Six Sigma

What is Six Sigma?

• Six Sigma is a statistical measure of quality:
− Based on rigorous process based performance measures
measures.
• A process for continual improvement:
− Six Sigma is a generic, structured methodology for continual
improvement (can be used to improve any process in any
Six Sigma business).
• An enabler of cultural change:
− Six Sigma changes the way organizations work and the way they
think.
• A disciplined process focused on delivering near perfect
products and services.

What is Six Sigma? Six Sigma Companies

• As a metric • At least 25% of the Fortune 200 companies claim to have a
− equates to 3.4 defects per million opportunities (DPMO). serious six sigma program.
− started as a defect reduction effort in manufacturing. • Manufacturing
− Motorola, GE Plastics, Nokia, Microsoft, Ford, Johnson & Johnson
• As a methodology
• Electronics
− DMAIC (Define opportunity, Measure performance, Analyze opportunity,
− Allied Signal, Samsung, Sony
Improve performance and Control performance )
• Chemicals
− DFSS (Design for Six Sigma) /DMADV (Define – Measure – Analyze –
− Dupont,
p , Dow Chemicals
Design – Verify)
• Airline
• As a management system − Singapore, Lufthansa, Bombardier
− Align business strategy to critical improvement efforts • Financial
− Mobilize teams to attack high impact projects − Bank of America, GE Capital,
− Accelerate improved business results • and hundreds of others world wide.
− Govern efforts to ensure improvements are sustained

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Six Sigma Results Six Sigma as a Metric

Sigma Short-term Long-term Long-term Defect rate
Company Annual Savings level Cpk sigma level Cpk % DPMO O
1 0.33 -0.5 -0.17 69.15% 691462
Motorola $16 billion (since inception in 2 0.67 0.5 0.17 30.85% 308538
1980s) 3 1.00 1.5 0.50 6.68% 66807
General Electric $2.0+ billion 4 1.33 2.5 0.83 0.62% 6210
5 1.67 3.5 1.17 0.02% 233
JP Morgan Chase $1.5 billion (since inception in 6 2.00 4.5 1.50 0.00034% 3.4
1998)) 7 2.33
33 5.5
5 5 1.83
83 0.000002%
0 00000 % 0 0.02
0
Johnson & Johnson $500 million
Honeywell $600 million

Six Sigma savings as % of revenue vary from 1.2 to 4.5 %

Short-term and Long-term Six Sigma Capability Defect Rates vs Sigma Level
LSL Short term
Short-term
USL

Cm=2 Cpk=1.5

-6σ -5σ -4σ -3σ -2σ -1σ µ 1σ 2σ 3σ 4σ 5σ 6σ

Long-term
Shift=1.5σ 4.5σ

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Key Concepts of Six Sigma

Six Sigma Improvement Path
• Critical to Quality:
y Attributes most important
p to the
customer
• Defect: Failing to deliver what the customer wants
• Process Capability: What your process can deliver
• Variation: What the customer sees and feels
• Stable Operations: Ensuring consistent
consistent, predictable
processes to improve what the customer sees and
feels
• Design for Six Sigma: Designing to meet customer
(Nonthaleerak, et al., 2008) needs and process capability

Six Sigma Project Methodology Key Elements of Six Sigma

• Customer Focus
Project Phases
• Process Orientation
Define Measure Analyze Improve Control • Project Orientation
• Y = f(X)
• Define the project • To build a factual • Establish the • Statistically verify • Establish standards to
purpose and scope, understanding of current process the vital few Xs that maintain process; • Data and Measurement Driven
etc (project charter). existing conditions capability cause the variation • Monitor the improved
• Conduct a Voice of by focusing on • Investigate cause- in Y; process continuously; • Focus on Variation Reduction
the Customer ((VOC)) specific, measurable and-effect • Determine the • Share the new
analysis CTQs (Ys) relationships and settings that knowledge and lessons • Statistical
S i i l Ri Rigour
• Validating the seek out root eliminate the Y learnt;
planned causes (the vital few variation; • Document the results • The DMAIC Process Improvement/Problem Solving Process
measurement Xs) • Statistically validate and accomplishments
system the new process for future reference. • Dedicated Personnel
• Collecting necessary operating conditions.
data

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Six Sigma Support Structure Crictism of Six Sigma

• Executive Leadership (includes the CEO and other members of top
management): Ensure the commitment within the organisation for Six Sigma;
• Champions: Business leaders who lead the implementation of Six Sigma within
• Lack
k off originality
l
the business; • Role of consultants
• Master Black Belts: Fully trained quality leaders responsible for Six Sigma
strategy, training, mentoring, deployment and results; • Potential negative effects
• Black Belts: Fully trained Six Sigma experts who lead improvement teams,
work on Six Sigma projects and mentor Green belts; • Lack of Proof of evidence of its success
• Green Belts:
l Fullyll trained
d individuals
d d l who h applyl Six Sigma skills
k ll to
improvement projects;
• Based on arbitrary standards
• Team Members: (Yellow Belts) Individuals who support projects in their areas. • Criticism of the 1.5 sigma shift

Six Sigma Innovation Six Sigma Parallel-Meso Structure

• Parallel-meso structure
− Strategic project selection
− Leadership engagement
• Improvement specialists
• Structured method
− e.g. DMAIC (after PDCA), seven basic and new tools, SPC, FMEA,
etc
• Performance metrics
− Customer-oriented metrics (CTQ characteristics)
− Financial metrics

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Major Six Sigma Tools

• Basic seven quality tools
• Seven new quality tools
• SPC
• Failure mode and effects analysis (FMEA)
• Analysis of variance (ANOVA)
• Design of experiments
• Quality Function Deployment (QFD)
• Taguchi methods
• TRIZ
• Regression analysis
• Root cause analysis
• SIPOC analysis (Suppliers, Inputs, Process, Outputs, Customers)
• …

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