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What is Six Sigma? . Six Sigma is the fastest growing business management system in industry today, credited with saving billions of dollars over the past decade. Six Sigma legacy increases management and engineering receptivity to opening doors for improving processes and products .Six Sigma emphasizes doing the right thing and doing it right. Six Sigma encourages a product

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## SIX SIGMA

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**1. **MANAGEMENT OF PROFIT
Dr. Ralph L. Harper Jr., CISM
SIX SIGMA

**2. **What is Six Sigma? Six Sigma is the fastest growing business management system in industry today, credited with saving billions of dollars over the past decade.
Six Sigma legacy increases management and engineering receptivity to opening doors for improving processes and products .
Six Sigma emphasizes doing the right thing and doing it right.
Six Sigma encourages a product pull rather than the push
Six Sigma is built around cross-development teams
The work product planning is promoted by brainstorming techniques.

**3. **What is Six Sigma?

**4. **What is Six Sigma? Business process that enables companies to increase profits
Streamlining of operation
Improving Quality
Eliminates defects in every thing a company does
A business philosophy to improve customer satisfaction
A tool for eliminating process variation
A metric of world class allowing process comparisons

**5. **What Six SigmaDoes Reduce Variation Concrete
Concrete curing time Process
Simplification Product or process optimization
Optimize tolerance flow down
Optimize specified operating limits

**6. **Why Emphasize Statistics?
Statistics Describe the Real World
Variation Probability Impact
Risk Hidden Factors Hidden Factory
Miss-Perceptions

**7. **WHY IMPLEMENT SIX SIGMA Top line growth
To improve customer satisfaction
Saving goes directly to bottom line
Statistical unit of measure that reflects process capability
Sigma Process Capability Defects Per Mil Opportunities
6 3.4
5 233
4 6,210
3 66,807
2 308,537

**8. **WHY IMPLEMENT SIX SIGMA A level of performance that reflects significantly reduced defects in our products
A statistical measurement of our process capability, as well as a benchmark for comparison
A set of statistical tools to help us measure, analyze, improve, and control our processes
A commitment to our consumers to achieve an acceptable level of defects

**9. **HOW SIX SIGMA WORKS It provides specific methods to re-create the process itself so that defects are never produced in the first place
Most companies operate at a three- to four-sigma level, where the cost of defects is roughly 20 to 30 percent of revenues or 6,200 - 67,000 defective parts transactions per million opportunities
Six Sigma fewer than 3.4 defect per One million opportunities -- the cost of quality drops to less than 1 percent of sales

**10. **Six Sigma Programs Implemented World Wide Corporation
Sony, Ford, Nokia, Texas Instruments, Polaroid, Raytheon, Allied Signal, General Electric, Motorola, BMW, Mercedes-Benz, Volvo Heavy Truck, Chase Manhattan Bank, U.S., AT&T, the U.S. Postal Service, the U.S. Department of Energy, Nuclear Electric, Westinghouse, Thermo King International Paper, Navistar, Gen. Corps, Raytheon
Countries
Australia, New Zealand, Singapore, Thailand and the Peoples Republic of China, U.S., Europe

**11. **SIX SIGMA ROLLS Hands on Champion (project management).
Black Belt (Six Sigma expert).
Process owner, who can institute any required changes.
Master Black Belt (Statistical and tool expert).
Green Belts (Received at less 80 hours of Six Sigma training)
Financial Analyst who validates the savings potential and realized savings

**12. **SIX SIGMA PROCESS

**13. **Six Sigma Results Radical net income improvements, most often financial results and shortly after implementation
Improved customer satisfaction
Reduced cycle times
Increased productivity
Improved capacity and output
Reduction in total defects
Increased product reliability
Decreased work-in-progress (WIP)
Improved process flow
$230,000 average direct cost reduction per project per Expert, Black Belts

**14. **SIX SIGMA RESULTS GENERAL ELECTRIC
Saved nearly $900 million on an investment of $580 million in just the first two years of Six Sigma implementation
More than $70 million in productivity gains in 1997. Six Sigma, even at this early stage, delivered more than $300 million General Electrics 1997 operating income.
GE Capital
Reduced cycle times for foreclosure actions and improved customer workout process by 50% at GE Capital Mortgage
By applying the disciplines of Six Sigma, GenCorps Specialty Polymers plant reduced the level of residue from a particular latex by 70 percent in just six months, with an annual cost savings of almost $500,000

**15. **SIX SIGMAN RESULTS NAVISTAR
Realized a 400 percent increase in stock prices just 14 months after initiating Six Sigma Quality methodologies in January 1997
U.S. POSTAL SERVICE
Reduced medical screening process cycle time for new hires from 11.8 to 2.9 days, while slashing annual direct program costs by $8 million

**16. **SIX SIGMA RESULTS MOTOROLA
Continuous improvement is an ongoing quest. Motorola was part of the consortium which conceived the Six Sigma concept over fourteen months ago. For more than a decade Motorola has implemented the Six Sigma process with dramatic results.
Increased productivity an average of 12.3% per year
Reduced the cost of poor quality by more than 84%
Eliminated 99.7% of in-process defects
Saved more than $11Billion in manufacturing costs
Realized an average annual compounded growth rate of 17% in revenues, earnings, and stock price

**17. **Measure & Analyze
. Gather Historical Data or Sample (Size & Subgroup)
Generates/Determines
Review Internal, External & Opportunity Costs Analytical
Tools Descriptive Statistics and Graphical Representations Confidence Intervals
Process Capability
Study Process Capability Indicators
Performance and Entitlement Determine

**18. **Measure & Analyze Cost of Quality Estimate Potential Benefits
Lost opportunities
Financially justify improvements warrant
Project Trends & Behaviors
Relationships Measure and distributional effects

**19. **Analyze Phase - Generates/Determines Statistical
Verification of effects; using the null Hypothesis as a test for Variable data
For trending pairs of continuous Data Variables
This completes the Characterize phaseIdentifying which input variables
Move on to Optimize
Settings or Procedures

**20. **Analyze Phase Difference in Means?
One Variable (Factor)
Standard Dev? From spec value
Two or more populations
If know X; Predict Y Strength & Direction
Testing

**21. **Analyze Phase Variables Data Analysis keyed to Proper sample size
To detect desired effect
Proportion Defects
Proportion Defectives Attribute

**22. **The Null Hypothesis Statistical Analysis
H0 is that the sample comes from a population of mean .
Then we see if the sample data supports that hypothesis.
under H0 xIn
At a 95% confidence, a P-value <.05 refutes the null hypothesis

**23. **Null Hypotheses
Statement generally assumed to be true unless sufficient evidence is found to be contrary
Often assumed to be the status quo, or the preferred outcome.
However, it sometimes represents a state you strongly want to disprove or Approve.
Designated as Ho Ho: Hypotheses presumed False
Ho: Hypotheses rejected

**24. **Improve Phase The Role of Measurement
Need repeatable and reproducible
Measurement capability
Limitations of attribute data
Demonstrate measurement control
When measurement systems are inadequate, so are the decisions we make using them.
The process is optimized, we need to maintain the gain .
Keep it in Control !

**25. **SIX SIGMA CAN IMPROVE YOUR GOLF SCORE If you played 100 rounds of golf per year, and played at:
2 sigma - youd miss 6 putts per round
3 sigma - youd miss 1 putt per round
6 sigma - youd miss 1 putt every 163 years

**26. **
Show Video

**27. **REFERENCE Goldstein, M. D. (2001, November). Six Sigma Program Success Factors. : Six Sigma Forum Magazine. Milwaukee, WI: ASQ Quality Press, vol. 1, number 1, November 2001
Leavitt, P. (2003). Lessons Learned in Six Sigma Implementation. : APQC (American Productivity & Quality Center). Retrieved March 31, 2003 from the World Wide Web:
www.kmadvantage.com/docs/leadership_article/Lessons_Learned_in_6Sigma_implementation.pdf

**28. **REFERENCE Dr. Samuel J. Keene, Presentation on Six Sigma Process Improvement Opportunities at RAMS 2005.
Charles Waxer http://www.isixsigma.com/library/content/c020729a.asp
http://www.isixsigma.com/
Dick Smith and Jerry Blakeslee Strategic Six Sigma: Best Practices From the Executive Suite. John Wiley & Sons, 2002.

**29. **REFERENCE Geoff Tennant, Six Sigma: SPC and Manufacturing and Services. Ashgate Publishing, Limited November 2000.
GE Investor Relations Annual Reports. General Electric Company. 22 July 2002 http://www.ge.com/company/investor/annreports.htm.
Honeywell Annual Reports. Honeywell Inc. 22 July 2002 http://investor.honeywell.com/ireye/ir_site.zhtml?ticker=HON&script=700
Lucas, J. M. (2002, January). The Essential Six Sigma. Milwaukee, WI: Quality Progress. Retrieved March 30, 2003 from the World Wide Web:
www.asq.org

**30. **Motorola Six Sigma Services. Motorola University. 22 July 2002
http://mu.motorola.com/sigmasplash.htm

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