Six Sigma

1. Six Sigma By: Tim Bauman April 2, 2007

2. Overview • What is Six Sigma? • Key Concepts • Methodologies • Roles • Examples of Six Sigma • Benefits • Criticisms

3. What is Six Sigma? • Improve customer satisfaction by producing virtually free processes and products • To achieve Six Sigma a process must not produce more than 3.4 defects per million opportunities • 6 standard deviations between the mean and the nearest specification limit • Developed by Bill Smith at Motorola in 1986 as a way to standardize the way defects are counted

4. Key Concepts • Critical to Quality: Attributes most important 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, predictable processes to improve what the customer sees and feels • Design for Six Sigma: Designing to meet customer needs and process capability

5. Methodologies • DMAIC • Improvement system for existing processes • DMADV • Improvement system for developing new processes or products

6. Methodologies: DMAIC • Define – “the project goals and deliverables for both internal and external customers” • Measure – “the process to determine current performance” • Analyze – “and determine the root cause(s) of the defects” • Improve – “the process by eliminating defects” • Control – “future process performance”

7. Methodologies: DMAIC • Define • Identify the Critical To Quality characteristics • Create a map of the process to be improved with defined and measurable, deliverables, and goals • Tools: Benchmark, Baseline, Voice of the Customer and Business, Quality Function Deployment, Process Flow Map

8. Methodologies: DMAIC • Measure • Establish valid and reliable metrics to monitor the progress of the project • Input, process, and output indicators are identified • Determine the impact of defects from each input on the CTQs • Once reasons for input failure are determined, preventative actions are put into place • Tools: Defect Metrics, Data Collection, Sampling Techniques

9. Methodologies: DMAIC • Measure • Defects Per Million Opportunities (DPMO) = (Total Defects / Total Opportunities) * 1,000,000 • Defects (%) = (Total Defects / Total Opportunities)* 100% • Yield (%) = 100 - %Defects • Process Sigma (type this formula into Excel): =NORMSINV(1-(total defects / total opportunities))+1.5 http://www.isixsigma.com/sixsigma/six_sigma_calculator.asp

10. Methodologies: DMAIC • Analyze • Identify the gap between existing performance and desired performance • Root Cause Analysis – finding the causes of defects • Process Improvement Scenarios • Tools: Cause and Effect diagrams, Decision and Risk Analysis, Control Charts

11. Methodologies: DMAIC • Improve • Create new improvement solutions for each root cause • Cost/Benefit Analysis • What happens if improvements are not made or improvements take too long to implement • Process experimentation and simulation • Implement and adapt to these solutions and the results from these changes

12. Methodologies: DMAIC • Control • A monitoring plan with proper change management methods • Implement the lesson learned • Put tools in place to maintain process improvement gains • Training • Document the project • New procedures and lessons learned are maintained and give a solid example • Identify future Six Sigma improvement opportunities

13. Methodologies: DMAIC • Extra Step: Synergize • Integrate and institutionalize the improvements throughout the whole organization • Create a learning organization • Multiply the gains achieved by Six Sigma

14. Methodologies: DMAIC • Checklists http://www.americanheart.org/presenter.jhtml?identifier=3039772

15. Methodologies: DMADV • First three steps are the same • Define – “the project goals and deliverables for both internal and external customers” • Measure – “and determine customer needs and specifications” • Analyze – “the process options to meet the customer needs” • Design – “the process to meet the customer needs” • Verify – “the design performance and ability to meet customer needs”

16. Methodologies: DMADV • Design • Specification Limits • Simulation model • Test Plan • Measurement and Control Plan

17. Methodologies: DMADV • Verify • Pilot runs • Training • Implementing the processes • Document the processes

18. Roles • Yellow Belt or Team Member • Professional who works on project • Awareness of Six Sigma, but no training

19. Roles • Green Belt • Part time professional • Receives direction from Black Belts • Works with a Black Belt’s project or leads smaller projects • Two weeks of training in methods and basic statistical tools

20. Roles • Black Belt • Full time professional • Team Leader on Six Sigma projects • Four to Five weeks of training in: • Methods • Statistical tools • Team skills

21. Roles • Master Black Belt • Expert in Six Sigma methods and tools • Mentors other belts on complex issues • Responsible for training others to the Green and Black belt levels • Assists the Champion with deployment

22. Roles • Champion • Middle or Senior level executive who helps a specific Six Sigma project • In charge of making sure resources are available • Resolves cross-functional issues

23. Roles • Leader • Senior level executive responsible for implementing Six Sigma throughout the business • Sponsor • Senior executive in charge of the overall Six Sigma Initiative

24. Examples of Six Sigma • Current average industry runs at 4 sigma • Domestic airline flights run at a rate higher than 6 sigma • Non competitive companies typically run at a sigma level of 2

25. Examples of Six Sigma • Companies currently using Six Sigma • Motorola • General Electric • Allied Signal • Citibank • Microsoft • Many others

26. Benefits • Save Money • Black Belts save companies approximately $230,000 per project • General Electric has estimated benefits of $10 billion in the first five years of its implementation • Raise customer satisfaction

27. Benefits • Save lives • Health Care • Intensive care results from 53 minutes to 22 minutes • Reduce error rates for patient controlled pumps to administer pain medication • Airplane Industry

28. Criticism • Cost of training at Motorola • Green Belt Certification: $2,950 • Black Belt Certification: $12,950 • Cost of infrastructure • Creating the roles and responsibilities

29. Criticism • Six Sigma does not always work • Need active leadership • Align with organizational strategy • Need aggressive performance tracking and accountability for results • Green and Black belts need to be process oriented and willing to learn and use statistical tools • Pay more attention to steps than the actual result

30. Sources [1] Functional Methods. “DMADV (Define, Measure, Analyze, Design, Verify) Roadmap.” 2004. Retrieved 25 March 2007 <http://www.functionalmethods.com/DMADV%20Roadmap.pdf>. [2] General Electric. “What is Six Sigma?” 2007. Retrieved 23 March 2007 <http://www.ge.com/en/company/companyinfo/quality/whatis.htm>. [3] ISixSigma LLC. “Six Sigma – What is Six Sigma.” 2007. Retrieved 24 March 2007 <http://www.isixsigma.com/sixsigma/six_sigma.asp>. [4] Motorola, Inc. “Motorola Univerisity, Six Sigma in Action.” 2007. Retrieved 22 March 2007 <http://www.motorola.com/motorolauniversity.jsp>.

31. Sources [5] Peterka, Peter. “The DMAIC Method in Six Sigma.” 25 October 2007. Retrieved 25 March 2007. <http://www.buzzle.com/editorials/10-24-2005-79640.asp>. [6] “Roles.” 2007. Retrieved 25 March 2007 <http://www.onesixsigma.com/node/2485>. [7] Siviy, Jenannine. “Six Sigma.” 11 January 2007. Retrieved 22 March 2007 <http://www.sei.cmu.edu/str/descriptions/sigma6_body.html>.