Six Sigma

Focus Group Meeting

Dr K. M. Madrecha

Projects & Quality Manager

The Kanoo Group – UAE & Oman

&

Consultative Committee Member

Supply Chain & Logistics Group

Quality History in the Industrial World• 1787 - Concept of Interchangeability introduced.

• 1870 - Concept of tolerance

• 1900 - Concept of standardization

• 1930 - National standardization organisations– 1901 UK, – 1920 Belgium, Canada, France, US…etc.– 1930s Most of the industrial countries

• 1920s-30s Development of SQC and SPC in Bell Labs and Western Electric

– 1924 Walter Shewhart developed Control Charts – Herold Dodge & Harry Romig developed sampling

techniques.

• 1940s - Deming applied sampling and control chart techniques in computer operations in US Census.

• 1950s- Deming’s thinking reaches Japan

Quality History in the Industrial World

• 1970-80s - TQM movement takes hold, national Quality Awards established

• 1987 - ISO 9000 family of standards published.– 1994 - First revision of ISO 9000 standards.– 1996 - ISO 14001 published

• Early 1990s Business Process Re-engineering movement became popular

• 1995-2000 - Development of the Internet, e-business

• 2000 - Major revision of ISO 9000 standards

1: Product Oriented (Upto 1940s)(Inspection after production, audits of finished products and problem solving activities)

2: Process Oriented (1950s)(QA during production processes including SPC and fool proofing)

3: System Oriented (Quality Management Systems covering all departments, ie. Design, manufacturing, sales & service)

4: Humanistic (Education and Training to all employees)

5: Society Oriented (1950s-60s)(Product and process designing based on DOE)

TQC

CWQC

Build Up of Quality in Japanese Industry(L.P.Sullivan, “The Seven Stages in Company-Wide Quality Control”, Quality Progress, May 1986 p 77, ASQC)

40%

100%

0%

7: Customer Oriented (1990s)(QFD, deploying voice of the customer in operational terms)

6: Cost Oriented (1970s-80s)(Product and process designing for robustness based on DOE)

Change required

Natural deterioration Innovation without KaizenInnovation without Kaizen

Kaizen + InnovationKaizen + Innovation

Time

Kaizen

Change required

(Adopted from Masaki Imai (1991), McGraw -Hill, pp 26-27)

Maintenance

The Kaizen View

Six Sigma

What is Six Sigma?

• A statistical measure for determining process capability (Six Sigma equates to 3.4 defects/million opportunities)

• A proven set of tools and tactics for reducing variation

• A successful business strategy (used by Motorola, Texas Instruments and Allied Signal)

• A comprehensive philosophy about operational excellence

• A disciplined process for identifying sources of variation / defects in a process; minimizing or eliminating that variation or those defects; and ensuring improvements stay in place.

Six Sigma is a Proven, Data-Driven Method for Improving Processes

Six Sigma is a Proven, Data-Driven Method for Improving Processes

TQM vs Six Sigma

• Lack of integration with business strategy

• Leadership apathy

• A fuzzy concept• Unclear goals

• Too technical approach• Failure to break bureaucracy• Emphasis on incremental

change

• Ineffective training• Focus on technical processes

(production, design)

• Links to the business and personal “bottom line”

• “Leadership” leadership• A “branded” concept• Clearly identified “status”• “Glamour” oriented approach• Populist form• Equal emphasis on

incremental and radical change

• “Branded” training• Improvement in all processes

TQM Six Sigma

BPR vs Six Sigma

• Too radical to digest• Traumatic • Anti-people• In practice internal cost

focus

• Participatory, people oriented• Enhances personal esteem of

employees• Radical changes achievable• Customer focus

BPR Six Sigma

TQM BPRSix Sigma

QUALITY(Technical Strategy)

ACCEPTANCE

(Cultu

ral Stra

tegy)

Implementing Change

Change InitiativeFocused On

Customer Needs(Target)

The Challenge: Do it with Speed

Six Sigma Roadmap

• Identify Core Processes and Key Customers• Define Customer Requirements (CTQs)• Measure Current Performance• Prioritise, analyse and implement improvements• Expand and integrate

Time(days)

Jan

Feb

Mar

Average

17426158793257118424849586286584676861042959456947675666552543

53

CUSTOMER’S VIEW

0 25 50 75 100 125

Min = 17Max = 118

GE’s VIEW

0 25 50 75 100 125

53

Capture What The Customer Sees - The Entire Distribution Of Y Values

Understanding the Output

SIPOC

• Supplier• Input • Process• Output • Customer

14

Define

Measure

Analyze

Improve

Control

1. What is important to the customers?(survey / interview / inquiries)

2. What is the frequency of defects?(measurement system / process mapping / sigma rating)

3. When, where and why do defects occur?(statistics / pareto / FMEA / benchmarking / etc...)

4. How can we improve the process?(design of experiments / expert brainstorming / etc...)

5. How can we maintain the process improvement?(measurement feedback control / procedural / etc...)

A Rigorous, Customer-Focused Improvement Process

Five Phase Improvement Process(DMAIC)

Definitions

• CustomerAnyone Who Receives Product, Service or Information

• OpportunityEvery Chance to Do Something Either “Right” or “Wrong”

• Successes vs. DefectsEvery Result of an Opportunity Either Meets the Customer Specification or it Doesn’t

What Is Six Sigma?

GE Company Proprietary

November 1998

The Six Sigma Goal

20,000 pieces mail lost per hour

Unsafe drinking water almost 15

minutes out of each day

2 short or long landings at most

major airports each day

No electricity for almost 7 hours

each month

2 308,5373 66,8074 6,2105 2336 3.4

DefectsDefects % Good% Good

68%93%99%

99.99%99.9997%

“99% Good”

Why 99% Isn’t Good Enough

99% Isn’t Good Enough!

CenterProcess

ReduceSpread

XX

X

X

X

XX X

X

XX

X

XX

XX

XXX

XX

X

XXX XX

X

XX

XXX

XX

X

XXX XX

X

Off-Center Too Much Spread

Centered On-Target

Bull’s Eye

The Objective of Six Sigmais to Identify & Reduce Variation

Process Philosophy

• Know What’s Importantto the Customer (CTQ)

• Reduce Defects (DPMO)

• Centre Around Target (Mean)

• Reduce Variation (Standard Deviation)

T

?

GE Company Proprietary

November 1998

What Is Six Sigma?

Target

USLLSL

Target

USLLSL

Target

USLLSL

CenterProcess

ReduceSpread

Off-Centre Too Much Spread

CentredOn-TargetDefects

With Normal Curves...

Reduced Variation Results in Fewer Defects & Higher Process Yields

Six Sigma Quality at GE

The Six Sigma Journey

Lynn FergussonManager, Corporate InitiativesGE Canada

Work-Out / Town Meetings: empowerment, bureaucracy busting, action

Productivity / Best Practices:

looking outside GE

Process Improvement: continuous improvement, re-engineering

Change Acceleration Process: increase success and accelerate change

Key Strategic Initiatives:

QMI*, NPI*, OTR*, SP*, Productivity, Globalization

high

low

Intensityof

Change

Time

Action Work-OutsCustomized Work-Outs

* New Product Introduction Quick Market Intelligence Order to Remittance Supplier Partnership

Bullet Train Approach

r 6/3/96

Six Sigma Quality

Best Practice Sharing

Work-Out: Stages of GE's Culture Change

22

“...this Six Sigma journey will change the paradigm from fixing products so they are perfect to fixing processes so that they produce nothing but perfection, or close to it.”

-Jack Welch

From Our CEO...

Key Six Sigma Roles

Senior management with clout and credibility responsible for the success of the Quality initiative

Team MembersTeam Members

Six Sigma project leaders (Part Time)

Key participants in Black Belt projects gatheringdata and implementing process improvements

ChampionChampion

Master Black BeltMaster Black Belt

Black BeltBlack Belt

Green BeltGreen Belt

Teachers, Trainers, Reviewers and Mentors of Black Belts (Full Time)

Leaders of the teams that conduct Six Sigma projects (Full Time)

All Employees Involved

Six Sigma Organisation

Sponsors/Champions(Recognise people, maintainmomentum/morale)

Master Black Belts(Coach, support project leaders)

Black Belts(Lead projects to success)

Green Belts/ Team Leaders(Lead projects to success)

GBs/Team members(Suggest projects, Analyse/experiment, implement solutions)

(Select, Oversee, guide projects)

Explosive Growth In Green Belts And Six Sigma Trained Employees

All Professional Employees GB Trained By Early 1999

Training

0%

20%

40%

60%

80%

100%

1996 1997 1998 1999 2000

15%

60%

100% 100%90%

Six SigmaTrained

Green Belts

MBB’s & BB’s

Trained GE Employees

Project Completion Drives Six Sigma Learning

Completed Projects Will Reach 55,000 by 2000

17000

37000

47000

55000

1998 1999

20001997

20,000 MoreProjects in 98

Projects

27

($ Millions)

Six Sigma Costs and Benefits

0

500

1000

1500

2000

2500

3000

3500

19961997

19981999

2000E2001E

Cost

GEBenefits

CustomerImpact

Benefit/Cost Ratio

19960.9

1997 1.8

1998~2.5

1999~5

Future Benefits Include Emphasis on Customer ImpactFuture Benefits Include Emphasis on Customer Impact

Six Sigma @ the Customer – emphasis on becoming more customer centric; BBs at customer sites to help customers improve their processes and for GE to gain better insights about our customers

Six Sigma Customer Centric Metrics – communicate customer metrics to employees on an on-going basis along with how our processes are impacting the customer’s metrics

Six Sigma in GE’s Fulfillment Process – focus on common metrics, measure the same way with emphasis on optimizing process against customer requests

Six Sigma in e-Business – focus on understanding e-Business and e-Commerce capabilities

Further Quality Initiatives at GE

The Keys to A Successful

Six Sigma Strategy Include:

Customer - Focus on the Customer Process - Look at the Process from the

Customers’ Perspective - “Outside-In Thinking”

Employees - Leadership Commitment

In Summary...

Six Sigma Must Become Part of the Culture

Example of Six Sigma in KM

•Quotation Timeliness in KM @ 2.95 sigma, DPMO = 73,873

•Delivery Timeliness in KM is @ 2.38 sigma, DPMO= 189,801

(* Period May-August, 2001)

The Way Forward?

•………………………………………………..•………………………………………………..

Thank You!