Six SigmaSix Sigma66Sam Tomas, CFPIM, CRM, C.P.M.Kokopelli2What is Six Sigma?Sigma is the Greek letter that represents the standarddeviation or vaia!ilit" of a group of items from their average value.A Six Sigma program is therefore a vaia!ilit" reducing program.The key objectives include improved processes product performance and reliabilityNumber of DefectsSix Sigma is a reference toa particular goal of reducingdefects to near !ero.#What $lse is Six Sigma?A concept that provides a relatively ne" "ay to measure ho" good a product is. #t relates to a manufacturing or service failure rate of only $.% rejects per million operations or a yield of &&.&& && && '(. )hen a product is six sigmait tells us that the *uality level is excellent.%Wh" Six Sigma?The inade*uacy of &&.&( accuracy can be illustrated as follo"s+,,--- checks "ill be deducted from the "rong bank accounts in the next .- minutes''---- credit cards in circulation "ill have incorrect cardholder information on their magnetic strips,.'/-- defective tires "ill be shipped this year0'$,, pieces of mail "ill be mishandled the next hour0%,-' defective computers "ill be shipped this year)hy spend money to achieve six sigma *uality "hen perhaps &&( or &'( perfect "ould be totally ade*uate1 /%&t With Six Sigma '&alit" ()&g pes*iptio+s2ne incorrect drug prescriptions every ,/ years.S&gi*al opeatio+s2ne incorrect surgical operation every ,- yearsMail )elive"2nly one article of maillost every $/ years,The %atht&! C&veSho"s reliability of a product in terms of -ail&e ate pe mo+thThe curve presents t"o shaded areas.ate+t /e-e*t ate 3auses early failure after a product is deliveredI+hee+t -ail&e ate 4unction of product design materials processes and technologies used in manufacturing.5efects in manufacturing are caused by+6arro" /esig+ margins for the product#nsu7cient manufacturing po*ess controls8oor incoming mateials0pats *uality1The %atht&! C&ve)esig+(Relate/ 2I+hee+t3 Fail&es'&alit" Fail&es /&e toPo*ess 4 MateialWea o&tFail&esTimeFail&

e RateFail&

e RateII+-a+tMotalit"II5se-&l.i-eIIIWea o&t6veall .i-e Chaa*teisti* *&ve.ate+t)e-e*tsI+hee+t Fail&e 7eaTime', Sigma8es&s 9 Sigma9ven "ell controlled processes experience shifts in the mean as great as : ;(;02 sta+/a/ /eviatio+s. A normal % sigma process plus a 0:0;, sigma shift in the process average "ould result in % sigma variations of ,,2;< /e-e*ts per million operations.)hy attempt to achieve . sigma "hen % sigma may be ade*uate1&=iel/ Rates o-Six Sigma Po/&*ts#t is possible to build a product in "hich each component is a six sigma component and yet have the product exhibit yields of only &-( '-( =-( .-( etc. )hat "e are talking about is rolled:throughput yield or the probability that all product process and material characteristics "ill simultaneously conform to their respective standards. 0-Impoveme+t $>ots Re?&ie/ to Rea*h Six Sigma9#;< @ Impoveme+t..'0- dpm.,0- dpmA#< @ Impoveme+t,,$ dpm,1< @ Impoveme+t$.% dpm)pmB /e-e*ts pe millio+0-00Whee ae 7veage Compa+ies i+ '&alit"?7ppoximatel" 2 Sigma#?S @ Tax advice over the phone7ppoximatel" 9 Sigma 27veage3?estaurant bills5octor prescription "riting8ayroll processing2rder "rite:ups7ppoximatel" , SigmaAest in class @ Seiko B8 #nc. etc.,.A Sigma5omestic Cight fatality rate 29,,.A0,Relatio+ship o- )e-e*ts to 6the Fa*tosThe . sigma concept indicates there are strong relationships bet"een product defects and such factors as+Relia!ilit"Po/&*t "iel/sC"*le timesI+ve+toiesS*he/&lesThe higher the sigma value the more reliable the process being monitored and the higher the improvement in all areas.0$Fi+a+*ial Impli*atio+so- .oC SigmaThe lo"er the sigma level the higher the repair costsA % sigma company spends more than 0/( of its sales dollars for internal and external repairsA . sigma company spends about 0(2ver the long run a % sigma company "ill not be able to compete "ith a . sigma company.;9What is the Cost o- '&alit"?Goal+ #mprove cost *uality and schedule performance via process improvement and reduction of process variations.Sigma Level Defects Per Million Opportunities Cost of Quality2 308,537 (Noncompetitive companies) N/A3 ,807 25!"0# of sa$es4 6,21 !"n#ustry average$ 1%&2%' of sales5 233 5!%5# of sa$es6 ()4 !*orl# Class$ 1' of salesDoteE $a*h sigma impoveme+t epese+ts a ;