1. PRINCIPLES OF SIX SIGMA

2. Six Sigma? It is a set of techniques and tools for process improvement. Introduced by engineer Bill Smith at Motorola in 1986 Jack Welch made it central to business strategy at General Electric in 1995

3. Six Sigma Six Sigma seeks to improve the quality of the output of a process by: – Identifying and removing the causes of defects and minimizing variability in manufacturing processes. Six Sigma uses a set of quality management methods – Mainly empirical & statistical methods – to create a special infrastructure of people within the organization, who are experts in these methods.

4. Six Sigma continued EMPIRICAL: A collective term for the knowledge or source of knowledge acquired by: – means of the senses – particularly by observation and experimentation. STATISTICAL METHODS: Methods used in the: – collection, analysis, interpretation, presentation, and organization of data

5. Six Sigma: Targets Reduce process cycle time Reduce pollution Reduce costs Increase customer satisfaction Increase profits

6. Six Sigma con. A goal of near perfection in meeting customer requirements A sweeping change of efforts to position a company for: greater customer satisfaction profitability and competitiveness A system for achieving, sustaining and maximizing business success; uniquely driven by disciplined use of facts, data, and statistical analysis diligent attention to managing, improving and reinventing business processes Source: The Six Sigma Way by Pande, Neuman and Cavanagh

7. Six Sigma continue Sigma rating indicates: – the yield or the percentage of defect-free products it creates. – A six sigma process is one in which 99.99966% of all opportunities to produce a product or its feature are statistically expected to be free of defects 6σ Means 3.4 defects per million opportunities It is by-word for the manufacturing, engineering and management practices

8. Is 99% Quality Good Enough? 25,000 checks will be deducted from the wrong bank accounts in the next 60 minutes. 12 babies (after delivery) will be given to the wrong parents each day. 25,000 incorrect drug prescriptions will be written in the next 12 months.

9. Six Sigma Quality DPMO Defects Per Million Opportunities – Objective of Six Sigma quality is to have: 3.4 defects per million opportunities! 2 Sigma3 Sigma4 Sigma5 Sigma6 Sigma 3085406680362002333.4

10. Is Six Sigma Realistic? Sigma 6( 3,4 ppm) – Best in Class Sigma 5: 333ppm Sigma 4: (6200 ppm) Average company PURCHASED MATERIAL LOT REJECT RATE – Restaurant Bills – MD Prescription Writing – Payroll Processing – Order write-up – Journal vouchers – Wire transfers – Airline baggage handling Sigma 3 (66803 ppm) – Tax advice [phone-in] Sigma 2 (308,540 ppm)

11. Six Sigma Improvement Methods DMAIC vs. DMADV Analyze Continuous Improvement Improve Control Re-engineering, New Product/Process Design Validate Measure Define

12. Six Sigma DMIAC – Process Define: 1. Define who your customers are and what their requirements are for your products/services & their expectations. 2.Define your team goals, project boundaries, what you will focus on and what you won ’ t. 3. Define the process you are striving to improve by mapping the process.

13. Six Sigma DMAIC Process - Measure Measure: 1.Eliminate guesswork and assumptions about what customers need and expect and how well processes are working. 2.Collect data from many sources to determine speed in responding to customer requests, defect types and how frequently they occur, client feedback on how processes fit their needs, how clients rate us over time, etc. 3.The data collection may suggest revisions.

14. Six Sigma DMAIC Process - Analyze Analyze: 1.Grounded in the context of the customer and competitive environment, this step is used to organize data and look for process problems and opportunities. 2.This step helps to identify gaps between current and goal performance, prioritize opportunities to improve, identify sources of variation and root causes of problems in the process.

15. Six Sigma DMAIC Process - Improve Improve: 1.Generate both obvious and creative solutions to fix and prevent problems. 2.Finding creative solutions by correcting root causes requires -innovation -technology and -discipline

16. Six Sigma DMAIC Process - Control Control: 1.Insure that the process improvements, once implemented, will “ hold the gains ” rather than revert to the same problems again. 2.Various control tools such as statistical process control can be used. 3.Other tools such as procedure documentation helps establish the improvement.

17. Six Sigma DMADV - Process Design: 1.Develop detailed design for new process. 2.Determine and evaluate new elements. 3.Create control and testing plan for new design. 4.Use tools: such as 1.Simulation 2.Benchmarking 3.DOE 4.FMECA 5.cost/benefit analysis

18. Simulation Simulation is the imitation of the operation of a process or system over time. – The act of simulating something first requires: – a model that represents the system itself, – the simulation represents the operation of the system over time.

19. Benchmarking Six Sigma Benchmarking: – The objective is to identify business processes which, when implemented will: lead companies to exceptional levels of performance – It is the most practical and cost-effective way of introducing best practices to an organization.

20. Benchmarking, contd. It is an integral part of the continuous improvement cycle Measure Results Compare to competiti on Identify opportuni ties to improve Select tool implemen tations Conduct training Implemen t Best Practice

21. FMEA/FMECA Failure Mode and Effects Analysis (FMEA) Failure Modes, Effects and Criticality Analysis (FMECA) are methodologies designed: To identify potential failure modes for a product or process To assess the risk associated with those failure modes To rank the issues in terms of importance To identify and carry out corrective actions to address the most serious concerns.

22. FMEA/FMECA, contd. In general, FMEA / FMECA requires the identification of the following basic information: – Item(s) – Function(s) – What could be the Failure(s) – Cause(s) of Failure – Effect(s) of Failure – Current Control(s) – Recommended Action(s) FME is common CA: Criticality analysis It assigns a number from 1-10 for: - Probability - Consequence - Confidence At the end: Each failure gets a number between 1-1000 Called Risk Priority Number (RPN)

23. Six Sigma DMADV Process - Validate Validate: 1. Test detailed design with a pilot implementation. If successful: - develop and execute a full-scale implementation. 2.Tools in this step include: -planning tools -flowcharts -work documentation

24. Key Advantages 1. Improved customer loyalty 2. Time management 3. Reduced cycle time 4. Employee motivation 5. Strategic planning 6. Supply chain management

25. Disadvantages 1. Costly: Investment of Time and money to train 2. Not a quick fix: Long term and shows cumulative results 3. Crucial training: levels of certification – White belt – Yellow belt – Green belt – Black belt – Master black belt