Six Sigma – Q & A

MQM Students & Quality Oasis MembersMQM Students & Quality Oasis Members

University of Wollongong, DubaiUniversity of Wollongong, Dubai

2626thth December 2002 December 2002

Sunil ThawaniSunil Thawanithawanis@hotmail.comthawanis@hotmail.com

Shift in Business FocusBusiness Business

FocusFocus <1950<1950 19501950 to1970’sto1970’s 1980’s1980’s 1990’s1990’s 2000’s2000’s

ProductivityProductivity

QualityQuality

Customer Customer SatisfactionSatisfaction

CostCost

Agility/Agility/SpeedSpeed

FlexibilityFlexibility

AdaptabilityAdaptability

Product life Product life cyclecycle Source - TQMI

Operating at 99 % Quality

At least 200,000 wrong drug prescriptions each At least 200,000 wrong drug prescriptions each year;year;

Two short or long landings at major airports each Two short or long landings at major airports each day;day;

5000 incorrect surgical procedures per week;5000 incorrect surgical procedures per week; Unsafe drinking water for almost 15 minutes each Unsafe drinking water for almost 15 minutes each

day;day; No electricity for almost 7 hours each month;No electricity for almost 7 hours each month; 50 dropped newborn babies each day;50 dropped newborn babies each day;

Is it Good Enough ?Is it Good Enough ?

Source: Six sigma forumSource: Six sigma forum

What is Six Sigma?

Born in Motorola about 15 years back. Born in Motorola about 15 years back. High performance, data driven approach for High performance, data driven approach for

analyzing the root causes of business analyzing the root causes of business processes/ problems and solving them. processes/ problems and solving them.

Links Customers, Process improvements with Links Customers, Process improvements with financial results.financial results.

What is Six Sigma? Greek character used in statistics;Greek character used in statistics; Measures Measures the capability of the process to the capability of the process to

perform defect free workperform defect free work I.e. variation - I.e. variation - standard deviation – i.e. how far a measured standard deviation – i.e. how far a measured result is from the average;result is from the average;

Six Sigma – Upper and lower specification Six Sigma – Upper and lower specification limits are 6 standard deviations from the limits are 6 standard deviations from the average;average;

Defect – anything which leads to customer Defect – anything which leads to customer dissatisfactiondissatisfaction

What is Six Sigma?

Sigma value indicates how often defects Sigma value indicates how often defects are likely to occur. are likely to occur.

As sigma increases, cost goes down As sigma increases, cost goes down while profitability, productivity and while profitability, productivity and customer satisfaction go up. customer satisfaction go up.

Six Sigma Failure Rates

Sigma Sigma LevelLevel

Defects per Million OpportunitiesDefects per Million Opportunities

11 697,672697,672

22 308,770308,770

33 66,81066,810

44 6,2096,209

55 232232

66 3.43.4

Who All are Using Six Sigma ?  

3M, Alcoa, GE , Abbott Pharmaceuticals, Johnson Controls , Ford, Pratt & Whitney , Northrop Grumann , BP, Air France, Lufthansa, Conoco, Halliburton, Ferrari , Morelli, Boeing, Motorola, TRW, Wipro, Tata Group, Singapore Airlines, Honeywell, Sun Microsystems, Citigroup, Jaguar, Rolls Royce, Bombardier, Home Depot , Amazon.com, Sprint, Apple Computer , IBM, Sony, Ericsson, Nokia, Canon, Hitachi , Maytag, Polaroid, Lockheed Martin, Dupont

+ hundreds of other companies worldwide.

All types of businesses – manufacturing, service,

e-business, process – in all types of processes/ functions.

GE – Investments Vs. Returns

1998 Annual Report General Electric Company

$500

$1,000

$1,500

$2,000

$2,500

1996 1997 1998 1999estimate

Million US$

InvestmentSavings

Cumulative figures

Six Sigma Sample Results

CompanyCompany Annual SavingsAnnual Savings

General ElectricGeneral Electric $2.0+ billion$2.0+ billion

JP Morgan ChaseJP Morgan Chase $1.5 billion $1.5 billion

Texas InstrumentsTexas Instruments $600 million$600 million

Johnson & JohnsonJohnson & Johnson $500 million$500 million

Honeywell Honeywell $600 million$600 million

Six Sigma Methodology Based on Dr. Deming & Dr. Juran Based on Dr. Deming & Dr. Juran

philosophy;philosophy; Dr. Deming's PDSA cycle to continually Dr. Deming's PDSA cycle to continually

improve the process in terms of quality, improve the process in terms of quality, cost and delivery. cost and delivery.

Dr. Juran - improvement is achieved Dr. Juran - improvement is achieved project by project. project by project.

US $ 100,000 to 250,000US $ 100,000 to 250,000 savings per savings per Six Sigma project. Six Sigma project.

Process Efficiency and Effectiveness

Process EffectivenessProcess Effectiveness: The process is effective if : The process is effective if the output meets customer needs e.g. % of orders the output meets customer needs e.g. % of orders delivered on time to the customers. delivered on time to the customers. 

Process EfficiencyProcess Efficiency: Process is efficient when it is : Process is efficient when it is effective at the least cost e.g. time taken to deliver effective at the least cost e.g. time taken to deliver goods to customer on time. goods to customer on time.

  Maximizing effectiveness and efficiency together Maximizing effectiveness and efficiency together means that process produces high quality at low means that process produces high quality at low cost i.e. providing most value to customer.cost i.e. providing most value to customer.

Six Sigma Methodology

DMAIC process : DMAIC process : Define;Define; Measure; Measure; Analyse; Analyse; Improve; Improve; Control.Control.

Six Sigma Methodology - Define

Poorly performing areas are identified and Poorly performing areas are identified and prioritized through use of data;prioritized through use of data;

Use of 7 QC tools like Check sheets, Pareto Use of 7 QC tools like Check sheets, Pareto diagram, Cause & Effect. diagram, Cause & Effect.

Make a business case for improvement;Make a business case for improvement; Form teams & issue charter.Form teams & issue charter.

Six Sigma Methodology - Measure

Identify suspected problem process;Identify suspected problem process; Is the process aligned with organisations Is the process aligned with organisations

strategic goals?strategic goals? How will we know we are successful?How will we know we are successful? What is the capability of the process?What is the capability of the process? Use of process flow charts, FMEA etc.Use of process flow charts, FMEA etc.

Six Sigma Methodology - Analyze

When, where and why do defects occur i.e.When, where and why do defects occur i.e.

understand exactly what is happening understand exactly what is happening within a process and why defects are within a process and why defects are occurring;occurring;

Use of statistical tools like Input/ Output Use of statistical tools like Input/ Output matrices, Scatter plots, Hypothesis testingmatrices, Scatter plots, Hypothesis testing

Six Sigma Methodology ImproveImprove

Vital factors in the process are identified;Vital factors in the process are identified; Experiments systematically designed to focus Experiments systematically designed to focus

on factors which can be modified to achieve on factors which can be modified to achieve target goals.target goals.

Use of Design of Experiments techniques.Use of Design of Experiments techniques. Control:Control:

Process capability and controls; Process capability and controls; Use of SPC tools to manage processes on Use of SPC tools to manage processes on

continual basiscontinual basis

The Players

Project Champions;Project Champions; Master Black Belts;Master Black Belts; Black Belts;Black Belts; Green Belts;Green Belts; Yellow BeltsYellow Belts

The Players – Project Champions

Project ChampionsProject Champions are involved in: are involved in: selecting projects;selecting projects; identifying Black and Green Belt candidates;identifying Black and Green Belt candidates; Set improvement targetsSet improvement targets Provide resources;Provide resources; Review the projects on regular basis andReview the projects on regular basis and Remove any road blocks to programs Remove any road blocks to programs

success. success.

The Players – Master Black Belts

Master Black BeltsMaster Black Belts are: are: Technical leaders of Six Sigma;Technical leaders of Six Sigma; Serve as instructors for Black & Green Belts;Serve as instructors for Black & Green Belts; Provide ongoing coaching and support to Provide ongoing coaching and support to

project teams to assure the appropriate project teams to assure the appropriate application of statistics;application of statistics;

Provide assistance to Project Champions;Provide assistance to Project Champions; Deploy Six Sigma program.Deploy Six Sigma program.

The Players – Black Belts

Black BeltsBlack Belts are: are: Backbone of Six Sigma deployment;Backbone of Six Sigma deployment; Highly qualified;Highly qualified; Lead teams;Lead teams; Attack chronic problems;Attack chronic problems; Manage projects;Manage projects; “ “ Drive “ teams for solutions that work;Drive “ teams for solutions that work; Responsible for bottom line results.Responsible for bottom line results.

The Players – Green Belts

Green BeltsGreen Belts:: Provide team support to Black Belts;Provide team support to Black Belts; Assist in data collection, input;Assist in data collection, input; Analyse data using software;Analyse data using software; Prepare reports for management.Prepare reports for management.

The Players – Yellow Belts

Yellow Belts:Yellow Belts: Represent large percentage of work Represent large percentage of work

force;force; Trained with basic skills;Trained with basic skills; Assist GB & BB on large projects;Assist GB & BB on large projects; Assist in build and sustain Six Sigma Assist in build and sustain Six Sigma

cultureculture

Conclusion Six sigma provides the desired speed, Six sigma provides the desired speed,

accuracy and agility to organisation to accuracy and agility to organisation to be in the digital age of tomorrow. be in the digital age of tomorrow.

“ “ I do not believe you can do today’s job I do not believe you can do today’s job with yesterday’s methods and be in with yesterday’s methods and be in business tomorrow “ - business tomorrow “ - Mr. Nelson JacksonMr. Nelson Jackson. .

ASQ Six Sigma Black Belt Certification

Visit Visit www.asq.orgwww.asq.org Download CSSBB Body of Knowledge;Download CSSBB Body of Knowledge; Prepare as per CSSBB BOK;Prepare as per CSSBB BOK; One completed & certified SS project;One completed & certified SS project; Appear examAppear exam

Thank you.Thank you.