Six Sigma ProgramsSix Sigma Programs
Students should be able to:
• Describe the key elements of a Six Sigma program and how they can be applied to any business process.
• Explain the five-step process for successful Six Sigma programs.
• Identify the important drivers for successful implementations of Six Sigma.
What is Six-Sigma?What is Six-Sigma?
Focus on and deliver what the customer wants
Simplify processes and close gaps in capabilities
Improve employee productivity and satisfaction
Achieve better business results…market share, revenue and income
A strategy. . . discipline. . . . a set of tools that:A strategy. . . discipline. . . . a set of tools that:
Key Concepts of Six SigmaKey Concepts of Six SigmaCritical to Quality (CTQ): Attributes most important to the
customer (Competitive Priorities)
Defect: Failing to deliver what the customer wants
Process Capability: What your process can deliver
Stable Operations: Ensuring consistent, predictable processes to improve what the customer sees and feels
Variation: What the customer sees and feels
Six Sigma focuses first on reducing process variation and then on improving process capability.
Why Variability is ImportantWhy Variability is Important
Lowerspecification
Mean
Upperspecification
Six sigma
Four sigma
Two sigma
Nominal value
Process CapabilityProcess CapabilityNature of the Problem
Six Sigma Methodology identifies Processes That Are Off-target, and/or Have a High Degree of Variation, and Corrects the Process
1. Define--Identify the gaps between competitive priorities and competitive capabilities.
What is a defect?
Scope
Deliverables
Team composition
Steering committee
Goals
Six Sigma: A Five-Step ProcessSix Sigma: A Five-Step Process
D - M - A - I - C
2. Measure — quantify the work the process does that affects the gap.
Process flowchart
Six Sigma: A Five-Step ProcessSix Sigma: A Five-Step Process
D - M - A - I - C
Pricing Process
3. Analyze—determine the drivers for optimal outcomes and establish procedures to make the outcome routine.
Process capability analysis
Cause and effect matrix
Six Sigma: A Five-Step ProcessSix Sigma: A Five-Step Process
D - M - A - I - C
Incapable ProcessesIncapable ProcessesProcess average
Nominal value
Lower specification Upper
specification
Off Target
Lowerspecification Upper
specification
Nominal value
Too Variable
Capability MeasuresCapability Measures
Cpk = Minimum of
ProcessProcessCapabilityCapabilityIndexIndex
Upper specification – x
3
x – Lower specification
3,
=
=
Target Value Variability Capability
1.00 Three Sigma 1.33 Four Sigma 1.67 Five Sigma 2.00 Six Sigma
Capability MeasuresCapability Measures
Cp =
Upper specification - Lower specification
6
Process Capability RatioProcess Capability Ratio
Target Value Variability Capability
1.00 Three Sigma 1.33 Four Sigma 1.67 Five Sigma 2.00 Six Sigma
Cause and Effect Matrix
Sales Data
4. Improve—modify or redesign existing methods to meet new performance objectives
Decision guidelines
Escalation process
Exception codes
Six Sigma: A Five-Step ProcessSix Sigma: A Five-Step Process
D - M - A - I - C
What Continuous Improvement Looks Like
5. Control—monitor processes to make sure high performance levels are
maintained.
Monthly performance reviews
Six Sigma: A Five-Step ProcessSix Sigma: A Five-Step Process
D - M - A - I - C
GE Early Dispute Resolution Process
• What are the competitive priorities for the EDR process?
• What is causing us to miss the competitive priorities?
• What process measurements would you suggest?
GE EDR System
Level 1:Level 1:PrivatePrivateResolutionResolution
Level 3:Level 3:Public Public
AdjudicationAdjudication
Level 2:Level 2:ExternalExternal
FacilitationFacilitation
No Further ActionNo Further ActionNecessaryNecessary
ConflictConflict NotedNoted
Business Unit Business Unit Attempts to Informally Attempts to Informally
Resolve ConflictResolve Conflict
ResolutiResolutionon
ReachedReached??
No
Yes
YesNo Further ActionNo Further Action
NecessaryNecessary
LitigationLitigation
Refer to Legal Group:
Refer to Legal Group:
•Form DR Team•Evaluate Case•Select DisputeResolution Vehicle/Review
•Ongoing Discussionw/Opponents
•Form DR Team•Evaluate Case•Select DisputeResolution Vehicle/Review
•Ongoing Discussionw/Opponents
Convene for ADRConvene for ADR
AppealAppeal
ResolutionResolutionReached?Reached?
No Further ActionNo Further ActionNecessaryNecessary
YesResolutionResolutionReached?Reached?
No
ResolutionResolutionReached?Reached? No Further ActionNo Further Action
NecessaryNecessaryNo
ADR ProcessADR Process(Mediation, (Mediation, Negotiation, Negotiation, Arbitration; Arbitration; Mediation Mediation Preferred)Preferred)
Yes
No
Summary
• Everything we do is a process that can be defined.
• Every process can be broken down, measured, and analyzed into its component parts and therefore can be improved by focusing on what is critical to the customer’s perception of quality. • To be successful, the entire process and any improvements must be continually measured and controlled.
• Drivers for success include a corporate culture institutionally committed to the notion of change, a profound commitment to quality in everything the business does, and strong leadership.