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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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σ % Accurate
Defects 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 σ)
64%64%99%(3.9 σ)
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 current
process, products &process, products &
servicesservices
•• Hard savings (EBIT) 12Hard savings (EBIT) 12--
month impactmonth impact
••
Improving Improving
the game!the game!
MAICDFSS
•• BreakthroughBreakthrough
differentiateddifferentiated
performance designs for performance designs for
new process, productsnew process, products
& services& services
•• Breakthrough inBreakthrough in
avoiding cost & capitalavoiding cost & capital
•• LongLong--term (NPV)term (NPV)
benefitsbenefits
•• Changing Changing the 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 $Baseline
Potential Tools & Techniques Key Deliverables
ProjectProjectCharter Charter
CurrentCurrentProcessProcess
CapabilityCapability
Me’mtMe’mtSystemSystem
VariabilityVariability
PotentialPotentialKIVs &KIVs &KOVsKOVs
CurrentCurrentProcessProcess
MEASURE:
Gathering the right data toaccurately assess a
problem.
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Analyze
Main activities
• Analyze Potential
Root Causes• Establish Key InputVariables
• Propose Key Input
Variable Limits• Implement ObviousInput VariablesControls
•Validated Root
Causes
•Key InputVariables
•Data Analysis•Validated KeyInput Variables
•Cost Savings
Validated
Key DeliverablesPotential Tools & Techniques
RootRootCauseCauseAnalysisAnalysis
CurrentCurrentandand
ValidatedValidated
““Fix theFix theobvious”obvious”
ProposeProposed Keyd Key
VariableVariableInputInputLimitsLimits
StatisticaStatisticall
AnalysisAnalysisfor Keyfor KeyInputInput
VariablesVariablesx
ANALYZE:
Using statistical tools tocorrectly identify the root
causes of a problem.
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Main activities
• Optimize key inputvariables
• Optimize processdesign
• Set key inputvariable limits
• Establish changestrategy
•ImprovementImpacts Validated
•ChangeManagementStrategy
•Improved Defectsper opportunity andCost SavingsValidated
•News Validated
Key DeliverablesPotential Tools & Techniques
Key InputKey InputVariablesVariablesOptimizeOptimize
dd
CurrentCurrentDPO/$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
System•Case 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
STAY fixed once and for all….
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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®
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