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“A comprehensive and flexible system for achieving, sustaining and maximising business success. Six Sigma is uniquely driven by close understanding of customer needs, disciplined use of facts, data and statistical analysis, and diligent attention to managing, improving and reinventing business processes.”
Putting Six Sigma in Perspective!Putting Six Sigma in Perspective!
If you played 100 rounds of golf per year, and played at:
• 2 sigma - you'd miss 6 putts per round• 3 sigma - you'd miss 1 putt per round• 4 sigma - you'd miss 1 putt every 9 rounds• 5 sigma - you'd miss 1 putt every 2.33 years• 6 sigma - you'd miss 1 putt every 163 years!
GE introduces its Six Sigma program and adds the “D” in DMAIC
1987
Dupont, 3M, Sun Microsystems, Raytheon, Boeing, Lockheed-Martin, Bank-of-America, American Express, HSBC, SAS Institute … the list keeps growing every day.
Who Else? GE - All 300,000+ GE employees must be Six Sigma certified. All new GE products developed using the “Design for Six Sigma” approach.
3M - CEO (from GE) requires all employees to become Six Sigma certified.
Many companies consider productivity to be a cost-saving operational issue. We at DuPont have elevated productivity to the strategic level because we believe that it is central to our efforts in sustainability. As a sign of our commitment in this area, we have adopted six-sigma methodology, a stringent approach that strives to reduce manufacturing defects to just several per million. At the end of last year, we had 1,100 black belts and 1,700 green belts (employees who have undergone weeks of training in the six-sigma methodology) working on 4,200 projects.
In one of them, DuPont was able to increase the production rate of its plant in Buffalo, New York, by 10% –without any capital investments. … The result: $26 million in additional revenue last year. This number might not seem huge for a company with $30 billion in sales, but DuPont has thousands of such projects, and we are adding 200 new ones each month. Altogether, our projects using six-sigma methodology are responsible for savings of more than $1 billion a year.
Source: Holliday, C. (2001). Sustainable growth the DuPont way. Harvard Business Review, Sept, pp 132
Six Sigma in the Services SectorSix Sigma in the Services Sector
“Sustaining the intensity of our Six Sigma work is critical for Bank of America to achieve its strategic goals. Six Sigma has enabled us to generate more than $300MM in first-year productivity gains for the company. It has also had a significant impact upon the leadership team with our personal education and certification as Six Sigma Green Belts. As we look to the future, our leadership charge is to keep Six Sigma a top priority and use it to produce organic customer revenue growth.” - Ken Lewis (10/9/02)
Failing to implement Six Sigma in commercial areas with the same force that the company implemented it in its industrial sectors cost Motorola $5 billion over a four-year period.
Key Elements of Six SigmaKey Elements of Six Sigma Process Orientation Customer Focus Y = f(X) Data and Measurement Driven Focus on Variation Reduction Statistical Rigour Project Orientation The DMAIC Process Improvement/Problem Solving Process Dedicated Personnel Bottom Line Results Focussed Data Driven Culture (In God we trust, all others bring Data)
Relationship between Quality, Market Share Relationship between Quality, Market Share and ROI - and ROI - The Business Case for Six SigmaThe Business Case for Six Sigma
Relative Market Share
Relative Quality
Low 25% 60% High Inferior
Superior
33 %
67%
Return on Investment (ROI) %
21
38
2029
27
20
13
7
14
Source: Buzzell, R.D. & Gales, B.T. (1987) The PIMS Principles
In god we trust, all others bring data.In god we trust, all others bring data.Grade your organisation on its use of dataGrade your organisation on its use of data
Our organisation uses only tribal knowledge i.e. people experience and “the way we do things around here”. We do not use data.
Our organisation collects data so as to say “we collect data” but the data is not used.
Our organisation collects data and we sometimes look at the numbers and use them to support problem solving and decision making.
Our organisation logically groups the data. We report it in the form of charts. Our organisation uses sample data along with basic statistics. Our organisation uses sample data along with inferential statistics. Our organisation quantifies processes via predictive equations.