Executive in wait

Ernst & Young measured 500 companies in 1992, on three categories: Profitability, Productivity & Quality. They concluded that Six Sigma approach achieves best results if implemented by high-performance organizations. Medium and Low performance companies should consider some building block steps first.

• Low Performance: Concentrate on basics, Problem Solving, Cost Mgmt, Customer innovation
• Medium Performance : Set goals & monitor, Process simplification, Department improvement teams, involve middle management.
• High Performance: Benchmark against other firms, empower employees, Communicate strategic plans, continuously improve.

Six Sigma may not be right if:

• Company has strong process improvement efforts in place
• Current changes are overwhelming company people and resources
• Potential gains are not sufficient to finance investment to support Six Sigma.

Average American company is at level four of six sigma. This is equivalent to 0.6% defective or 6.210 defects per million.

Six sigma can be defined as “Business improvement approach that seeks to find and eliminate causes of mistakes or defects in business processes by focusing on outputs that are of critical importance to customers”

In Six Sigma, failure rate is defined as defects per opportunity (DPO) or Defects per million opportunities (DPM).

Defect Levels:

• 6 Sigma 3.4 ppm
• 5 Sigma 233 ppm
• 4 Sigma 6,210 ppm

Six Sigma strategy should consist of the following eight elements:

• R Recognize true state of business
• D Define what plans are in place to realize improvement of each state
• M Measure the business systems that support the plans
• A Analyse the gaps in system performance benchmarks
• I Improve system
• C Control system-level chars
• S Standardize the systems
• I Integrate systems

Business successes from Six Sigma:

1. Cost reductions
2. Market-share growth
3. Defect reductions
4. Culture changes
5. Productivity improvements
6. Customer relations imporvements
7. Product & service improvements
8. Cycle-time reductions

Motorola credits Six-Sigma to savings of $940 M over 3 years. It discovered a 10 to 1 payback for Six Sigma training investments.

Levels of training required:

1. Sr Mgmt : Sponsorship Training
2. Master Black Belt: Black Belt training
3. Management : Executive Training
4. Supervisors: Overview
5. Everyone: Six Sigma Orientation
6. Green Belts: Green Belt Training.

Six Sigma:

Six Sigma methodology provides the techniques and tools to improve the capability and reduce the defects in any process. It was started in Motorola, in its manufacturing division, where millions of parts are made using the same process repeatedly

Six Sigma methodology improves any existing business process by constantly reviewing and re-tuning the process. To achieve this, Six Sigma uses a methodology known as DMAIC (Define opportunities, Measure performance, Analyze opportunity, Improve performance, Control performance).

Six Sigma Strives for perfection.It allows for only 3.4 defects per million opportunities for each product or service transaction.

Six Sigma experts (Green Belts and Black Belts) evaluate a business process and determine ways to improve upon the existing process. Six Sigma experts can also design a brand new business process using DFSS (Design For Six Sigma) principles.

(http://www.isixsigma.com/ca/mbb_bb/)

Six Sigma improves the process performance, decreases variation and maintains consistent quality of the process output. This leads to defect reduction and improvement in profits, product quality and customer satisfaction

The three key elements of Six Sigma are:

Customer Satisfaction

Defining Processes and defining Metrics and Measures for Processes

Using and understanding Data and Systems

Setting Goals for Improvement

Team Building and Involving Employees

Source: http://sixsigmatutorial.com/Six-Sigma/Six-Sigma-Tutorial.aspx