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Six SigmaSix Sigma

Business ExcellenceBreakthrough

"Delivering Tomorrow's

Performance Today"

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Your first question is likely.What is Six Sigma?

Your second question is likely

Why Six Sigma?

Six Sigma

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What is a Sigma?

What is Six Sigma?

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Six Sigma Defined

A quality discipline that focuses onproduct and service excellence to

create a culture that demandsperfection (on target, every time!)

But, it is much more!

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% AccurateDefects per Million

Opportunities

The Range of Six Sigma

22 308,500308,50069.1569.15

33 66,80066,80093.3293.32

44 6,2106,21099.3899.3855 23323399.97799.977

66 3.43.499.999799.9997

11 691,500691,50030.8530.85

77 0.0200.02099.99999899.999998

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Cost of Poor Quality (COPQ)Traditional Quality Costs

Tangible

Scrap

Rework

Inspection

Warranty

Rejects

Administration /

Disposition

Concessions

Engineering Change Orders

Lost OpportunityHidden Factory

Lost Sales

Late Delivery

Long Cycle Times

Expediting Costs

Excess Inventory

Additional Costs of Poor Quality

IntangibleDifficult or impossible to measure

Lost Customer Loyalty

More Setups

Average COPQ Approximately 15% of Sales

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A B C DCustomers

(Products!)

99% 98% 97%95%Suppliers

(Raw Materials)

89%89%

96%

86%86%

ECustomers

(Products!)

96% 94%

F

95%

G

78%78%

90%Suppliers

(Raw Materials)

64%64%

70%70%H

94% 90%

I54%54%

49%49%

Rework

SS

Rework

SS

Rework

SS

RedoSS Rework

SS

RedoSS

Redo

SS

64%64%99%(3.9 )

64%64%99%(3.9 )

The Hidden Factory

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MeasureMeasure

ExploreExplore

ImplementImplement

MeasureMeasure

AnalyzeAnalyze

ImproveImprove

ControlControl

Define the opportunity

YesDo products,process and

service

standards existto satisfy therequirements?

DevelopDevelopIs Improvement

Sufficient?

Yes

LeverageLeverage

No

No

Improve currentImprove currentprocess, products &process, products &

servicesservices

Hard savings (EBIT) 12Hard savings (EBIT) 12--month impactmonth impact

ImprovingImproving

the game!the game!

MAICDFSS

BreakthroughBreakthroughdifferentiateddifferentiated

performance designs forperformance designs for

new process, productsnew process, products

& services& services

Breakthrough inBreakthrough inavoiding cost & capitalavoiding cost & capital

LongLong--term (NPV)term (NPV)benefitsbenefits

ChangingChangingthe game!the game!

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Measure

Main activities

Finalize ProjectCharter

Define CurrentProcess

Identify PossibleInput/Output

Variables

DetermineMeasurementSystem Variation

Assess CurrentCapability

Finalized ProjectCharter

Prepared ProjectTeam

Use Excellence tool

Possible Key Input /Output Variables

Data CollectionMethodology

Critical to Cost Current Sigma, and $Baseline

Potential Tools & Techniques Key Deliverables

ProjectProjectCharterCharter

CurrentCurrentProcessProcess

CapabilityCapability

MemtMemtSystemSystem

VariabilityVariability

PotentialPotentialKIVs &KIVs &KOVsKOVs

CurrentCurrentProcessProcess

MEASURE:

Gathering the right data toaccurately assess a

problem.

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Analyze

Main activities

Analyze Potential

Root Causes Establish Key InputVariables

Propose Key Input

Variable Limits Implement ObviousInput VariablesControls

Validated Root

Causes

Key InputVariables

Data AnalysisValidated KeyInput Variables

Cost Savings

Validated

Key DeliverablesPotential Tools & Techniques

RootRootCauseCauseAnalysisAnalysis

CurrentCurrentandand

ValidatedValidated

Fix theFix theobviousobvious

ProposeProposed Keyd Key

VariableVariableInputInputLimitsLimits

StatisticaStatisticall

AnalysisAnalysisfor Keyfor KeyInputInput

VariablesVariablesx

ANALYZE:

Using statistical tools tocorrectly identify the root

causes of a problem.

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Main activities

Optimize key inputvariables

Optimize processdesign

Set key inputvariable limits

Establish changestrategy

ImprovementImpacts Validated

ChangeManagementStrategy

Improved Defectsper opportunity andCost SavingsValidated

News Validated

Key DeliverablesPotential Tools & Techniques

Key InputKey InputVariablesVariablesOptimizeOptimize

dd

CurrentCurrentDPO/$DPO/$

ChangeChangeManagementManagement

StrategyStrategy

KeyKeyVariablesVariables

((KIVsKIVs))InputInput

Limits SetLimits Set

OptimizeOptimizeProcessProcessDesignDesign

Improve

IMPROVE:

Correcting the problem (notthe symptom).

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Control

Key DeliverablesMain activities

Implement controlplan

Monitor controlsystem

Document lessonslearned

Process Control

SystemCase Study,LessonsLearned

Potential Tools & Techniques

Controlling theControlling theImproved ProcessImproved Process

Final $Final $ValidatedValidatedVS GoalVS Goal

$$

LessonsLessonsLearnedLearned

andand

LeveragedLeveraged

ControlControlSystemSystemAuditAudit

x

CONTROL:

Putting a plan in place tomake sure that problems

STAYfixed once and forall.

SUSTAIN THE GAINS!

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At Dow Six Sigma is

more

than a quality Program- and more than just

dollars

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