Six Sigma

Business Excellence
Breakthrough

"Delivering Tomorrow's
Performance Today"
Six Sigma
Your first question is likely….
What is Six Sigma?
Your second question is likely…
Why Six Sigma?
What is Six Sigma?
a Sigma?
Six Sigma Defined
A quality discipline that focuses on
product and service excellence to
create a culture that demands
perfection (on target, every time!)

But, it is much more!

The Range of Six Sigma
Defects per Million
σ % Accurate Opportunities

1 30.85 691,500
2 69.15 308,500
3 93.32 66,800
4 99.38 6,210
5 99.977 233
6 99.9997 3.4
7 99.999998 0.020
Why Six Sigma?
• To deal with a world of declining product prices
• To compete successfully with the best
companies in the world

Need to accelerate our rate of

improvement of quality and productivity
faster than our competitors

• To establish standard language and approaches

across functions and across businesses
• To develop the next generation of leaders
Cost of Poor Quality (COPQ)
Traditional Quality Costs
Tangible
Inspection Administration /
Warranty Disposition
Scrap Concessions
Rework
Rejects

Additional Costs of Poor Quality

More Setups
Intangible
Expediting Costs
Difficult or impossible to measure
Lost Sales
Late Delivery Lost Opportunity
Lost Customer Loyalty
Excess Inventory Hidden Factory
Long Cycle Times
Engineering Change Orders

Average COPQ Approximately 15% of Sales

 49%
The “Hidden” Factory 99%
64%(3.9 σ)86%
64%
Rework Rework 89%
96% 95% 99% S 98% S 97%
Suppliers Customers
(Raw Materials)
A B C D
(Products!)
S Rework

90%
Suppliers
Redo 96% S 94% 95%
Customers
(Raw Materials) E F G
(Products!)
S Redo S
94% 90% Rework 78%
99%
64%(3.9 σ)70%
H I
54%
S
Redo
 Define the opportunity

DFSS Do products,
MAIC
process and Yes
No service
standards exist
to satisfy the

• Breakthrough
requirements?
• Improve current
Measure
differentiated process,
Measure
products &
performance designs for services
Explore
new process, products Analyze
• Hard savings (EBIT) 12-
& services month impact
No
• Breakthrough in
Develop • Improving the game!
Is Improvement
Sufficient?

avoiding cost & capital Yes

• Long-term Implement
(NPV) Improve

benefits
• Changing the game! Control

Leverage
How MAIC Six Sigma Works

Measure Execute Analyze Execute Improve Execute Control Execute

 MEASURE:
Measure

Gathering
Main activities
the right dataKeyto
Potential Tools & Techniques Deliverables

Charter
accurately
• Finalize Project assess
Project
Charter
Current
Process
a • Finalized Project
Potential
KIVs &
Charter
KOVs
Me’mt
System
Variability
Current
Process
Capability

Process
problem.
• Define Current • Prepared Project
Team
• Identify Possible • Use Excellence tool
Input/Output • Possible Key Input /
Variables Output Variables
• Determine • Data Collection
Measurement Methodology
System Variation
• Critical to Cost
• Assess Current
Capability • Current Sigma, and $
Baseline
 ANALYZE:
Analyze

Using statistical tools to

correctly identify the root
Main activities Potential Tools & Techniques Key Deliverables
• Analyze Potential Root Statistica Propose• Validated Root
“Fix the Current

causes
Root Causes
• Establish Key Input
of
Cause
a problem.
l
Analysis Analysis
for Key
Input
d Key
Variable
Input
Limits
obvious”
Causes
and
Validated

Variables • Key Input

Variables
Variables
x

• Propose Key Input

Variable Limits • Data Analysis
• Implement Obvious • Validated Key
Input Variables Input Variables
Controls
• Cost Savings
Validated
 IMPROVE:
Improve

Correcting the problem (not

the symptom).
Main activities
• Optimize key input
Potential Tools & Techniques Key Deliverables
Key Input Optimize • Improvement
Key Change Current
Variables Process Variables Management DPO/$
variables Optimize
d
Design (KIVs)
KIVs)
Input
Strategy
Impacts Validated
Limits Set
• Optimize process • Change
design
Management
• Set key input Strategy
variable limits
• Improved Defects
• Establish change per opportunity and
strategy
Cost Savings
Validated
• News Validated
 CONTROL:
Control

Putting a plan in place to

Main activities Potential Tools & Techniques Key Deliverables
• Implement make
control sure that problems
Controlling the
Improved Process
Control
System •Process Control
Lessons Final $
Learned Validated
plan Audit
System
and VS Goal

STAY fixed once and for

• Monitor control
Leveraged $

•Case Study,
x

system
all….
• Document lessons Lessons
learned Learned

SUSTAIN THE GAINS!

 At Dow Six Sigma is
more
than a quality Program
- and more than just
dollars
®