3. SIXSIGMA
“Six Sigma”: What is it?
“A comprehensive and flexible system for
achieving, sustaining and maximizing business
success. Six Sigma is uniquely driven by close
understanding of customer needs, disciplined use
of facts, data and statistical analysis, and diligent
attention to managing, improving and reinventing
business processes.”
-- The Six Sigma Way, by Pande, Newman and Cavanaugh
creating value for our customers
4. SIXSIGMA
Six Sigma: What is it?
Specifically –
• Customer-focused, fact and data-based
decision making driving out waste and
defects which creates value for our
customers.
It is just NOT Supply Chain or Manufacturing
creating value for our customers
5. SIXSIGMA
• A culture that rapidly drives our key activities* to
be defect free 999,997 times out of 1,000,000.
• < 3.4 defects per million opportunities.
* Valued by or critical to our customer.
Six Sigma: What is it?
creating value for our customers
6. SIXSIGMA
Sigma - the lower case Greek letter that
denotes a statistical unit of measurement
used to define the standard deviation of a
population. It measures the variability or
spread of the data.
What is Sigma?
s
7. SIXSIGMA
Cure Time of Silicone Sealant
NumberofSamples
Lower Specification Limit
(LSL)
Upper Specification Limit
(USL)
10. SIXSIGMA
Putting Six Sigma in Perspective!
creating value for our customers
If you played 100 rounds of golf per year, and
played at:
• 2 sigma - you'd miss 6 putts per round
• 3 sigma - you'd miss 1 putt per round
• 4 sigma - you'd miss 1 putt every 9 rounds
• 5 sigma - you'd miss 1 putt every 2.33 years
• 6 sigma - you'd miss 1 putt every 163 years!
11. SIXSIGMA
Putting Six Sigma in Perspective!
• 20,000 lost articles of mail every hour.
• Power outages seven hours each month. .
• 5,000 incorrect surgical procedures each week
for a major healthcare provider.
• Unsafe drinking water nine minutes every day.
• Two long / short airport landings every day.
Four Sigma quality (6210 DPMO) means…
99.370% right…but…..
creating value for our customers
12. SIXSIGMA
Putting Six Sigma in Perspective!
• Airline passenger safety ~ 8.2 s
– Currently at 2.6 DPMO (incidents per million
takeoffs and landings).
• Airline baggage handling ~ 3 s.
Six Sigma quality (< 3.4 DPMO).
creating value for our customers
13. SIXSIGMA
Impact of Six Sigma
The Cost of Poor Quality
Sigma Level Defects per Million Opportunities Cost of Poor Quality
2 398,537 (Noncompetitive Companies) Not applicable
3 66,807 25-40% of sales
4 6,210 (Industry Average) 15-25% of sales
5 233 5-15% of sales
6 3.4 (World Class) < 1% of sales
Each sigma shift provides a net income improvement which equals 10% of sales.
Six Sigma, by Harry and Schroeder, p. 17
creating value for our customers
14. SIXSIGMA
• 1987 Motorola introduced Quality Program now known as
Six Sigma.
• Allied Signal picked it up.
• G.E. Success….
– Capital Services
– Medical Systems (CAT Scan)
• Dozens of others…...
– Learned the highest quality producer is also the lowest cost
producer.
– Learned customer loyalty of a Six Sigma company is ~3X that
of the average company.
It all began at…..Motorola…not G.E.
creating value for our customers
15. SIXSIGMA
Who else is doing Six Sigma?
• Avery Dennison
• Dow
• DuPont
• Foxboro
• Sony
• Deere & Co.
(John Deere)
• Delphi
• Allied Signal
• Ford
• Johnson & Johnson
• Caterpillar
• Lockheed Martin
• IBM
• CitiGroup
(Visa/MasterCard)
• G.E.
• J.P. Morgan
• ServiceMaster
creating value for our customers
16. SIXSIGMA
How does Six Sigma work?
Why is it different?
Top down, executive led.
Customer focused (VOC).
Project oriented
• Led by “Black Belts”.
• 3-5 months long.
• Ave. yearly impact $150-250K/project.
• Consistent methodology.
creating value for our customers
Process
Controls
X4, X5, X6…
X1
X2
X3
Output Y
Critical to
Customer
Six Sigma
17. SIXSIGMA
What is the “Methodology”?
Define
Measure
Analyze
Improve
Control
D M A I C
creating value for our customers
18. SIXSIGMA
• What are the “The Tools”?
Six Sigma is a discipline using these tools:
– 7 Tools of Quality
– Advanced analysis tools (Design of Experiment,
Linear Regression, etc.)
– Re-engineering
– Lean manufacturing
– Supply chain improvements
– Design for Six Sigma (DFSS)
– For development of new products, new services,
new processes, and new workflows.
creating value for our customers
19. SIXSIGMA
Who are the other “Key Players”?
• Senior Champion – Owns Six Sigma for the Business.
• Champion – Identifies and resources projects.
• Master Black Belt – Serves as coach to the Black Belt
and project team.
• Black Belt – Leads the project team, full time.
• Green Belts – Team members (part-time) from the
organization sponsoring the project
• Project Sponsors – Team leaders.
• Process Owners – Owns the process / workflow.
• Executive Six Sigma Steering Committee – Oversees
progress, resolves issues, ensures success enterprise-
wide.
creating value for our customers
20. SIXSIGMA
Summary “take aways”
Customer focused….Driven by the Voice of the Customer.
Strong top management leadership, commitment, and
involvement. Very Key!
Project orientation with measurable financial results.
Consistent methodology for all work. Time driven.
Time driven….more accountable.
• Six Sigma - is a discipline not an “add on” or “program”.
- NOT a supply chain/manufacturing activity.
- No new tools….new ways to apply them!
• Goals
– Value for the Customer (i.e. no defects or waste & low cost)
– Improved productivity = profitability.
– Customer success and satisfaction + Profitability = Growth
creating value for our customers
21. SIXSIGMAcreating value for our customers
References……
• The Six Sigma Way (ISBN 0-07-135806-4) by Pande,
Neuman, and Cavanaugh
• The Power of Six Sigma (ISBN 0-7931-4434-5) by Subir
Chowdhury
• Six Sigma (ISBN 0-385-49437-8) by Harry and Schroeder.
• The Six Sigma Handbook (ISBN 0-07-137233-4) by Pyzdek is
more technical and becoming the 'handbook' for Black Belts.
You can get them through Amazon, http://www.amazon.com/ in
a couple of days.
22. SIXSIGMAcreating value for our customers
References……
Also...you might consider:
•www.6-sigma.com
•www.sixsigma.co.uk
•www.sixsigmasystems.com
•www.isixsigma.com
Editor's Notes
Sustained performance!!! Customer needs!!
Notes:None
We are currently operating at between 3.0 – 3.5 Sigma.
Given this information, how satisfied are we at operating at this level?
We are currently operating at between 3.0 – 3.5 Sigma.
Given this information, how satisfied are we at operating at this level?
Airline fatalities are at 6.2 sigma.
Six Sigma is 20,000 times better than 3 sigma.
Key customers and key competitors……and shareholders.
