SIX SIGMA OVERVIEW

Six Sigma “ Six Sigma ” refers to tools, processes and cultures made famous by Motorola and General Electric in the 1980s and are aimed at reducing variability and defects. “ Six Sigma ” refers to tools, processes and cultures made famous by Motorola and General Electric in the 1980s and are aimed at reducing variability and defects.

Six Sigma Origins Motorola deployed Six Sigma Methodology in 80 ’ s Motorola deployed Six Sigma Methodology in 80 ’ s In1981, Motorola set out to improve the quality of their products and services tenfold. In1981, Motorola set out to improve the quality of their products and services tenfold. In 1988, accepted Malcolm Baldrige National Quality Award, and began the Six Sigma Quality movement. In 1988, accepted Malcolm Baldrige National Quality Award, and began the Six Sigma Quality movement.

Motorola Experience Between : spent $70 Million on quality related education. Between : spent $70 Million on quality related education. Productivity increased average of 12.3%/yr. Productivity increased average of 12.3%/yr. Cost of Quality reduced by more than 84%. Cost of Quality reduced by more than 84%. 99.7% of in-process defects eliminated. 99.7% of in-process defects eliminated. $11 Billion in manufacturing costs saved. $11 Billion in manufacturing costs saved. Average annual compounded growth rate of 17% in earnings, revenues and stock prices. Average annual compounded growth rate of 17% in earnings, revenues and stock prices.

Six Sigma Applications Manufacturing, Service, Chemical, Financial.. Manufacturing, Service, Chemical, Financial.. High or low volume. High or low volume. Thousands, Millions or Billions in Revenue. Thousands, Millions or Billions in Revenue. Even Non-Profit Organizations. Even Non-Profit Organizations.

Integral Management and Quality Solutions 6 GE Experience

Capacity improvements of 12-18%. Capacity improvements of 12-18%. Rise in operating margin to 16.7%. Rise in operating margin to 16.7%. $750 millions in savings. $750 millions in savings.

GE plastics Reduced color variation in plastic products. Reduced color variation in plastic products.  Raised quality from 2 sigma to 4.9 sigma over 4 months.  Saved $400,000 a year for one plant. (ref GE Way). In 1996, first year of Six Sigma deployment, GE Plastics achieved benefits of $20 million In 1996, first year of Six Sigma deployment, GE Plastics achieved benefits of $20 million

GE Medical Systems Developed a new Ultrasound technology which allows medical personnel to more Cleary diagnose risk factors contributing to stroke. Developed a new Ultrasound technology which allows medical personnel to more Cleary diagnose risk factors contributing to stroke. Technology became available two years earlier than otherwise possible, due to GE's Design for Six Sigma deployment. Technology became available two years earlier than otherwise possible, due to GE's Design for Six Sigma deployment.

Other Six Sigma Industry Leaders Boeing, IBM, Bombardier, Asea Brown Boveri, DuPont, Kodak, Compaq and Texas Instruments. Boeing, IBM, Bombardier, Asea Brown Boveri, DuPont, Kodak, Compaq and Texas Instruments. GMAC Mortgage, Citibank, JP Morgan and Cendant Mortgage. GMAC Mortgage, Citibank, JP Morgan and Cendant Mortgage.

Integral Management and Quality Solutions 11 Integral MQS Achievements Sample of Six Sigma Projects Implemented

Integral Management and Quality Solutions 12 Project 1: Optimization of Calcium Addition

EFS loss of 1,481,544 L.E per year due to the uses of the heated Calcium-wire after Calcium optimization. The process current sigma level is 2.15 Opportunity Statement: ( Problem Definition ) Reduce defects percentage from 25% to 11% by July Reduce revenue losses by 740,772 L.E. Improve process Sigma level to 3.69 sigma. Goal Statement:

Integral Management and Quality Solutions 14 Project 2: Reduce Casting Time

Achieve the average process time Save annual revenue loss of LE 20,000,000. Increase productivity. Improve On-Time Delivery. Improve Employee Morale. Improve Flexibility & Reduce Production Interruption. Currently the Variable operation process current sigma level is 2.49, if it increased to 3; So there will be 0.51 increase in sigma level. Opportunity Statement: ( Problem Definition ) Goal Statement

Integral Management and Quality Solutions 16 Project 3: Width Drop Defect (Project Charter)

Project 3: (Project Charter) Width Drop Defect Business Case: The Width Drop defect beside causing an annual revenue loss of 6,704, L.E., it causes rework and production disturbance and it might cause a delay in finished product delivery. By reducing this defect, the company will improve its financial performance, increase productivity and deliver finished product on time. Opportunity Statement: Currently, in EFS, there are 0.62% defective Coils due to width drop after the hot strip Mill process. This represents a revenue loss of 6,704, L.E. per year. The process current sigma level is 3.76 Project Goal : Reduce the cost of width drop defect by 6,033,979 LE Reduce the cost of width drop defect by 6,033,979 LE Improve process Sigma level from 3.76 to 4.54 sigma. Improve process Sigma level from 3.76 to 4.54 sigma. Improve Delivery on time. Improve Delivery on time. Reduce production interruption. Reduce production interruption. Improve employee morale. Improve employee morale. Increase Customer satisfaction. Increase Customer satisfaction. Project Scope: HSM Operation Process: 1. HSM: Start with slabs and ends with Hot Rolled Coils (HRC). 2. The Project scope is to control the width drop which occurred in the Hot Strip Mill. Time Schedule & Project Plan: Activity From To Define Phase 15/01/ /02/2006 Measure Phase 15/02/ /04/2006 Analyze Phase 01/05/ /05/2006 Improve Phase 15/05/ /06/2006 Control Phase 01/07/ /07/2006 Team Selection: Dr.Gamal Megahed Sponsor TD Manager Nabil Douban Black Belt Ahmed Nabil Adhoc Financial Manager Usama Ahmed Member HSM Process Engineer Mohammed Awad Member HSM Production Eng. Mohammed Ibrahim Member Quality Control Eng. Ahmed Attala Member Automation Engineer Niraj Singh Member SKP in Charge

Integral Management and Quality Solutions 18 Improve Sales Order cycle and Scrap Products Due To Expiry

1- Definition of key terms Return Goods : The Returned Products which is stayed on the customer shelf until expiration or any kind of defect. Return Goods : The Returned Products which is stayed on the customer shelf until expiration or any kind of defect. Returns Invoices : The invoices which are totally returned, the customer did not accept any of it’s contents. Returns Invoices : The invoices which are totally returned, the customer did not accept any of it’s contents. Partial R. Invoices : The invoices which are partially returned, the customer accepted some of it’s contents and returned the others. Partial R. Invoices : The invoices which are partially returned, the customer accepted some of it’s contents and returned the others. Contract : Local or exportation tenders. Contract : Local or exportation tenders. Sales : The Net sales (Total Sales – Returns) Sales : The Net sales (Total Sales – Returns) Sale order cycle: From Salesman visits schedule, physical visit, order taking, order follow-up, order delivery to on shelf products follow-up Sale order cycle: From Salesman visits schedule, physical visit, order taking, order follow-up, order delivery to on shelf products follow-up Scrap : The Executed Finished Products Scrap : The Executed Finished Products Scrape due to expiry date: The scraped products due to exceeding the expiration date at the customer place. Scrape due to expiry date: The scraped products due to exceeding the expiration date at the customer place. Rework: The needed work on returned products to reuse them Rework: The needed work on returned products to reuse them Customers: Pharmacies, Distributors, and others like hospitals, Health insurance, …Etc. Customers: Pharmacies, Distributors, and others like hospitals, Health insurance, …Etc.

2- Project Selection Sales Net Sales DistributorsPharmacies Other Customer Returns DistributorsPharmacies Invoice Returns Return Goods ReworkScrape Due to Expiration At Company At Pharmacy Others Other customers Work Break Down Structure

Returned Products Returned products Contract R. partially Invoice R. partially Contract R. Invoice Invoice Returns Contract Returns Returned Goods

Why is this so important? The Total returns represent 6 % from The Total Sales while the samples represent 2 %

Returned Goods (A Closer Look)

Facts Almost 57% of Returned goods are from the pharmacies

Business Case The defect of returned products based on expiry date cause loss of about 3,000,000 LE per year. The defect of returned products based on expiry date cause loss of about 3,000,000 LE per year. The current sale order form not adequate for sales man requirements. The current sale order form not adequate for sales man requirements.

Opportunity Statement Currently,the returned products Currently,the returned products represent 18% from all returned Products. But 82 % from them goes to scrap This represent loss of about represent 18% from all returned Products. But 82 % from them goes to scrap This represent loss of about Million - L.E. per year Million - L.E. per year.

Facts The Company gives about 2 % form sales value as The Company gives about 2 % form sales value as A Samples, so there is an opportunity to reuse the A Samples, so there is an opportunity to reuse the Returned products if we have control on the products in the market Returned products if we have control on the products in the market

Project Scope The Sales Cycle From Getting the The Sales Cycle From Getting the Customer Order until The Customer Order until The Expired product Execution Expired product Execution

Project Objectives 1- Reduce the Expired products by 1- Reduce the Expired products by 1,000,000 L.E. per year. 1,000,000 L.E. per year. 2- Improve process sigma level from 2- Improve process sigma level from 0.6 to 1.6 Sigma. 0.6 to 1.6 Sigma.0.6 to to Improve the return cycle. 3- Improve the return cycle. 4- Improve Sales order cycle 4- Improve Sales order cycle 5- Increase the customer satisfaction. 5- Increase the customer satisfaction.

Project Charter Business Case The defect of returned products Based on expiry date cause loss of about 3,000,000 LE per year. Opportunity Statement Currently,the returned products due to expiry date represent 18% defect from all returned Products The Company Scrape about 82% from them. This represent loss of about 3 M L.E. per year. The current sigma level 0.6 Project Goal 1- Reduce the cost of returned products by 1,000,000 L.E. per year. 1,000,000 L.E. per year. 2- Improve process sigma level from 0.6 to 1.6 Sigma. 0.6 to 1.6 Sigma.0.6 to to Improve the return cycle. 4- Increase the customer satisfaction. Project Scope The Sales From Getting the Customer Order until The Expired product Execution. Time Schedule Define 2 Weeks Measure 2 Weeks Measure 2 Weeks Analyze 2 Weeks Analyze 2 Weeks Improve 1 Month Improve 1 Month Control 1 Month Control 1 Month

Integral Management and Quality Solutions 31 Thank You