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Six Sigma - Basic Introduction

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    Prof. Rushen Chahal

    Prof. Rushen Chahal

    SIX SIGMA Introduction

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    What is Six Sigma

    Six Sigma is the measure of quality thatstrives for near perfection. It is adisciplined, data-driven methodologyfocused on eliminating defects. A SixSigma defect is defined as anything thatfalls outside ofa customer's specifications.Six Sigma is a reference to a statisticalmeasuring system, equivalent to just 3.4defects per every million opportunities(Snee, 2003).

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    WHY SIX SIGMA

    Intense competitive pressures especiallyfrom rapid globalization.

    Greater consumer demand for high qualityproducts and services, little tolerance forfailures ofany type.

    Top management (and stockholder)recognition of the high costs of poor quality.

    The a

    va

    ila

    bility

    and

    acc

    essibi

    lity of

    larg

    ed

    ata

    bases and the increasing ability to explore,understand, and use the data.

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    Sigmaand % accuracy

    Defects per Million % Accur acyOpportunities (DPMO)

    One Sigma691,500 30.85%

    Two Sigma308,500 69.15%Three Sigma66,810 93.32%

    Four Sigma 6,210 99.38%

    Five

    Sigma

    23399

    .977

    %Six Sigma 3.4 99.9997%

    Seven Sigma 0.020 99.999998%

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    Cost of Poor Quality

    Fig. 1 Cost of poor quality versus Sigma level

    0%

    10%

    20%

    30%

    3 4 5 6 7

    Sigma Level

    Cos

    tofpoorquality

    as

    %o

    fearnings

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    Inventor of Six Sigma

    Motorola is known for its cool cell phones,but the company's mor e lastingcontribution to the world is the quality-

    improvement process called Six Sigma. In1986 an engineer named Bill Smith, soldthen-Chief Executive Robert Galvin on aplan to strive for error-free products99.9997% o f the time. I t i s the origin of SixSigma.

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    Six Sigmaat Motorola

    Motorola saved $17 Billion from 1986 to2004, r eflecting hundreds of individualsuccesses in all Motorola business areasincluding: Sales and Marketing

    Product design

    Manufacturing

    Customer service Transactional processes

    Supply chain management

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    General Electric: What Is Six Sigma?

    First, what it is not. It is not a secret society,a slogan, or a clich. Six Sigma is a highlydisciplined process that helps us focus ondeveloping and delivering near-perfect

    products and services Saved $750 million by theend of1998

    Cut invoice defects and disputes by 98 percent,speeding payment, and creating better

    productivity Streamlined contract review process, leading to

    faster completion of deals and annual savings of$1 million

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    Honeywell: Six Sigma Plus

    Six Sigma is one of the most potentstrategies ever developed to accelerateimprovements in processes, products, andservices, and to r adically reducemanufacturing and/or administrative costsand improve quality. It achieves this byrelentlessly focusing on eliminating waste andreducing defects and variations.

    Initiated Six Sigmaefforts in 1992 and saved more then $600 million ayear by 1999.

    Reduced time from design to certification of new projects likeaircraftengines from 42 to 33 months.

    Incr eased market value by a compounded 27% per year through fiscalyear1998.

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    Selecting the right projects for SIX SIGMA

    Assur e that the importance of the projects isevident or can be readily demonstrated.

    Assur e

    the

    projects

    ar

    evi

    ab

    leand do

    ab

    lein

    ashort time.

    Assur e that the success of the projects can be

    readily quantified.

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    The Structure

    Six Sigma Team

    Prof. Rushen Chahal

    Own vision, direction,

    integration, results Lead change

    Project owner Implement solutions Black Belt managers

    Full time Train and coach

    Black and Green Belts Statistical problem solving experts

    Devote 50% - 100% of time to Black Belt activities Facilitateand practice problem solving Train and coach Green Belts and project teams

    Part-time Help Black Belts

    Master Black

    Belts

    Black Belts

    Green BeltsProject Champions

    Executive Leadership

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    Six Sigma Methodology (DMAIC)

    Define

    Measure

    Analyse

    Control

    Improve

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    DMAIC Steps 1. Define

    1. Define 2. Measure 3. Analyze 4. Improve 5. Control

    Identify projects that are measurable Define projects including the demands of the customer

    and the content of the internal process.

    Dev

    elop t

    eam c

    hart

    er Define process map

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    DMAIC Steps 2. Measure

    2. Measure1. Define 3. Analyze 4. Improve 5. Control

    Define performance standards

    Measure current level of quality into Sigma. Itprecisely pinpoints thearea causing problems.

    Identify all potential causes for such problems.

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    DMAIC Steps 3. Analyse

    3. Analyse1. Define 2. Measure 4. Improve 5. Control

    Establish process capability

    Define performance objectives Identify variation sources

    Tools foranalysis

    Process Mapping

    Failure Mode & Effect Analysis Statistical Tests

    Design of Experiments

    Control charts

    Quality Function Deployment (QFD)

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    DMAIC Steps 4. Improve

    4. Improve1. Define 2. Measure 3. Analyse 5. Control

    Scr een potential causes

    Discover variable relationships among causes and effects

    Establish operating tolerances

    Pursuea method to resolveand ultimately eliminate problems. It isalso a phase to explore the solution how to change, fix and modify theprocess.

    Carryout a trial run fora planned period of time to ensure the revisionsand improvements implemented in the process result in achieving thetargeted values.

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    DMAIC Steps 5. Control

    5. Control1. Define 2. Measure 3. Analyse 4. Improve

    Monitor the improved process continuously toensurelong term sustainability of the newdevelopments.

    Share thelessons learnt Document the results and accomplishments ofall

    the improvement activities for future reference.

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    Six Sigma Case study

    A dabbawala is a person in the Indian city ofMumbai whose job is to carry and deliverfreshly made food from home in lunch boxesto office workers.

    Dabbawalas pick up 175,000 lunches fromhomes and deliver to their customerseveryday.

    Only one mistake is made in every 6 milliondeliveries.

    Accur acy rating is 99.999999. More than SixSigma.

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    Six Sigma- First Generation (SSG 1)

    The era 1986 to 1990 is referred to as the firstgeneration of Six Sigma, or SSG 1 for short.

    Pioneered at Motorola

    Statisticalapproach

    Measured Defects Per Million Opportunities(DPMO)

    Focused on: Elimination of defects

    Improving product and service quality Reducing cost

    Continuous process improvement

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    Six Sigma- Second Generation (SSG 2)

    In the1990s, the focus of Six Sigma shiftedfrom product quality to business quality.General Electric Corp. ushered in the secondgeneration of Six Sigma, or

    SSG 2 as it is known. Six Sigma becamea business-centric system

    of management.

    Strong measurement on bringing dollars tothe bottom line.

    High potential candidates were selected asBlack Belts.

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    Six Sigma- Third Generation (Gen III)

    Developed after the year 2000. Gen III can show companies how to

    deliver products or services that, in theeyes of customers, have real value.

    Combines Lean ManufacturingTechniques and Six Sigma. Termed asLean Six Sigma.

    Kor ean steel maker Posco and electronicsmaker Samsung has begun a Gen IIIprogram.

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    Conclusion

    A gauge of quality and efficiency, Six Sigma is also ameasure of excellence. Embarking on a Six Sigma programmeans delivering top-quality service and products whilevirtually eliminating all internal inefficiencies (Dedhia, 2005).

    A true Six Sigma organization produces not only excellent

    product but also maintains highly efficient production andadministrative systems that work effectively with thecompany's other service processes (Lucas, 2002).

    The primary factor in the successful implementation ofa sixsigma project is to have the necessary resources, the supportand leadership of top management.


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