Principles of Six Sigma

A Strategy for Achieving World Class Performance

Dr. John V. Padua

CONTENTS/Objectives

Students are expected and understand the ff:

Introduction

Understanding Six Sigma

Background and growth of Six sigma

Methodology

Key role of six sigma

What makes it different

Benefits

Certificate of Six Sigma

A highly disciplined process that helps us focus on developing and delivering near-perfect products and services.

A term used in statistics to represent standard deviation, an indicator of the degree of variation in a set of a process

The central idea behind Six Sigma is that if you can measure how many “defects” you have in a process, you can systematically figure out how to eliminate them and get as close to “zero defects” as possible.

4

DEFINITIONS

Business Definition

A break through strategy to significantly improve customer

satisfaction and shareholder value by reducing variability

in every aspect of business.

Technical Definition

A statistical term signifying 3.4 defects per million

opportunities.

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Understanding Six Sigma

Degree of variation; Sigma is a letter in the Greek Alphabet Level of performance in terms of defects Statistical measurement of process capability Benchmark for comparison Process improvement methodology It is a Goal Strategy for change; A commitment to customers to achieve an

acceptable level of performance

sigma Defect rate ppm

Cost of poor quality (%of sales)

Competitive level

six 3.4 > 10% World class

five 233 10-15% World class

four 6210 15-20% Industry average

three 66807 20-30% Industry average

two 308537 30-40% Non - competitive

one 690000 < 40% Non - competitive

ORIGIN OF SIX SIGMA

Motorola company that invented Six Sigma.

The term “Six Sigma” was coined by Bill Smith, an engineer

with Motorola

Late 1970s - Motorola started experimenting with problem

solving through statistical analysis

1987 - Motorola officially launched it’s Six Sigma program

Motorola saved more than $ 15 billion in the first 10 years

of its Six Sigma effort

The Growth Of Six SIGMA

The company that perfected Six Sigma

Jack Welch launched Six Sigma at GE in Jan,1996

At GE, Six Sigma added more than $ 2 billion to the

bottom line in 1999 alone.

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Six Sigma Methodology

DMADVDMAIC

Lean Six Sigma Methodology

DMAIC

Six Sigma Project Methodology

ControlDefine Measure Analyze Improve

Establish

standards to

maintain

process;

Design the

controls,

implement

and monitor.

Evaluate

financial

impact of the

project

Identify,

evaluate

and select

projects for

improveme

nt

Set goals

Form

teams.

Collect data

on size of the

selected

problem,

identify key

customer

requirements

,

Determine

key product

and process

characteristi

c.

Analyze

data,

establish

and confirm

the “

vital few “

determinant

s of the

performanc

e.

Validate

hypothesis

Improvem

ent

strategy

Develop

ideas to

remove

root causes

Design and

carry out

experiment

s,

Optimize

the

process.

DMADValso known as DFSS ("Design

For Six Sigma")

Define Phase: design goals that are consistent with customer demands

and the enterprise strategy.

Measure Phase: Identify and measure CTQs (characteristics that

are critical to quality), product capabilities, production process

capability, and risks.

Analyze Phase: Analyze, develop and design alternatives, create a high-level design and evaluate design

capability to select the best design.

Design Phase: Design the details, optimize the design, and plan for

design verification. This phase may require simulations

Verify Phase: Verify the design, set up pilot runs, implement the

production process and hand it over to the process owners.

DMAIC V/S DMADV

• DMAIC is used for projects aimed at improving an existing business process.

• DMADV is used for projects aimed at creating new product or process designs.

Master black Belt

Black Belts

Green Belts

Yellow belt

White belt

Team members

Key Roles for Six Sigma

Master Black Belts, act as in-house

coaches on Six Sigma. They devote

100% of their time to Six Sigma. They

guide Black Belts and Green Belts.

Apart from statistical tasks, their

time is spent on ensuring consistent

application of Six Sigma across

various functions and departments.

Master Black Belt

Master black belt should have

• Two-plus years of Black Belt experience

• Five-plus years of business experience

• Mastery of the tools of Six Sigma process improvement (DMAIC),

• Completion of at least five Black Belt projects with significant business results

• Experience in managing cross-functional projects, strong ability to lead others without direct authority

• Strong change management skills

• Experience in delivering Black Belt and Green Belt training

• Ten or more Black Belts or Green Belts coached to successful project completion and certification

• Excellent written and verbal communication and presentation skills

Black Belts operate under Master

Black Belts to apply Six Sigma

methodology to specific projects.

They devote 100% of their time to Six

Sigma. They primarily focus on Six

Sigma project execution, whereas

Champions and Master Black Belts

focus on identifying

projects/functions for Six Sigma

Black Belts

Black belt should have

• He should have experience of 1-2 yr and carried out 4-8 projects

• He must be expert in problem solving, data collection and analysis.

• He must be organizational savvy.

• He must focus on leadership and understanding of administrative system and processes.

Green Belts

• Green Belts are the employees who take up Six Sigma implementation along with their other job responsibilities, operating under the guidance of Black Belts.

Green belt should have

• Operates in support of or under the supervision of a

Six Sigma of Black Belt.

• Analyses and solves quality problems.

• Involved in quality improvement projects.

• Participated in a project, but has not led a project.

• Has at least three years of work experience.

• Has ability to demonstrate their knowledge of Six

Sigma tools and processes.

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Who are Implementing Six Sigma

Financial - Bank of America, GE Capital,

Electronics - Allied Signal, Samsung, Sony

Chemicals - DuPont, Dow Chemicals

Manufacturing - GE Plastics, Johnson and Johnson,Motorola, Nokia, Microsoft, Ford.

Airline - Singapore, Lufthansa, Bombardier

And hundreds of others in Americas, Europe, SubContinent

Company Annual Savings

General Electric $2.0+ billion

JP Morgan Chase *$1.5 billion (*since

inception in 1998)

Motorola $ 16 billion (*since

inception in 1980s)

Johnson & Johnson $500 million

Honeywell $600 million

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Six Sigma Results

•Six Sigma Savings as % of revenue vary from 1.2 to 4.5 %

•For $ 30 million/yr sales – Savings potential $ 360,000 to $ 1.35 million.

•Investment: salary of in house experts, training, process redesign.

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What Makes Six Sigma Different?

VersatileBreakthrough improvementsFinancial results focusProcess focusStructured & disciplined problem solving methodology using scientific tools and techniques.Customer centeredInvolvement of leadership is mandatory.

Training is mandatory

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Benefits of Six Sigma

Generates sustained success

Sets performance goal for everyone

Enhances value for customers;

Accelerates rate of improvement

Executes strategic change

Six Sigma certification given to organistion by:-

1. Institute of Industrial Engineer.

2. American Society for Quality.

Six Sigma certification given to Individual by:-

1. ISO 2000(international standard organisation)

2. COPC (customer operation performance center)

3. CMMI (capability maturity model integration)

4. ISL( institution of sigma learning)

Six Sigma Certification