SIX SIGMA PRESENTATION

DAVID DILLAMORE
B.Sc, DMS, FCMC, FIQA

Email:- [email protected]
QUALITY QUEST, QUALITY QUEST Ltd.,
P.O.BOX 40693, P.O.BOX 3,
RALEIGH, WHITLEY BAY,
N.C. 27629-0693, TYNE & WEAR,
UNITED STATES NE26 1BP, UNITED KINGDOM
TEL:- 0191 2510789
 INTRODUCTION
GREEK LETTER σ IS THE UNIVERSALLY ACCEPTED
SYMBOL FOR STANDARD DEVIATION.

STANDARD DEVIATION IS A MEASURE OF DISPERSION,

VARIATION OR SPREAD.

6 σ IS THE SPREAD ABOUT THE MEAN WHICH

INCLUDES 99.74% OF THE TOTAL POPULATION.

BUT TO MANY COMPANIES LIKE GE, SIEMENS,

BLACK & DECKER IT IS MUCH MORE ……..
 WHAT IS SIX SIGMA?

“Six Sigma is an information-driven methodology for reducing

waste, increasing customer satisfaction and improving
processes, with a focus on financially measurable results.” ……
Minitab Inc.

“Six Sigma is a business philosophy of driving behaviour by

making an organisation’s values explicit in its compensation
system and a business strategy of cutting costs and boosting
customer satisfaction” …… Motorola.

“ ….. a disciplined method of using extremely rigorous data

gathering and statistical analysis to pinpoint sources of
errors and ways of eliminating them.” ….. Harry & Schroeder

SIX SIGMA
 SIX SIGMA DEFINITION

The International Organisation for

Standardisation (ISO) defines Six Sigma as
a "statistical business-improvement
approach that seeks to find and eliminate
defects and their causes from an
organisation's processes, focusing on
outputs of critical importance to
customers."

SIX SIGMA
 SIGMA DEFINITION

One definition of sigma is "…a metric that

indicates how well a process is performing.
The higher the sigma value, the higher the
performance quality of the organisation's
process. Sigma measures the capability of
the process to perform defect-free work,
with a defect being anything that results in
customer dissatisfaction."
 SIX SIGMA QUALITY

ITS NOT ROCKET SCIENCE - ITS COMMON SENSE!!!

ITS BASED ON MANY QUALITY MANAGEMENT
TECHNIQUES THAT HAVE BEEN AROUND FOR A DECADES.
• STATISTICAL PROCESS CONTROL, SPC.
• TOTAL QUALITY MANAGEMENT, TQM.
• PROBLEM SOLVING TOOLS & TECHNIQUES ARE CRITICAL.
• TRAINING IN THESE TOOLS AND TECHNIQUES ESSENTIAL.
•INTERDISCIPLINARY QUALITY IMPROVEMENT TEAMS SOLVE
PROBLEMS.

SIX SIGMA
 SIX SIGMA METHODOLOGY
MEAN ( X )
CUSTOMER LOWER CUSTOMER UPPER
YCNE U QE RF SPECIFICATION SPECIFICATION

6σ
PROCESS OUTPUT

SIGMA = MEASUREMENT OF STANDARD DEVIATION

1.2 SIGMA : 600 DEFECTS OUT OF 1000.

2.5 SIGMA : 150 DEFECTS OUT OF 1000. - SERVICES
3.0 SIGMA : 67 DEFECTS OUT OF 1000. - MANUFACTURING
6.0 SIGMA : 0.0034 DEFECTS OUT OF 1000. = 3.4 DEFECTS PER MILLION.
SIX SIGMA
 GENERAL ELECTRIC G.E.
PRESIDENT, JACK WELCH, TOTALLY COMMITTED,
SAYS “THE DRIVE FOR SIX SIGMA QUALITY IS THE
CENTRE PIECE OF GE’s DREAMS AND ASPIRATIONS”

• SIX SIGMA PHILOSOPHY IS USED IN ALL G.E. BUSINESSES TO

COMPARE NOT ONLY INTERNAL PROCESSES BUT ALSO EACH G.E.
COMPANY.
• G.E. ASSESS PERFORMANCE AGAINST CUSTOMER NEEDS, BOTH
INTERNAL AND EXTERNAL.
• SIX SIGMA OBJECTIVE FOCUSES G.E. EMPLOYEES ON IMPROVING
PERFORMANCE THROUGH THE ELIMINATION OF PROCESS
VARIANCE AND DEFECTS.

SIX SIGMA
 GE …. Cost of 6 Sigma
600

500

400

$M 300

200

100

0
1996 1997 1998 1999 2000
Year
 GE .... The Benefits of Six Sigma

3500

3000

2500

2000
$M
1500

1000

500

0
1996 1997 1998 1999 2000
Year
 SIX SIGMA PERFORMANCE
US CORPORATE RESULTS - 2000 YEAR END
AVERY DENNISON - PHIL NEAL, CHAIRMAN & CEO.
WORLDWIDE LEADER IN SELF-ADHESIVE LABEL MANUFACTURE
REPORTING 12% ANNUAL EARNINGS PER SHARE GROWTH RESULTS FOR 2000, SAID

“OUR SIX SIGMA PROGRAM, WHICH GENERATED APPROXIMATELY $10 MILLION OF

INCREMENTAL SAVINGS IN OUR WORLDWIDE ROLL LABEL MATERIALS BUSINESS IN
2000, CONTINUES TO PROVIDE COST SAVINGS AND ADDED PRODUCTION CAPACITY”
REUTERS PRESS RELEASE, JANUARY 23RD, 2001.

RAYTHEON - DAN BURNHAM, CHAIRMAN.

US DEFENCE COMPANY, MANUFACTURER OF PATRIOT MISSILES AND BUSINESS
JETS. REPORTING FOURTH QUARTER PROFITS MORE THAN DOUBLED TO $190
MILLION, BURNHAM….

“ATTRIBUTED PART OF RAYTHEON’S NEARLY $1.4 BILLION SWING IN CASH FLOW

DURING 2000 TO SIX SIGMA, AN IMPROVEMENT PROGRAM FOR WORKERS THAT
MEASURES PRODUCTIVITY”. AS A RESULT, BURNHAM “PLANS TO HAVE 900 BLACK
BELTS TRAININED BY THE END OF 2001”.
REUTERS PRESS RELEASE, JANUARY 25TH, 2000.

SIX SIGMA
 SIX SIGMA BUSINESS IMPROVEMENT

MARKET

CRITICAL
BUSINESS PROCESS CUSTOMER
SUPPLIERS INPUTS OUTPUTS
PROCESS REQUIREMENTS

DEFECTS

ROOT-CAUSE ANALYSIS
OF DEFECTS LEADS TO
PERMANENT DEFECT
REDUCTION
VARIATION IN
THE OUTPUT OF
PROCESSES
CAUSES DEFECTS

SIX SIGMA
 SIX SIGMA PERFORMANCE
IMPROVEMENT MODEL
D M A I C

DEFINE - THE OBJECTIVES OF THE QUALITY

PERFORMANCE ACTIVITY

MEASURE - THE EXISTING PROCESSES AND SYSTEMS

ANALYSE - TO IDENTIFY WAYS TO ELIMINATE THE

GAPS & DEFICIENCIES

IMPROVE - DO THINGS BETTER, CHEAPER AND FASTER

CONTROL - IMPLEMENT & STANDARDISE ON THE

IMPROVED SYSTEM
SIX SIGMA
SIX SIGMA AND OTHER QUALITY
IMPROVEMENT SYSTEMS

• ISO.9000 QUALITY MANAGEMENT SYSTEMS

• BALANCED SCORECARD
• BUSINESS EXCELLENCE

• LEAN MANUFACTURING

• SUPPLY CHAIN MANAGEMENT

• CUSTOMER PERCEPTION SURVEYS

• QUALITY COSTING
ISO.9001:2000 QUALITY MANAGEMENT PROCESS MODEL

ISO.9001:2000 QUALITY MANAGEMENT

SYSTEM- Continual Improvement

MANAGEMENT
Requirements

CUSTOMER
CUSTOMER

RESPONSIBILITY

Satisfaction
MEASUREMENT
RESOURCE ANALYSIS
MANAGEMENT IMPROVEMENTS

INPUT OUTPUT
PRODUCT Product /
(and/or service) Service
REALISATION

QUALITY MANAGEMENT SYSTEM

SIX SIGMA
 THE DEMING PDSA CYCLE

ACT PLAN
DECIDE WHICH ASK QUESTIONS AND
CHANGES TO MAKE MAKE PREDICTIONS

DECIDE ON THE CONSTRUCT A PLAN

NEXT CYCLE TO COMPLETE THE
CYCLE

STUDY DO
COMPLETE DATA ANALYSIS CARRY OUT THE PLAN

COMPARE YOUR RESULTS COLLECT DATA ON THE

WITH YOUR PREDICTIONS RESULTS

SUMMARISE WHAT BEGIN ANALYSING

WAS LEARNED THE DATA

SIX SIGMA
 QUALITY MANAGEMENT PRINCIPLES

• CUSTOMER - FOCUSED ORGANISATION

• LEADERSHIP
• INVOLVEMENT OF PEOPLE
• PROCESS APPROACH
• SYSTEM APPROACH TO MANAGEMENT
• CONTINUAL IMPROVEMENT
• FACTUAL APPROACH TO DECISION MAKING
• MUTUALLY BENEFICIAL SUPPLIER RELATIONSHIP

SIX SIGMA
 BALANCED BUSINESS SCORECARD

FOUR KEY AREAS TO DEVELOP AN EFFECTIVE

MEASUREMENT FRAMEWORK TO EVALUATE
AND FACILITATE CONTINUOUS
IMPROVEMENT PROGRAMS:-

1. FINANCE & BUSINESS RESULTS

2. CUSTOMER PERCEPTION
3. INTERNAL PERFORMANCE
4. ORGANISATIONAL DEVELOPMENT

SIX SIGMA
 THE BALANCED SCORECARD

VISION STATEMENT

FINANCIAL CUSTOMER INTERNAL INNOVATION

PERSPECTIVE PERSPECTIVE PERSPECTIVE & LEARNING

CRITICAL SUCCESS FACTORS

MEASURMENT OF CONTINUOUS IMPROVEMENT

SIX SIGMA
 EFQM BUSINESS EXCELLENCE MODEL

People People
Management Results
9% 9%

Key
Policy & Customer
Leadership Processes Performance
Strategy Results
10% 14% Results
8% 20%
15%

Society
Partnerships
Results
& Resources
6%
9%

ENABLERS 50% RESULTS 50%

INNOVATION AND LEARNING

SIX SIGMA
 CONTINUOUS QUALITY IMPROVEMENT
CUSTOMER MARKET
PROFITS
SATISFACTION LEADER

No:1
DELIGHTED
ZERO DEFECTS CUSTOMERS

REAL TIME SPC/SQC/

EMPLOYEE/CUSTOMER CUSTOMER DATA
OPINION SURVEYS

BALANCED SCORECARD
SIX SIGMA QUALITY

BUSINESS EXCELLENCE,
EFQM
ISO.9000

FINAL QC
INSPECTION

SIX SIGMA
 BUSINESS PERFORMANCE MEASURES

WHERE ARE WE GOING ? VISION

HOW DO WE GET THERE ? STRATEGY

WHAT DO WE CRITICAL SUCCESS

DO WELL ? FACTORS

BUSINESS PERFORMANCE
HOW DO WE MEASURES
MEASURE
PROGRESS ?
FINANCIAL CUSTOMER PROCESSES LEARNING

SIX SIGMA
 PERFORMANCE MEASURES LINK STRATEGY
TO OPERATIONS
COMPETITION TECHNOLOGY

REGULATORY
ENVIRONMENT REWARD
SYSTEMS

ORGANISATIONAL PERFORMANCE OPERATIONS PEOPLE

STRATEGY MEASURES

CULTURE

CHANGING
EMPLOYEES
ATTITUDES
DEMANDS
FOR
QUALITY

SIX SIGMA
 INTEGRATING SIX SIGMA WITH
BUSINESS STRATEGY

BUSINESS KEY
STRATEGY PERFORMANCE CHOSEN MARKETPLACE
DEVELOPMENT MEASURES

CORE PROCESS CRITICAL

BUSINESS OUTPUT CUSTOMER
PROCESS MEASURES REQUIREMENTS
S ESS E C ORP PI HS RE DAEL

PROCESS
SIGMA

SIX SIGMA
 SIX-SIGMA OBJECTIVE
AN OBJECTIVE OF SIX SIGMA IS TO REDUCE VARIATION AND MOVE PRODUCT OR
SERVICE OUTPUTS PERMANENTLY INSIDE CUSTOMER REQUIREMENTS.
B A CRITICAL CUSTOMER
(CURVE A TO B)
REQUIREMENT

DEFECTS: SERVICE
UNACCEPTABLE TO
CUSTOMER

SERVICE OUTPUTS
SIX SIGMA
 SIX SIGMA IMPLEMENTATION SUCCESS FACTORS

COMMITTED 1. SENIOR MANAGEMENT COMMITMENT.

E.G. BOB GALVIN - MOTOROLA; JACK WELCH - G.E.;
LEADERSHIP
LARRY BOSSIDY - ALLIED SIGNAL

INTEGRATION WITH 2. INTEGRATION WITH BUSINESS OBJECTIVES AND KEY

TOP-LEVEL STRATEGY PERFORMANCE MEASURES.

BUSINESS PROCESS 3. BUSINESS PROCESS MAPPING IS CRITICAL.

FRAMEWORK

CUSTOMER & MARKET 4. CUSTOMER SATISFACTION SURVEYS AND MARKET

INTELLIGENCE NETWORK INTELLIGENCE DATA.

PROJECTS PRODUCE 5. COST SAVINGS ACCURATELY MEASURED.

SAVINGS OR REVENUES

FULL-TIME SIX SIGMA

TEAM LEADERS 6. DRIVEN BY FULL TIME TRAINED BLACK BELTS.

INCENTIVES FOR ALL 7. CONTINUOUS RECOGNITION, REWARD AND REINFORCEMENT.

SIX SIGMA
 WHAT IS SIX SIGMA - SUMMARY

SIX SIGMA IS A UNIFIED APPROACH TO PROCESS EXCELLENCE.

SIX SIGMA HAS TRANSFORMED SOME OF THE MOST SUCCESSFUL COMPANIES

IN THE WORLD - MOTOROLA, ALLIED SIGNAL, GENERAL ELECTRIC, DOW
CHEMICALS

SIX SIGMA IS A TARGET - FEWER THAN 3.4 DEFECTIVES OR ERRORS IN A

MILLION

SIX SIGMA IS AN APPROACH TO AIM AT THAT TARGET BY CHANGING THE

ORGANISATIONAL CULTURE OF A COMPANY. IT INVOLVES EVERYONE IN THE
COMPANY NOT JUST THE BLACK BELTS

SIX SIGMA IDENTIFIES PROBLEMS IN A PROCESS, SETS UP PROJECTS TO

IMPROVE THE RELIABILITY OF THE PROCESS BY APPLYING IMPROVEMENT
PROJECTS (DEFINE, MEASURE, ANALYSE, IMPROVE AND CONTROL)

SIX SIGMA CAN BE APPLIED IN MANUFACTURING AND SERVICE

ORGANISATIONS USING FACTS AND HARD DATA NOT VAGUE THEORIES.

SIX SIGMA
 QUALITY QUEST SIX SIGMA
TRAINING APPROACH

BUSINESS PROCESS
MANAGEMENT,
PEOPLE PROCESSES
PROCESS CAPABILITY,
STATISTICAL TOOLS &
TECHNIQUES
LEADERSHIP, SENIOR
MANAGEMENT
COMMITMENT, HIGH
PERFORMANCE
PROJECT TEAMS PERFORMANCE

MASTER BLACK STRATEGY OF BUSINESS IMPROVEMENT

BELT, BLACK WITH PERFORMANCE MEASURES FOR
BELTS AND
SUPPLY CHAIN EFFICIENCY, INTERNAL
GREEN BELTS
REWORK AND PRODUCTIVITY AND
SIX SIGMA CUSTOMER SATISFACTION