Fundamentals of Lean Six Sigma (C11FS)

Lecture 7

Professor Jiju Antony (BE, MSc, PhD, FIOM, FRSS, FCQI, FASQ, FISSP)
Professor of Quality Management
Certified Lean Six Sigma Master Black Belt
Editor, International Journal of Lean Six Sigma
Associate Editor, TQM and Business Excellence
Esmee Fairbairn Building (EF25)
School of Management and Languages
Heriot Watt University, Edinburgh, Scotland, UK
E-mail: J.Antony@hw.ac.uk
Introduction to Six Sigma
 Origin of Six Sigma……

• 1979: Art Sundry – ‘Our Quality stinks’

• Motorola was spending $700-800m correcting defects; 20% of

revenue

• Bill Smith : Correlation between a product’s field life and the number
of times it was corrected during manufacturing

• 1988: Motorola wins Malcolm Baldridge

• Popularized by Mikel Harry and Richard Schroeder

• 1995: GE adopts Six Sigma as ‘the’ strategic initiative

Six Sigma is a proven business process
improvement methodology….
Main elements/Key Facets of Six Sigma
Voice of the
Customer (VOC)
What is Six Sigma?
Process & Statistical
It is a proven methodology Thinking
to identify and eliminate Data Driven
defects, rework, failures,
Disciplined Project
etc. resulting in financial D M A I C
Management
savings and improved
customer satisfaction. Investment in people

Hard measurable
€ benefits
What makes Six Sigma Successful? (Exercise)
Golf Player ( 3 Sigma vs 6 Sigma)

If you would have played 100 rounds of golf per year and
played at:

3 sigma quality level – you would miss 1 putt per round

4 sigma quality level – you would miss 1 putt every 9 rounds

5 sigma quality level – you would miss 1 putt every 2.3 years

6 sigma quality level – you would miss 1 putt every

160 years !!!!!
EXAMPLES OF SIGMA QUALITY LEVELS AND CORRESPONDING DPMO

US AIRLINE BAGGAGE HANDLING-

AVERAGE SIGMA LEVEL OF 3.4 SIGMA (28,700)
US MANUFACTURING INDUSTIES
IS BETWEEN 3 -3.5
(23,000 –67,000)

US AIRLINE FATALITY RATE <1/2 PER

MILLION FLIGHTS > 6 SIGMA World-Class Companies: < 1000 DPMO
( > 4.6 SIGMA) – ONLY FOR SOME
PROCESSES
 What is Six Sigma performance ?
Consider darts thrown at a target . . .

Precise,
not accurate

Accurate Precise and Accurate

not precise
Six Sigma strategy centres
processes & reduces variation
 Explaining variation (Delivery Performance)
Capture performance from the customer’s perspective

Mean-Based Measurement Variance-Based Measurement

Process Av.
25 days Target
30 days Dissatisfied
Customers?

10 20 30 40 50

Delivery Time (days) Delivery Time (Days)

“We’re Good!” “We’re Not Good Enough!”

The Customer Feels Variance - Not the Mean !

How can we meet Customer Requirements?

Upper Process Limit

Upper Spec Limit

Lower Spec Limit

Lower Process Limit

The Voice of the Process The Voice of the Customer

By reducing variation in your process…….

Upper Process Limit Upper Spec Limit

Lower Process Limit

Lower Spec Limit

The Voice of the Process The Voice of the Customer

What Makes Six Sigma World Class??

Performance # of Defects per Cost of

Level SIGMA % Yield Million (DPM) Quality %
A+ 6 99.99966 3.4 <1% of sales

A 5 99.9767 233 5 - 15% of sales

B 4 99.3790 6,210 15 - 25% of sales

C 3 93.3
93.3 66,807 25 - 40% of sales

D 2 69 308,537 Non-competitive

F 1 31 691,462 Out of Business

Why Six Sigma is imperative in modern business??

X (66,810)
100000
10 x improvement

10000 X (6200)
$$$
30 x improvement $ $ $ $$
1000 X (230)
DPMO

100
70 x improvement
$ $ $ $$ $$ $
10
X (3.4)
1
2 3 4 5 6
Sigma Process Quality Level
 What is Six Sigma NOT?

 Not a replacement for all other quality initiatives, or the solution for
everything - it’s a framework for improving business performance
 Not just about statistics and measurement programme - it’s a
practical approach to improving business performance
 Not just a training programme

 Not just a tool for manufacturing - applies to every function and

business
 Not a brand new initiative - it combines the best techniques from
previous quality initiatives with recent breakthroughs in
management thinking and common sense
Who makes Six Sigma Work???
Six Sigma Infrastructure

•Champion
–Reviews projects
•Master Black Belts
–Process Improvement Specialist
–Promotes Org / Culture Change
•Black Belts
–Full Time
–Detect and Eliminate Defects
–Project Leader
•Green Belts
–Part-time involvement
•Yellow Belts
–Part-time involvement
 Differences between Lean and Six Sigma

Lean Six Sigma

 Focused on ‘Flow’  Focused on problems with
unknown solution
 Removal of ‘Waste’  Reduction of ‘Defects’ often
 Technically simple through reduction of variation
 Technically more difficult
 Low investment
 More significant investment
 Typically non-statistical tools
 Statistical tools typically used
 Appropriate for first round of (Though not applicable to all
cases)
improvements
 Appropriate for more complex
problems
 Development of Six Sigma in various sectors

Public Services

Health

Finance

Telecom

Automotive
Sector
Process

Manufacturing

1987-1994 1996 1998 2000 2004 2007 2009/10/11/12/13/14/15…

Year
The 20-60-20 rule of a change process
How does an organization behave when it changes?

20 % of the employees endorse

change actively
60 % of the employees remain 20 %
passive at first and will only
become active when success
20 % 60 % 20 %
is clearly visible
20 % of the employees don´t want
any changes

Focus during the introduction of Six Sigma is on the

active 20 % and arouse the enthusiasm of the passive 60 %
“If I had to reduce my message
to management to just a few
words, I’d say it all had to do
with reducing variation” – Dr W E Deming

Variation:
Variation: The
The Voice
Voice of
of the
the Process
Process
Key to Process Improvement………

IfIf we
we cannot
cannot express
express what
what we
we know
know in
in numbers,
numbers,
we
we don’t
don’t know
know much
much about
about it.
it.

IfIf we
we don’t
don’t know
know much
much about
about it,
it, we
we cannot
cannot control
control it.
it.

IfIf we
we cannot
cannot control
control it,
it, we
we are
are at
at the
the mercy
mercy of
of
chance.
chance.

In God we trust…
the rest have to
bring data !!!!!

Material© Centre for Research in

Six Sigma and Process Excellence
 Thank you !!!

Any Questions??