?
What is Sigma?

SIXSIGMA
Cure Time of Silicone Sealant
N
u
m
b
e
r

o
f

S
a
m
p
l
e
s
Lower Specification Limit
(LSL)
Upper Specification Limit
(USL)
SIXSIGMA
Upper Specification Limit
(USL)
Lower Specification Limit
(LSL)
x
x
Lower Specification Limit
(LSL)
Upper Specification Limit
(USL)
SIXSIGMA
Upper Specification Limit
(USL)
Lower Specification Limit
(LSL)
x
SIXSIGMA
Putting Six Sigma in Perspective!
Putting Six Sigma in Perspective!
creating value for our customers
If you played 100 rounds of golf per year, and
played at:
2 sigma - you'd miss 6 putts per round
3 sigma - you'd miss 1 putt per round
4 sigma - you'd miss 1 putt every 9 rounds
5 sigma - you'd miss 1 putt every 2.33 years
6 sigma - you'd miss 1 putt every 163 years!
SIXSIGMA
Putting Six Sigma in Perspective!
Putting Six Sigma in Perspective!

20,000 lost articles of mail

20,000 lost articles of mail
every hour.
every hour.

Power outages seven hours

Power outages seven hours
each month.
each month.
.
.

5,000 incorrect surgical procedures

5,000 incorrect surgical procedures
each week
each week
for a major healthcare provider.
for a major healthcare provider.

Unsafe drinking water nine minutes

Unsafe drinking water nine minutes
every day.
every day.

Two long / short airport landings

Two long / short airport landings
every day
every day
.
.
Four
Four
Sigma
Sigma
quality (
quality (
6210 DPMO)
6210 DPMO)
means
means
99.370% rightbut..
99.370% rightbut..
creating value for our customers
SIXSIGMA
Putting Six Sigma in Perspective!
Putting Six Sigma in Perspective!

Airline passenger safety ~ 8.2

Airline passenger safety ~ 8.2

Currently at 2.6 DPMO (incidents per million

Currently at 2.6 DPMO (incidents per million
takeoffs and landings).
takeoffs and landings).

Airline baggage handling ~ 3

Airline baggage handling ~ 3
.
.
Six
Six
Sigma
Sigma
quality (
quality (
< 3.4 DPMO).
< 3.4 DPMO).
creating value for our customers
SIXSIGMA
Impact of Six Sigma
Impact of Six Sigma
The Cost of Poor Quality
Sigma Level Defects per Million Opportunities Cost of Poor Quality
2 398,537 (Noncompetitive Companies) Not applicable
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
Each sigma shift provides a net income improvement which equals 10% of sales.
Six Sigma, by Harry and Schroeder, p. 17
creating value for our customers
SIXSIGMA

1987 Motorola introduced Quality Program now known as

1987 Motorola introduced Quality Program now known as
Six Sigma
Six Sigma
.
.

Allied Signal picked it up.

Allied Signal picked it up.

G.E. Success.
G.E. Success.
Capital Services Capital Services
Medical Systems (CAT Scan) Medical Systems (CAT Scan)

Dozens of others...
Dozens of others...
Learned the h Learned the highest ighest q quality uality p producer is also the roducer is also the l lowest owest c cost ost
p producer. roducer.
Learned customer loyalty Learned customer loyalty of a Six Sigma company is of a Six Sigma company is ~3X ~3X that that
of the of the average average company company. .
It all began at..Motorolanot G.E.
It all began at..Motorolanot G.E.
creating value for our customers
SIXSIGMA
Who else is doing Six Sigma?
Who else is doing Six Sigma?
Avery Dennison Avery Dennison
Dow Dow
DuPont DuPont
Foxboro Foxboro
Sony Sony
Deere & Co. Deere & Co.
(John Deere) (John Deere)
Delphi Delphi
Allied Signal Allied Signal
Ford Ford

Johnson & Johnson Johnson & Johnson

Caterpillar Caterpillar

Lockheed Martin Lockheed Martin

IBM IBM

CitiGroup CitiGroup
(Visa/MasterCard) (Visa/MasterCard)

G G. .E E. .

J.P. Morgan J.P. Morgan

ServiceMaster ServiceMaster
creating value for our customers
SIXSIGMA
How does Six Sigma work?
How does Six Sigma work?
Why is it different?
Why is it different?
Top down, executive led.
Customer focused (VOC).
Project oriented
Led by Black Belts.
3-5 months long.
Ave. yearly impact $150-250K/project.
Consistent methodology.
creating value for our customers
Process
Corlro|s
X1, X5, X.
X1
X2
X3
0ulpul Y
Cr|l|ca| lo
Cuslorer
3|x 3|gra
SIXSIGMA
What is the Methodology?
What is the Methodology?
D
D
efine
efine
M
M
easure
easure
A
A
nalyze
nalyze
I
I
mprove
mprove
C
C
ontrol
ontrol
D MA I C
creating value for our customers
SIXSIGMA

What are the The Tools?

What are the The Tools?
Six Sigma is a
Six Sigma is a
discipline
discipline
using these tools:
using these tools:

7 Tools of Quality 7 Tools of Quality

Advanced analysis tools (Design of Experiment, Advanced analysis tools (Design of Experiment,
Linear Regression, etc.) Linear Regression, etc.)

Re Re- -engineering engineering

Lean manufacturing Lean manufacturing

Supply chain improvements Supply chain improvements

Design for Six Sigma (DFSS) Design for Six Sigma (DFSS)

For development of new products, new services, For development of new products, new services,
new processes, and new workflows. new processes, and new workflows.
creating value for our customers
SIXSIGMA
Who are the other Key Players?
Who are the other Key Players?

Senior Champion
Senior Champion

Owns Six Sigma for the Business.

Owns Six Sigma for the Business.

Champion
Champion

Identifies
Identifies
and resources
and resources
project
project
s.
s.

Master
Master
B
B
lack
lack
B
B
elt
elt

Serves as coach
Serves as coach
to the Black Belt
to the Black Belt
and project team.
and project team.

Black
Black
B
B
elt
elt

Leads the project team, full time

Leads the project team, full time
.
.

Green
Green
B
B
elts
elts

Team members (part

Team members (part
-
-
time) from the
time) from the
organization sponsoring the project
organization sponsoring the project

Project Sponsors
Project Sponsors

Team leaders.
Team leaders.

Process Owners
Process Owners

Owns the process / workflow.

Owns the process / workflow.

Executive Six Sigma Steering Committee

Executive Six Sigma Steering Committee

Oversees
Oversees
progress, resolves issues, ensures success enterprise
progress, resolves issues, ensures success enterprise
-
-
wide.
wide.
creating value for our customers
SIXSIGMA
Summary take aways
Summary take aways

Customer focused.Driven by the Voice of the Customer. Customer focused.Driven by the Voice of the Customer.

Strong top management leadership, commitment, and Strong top management leadership, commitment, and
involvement. Very Key! involvement. Very Key!

Project orientation with measurable financial results. Project orientation with measurable financial results.

Consistent methodology for all work. Consistent methodology for all work. Time driven. Time driven.

Time driven.more accountable. Time driven.more accountable.

Six Sigma Six Sigma - - is a is a discipline discipline not an add on or program. not an add on or program.
- - NOT NOT a supply chain/manufacturing activity. a supply chain/manufacturing activity.
- - No new tools No new tools.new ways to apply them! .new ways to apply them!

Goals Goals
Value for the Customer (i.e. no defects or waste & low cost) Value for the Customer (i.e. no defects or waste & low cost)
Improved productivity = profitability. Improved productivity = profitability.
Customer success and satisfaction + Profitability = Growth Customer success and satisfaction + Profitability = Growth
creating value for our customers
SIXSIGMA
creating value for our customers
References
The Six Sigma Way (ISBN 0-07-135806-4) by Pande,
Neuman, and Cavanaugh
The Power of Six Sigma (ISBN 0-7931-4434-5) by Subir
Chowdhury
Six Sigma (ISBN 0-385-49437-8) by Harry and Schroeder.
The Six Sigma Handbook (ISBN 0-07-137233-4) by Pyzdek is
more technical and becoming the 'handbook' for Black Belts.
You can get them through Amazon, http://www.amazon.com/ in
a couple of days.
SIXSIGMA
creating value for our customers
References
Also...you might consider:
www.6-sigma.com
www.sixsigma.co.uk
www.sixsigmasystems.com
www.isixsigma.com