six sigma
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66Six Sigma
Presented By:- Amit Kumar DMS Pondicherry University
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What is six sigma?
•Sigma is a measure of “goodness: the capability of a process to produce perfect work.
• Sigma indicates how often defects are likely to occur.
• The higher the sigma level, the lower the defect rate.
• The lower the defect rate, the higher the quality.
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Sigma Conversion Table:
If your yield is: Your DPMO is: Your Sigma is:
30.9% 690,000 1.0
62.9% 308,000 2.0
93.3 66,800 3.0
99.4 6,210 4.0
99.98 320 5.0
99.9997 3.4 6.0
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The Six Sigma Evolutionary Timeline
1986: Bill Smith, a senior engineer and scientist introduces the concept of Six Sigma at Motorola
1994: Larry Bossidy launches Six Sigma at Allied Signal.
1995: Jack Welch launches Six Sigma at GE.
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THE GROWTH OF SIX SIGMA
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in General Electric
Imagination at Work
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The General Electric Company (GE) is a multinational American technology and services conglomerate incorporated in the state of New York.
General Overview
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Group Companies of GE
Radio Corporation of America (RCA)
• The Electric Bond and Share Co
• GE Commercial Finance
• GE Consumer Finance
• GE Infrastructure• GE Money• GE Security• GE IndustrialGE Healthcare
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• Welch’s Corporate Model:– High Discipline– High Efficiency– Cut costs whenever possible
• Per Annum organic growth rate:– Only 4%
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• Implementation of lean Six Sigma methodology for manufacturing and service processes
• Originally established in U.S. by Motorola• Goal: meet or exceed level of 3.4 defects per million
operations within any process
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“the most important initiative GE has ever undertaken”.Jack Welch
Chief Executive OfficerGeneral Electric
• In 1995 GE mandated each employee to work towards achieving 6 sigma• The average process at GE was 3 sigma in 1995• In 1997 the average reached 3.5 sigma • GE’s goal was to reach 6 sigma by 2001• Investments in 6 sigma training and projects reached 45MUS$ in 1998, profits increased by 1.2BUS$
General Electric
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1995 Operating margin—13.5%
1998 Operating margin—16.7%
Result: $600million bonus
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Company Annual SavingsGeneral Electric $2.0+ billionJP Morgan Chase *$1.5 billion (*since
inception in 1998)Motorola $ 16 billion (*since
inception in 1980s)Johnson & Johnson
$500 million
Honeywell $600 million
Six Sigma Results
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66Thanks