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• Proven Method to Reduce Costs • Highly Quantitative Method – Science and Logic Instead of Gut Feel • Includes Manufacturing & Service (close to customer) and Provides Bridge
So...What is Six Sigma?
• A Measurement System • A Problem-Solving Approach • A Disciplined Change Process
Measure
Analyze
Improve
Control
“THE SIX SIGMA BREAKTHROUGH STRATEGY”
6 Overview
Why Does GE Need A Quality Initiative?
Cost of Failure (% of Sales)
40% 35% 30% 25% 20% 15% 10%
5%
Defects per Million 3.4 Sigma 6
233 6210 66,807 308,537 500,000
6 Overview
Problem Solving Approach
Off-Target
Target
Unpredictable
Target
LSL Defects
USL
Center Process
On-Target
Target
LSL
USL
Reduce Spread
“Lower Specification Limit”
Deployment and Application of Six Sigma Concepts & Tools
Learning from Those Who Have had Success With 6Will Accelerate its Implementation at GE
6 Overview
• Six Sigma Structure
• Key Concepts & Tools
• A Practical Example
An Overview....Not a lot of Details!!
6 Overview
“Six Sigma”
• If we can’t express what we know in the form of numbers, we really don’t know much about it.
$2 Indebtedness
6 Seconds
of the Books in a Small
per $1 Billion in Assets
per Century
Library
6 is Several Orders of Magnitude Better Than 3!!!
6 Overview
Where Does “Six Sigma” Come From?
• If we don’t know much about it, we can’t control it.
• If we can’t control it, we are at the mercy of chance.
Mikel J. Harry President & CEO Six Sigma Academy, Inc.
6 Overview
Measurement System How Do We Arrive at Sigma?
Identify the CTQs
• “Critical to Quality” Characteristics or the Customer Requirements for a Product or Service
Measuring & Eliminating Defects is the “Core” of Six Sigma
6 Overview
Measurement System
Some Sigma “Benchmarks”
SIGMA LEVEL
DEFECTS per MILLION
OPPORTUNITY
A Rigorous Method for Measuring & Controlling Our Quality
6 Overview
What Does “Sigma” Mean?
Sigma is a Measure of the Consistency of a Process
It (is Also the 18th Letter in the Greek Alphabet!
2 1/2 Days per Century
5
1 Misspelled Word in
a set of Encyclopedias
$570 Indebtedness per $1 Billion in Assets
30 Minutes per Century
6
1 Misspelled Word in all
“...will bring GE to a whole new level of quality in a fraction of the
time it would have taken to climb the learning curve on our own.”
John F. Welch, Jr. 1995 GE Annual Report
PPM
{ IRS Tax Advice
2
308,537
{ Restaurant Bills Airline Baggage Doctor’s Prescription
3
66,807
{ GE Average Company
4
6,210
5
233
6
3.4
{ Best Companies Airline Safety
பைடு நூலகம்
4
1 Misspelled Word
per 30 Pages in a Book
Money
$2.7 Million Indebtedness per $1 Billion in Assets
Time
3 1/2 Months per Century
$63,000 Indebtedness per $1 Billion in Assets
to Design for Quality Concepts • Has Support and Commitment of Top Management
It Works!!!
6 Overview
Sigma: A Measure of Quality
Sigma 3
Spelling
1.5 Misspelled Words per Page in a Book
Sigma Level
2 3 4 5 6
Defects per Million of Opportunity
PPM
308,537 66,807 6,210 233 3.4
Convert DPMO to Sigma
• Use the SIGMA TABLE
Arrive at DPMO
• Defects Per Million Opportunities
Time
Average Value
Many Data Sets Have a Normal or Bell Shape
6 Overview
Problem Solving Approach
Off-Target
XXXXXXXXXXXXXX
Center Process
On-Target
XXXXXXXXXXXXXX
• Mikel J. Harry one of the Original Architects • Previously Headed Quality Function at ABB and Motorola • Now President/CEO of Six Sigma Academy in Phoenix, Arizona • Has Consulted for Texas Instruments, Allied Signal (and others) • Currently Retained by GE to Teach the Implementation,
5
4
3
2
1
Estimated Cost of Failure in US Industry is 15% of Sales; Taking GE From a 3 to a 6 Company Will Save ~ $10.5 Billion per Year!
Why “Six Sigma”?
• Proven Successful in “Quality-Demanding” Industries e.g., Motorola, Texas Instruments (many process steps in series)
LSL
USL
“Upper Specification Limit”
Less Variation Means Fewer Defects & Higher Process Yields
6 Overview
Problem Solving Approach
Average Company in 3 to 4Range
6 Overview
Measurement System
A Graphic/Quantitative Perspective on Variation
Number of People Arriving at CRD
7:00 7:15 7:30 7:45 8:00 8:15 8:30 8:45 9:00 9:15
We Must Acknowledge Our Vulnerabilities • Poor Quality That Impacts Customers • Problems with NPI • Too High Internal Costs
We Need a Major Initiative to Move From Where we Are to Where we Want to be
6 Overview
Why Does GE Need A Quality Initiative?
GE Raising The Bar • New Goal to be “Best in the World” vs. #1 or #2 • Customers are Expecting More, we Must Deliver • “Ship-and-fix” Approach no Longer Tolerated in the Market • Aim to Speed Past Traditional Competitors in 5 Years • Goal Consistent with Reduced Total Costs
Unpredictable
X
X
XX X
X
X XX
X X
X
X X
Reduce Spread
6 Helps us Identify and Reduce VARIATION due to: - Insufficient Process Capability - Unstable Parts & Materials - Inadequate Design Margin
Define Defect Opportunities
• Any step in the process where a Defect could occur in a CTQ
Look for Defects in Products or Services
• Count Defects or failures to meet CTQ requirements in all process steps
6 Overview
• Six Sigma: - A Definition - Applied to GE - GE Quality Initiative - Why This Approach? - Origin of Six Sigma - The “Breakthrough Strategy” - Arriving at Sigma
So...What is Six Sigma?
• A Measurement System • A Problem-Solving Approach • A Disciplined Change Process
Measure
Analyze
Improve
Control
“THE SIX SIGMA BREAKTHROUGH STRATEGY”
6 Overview
Why Does GE Need A Quality Initiative?
Cost of Failure (% of Sales)
40% 35% 30% 25% 20% 15% 10%
5%
Defects per Million 3.4 Sigma 6
233 6210 66,807 308,537 500,000
6 Overview
Problem Solving Approach
Off-Target
Target
Unpredictable
Target
LSL Defects
USL
Center Process
On-Target
Target
LSL
USL
Reduce Spread
“Lower Specification Limit”
Deployment and Application of Six Sigma Concepts & Tools
Learning from Those Who Have had Success With 6Will Accelerate its Implementation at GE
6 Overview
• Six Sigma Structure
• Key Concepts & Tools
• A Practical Example
An Overview....Not a lot of Details!!
6 Overview
“Six Sigma”
• If we can’t express what we know in the form of numbers, we really don’t know much about it.
$2 Indebtedness
6 Seconds
of the Books in a Small
per $1 Billion in Assets
per Century
Library
6 is Several Orders of Magnitude Better Than 3!!!
6 Overview
Where Does “Six Sigma” Come From?
• If we don’t know much about it, we can’t control it.
• If we can’t control it, we are at the mercy of chance.
Mikel J. Harry President & CEO Six Sigma Academy, Inc.
6 Overview
Measurement System How Do We Arrive at Sigma?
Identify the CTQs
• “Critical to Quality” Characteristics or the Customer Requirements for a Product or Service
Measuring & Eliminating Defects is the “Core” of Six Sigma
6 Overview
Measurement System
Some Sigma “Benchmarks”
SIGMA LEVEL
DEFECTS per MILLION
OPPORTUNITY
A Rigorous Method for Measuring & Controlling Our Quality
6 Overview
What Does “Sigma” Mean?
Sigma is a Measure of the Consistency of a Process
It (is Also the 18th Letter in the Greek Alphabet!
2 1/2 Days per Century
5
1 Misspelled Word in
a set of Encyclopedias
$570 Indebtedness per $1 Billion in Assets
30 Minutes per Century
6
1 Misspelled Word in all
“...will bring GE to a whole new level of quality in a fraction of the
time it would have taken to climb the learning curve on our own.”
John F. Welch, Jr. 1995 GE Annual Report
PPM
{ IRS Tax Advice
2
308,537
{ Restaurant Bills Airline Baggage Doctor’s Prescription
3
66,807
{ GE Average Company
4
6,210
5
233
6
3.4
{ Best Companies Airline Safety
பைடு நூலகம்
4
1 Misspelled Word
per 30 Pages in a Book
Money
$2.7 Million Indebtedness per $1 Billion in Assets
Time
3 1/2 Months per Century
$63,000 Indebtedness per $1 Billion in Assets
to Design for Quality Concepts • Has Support and Commitment of Top Management
It Works!!!
6 Overview
Sigma: A Measure of Quality
Sigma 3
Spelling
1.5 Misspelled Words per Page in a Book
Sigma Level
2 3 4 5 6
Defects per Million of Opportunity
PPM
308,537 66,807 6,210 233 3.4
Convert DPMO to Sigma
• Use the SIGMA TABLE
Arrive at DPMO
• Defects Per Million Opportunities
Time
Average Value
Many Data Sets Have a Normal or Bell Shape
6 Overview
Problem Solving Approach
Off-Target
XXXXXXXXXXXXXX
Center Process
On-Target
XXXXXXXXXXXXXX
• Mikel J. Harry one of the Original Architects • Previously Headed Quality Function at ABB and Motorola • Now President/CEO of Six Sigma Academy in Phoenix, Arizona • Has Consulted for Texas Instruments, Allied Signal (and others) • Currently Retained by GE to Teach the Implementation,
5
4
3
2
1
Estimated Cost of Failure in US Industry is 15% of Sales; Taking GE From a 3 to a 6 Company Will Save ~ $10.5 Billion per Year!
Why “Six Sigma”?
• Proven Successful in “Quality-Demanding” Industries e.g., Motorola, Texas Instruments (many process steps in series)
LSL
USL
“Upper Specification Limit”
Less Variation Means Fewer Defects & Higher Process Yields
6 Overview
Problem Solving Approach
Average Company in 3 to 4Range
6 Overview
Measurement System
A Graphic/Quantitative Perspective on Variation
Number of People Arriving at CRD
7:00 7:15 7:30 7:45 8:00 8:15 8:30 8:45 9:00 9:15
We Must Acknowledge Our Vulnerabilities • Poor Quality That Impacts Customers • Problems with NPI • Too High Internal Costs
We Need a Major Initiative to Move From Where we Are to Where we Want to be
6 Overview
Why Does GE Need A Quality Initiative?
GE Raising The Bar • New Goal to be “Best in the World” vs. #1 or #2 • Customers are Expecting More, we Must Deliver • “Ship-and-fix” Approach no Longer Tolerated in the Market • Aim to Speed Past Traditional Competitors in 5 Years • Goal Consistent with Reduced Total Costs
Unpredictable
X
X
XX X
X
X XX
X X
X
X X
Reduce Spread
6 Helps us Identify and Reduce VARIATION due to: - Insufficient Process Capability - Unstable Parts & Materials - Inadequate Design Margin
Define Defect Opportunities
• Any step in the process where a Defect could occur in a CTQ
Look for Defects in Products or Services
• Count Defects or failures to meet CTQ requirements in all process steps
6 Overview
• Six Sigma: - A Definition - Applied to GE - GE Quality Initiative - Why This Approach? - Origin of Six Sigma - The “Breakthrough Strategy” - Arriving at Sigma