Motorola launched Six Sigma in the 1980s to reduce defects through statistical analysis of processes. General Electric widely adopted it in the 1990s. Six Sigma aims to reduce variation and defects through training employees in statistical process analysis and improvement methods. It uses the "DMAIC" structure of Define, Measure, Analyze, Improve, and Control to systematically solve problems and track processes. The goal is to reduce defects to 3.4 per million opportunities.

1. Development of
Six Sigma
 Motorola launched the Six Sigma program in
the 1980s
 General Electric initiated the implementation
of Six Sigma in the mid-1990s
 Organizations in all industries have applied
Six Sigma in recent years
 Six Sigma has replaced TQM and BPR as
the key strategy for quality improvement

2. Definitions
 s – Standard Deviation, a measure of
variability
 Six Sigma – A quality improvement philosophy
that focuses on eliminating defects through
reduction of variation in a process
 Defect – A measurable outcome that is not
within acceptable (specification) limits

3. TQM Versus Six Sigma
TQM Six Sigma
A management
philosophy of quality
improvement
A philosophy that focuses
on defect reduction and
cost reduction
Encourages involvement
of all employees
Relies on a selected group
of highly-trained employees
Senior management
provides direct support
Senior management is held
accountable for results

4. Key Success Factors for
Six Sigma
 Committed leadership from top management
 Integration with existing initiatives, business
strategy, and performance measurement
 Process thinking
 Disciplined customer and market intelligence
gathering
 A bottom-line orientation and continuous
reinforcement and rewards
 Training

5. Six-Sigma Metrics –
Measuring Defect Rate
 Defects per unit (DPU) = number of defects
discovered  number of units produced
 Defects per million opportunities (DPMO) =
number of defects discovered  opportunities
for error  1,000,000

6. Estimating Defect Rate –
Process Capability Index (Cp)
 USL/LSL : Upper & Lower Specification Limit
 Cp = (USL –LSL) / (6s)
 Example : Time to process a student loan
application (Standard = 26 working days)
 Specification Limits : 20 to 32 working days
 s : 2 working days
 Cp = (32 – 20)/ (6*2) = 1.00 (Three Sigma)

7. Cp Index and DPMO
Cp Index DPMO
1 2,700
1.33 63
1.5 6.8
2 0.002

8. Estimating Process Capability
Index from A Sample - Cpk Index
 XBAR : average outcome from a sample
 S : standard deviation from a sample
 Cpk = min { (USL-XBAR) / (3S),
(XBAR-LSL) / (3S) }
 Example : XBAR = 25 days, S = 3 days
 Cpk = min { (32-25)/(3*3), (25-20)/(3*3)}
= min {0.77, 0.55} = 0.55

9. Six-Sigma Quality (Cp =2 with
Mean Shifting from the Center)
Ensuring that process variation is half the design
tolerance (Cp = 2.0) while allowing the mean to shift as
much as 1.5 standard deviations.

10. k-Sigma Quality Levels
 Six sigma results in at most 3.4 defects per
million opportunities

11. GE’s Six-Sigma
Problem Solving Approach
1. Define
2. Measure
3. Analyze
4. Improve
5. Control

12. DMAIC - Define
 Identify customers and their priorities
 Identify business objectives
 Select a six sigma project team
 Define the Critical-to-Quality (CTQ’s)
characteristics that the customers consider
to have the most impact on quality

13. DMAIC - Measure
 Determine how to measure the processes
•Identify key internal processes that
influence CTQ’s
•Measure the defect rates currently
generated relative to those processes

14. DMAIC - Analyze
 Determine the most likely causes of
defects.
•Identify key factors that are most
likely to create process variation.

15. DMAIC - Improve
 Identify means to remove causes of the
defects.
• Confirm the key variables and quantify the
effects on CTQ’s
• Identify maximum acceptable ranges for the
key variables and a system to measure
deviations of the variable
• Modify the process to stay within the
acceptable ranges

16. DMAIC - Control
 Determine how to maintain the
improvement
•Put tools in place to ensure that the key
variables remain within the maximum
acceptable ranges under the modified
process

17. Tools for Six-Sigma
and Quality Improvement
 Elementary and advanced statistics
 Product design and reliability analysis
 Measurement
 Process control & Process improvement
 Implementation and teamwork
 Customer survey and feedback
 Lean thinking

18. Organization for Six Sigma
 Project Champions – project selection
and management, knowledge sharing
 Master Black Belts – instructors, coaches,
technical leaders
 Black Belts – project team leaders and
team members
 Green Belts – project team members,
temporary team members