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Six Sigma Introduction and Goals May 11, 2008

Posted by Coolguy in Six Sigma goals.
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I will attempt to introduce Six Sigma and various training programs available to get trained on Six Sigma with a series of simple Q&A’s. Refer to my post for additional information on Six Sigma certification

What is Six Sigma ?

Six Sigma is a highly disciplined process that focusses on producing and delivering near perfect products and services. Its a business improvement approach that seeks to find and eliminate causes of mistakes or defects in business processes.

Six Sigma measures defects in million ‘opportunities’ and assigns ‘levels’. There are six such levels. An organizations is said to be at 6 sigma level if it has 3.4 defects per million opportunities. This is the highest level an organization can attain. Average American company is at 4 sigma level. That is equivalent to 6,210 defects per million opportunities.

The six sigma steps for many organizations are described as DMAIC:

Define: Select responses/processes to be improved

Measure: Gather data to measure the process/response

Analyze: Identify the root causes for defects

Improve: Eliminate the cause

Control: Monitor the process/response to sustain improvements

Who developed it?

Motorola developed Six Sigma in 1987. Dr Mikel Harry is credited with the development of Six Sigma in Motorola.

Does Six Sigma really work ?

Short answer is; yes it does !!. Here are some reported facts on how Six Sigma made a difference in big corporations:

  • Six Sigma is believed to have saved Morotola $940 million over 3 years.
  • HoneyWell reported a estimated saving of $1.75 billion in year 1997
  • GE reported a saving of $1.75 billion in 1998 and a accumulated savings of $2.5 billion in 1998.

Why does Six Sigma work ?

  • Typically short project times (6-9) months
  • It forces Senior Management involvement
  • Clear definition of success and its measurement
  • Defined processes for training individuals. (Green belts, black belts etc)

Who is using Six Sigma ? (Just to name a few..)

  • Morotola (Not surprisingly)
  • GE
  • Sony
  • Toshiba
  • Johnson and Johnson

Does getting trained in Six Sigma make sense ?

An average black/green belt will save a company about $175k, if there are around 5 to 6 projects per year. In big corp’s there is about one black belt per 100 employees. So plenty of opportunities there..

Which level of training is right for me ?

Everyone- Orientation Training

Green belt candidates – Green belt training

Supervisors – Overview

Black Belt candidates – Black belt training

Management – Executive training

Master black belts – Master black belt training

Senior management – Sponsorship training

When is it a good time to implement a improvement program like Six Sigma ?

When times are good and when times are bad. When times are bad, focus is on survival. At the same time its important to realize that a company cannot loose money because of poor quality, especially at bad times. When times are good, resources are typically dedicated to take advantage of the opportunity.Improvement projects are typically last on list.However customers are not likely to to repeat business with a company known for quality issues.

When is a company ready for Six Sigma ?

If performance of a company is low, its better to concentrate on basics. Apply cost management techniques and engage with customer. When the performance is OK, set goals and monitor them. Simplify processes. When performance is high, benchmark with other firms, develop and communicate strategic plans and strive to continously improve.

What does Six Sigma measure ?

Six Sigma advocates a holistic view on metrics. After the metrics are established, project teams must work to implementing them.

What should be a first project to implement Six Sigma ?

  • Should be simple but not trivial
  • Should last around 3-4 months
  • Reasonable time and resource constraints
  • Problem should be clearly defined
  • Problem should be measurable

When is a company ready for Six Sigma ? October 1, 2007

Posted by Coolguy in Six Sigma.
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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.

Six Sigma Goals October 1, 2007

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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 Basics February 11, 2005

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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