SIX SIGMA

How good is good enough?

99.9% is already VERY GOOD

But what could happen at a quality level of 99.9% (i.e., 1000 ppm),
in our everyday lives (about 4.6)?

• 4000 wrong medical prescriptions each year

• More than 3000 newborns accidentally falling

from the hands of nurses or doctors each year
• Two long or short landings at American airports each day

• 400 letters per hour which never arrive at their destination

 SIX SIGMA
How can we get these results

• 13 wrong drug prescriptions per year

• 10 newborn babies dropped by
doctors/nurses per year
• Two short or long landings per year in all
the airports in the U.S.
• One lost article of mail per hour
 SIX SIGMA
The answer is:

Six Sigma
 SIX SIGMA
What is Six Sigma
 A Vision and Philosophical commitment
to our consumers to offer the highest quality,
lowest cost products

 A Metric that demonstrates quality levels at

99.9997% performance for products and
processs

 A Benchmark of our product and process

capability for comparison to ‘best in class’

 A practical application of statistical Tools

and Methods to help us measure, analyze,
improve, and control our process
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Six Sigma as a Philosophy
 is a measure of how much
Internal &
External
Prevention & variation exists in a process
Appraisal
Failure
Costs
Costs
Old Belief
Costs

Old Belief
4 High Quality = High Cost

Quality
Internal & Prevention &
External Appraisal
Costs Failure Costs Costs

New Belief 4
New Belief
High Quality = Low Cost 5
6

Quality
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3 Sigma Vs. 6 Sigma
The 3 sigma Company The 6 sigma Company
• Spends 15~25% of sales dollars • Spends 5% of sales dollars on
on cost of failure cost of failure
• Relies on inspection to find • Relies on capable process that
defects don’t produce defects
• Does not have a disciplined • Use Measure, Analyze, Improve,
approach to gather and analyze Control and Measure, Analyze,
data Design
• Benchmarks themselves • Benchmarks themselves
against their competition against the best in the world
• Believes 99% is good enough • Believes 99% is unacceptable
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Six Sigma as a Metric

D
 2


RE
( xi  x )


SO
 =
n 1

N
Sigma =  = Deviation

CE
( Square root of variance )

Axis graduated in Sigma

-7
-6
-5

-2
-1
-4
-3

1
2
3

5
6
7
0

4
between + / - 1 68.27 % result: 317300 ppm outside
(deviation)
between + / - 2 95.45 % 45500 ppm

between + / - 3 99.73 % 2700 ppm

between + / - 4 99.9937 % 63 ppm

between + / - 5 99.999943 % 0.57 ppm

between + / - 6 99.9999998 % 0.002 ppm

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Non-Liner Decrease
 PPM

2 308,537 80 800000

70 From 5 to 6 700000

3 66,811 60 600000

50 500000

% Change
PPM % Change

PPM
40 400000
4 6,210 30 From 4 to 5 300000

20 200000

233
From 3 to 4

5 10
From 1 to 2
100000

0 0

1 2 3 4 5 6
6 3.4
Process Sigma
Process Defects per Million
Capability Opportunities

* Includes 1.5 shift

Focusing on 
Focusing on  requires
requires thorough
thorough process
process
understanding
understanding and
and breakthrough
breakthrough thinking
thinking
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Six Sigma as a Tool
Process Mapping Tolerance Analysis

Structure Tree Components Search

Pareto Analysis Hypothesis Testing

Gauge R & R Regression

Rational Subgrouping DOE

Baselining SPC

Many
Many familiar
familiar quality
quality tools
tools applied
applied in
in aa
structured
structured methodology
methodology
 SIX SIGMA
Six Sigma as a Method

To get results, should we focus our behavior on the Y or X

•Y •X1…Xn
•Dependent •Independent
•Output •Input-Process
•Effect •Cause
•Symptom •Problem
•Monitor •Control
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A Traditional View

Market Share

Sales Growth
• Output Variables
Profitability

Manage the outputs.

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A Non-Traditional View

Product Quality
COQ Service

• Input Variables On-Time Delivery

Relationships
Credit Terms
Customer
Training

Customer Satisfaction

Market Share

Sales Growth
• Output Variables
Profitability

Manage the inputs; respond to the outputs.

 Measure
SIX SIGMA
Strategy by Phase -

Analyz e

Control
Control
Improvement
Phase Step Focus

Process Characterization
Measure What is the frequency of Defects? Measure

(What) • Define the defect Y

Control
Analyze
• Define performance standards Y
• Validate measurement system Y Improve

• Establish capability metric Y

Measure

Analyze Where, when and why do Defects occur?

Control
• Identify sources of variation

Analyze
(Where, When, Why) X
• Determine the critical process parameters Vital X
Improve

Process Optimization
Improve How can we improve the process? Measure

(How) • Screen potential causes X

Control
Analyze
• Discover relationships Vital X
• Establish operating tolerances Vital X Improve

Were the improvements effective?

• Re-establish capability metric Y, Vital X Measure

Control
How can we maintain the improvements? Y, Vital X

Analyze
Control
(Sustain, Leverage) • Implement process control mechanisms
• Leverage project learning's Improve

• Document & Proceduralize

 SIX SIGMA

Measure
Characterize Process

Evaluate Control
Understand Process Maintain New Process

Improve
Improve and Verify Process
 SIX SIGMA
What Do I need to do to improve my Game?

6
GUTTER!
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Motorola ROI
1987-1994
• Reduced in-process defect levels by a factor of 200.
• Reduced manufacturing costs by $1.4 billion.
• Increased employee production on a dollar basis by 126%.
• Increased stockholders share value fourfold.

AlliedSignal ROI
1992-1996
• $1.4 Billion cost reduction.
• 14% growth per quarter.
• 520% price/share growth.
• Reduced new product introduction time by 16%.
• 24% bill/cycle reduction.
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General Electric ROI

1995-1998
• Company wide savings of over $1 Billion.
• Estimated annual savings to be $6.6 Billion by the year 2000.