SixSigma Overview

Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved.
Six Sigma Training and

Implementation Proposal

Purpose

Deployment of Six Sigma as a strategy to achieve
World Class Performance at (XYZ).

Scope

Example:
Emerging Leader- AM to DGM
Leaders- Sr. DGM and Above
Success Factor
Where to apply Six Sigma
Lean
Six
Sigma
Steel
Power
IT &
ITES
Hotel &
Tourism
Business
Developm
ent
Quality
Finance
HR
Admin
Retail
Step 1: GAP Analysis
Its performed to understand the performance of a process
when compared to what is expected or standard
Its used to compare the output of a process versus the
competition
Its based on statistical process control & robust methods to
measure and collect data
Step 2: Staff sensitization

1 to 1 hand holding (Mentoring/ Coaching)

2 days workshop for Leaders
At max 10 participants per Workshop/ Location

4 day workshop for Emerging Leaders
At max 15 participants per Workshop/ Location
Step 3: Project identification/Selection
Prioritize Project based on Benefit Analysis, and ROI

Analysis & evaluation of opportunities by the Senior management for
decisions, projects to be selected for implementations
Step 4: Implementation

Stage 1- One to One handholding (Min 3-4 months; 3
resource required)
Pilot Site
Stage 2- One to One handholding (Min 2 month; 3 resource
required)
??? Sites (Location) identified
Stage 3- One to One handholding (Min 2 month; 3 resource
required)
??? Remaining Sites
Six Sigma Staff Sensitization - Approach
9
Staff Sensitization & 1 on 1 Support
Initiative(s) Roadmap 1 Year
Six Sigma Improvement Initiative
MS1 Opening Meeting
MS3 Stage 1 Review
MS2
Gap Analysis & Project
Identification
Jul13 Aug13 Sep13 Oct13 Nov13 Dec13 Jan14 Feb14 Mar14 Apr14 May14 Jun14 Jul14
MS5 Stage 3 Review
MS4 Stage 2 Review
MS1 MS2 MS5 MS3 MS4
Level 1: Initial (Heroic Efforts)
Level 2: Managed (Basic Project Management)
Level 3: Defined (Process Standardization)
Level 4: Quantitatively Managed
Level 5: Optimizing
SIX Sigma Implementation Benefits
Greater productivity & throughput
Improved quality & performance
Reduced cycle times & operating costs
Smoother operation & executes strategic change
Generates sustained success & enhances value
Accelerates improvement & promotes learning across boundaries

Case Study
Bank of America Six Sigma
Experience
Bank of America Six Sigma Experience
14
Goals
# 1 in Customer Satisfaction
Worlds most admired company
Worlds largest bank
Strategy - Develop business process excellence by applying
voice of the customer to identify and engineer critical few
business processes using Six Sigma
Created Quality & Productivity Division
Source: Best Practices Report
15
Wanted results in 1 year;
Developed 2 week Green Belt training programs
Introduced computer simulation of processes
Trained 3767 Green Belts, certified 1230 - Minimum value target
per GB project $ 250K
Trained 305 Black Belts, certified 61 - Minimum value target per
BB project $ 1 million
Trained 43 MBB,
1017 in DFSS
80 % of Executive Team trained in GB and 50 % Certified
16
Results of first 2 years:

Reduced ATM withdrawal losses by 29.7 %
Reduced counterfeit losses in nationwide cash vaults by 54%
Customer delight up 20%;
Added 2.3 million customer households
1.3 million fewer customer households experienced problems
Stock value up 52%
Y 2002 BOA named Best Bank in US & Euro money's
Worlds Most Improved Bank
Backup Slides:

Six Sigma Concept, Philosophy &
History
17
Organizational Entities and Quality Initiative.
18
Six Sigma is. . .
19
A performance goal, representing 3.4 defects for every million opportunities to
make one.

A series of tools and methods used to improve or design products, processes,
and/or services.

A statistical measure indicating the number of standard deviations within
customer expectations.

A disciplined, fact-based approach to managing a business and its processes.

A means to promote greater awareness of customer needs, performance
measurement, and business improvement.
A scientific and practical method to achieve improvements in a company
Scientific:
Structured approach.
Assuming quantitative data.

Practical:
Emphasis on financial result.
Start with the voice of the customer.
Show me
the data
Show me
the money
What is Six Sigma?
20
Philosophy: The philosophical perspective views all works as a processes that can
be defined, measured, analysed, improved & controlled (DMAIC). Processes
require inputs & produce outputs. If you control the inputs, you will control the
outputs. This is generally expressed as the y= f (x) concept. The philosophy results
in a culture of total aversion to defects.

Set of Tools: Six Sigma as a set of tools includes all the qualitative and
quantitative techniques used by the six sigma expert to drive process improvement.
A few such tools include statistical process control (SPC), Control charts, failure
mode & effects analysis, process mapping etc

Methodology: This view of Six Sigma recognizes the underlying and rigorous
approach known as DMAIC. DMAIC defines the steps a Six Sigma practitioner is
expected to follow, starting with identifying the problem and ending with the
implementation of long-lasting solutions. While DMAIC is not only Six Sigma
Methodology in use, it is certainly the most widely adopted and recognized.

Metrics: In simple terms, Six Sigma quality performance means 3.4 defects per
million opportunities.

Whats in a name?
21
Sigma is the Greek letter (18
th
character)
representing the standard deviation of a population of
data.

Sigma is a measure
of variation
(the data spread)
As defects
go down...
...the Sigma capability
goes up
D

What does variation mean?
22
Variation means that a
process does not produce
the same result (the Y)
every time.

Some variation will exist in
all processes.

Variation directly affects customer experiences.
Customers do not feel averages!
-10
-5
0
5
10
15
20
Measuring Process Performance - The pizza delivery example. . .

23
Customers want their pizza
delivered fast!

Guarantee = 30 minutes or less

What if we measured performance and found an average delivery time
of 23.5 minutes?
On-time performance is great, right?
Our customers must be happy with us, right?
How often are we delivering on time?
24

Managing by the average doesnt tell the whole story. The average and the variation
together show whats happening.
s
x
30 min. or less
0 10 20 30 40 50
Answer: Look at the variation!
Delivery Cycle Time (Days)
Baseline Improved?
What we see
12
24
13
7
16
8
20
25
14
10
11
30
16
Mean 15.8
Std Dev 7.0
27
7
15
4
18
6
23
6
2
24
2
6
5
11.2
9.0
11.2 15.8
What customers feel
Using mean-based thinking, we
improve average performance by
29%, and break out the champagne.
But our customer only feels the
variance and cancels the next order.
Customers Feel Variance, Not the Mean
Insight Through Variance
25
Reduce Variation to Improve Performance

26

Sigma level measures how often we meet (or fail to
meet) the requirement(s) of our customer(s).
s
x
30 min. or less
0 10 20 30 40 50
How many standard
deviations can you fit
within customer
expectations?
A Standard Deviation (s) is
a measure of the amount
of spread or dispersion
about the mean (m).
s s s
T
m
LSL USL
T = Process Target
s = Standard Deviation
m = Mean
LSL = Lower Spec. Limit
USL = Upper Spec.
Limit
This is an illustration of a three sigma process . Alternatively, it can
be said that this process has a sigma level of 3. In conventional
quality lingo , the CpK of this process is 1.0.
CpK = Sigma Level / 3
A Three Sigma Process
27
s s s
T
m
LSL USL
s
s s
A Six sigma process has room for six standard deviation between the
mean and nearest specification limit or Cpk of 2.
A Six Sigma Process
28
Managing Up the Sigma Scale
29
Sigm
a
% Good % Bad DPMO
Short Term
CPk
Long term
CPk
1
30.9% 69.1% 691,462 0.33 -0.17
2
69.1% 30.9% 308,538 0.67 0.17
3
93.3% 6.7% 66,807 1.00 0.5
4
99.38% 0.62% 6,210 1.33 0.83
5
99.977% 0.023% 233 1.67 1.17
6
99.9997% 0.00034% 3.4 2.0 1.5
Process Capabilities
Defect per
million
Opportunity
Rolled
Throughput
Yield
Examples of the Sigma Scale

There are 964 U.S. flight
cancellations per day.

The police make 7 false arrests
every 4 minutes.

In MA, 5,390 newborns are
dropped each year.

In one hour, 47,283
international long distance calls
are accidentally disconnected.

1 U.S. flight is cancelled every
3 weeks.

There are fewer than 4 false
arrests per month.

1 newborn is dropped every 4
years in MA.

It would take more than
2 years to see the same
number of dropped
international calls.
5,000 incorrect surgical operations
per week
No electricity for almost seven hours
each month.
4 Sigma = 99 % Good
6 Sigma = 99.9997 % Good
1.7 incorrect surgical operations
per week
One hour without electricity every
34 years.
3 Sigma = 93.3 % Good 6 Sigma = 99.9997 % Good
1,000,000
100,000
Restaurant Bills
Order Taking
Airline Baggage
Handling
Payroll Processing
10,000
Average
Company
Purchased Material
Reject Rate
1,000
100
10
World Class
1
2 3 4 5 6 7
Domestic Airline Flight
Fatality Rate 0.43 PPM
Benchmarking Chart

31
s-level
Defect rate
(ppm)
Costs of poor quality Status of the
company
6 3.4 < 10% of turnover World class
5 233 10-15% of turnover
4 6210 15-20% of turnover Current standard
3 66807 20-30% of turnover
2 308537 30-40% of turnover Bankruptcy

Benefits of 6s approach w.r.t. financials
32
Know what is Important to the Customer and to the Business
Reduce Defect Levels by:
1. Reducing the Variation
2. Centering around the Target
Long Term
LSL USL
Six Sigma Improvement Strategy
33
Process Off Target
Target
Excessive Variation
Target
LSL USL LSL USL
Center
Process
Target
Reduce
Spread
Defects LSL
USL
Ideal State:
Centred on the Customers Target with
Minimal Variation
The Statistical Objective of Six Sigma
34
Target Analogy
Measurement
Precise,
Not Accurate
Statistical
LSL T USL
Accurate
Not Precise
Precise and
Accurate
LSL T USL
Ideal State: Centred on the Customers Target with Minimal Variation
The Statistical Objective of Six Sigma
35
Defect Reduction
Yield Improvement
Customer
Satisfaction
$
Six Sigma (s) is a business-driven, multi-faceted approach to process improvement, reduced
costs, and increased profits. With a fundamental principle to improve customer satisfaction by
reducing defects.
The Goal of Six Sigma
36
Customer
Satisfaction
Organization
Goal
Quality
Defects
Delivery
Cycle Time
Price/Value
Cost
Whatever is critical to
the customer must be
critical to our
business.
Six Sigma project are
then focused on the
process required to
satisfy the critical to
customer & process.
Customer Satisfaction

37
The Six Sigma Evolutionary Timeline
38
1736: French
mathematician
Abraham de
Moivre publishes
an article
introducing the
normal curve.
1896: Italian sociologist Vilfredo
Alfredo Pareto introduces the 80/20
rule and the Pareto distribution in
Cours dEconomie Politique.
1924: Walter A. Shewhart introduces
the control chart and the distinction of
special vs. common cause variation as
contributors to process problems.
1941: Alex Osborn, head of
BBDO Advertising, fathers a
widely-adopted set of rules for
brainstorming.
1949: U. S. DOD issues Military
Procedure MIL-P-1629, Procedures
for Performing a Failure Mode Effects
and Criticality Analysis.
1960: Kaoru Ishikawa
introduces his now famous
cause-and-effect diagram.
1818: Gauss uses the normal curve
to explore the mathematics of error
analysis for measurement, probability
analysis, and hypothesis testing.
1970s: Dr. Noriaki Kano
introduces his two-dimensional
quality model and the three
types of quality.
1986: Bill Smith, a senior
engineer and scientist introduces
the concept of Six Sigma at
Motorola
1994: Larry Bossidy launches
Six Sigma at Allied Signal.
1995: Jack Welch
launches Six Sigma at GE.
Thank you

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Information Classification: Internal Copyright 2013. Allwyn George, All rights reserved.

Six Sigma Training and

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