6 sigma

1. SIXSIGMA
An IntroductionAn Introduction
LSSU - IABLSSU - IAB
30 January 200230 January 2002
creating value for our customers
creating value for our customers

2. SIXSIGMA
What is it?What is it?
creating value for our customers

3. SIXSIGMA
““Six Sigma”Six Sigma”: What is it?: What is it?
““A comprehensive and flexible system forA comprehensive and flexible system for
achieving, sustaining and maximizing businessachieving, sustaining and maximizing business
success. Six Sigma is uniquely driven by closesuccess. Six Sigma is uniquely driven by close
understanding of customer needs, disciplined useunderstanding of customer needs, disciplined use
of facts, data and statistical analysis, and diligentof facts, data and statistical analysis, and diligent
attention to managing, improving and reinventingattention to managing, improving and reinventing
business processes.”business processes.”
-- The Six Sigma Way, by Pande, Newman and Cavanaugh
creating value for our customers

4. SIXSIGMA
Six SigmaSix 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

5. SIXSIGMA
• AA cultureculture that rapidly drives our key activities* tothat 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 SigmaSix Sigma: What is it?: What is it?
creating value for our customers

6. 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?
σ

7. SIXSIGMA
Cure Time of Silicone Sealant
NumberofSamples
Lower Specification Limit
(LSL)
Upper Specification Limit
(USL)

8. SIXSIGMA
Upper Specification Limit
(USL)
Lower Specification Limit
(LSL)
x
x
Lower Specification Limit
(LSL)
Upper Specification Limit
(USL)

9. SIXSIGMA
Upper Specification Limit
(USL)
Lower Specification Limit
(LSL)
x

10. 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!

11. SIXSIGMA
Putting Six Sigma in Perspective!Putting Six Sigma in Perspective!
• 20,000 lost articles of mail20,000 lost articles of mail every hour.every hour.
• Power outages seven hoursPower outages seven hours each month.each month. ..
• 5,000 incorrect surgical procedures5,000 incorrect surgical procedures each weekeach week
for a major healthcare provider.for a major healthcare provider.
• Unsafe drinking water nine minutesUnsafe drinking water nine minutes every day.every day.
• Two long / short airport landingsTwo long / short airport landings every dayevery day..
FourFour SigmaSigma quality (quality (6210 DPMO)6210 DPMO) means…means…
99.370% right…but…..99.370% right…but…..
creating value for our customers

12. SIXSIGMA
Putting Six Sigma in Perspective!Putting Six Sigma in Perspective!
• Airline passenger safety ~ 8.2Airline passenger safety ~ 8.2 σσ
– Currently at 2.6 DPMO (incidents per millionCurrently at 2.6 DPMO (incidents per million
takeoffs and landings).takeoffs and landings).
• Airline baggage handling ~ 3Airline baggage handling ~ 3 σ.σ.
SixSix SigmaSigma quality (quality (< 3.4 DPMO).< 3.4 DPMO).
creating value for our customers

13. SIXSIGMA
Impact of Six SigmaImpact 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

14. SIXSIGMA
• 1987 Motorola introduced Quality Program now known as1987 Motorola introduced Quality Program now known as
Six SigmaSix Sigma..
• Allied Signal picked it up.Allied Signal picked it up.
• G.E. Success….G.E. Success….
– Capital ServicesCapital Services
– Medical Systems (CAT Scan)Medical Systems (CAT Scan)
• Dozens of others…...Dozens of others…...
– Learned the hLearned the highestighest qqualityuality pproducer is also theroducer is also the llowestowest ccostost
pproducer.roducer.
– Learned customer loyaltyLearned customer loyalty of a Six Sigma company isof a Six Sigma company is ~3X~3X thatthat
of theof the averageaverage companycompany..
It all began at…..Motorola…not G.E.It all began at…..Motorola…not G.E.
creating value for our customers

15. SIXSIGMA
Who else is doing Six Sigma?Who else is doing Six Sigma?
• Avery DennisonAvery Dennison
• DowDow
• DuPontDuPont
• FoxboroFoxboro
• SonySony
• Deere & Co.Deere & Co.
(John Deere)(John Deere)
• DelphiDelphi
• Allied SignalAllied Signal
• FordFord
• Johnson & JohnsonJohnson & Johnson
• CaterpillarCaterpillar
• Lockheed MartinLockheed Martin
• IBMIBM
• CitiGroupCitiGroup
(Visa/MasterCard)(Visa/MasterCard)
• GG..EE..
• J.P. MorganJ.P. Morgan
• ServiceMasterServiceMaster
creating value for our customers

16. 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
Controls
X4, X5, X6…
X1
X2
X3
Output Y
Critical to
Customer
Six Sigma

17. SIXSIGMA
What is the “Methodology”?What is the “Methodology”?
DDefineefine
MMeasureeasure
AAnalyzenalyze
IImprovemprove
CControlontrol
D M A I C
creating value for our customers

18. SIXSIGMA
• What are the “The Tools”?What are the “The Tools”?
Six Sigma is aSix Sigma is a disciplinediscipline using these tools:using these tools:
– 7 Tools of Quality7 Tools of Quality
– Advanced analysis tools (Design of Experiment,Advanced analysis tools (Design of Experiment,
Linear Regression, etc.)Linear Regression, etc.)
– Re-engineeringRe-engineering
– Lean manufacturingLean manufacturing
– Supply chain improvementsSupply 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

19. SIXSIGMA
Who are the other “Key Players”?Who are the other “Key Players”?
• Senior ChampionSenior Champion – Owns Six Sigma for the Business.– Owns Six Sigma for the Business.
• ChampionChampion – Identifies– Identifies and resourcesand resources projectprojects.s.
• MasterMaster BBlacklack BBeltelt – Serves as coach– Serves as coach to the Black Beltto the Black Belt
and project team.and project team.
• BlackBlack BBeltelt – Leads the project team, full time– Leads the project team, full time..
• GreenGreen BBeltselts – Team members (part-time) from the– Team members (part-time) from the
organization sponsoring the projectorganization sponsoring the project
• Project SponsorsProject Sponsors – Team leaders.– Team leaders.
• Process OwnersProcess Owners – Owns the process / workflow.– Owns the process / workflow.
• Executive Six Sigma Steering CommitteeExecutive 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

20. 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, andStrong 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 - is aSix Sigma - is a disciplinediscipline not an “add on” or “program”.not an “add on” or “program”.
-- NOTNOT a supply chain/manufacturing activity.a supply chain/manufacturing activity.
-- No new toolsNo new tools….new ways to apply them!….new ways to apply them!
• GoalsGoals
– 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 = GrowthCustomer success and satisfaction + Profitability = Growth
creating value for our customers

21. SIXSIGMAcreating 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.

22. SIXSIGMAcreating value for our customers
References……
Also...you might consider:
•www.6-sigma.com
•www.sixsigma.co.uk
•www.sixsigmasystems.com
•www.isixsigma.com