Group Members Luis Alacan Paola del Valle Jandro Roque Chen Wang SIX SIGMA Group Members Luis Alacan Paola del Valle Jandro Roque Chen Wang

WHAT IS SIX SIGMA? A statistical concept that represents amount of variation present in a process Corresponds to being 99.9997% defect free Produce at defect levels below 3.4 DPMO Refers to a business philosophy of focusing on continuous improvement Methodology that an organization uses to ensure that it is improving its key processes

WHAT IS IT USED FOR? Having a measurable way to track performance improvements Focusing attention on process management at all organizational levels Improving customer relationships by addressing defects Improving the efficiency and effectiveness of processes by aligning them with your customer needs

SIX SIGMA PROGRAM DEVELOPMENT Bill Smith introduced the concept of Six Sigma to Motorola in the mid-1980s Mikel Harry began to study the variations in the various processes within Motorola Motorola began focusing on creating strategies to reduce defects in its products Achieved the Malcolm Baldridge National Quality Award in 1988

SIX SIGMA TODAY Six Sigma has evolved Lean Six Sigma Design for Six Sigma (DFSS) DMAIC methodology CTQs Certifications Yellow, Green, Black Belts Overall has achieved greater awareness

SIX SIGMA METHODOLOGY

NORMAL DISTRIBUTION

REGIONS About 68% of the area under the curve falls within 1 standard deviation of the mean About 95% of the area under the curve falls within 2 standard deviations of the mean About 99.7% of the area under the curve falls within 3 standard deviations of the mean

PROCESS SHIFT

INDICES Cp = USL – LSL 6σ Cp > 2 indicates process is in good statistical control Cpk = Min [ USL – μ USL – μ ] 3σ , 3σ Cpk < 1.33 indicates process is not capable of producing repeatable products

METRICS Defect Rate in parts per million (ppm) Sigma Levels (1σ, 2σ, 3σ, 4σ, 5σ, 6σ) Process Capability Index Cpk= 0.5 means you've crunched nearest the door edge Cpk=1 means you're just touching the nearest edge Cpk=2 means your width can grow 2 times before touching Cpk=3 means your width can grow 3 times before touching Defects per unit (average number of defects observed when sampling a population) Yield (percentage of a process that is free of defects)

LEVELS Defects (in ppm) Sigma Level % Acceptable 690,000 1σ 31.0000% 308,000 2σ 69.2000% 66,800 3σ 93.3200% 6,210 4σ 99.3790% 230 5σ 99.9770% 3.4 6σ 99.9997%

SIX SIGMA – PRACTICAL MEANING

SIX SIGMA ROADMAP 1. Identifying core processes and key customers 2. Defining customer requirements 3. Measuring customer performance 4. Prioritizing, analyzing, and implementing improvements 5. Expanding and integrating the Six Sigma system

SIX SIGMA PLAYERS

FOSTERING SIX SIGMA CULTURE Six Sigma Overview – 4-8 hours in length Business process management – 3 days Green Belt for Champions – 3 or 8 days Black/Green Belt Training – 12 days Change Management – 3 days Facilitative Management – 2 days Individual Tools Clinic – Depend on tool or technique

WHAT IS NEEDED FOR A SUCCESSFUL SIX SIGMA PROGRAM? Have management lead your improvement efforts. Actively support a focus on delighting your customers. Provide the sigma improvement team with access to experts who can offer ongoing guidance and coaching. Encourage open discussion about defects. People should not be afraid to point out that something is wrong. The airline industry for instance, studies crashes and “near-misses” to improve safety. Value and use the data you gather. Help employees work effectively by providing a team-based, cooperative environment.

PITFALLS TO AVOID Failure to achieve quick success Clear your agendas of competing distractions Unrealistic timeframes Ignore previous quality efforts Poor Six Sigma cultural planning and follow through Cultural development cannot be delegated or seen as an one-time event No culture goals and objectives Not allowing for unexpected interruptions False positive readings that you have achieved Six Sigma cultural transformation Underestimate resource allocation

MOTOROLA: REASONS WHY SIX SIGMA MAY FAIL Lack of senior Sponsorship Lack of Alignment to a clear strategy Lack of tracking and Accountability Failure to link to the Bottom-Line Insufficient or ineffective allocation of Human Resources Over-emphasizing on Rigid Approach

BALDRIGE AWARD AND SIX SIGMA Baldrige criteria is used as a management tool Most organizations that use the Baldrige criteria never apply for an award Baldrige Criteria as a method of establishing a “culture of excellence,” assessing performance, and prioritizing initiatives Six Sigma can be used to drive deep into root causes to solve the organization’s highest-impact problems

BALDRIGE AND SIX SIGMA ALIGNMENT Sigma encourages a focus on meeting customer requirements (Baldrige Category 3) Leadership-driven initiative (Baldrige Category 1) Alignment of improvement projects to the organization’s strategy (Baldrige Item 2.2) Effective development and training of human resources (Baldrige Item 5.2) Data-driven decision-making (Baldrige Category 4)

BALDRIGE /LEAN THINKING /SIX SIGMA ALIGNMENT

STARWOOD HOTELS

STARWOOD HOTELS Starwood has found Six Sigma's strengths can promote innovation, not stifle it. Starwood has been successful, in part, because it began with a culture of creativity before introducing the management tool Programs developed using six sigma techniques delivered more than $100 million in profit to its bottom line Since the program launched in 2001, more than 150 employees have been trained as "black belts" and more than 2,700 as "green belts"

STARWOOD HOTELS The process begins when hotel teams pitch a new idea A Six Sigma council then evaluates an idea's merit based on the division's priorities and the project's expected payoff. If the council approves a project, black belts and green belts are deployed like swat teams to the hotels to execute the project. After rolling out a prototype, green belts shift into analytical mode. At that point they spend a lot of time with the E-Tool, a proprietary Web-based system that allows Starwood to monitor a slew of performance metrics to gauge the success or failure of a new project. .

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