6 Sigma

6 SIGMA 1

How Six Sigma is Different?

Six Sigma breakthrough is a

business initiative, rather than quality initiative 2

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Six Sigma Definition - What Is Six Sigma ?

Six sigma is a set of methodologies used by businesses to achieve extremely low failure rates in any process. Six Sigma stands for Six Standard Deviations (Sigma is the Greek letter used to represent standard deviation in statistics) from mean. Six Sigma methodology provides the techniques and tools to improve the capability and reduce the defects in any process.

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Data for Ketchup Content in grams 497 493 497 517 486 474 507 501 522 504

487 483 496 484 492 514 503 508 514 506

502 482 513 505 485 487 491 509 513 502

513 490 499 509 496 493 498 494 501 490

512 492 498 519 500 508 501 491 500 512

517 479 495 499 500 505 506 511 505 497

478 494 520 495 497 509 501 488 500 492

498 496 509 507 522 506 491 484 489 492

511 501 524 496 483 486 519 507 482 496

489 496 493 508 493 489 505 506 508 495

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525

520

515

510

505

500

495

490

485

480

475

470

Frequency

Pattern of Population (Data) 20

15

10

5

0

7

Location of Process Location of process

Spread of process 8

A Two Sigma Process LSL

If σ = 2

USL

Target

12

3

4 5

6 7

2σ

8 9 10 11 12 13 14 15 16

2σ 9

A Three Sigma Process

Ifσ = 2

LSL

USL

Target

12

3

4 5

6 7

3σ

8 9 10 11 12 13 14 15 16

3σ 10

A Four Sigma Process LSL

IFσ = 1.5

Target

12

3

USL

4 5

6 7

4σ

8 9 10 11 12 13 14 15 16

4σ 11

A Five Sigma Process LSL

USL

If σ = 1.2

Target

12

3

4 5

6 7

5σ

8 9 10 11 12 13 14 15 16

5σ 12

A Six Sigma Process LSL

USL

σ=1

Target

12

3

4 5

6 7

6σ

8 9 10 11 12 13 14 15 16

6σ 13

Sigma Processes at A Glance LSL

6σ

5σ

USL

4σ 3σ

1 2

3 4 5

6 7 8 9 10 11 12 13 14 15 16

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Defect A

failure to meet customer / performance standard A

leaky gear box

A

horn failure

A

lost reservation at hotel

A

statement error 16

Defective



Any unit which has one or

more defects is defective

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Defect Opportunities



Most products and services have multiple customer requirements and therefore there can be several chances or opportunities for a defect. 18

Defects per Opportunities # of defects DPO = (# of Units) × (# of opportunities) Example - # of defects = 59 - # of units = 330 - # of opportunities = 7

59 DPO = = 0.025 330 × 7

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Defects per Million Opportunities, DPMO DPMO

= DPU × 10

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(# of defects) × 10 DPMO = (# of Units) × (# of opportunities) 6

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2 σ process LSL

-6σ -5σ -4σ -3σ -2σ -1σ

USL

µ

1σ

2σ

3σ

4σ

5σ 6σ

% with in specification = 95.45 DPMO without shift = 45400 21

3 σ process LSL

-6σ -5σ -4σ -3σ -2σ -1σ

USL

µ

1σ

2σ

3σ

4σ

5σ 6σ

% with in specification = 99.73 DPMO without shift = 2700 22

4 σ process LSL

-6σ -5σ -4σ -3σ -2σ -1σ

USL

µ

1σ

2σ

3σ

4σ

5σ 6σ

% with in specification = 99.9937 DPMO without shift = 63 23

6 σ process USL

LSL

-6σ

-5σ -4σ -3σ -2σ -1σ

µ

1σ

2σ

3σ

4σ

5σ 6σ

% within specification = 99.9999998 DPMO without shift = 0.002 24

A Practical Situation Keeping process at the target all the time is impossible A shift of 1.5σ is widely agreeable

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6 σ process 1.5σ 1.5σ USL

LSL

-6σ -5σ -4σ -3σ -2σ -1σ

µ

1σ

2σ

3σ

4σ

5σ 6σ

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Conformance and Non Conformance with Shift Sigma level

% within Defective PPM specification limit

1

30.23

697700

2

69.15

308500

3

93.23

66810

4

99.379

6210

5

99.9767

233

6

99.99966

3.4 27

Level of Competition Sigma DPMO 6 5 4 3 2 1

3.4 233 6,210 66,807 308,537 690,000

Cost of poor Competitive quality level (% of sales) <10 World class 10 – 15 15 – 20 Industry average 20 – 30 30 – 40 Non competitive > 40 28

3σ VS 6σ Supplier – Performance Gap Event Wrong drug prescription Unsafe drinking water Incorrect surgical operation

3-Sigma 54,000/year

6-Sigma 1 in 25 years

1 sec in 25 2 hours/month years 1,350 / week

54,000 per Lost article in post hour

1 in 20 years 35 in a year 29

Still Another Way to Describe Six Sigma

A

comprehensive and flexible

system for achieving, sustaining and maximizing business success. 30

Hidden Truth 

Six Sigma approach extracts 

Technical excellence



Creativity



Collaboration



Communication



Dedication

from people in the organisation

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The Six Sigma Breakthrough Strategy Define Measure Analyse Improve Control 32

Benefits of Six Sigma  Sets

performance goals for every one

uses

common business frame work

ensures

consistency for meeting

customer requirements.

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Benefits of Six Sigma 

Accelerates the rate of improvement

100 times improvement in four years at Motorola.

It helps companies not only to improve performance, but

improve the improvement 34

Benefits of Six Sigma #5 

Promotes Learning and Cross Pollination Accelerates development and sharing of new ideas throughout the organisation. Six Sigma is data based and therefore applicable to any functional area.

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Key Elements of Six Sigma Process Improvement. Customer requirements, Design quality, metrics and measures, Employee involvement Continuous improvement

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The three key elements of Six Sigma are: Customer Satisfaction Defining Processes and defining Metrics and Measures for Processes •Using and understanding Data and Systems •Setting Goals for Improvement Team Building and Involving Employees Involving all employees is very important to Six Sigma. The company must involve all employees. Company must provide opportunities and incentives for employees to focus their talents and ability to satisfy customers. Defining Roles: This is important to six sigma. All team members should have a well defined role with measurable objectives. 37

It was started in Motorola, in its manufacturing division, where millions of parts are made using the same process repeatedly. Eventually Six Sigma evolved and applied to other non manufacturing processes. Today you can apply Six Sigma to many fields such as Services, Medical and Insurance Procedures, Call Centers. Six Sigma methodology improves any existing business process by constantly reviewing and retuning the process. 38

To achieve this, Six Sigma uses a methodology known as DMAIC (Define opportunities, Measure performance, Analyze opportunity, Improve performance, Control performance). Six Sigma methodology can also be used to create a brand new business process from ground up using DFSS (Design For Six Sigma) principles. Six Sigma Strives for perfection. It allows for only 3.4 defects per million opportunities for each product or service transaction. Six Sigma relies heavily on statistical techniques to reduce defects and measure quality. 39

Six Sigma experts (Green Belts and Black Belts) evaluate a business process and determine ways to improve upon the existing process. Six Sigma experts can also design a brand new business process using DFSS (Design For Six Sigma) principles. Typically its easier to define a new process with DFSS principles than refining an existing process to reduce the defects. 40

Six Sigma incorporates the basic principles and techniques used in Business, Statistics, and Engineering. These three form the core elements of Six Sigma. Six Sigma improves the process performance, decreases variation and maintains consistent quality of the process output. This leads to defect reduction and improvement in profits, product quality and customer satisfaction. 41

In theory, a six sigma would be approximately two failures per billion attempts. In practice, due to a drift of plus or minus 1.5, six sigma status means less than 3.4 failures per million. This is an extremely low rate of failure, but has been proven possible in industry after industry over the past twenty years. 42

Bob Galvin of Motorola was a trailblazer in the adoption of six sigma by Motorola and other companies. His insistence on high levels of quality control, and subsequent vindication as Motorola achieved these levels, led to the spread of the six sigma system throughout the manufacturing world. The tenets of six sigma have since been successfully applied in many other areas of business, including customer service, transactional businesses, and the service industries. 43

The term failure is defined within each industry and product line, and simply means a defect that customers consider critical. Six sigma attempts to reduce these defects to a level below 3.4 failures per million. There are two main methodologies in six sigma. The first is the DMAIC process: define, measure, analyze, improve, control. 44

The second is the DMADV process: define, measure, analyze, design, verify. DMAIC is used for processes already in place which do not meet six sigma specifications, to help bring them within the six sigma threshold. DMADV is used for the development of new products or processes, to ensure that they meet the world at six sigma levels of quality. 45

There are three main certification levels of six sigma mastery: six sigma green belts, black belts, and master black belts. To achieve each ranking, one must undergo extensive training in six sigma techniques and methodologies, then pass a certification test. According to some research, six sigma black belts save companies an average of US$200,000 to US$300,000 per project and are able to complete up to six projects per year. 46

General Electric is the poster-child of the six sigma movement, with estimated savings of over US$10 billion within the first five years of implementation since 1995. Their dedication towards reducing variation on each and every transaction since implementation has led not only to increased profits, but also to an improved public image and customer relations. Six sigma values are straight-forward and incredibly useful for businesses of all sizes. By focusing relentlessly on quality and the reduction in variations of product consistency, six sigma promises a better business overall.

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Six Sigma methodology is also used in many Business Process Management initiatives these days. These Business Process Management initiatives are not necessarily related to manufacturing. Many of the BPM's that use Six Sigma in today's world include call centers, customer support, supply chain management and project management. 48

Six Sigma Leader Roles for DMAIC nEstablish

project selection

criteria nApprove

projects – ensure linkage to strategy and key needs nSelect

Project Champions

nProvide

needed resources and

training nReview

Black Belt and Green Belt projects monthly

Establish and use communication process nReview

the entire process every 3-6 months nEstablish

reward and recognition structure nLink

rewards to performance

nBe

accountable for the success of the effort 49