Chapter 14 -

Six-Sigma Management and

Tools
6Σ Organization, DMAIC, Taguchi
Method, Robust Design, Design of
Experiments, Design for Six
Sigma, Reasons for 6Σ Failure

11/13/07 SJSU Bus. 142 - David Bentley 1

 Topics
 What is Six-Sigma?
 Organizing Six-Sigma

 DMAIC overview

 DMAIC phases

 The Taguchi method

 Design for Six-Sigma

 Using Six-Sigma from a contingency

perspective
11/13/07 SJSU Bus. 142 - David Bentley 2
 Six Sigma Evolution
 Started as a simple quality metric at
Motorola (Bill Smith)
 Migrated to Allied Signal
 (acquired Honeywell and took its name)
 Picked up by General Electric
 Commitment by CEO Jack Welch
 Grown to be an integrated strategy for
attaining extremely high levels of quality

11/13/07 SJSU Bus. 142 - David Bentley 3

 What is Six-Sigma?
 Sigma () is a greek letter used to
designate a standard deviation (SD) in
statistics
 Six refers to the number of SD’s from the
specialized limit to the mean.

11/13/07 SJSU Bus. 142 - David Bentley 4

 Percent Not Meeting
Specifications
 +1Σ = 32%
 +2Σ = 4.5%
 +3Σ = 0.3%
 +6Σ = 0.00034%

11/13/07 SJSU Bus. 142 - David Bentley 5

Six-Sigma Levels
Sigma Level Long-term ppm* defects
1 691,462
2 308,538
3 66,807
4 6,210
5 233
6 3.4

11/13/07 SJSU Bus. 142 - David Bentley 6

 Statistics - DPU
 Defect
 Six Sigma: “any mistake or error passed on to
the customer” ???
 General view: any variation from specifications
 DPU (defects per unit)
 Number of defects per unit of work
 Ex: 3 lost bags ÷ 8,000 customers
= .00375
11/13/07 SJSU Bus. 142 - David Bentley 7
 Statistics – dpmo (defects per
million opportunities)
 Process may have more than one
opportunity for error (e.g., airline baggage)
 dpmo = (DPU × 1,000,000) ÷
opportunities for error
 Ex: (3 lost bags × 1,000,000) ÷
(8,000 customers × 1.6 average bags)
= 234.375

11/13/07 SJSU Bus. 142 - David Bentley 8

 Statistics – dpmo (cont’d)

 May extend the concept to include higher

level processes
 E.g., may consider all opportunities for errors
for a flight (from ticketing to baggage claim)

11/13/07 SJSU Bus. 142 - David Bentley 9

 Statistics - Off-Centering
 Represents a shift in the process mean
 Impossible to always keep the process
mean the same (this WOULD be perfection)
 Does NOT represent a change in
specifications
 Control of shift within ± 1.5 σ of the target
mean keeps defects to a maximum of 3.4
per million

11/13/07 SJSU Bus. 142 - David Bentley 10

Statistics - Off-Centering
Source: Evans & Lindsay, The Management and Control of Quality, Southwestern, 2005
(cont’d)

11/13/07 SJSU Bus. 142 - David Bentley 11

 k-Sigma Quality Levels
 Number of defects per million
 For a specified off-centering and
 a desired quality level

11/13/07 SJSU Bus. 142 - David Bentley 12

k-Sigma Quality Levels
Source: Evans & Lindsay, The Management and Control of Quality, Southwestern, 2005

11/13/07 SJSU Bus. 142 - David Bentley 13

Six Sigma and Other
Techniques

Six-Sigma is … designed to handle

the most difficult quality problems.
% Quality Problems Techniques
90% Basic tools of Quality
< 10% Six-Sigma
< 1% Outside specialists

11/13/07 SJSU Bus. 142 - David Bentley 14

Organizing Six Sigma

11/13/07 SJSU Bus. 142 - David Bentley 15

 Key Players
 Champion. Work with black belts to
identify possible projects
 Master Black Belts. Work with and train
new black belts
 Black Belts. Committed full time to
completing cost-reduction projects
 Green Belts. Trained in basic quality
tools

11/13/07 SJSU Bus. 142 - David Bentley 16

 Distribution of Six Sigma
Trained Employees
In a company with 100 employees there
might be:
 One black belt
 Sixty green belts
 Some companies have yellow belts, employees
familiar with improvement processes

11/13/07 SJSU Bus. 142 - David Bentley 17

Six Sigma Tools

DMAIC, Taguchi Method, Design

for Six Sigma

11/13/07 SJSU Bus. 142 - David Bentley 18

DMAIC

11/13/07 SJSU Bus. 142 - David Bentley 19

DMAIC Overview

 Stands for the six phases:

 Define
 Measure

 Analyze

 Improve

 Control

11/13/07 SJSU Bus. 142 - David Bentley 20

Define – (1)
 Four Sub-Phases:
1. Develop the business case
2. Project evaluation
3. Pareto analysis
4. Project definition

11/13/07 SJSU Bus. 142 - David Bentley 21

 Define – (2)

 Developing the Business Case:

1. Identify a group of possible projects
2. Writing the business case
3. Stratifying the business case into problem
statement and objective statement

11/13/07 SJSU Bus. 142 - David Bentley 22

 Define – (3)

 RUMBA is used to check the efficacy of

the business case
1. Realistic
2. Understandable
3. Measurable
4. Believable
5. Actionable

11/13/07 SJSU Bus. 142 - David Bentley 23

Measure – (1)

 Two major steps:

1. Select process outcomes
2. Verifying measurements

11/13/07 SJSU Bus. 142 - David Bentley 24

 Measure – (2)
 Select process outcomes (step 1)
 Tools Used:
 Process map
 XY matrix
 FMEA
 Gauge R&R
 Capability Assessment

11/13/07 SJSU Bus. 142 - David Bentley 25

 Measure – (3)
 Verifying measurements (step 2)
 Tools Used:
 Gauges, calipers and other tools.
 Management System Analysis (MSA) is used
to determine if measurements are consistent

11/13/07 SJSU Bus. 142 - David Bentley 26

Measure – (4)
 Gauge R&R
 Most commonly used MSA
 Determine the accuracy and precision
of your measurements

11/13/07 SJSU Bus. 142 - David Bentley 27

 Analyze – (1)
 Three major steps:
1. Define your performance objectives (X’s)
2. Identify independent variables
3. Analyze sources of variability

11/13/07 SJSU Bus. 142 - David Bentley 28

 Analyze – (2)
 Define your performance objectives (X’s)
(step 1)

11/13/07 SJSU Bus. 142 - David Bentley 29

 Analyze – (3)

 Identify the independent variables where

data will be gathered (step 2)
 Process maps, XY matrices brainstorming
and FMEA’s are the tools used

11/13/07 SJSU Bus. 142 - David Bentley 30

 Analyze – (4)

 Analyze sources of variability (step 3)

 Use visual and statistical tools to better
understand the relationships between
dependent and independent variables

11/13/07 SJSU Bus. 142 - David Bentley 31

Improve
 Off-line experimentation
 Analysis of variance (ANOVA)
 Taguchi method or approach

11/13/07 SJSU Bus. 142 - David Bentley 32

 Control Phase

 Manage the improved processes

using control charts… covered in:
 Chapter 12 – Variables
 Chapter 13 – Attributes

11/13/07 SJSU Bus. 142 - David Bentley 33

The Taguchi Method

11/13/07 SJSU Bus. 142 - David Bentley 34

 The Taguchi Method provides:
1. A basis for determining the functional
relationship between controllable factors
2. A basis for determining the functional
relationship between controllable factors
3. A procedure for examining the relationship
between random noise … and product or
service variability

11/13/07 SJSU Bus. 142 - David Bentley 35

 Design of Experiments (DOE)
 Robust design - designed so that
they are inherently defect free
 Concept Design
 Parameter Design
 Tolerance Design

11/13/07 SJSU Bus. 142 - David Bentley 36

 Robust Design
 Concept Design - examining competing
technologies
 Parameter Design – selection of control
factors and optimum levels
 Tolerance Design – specification limits

11/13/07 SJSU Bus. 142 - David Bentley 37

 The Taguchi Process
1. Problem identification
2. Brainstorming session
3. Experimental design
4. Experimentation
5. Analysis
6. Confirming experiment

11/13/07 SJSU Bus. 142 - David Bentley 38

Design for Six Sigma

DFSS

11/13/07 SJSU Bus. 142 - David Bentley 39

 Design for Six-Sigma (DFSS)
 Used in designing new products with
high performance, instead of DMAIC
1. DMADV
2. IDOV

11/13/07 SJSU Bus. 142 - David Bentley 40

DMADV
1. Design
2. Measure
3. Analyze
4. Design
5. Verify

11/13/07 SJSU Bus. 142 - David Bentley 41

IDOV
1. Identify
2. Design
3. Optimize
4. Verify

11/13/07 SJSU Bus. 142 - David Bentley 42

Reasons for Six Sigma Failure

11/13/07 SJSU Bus. 142 - David Bentley 43

 Reasons for Six-Sigma Failure
- (1)
1. Lack of leadership by champions
2. Misunderstood roles and responsibility
3. Lack of appropriate culture for
improvement

11/13/07 SJSU Bus. 142 - David Bentley 44

 Reasons for Six-Sigma Failure
- (2)
4. Resistance to change and the Six-Sigma
structure
5. Faulty strategies for deployment
6. Lack of data

11/13/07 SJSU Bus. 142 - David Bentley 45

 Summary
 The process for Six-Sigma is define,
measure, analyze, improve and control
 Keys to Six-Sigma success are skilled
management, leadership and long-
term commitment

11/13/07 SJSU Bus. 142 - David Bentley 46