Six Sigma Six Sigma

ByBy

Cathy HiattCathy Hiatt

Boise State UniversityBoise State University

October 9, 2001October 9, 2001

Overview:Overview:

• Six Sigma DefinedSix Sigma Defined• The Statistical Tools of Six SigmaThe Statistical Tools of Six Sigma• The Components of Six SigmaThe Components of Six Sigma• Corporations practicing Six Sigma and a Corporations practicing Six Sigma and a

specific success storyspecific success story• An exercise opportunityAn exercise opportunity• SummarySummary

Six Sigma Defined:Six Sigma Defined:

Quality management program developed by Motorola in Quality management program developed by Motorola in the 1980s.the 1980s.

Management philosophy focused on business process Management philosophy focused on business process improvements to:improvements to:• Eliminate waste, rework, and mistakesEliminate waste, rework, and mistakes• Increase customer satisfactionIncrease customer satisfaction• Increase profitability and competitivenessIncrease profitability and competitiveness

Statistical measure to objectively evaluate processes.Statistical measure to objectively evaluate processes.

GOAL: Reach Six Sigma QualityGOAL: Reach Six Sigma Quality

Six SigmaSix Sigma

List some ways this program can be used List some ways this program can be used in your organization.in your organization.

The Statistical Tools of Six The Statistical Tools of Six Sigma:Sigma:

The Statistical Tools of Six The Statistical Tools of Six Sigma:Sigma:

The Statistical Tools of Six The Statistical Tools of Six SigmaSigma

Another way to look at it:Another way to look at it:

1.1. Clearly define the customer’s explicit Clearly define the customer’s explicit requirements--CTQrequirements--CTQ

2.2. Count the number of defects that occur.Count the number of defects that occur.

3.3. Determine the yield-- percentage of items Determine the yield-- percentage of items without defects.without defects.

4.4. Use the conversion chart to determine DPMO Use the conversion chart to determine DPMO and Sigma.and Sigma.

Sigma Conversion Table:Sigma Conversion Table:

If your yield is:If your yield is: Your DPMO is:Your DPMO is: Your Sigma is:Your Sigma is:

30.9%30.9% 690,000690,000 1.01.0

62.9%62.9% 308,000308,000 2.02.0

93.393.3 66,80066,800 3.03.0

99.499.4 6,2106,210 4.04.0

99.9899.98 320320 5.05.0

99.999799.9997 3.43.4 6.06.0

The Components of Six The Components of Six Sigma:Sigma:

• People PowerPeople Power• Process PowerProcess Power

People Power:People Power:

Executive Leader

Champion/Sponsor

Master Black Belt

Black Belt

Green Belt Green Belt Green Belt

Executive Leader Roles:Executive Leader Roles:

• High Level Executive committed to Six High Level Executive committed to Six Sigma SuccessSigma Success

• Knowledgeable in Six Sigma ProcessKnowledgeable in Six Sigma Process• Assign key individuals to the Assign key individuals to the

Champion/Sponsor Position.Champion/Sponsor Position.

Champion/Sponsor Roles:Champion/Sponsor Roles:

• High Level Executive High Level Executive • Oversee the Black Belt positionsOversee the Black Belt positions• Provide resources to complete the jobProvide resources to complete the job• Assist Black Belts to select projectsAssist Black Belts to select projects• Benchmark with other organizationsBenchmark with other organizations

Master Black Belt Roles:Master Black Belt Roles:

• Resource for the Black Belts-experts on Resource for the Black Belts-experts on the mathematical theory of statistical the mathematical theory of statistical methodsmethods

• Experts on the Six Sigma processExperts on the Six Sigma process• Works with the Champion/Sponsor to Works with the Champion/Sponsor to

select projects.select projects.

Black Belt Roles:Black Belt Roles:

• Leaders of the Six Sigma processLeaders of the Six Sigma process• Management and technical skillsManagement and technical skills• Bring the project vision to realityBring the project vision to reality• Solely dedicated to Six Sigma ProgramSolely dedicated to Six Sigma Program• Oversee Green BeltsOversee Green Belts

Green Belt Roles:Green Belt Roles:

• Project LeadersProject Leaders• Support the Black Belt to complete the Support the Black Belt to complete the

projectproject

Process Power:Process Power:DMAIC—Five Step ProcessDMAIC—Five Step Process

Define

Measure

AnalyzeImprove

Control

Define:Define:

• Clearly identify the problemClearly identify the problem• Utilize numerical definitionUtilize numerical definition• Focus on process that creates the Focus on process that creates the

problem not on the outcomeproblem not on the outcome

Measure:Measure:

• BenchmarkBenchmark• Capability of a given processCapability of a given process• Focus on CTQFocus on CTQ

Analyze:Analyze:

• Current process resultsCurrent process results• What is possible compared to what the What is possible compared to what the

competition is doingcompetition is doing

Improve:Improve:

• Implement changesImplement changes• Be creative to find new ways to do Be creative to find new ways to do

things better, cheaper, or fasterthings better, cheaper, or faster

Control:Control:

• Lock in successesLock in successes• Implement measures to keep variables Implement measures to keep variables

within the new operating limitswithin the new operating limits

Corporations Practicing Six Corporations Practicing Six Sigma:Sigma:

• General ElectricGeneral Electric• MotorolaMotorola• Allied SignalAllied Signal• SonySony• PolaroidPolaroid

Specific Success Story: GESpecific Success Story: GE

• 1995 Operating margin—13.5%1995 Operating margin—13.5%• 1998 Operating margin—16.7%1998 Operating margin—16.7%• Result: $600million bonusResult: $600million bonus

““The most important initiative GE The most important initiative GE has ever undertaken”has ever undertaken”

--Jack Welch, CEO General Electric--Jack Welch, CEO General Electric

ExerciseExercise

You have just completed all your training sessions for the You have just completed all your training sessions for the valued Black Belt role. Currently your organization is valued Black Belt role. Currently your organization is operating at a 2 sigma level and your Champion wants operating at a 2 sigma level and your Champion wants this to improve using the Six Sigma process. It seems this to improve using the Six Sigma process. It seems that although production is high, the defect levels are that although production is high, the defect levels are too high for the production of your leading line of too high for the production of your leading line of products, Sticky Buns. This has significantly cut into products, Sticky Buns. This has significantly cut into profits almost to the point of dropping the line. profits almost to the point of dropping the line. Customer surveys indicate there is a demand for Sticky Customer surveys indicate there is a demand for Sticky Buns so you are handed the challenging task of Buns so you are handed the challenging task of improving this process using the Six Sigma DMAIC improving this process using the Six Sigma DMAIC approach.approach.

Summary:Summary:

• Management philosophy of qualityManagement philosophy of quality• Statistical target of six sigma or 3.4 defects in Statistical target of six sigma or 3.4 defects in

one million opportunitiesone million opportunities• Components of Six Sigma are people power Components of Six Sigma are people power

and process powerand process power– Executive Leader, Champion, Master Black Executive Leader, Champion, Master Black

Belt, Black Belt, and Green BeltBelt, Black Belt, and Green Belt– Define, Measure, Analyze, Improve, ControlDefine, Measure, Analyze, Improve, Control

• Customer focusCustomer focus

BibliographyBibliography• Chowdhury, S. Chowdhury, S. The Power of Six SigmaThe Power of Six Sigma. Chicago: Dearborn Trade, 2001. Chicago: Dearborn Trade, 2001• Pande, P. S., Neuman, R. P., Cavanaugh, R. R. Pande, P. S., Neuman, R. P., Cavanaugh, R. R. The Six Sigma Way How The Six Sigma Way How

GE, Motorola, and Other Top Companies Are Honing Their PerformanceGE, Motorola, and Other Top Companies Are Honing Their Performance. . New York: McGraw-Hill, 2000 New York: McGraw-Hill, 2000

• Normal Distribution Bell Curve:Normal Distribution Bell Curve:

Six Sigma IT Concepts Kurt Haubner HomePage: Six Sigma IT Concepts Kurt Haubner HomePage: http://www.sixsigma.de/english/images/sixsigma/gauss_kurve.gifhttp://www.sixsigma.de/english/images/sixsigma/gauss_kurve.gif

• Six Sigma Process Graph:Six Sigma Process Graph:

http://www.isixsigma.com/me/six_sigma/http://www.isixsigma.com/me/six_sigma/