$ix $igma

Remarkable Results and Rave Reviews

Is it really more fun than a Root Canal?

Hamdi A. Said Nov 13, 2002

Agenda
and 6
Some 6 History
Normal Distribution, Specification Limits, Control
Limits, and the 6 Methodology
How good is 99% accuracy? - 6 vs. 3
What are the 6 benefits? Why is it attractive?
The DMAIC model
Some 6 tools
TQM failures and 6 successes
2

 and 6 !
Sigma () is a Greek letter used to measure the variability or
the spread in a process
In business, is a metric that measures how well a processes is
performing and how often a defect is likely to occur
The higher the Sigma value, the lower the variation and fewer
the defects
Traditionally, companies accepted 3 or 4 sigma performance
levels as the norm
Six Sigma effectively utilizes some proven quality tools,
principles and techniques
The 6 tools are applied within a simple model known as
DMAIC (Define-Measure-Analyze-Improve-Control )
3

So, What is Six Sigma?

Six Sigma is a business system for achieving and sustaining
success through Customer Focus, Process Management, Process
Improvement, and the wise use of Facts and Data
It can be used for any activity that is concerned with cost,
quality, and timeliness. It can be used from production, to
human resources, to order entry, to technical support
Unlike previous quality improvement efforts, Six Sigma is
designed to provide tangible business results and cost savings
that are directly tied to the bottom line
4

The 6 integrated tools are

applied routinely, repeatedly
and in harmony
Focus is on customer
wants and needs

Decisions are
based on data
and facts

Systematic
Approach
Customer
Centered

Six Sigma is a

Data Driven

Method
For Doing Things Better

Better for the customers,

workers and shareholders

Some Six Sigma History

Roots of Six Sigma can be traced back to the 17th century
when Gauss introduced the normal curve
In the 1920's, Shewhart showed that 3 from the mean is
the point where a process requires correction
In the 1970s, a Japanese firm took over a Motorola factory
in the US (Quasar TV) and achieved a 95% reduction in
defects while using the same workforce, technology, and
designs

Some Six Sigma History (continued)

In the mid 1980s, Motorola decided to take quality seriously
and developed the Six-Sigma standard / methodology
In 1988, Motorola won the Malcolm Baldrige Award,
became a worldwide quality and profit leader, and reported
Billions of savings as a result of using Six-Sigma
Soon, other major US and world companies adapted the new
standard and reported huge successes. Among them Allied
Signal, GE, and Honeywell.

Cost of Poor Quality (% of Revenues) versus Level

25%

15%

GE: $8 - $12 Billion/Yr

10%

5%
2%

The Normal Distribution

The Normal Distribution can be
described entirely by its MEAN and

STANDARD DEVIATION (

The Distribution

Mean
68.3%

Normal Distribution has unique characteristics:

The Mean = the Mode = the Median

Symmetrical around the mean.

+ 1
95.5% of all measurements lie between: + 2
99.7% of all measurements lie between: + 3
68.3% of all measurements lie between:

-3 -2 -

95.5%

99.7%

+2

+3

At 99% accuracy, the following is likely to occur

ANNAUALLY! (In the US)

730 short or long landings at major airports

200,000 wrong drug prescriptions
260,000 incorrect surgical procedures
175,200,000 lost articles of mail
10

Performance Goals What Youd Get

For every 300,000 letters delivered

Out of every 500,000 computer restarts

For 500 Years of month-end closings

For every week of TV broadcasting (per channel)

11

With 99%

With 6

3,000 Misdeliveries

1 Misdelivery

4,100 Crashes

< 2 Crashes

60 Months would not balance

0.018 Months would not

6048 Seconds of dead air

1.8 Second of dead air

balance

Product Specifications vs. Process Outcome

Specifications
LSL

USL

Nominal

12

Control Limits
LCL

UCL

Average

Six Sigma Long Term Shift & Drift

LSL

1.5

Average

13

1.5

Nominal

USL

Average

Shifted 6 Process, 3.4

defects of 1 million
opportunities

LSL

6 vs. 3
Centered 3 Process,
66,372 defects of 1 million
opportunities

Mean

LSL

Mean

Nominal
14

Mean

USL

Simplified Conversion Table:

6
5
4
3
2
1

DPMO*
3.4
320
6,210
66,800
308,000
690,000

* Defect Per Million Opportunity

15

The DMAIC Model

Define

Measure

Analyze

The Problem
Project Scope
The Customer
Metrics

Collect Data
Feed to SPC
Variation
Key Metrics
GR&R (Validation)

Pareto Charts

Current Process map

Deliverables
Process KIV
Process KOV

Process Capability

Yield
Sigma Level

Multilevel Pareto

Root Cause
Control Charts
Fishbone D.
FMEA
Process Maps
Major Obstacles
Needed Resources

Input: x

16

Process

Improve
Multi-Vari
Optimization
DOE
PM
Train Operators
Visual Aids
Gauges &
Fixtures

Output: Y=f (x)

Control
Control Plans
Monitoring
Standardization
Documentation
Audits & Reports

Prevention
Mistake Proof
Sustain the Gain

Benefits of Using $ix $igma

Cost Reduction

Productivity
Improvements

Cycle Time Reduction

DMAIC

Culture Change

Customer Retention
Product/Service
Development
17

Market-Share
Growth

What makes it Attractive?

Generates Sustained
Results

Tool to Plan & Deliver

Values To Customers

Accelerates the Rate

Of Improvement

18

Promotes Learning &

Cross-Pollination

Executes Strategic
Change

$ix $igma

Sets a Performance
Goal for Everyone
Measurable Results
Tied to the Bottom-line

Is It Easy to Implement?
Done right, Six-Sigma is a lot of work
It has its own risks, and takes an investment in:
Time,
Energy, and
Money

Implementing 6, company wide, could be a challenge

However, Six-Sigma improvements are usually
thrilling and rewarding

19

Some Six Sigma Tools

Process Design/Re-design

Voice of the Customer

SPC

DOE
Process Management

20

Creative Thinking

Six Sigma and other Continuous Improvement Initiatives

Kaizen
Quick Strike
1-6 day
Process mapping
Cause & Effect
Other basic tools

Quick fixes
Simple solutions
Containment

21

Lean

Six Sigma

One piece flow

Cells
Visual controls
Pull system
Kanban
TPM

DMAIC
Statistical tools
FMEA
Cp and Cpk
GR&R
ANOVA & DOE

Cycle time
Waste
Inventory
Standardization
Variance

Complex problems
Defect prevention
Stability
Process capability
Customer focused
Variation reduction

TQM failures and 6 success

6

TQM
Viewed as a Quality Tool
Top Mgt skepticism (OT)
Occasional. Firefighting.
Temporary, tied to the
leader who started the
initiative

Viewed as a Mgt Tool

More visible activity
Monitored closely
Continuous Mgt reviews
Constant reinvention of the
business

1- Leadership
22

TQM failures and 6 success

TQM
Unclear, fuzzy and hard
to measure (meeting or
exceeding ..)
Might meet today's
customer needs, but not
ready for tomorrow's

6
Ambitious and challenging
Goals & results are tied to $s
People can see their results
grow
Closed-loop system helps to
adjust

2- Goals
23

TQM failures and 6 success

TQM

Focus on product quality

Efforts are concentrated
on mfg & production
Not enough focus on
customer wants and needs

Attention to all business

processes
Works in transactional and
services
More total than Total Quality

3- Focus
24

TQM failures and 6 success

TQM

Departmental Activity
Improvement projects are
done in isolated chunks
(Engineering Project, HR
project, Mfg project, etc..)

Cross Functional.
Targets customer-critical issues
The built in Process Management
monitors, measures and improves
processes

4- Barriers
25

TQM failures and 6 success

TQM
More of a Quality Police activity
Quality tools are applied by the
quality experts only
Inappropriate / unnecessary tools
could waste resources

Involves process owners & Mgrs

Demands a great diversity of skills
Adopts tools to circumstances
Uses tools that get results

5- Application
26

TQM failures and 6 success

6

TQM
Light and weak
Not well structured
More theory, less applications
Less emphasis on advanced
statistical analysis

Demanding and heavy

Well structured hands on
Training is mandatory and
sometimes tied to promotion
Training is not limited to
Quality professionals

6- Training
27

Conclusion!

$ix $igma could be:

Dangerous,
Contagious,
Addictive,
and
Highly profitable.
28

Questions
&
Answers
29

Hamdi A. Said Nov 13, 2002