Six SigmaAStrategy forAchieving WorldClassPerformance
MEANINGA term used in statistics to represent standard deviation, anindicator of the degree of variation in a set of a process
3DEFINITIONBusiness DefinitionA break through strategy to significantly improve customersatisfaction and shareholder value by reducing variability inevery aspect of business.Technical DefinitionA statistical term signifying 3.4 defects per millionopportunities.
What is Six Sigma?• A goal of near perfection in meeting customer requirements• A sweeping culture change effort to position a company forgreater customer satisfaction, profitability and competitiveness• A comprehensive and flexible system for achieving,sustaining and maximizing business success; uniquely driven byclose understanding of customer needs, disciplined use offacts, data, and statistical analysis, and diligent attention tomanaging, improving and reinventing business processes(Source:The Six Sigma Way by Pande, Neuman and Cavanagh)
Why Six Sigma ?Mail Delivery99 % defect free (3.8 ) means 20,000 lost articles per hourWhile delivery at 6 (99.99966 % defect free) means 7 articles lost perhourElectricity99 % defect free (3.8 ) means no electricity for 7hours per monthWhile at 6 (99.99966 % defect free) it means 1hour no electricity every 34 yearsSurgeries99 % defect free (3.8 ) means 5000 errorsper weekWhile at 6 (99.99966 % defect free) means1.7 errors per week
ORIGIN OF SIX SIGMA Motorola company that invented Six Sigma.The term “Six Sigma” was coined by Bill Smith, an engineerwith MotorolaLate 1970s - Motorola started experimenting with problemsolving through statistical analysis1987 - Motorola officially launched it’s Six Sigma programMotorola saved more than $ 15 billion in the first 10 years ofits Six Sigma effort
Six Sigma Project MethodologyControlDefine Measure Analyze ImproveEstablishstandards tomaintainprocess;Design thecontrols,implementand monitor.Evaluatefinancialimpact of theprojectIdentify,evaluate andselectprojects forimprovementSet goalsFormteams.Collect dataon size of theselectedproblem,identify keycustomerrequirements,Determinekey productand processcharacteristic.Analyze data,establish andconfirm the “vital few “determinantsof theperformance.ValidatehypothesisImprovement strategyDevelopideas toremove rootcausesDesign andcarry outexperiments,Optimizethe process
Six Sigma DMAIC ProcessMeasureControlDefineAnalyzeImproveDefine: Define who your customersare, and what their requirements arefor your products and services – Theirexpectations. Define your team goals,project boundaries, what you will focuson and what you won’t. Define theprocess you are striving to improve bymapping the process.
Six Sigma DMAIC ProcessMeasureControlDefineAnalyzeImproveMeasure: Eliminate guesswork andassumptions about what customers needand expect and how well processes areworking. Collect data from many sourcesto determine speed in responding tocustomer requests, defect types and howfrequently they occur, client feedback onhow processes fit their needs, how clientsrate us over time, etc. The data collectionmay suggest Charter revision.
Six Sigma DMAIC ProcessMeasureControlDefineAnalyzeImproveAnalyze: Grounded in the context of thecustomer and competitive environment,analyze is used to organize data and lookfor process problems and opportunities.This step helps to identify gaps betweencurrent and goal performance, prioritizeopportunities to improve, identify sourcesof variation and root causes of problemsin the process.
Six Sigma DMAIC ProcessMeasureControlDefineAnalyzeImproveImprove: Generate both obvious andcreative solutions to fix and preventproblems. Finding creative solutions bycorrecting root causes requiresinnovation, technology and discipline.
Six Sigma DMAIC ProcessMeasureControlDefineAnalyzeImproveControl: Insure that the processimprovements, once implemented, will“hold the gains” rather than revert tothe same problems again. Variouscontrol tools such as statistical processcontrol can be used. Other tools suchas procedure documentation helpsinstitutionalize the improvement.
Six Sigma DMADV ProcessMeasureValidateDefineAnalyzeDesignDesign: Develop detailed designfor new process. Determine andevaluate enabling elements.Create control and testing plan fornew design. Use tools such assimulation, benchmarking, DOE,Quality Function Deployment(QFD), FMECA analysis, andcost/benefit analysis.
Six Sigma DMADV ProcessMeasureValidateDefineAnalyzeDesignValidate: Test detailed designwith a pilot implementation. Ifsuccessful, develop and execute afull-scale implementation. Toolsin this step include: planningtools, flowcharts/other processmanagement techniques, andwork documentation.
The Growth Of Six SIGMAThe company that perfected Six SigmaJack Welch launched Six Sigma at GE in Jan,1996 At GE, Six Sigma added more than $ 2 billion to the bottomline in 1999 alone.
21Who are Implementing Six SigmaAt least 25% of the fortune 200 claim to have a serious sixsigma programFinancial - Bank of America, GE Capital, Electronics - Allied Signal, Samsung, SonyChemicals - DuPont, Dow ChemicalsManufacturing - GE Plastics, Johnson and Johnson,Motorola, Nokia, Microsoft, Ford.Airline - Singapore, Lufthansa, BombardierAnd hundreds of others in Americas, Europee, SubContinent
Company Annual SavingsGeneral Electric $2.0+ billionJP Morgan Chase *$1.5 billion (*sinceinception in 1998)Motorola $ 16 billion (*sinceinception in 1980s)Johnson & Johnson $500 millionHoneywell $600 million22Six Sigma Results