Demystifying Six Sigma

A company-wide approach to continuous improvement

Alan Larson

Six Sigma at a Glance

• Alan Larson– One of the original divisional quality directors

at Motorola• Developing

• Training

• Deploying

the culture and methods of Six Sigma

– Achievement• Reduce cost

– Cost of sales by 30 percent

• Improve efficiencies– Cycle time and cost of administration and service by 90

percent

• Maximize customer satisfaction

in all operations at Motorola

• Critical Success Factors of six sigma– Create a six sigma culture

• Goals and objectives are clearly defined and communicated

– Create a continuous improvement models• Utilize the JUSE seven problem-solving tools

– Effective management of changes

• Key elements of six sigma– Focused on customer satisfaction– Data– Reach-out goals– Team based– All employees involved– Clear definition and understanding of roles– Personal growth

• How to establish improvement programs– Customer focused– Team based– Deployed throughout the entire workforce– Applicable to

• Manufacturing

• Administrative

• Service

– Six-step continuous improvement methods1. Create the operational statement and metric

2. Define the improvement teams

3. Identify potential causes

4. Investigation and root cause identification

5. Make improvement permanent

6. Demonstrate improvement and celebrate

– JUSE seven tools• Pareto diagram 柏拉圖• Fishbone diagram 魚骨圖、石川圖、特性要因圖• Check sheet 查檢表• Histogram 直方圖• Stratification 層別法• Scatter diagram 散佈圖• Charting 管制圖

The Basics of Six Sigma

• What is – Six sigma and continuous improvement

Tools and Techniques • that can be learned

• and successfully used

• by all employees

• What is – Six sigma and continuous improvement

Total Employee Involvement• Utilize your most valuable resources

• The intelligence of your workforce

• What is – Six sigma and continuous improvement

Building quality into all operations• Manufacturing: inspection increase cost

• Service: every encounter is a moment of truth

• What is – Six sigma and continuous improvement

Engaging the people who perform the work• Ownership and pride

• High morale

Why Six Sigma had to be invented

• In the mid-1980s– Motorola was losing ground to its Japanese

competitors– Customer’s comments

• “Love, love, love the product; hate, hate, hate the company”

– Motorola’s systems for doing business– Contract review

– Response to requests for quote

– Response to customer complaints

– ……

• Were not designed for customer satisfaction

• The internal bureaucracy fed on itself

– Motorola’s product suffers• Too many out-of-box failures

• High level of early-life failure– Warranty returns

– Were predominately units that

» Had failed at final test

» Had gone through a rework cycle

– Motorola’s reaction• Benchmark those Japanese companies that were

destroying Motorola– Senior managers and executives sent on a benchmarking

tour of Japan» Operating methods» Product quality method

• Discovered– National program for employee involvement

» Use employee’s muscle and their brains and knowledge

The Birth of Six Sigma

• Motorola learned– From customers

• Need to change all systems to focus on total customer satisfaction

– From Japanese• Involvement all employees to increase efficiency

and moral

• Simpler designs result higher levels of quality and reliability

– From early-life field failure study• Products need to be built right the first time

• Motorola’s leader pulled this together to – establish vision and – set the framework for– six sigma

• Six Sigma was launched in 1987

Mathematics of Six Sigma

• Opportunities-for-error

• DPMO: defect per million opportunity

• A way of leveling the playing field– Manufacturing operations vs order-entry work

• Account for differing complexities– An invoice consisting of 40 line items vs 2 line

items

• Sigma calculations are controversial– Attribute data

– Go, no-go

• Utilizing normal curve and z-table violates many of the rules of statistics

– Accounting for variation over time by adding 1.5 sigma to the actual z-table

Sigma calculations are developed empirically

• Sigma-scale measures– Optional element of six sigma system

• “The six sigma way – Pande, et al.”

Black belts and Green belts

• Local statistical resources (LSR)– Engineers trained in advanced form

• Experimental design

• Data analysis

• Process control

Black belt

• Total customer satisfaction (TCS) team– Factory workers– Received training and couching in problem-

solving methods

Green belt

• “Black belts” and “Green belts” were not applied to six sigma program at Motorola until the 1990s

• Avoid special-assignment employee with the title of “Black Belt”– External to the operations that they support

• Expensive

• Less-than-optimum structure for six sigma– Disenfranchise most employee

– Convenient way for employee to abandon their responsibility

– Only result in short term benefits

Requirements for Six Sigma Transformation

1. Reward and Recognition• Honor the achievement of teams or work unit• Executive bonus tie to six sigma

2. Training• Teach everyone the new skills

3. Uniform Measurement• Unacceptable deliveries (to the customers) are

counted and converted to a defect rate measurement

4. Facilitators• Employees with aptitude and received

required training

5. Communication• Everyone understand what is expected

6. Senior executive behavior• Model the expectations of six sigma

Creating the Cultural Structure

The elements of a six sigma culture

Chapter 2

• “Six Sigma is a successful evolution of total quality management systems.”– Larson, p. 19, chapter 2

TQM definition

Total: Everyone committed

Quality: Meeting the customers’ expectation

Management: Collaborative focus

Six Sigma Definition

• “Within a Six Sigma system, everyone is committed to meet the customers’ expectations through the use of a collaborative focus.”– Larson, p. 20, chapter 2

Senior Management Role

• Create Six Sigma culture– Models new rules and norms

– Enable all the good things to happen

• Set the vision– Framework of how the company will function to serve its

customer base

» Mission

» Objectives

» Strategies

» Tactics

• Mission– Why company exist

and how customers serves

• “Ecomagination”

• “First to know”

• 『世界工廠』• 『亞太營運中心』• 『研究型大學』

• Objectives– Quantifiable high-level

goals• Increase market share

• Reduce manufacturing costs

• Zero safety incidents

(5 – 8 objectives)

• Strategies– Means to accomplish

objectives• Cross functional teams

• Continuous improvement

• Clear and safe work environment

• Tactics– Actions

• Performance reviews weekly, biweekly, or monthly

– Provide feedback

– Identify barriers

– Resources needs

• All operations and functions concentrate on total customer satisfaction

– Mechanism in place to determine customer satisfaction levels

– Metrics in place to measure the quality level

• Suppliers relations– Buying based on price only or

– Buying from the lowest-cost-to-do-business-with

• Employee empowerment– Training, Training, Training

– People are challenged to work more efficiently

– Team are abundant

• Reward and recognition systems

Change Managementfor transition to six sigma

vision Skills Incentive Resources Action plan Change+ + + + =

Skills Incentive Resources Action plan Confusion+ + + =

vision Incentive Resources Action plan Anxiety+ + + =

vision Skills Resources Action plan GraduateChange

+ + + =

vision Skills Incentive Action plan Frustration+ + + =

vision Skills Incentive Resources FalseStarts

+ + + =

Preliminary Tasks

Prior to creating Six Sigma program

Chapter 3

1. What will be accomplished

2. Who will be black belts and green belts

3. Training programs for black-belt and green-belt candidates

4. Select the initial projects

5. The required data collection systems

6. Identify the required teams

• What do you want?Commit for a very long period of time to make it work

– Six Sigma culture • Focuses on the voice of the customer

• Includes teaming and empowerment

• Complete organizational development– Vision

– Mission

– Objectives

– Strategies

– Tactics

– Commits resources• Time available during working hours

– Improvement

– Training

• Selects initial green belts and black belts– Create an environment where everyone is a positive

change agents

• Identifies internal and external resources– Phase out external as internal developed

• Select the initial projects– Start with your customer data

• Complaints

• Returns– Pareto Diagram

» Prioritize the chronic reasons for customer dissatifactions

• Annual customer satisfaction survey– Third party service providers

– Data of cost of poor quality• Rework & repair cost

• In-process scrap cost

• Damage control cost– Customer service

• Final inspection cost

• Lost business

• Collecting Data– Six sigma culture

• Decisions are made

• Programs are established

based on DATA

– Establishes way to collect data• If customer is lost, follow up

• Data to identify where your problems are

• Goal of Six Sigma– Ten-fold improvement– Every two years

• Ex: 不良率於 2 年內，從 12% 降到 1.2%

• Identify required teams– Cross functional view

• Recruit team members from every units involved• EX: parties involved in delivering products &

services late– Sales: receiving the orders– Order entry personnel– Production control– Manufacturing engineering– …….