Six Sigma What is Six Sigma A statistical

Six Sigma

What is Six Sigma? ? A statistical concept that represents amount of variation in a process relative to a specification ¡ 99. 9997% defect free ¡ A business philosophy focused on continuous improvement of key processes through the use of thorough process analysis to achieve operational excellence ¡

What’s So Bad About Variation? ¡ In world-class organizations, working to improve quality is not an extracurricular activity. It is a minimum requirement. - Chang, Labovitz, and Rosansky

DPMO 1 ¡ 3 ¡ 5 ¡ 6 ¡ sigma = = 68. 27% = 697, 700 dpmo 99. 73% = 66, 810 dpmo 99. 977% = 233 dpmo 99. 9997% = 3. 4 dpmo Note: estimates of long-term sigma values

Where did Six Sigma Come From? Motorola started it ¡ GE made Six Sigma famous ¡ Based on the QI tools learned in this course, plus other tools ¡ Need for companies to become more competitive ¡

www. motorola. com ¡ Motorola has been implementing Six Sigma throughout the organization now for over 15 years, extending the practice beyond manufacturing into transactional, support, and service functions. As a result, we have documented over $16 billion in savings to our own organization!

SS is not Continuous QI ¡ ¡ SS has an increased focus on quality as defined by the customer and uses a “sigma score” SS uses rigorous statistical techniques SS prioritizes improvement projects and resources based on the company’s strategic initiatives It is TQM with a stats focus – quantitative and qualitative

How to Do SS Management commitment ¡ Focus on the Customer ¡ Structured Training ¡ Encourage open discussion about processes and defects ¡ Gather data, analyze it, make improvements (DMAIC) on a project basis ¡ Create a team-based, cooperative environment ¡

The Training Black Belt ¡ Green Belt ¡ (Yellow Belt) ¡ Master Black Belt ¡ Champion ¡ Executive Sponsors ¡

Typical Structure for SS at GE

SS Deployment (from B&W) Business alignment planning ¡ First wave of BB training ¡ Second wave of BB and GB training ¡ Infrastructure development to deliver results and sustain culture (a QMS is always best) ¡

SS Method 1 Define 5 Control 4 Improve 2 Measure 3 Analyze

Financial Tool: COPQ ¡ Cost of Poor Quality l l l Internal Failure External Failure Appraisal Prevention (Lost Opportunity)

Internal Failure Costs Design corrective action ¡ Production rework ¡ Material losses (scrap) ¡ Machine down time ¡ Overtime ¡

Appraisal Costs Measuring/inspecting product ¡ Receiving inspection ¡ Testing ¡ External and internal auditors ¡

External Failure Costs Cost of recall/warranty ¡ Liability claims ¡ Customer complaint investigations ¡ Loss of customer loyalty ¡ Effects on reputation/marketplace perception ¡

Prevention Costs Customer satisfaction surveys ¡ Supplier reviews and ratings ¡ Process validation ¡ SPC ¡ Education/training ¡

Lost Opportunity Costs Lost sales ¡ Lost customers ¡ Delayed market entry ¡ Environmental and safety issues ¡

Total Cost of Quality ¡ Add up all costs ¡ COPQ Ratio = Total Cost of Quality $ Monthly Cost of Sales $ ¡ Examples