Defining Six Sigma (6 ) σ

“Six Sigma: A comprehensive and flexible system for achieving, sustaining

and maximizing business success. Six sigma is uniquely driven by a close
understanding of customer needs, disciplined use of facts, data, and
statistical analysis and diligent attention to managing, improving, and
reinventing business processes.”
- Peter S. Pande
The History of Six Sigma

• 1987 Motorola introduced Quality Program now

known as Six Sigma.
• Allied Signal picked it up.
• G.E. Success….
– Capital Services
– Medical Systems (CAT Scan)
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

Key Concepts

Cp: Process Capability Index

= product specifications = customer
Total Process Variation supplier
USL(+): upper specification limit
LSL(-) : lower specification limit
Under Normality assumption of the Process:
Total Process Variation is set to be 6σ
Cp=USL-LSL
6σ
 Defining Six Sigma (6 σ )
σ
The Greek symbol (sigma) refers to the amount of variation
in a process around the mean value for that process

Processes have acceptable upper and lower limits

Six Sigma is concerned with reducing the variations to get

more output within those limits
 Units of Measure

Performance
Limit
Probability Units of Measure
Area of Yield µ
of a Defect µ

Units of Measure

Excellent
PoorProcess Process
Capability Capability
VeryHigh VeryHigh VeryLow VeryLow
Probability Probability Probability Probability
of Defects of Defects of Defects of Defects

LSL USL LSL USL

Low
LowSigma
Sigma High
HighSigma
Sigma
A metric that indicates how well a process is performing.
Higher is better
Measures the capability of the process to perform defect-
free work
Also known as “z”, it is based on standard deviation for
continuous data
For discrete data it is calculated from DPMO
Why 3.4 ppm?
Defects Rate (ppm) Table

Cp +SL 0 shift +1σshift +1.5σshift

----------------------------------------------------------------------

1.0 +3σ 2700.0 22782.0 66803.0

99.73% 97.72% 93.32%
1.33 +4σ 64.0 1350.0 6210.0
99.9936% 99.87% 99.38%
1.67 +5σ 0.6 32 233
99.99994% 99.997% 99.977%
2.0 +6σ 0.002 0.3 3.4
99.9999998% 99.9997% 99.99966%
To achieve Six-Sigma

Cp=2.0

USL-LSL=12σ

Defect parts number: 3.4 pm

 What is 6 Sigma?
A vehicle for strategic change ... an organizational
approach to performance excellence
• TRANSFORMATIONAL CHANGE
– Across-the-board: Large-scale integration of
fundamental changes throughout the organization –
processes, culture, and customers – to achieve and
sustain breakaway results
• TRANSACTIONAL CHANGE
– Business processes: Tools and methodologies
targeted at reducing variation and defects, and
dramatically improving business results
 Six Sigma methodology

Designing robust processes:

A structured methodology, DFSS (Design for Six Sigma),
assures that:
New processes have high capability (satisfy customers
and produce low defects) right from the start
New processes are designed to minimize the risk of
failure
Six Sigma methodology

Improving existing processes:

A structured methodology, DMAIC (Define, Measure,
Analyse, Improve, Control):
Uses statistical tools to locate and eliminate the root
causes of otherwise intractable problems
Focuses on removal and prevention of defects
Reduces process variability
 Six Sigma methodology

Controlling processes, so that their behavior is predictable

(within limits). Six Sigma provides:
Special tools and techniques including a framework:
For measuring and judging process variation
For detecting special causes
To providing early warning of process changes
The ability to calculate Process Sigma, an index of process
performance
 Define phase
• First phase of DMAIC methodology
• Identifies products and or processes to be
improved
• Ensures resources in place for the improved
project
• Establishes expectation of the improvement
project
• Maintains focus of breakthrough strategy on
customers requirements
Define Phase Road Map

Problem Statement

Identify customer

Identify CTQs

High level process map

 Tools commonly used in Define Phase

• Project Charter
• SIPOC
• VOC
• KANO Model
• AFFINITY DIAGRAM
 Project Selection
Impact
• Business Impact
• Revenue Growth
• Cost Reduction
• Capital Reduction
• Key Business Objectives
• On Time Delivery
• Lead Time
• Quality
• Customer Satisfaction
• Impact on Operational Excellence Metrics
 Evaluate and Rank
Suggestions
Effort and Risk
• Effort required
• People Resources
• Capital Resources
• Duration of Project
• Probability of success
• Technical Risk
• Data available
• Knowledge of process
• Management Risk
• Aligned with objectives
• Impact vs. Risk vs. Effort
• Assess ROI (Return On Investment)
• Assign priorities to projects
Evaluate and Rank
Suggestions

Example tool to rank projects

 Project Risk =
Project
Ranking Ball Size
Number
n

4 9
6

3 4
Impact

1
3
2

7 5
1 2
8

0
1 2 3 4 5
Effort
 Measure Phase
• Clearly defined process output measures
• Measurement system analysis
• Baseline of process performance
• Valid data on input and output variables
and customer CTQs
 Tools used in Measure Phase

• Data collection
• Control charts
• Frequency plots
• MSA
• Pareto
• FMEA
• Prioritisation Matrix
• Stratification
 Analyse Phase
• Prioritized list of potential sources of
variation
• P value establishing level of significance
and probability
• Statistical analysis of data, input variables
versus output variables, and sources of
variation
 Tools used in Analyse Phase
• Brainstorming
• Cause & Effect
• Control Charts
• Hypothesis Testing
• Flow Diagrams
• Design of Experiments
• Regression Analysis
• Pareto Charts
 Improve Phase
• Proposed optimum operating conditions
and solution
• A new (improved ) process performance
baseline and capability
 Tools used in improvement phase
• Brainstorming
• Creativity Techniques
• Hypothesis Testing
• Design of Experiments
• FMEA
• Flow Diagrams
• Cost / Benefit Techniques
 Control Phase
• Approved control plan encompassing
documentation required to maintain
improvements
• Documented project and process
improvements
• Statistically validated process
performance monitoring vehicle
 Tools used in control phase
• Control Charts
• Flow Diagrams
• Control plans
 Basic Implementation
Roadmap
Identify Customer Requirements

Understand and Define

Entire Value Streams
Vision (Strategic Business Plan)
Deploy Key Business Objectives
- Measure and target (metrics)
- Align and involve all employees
- Develop and motivate
Continuous Improvement (DMAIC)
Define, Measure, Analyze, Improve
Identify root causes, prioritize, eliminate waste,
make things flow and pulled by customers

Control
-Sustain Improvement
-Drive Towards Perfection
 Key Six Sigma Roles

• The Leadership Group

– Be actively involved from outset
– Develop a strategic plan
– Establish Roles and Infrastructure
– Establish supporting policies
• Job descriptions
• Reward/Compensation systems
• Career paths
 Key Six Sigma Roles

• The Leadership Group (cont’d)

– Select projects
– Prioritize projects and allocate resources
– Facilitate, guide, manage
 Key Six Sigma Roles
• The Champions
– Find appropriate projects
– Represent projects to the leadership
– Provide coaching
– Ensure allocation of resources
– Resolve issues
 Key Six Sigma Roles
• Master Back Belts
– Coach and support project leads

– Work as a change agent

– Train others in the use of six sigma tools

 Key Six Sigma Roles

• Black Belts
– Highly trained experts

– Manage project leaders

– Lead project teams

 Key Six Sigma Roles

• Green Belts
– Trained in the use of statistical tools

– Lead project teams

– Participate on project teams

 Six Sigma Summary
• Project-driven management philosophy
• Relies on fact-based decision making
(statistical tools)
• Requires top-down support
• Requires an infrastructure that can support
quality project management
• Has been shown to have markedly positive
impacts on business performance
 Project Selection
• What are the largest customer
complaints ?
• What processes are currently causing the
largest number of defects ?
• How is our product or service compared to
competition ?
• Business goals of the company
 Good six sigma project
➤ Process is supportive of key business
objectives
➤ Process is focussed on an ongoing process
➤ The process is measurable
➤ Project is linked to customer CTQ (Critical to
Satisfaction)
➤ Should have a high probability of success and
be executable in 4~6 months
 Plan Execute
• Strategic Link to Business Plan defined in Project Selection Process
• Defined Business Impact with Op Ex Champion support
Identify • Structured Brainstorming at all organizational levels
Problem • Cause and Effect Diagrams identifying critical factors
• Primary and Secondary Metrics defined and charted
• Multi-Level Pareto Charts to confirm project focus
DMAIC Methodology

• Develop a focused Problem Statement and Objective

• Develop a Process Map and/or FMEA
Practical • Develop a Current State Map
Problem • Identify the response variable(s) and how to measure them
• Analyze measurement system capability
• Assess the specification (Is one in place? Is it the right one?)

• Characterize the response, look at the raw data

• Time Observation • Spaghetti Diagram • Takt Time
• Future State Maps
Problem
• Standard Work Combination
Definition • Use Graphical Analysis, Multi-Vari, ANOVA and basic
statistical tools to identify the likely families of variability

• Identify the likely X’s

• 5S • Set Up Time Reduction (SMED)
• Material Replenishment Systems
Problem
• Level Loading / Line Leveling
Solution • Cell Design • Visual Controls
• Use Design of Experiments to find the critical few X’s
• Move the distribution; Shrink the spread; Confirm the results

• Mistake Proof the process (Poka-

Yoke) Problem
 What do you want to know?
Problem • Tolerance the process Solving
 How do you want to see what it is that you need
• Measure the final capability to know?
Control
• Place appropriate process controls on  What type of tool will generate what it is that you
need to see?
the critical X’s  What type of data is required of the selected tool?
• Document the effort and results
Execute Plan  Where can you get the required type of data?
• Standard Work • TPM
Based in part on Six Sigma Methodology developed by GE Medical Systems and Six Sigma Academy,
Crane
Inc. Co. Op. Ex. Methodology Originated by MBBs; D. Braasch, J. Davis, R. Duggins, J. O’Callaghan, R.