Six Sigma By Cathy Hiatt Boise State University October 9, 2001

Overview: Six Sigma DefinedSix Sigma Defined The Statistical Tools of Six SigmaThe Statistical Tools of Six Sigma The Components of Six SigmaThe Components of Six Sigma Corporations practicing Six Sigma and a specific success storyCorporations practicing Six Sigma and a specific success story An exercise opportunityAn exercise opportunity SummarySummary

Six Sigma Defined:  Quality management program developed by Motorola in the 1980s.  Management philosophy focused on business process improvements to: Eliminate waste, rework, and mistakesEliminate waste, rework, and mistakes Increase customer satisfactionIncrease customer satisfaction Increase profitability and competitivenessIncrease profitability and competitiveness  Statistical measure to objectively evaluate processes.  GOAL: Reach Six Sigma Quality

Six Sigma List some ways this program can be used in your organization.

The Statistical Tools of Six Sigma:

The Statistical Tools of Six Sigma Another way to look at it: 1.Clearly define the customer’s explicit requirements--CTQ 2.Count the number of defects that occur. 3.Determine the yield-- percentage of items without defects. 4.Use the conversion chart to determine DPMO and Sigma.

Sigma Conversion Table: If your yield is: Your DPMO is: Your Sigma is: 30.9%690, %308, , ,

The Components of Six Sigma: People PowerPeople Power Process PowerProcess Power

People Power: Executive Leader Champion/Sponsor Master Black Belt Black Belt Green Belt

Executive Leader Roles: High Level Executive committed to Six Sigma SuccessHigh Level Executive committed to Six Sigma Success Knowledgeable in Six Sigma ProcessKnowledgeable in Six Sigma Process Assign key individuals to the Champion/Sponsor Position.Assign key individuals to the Champion/Sponsor Position.

Champion/Sponsor Roles: Champion/Sponsor Roles: High Level ExecutiveHigh Level Executive Oversee the Black Belt positionsOversee the Black Belt positions Provide resources to complete the jobProvide resources to complete the job Assist Black Belts to select projectsAssist Black Belts to select projects Benchmark with other organizationsBenchmark with other organizations

Master Black Belt Roles: Resource for the Black Belts-experts on the mathematical theory of statistical methodsResource for the Black Belts-experts on the mathematical theory of statistical methods Experts on the Six Sigma processExperts on the Six Sigma process Works with the Champion/Sponsor to select projects.Works with the Champion/Sponsor to select projects.

Black Belt Roles: Leaders of the Six Sigma processLeaders of the Six Sigma process Management and technical skillsManagement and technical skills Bring the project vision to realityBring the project vision to reality Solely dedicated to Six Sigma ProgramSolely dedicated to Six Sigma Program Oversee Green BeltsOversee Green Belts

Green Belt Roles: Project LeadersProject Leaders Support the Black Belt to complete the projectSupport the Black Belt to complete the project

Process Power: DMAIC—Five Step Process Define Measure AnalyzeImprove Control

Define: Clearly identify the problemClearly identify the problem Utilize numerical definitionUtilize numerical definition Focus on process that creates the problem not on the outcomeFocus on process that creates the problem not on the outcome

Measure: BenchmarkBenchmark Capability of a given processCapability of a given process Focus on CTQFocus on CTQ

Analyze: Current process resultsCurrent process results What is possible compared to what the competition is doingWhat is possible compared to what the competition is doing

Improve: Implement changesImplement changes Be creative to find new ways to do things better, cheaper, or fasterBe creative to find new ways to do things better, cheaper, or faster

Control: Lock in successesLock in successes Implement measures to keep variables within the new operating limitsImplement measures to keep variables within the new operating limits

Corporations Practicing Six Sigma: General ElectricGeneral Electric MotorolaMotorola Allied SignalAllied Signal SonySony PolaroidPolaroid

Specific Success Story: GE 1995 Operating margin—13.5%1995 Operating margin—13.5% 1998 Operating margin—16.7%1998 Operating margin—16.7% Result: $600million bonusResult: $600million bonus “The most important initiative GE has ever undertaken” --Jack Welch, CEO General Electric

Exercise You have just completed all your training sessions for the valued Black Belt role. Currently your organization is operating at a 2 sigma level and your Champion wants this to improve using the Six Sigma process. It seems that although production is high, the defect levels are too high for the production of your leading line of products, Sticky Buns. This has significantly cut into profits almost to the point of dropping the line. Customer surveys indicate there is a demand for Sticky Buns so you are handed the challenging task of improving this process using the Six Sigma DMAIC approach. You have just completed all your training sessions for the valued Black Belt role. Currently your organization is operating at a 2 sigma level and your Champion wants this to improve using the Six Sigma process. It seems that although production is high, the defect levels are too high for the production of your leading line of products, Sticky Buns. This has significantly cut into profits almost to the point of dropping the line. Customer surveys indicate there is a demand for Sticky Buns so you are handed the challenging task of improving this process using the Six Sigma DMAIC approach.

Summary: Management philosophy of qualityManagement philosophy of quality Statistical target of six sigma or 3.4 defects in one million opportunitiesStatistical target of six sigma or 3.4 defects in one million opportunities Components of Six Sigma are people power and process powerComponents of Six Sigma are people power and process power –Executive Leader, Champion, Master Black Belt, Black Belt, and Green Belt –Define, Measure, Analyze, Improve, Control Customer focusCustomer focus

Bibliography Chowdhury, S. The Power of Six Sigma. Chicago: Dearborn Trade, 2001Chowdhury, S. The Power of Six Sigma. Chicago: Dearborn Trade, 2001 Pande, P. S., Neuman, R. P., Cavanaugh, R. R. The Six Sigma Way How GE, Motorola, and Other Top Companies Are Honing Their Performance. New York: McGraw-Hill, 2000Pande, P. S., Neuman, R. P., Cavanaugh, R. R. The Six Sigma Way How GE, Motorola, and Other Top Companies Are Honing Their Performance. New York: McGraw-Hill, 2000 Normal Distribution Bell Curve:Normal Distribution Bell Curve: Six Sigma IT Concepts Kurt Haubner HomePage: Six Sigma IT Concepts Kurt Haubner HomePage: Six Sigma Process Graph:Six Sigma Process Graph: