1. business and industrial

creating value for our customers
An Introduction
LSSU - IAB
30 January 2002
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SIXSIGMA
What is it?
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“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
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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
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Six Sigma: What is it?
• 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.
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What is Sigma?
s
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.
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Number of Samples
Lower Specification Limit
(LSL)
Upper Specification Limit
(USL)
Cure Time of Silicone Sealant
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Lower Specification Limit
(LSL)
Upper Specification Limit
(USL)
x
Lower Specification Limit
(LSL)
Upper Specification Limit
(USL)
x
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Lower Specification Limit
(LSL)
Upper Specification Limit
(USL)
x
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Putting Six Sigma in Perspective!
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!
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Putting Six Sigma in Perspective!
Four Sigma quality (6210 DPMO) means…
99.370% right…but…..
• 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.
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Putting Six Sigma in Perspective!
Six Sigma quality (< 3.4 DPMO).
• Airline passenger safety ~ 8.2 s
– Currently at 2.6 DPMO (incidents per million
takeoffs and landings).
• Airline baggage handling ~ 3 s.
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Impact of Six Sigma
The Cost of Poor Quality
Sigma Level
2
3
4
5
6
Defects per Million Opportunities
Cost of Poor Quality
398,537 (Noncompetitive Companies)
Not applicable
66,807
25-40% of sales
6,210 (Industry Average)
15-25% of sales
233
5-15% of sales
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
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It all began at…..Motorola…not G.E.
• 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.
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Who else is doing Six Sigma?
•
•
•
•
•
•
Avery Dennison
Dow
DuPont
Foxboro
Sony
Deere & Co.
(John Deere)
• Delphi
• Allied Signal
• Ford
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•
•
•
•
•
•
•
•
Johnson & Johnson
Caterpillar
Lockheed Martin
IBM
CitiGroup
(Visa/MasterCard)
G.E.
J.P. Morgan
ServiceMaster
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How does Six Sigma work?
Why is it different?
 Top down, executive led. X1
Process
 Customer focused (VOC). X2
Controls
X4, X5, X6…
 Project oriented
X3
• Led by “Black Belts”.
• 3-5 months long.
• Ave. yearly impact $150-250K/project.
• Consistent methodology.
Output Y
Critical to
Customer
Six Sigma
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What is the “Methodology”?
D MAIC
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Define
Measure
Analyze
Improve
Control
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• 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.
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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 enterprisewide.
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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
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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.
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References……
Also...you might consider:
•www.6-sigma.com
•www.sixsigma.co.uk
•www.sixsigmasystems.com
•www.isixsigma.com
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