Introduction to Six Sigma & DMAIC

Dr. Douglas C. Montgomery

Six Sigma is the Latest Approach in the Ongoing
Development of Strategies for Business Improvement
• Use of analytical tools has grown steadily for over 80 years
• Statistical quality control (origins in 1920s, explosive growth during WW II, 1950s)
• Operations research/Industrial Engineering – “the science of better” (1940s)
• Value engineering, zero defects (1950s)
• FDA, EPA (1970’s)
• TQM (Total Quality Management) movement -1980’s
• Reengineering of business processes (late 1980’s)
• Six-Sigma (origins at Motorola in 1987, expanded impact during 1990s to present)
Focus of Six Sigma is on Process Improvement with an
Emphasis on Achieving Significant Business Impact
• A process is an organized sequence of activities that produces an
output that adds value to the organization
• All work is performed in (interconnected) processes
o Easy to see in some situations (manufacturing)
o Harder in others

• Any process can be improved

• An organized approach to improvement is necessary
• The process focus is essential to six sigma
From Montgomery, D. C. (2020), Introduction to Statistical Quality Control 8th edition, Wiley, New York
 {
Process Inputs
• Email, fax, phone, postal service

Customer •

•
Completeness of customer order

Accuracy of customer order

Order Controllable Process Variables

• Customer service rep training
Process • Inventory level

• Shipping method

• Promise ate
 {
Uncontrollable Process Variables
• Customer service rep attitude, shift,

Customer
team

• Day of week, season of year

Order • Customer required date

Process Outputs
Process
(Cont.)
• Order correctness

• Delivery time
• Package quality
Additional information here

Process Variation
• Variation is present in all processes and every aspect of the workplace
• Excess variation reduces process performance, decreases customer
satisfaction, and has a negative impact on the bottom line
• Applies to all aspects of a business
• Statistical methods, an integral component of six sigma, are useful in
shifting the process target to the desired level and reducing the
variation around this target
Variation is everywhere!
• Meeting delivery schedule and delivery • Forecasting accuracy & timing
accuracy
• Improving audit process
• Reducing average and variability in
days outstanding of accounts receivable • Closing books, accuracy of journal entry
& posting (3-4% error rate typical)
• Optimizing payment of outstanding
accounts • Reducing variability in cash flow

• Minimizing costs of public accountants, • Payroll accuracy

legal services, other consultants
• Purchase order accuracy and rework
• Inventory management
(finished goods, WIP)
How Variation Hurts…

From Montgomery, D. C. (2020), Introduction to Statistical Quality Control 8th

edition, Wiley, New York
 Additional information here

The original six sigma

concept (Motorola)

Has direct application

to manufacturing

Good conceptual
model
Quality Improvement
Traditional definitions of quality
Quality of design
Quality of conformance

Quality is inversely proportional to variability

Quality is inversely proportional to the amount

of “waste” in a system
Dimensions of Quality

• Performance • Aesthetics
• Reliability • Features
• Durability • Perceived quality
• Serviceability • Conformance to standards
Additional information here

Quality Terminology
• Quality characteristics (CTQs)
• Specifications
o Nominal or target value
o Upper and lower specification limits
• Natural tolerance limits
• Variables versus attribute data
• Nonconforming product
• Defects (nonconformities)
Additional information here

Why “Quality Improvement” is Important:

A Simple Example
A visit to a fast-food store: Hamburger (bun, meat, special sauce, cheese, pickle, onion,
lettuce, tomato), fries, drink

Product has 10 components - is 99% good okay?

P{Single meal good} = (0.99)10 = 0.9044

Family of four, once a month: P{All meals good} = (0.9044)4 = 0.6690
P{All visits during the year good} = (0.6690)12 = 0.0080
P{single meal good} = (0.999)10 = 0.9900, P{Monthly visit good} = (0.99)4 = 0.9607
P{All visits in the year good} = (0.9607)12 = 0.6186
The History of Six Sigma
• Three “generations” so far:
o Generation I – focus on defect elimination (Motorola, 1987-
1993)

o Generation II – focus on cost reduction (GE, Allied

Signal/Honeywell, 1994-1999)

o Generation III – focus on value creation (Dupont, 2000-present)

• What’s next?
“…I believe that our people and world-class six sigma deployment distinguish
Caterpillar from the crowd. What an incredible success story six sigma has been
for Caterpillar! It is the way we do business – how we manage quality, eliminate
waste, reduce costs, create new products and services, develop future leaders,
and help the company grow profitably. We continue to find new ways to apply the
methodology to tackle business challenges. Our leadership team is committed to
encoding six sigma into Caterpillar’s “DNA” and extending its deployment to our
dealers and suppliers – more than 500 of whom have already embraced the six
sigma way of doing business.”

Jim Owens, Chairman, Caterpillar

27 January 2005
Six Sigma Focus
• Initially in manufacturing • DFSS – Design for Six Sigma

• Commercial applications o Only so much improvement can be

wrung out of an existing system
o Banking
o New process design
o Finance
o New product design (engineering)
o Public sector
• Link businesses, suppliers
o Services
together– logistics & supply chain
management
Six-Sigma
• Specialized roles for people

• Top-down driven (Champions from each business)

• BBs and MBBs have responsibility (project definition, leadership, training/mentoring, team facilitation)

Involves a five step process (DMAIC) :

o Define

o Measure

o Analyze

o Improve

o Control
 Structure of a
Leadership Team
typical six sigma
organization
Champion,
MBBs project
sponsors

GBs
HR, IT, Legal, Logistics,
Finance, MFG, Engineering

Functional business BBs + team

groups members
 The DMAIC problem solving process

1.0 2.0 3.0 4.0 5.0

Define Measure Analyze Improve Control
Opportunities Performance Opportunity Performance Performance

Objectives Objectives Objectives Objectives Objectives

• Identify and/or • Determine what to • Analyze data to • Develop and • Develop
validate the measure understand reasons quantify ongoing process
business • Manage for variation and potential management
improvement measurement data identify potential root solutions plans.
opportunity collection causes • Evaluate and • Monitor and
• Define critical • Develop and • Formulate, select final control critical
customer validate investigate, and solution process
requirements measurement verify root cause • Verify and gain characteristics
• Document (Map) systems hypotheses. approval for • Develop out of
processes • Determine sigma final solution control action
• Build effective performance plans
Teams
Tollgates exist between each step
Additional information here

What makes it work?

• Successful implementations characterized by:
o Committed leadership
o Use of top talent
o Supporting infrastructure
• Formal project selection process
• Formal project review process
• Dedicated resources
• Financial system integration
The Process Improvement Triad: DFSS, Lean, and DMAIC
OVERALL PROGRAMS
DFSS Lean DMAIC
DESIGN ELIMINATE ELIMINATE
PREDICTIVE WASTE, DEFECTS,
QUALITY INTO IMPROVE REDUCE
PRODUCTS CYCLE TIME VARIABILITY
Robust Lead-time Capable

Design for Six Sigma LEAN Variation Reduction

• Requirements allocation • Flow Mapping • Predictability
• Capability assessment • Waste Elimination • Feasibility
• Robust Design • Cycle Time • Efficiency
• Predictable Product Quality • WIP Reduction • Capability
• Operations and Design
• Accuracy

The “I” in DMAIC may become DFSS

DFSS Matches Customer Needs with Capability
• Mean and variability affects product performance and cost
o Designers can predict costs and yields in the design phase
• Consider mean and variability in the design phase
o Establish top level mean, variability and failure rate targets for
a design
o Rationally allocate mean, variability, and failure rate targets to subsystem
and component levels
o Match requirements against process capability and identify gaps
o Close gaps to optimize a producible design
o Identify variability drivers and optimize designs or make designs robust to
variability
• Process capability impact design decisions
DFSS enhances product design methods.
 Contact Information
Dr. Douglas Montgomery,
Regents’ Professor of Industrial Engineering
doug.montgomery@asu.edu