What is Six Sigma? What is Six Sigma?

asics asics
A new way of doing business A new way of doing business
Wise application of statistical tools within Wise application of statistical tools within
a structured methodology a structured methodology
Repeated application of strategy to Repeated application of strategy to
individual projects individual projects
Projects selected that will have a Projects selected that will have a
substantial impact on the 'bottom line' substantial impact on the 'bottom line'
A scientific and practical method to achieve
improvements in a company
Scientific:
Structured approach.
Assuming quantitative data.
Practical:
Emphasis on financial result.
Start with the voice of the customer.
"Show me
the data
Show me
the money
Six Sigma
Six Sigma
Methods
Production
Design
Service
Purchase
HRM
Administration
QuaIity
Depart.
Management
M & S
IT
Where can Six Sigma be applied?
'Six Sigma' companies 'Six Sigma' companies
Companies who have successfully Companies who have successfully
adopted 'Six Sigma' strategies include: adopted 'Six Sigma' strategies include:
the most important initiative GE has
ever undertaken".
Jack WeIch
Chief Executive Officer
GeneraI EIectric
In 1995 GE mandated each employee to work towards
achieving 6 sigma
The average process at GE was 3 sigma in 1995
In 1997 the average reached 3.5 sigma
GE`s goal was to reach 6 sigma by 2001
Investments in 6 sigma training and projects reached
45MUS$ in 1998, proIits increased by 1.2BUS$
eneral Electric eneral Electric
t Motorola we use statistical methods daily
throughout all oI our disciplines to synthesize an
abundance oI data to derive concrete actions..
How has the use oI statistical methods within
Motorola Six Sigma initiative, across disciplines,
contributed to our growth? Over the past decade we
have reduced in-process deIects by over 300 Iold,
which has resulted in cumulative manuIacturing cost
savings oI over 11 billion dollars*.
Robert W. GaIvin
Chairman of the Executive Committee
MotoroIa, Inc.
%RA %RA
arrier #1: Engineers and managers are not interested in
mathematical statistics
arrier #2: Statisticians have problems communicating with
managers and engineers
arrier #3: Non-statisticians experience "statistical anxiety
which has to be minimized before learning can take place
arrier # 4: Statistical methods need to be matched to
management style and organizational culture
arriers to impIementation
Reality Reality
Six Sigma through the correct application Six Sigma through the correct application
of statistical tools can reap a company of statistical tools can reap a company
enormous rewards that will have a positive enormous rewards that will have a positive
effect for years effect for years
or or
Six Sigma can be a dismal failure if not Six Sigma can be a dismal failure if not
used correctly used correctly
SRU, CA% and Sauer Danfoss will SRU, CA% and Sauer Danfoss will
ensure the ensure the 1ormer occurs 1ormer occurs
Six Sigma Six Sigma
%he precise definition of Six Sigma is not %he precise definition of Six Sigma is not
important; the content of the program is important; the content of the program is
A disciplined quantitative approach for A disciplined quantitative approach for
improvement of defined metrics improvement of defined metrics
Can be applied to all business Can be applied to all business
processes, manufacturing, finance and processes, manufacturing, finance and
services services
ocus of Six Sigma* ocus of Six Sigma*
Accelerating fast breakthrough Accelerating fast breakthrough
performance performance
Significant financial results in 4 Significant financial results in 4- -8 8
months months
Ensuring Six Sigma is an extension of Ensuring Six Sigma is an extension of
the Corporate culture, not the program the Corporate culture, not the program
of the month of the month
Results first, then culture change! Results first, then culture change!
Six Sigma: Reasons for Success Six Sigma: Reasons for Success
%he Success at otorola, E and %he Success at otorola, E and
AlliedSignal has been attributed to: AlliedSignal has been attributed to:
Strong leadership (Jack Welch, arry Strong leadership (Jack Welch, arry
ossidy and ob alvin personally involved) ossidy and ob alvin personally involved)
nitial focus on operations nitial focus on operations
Aggressive project selection (potential Aggressive project selection (potential
savings in cost of poor quality > savings in cost of poor quality >
$50,000/year) $50,000/year)
%raining the right people %raining the right people
%he right way! %he right way!
Plan for "quick wins Plan for "quick wins
ind good initial projects ind good initial projects - - fast wins fast wins
Establish resource structure Establish resource structure
ake sure you know where it is ake sure you know where it is
Publicise success Publicise success
ften and continually ften and continually - - blow that trumpet blow that trumpet
Embed the skills Embed the skills
Everyone owns successes Everyone owns successes
Consider a 99% quality level Consider a 99% quality level
5000 incorrect surgical operations per 5000 incorrect surgical operations per
week! week!
200,000 wrong drug prescriptions per 200,000 wrong drug prescriptions per
year! year!
2 crash landings at most major airports 2 crash landings at most major airports
each day! each day!
20,000 lost articles of mail per hour! 20,000 lost articles of mail per hour!
Not very satisfactory! Not very satisfactory!
Companies should strive for 'Six Sigma' Companies should strive for 'Six Sigma'
quality levels quality levels
A successful Six Sigma programme can A successful Six Sigma programme can
measure and improve quality levels across measure and improve quality levels across
all areas within a company to achieve all areas within a company to achieve
'world class' status 'world class' status
Six Sigma is a Six Sigma is a continuous improvement continuous improvement
cycle cycle
!rioritise (D)
Measure (M)
Interpret
(D/M/)
!roblem (D/M/)
solve
Improve (I)
Hold
gains (C)
Alternative interpretation
Statistical background Statistical background
Six Six- -Sigma allows for un Sigma allows for un- -foreseen foreseen
'problems' and longer term issues 'problems' and longer term issues
when calculating failure error or when calculating failure error or
re re- -work rates work rates
Allows for a process 'shift' Allows for a process 'shift'
Performance Standards
2
3
4
5
6
308537
66807
6210
233
3.4
9 PP
69.1%
93.3%
99.38%
99.977%
99.9997%
Yield
Process
performance
Process
performance
Defects per
million
Defects per
million
ong term
yield
ong term
yield
Current standard Current standard
World Class World Class
enefits of 6 enefits of 69 9 approach w.r.t. financials approach w.r.t. financials
9-level
Defect rate
(ppm)
Costs of poor quality Status of the
company
6 3.4 10 oI turnover World class
5 233 10-15 oI turnover
4 6210 15-20 oI turnover Current standard
3 66807 20-30 oI turnover
2 308537 30-40 oI turnover Bankruptcy

inancial Aspects
Six Sigma and other Six Sigma and other
Quality programmes Quality programmes
Comparing three recent developments Comparing three recent developments
in "Quality anagement in "Quality anagement
S 9000 ( S 9000 (- -2000) 2000)
EQ odel EQ odel
Quality mprovement and Six Quality mprovement and Six
Sigma Programs Sigma Programs
S 9000 S 9000
Proponents claim that S 9000 is a Proponents claim that S 9000 is a
general system for Quality anagement general system for Quality anagement
n fact the application seems to involve n fact the application seems to involve
an excessive emphasis on an excessive emphasis on Quality Assurance Quality Assurance, ,
and and
standardization of already existing systems standardization of already existing systems
with little attention to Quality mprovement with little attention to Quality mprovement
t would have been better i1 improvement t would have been better i1 improvement
e11orts had preceded standardization e11orts had preceded standardization
EQ odel EQ odel
A tool for assessment: Can measure where we A tool for assessment: Can measure where we
are and how well we are doing are and how well we are doing
Assessment is a small piece of the bigger Assessment is a small piece of the bigger
scheme of Quality anagement: scheme of Quality anagement:
Planning Planning
Control Control
mprovement mprovement
" provides a tool 1or assessment, but no " provides a tool 1or assessment, but no
tools, training, concepts and managerial tools, training, concepts and managerial
approaches 1or improvement and planning approaches 1or improvement and planning
%he "Success of Change %he "Success of Change
Programs? Programs?
'Performance improvement efforts .
have as much impact on
operational and financial results as a
ceremonial rain dance has on the weather`
SchaIIer and Thomson,
arvard Business Review (1992)
Change anagement: Change anagement:
%wo Alternative Approaches %wo Alternative Approaches
ctivity Centered
Programs
Result Oriented
Programs
Change
Management
Activity Centered Programs Activity Centered Programs
Activity Centered Programs: Activity Centered Programs: %he pursuit of %he pursuit of
activities that sound good, but contribute little activities that sound good, but contribute little
to the bottom line to the bottom line
Assumption: Assumption: f we carry out enough of the f we carry out enough of the
"right activities, performance improvements "right activities, performance improvements
will follow will follow
%his many people have been trained %his many people have been trained
%his many companies have been certified %his many companies have been certified
ias Towards Orthodoxy ias Towards Orthodoxy:: eak or no eak or no
empirical evidence to assess the relationship empirical evidence to assess the relationship
between e11orts and results between e11orts and results
An Alternative: An Alternative:
Result Result- -Driven mprovement Programs Driven mprovement Programs
ResuIt ResuIt- -Driven Programs: Driven Programs: ocus on ocus on
achieving achieving speci1ic speci1ic, , measurable, measurable, operational operational
improvements within a few months improvements within a few months
Examples of specific measurable goals: Examples of specific measurable goals:
ncrease yield ncrease yield
Reduce delivery time Reduce delivery time
ncrease inventory turns ncrease inventory turns
mproved customer satisfaction mproved customer satisfaction
Reduce product development time Reduce product development time
Result riented Programs Result riented Programs
Project based Project based
Experimental Experimental
uided by uided by empirical evidence empirical evidence
easurable results easurable results
Easier to assess Easier to assess cause and e11ect cause and e11ect
Cascading strategy Cascading strategy
Six Sigma Demystified* Six Sigma Demystified*
Six Sigma is %Q in disguise, but this Six Sigma is %Q in disguise, but this
time the focus is: time the focus is:
Alignment of customers, strategy, process Alignment of customers, strategy, process
and people and people
Significant measurable business results Significant measurable business results
arge scale deployment of advanced arge scale deployment of advanced
quality and statistical tools quality and statistical tools
Data based, quantitative Data based, quantitative
eys to Success* eys to Success*
Set clear Set clear expectations expectations for results for results
easure easure the progress (metrics) the progress (metrics)
anage for anage for results results
ey personnel in ey personnel in
successful Six Sigma successful Six Sigma
programmes programmes
Black Belt required resources
-%raining in statistical methods.
-%ime to conduct the project!
-Software to facilitate data analysis.
-Permissions to make required changes!!
-Coaching by a champion or external support.
lack elt requirements
3 other words the Black Belt is
-Empowered.
-n the sense that it was always meant!
-As the theroists have been saying for years!
lack elt role!
urther down the line urther down the line - - a1ter initial Six Sigma a1ter initial Six Sigma
implementation package implementation package
aster lack elts aster lack elts
lack elts who have reached an acquired level lack elts who have reached an acquired level
of statistical and technical competence of statistical and technical competence
Provide expert advice to lack elts Provide expert advice to lack elts
reen elts reen elts
Provide assistance to lack elts in Six Sigma Provide assistance to lack elts in Six Sigma
projects projects
Undergo only two weeks of statistical and Undergo only two weeks of statistical and
problem solving training problem solving training
Six Sigma instructors (SRU) Six Sigma instructors (SRU)
Aim Aim: : Successfully integrate the Six Sigma Successfully integrate the Six Sigma
methodology into a company's existing culture methodology into a company's existing culture
and working practices and working practices
ey traits ey traits
nowledge of statistical techniques nowledge of statistical techniques
Ability to manage projects and reach closure Ability to manage projects and reach closure
High level of analytical skills High level of analytical skills
Ability to train, facilitate and lead teams to Ability to train, facilitate and lead teams to
success, 'soft skills' success, 'soft skills'
Six Sigma training Six Sigma training
package package
Aim of training package Aim of training package
%o successfully i3tegrate Six Sigma %o successfully i3tegrate Six Sigma
methodology i3to Sauer Da3foss' methodology i3to Sauer Da3foss'
culture a3d attai3 sig3ifica3t culture a3d attai3 sig3ifica3t
improveme3ts i3 quality, service a3d improveme3ts i3 quality, service a3d
operatio3al performa3ce operatio3al performa3ce
DAC
Define
Select a project
Measure
Prepare for assimilating information
AnaIyze
Characterise the current situation
Improve
ptimize the process
ControI
Assure the improvements
Six-Sigma - A "Roadmap for improvement
%raining (1 week) %raining (1 week)
Work on project
(3 weeks)
Work on project
(3 weeks)
Review Review
Define
Measure
AnaIyze
Improve
ControI
%hroughput time project %hroughput time project
4 months (full time) 4 months (full time)
Example of a Classic %raining strategy
easure easure
nalyze nalyze
Improve Improve
Control Control
Define Define
5 weeks of training 5 weeks of training
easurement phase easurement phase
%opics covered include: %opics covered include:
Quality %ools Quality %ools
Risk Assessment Risk Assessment
easurements easurements
Capability & Performance Capability & Performance
easurement Systems Analysis easurement Systems Analysis
Quality unction Deployment Quality unction Deployment
House f Quality
. TechnicaI assessment and
target vaIues
1. Customer
requirements
4. ReIationship
matrix
3. Product
characteristics
Importance
2. Competitive
assessment
5. Tradeoff
matrix
ead ead- -times times - - the time to market and time the time to market and time
to stable production to stable production
Start Start- -up costs up costs
Engineering changes Engineering changes
QD can reduce QD can reduce
Analysis phase Analysis phase
%opics include: %opics include:
Hypothesis testing Hypothesis testing
Comparing samples Comparing samples
Confidence ntervals Confidence ntervals
ulti ulti- -Vari analysis Vari analysis
ANVA (Analysis of Variance) ANVA (Analysis of Variance)
Regression Regression
mprovement phase mprovement phase
%opics include: %opics include:
History of Design of Experiments (DoE) History of Design of Experiments (DoE)
DoE Pre DoE Pre- -planning and actors planning and actors
DoE Practical workshop DoE Practical workshop
DoE Analysis DoE Analysis
Response Surface ethodology (ptimisation) Response Surface ethodology (ptimisation)
ean anufacturing ean anufacturing
Example Example - - Design of Experiments Design of Experiments
What can it do for you? What can it do for you?
inimum cost aximum output
What does it involve? What does it involve?
rainstorming sessions to identify rainstorming sessions to identify
important factors important factors
Conducting a Conducting a few few experimental trials experimental trials
Recognising Recognising significant factors significant factors which which
influence a process influence a process
Setting these factors to get Setting these factors to get maximum maximum
output output
Results of SPC Results of SPC
An improvement in the process An improvement in the process
Reduction in variation Reduction in variation
etter control over process etter control over process
Provides practical experience of Provides practical experience of
collecting useful information for analysis collecting useful information for analysis
Hopefully some enthusiasm for Hopefully some enthusiasm for
measurement! measurement!
%raditio3al Six Sigma
-Project leader is obliged to
make an effort.
-Set of tools.
-ocus on technical knowledge.
-Project leader is left to his own
devices.
-Results are fuzzy.
-Safe targets.
-Projects conducted "on the
side.
-lack elt is obliged to
achieve financial results.
-Well-structured method.
-ocus on experimentation.
-lack elt is coached by
champion.
-Results are quantified.
-Stretched targets.
-Projects are top priority.
Conducting projects
The right right support

The right right projects

The right right people

The right right tools

The right right plan

The right right results
Champions Role Champions Role
Communicate vision and progress Communicate vision and progress
Facilitate selecting projects and people Facilitate selecting projects and people
Track the progress oI Black Belts Track the progress oI Black Belts
Breakdown barriers Ior Black Belts Breakdown barriers Ior Black Belts
Create supporting systems Create supporting systems
Champions Role Champions Role
Measure and report Business Impact
Lead projects overall
Overcome resistance to Change
Encourage others to Follow
Defi3e
Select:
- the project
- the process
- the lack elt
- the potential savings
- time schedule
- team
Project selection
Projects may be seIected according to:
1. A complete list of requirements of customers.
2. A complete list of costs of poor quality.
3. A complete list of existing problems or targets.
4. Any sensible meaningful criteria
5. Usually improves bottom line - but exceptions
Project selection
utcome Examples utcome Examples
#educe deIective parts per million
Increased capacity or yield
Improved quality
#educed re-work or scrap
Faster throughput
ey Questions ey Questions
Is this a new product - process?
Yes - then potential six-sigma
Do you know how best to run a
process?
No - then potential six-sigma
ey Criteria ey Criteria
Is the potential gain enough - e.g. -
saving ~ $50,000 per annum?
Can you do this within 3-4 months?
Will results be usable?
Is this the most important issue at the
moment?
IINDUS%RA NDUS%RA
SS%A%S%CS %A%S%CS
R RESEARCH ESEARCH U UN% N%
We are based in the School of echanical and
Systems Engineering, University of Newcastle upon
%yne, England
ission statement ission statement
To promofe fhe effecfive ond
widespreod use of sfofisficoI
mefhods fhroughouf Europeon
indusfry.
%he work we do can be broken %he work we do can be broken
down into 3 main categories: down into 3 main categories:
Consultancy Consultancy
%raining %raining
ajor Research Projects ajor Research Projects
All with the common goal of promoting quality
improvement by implementing statistical
techniques
Consultancy Consultancy
We have long term one to one consultancies We have long term one to one consultancies
with large and small companies, e.g. with large and small companies, e.g.
%ransco %ransco
Prescription Pricing Agency Prescription Pricing Agency
Silverlink Silverlink
%o name but a few %o name but a few
%raining %raining
n n- -House courses House courses
SPC SPC
QD QD
Design of Experiments Design of Experiments
easurement Systems Analysis easurement Systems Analysis
n n- -Site courses Site courses
As above, tailored courses to suit the company As above, tailored courses to suit the company
Six Sigma programmes Six Sigma programmes
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enefits enefits
etter monitoring of processes etter monitoring of processes
etter involvement of people etter involvement of people
Staff morale is raised Staff morale is raised
%hroughput is increased %hroughput is increased
Profits go up Profits go up
Examples of past successes Examples of past successes
Down time cut by 40% Down time cut by 40% - - Villa soft drinks Villa soft drinks
Waste reduced by 50% Waste reduced by 50% - - any projects any projects
Stock holding levels halved Stock holding levels halved - - any any
projects projects
aterial use optimised saving 150k pa aterial use optimised saving 150k pa - -
oots oots
Expensive equipment shown to be Expensive equipment shown to be
unnecessary unnecessary - - Wavin Wavin
Examples of past successes Examples of past successes
aster Payment of ills (cut by 30 days) aster Payment of ills (cut by 30 days)
Scrap rates cut by 80% Scrap rates cut by 80%
New orders won (e.g 100,000 for an New orders won (e.g 100,000 for an
SE SE) )
Cutting stages from a process Cutting stages from a process
Reduction in materials use ( Reduction in materials use (Paper Paper - - nk nk) )
Are you on the bus? Are you on the bus?