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Six Sigma
Six Sigma was initiated and developed in Motorola. Motorola won Malcolm Baldridge Quality Award. Six Sigma is a business concept that answers customers demand for high quality and Defect-free Business process. It is the Business improvement approach that seeks to find and eliminate causes of defects and errors in processes. Six Sigma is based on a statistical measure that equates 3.4 or fewer errors or defects per million opportunities. GE (specifically CEO Jack Welch) extensively promoted it.
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Were not talking about intangible savings here. Six Sigma has given us the power to measure and control costs. And that goes straight to our bottom line.
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A philosophy and set of methods companies use to eliminate defects in their products and processes Seeks to reduce variation in the processes that lead to product defects The name six sigma refers to the variation that exists within plus or minus six standard deviations of the process outputs
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A comprehensive and flexible system for achieving, sustaining and maximizing business success; uniquely driven by close understanding of customer needs, disciplined use of facts, data, and statistical analysis, and diligent attention to managing, improving and reinventing business processes.
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Process variation
LSL
USL
Six Sigma
Two meanings 2,700 defects/million
Lower limits Upper limits
Statistical definition of a process that is 3.4 defects/million 99.9997% capable, 3.4 defects per million opportunities (DPMO) A program designed to reduce defects, lower costs, and improve customer Mean satisfaction
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PROCESS CAPABILITY
Process capability is simply a measure of how good a metric is performing against established standard(s).
Upper and Lower Standards (Specifications) Spec (Low er) Out of Spec In Spec Spec (Upp er) Out of Spec Single Standard (Specification) Spec
In Spec
Out of Spec
Probabi lity
Probabi lity
Probabil ity
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Normal Distribution
normdist(x,.,.,1)
Probab
normdist(x,.,.,0)
Mean
95.44% 99.74%
Excel statistical functions : normdist ( x, mean , st _ dev,0) normal pdf at x. Excel statistical functions : normdist ( x, mean , st _ dev,1) normal cdf at x.
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Six Sigma
Core philosophy based on key concepts: Think in terms of key business processes and customer requirements with focus on strategic objectives. Focus on corporate sponsors responsible for championing projects. Emphasize quantifiable measures such as defects per million opportunities (dpmo). Ensure appropriate metrics is identified to maintain accountability. Provide extensive training. Create highly qualified process improvement experts belts. Set stretch objectives for improvement.
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Six Sigma
A business process for improving quality, reduce cost and increasing customer satisfaction. Statistically
Having no more than 3.4 defects per million
Conceptually
Program designed to reduce defects Requires the use of certain tools and techniques
Employed in
Design Production Service Inventory management Delivery
6-Sigma Team
Master Black Belt
- Leadership
Black Belt
- Backbone of Six Sigma Org. Black Belt - Mentor Green Belts - Deployed to complex or high risk projects Green Belt
Green Belt
Green Belt
Improve
Control
Design
Validate
Define: Define who your customers are, and what their requirements are for your products and services Their expectations. Define your team goals, project boundaries, what you will focus on and what you wont. Define the process you are striving to improve by mapping the process.
DEFINE
Determine Bench mark Set the foundation Determine Customer requirements / Create Problem Statement Determine product specifications
Measure: Eliminate guesswork and assumptions about what customers need and expect and how well processes are working. 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.
MEASURE
Develop Defect Measurement Develop Data Collection process Collect Data
Interpret data
Analyze: Grounded in the context of the customer and competitive environment, analyze is used to organize data and look for process problems and opportunities. 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.
ANALYSE
Verify Data Draw Conclusions From Data Test Conclusions Determine Improvement Opportunities
Improve: Generate both obvious and creative solutions to fix and prevent problems. Finding creative solutions by correcting root causes requires innovation, technology and discipline.
IMPROVE
Create Improvement Ideas
Create Models
Experiment
Control: Ensure that the process improvements, once implemented, will hold the gains rather than revert to the same problems again. Various control tools such as statistical process control can be used. Other tools such as procedure documentation helps institutionalize the improvement.
CONTROL
Monitor Improvement Progress
Revenue
Investment in 6-Sigma
Savings
% Revenue Savings
Honeywell
1998 1999 23.6 23.7 ND ND 0.5 0.6 2.2 2.5
Key: All are measured in $B = $ Billions, United States ND = Not Disclosed Note: Numbers Are Rounded To The Nearest Ten
Design: Develop detailed design for new process. Determine and evaluate enabling elements. Create control and testing plan for new design. Use tools such as simulation, benchmarking, DOE, Quality Function Deployment (QFD), FMEA analysis, and cost/benefit analysis.
Validate: Test detailed design with a pilot implementation. If successful, develop and execute a full-scale implementation. Tools in this step include: planning tools, flowcharts/other process management techniques, and work documentation.