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Six Sigma: (A Strategy For Achieving World Class Performance)
Six Sigma: (A Strategy For Achieving World Class Performance)
Purpose of Presentation
Share
3,000 misdeliveries
1 misdelivery
4100 crashes
Developed
Sigma is a letter
in the Greek
Alphabet
Degree of variation;
Level of performance in terms of
defects;
Statistical measurement of process
capability;
Benchmark for comparison;
Process improvement methodology;
It is a Goal;
Strategy for change;
A commitment to customers to achieve
an acceptable level of performance
Definition
A break through strategy to significantly
improve customer satisfaction and
shareholder value by reducing variability in
every aspect of business.
Technical Definition
A statistical term signifying 3.4 defects per
million opportunities.
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Rate of
Improvement
308,000
2 times
66,800
5 times
6,210
11 times
230
27 times
3.4
68 times
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excellence
by applying voice of the customer to identify and
engineer critical few business processes using Six
Sigma
Created Quality & Productivity Division
Source: Best Practices Report
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Quote Time
Defect Rate
Waste
On Time Delivery
Inventory;
Machine Utilization
Revenue
Capital Utilization
Return on Assets
Profits
People
Developing
Team skills
Encouraging
& enabling people
To participate in
Improvement
Results
Recognizing
People
Aligning
Individual &
Organization
Goals
Identifying &
designing
processes to deliver
strategy
Establishing
Process
management
System to be
used
Implementing
Process
Measures
Leadership
Partnerships
Resources
Competency
Productivity
Satisfaction
Involvement
Recognition
Improving
processes
to satisfy and
Generate value
For customers
Key Perf
Results
Gross margins
Net profit
Sales
Market Share
Customer Results
Delivery,
Value,
reliability
Response
Time to
customers
Repurchase
satisfaction
Recognizing
Individual &
Team effort
People
Results
Time to
Market
Cash flow
Maintenance cost
Return on assets
Society
Results
Processes
Utility
consumption
Timeliness
Inventory
Financial
Annual Savings
$2.0+ billion
*$1.5 billion (*since inception in
1998)
Motorola
$ 16 billion (*since inception in 1980s)
Johnson & Johnson $500 million
Honeywell
$600 million
Six Sigma Savings as % of revenue vary from 1.2 to 4.5 %
For $ 30 million/yr sales Savings potential $ 360,000 to $
1.35 million.
Investment: salary of in house experts, training, process
redesign.
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Measure
Measure
Analyze
Analyze
Improve
Improve
Control
Control
Collect
Analyze
Improveme Establish
Identify,
data on
data,
nt strategy
evaluate
standards
Develop
size of the
establish
and select
to maintain
selected
and
ideas to
projects for
process;
problem,
confirm the remove
improveme
Design the
identify
vital few
root causes
nt
controls,
Design and
Set goals
key
implement
Form
customer
determinan carry out
and
requiremen ts of the
experiment
teams.
monitor.
ts,
performanc s,
Evaluate
Determine
e.
Optimize
financial
Validate
key
the
impact of
product
hypothesis
process.
the project
Final
and
process
solutions
characteris
tic.
15
16
Customer
needs
Level 1 CTQ
Level 2 CTQ
Improved delivery
performance
Timely delivery
On time delivery to schedule
Level 3 CTQ
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Output
characteristic
Timely delivery
Project Y measure
Specification limits
Target
Defect
No. of defect
opportunities per
unit
Stores Manager
Input
Process Steps
Stores Order
(high level)
Output
Receive order
Plan delivery
Dispatch Driver with goods
Deliver goods to stores
Receive delivery
Received freight with
Documents
Store Manager
Customer
Detailed process maps drawn
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Improve
Experiments
Control
Test implementation.
Process sigma level up
from 2.43 or
175889 DPMO to 3.94 or 7353 DPMO.
Performance still fell short of best in class
4.32 or 2400 DPMO.
Improvement led to significant customer
satisfaction.
Process continually monitored and data on
new cycle times, tyre failure collected as
per defined methods and frequency,
analysed and monitored.
Customer satisfaction measured and
monitored.
23
Measure
Inefficient data gathering;
Lack of measures;
Lack of speed in execution;
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Analyse
Challenge of identifying best practices
Overuse of statistical tools/ under use of practical
knowledge
Challenge of developing hypotheses
Improve
Challenge of developing ideas to remove root
causes
Difficulty of implementing solutions
Control
Lack of follow up by Managers/ Process Owners
Lack of continuous Voice of the Customer
feedback
Failure to institutionalize continuous improvement.
25
26
Versatile
Breakthrough improvements
Financial results focus
Process focus
Structured & disciplined problem solving
methodology using scientific tools and techniques
Customer centered
Involvement of leadership is mandatory.
Training is mandatory;
Action learning (25% class room, 75 %
application)
Creating a dedicated organisation for problem
solving (85/50 Rule).
27
sustained success
Sets performance goal for everyone
Enhances value for customers;
Accelerates rate of improvement;
Promotes learning across boundaries;
Executes strategic change
28
Thank you
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