.

Six Sigma Overvie w

1.1What is Six Sigma?

Sigma (

) is a letter in the Greek alphabet that has becomethe statistical

symbol and metric of process variation. Thesigma scale of measure is perfectly

correlated to such characteristics as defects-perunit, partsper-million defectives,

andthe probability of a failure. Six is the number of sigma measured in a process,

when the variation around the target issuch that only 3.4 outputs out of one

million are defects underthe assumption that the process average may drift

over thelong term by as much as 1.5 standard deviations.S ix Sigma may be defined in

several ways. Tomkins (1997)defin es Six Sigma to be

a program aimed at the near-elimination of defects from every product,

process and transac-tion. Harry (1998) defines Six Sigma to be

a strategic ini-tiative to boost profitability, increase market share andimprove

customer satisfaction through statistical tools thatcan lead to breakthroug

h quantum gains in quality. Six Sigma was launched by Motorola in

1987. It was theresult of a series of changes in the quality area starting in thelate

1970s, with ambitious ten-fold improvemen t drives. Thetop-level managemen t along with

CEO Robert Galvin devel-oped a concept called Six Sigma. After some internal

pilotimplem entations, Galvin, in 1987, formulated the goal of

achieving Six-Sigma capability by 1992 in a memo to allMotorola

employees (Bhote, 1989). The results in terms of reduction in process variation

were ontrack and cost savingstotall ed US$13 billion and improvemen t in labor

productivity achieved 204% increase over the period 1987

1997(Losian owycz, 1999).In the wake of successes at Motorola, some leading

elec-tronic companies such as IBM, DEC, and Texas Instrumentsl aunched Six Sigma

initiatives in early 1990s. However, it was

1

not until 1995 when GE and

Allied Signal launched Six Sigmaas strategic initiatives that a rapid disseminatio n took place

innonelectronic industries all over the world (Hendricks andKelbaug h, 1998). In

early 1997, the Samsung and LG Groupsin Korea began to introduce Six Sigma

within their compa-nies. The results were amazingly good in those companies.

Forinstance, Samsung SDI, which is a company under the Sam-sung Group, reported

that the cost savings by Six Sigma pro-jects totalled US$150 million (Samsung

SDI, 2000a). At thepresent time, the number of large companies applying

SixSigma in Korea is growing exponentiall y, with a strong vertical deployment

into many small- and mediumsize enterprisesa s well.As a result of consulting

experiences with Six Sigma inKorea, the author (Park et. al., 1999) believes

that Six Sigma isa new strategic paradigm of managemen t innovation

for company survival in this 21st century, which implies three

things:statis tical measureme nt, managemen t strategy and quality cul-ture.

 It tells us how good our products, services and process-es really are

through statistical measureme nt of quality level. Itis a new managemen t strategy

under leadership of toplevelmanage ment to create quality innovation

and total customersat isfaction. It is also a quality culture. It provides a means of

doing things right the first time and to work smarter by usingdata information. It also

provides an atmosphere for solvingmany CTQ (critical-toquality) problems

through team efforts.CTQ could be a critical process/pro duct result characteristi

c toquality, or a critical reason to quality characteristi c. The former is termed as

CTQy, and the latter CTQx. 1.2Why is Six Sigma Fascinatin g?

Six Sigma has become very popular throughout the wholeworld. There are several

reasons for this popularity. First, it isregarded as a fresh quality managemen

t strategy which canreplace TQC, TQM and others. In a sense, we can view thedevelop

ment process of Six Sigma as shown in Figure 1.1.

2 Six Sigma for Quality and

Productivity Promotion

Many companies, which were not quite successful in imple-

menting previous managemen t strategies such as TQC andTQM, are eager to

introduce Six Sigma.

Figure 1.1. Development process of Six Sigma in quality management

Six Sigma is viewed as a systematic, scientific, statisticalan d smarter (4S) approach

for managemen t innovation whichis quite suitable for use in a knowledge-

based informations ociety. The essence of Six Sigma is the integration of four ele-

ments (customer, process, manpower and strategy) to provideman agement

innovation as shown in Figure 1.2.

Figure 1.2. Essence of Six Sigma

Six Sigma provides a

scientific and statistical basis for quali-ty assessment for all processes

through measureme nt of qualitylevels . The Six Sigma method allows us to

draw comparisons among all processes, and tells how good a process is. Throughthis

information, top-level managemen t learns what path to follow to achieve process

innovation and customer satisfaction. Second, Six Sigma provides efficient

manpower cultivationa nd utilization. It employs a belt system

in which the levelsof mastery are classified as green belt, black belt, master blackbelt

and champion. As a person in a company obtains certain

CustomerProcessMa npowerStrategyMan agementinnovationS ystematic andScientific Approach Six Sigma Q C S Q C T Q M Six Sigma TQCISO 9000SeriesScientific

management toolssuch as SPC, TPM,QE and TCS

Six Sigma Overview 3

training, he acquires a belt. Usually, a black belt is the leaderof a project team and

several green belts work together for theproject team.Third, there are many

success stories of Six Sigma appli-cation in well known world-class companies.

As mentionede arlier, Six Sigma was pioneered by Motorola and launchedas

a strategic initiative in 1987. Since then, and particular-ly from 1995, an exponentiall

y growing number of presti-gious global firms have launched a Six Sigma program.

Ithas been noted that many globally leading companies runSix Sigma

programs (see Figure 3), and it has been wellknown that Motorola, GE, Allied

Signal, IBM, DEC, TexasInstru ments, Sony, Kodak, Nokia, and Philips

Electronicsa mong others have been quite successful in Six Sigma. InKorea, the

Samsung, LG, Hyundai groups and Korea HeavyIndus tries & Constructio n Company

have been quite successful with Six Sigma.Lastl y, Six Sigma provides flexibility in

the new millenniumo f 3Cs, which are: Change: Changing society

 Customer: Power is shifted to customer and customerde

mand is high Competition: Competition in quality and productivityT

he pace of change during the last decade has been unprecedented, and the speed of

change in this new millennium is per-haps faster than ever before. Most notably, the

power has shift-ed from producer to customer. The produceroriented industri-al

society is over, and the customeroriented information soci-ety has arrived. The

customer has all the rights to order, selectand buy goods and services.

Especially, in ebusiness, the customer has all-mighty power. Competition

in quality and productivity has been everincreasing. Second-rate quality goodscannot

survive anymore in the market. Six Sigma with its 4S(systemat ic, scientific, statistical

and smarter) approaches pro-vides flexibility in managing a business unit.

4 Six Sigma for Quality and Productivity Promotion

1.3Key Concepts of

Manageme nt The core objective of Six Sigma is to improve the performance of

processes. By improving processes, it attempts toachieve three things: the

first is to reduce costs, the second isto improve customer satisfaction, and the

third is to increaserev enue, thereby, increasing profits.

Figure 1.3.

Globally well known Six Sigma companies

1.3.1Proces s A general definition of

a process is an activity or series of activities transformin g inputs to outputs in a repetitive

flow asshown in Figure 1.4. For companies, the output is predominantly a

product taking the form of hardware goods withtheir associated services.

However, an R&D activity or a nonmanufacturi ng service activity which does not have

any formof hardware goods could also be a process.

Figure 1.4.

The process with inputs and outputs

Input variables (control factors) Input variables (noise factors) Process Process characteristicsX1X2 X3XnV1V2V3Vn Output, Y

Pro duct characteristics

198 7 1 9 8 9 1 9 9 1 1 9 9 3 19951 9 9 7 1 9 9 9 American ExpressJohnson & JohnsonSamsung GroupLG GroupEricssonNCRNo kiaPhilipsSolectronUS Postal ServiceDow

ChemicalDuPontNEC Samsung SDILG ElectronicsSonyToshi baWhirlpoolGEAllied SignalTIABBKodakDE CIBMMotorola

Six Sigma Overview 5

of 218

Leave a Comment
You must be logged in to leave a comment. Submit Characters: 400

You must be logged in to leave a comment. Submit Characters: ...

Six Sigma Book PDF Form

Download or Print 44,721 Reads Info and Rating Category: Uncategorized. Rating: (13 Ratings) Upload Date: 07/23/2008 Copyright: Attribution Non-commercial Tags: Business-Management Flag document for inapproriate content Uploaded by babudukku Follow Download

Embed Doc Copy Link Add To Collection Comments Readcast Share

Share on Scribd: Readcast

Search TIP Press Ctrl-F F to quickly search anywhere in the document. Search Search History: Searching... Result 00 of 00 00 results for result for p. More from This User Related Documents

More From This User

14 p. Lean Six Sigma

40 p. Six Sigma Concepts

23 p. Introduction to 6 Sigma Next

Send me the Scribd Newsletter, and occasional account related communications. Upload a Document Search Documents

Follow Us! scribd.com/scribd twitter.com/scribd facebook.com/scribd About Press Blog Partners Scribd 101 Web Stuff Support FAQ Developers / API Jobs Terms Copyright Privacy

Copyright 2012 Scribd Inc. Language: English scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. scribd. < div style="display: none;"><img src="//pixel.quantserve.com/pixel/p-13DPpbyg8ofc.gif" height="1" width="1" alt="Quantcast"/></div> <img src="http://b.scorecardresearch.com/p?c1=2&c2=9304646&cv=2.0&cj=1" />