This document provides an overview of the Six Sigma initiative for business excellence. It discusses key Six Sigma concepts like defining, measuring, analyzing, improving and controlling processes. It also outlines the deployment structure for Six Sigma, including Champions, Black Belts, Green Belts and others. Tools for Six Sigma are presented, as well as examples of how Six Sigma can be applied in both large enterprises and small-medium enterprises. The relationship between Six Sigma and other initiatives like strategic management, balanced scorecard and financial ratios is also examined.

1. 1 of
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SSiixx SSiiggmmaa IInniittiiaattiivvee
Driver for Business Excellence

2. 2 of
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AAggeennddaa
 Revenue & Cost & Profit
 Hard & Soft Saving
 What is Six Sigma?
 Background
 Basic Definitions
Strategic Perspective
Statistic Perspective
 Deployment Structure
Champion
Black Belt
Green Belt
Others

3. 3 of
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AAggeennddaa
 Tools for Six Sigma
 Six Sigma for Small & Medium Enterprise
(SME) and Large Enterprise in Thailand
 Six Sigma & Other Initiatives
Strategic Management
Balanced Score Card
Financial Ratios
Benchmarking
Lean Measures
QCC/Kaizen

4. 4 of
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RReevveennuuee && CCoosstt && PPrrooffiitt

5. 5 of
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IIddeeaall SSiittuuaattiioonn
Year 1 Year 2 Year 3 Year 4
Profit
Cost
Revenue

6. 6 of
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AAccttuuaall SSiittuuaattiioonn
Year 1 Year 2 Year 3 Year 4
Profit
Cost
Revenue

7. 7 of
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WWoorrssee SSiittuuaattiioonn
Year 1 Year 2 Year 3 Year 4
Profit
Cost
Revenue

8. 8 of
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SSttrraatteeggyy ffoorr WWoorrssee SSiittuuaattiioonn
 Long Term Strategy:
 New Customers/Market (Local/Global)
 New Products/Services
 Etc.
 Short Term Strategy:
 Cost Saving
 Improve Productivity
 Etc.

9. 9 of
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HHaarrdd SSaavviinngg
 These savings must go to the bottom line to
increase profit
 Reduce Headcount –
Remove from payroll
Replace someone, in another area, that would
have been hired anyway;
 More pieces –
Need the extra pieces
Extra pieces can reduce overtime or manpower;

10. 10 of
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SSoofftt SSaavviinngg
 Any savings that are not Hard savings
 Transfer Headcount –
A person’s time was saved on that process so that
he/she could spend more time on another
process
There is no reduction to payroll.

11. 11 of
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SSiixx SSiiggmmaa
Strategic Tool for
Cost Reduction
Process Improvement
Customer Satisfaction

12. 12 of
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BBaacckkggrroouunndd

13. 13 of
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SSttaarrtt aatt MMoottoorroollaa
 In 1980s, Six Sigma began at Motorola
 As a statistical measures of process performance
 “Six Sigma Quality Program”
 Target to achieve six sigma level in five years.

14. 14 of
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AAddoopptteedd bbyy OOtthheerrss
 In 1990s, Six Sigma approach was broadened by
General Electric (GE) and AlliedSignal
 Then..
 DuPont
 Dow Chemical
 3M
 Ford
 American Express
 Companies in Europe and Pacific Rim

15. 15 of
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SSiixx SSiiggmmaa aatt GGEE
 In 1997, the GE annual report states that
 Six Sigma delivered more than $300 million to its
operating income
 This number increased to $750 million in 1998
 Today, GE has
~ 3,900 Full-Time Black Belts and Master Black Belts
~ 60,000 Green Belts
$1 = 43 Baht  $750 million = 32,250,000,000 Baht

16. 16 of
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SSiixx SSiiggmmaa TTooddaayy
 Six Sigma is viewed as
 A business strategy and methodology for
Improving process performance
Increase customer satisfaction
Improve bottom line

17. 17 of
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WWhhyy SSiixx SSiiggmmaa??
Increasing PROFIT by Reducing COST
The Bottom Line Focus
 Gets the attention and support of senior
executives and financial controllers.
 Makes Six Sigma different from other
improvement approaches.

18. 18 of
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BBaassiicc DDeeffiinniittiioonnss

19. 19 of
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SSttrraatteeggiicc PPeerrssppeeccttiivvee
 Definition :
 It is a Process Improvement Initiative
 It is Customer focused
 It is data driven - decisions are based on facts
 Involves the use of statistical tools
 It must have a bottom-line impact
 Paying back all the training.

20. 20 of
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SSiixx SSiiggmmaa PPrroocceessss
Define - Measure - Analysis - Improve - Control
D-M-A-I-C

21. AA PPrroocceessss ffoorr IImmpprroovviinngg OOtthheerr PPrroocceesssseess..
21 of
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Input
Feedback/Information/Specification
Product/
Business/
Support
Process
Internal/External
Suppliers
Output
Internal/External
Customers
Defects
Measures/Indicators

22. 22 of
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SSttaattiissttiicc PPeerrssppeeccttiivvee
 What is Sigma a ?
 The Greek letter
 A statistical unit of measurement
 Used to define the standard deviation of a
population
 Measures the variability or spread of the data

23. 23 of
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HHooww ggoooodd iiss mmyy pprroocceessss??
 Sigma Level (ns):
 The number before “s” indicates how much of the
data falls within the customers’ requirements
 The higher the process sigma, the more of the
process outputs meet customers’ requirements (the
fewer the defects).

24. 24 of
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DDeeffeeccttss PPeerr MMiilllliioonn UUnniittss
ns (Sigma Level) & Defect Rate
PPM = (Defect) Part Per Million
Sigma Level % of Output that meet
Customer’s Requirement Defect (PPM)
6s 99.99966% 3.4 PPM
4s 99.379% 6,210 PPM
2s 69.146% 308,538 PPM

25. 25 of
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GGooaall ooff SSiixx SSiiggmmaa MMeetthhooddoollooggyy
Six Sigma methodology focuses on shifting process output average from A
to B and reducing process output variation from B to C to achieve Six
Sigma Level.
Customer Requirement Zone
B A
Acceptable Output
C
Defect Zone
Unacceptable Output

26. 26 of
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CCoorree VVaalluueess
 The core values of Six Sigma methodology is
that..
 if you look at your organization as an integration of
business processes
 and can measure the defects in those processes,
 you can systematically figure out ways to eliminate
them to achieve
zero-defect performance level
and bottom-line profitability.

27. HHooww ddooeess tthhee SSiixx SSiiggmmaa PPrroocceessss wwoorrkk??
 Work on Issues that will Transfer Money to the
Bottom Line
 Focus on Specific Area or Process
 Top-Down
 Work in 4-6 Month Time Segments
 Program/Project must be Sustainable in the Future
 Changes will Effect Everyone in the Organization
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28. 28 of
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EExxaammpplleess ooff SSiixx SSiiggmmaa PPrroojjeeccttss
 In manufacturing organization:
Reducing inserts/tools costs in machining
process:
Using t-Test or DOE to find the optimal combination of feed,
speed, coolant concentration, and coolant flow rate to reduce
tools/inserts consumption.
 In a service organization:
Reducing overtime payment in accounting
month-end-closing process.
Reducing lead-time of the contract review
process:
more responsive to clients
and reduce costs.

29. OOtthheerr bbeenneeffiittss ffrroomm ddeeppllooyyiinngg SSiixx SSiiggmmaa....
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 Improve capacity and output
 Improve overall customer satisfaction
 Increase productivity and efficiency
 Reduce total defects and cycle time
 Decrease work-in-process
 Improve process flow
 ROI for Black Belt training

30. 30 of
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DDeeppllooyymmeenntt SSttrruuccttuurree
c.

31. 31 of
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SSeenniioorr MMaannaaggeemmeenntt TTeeaamm
 Strategy & Infrastructure Building
 Set short and longer-term direction for Six Sigma
implementation (now)
 Identify Six Sigma objectives during Strategic
Planning process (yearly)
 Resource planning (yearly)
 Review Six Sigma results (monthly)
 Communication and Recognition

32. 32 of
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CChhaammppiioonn
 Priority & Deployment
 Provide Project Management.
 Select projects that support business strategy and
achieving performance objectives.
 Manage for results.
 Champion improvement projects.
 Communicate business needs.
 Review and mentor Black Belts.
 Reward success.

33. 33 of
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BBllaacckk BBeelltt
 Deliver Improvement Results (Big Projects)
 Full time
 Lead & Train Teams
 Responsible for the Six Sigma process of
Improving key processes that affect customer
satisfaction and bottom line profitability
 Utilizing the 6 Sigma tools (advanced tools)
 Help Green Belts to analyze complex data
 Report results back to the Champions.

34. 34 of
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BBllaacckk BBeelltt//EEmmppllooyyeeee RRaattiioo
 In general, the minimum numbers of Black Belt
in your organization is:
1 Black Belt : 100 Employees

35. 35 of
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SSaavviinngg ffrroomm BBllaacckk BBeelltt PPrroojjeeccttss
 In USA
$125,000 to $250,000
per year/Project
 $1 = 43 baht  5,375,000 – 10,750,000 baht

36. 36 of
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GGrreeeenn BBeelltt
 Deliver Improvement Results (Small Projects)
 Part-time
 Lead Teams
 Responsible for the Six Sigma process of
Improving key processes that affect customer
satisfaction and bottom line profitability
 Utilizing the 6 Sigma tools (basic tools)
 Report results back to the Champions.

37. 37 of
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SSaavviinngg ffrroomm GGrreeeenn BBeelltt PPrroojjeeccttss
 In USA
$50,000 - $75,000
per year/Project
 $1 = 43 Baht  2,150,000 – 3,225,000 Baht

38. 38 of
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OOtthheerrss
 Support Teams
 Master Black Belts
 Other Belts
 Yellow
 Grey
 White

39. 39 of
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DDeeppllooyymmeenntt SSttrruuccttuurree
Senior
Management
Team
Champions
Support
Teams
Master
Black Belts
Support
Teams
Black Belts
Green Belts
CEO
Process
Owners
Finance
IT
HR

40. 40 of
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TToooollss ffoorr SSiixx SSiiggmmaa

41. 41 of
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EExxaammpplleess ooff KKeeyy TToooollss
 Process Mapping & Value Analysis
 Failure Mode & Effect Analysis
 Pareto Analysis
 Measurement Systems Analysis
 Statistical Process Control
 t-Test, z-Test, Data Comparison
 Design of Experiment (DOE)
 Financial Analysis
 Risk Analysis
 Etc.

42. 42 of
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SSiixx SSiiggmmaa
for
Small & Medium Enterprise (SME)
and
Large Enterprise
in Thailand

43. 43 of
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LLaarrggee EEnntteerrpprriissee
Country Manager
Plant A Manager Plant B Manager Financial Controller Mkt Develop Mgr
Production Mgr Engineer Mgr
Line 1 Sup Line 2 Sup Maintenance
Quality Mgr
Product Eng
Process Eng
SQE
CQE
Production Mgr Engineer Mgr Quality Mgr
Sup 1
Sup 2
Sup 3
Product
Process
SQE
CQE
Accounting MKT
Sales
Senior Management Team
Process
Owners Champions
Master
Black Belts
Champions
Support
Teams
Support
Teams
Black Belts
Green Belts
CEO
Finance
IT
HR
Support
Teams
Support
Teams
Black Belts
Green Belts
Champions
Support
Black Belts Teams

44. 44 of
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SSMMEE
Owner
General Manager
Production Mgr Store Mgr.
Line Sup Maintenance
Accounting Mgr
Officer Officer
Officer
Business
Owners
Account
Champion
Green Belt
Team
Black Belt
Process
Owners
Green Belt
Team Process
Owners

45. 45 of
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SSiixx SSiiggmmaa && OOtthheerr IInniittiiaattiivveess

46. SSiixx SSiiggmmaa aanndd SSttrraatteeggiicc MMaannaaggeemmeenntt
TriView National Bank’s Strategic Planning Process (2001 Baldrige Program’s Case study)
46 of
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1
2
3

47. 47 of
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1
2
3
TQM SSttrraatteeggiicc PPllaannnniinngg
TQM Strategic Planning at Solectron – Baldrige Winner

48. SSiixx SSiiggmmaa aanndd BBaallaanncceedd SSccoorree CCaarrdd
48 of
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49. 49 of
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SSiixx SSiiggmmaa SSccoorree CCaarrdd
Customer:
Customer Satisfaction
On-Time Delivery
Product Quality
Reduce Cost
Customer Satisfaction
Improve Process
Financial:
Cost Saving (Hard)
Inventory Level
Scrap Cost
Learning:
Training Hrs/Person
Employee Involvement
Improvement Ideas/Person
Internal Process:
Defect Level
Sigma Level
Cycle Time

50. 50 of
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SSiixx SSiiggmmaa aanndd FFiinnaanncciiaall RRaattiiooss
 A standard of comparisons of items on the
company's financial statements rather than a
direct reading of the financial figures.
 Why do you need the Financial Ratios?
 Information Sharing
 Benchmarking
 Comparison Data

51. 51 of
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EExxaammpplleess ooff FFiinnaanncciiaall RRaattiiooss
 Sales Growth
Definition: Percentage increase (or decrease) in sales
between two time periods.
Formula: ( Current Year's sales - Last Year's sales )
Last Year's sales
 Net Profit Margin
Definition: Shows how much profit comes from every
dollar of sales.
Formula: Net Profit/Total Sales
 Inventory Turnover
Definition: Number of times that you turn over (or sell)
inventory during the year.
Formula: Cost of Goods Sold/Average Inventory

52. 52 of
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SSiixx SSiiggmmaa aanndd BBeenncchhmmaarrkkiinngg
 Benchmarking process and data are key
requirements in Baldrige Program (Thailand
Quality Award Program.)
 They are very important inputs for the Strategic
& Business Planning Process.
 How can you plan and set objectives without the
comparison/benchmark data?
 How can you ensure that the Six Sigma objectives
that you set are:
Achievable within specific time-frame?
Reasonable – not too easy?

53. 53 of
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SSiixx SSiiggmmaa aanndd LLeeaann MMeeaassuurreess
 Lean Manufacturing focuses on:
 Waste Reduction
 Process Cycle-Time Reduction
 Line Balancing & WIP
 Material Flow/Kanban
 Single Minute Exchange of Dies
 Lean Measures
 Evaluate/Monitor Entire Key Production Processes.
 Foundation for Six Sigma
Project Selection
Measure/Analyze Phases

54. 54 of
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SSiixx SSiiggmmaa aanndd QQCCCC//KKaaiizzeenn
 Quality Control Circle & Kaizen Teams
 Continuous Improvement Activities
 Part of JIT/Lean
 Employee Involvement
 Use Basic Analytical Tools (7QC Tools)
 Bottom-Up
 PDCA
 Support Six Sigma
 Support Teams for Green Belts/Black Belts
 Pre-requisite Program for Green Belts/Black Belts

55. 55 of
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RR&&AA’’ss BBuussiinneessss EExxcceelllleennccee MMooddeell
Business
Excellence

56. 56 of
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WWhhaatt TTrraaiinniinngg DDoo YYoouu NNeeeedd??

57. TThhee 11sstt WWaavvee ooff TTrraaiinniinngg
57 of
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AAlliiggnn SSiixx SSiiggmmaa TTrraaiinniinngg PPllaann
wwiitthh OOrrggaanniizzaattiioonn SSttrraatteeggyy
Black Belt
Training
Strategic
Objectives Executive
Overview
Project
Selection
Champion
Training
Organizational/Strategic Level
Official
Project
Charter
Champion/
Black Belt
Green Belt
Training
Official
Project
Charter
Champion/
Green Belt
Operational/Deployment Level
1
2
3
4

58. 58 of
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Payback PPeerriioodd CCaallccuullaattiioonn
Payback Point
Assumption: Monthly Hard Saving = 25,000 Baht/Month/Project

59. 59 of
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RR&&AA’’ss TTrraaiinniinngg PPaacckkaaggee
 Objectives:
 Develop Six Sigma Organization
Not Individual Black Belt Development
 Use Strategic Planning Process to Drive and
Maintain Six Sigma Process.
Focus on Senior Management and Champion
Program
Develop Six Sigma Infrastructure
Project Selection, Management, and Review
 Long-Term Strategic Partnership with Clients

60. 60 of
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QQuueessttiioonnss??
Thank You