What is Six Sigma?

Sigma is a letter in the Greek Alphabet

What Is Six Sigma?

Degree of variation; Level of performance in terms of defects; Statistical measurement of process capability; Benchmark for comparison; Process improvement methodology; It is a Goal; Strategy for change; A commitment to customers to achieve an acceptable level of performance

Six Sigma Definitions

Business Definition A break through strategy to significantly improve customer satisfaction and shareholder value by reducing variability in every aspect of business. Technical Definition A statistical term signifying 3.4 defects per million opportunities.

Sigma Defects Per Million Level Opportunities 690,000 1 2 3 308,000 66,800

Rate of Improvement 2 times 5 times

4
5 6

6,210
230 3.4

11 times
27 times 68 times
4

Six Sigma

A scientific and practical method to achieve improvements in a company

Scientific: Structured approach. Assuming quantitative data. Show me the money

Show me the data

Practical: Emphasis on financial result. Start with the voice of the customer.

Where can Six Sigma be applied?

Service Management
Purchase

Design

Administration

Six Sigma Methods

Production

Quality Depart. HRM

IT

M&S

Six Sigma companies

Companies who have successfully adopted Six Sigma strategies include:

General Electric
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 GEs goal was to reach 6 sigma by 2001 Investments in 6 sigma training and projects reached 45MUS$ in 1998, profits increased by 1.2BUS$

the most important initiative GE has ever undertaken. Jack Welch

Chief Executive Officer General Electric

Barriers to implementation
Barrier #1: Engineers and managers are not interested in mathematical statistics
Barrier #2: Statisticians have problems communicating with managers and engineers Barrier #3: Non-statisticians experience statistical anxiety which has to be minimized before learning can take place Barrier # 4: Statistical methods need to be matched to management style and organizational culture

Reality
Six Sigma through the correct application of statistical tools can reap a company enormous rewards that will have a positive effect for years or Six Sigma can be a dismal failure if not used correctly ISRU, CAMT and Sauer Danfoss will ensure the former occurs

Six Sigma
The precise definition of Six Sigma is not important; the content of the program is A disciplined quantitative approach for improvement of defined metrics Can be applied to all business processes, manufacturing, finance and services

Focus of Six Sigma*

Accelerating fast breakthrough performance Significant financial results in 4-8 months Ensuring Six Sigma is an extension of the Corporate culture, not the program of the month Results first, then culture change!
*Adapted from Zinkgraf (1999), Sigma Breakthrough
Technologies Inc., Austin, TX.

The Six Sigma metric

Statistical background
Some Key measure

Target = m

Statistical background
Control limits +/ - 3

Target = m

Statistical background
Required Tolerance
LSL USL

+/ - 3

Target = m

Statistical background
Tolerance
LSL

+/ - 3

USL

Target = m

+/ - 6
Six-Sigma

Statistical background
Tolerance
LSL

+/ - 3

USL

1350 pp m

1350 pp m

Target = m

+/ - 6

Statistical background
Tolerance
LSL

+/ - 3

USL

0.001 pp m

1350 pp m

1350 pp m

0.001 pp m

Target = m

+/ - 6

Statistical background

Six-Sigma allows for un-foreseen problems and longer term issues when calculating failure error or re-work rates Allows for a process shift

Statistical background
Tolerance
LSL

1. 5

USL

0 ppm

3. 4 ppm

66803 ppm

3. 4 ppm

+/ - 6

Performance Standards

2 3 4 5 6
Process performance

PPM
308537 66807 6210 233 3.4
Defects per million

Yield
69.1% 93.3% 99.38% 99.977% 99.9997%
Long term yield
Current standard

World Class

Performance standards
First Time Yield in multiple stage process Number of processes 1 10 100 500 1000 2000 2955 3 4 5 6

93.32 99.379 99.9767 99.99966 50.09 93.96 99.77 99.9966 0.1 53.64 97.70 99.966 0 4.44 89.02 99.83 0 0.2 79.24 99.66 0 0 62.75 99.32 0 0 50.27 99.0

Financial Aspects Benefits of 6 approach w.r.t. financials

-level Defect rate Costs of poor quality Status of the (ppm) company 6 3.4 < 10% of turnover World class 5 233 10-15% of turnover 4 6210 15-20% of turnover Current standard 3 66807 20-30% of turnover 2 308537 30-40% of turnover Bankruptcy

Six Sigma Process

Six-Sigma - A Roadmap for improvement

Define Measure Analyze Improve
Select a project Prepare for assimilating information Characterise the current situation Optimize the process

Control

Assure the improvements

DMAIC

Define

Measure

Analyze

Improve

Control

Deployment (Define) phase

Team Roles Presentation skills Project management skills Group techniques Quality Pitfalls to Quality Improvement projects Project strategies

Measurement phase
Quality Tools Risk Assessment Measurements Capability & Performance Measurement Systems Analysis Quality Function Deployment FMEA

Analysis phase
Hypothesis testing Comparing samples Confidence Intervals Multi-Vari analysis ANOVA (Analysis of Variance) Regression

Improvement phase
History of Design of Experiments (DoE) DoE Pre-planning and Factors DoE Practical workshop DoE Analysis Response Surface Methodology (Optimisation) Lean Manufacturing

Example - Design of Experiments

What can it do for you?

Minimum cost Maximum output

What does it involve?

Brainstorming sessions to identify important factors
Conducting a few experimental trials

Recognising significant factors which influence a process Setting these factors to get maximum output

Control phase
Control charts SPC case studies EWMA Poka-Yoke 5S Reliability testing Business impact assessment

Example - SPC (Statistical Process Control)

- reduces variability and keeps the process stable
Disturbed process Natural process
Natural boundary

Temporary upsets

Natural boundary