Chapter 10

MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing 1

Chapter 10Chapter 10

Principles of

Six Sigma

MANAGING FOR QUALITY AND PERFORMANCE EXCELLENCE, 7e, © 2008 Thomson Higher Education Publishing

Key IdeaAlthough we view quality improvement tools and techniques from the perspective of Six Sigma, it is important to understand that they are simply a collection of methods that have been used successfully in all types of quality management and improvement initiatives, from generic TQM efforts, to ISO 9000, to Lean Production, and in Baldrige processes.


Six-Sigma Metrics

Defect – any mistake or error that is passed on to a customer

Defects per unit (DPU) = number of defects discovered number of units produced

Defects per million opportunities (dpmo) = DPU 1,000,000 opportunities for error

Defective – a product or service that is unacceptable to a customer due to one or more defects


Is 99.9% Good Enough?Is 99.9% Good Enough?

20,000 incorrect drug prescriptions will be 20,000 incorrect drug prescriptions will be written in the next 12 months.written in the next 12 months.

22,000 checks will be deducted from the 22,000 checks will be deducted from the wrong bank accounts in the next 60 wrong bank accounts in the next 60 minutes.minutes.

12 babies will be given to the wrong 12 babies will be given to the wrong parents each day.parents each day.


Key Idea

Although originally developed for manufacturing in the context of tolerance-based specifications, the Six Sigma concept has been operationalized to apply to any process and has come to signify a generic quality level of at most 3.4 defects per million opportunities.


Six-Sigma Quality Ensuring that process variation is half the

design tolerance (Cpk = 2.0) while allowing the mean to shift as much as 1.5 standard deviations, resulting in at most 3.4 dpmo.


Motorola’s Motorola’s Corporate Quality GoalCorporate Quality Goal

(January 1987)(January 1987)

10 times by 198910 times by 1989

100 times by 1991100 times by 1991

Six Sigma by 1992Six Sigma by 1992

(In Everything We Do)(In Everything We Do)


Motorola’s Initial Six SigmaMotorola’s Initial Six SigmaMeasurement ProcessMeasurement Process

Cycle time; e.g., 81 minutes Cycle time; e.g., 81 minutes 27 minutes 27 minutes 9 9 minutes minutes 3 minutes 3 minutes 1 minute 1 minute 20 seconds 20 seconds

Defects; e.g., 81 defects Defects; e.g., 81 defects 27 defects 27 defects 9 9 defects defects 3 defects 1 defect 3 defects 1 defect 0.3 defects 0.3 defects

REDUCE BOTH SIMULTANEOUSLY!REDUCE BOTH SIMULTANEOUSLY!


k-Sigma Quality Levels


But is Six Sigma Realistic?But is Six Sigma Realistic?

·

1

11

21

31

41

3 4 5 6 7

10

1

100

1K

10K

100K

765432

(66810 ppm)· IRS – Tax Advice (phone-in)

Best in Class

(3.4 ppm)

Domestic AirlineFlight Fatality Rate

(0.43 ppm)

·(233 ppm)

AverageCompany

Purchased MaterialLot Reject Rate

Air Line Baggage Handling

Wire Transfers

Journal VouchersOrder Write-up

Payroll Processing

Doctor Prescription WritingRestaurant Bills

·······

PP

M P

er

Part

or

Pro

cess S

tep

SIGMA

11

Problem Solving Focus

Problem: any deviation between what “should be” and what “is” that is important enough to need correcting

Problem Solving: the activity associated with changing the state of what “is” to what “should be”

Question: should we be focused on studying problems or on best in class processes?


Key Factors in Six Sigma Project Selection Financial return, as measured by costs

associated with quality and process performance, and impacts on revenues and market share

Impacts on customers and organizational effectiveness

Probability of success Impact on employees Fit to strategy and competitive advantage


Problem Solving Process

1. Redefining and analyzing the problem/opportunity

2. Generating ideas

3. Evaluating and selecting ideas

4. Implementing ideas


Key Idea

A structured problem-solving process provides all employees with a common language and a set of tools to communicate with each other, particularly as members of cross-functional teams.


DMAIC Methodology

1. Define

2. Measure

3. Analyze

4. Improve

5. Control


Common Six Sigma Tools


Define

Describe the problem in operational terms

Drill down to a specific problem statement (project scoping)

Identify customers and CTQs, performance metrics, and cost/revenue implications


MeasureKey data collection questions

What questions are we trying to answer? What type of data will we need to answer

the question? Where can we find the data? Who can provide the data? How can we collect the data with minimum

effort and with minimum chance of error?


Analyze

Focus on why defects, errors, or excessive variation occur

Seek the root cause5-Why techniqueExperimentation and verification


Improve

Idea generationBrainstormingEvaluation and selectionPiloting Implementation planning


Control

Process ownership Certification of project benefits Maintain improvements Standard operating procedures Training Checklist or reviews Statistical process control charts


Tools for Six-Sigma and Quality Improvement

Elementary statistics Advanced statistics Product design and reliability Measurement Process control Process improvement Implementation and teamwork


The Six Sigma Process: The Six Sigma Process: DMAIC vs. DMADVDMAIC vs. DMADV

Define

Measure

Analyze

Design

Validate

Improve

Control

Continuous Improvement Reengineering


Design for Six Sigma Focus on optimizing product and process

performance Features

A high-level architectural view of the design Use of CTQs with well-defined technical

requirements Application of statistical modeling and simulation

approaches Predicting defects, avoiding defects, and

performance prediction using analysis methods Examining the full range of product performance

using variation analysis of subsystems and components


Key Idea

All Six Sigma projects have three key characteristics: a problem to be solved, a process in which the problem exists, and one or more measures that quantify the gap to be closed and can be used to monitor progress.


Key Six Sigma Metrics in Services Accuracy (Validity) Reliability (Consistency) Cycle time Cost Customer satisfaction


TQM vs. Six SigmaTQM vs. Six Sigma

In general, Six Sigma:In general, Six Sigma: Is more structured (DMAIC, “tollgates”)Is more structured (DMAIC, “tollgates”) Has more management involvementHas more management involvement Is more statistically basedIs more statistically based Is based on cost-benefit analysisIs based on cost-benefit analysis Has dedicated resources/certificationHas dedicated resources/certification


Lean + Six SigmaLean + Six SigmaThe perfect complement!The perfect complement! Six Sigma is about Quality; Lean is about speedSix Sigma is about Quality; Lean is about speed Lean is about eliminating delays and other waste Lean is about eliminating delays and other waste

(“muda”); Six Sigma is about improving the work (“muda”); Six Sigma is about improving the work through eliminating variationthrough eliminating variation

Lean works on obvious problems (and solutions); Lean works on obvious problems (and solutions); Six Sigma is needed to find root causes when Six Sigma is needed to find root causes when solutions are not obvioussolutions are not obvious

Lean involves everyone, while Six Sigma relies on Lean involves everyone, while Six Sigma relies on highly trained “belts”highly trained “belts”

Lean methods are very useful in creating “Six Lean methods are very useful in creating “Six Sigma ready” environmentsSigma ready” environments

Parts of Lean projects may become Six Sigma Parts of Lean projects may become Six Sigma opportunities, and vice-versaopportunities, and vice-versa

Many leading companies are implementing Lean Many leading companies are implementing Lean Six SigmaSix Sigma


Lean Production Concepts and Tools The 5S’s: seiri (sort), seiton (set in order), seiso

(shine), seiketsu (standardize), and shitsuke (sustain)

Continuous flow/takt time Visual controls Efficient layout and standardized work Pull production Single minute exchange of dies (SMED) Total productive maintenance Continuous improvement

Chapter 10

Documents

process step sigma

sigma quality ensuring

sigma quality levels

sigma concept

sigma metrics

sigma realistic

customer defects

principles ofsix sigma