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01 Introduction to Six Sigma

Six Sigma Black Belt and Green Belt Day Zero 2008-06-01

Six Sigma in Brief

Concept for systematic and focused
approach for improvements

About reducing variation Builds on our previous and present

programmes

Find out the facts before acting Full time committed Black Belts Part time committed Green Belts DMAIC - the road map Strategic link for project selection

2008-06-01 SKF Group Slide 1

SKF (Group Six Sigma)

0.01 Introduction to Six Sigma

Background

2008-06-01 SKF Group Slide 2

SKF (Group Six Sigma)

0.01 Introduction to Six Sigma

Six Sigma Background Genesis of Six Sigma (1)

1979 Our Quality Stinks (Art Sundry) 1981 Motorola initiative*: 5 yr, 10% quality improvement 1987 Motorola adopts Six Sigma Quality
Every 2 year: 10x quality improvement; Goal: Six Sigma by 1992

1988 Malcolm Baldrige National Quality Award

Motorola shared its Six Sigma approach with other companies

1989 Motorola Chairman, Bob Galvin asks Mikel Harry to head the Six Sigma Research Institute Organisation
funded by a number of Fortune 500 companies

1993 Mikel Harry left Motorola and went to ABB Ltd.

Strategy changed from Quality First to Business First
* In the 1980 NBC White Paper If Japan Can, Why Cant We? Motorola Television Sets Were Cited As Produced With 120+ Defects per 100 Units.
2008-06-01 SKF Group Slide 3 SKF (Group Six Sigma) 0.01 Introduction to Six Sigma

Genesis of Six Sigma (2)

1994 AlliedSignal implemented Six Sigma
Claimed savings of $1.2 Billion by 1998

1995 Larry Bossidy, CEO of AlliedSignal, convinced General Electrics Jack Welch to try Six Sigma
Many Fortune 500 companies have begun Six Sigma initiatives Requiring / requesting that first tier suppliers adopt Six Sigma Product and service advertisements now mention Six Sigma
2008-06-01 SKF Group Slide 4 SKF (Group Six Sigma) 0.01 Introduction to Six Sigma

Air Products American Express Mr. Jack Welch, GE: Ford Motor Mr. Jack Welch, GE: Johnson Control Johnson & Johnson Six Sigma is the most J.P. Morgan Six Sigma is the most LG Group important concept we important concept we Ericsson Maytag Compaq ever adopted, and it ever adopted, and it Navistar Dow Chemical will bring 70 to 110 in NCR DuPont will bring 70 to 110 in Nokia Deere saving MUSD in saving MUSD in Philips Lockheed Martin 55years time Raytheon NEC years time Praxair PACCAR Samsung Electronics Seagate Tech. Solectron Siemens ABB Sumitomo Sony Kodak Allied Signal United Technologies Toshiba Motorola IBM DEC TI General Electric Whirlpool US Postal Service 1987 1989 1991 1993 1995 1997 1999

Ref: "Six Sigma - The Pragmatic Approach" by Magnusson, Kroslid, Bergman.

What is Six Sigma?

2008-06-01 SKF Group Slide 5

SKF (Group Six Sigma)

0.01 Introduction to Six Sigma

Its about reducing variation

Six Sigma is about:

Describing and reducing variation in all processes in all parts of the organisation Fact based driven decisions Team based projects led by Black or Green Belts Customer focused and business results driven projects - strategic link

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SKF (Group Six Sigma)

0.01 Introduction to Six Sigma

Not an add-on ... Six Sigma is not ...

an add on to the normal business activities.

Six Sigma is ...

a structured and disciplined way of solving the critical issues from a business
perspective that we haven't been able to solve with current methodology.

it is an integrated part of the improvement process.

2008-06-01 SKF Group Slide 7

SKF (Group Six Sigma)

0.01 Introduction to Six Sigma

Based on Statistics
Failure rate with Six Sigma: less than 3.4 defects per one million opportunities Out of Spec
Sigma Level PPM 2 308537 3 66807 4 6210 5 233 6 3.4

Average - 1.5 Sigma Max 3.4 ppm outside spec. LSL -6 -5 -4 -3 -2 -1

2008-06-01 SKF Group Slide 8 SKF (Group Six Sigma)

+1.5 Sigma Max 3.4 ppm outside spec. USL 0 +1 +2 +3 +4 +5 +6

0.01 Introduction to Six Sigma

Harvesting the Fruits of Six Sigma

S I X S I G M A

Cant be harvest by known methods Sophisticated systematic approach required Some systematic approach required Normal improvements

Design for Six Sigma DMAIC model FADE / QIT tools / Value Management

Day to day improvements

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SKF (Group Six Sigma)

0.01 Introduction to Six Sigma

Reaching higher levels

With Six Sigma we will reach higher goals. Six Sigma impact on our performance at different levels:

Business transformation Strategic improvement Problem solving

2008-06-01 SKF Group Slide 10 SKF (Group Six Sigma) 0.01 Introduction to Six Sigma

Six Sigma in SKF

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SKF (Group Six Sigma)

0.01 Introduction to Six Sigma

Why Introduce Six Sigma?

Six Sigma will help us become the Preferred Business Partner by increasing:
Customer Focus Operational Excellence Profitable Growth
Operational Excellence Profitable Growth Customer Focus

2008-06-01 SKF Group Slide 12

SKF (Group Six Sigma)

0.01 Introduction to Six Sigma

The SKF definition of Six Sigma

Definition: A systematic and disciplined approach to achieve excellence in all current and new processes with improved customer satisfaction and profitable growth for SKF as the main drivers.

2008-06-01 SKF Group Slide 13

SKF (Group Six Sigma)

0.01 Introduction to Six Sigma

The SKF way We need to set a new standard in the market place and Six Sigma contains the process, the tools and way of working that will help us move to that level. Tom Johnstone President and CEO

2008-06-01 SKF Group Slide 14

SKF (Group Six Sigma)

0.01 Introduction to Six Sigma

The Winning Way SKF Targets

12% 6-8% 24% 6 4

Operating Margin Growth per Annum ROCE Six Sigma Z

TM

BeyondZero

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SKF (Group Six Sigma)

0.01 Introduction to Six Sigma

What does the Six Sigma Target mean?

Black Belts / workforce Black Belt projects Profits / savings
1% by 2007 2 - 3 running per year >3 the project cost

Will help us achieve and sustain improvements in performance in all kinds of processes All Six Sigma projects must be in line with the strategic targets of the organisation

2008-06-01 SKF Group Slide 16

SKF (Group Six Sigma)

0.01 Introduction to Six Sigma

Six Sigma History in SKF

1998 MRC - the first SKF unit to deploy Six Sigma Other units followed: Chicago Rawhide (2001), Eurotrade (2002), SKF India (2003) 2003 Deployment in the entire Automotive Division 2004 The entire SKF Group

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SKF (Group Six Sigma)

0.01 Introduction to Six Sigma

Building On Our Foundation of Earlier Successes

Towards:
Operational Excellence Customer Focus Profitable Growth
SKF Six Sigma Value Leadership / mgmt Zero Defect Concept Business Process Re-Engineering TQM and Employee Involvement SKF Channel Concept SKF Quality Management System

2008-06-01 SKF Group Slide 18

SKF (Group Six Sigma)

0.01 Introduction to Six Sigma

TQM/QIT vs. Six Sigma

TQM/QIT
Open project selection process Generic projects F-A-D-E improvement cycle
focus - analyse - develop - execute

Six Sigma
Specific project selection process Projects linked to strategic goals D-M-A-I-C improvement cycle
define-measure-analyse-improve-control

Tool box Tools not mandatory QIT facilitators supporting teams

facilitator profile - part time

Tool box bigger Tools mandatory

high potentials - specified assignment, full time

Black Belts leading teams

Result oriented
Generic improvements

Result oriented Data driven

Customer satisfaction / Process improvements

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SKF (Group Six Sigma)

0.01 Introduction to Six Sigma

Six Sigma Projects

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SKF (Group Six Sigma)

0.01 Introduction to Six Sigma

Six Sigma Projects Description

Driven by customer focus and business results Fact based, data driven decisions Clearly defined and limited scope Project duration limited to 4-6 months Full time committed Black Belts Part time committed Green Belts

2008-06-01 SKF Group Slide 21

SKF (Group Six Sigma)

0.01 Introduction to Six Sigma

Phases of a Six Sigma project

Problem identified

by Line Manager, i.e. Project Sponsor

Project approved

i.e. by Steering Group

End of project
and Belt leaves project

Black/Green Belt project starts

Implementation

i.e. Line Manager responsible for results

2008-06-01 SKF Group Slide 22

SKF (Group Six Sigma)

0.01 Introduction to Six Sigma

Six Sigma projects vs. other kinds of projects

Examples of projects that are too big and too complex for Six Sigma are: a new factory acquisitions

S I X S I G M A

Improvement projects, following "DMAIC" roadmap led by Black Belts

Less complex problems and improvement projects, following DMAIC roadmap led by Green Belts

Continuous improvements, e.g. Five Whys "Five S" , QITs

2008-06-01 SKF Group Slide 23

SKF (Group Six Sigma)

0.01 Introduction to Six Sigma