Six Sigma

Green Belt

Six Sigma Overview

- What is Six Sigma?

-6

-4

-2

Six Sigma
Green Belt

What is Six Sigma?

What is it?
How does it work?
What are the Benefits?
What are the Main Challenges?
What will it take?

Six Sigma
Green Belt

What is Six Sigma?

What is it?
How does it work?
What are the Benefits?
What are the Main Challenges?
What will it take?

Six Sigma
Green Belt

Six Sigma Includes

Master Black Belts, Black Belts, Green Belts

Training

Business Process Council

Sponsors/Champions
DMAIEC

Teams

DFSS

Sigma Calcs

DASHBOARDS that
Drive to Achieve
Strategy

Strategy
Processes
Projects

Change
Acceleration

Rewards, Recognition,
Promotions, Bonuses:
NOT OPTIONAL!

DOE

ACTIVE
Leadership

Lean Sigma

Six Sigma can seem overwhelming! What IS 6?

Six Sigma
Green Belt

Sigma Is a Measure of Process Capability...

Customer
Requirement
Sigma

DPMO

1
2
3
4
5
6

680,000
298,000
67,000
6,000
400
3.4

4
2

DPMO Defects per Million Opportunities

that focuses on the average and variation of the output.

Six Sigma
Green Belt

Importance of Reducing Variation

To increase a process performance, you have to decrease variation

Too early

Defects

Too late

Defects

Delivery Time
Spread of variation
too wide compared
to specifications

Too early

Too late

Reduce
variation
Delivery Time
Spread of variation
narrow compared to
specifications

Less variation provides

Greater predictability in the process

Less waste and rework, which lowers costs
Products and services that perform better and last longer
Happier customers

What Is the Goal?

Six Sigma
Green Belt

Six Sigma is about satisfying

customer needs profitably

From GE Capitals Six Sigma Vision

Six Sigma
Green Belt

Six Sigmas Methodologies

Si
g

ix

Six
Six Sigma
Sigma

EC

Fo
rS

AI

De
si
gn

Improve existing processes

so that their outputs meet
customer requirements

DM

Design new products and

processes that meet
customer needs

m
a

Alignment & Linkage to Business

Strategy & Transformation Objectives

Process Management
Control and Manage cross-functional
processes to meet business goals

How Can Six Sigma Help Us?

Six Sigma
Green Belt

Provides a standard toolkit to improve business processes

Makes processes transparent, manageable
Enables fact-based decision making
Provides a platform for profitable growth
Aligns organizational and process goals
Helps establish customer focus
Establishes a common language

Six Sigma
Green Belt

What is Six Sigma?

What is it?
How does it work?
What are the Benefits?
What are the Main Challenges?
What will it take?

Six Sigma
Green Belt

What Is Sigma?

Sigma is the scale that compares the output of a process to customer or

design specifications.
Customer
spec

FREQUENCY

FREQUENCY

Customer
spec

70

80

90

95

100

Dimension

70

80

90

95

100

Dimension

Getting
Getting better
better requires
requires reducing
reducing the
the variation
variation and
and
moving
moving the
the average
average away
away from
from the
the spec
spec limit.
limit.

Six Sigma
Green Belt

Sigma Advantages
Which process is performing best?
PROCESS

PERFORMANCE

Call servicing

32 seconds vs goal of 35

Manufacturing Cable

98% defect free

Accounts Receivable

33 days average aging vs goal of 40

Customer Service

82% rated 4 or 5 on responsiveness

The
The Sigma
Sigma Scale
Scale provides
provides aa common
common metric
metric for
for comparison.
comparison.

Six Sigma
Green Belt

Sigma Advantages
Percent

DPMO

93%

66,800

3.0

98%

22,700

3.5

99%

6,210

4.0

99.87%

1,350

4.5

99.9997%

3.4

6.0

99%
99% seems
seems outstanding;
outstanding; but
but 6,210
6,210 DPMO
DPMO reveals
reveals
significant
significant room
room for
for improvement.
improvement.

Calculating the Sigma Level

Six Sigma
Green Belt

Counting Defects Approach:

A packaging process is required to put at least 5 kg. of fertilizer in each bag.
In addition, the fill date must be stamped on the bag.
Last weeks performance:
Bags produced (units) 10,000
Under-filled bags 62
Fill dates missing 21
Number of defect opportunities - 2
Sigma Calculation:

defects
DPMO
106
no. opps no. units
DPMO

62 21
10 6 4150
2 10,000

From Sigma Table:

Sigma Level ~ 4.1

Six Sigma
Green Belt

Sigma Conversion Table

Long-Term Process Yield
(%)

Short-Term
Sigma

DPMO

6.68

933,193

94.52

3.1

54,799

8.08

0.1

919,243

95.54

3.2

44,565

9.68

0.2

903,199

96.41

3.3

35,930

11.51

0.3

884,930

97.13

3.4

28,716

13.57

0.4

864,334

97.73

3.5

22,750

15.87

0.5

841,345

98.21

3.6

17,864

18.41

0.6

815,940

98.61

3.7

13,903

21.19

0.7

788,145

98.93

3.8

10,724

24.20

0.8

758,036

99.18

3.9

8,198

27.43

0.9

725,747

99.38

6,210

30.85

691,462

99.53

4.1

4,661

34.46

1.1

655,422

99.65

4.2

3,467

38.21

1.2

617,911

99.74

4.3

2,555

42.07

1.3

579,260

99.81

4.4

1,866

46.02

1.4

539,828

99.87

4.5

1,350

50.00

1.5

500,000

99.90

4.6

968

53.98

1.6

460,172

99.93

4.7

687

57.93

1.7

420,740

99.95

4.8

483

61.79

1.8

382,089

99.97

4.9

337

65.54

1.9

344,578

99.98

233

69.15

308,538

99.98

5.1

159

72.57

2.1

274,253

75.80

2.2

241,964

78.81

2.3

211,855

81.59

2.4

184,060

84.13

2.5

158,655

86.43

2.6

135,666

88.49

2.7

115,070

90.32

2.8

96,801

91.92

2.9

80,757

93.32

66,807

99.989

5.2

108

99.9927

5.3

72

99.9951

5.4

48

99.9968

5.5

32

99.9979

5.6

21

99.99866

5.7

13

99.99914

5.8

8.5

99.99946

5.9

5.4

99.99966

3.4

Calculating the Sigma Level

Six Sigma
Green Belt

When Process Data is Continuous:

A packaging process is required to put at least 5 kg. of fertilizer in each bag.
Last weeks performance:
Bags produced (units) 10,000
Mean Fill Weight: 5.1 kg.
Standard Deviation of Fill Weight: 0.03 kg.
Sigma Calculation:

X LSL 5.1 5.0

Z

3.33
s
0.03
Short-Term Sigma Level

Attacking ProblemsPre-Six Sigma

Six Sigma
Green Belt

PRACTICAL
PROBLEM

PRACTICAL
SOLUTION

NEXT PROBLEM
In
Insome
somecases,
cases,effective
effective......But
Butcan
canresult
resultin
infire
firefighting
fightingand
andin
in
recurring
recurringproblems.
problems.

The Six Sigma Way to Attack Problems

Define

Six Sigma
Green Belt

PRACTICAL
PROBLEM

STATISTICAL
PROBLEM

Measure

PRACTICAL
SOLUTION

STATISTICAL
SOLUTION

Analyze

Control

Execute

Identify

NEXT
NEXT PROBLEM
PROBLEM

What Factors Drive

Performance?
How Can We Prevent
Problem Reoccurrence?

Six Sigma
Green Belt

The Power of the DMAIEC . . .

Not
Notjust
justan
anassortment
assortmentof
oftools,
tools,but
butwhat
whatto
todo
doat
at
each
eachstep
stepof
ofthe
theimprovement
improvementprocess.
process.

Analyze

DoE
Regression
ANOVA
t-tests
Process Analysis

Charter
VOC
SIPOC
CE Matrix

QC Chart
Documentation
Monitoring

Improve
Select Solutions
Risk Analysis

Execute

Planning
Piloting
Planning
Implementation

Measure

Define

Control

Data Collection Plan

Gage R&R
Control Chart
Capability Analysis

Common
Common language
language and
and synergy
synergy
of
of employing
employing aa standard
standard
improvement
improvement approach
approach

The DMAIEC Way to Attack Problems

PRACTICAL
PROBLEM

STATISTICAL
PROBLEM

STATISTICAL
SOLUTION

PRACTICAL
SOLUTION

Six Sigma
Green Belt

DEFINE:
We are not consistently achieving Ready for Control (Y).
MEASURE:
There was a lot of variation in Y - poor performance (RFC =
35%, 1.1 ). Determined RFC was a function of (1) boiler tube
failures, (2) excessive cooldown (previous shutdown), (3)
turbine first-stage metal temperature control, and (4)
operator errors. The boiler tube failures and temperature
control were major contributors
ANALYZE:
Pareto Analysis & Weibull Analysis of boiler tube failures revealed
inadequate water/steam flow in the ends of the waterwall
tubesheet
IDENTIFY/EXECUTE AND CONTROL:
Design changes improving flow distribution were implemented
and process is currently achieving RFC 91% of the time (2.7 )
(other countermeasures also contributing).

Design For Six Sigma (DFSS)What is it??

Six Sigma
Green Belt

A process - a more structured approach to design

A tool set
An enhancement to our current design process
A tool for assessing and mitigating risk
Teamwork
Customer focused
A culture change

a continuation of the six sigma tool set being applied

specifically to process, product, or service design.

Six Sigma
Green Belt

DFSS 50,000 foot View

Define
Define

Measure
Measure

Explore
Explore

Design
Design

Validate
Validate

Implement
Implement

Launch The

Identify

Develop

Develop

Build Pilot

Build Full-Scale

Project

Customers

Processes, Train
Staff

Define State of
Current
Customer
Knowledge

Detailed Product
& Service
Designs

Processes

Define
Outcomes

Product/ Service
Necessary
Functions
Develop
Conceptual
Product/ Service
Designs

Develop Detailed
Production
Processes

Perform Pilot
Testing

Refine Capability
& Gap Evaluation,
Perform Tradeoffs

Analyze Gaps,
Determine Root
Causes

Develop Process
Control &
Validation Plans

Evaluate Scaleup Potential

Scope Project
Identify
Stakeholders
Select Team
Determine
Project
Approach
Create
Project Plan
Define Project
Controls

Develop &
Implement
Customer
Research Plan
Translate
Customer Needs
to Product/
Service CTQs
Specify Targets,
Tolerance Limits
& Sigma Targets

Develop HighLevel Production

Processes
Predict
Capability &
Evaluate Gaps

Validate Pilot
Readiness

Perform Start-up
Testing
Analyze Gaps,
Determine Root
Causes
Transition to
Process Owners
Evaluate & Close
Design Project

Develop
Implementation
& Transition
Plans

- Design Review

Six Sigma
Green Belt

What is Six Sigma?

What is it?
How does it work?
What are the Benefits?
What are the Main Challenges?
What will it take?

Six Sigmas Broad Application

Six Sigma
Green Belt

J&J over $1 Billion in 2 years

Six
Sigma
Results

GE Capital over $1 Billion in value in 1996.

JP Morgan created $510 Million in value in year one
AIG found $38 million in revenue from one of first nine projects

Sigma often reveals that less than 10% of total service process time is
devoted to value-added work.
Measuring the soft stuff becomes not only possible but profitable.
Quality of Deal teams. VOC says experience in industry and size of
deal were the decisive factors in which firm to engage for an IPO.
Quantified & easily measured.
Quality of Communications in a leasing business. Do you notify me of
changes in schedule, do I have a designated rep, do you return calls,
emails etc within 8 hours? Quantified & easily measured.
Quality of Customer Contact. 10, 5, first and last teller measures.

Quantified & easily measured

Six Sigma
Green Belt

What is Six Sigma?

What is it?
How does it work?
What are the Benefits?
What are the Main Challenges?
What will it take?

Six Sigma Challenges

Six Sigma
Green Belt

New (?) Ways of Thinking...

Customer Thinking (customer specs)

Process Thinking (leading indicators)
Statistical Thinking (variation)
Causal Thinking [y = (x1, x2, x3 xn)]
Experimental Thinking (data-driven hypothesis testing)
Control Thinking
Stretch Thinking
Adopting Common language/way of thinking about problems
Accountability Thinking

The
The real
real Six
Six Sigma
Sigma advantage
advantage
the
the transformation
transformation of
of the
the culture.
culture.

Six Sigma
Green Belt

What is Six Sigma?

What is it?
How does it work?
What are the Benefits?
What are the Main Challenges?
What will it take?

General Electric The Benchmark!

Six Sigma
Green Belt

Senior leadership, especially Jack

Welch, provided unyielding commitment
to get the initiative going and ensure its
continued success. This will not be easy
for other companies to copy.
Hoerl, Roger (2002), An Inside Look at Six
Sigma at GE, Six Sigma Forum Magazine, Vol.
1, No. 3, May, pages 35-44.

General Electric The Benchmark!

Six Sigma
Green Belt

Six Sigma was directed toward specific,

tangible objectives, including financial
objectives. The culture changed as a
result of delivering tangible benefits, not
because of a focus on the culture itself.
Hoerl, Roger (2002), An Inside Look at Six Sigma
at GE, Six Sigma Forum Magazine, Vol. 1, No. 3,
May, pages 35-44.

Six Sigma At 3M

Six Sigma
Green Belt

500 Black Belts and Master Black Belts for ever and ever
Each has a two-year assignment.
All 28,000 salaried and technical people trained at least at
Green Belt level. Many hourly people selected also for
Green Belt training.
Major goal is to have for first time common approach to
problem solving, new product development, and
measurement across entire company.
W. James McNerney, Jr. CEO, 3M Company, 25 June 2002

Twenty Key Lessons Learned

Six Sigma
Green Belt

1. The time is right.

2. The enthusiastic commitment of top management is
critical.
3. Develop an infrastructure.
4. Commit top people.
5. Invest in relevant hands-on training.
6. Select initial projects to build credibility quickly.
7. Make it all pervasive, and involve everybody.
8. Emphasize DFSS.
9. Dont forget design for reliability.
10. Focus on the entire system.
Gerald J. Hahn, 20 Key Lessons Learned, Six
Sigma Forum Magazine, May 2002, pages 28-34.

Twenty Key Lessons Learned

Six Sigma
Green Belt

11. Emphasize customer CTQs (critical to quality).

12. Include commercial quality improvement.
13. Recognize all savings.
14. Customize to meet business needs.
15. Consider the variability as well as the mean.
16. Plan to get the right data.
17. Beware of dogmatism.
18. Avoid nonessential bureaucracy.
19. Keep the tool box vital.
20. Expect Six Sigma to become a more silent partner.
Gerald J. Hahn, 20 Key Lessons Learned, Six
Sigma Forum Magazine, May 2002, pages 28-34.

Six Sigma
Green Belt

Shareholder Value
Customer Loyalty/Revenue Growth
Cost/Working Capital Reduction

Business
Dashboards

Six Sigma
Methodologies
& Tools

Voice of

Change

Process

the Customer

Management

Management

The Essential Role of Leadership

The Strategic Process-Management Approach

Six Sigma
Green Belt

1. Identify Core Business Processes and Strategic Opportunities

2. Define Process Goals that lead to Competitive Advantage
3. Determine the Process Measures needed to evaluate Process
Performance

5. Project Selection

4. Process Management

Identify & Prioritize Performance Gaps

Develop Process Goals & Dashboards

Identify Priority Projects

Validate Measurement & Causal

Relationships

Charter, Launch and Support Projects

Assign and Build Accountabilities

Six Sigma Companies - Characteristics

Six Sigma
Green Belt

Start with a prioritized list of customer and business requirements and

specifications
Have a clear sense of process owners
Track performance over time
Analyze causes of process and output variation with statistical and process
analysis tools
Think systematically about solutions and determine financial return (the ROI may
not be there to move from 4.5 to 6.0 Sigma)
Standardize processes to hold the gains

Six
Six Sigma
Sigma is
is prioritized,
prioritized, disciplined
disciplined problem
problem solving
solving to
to
deliver
deliver on-target
on-target performance
performance with
with minimum
minimum variation.
variation.

Six Sigma Summary

Six Sigma ISs:
A Framework to Improve
Performance
Applicable to Every Function
and Business
About Business
Performance

Six Sigma
Green Belt

Six Sigma NOTs:

The Solution for Everything
Applicable Only to
Manufacturing
Its Just About Statistics

Using 6 to Achieve Your Cos Objectives

Six Sigma
Green Belt

1. Large Group Discussion: What are the Your Company Business

Objectives/Opportunities?
2. As a small group, discuss how the Six Sigma Approach can help
Your Company Achieve the Business Objectives.
3. What will Six Sigma not achieve, relative to the Objectives?
4. Summarize your team conclusions on a flipchart and be prepared to
discuss your list with the large group.