six sigma programs

Six Sigma ProgramsSix Sigma Programs

Students should be able to:

• Describe the key elements of a Six Sigma program and how they can be applied to any business process.

• Explain the five-step process for successful Six Sigma programs.

• Identify the important drivers for successful implementations of Six Sigma.

What is Six-Sigma?What is Six-Sigma?

Focus on and deliver what the customer wants

Simplify processes and close gaps in capabilities

Improve employee productivity and satisfaction

Achieve better business results…market share, revenue and income

A strategy. . . discipline. . . . a set of tools that:A strategy. . . discipline. . . . a set of tools that:

Key Concepts of Six SigmaKey Concepts of Six SigmaCritical to Quality (CTQ): Attributes most important to the

customer (Competitive Priorities)

Defect: Failing to deliver what the customer wants

Process Capability: What your process can deliver

Stable Operations: Ensuring consistent, predictable processes to improve what the customer sees and feels

Variation: What the customer sees and feels

Six Sigma focuses first on reducing process variation and then on improving process capability.

Why Variability is ImportantWhy Variability is Important

Lowerspecification

Mean

Upperspecification

Six sigma

Four sigma

Two sigma

Nominal value

Process CapabilityProcess CapabilityNature of the Problem

Six Sigma Methodology identifies Processes That Are Off-target, and/or Have a High Degree of Variation, and Corrects the Process

1. Define--Identify the gaps between competitive priorities and competitive capabilities.

What is a defect?

Scope

Deliverables

Team composition

Steering committee

Goals

Six Sigma: A Five-Step ProcessSix Sigma: A Five-Step Process

D - M - A - I - C

2. Measure — quantify the work the process does that affects the gap.

Process flowchart


D - M - A - I - C

Pricing Process

3. Analyze—determine the drivers for optimal outcomes and establish procedures to make the outcome routine.

Process capability analysis

Cause and effect matrix


D - M - A - I - C

Incapable ProcessesIncapable ProcessesProcess average

Nominal value

Lower specification Upper

specification

Off Target

Lowerspecification Upper

specification

Nominal value

Too Variable

Capability MeasuresCapability Measures

Cpk = Minimum of

ProcessProcessCapabilityCapabilityIndexIndex

Upper specification – x

3

x – Lower specification

3,

=

=

Target Value Variability Capability

1.00 Three Sigma 1.33 Four Sigma 1.67 Five Sigma 2.00 Six Sigma

Capability MeasuresCapability Measures

Cp =

Upper specification - Lower specification

6

Process Capability RatioProcess Capability Ratio

Target Value Variability Capability

1.00 Three Sigma 1.33 Four Sigma 1.67 Five Sigma 2.00 Six Sigma

Cause and Effect Matrix

Sales Data

4. Improve—modify or redesign existing methods to meet new performance objectives

Decision guidelines

Escalation process

Exception codes


D - M - A - I - C

What Continuous Improvement Looks Like

5. Control—monitor processes to make sure high performance levels are

maintained.

Monthly performance reviews


D - M - A - I - C

GE Early Dispute Resolution Process

• What are the competitive priorities for the EDR process?

• What is causing us to miss the competitive priorities?

• What process measurements would you suggest?

GE EDR System

Level 1:Level 1:PrivatePrivateResolutionResolution

Level 3:Level 3:Public Public

AdjudicationAdjudication

Level 2:Level 2:ExternalExternal

FacilitationFacilitation

No Further ActionNo Further ActionNecessaryNecessary

ConflictConflict NotedNoted

Business Unit Business Unit Attempts to Informally Attempts to Informally

Resolve ConflictResolve Conflict

ResolutiResolutionon

ReachedReached??

No

Yes

YesNo Further ActionNo Further Action

NecessaryNecessary

LitigationLitigation

Refer to Legal Group:

Refer to Legal Group:

•Form DR Team•Evaluate Case•Select DisputeResolution Vehicle/Review

•Ongoing Discussionw/Opponents

•Form DR Team•Evaluate Case•Select DisputeResolution Vehicle/Review

•Ongoing Discussionw/Opponents

Convene for ADRConvene for ADR

AppealAppeal

ResolutionResolutionReached?Reached?

No Further ActionNo Further ActionNecessaryNecessary

YesResolutionResolutionReached?Reached?

No

ResolutionResolutionReached?Reached? No Further ActionNo Further Action

NecessaryNecessaryNo

ADR ProcessADR Process(Mediation, (Mediation, Negotiation, Negotiation, Arbitration; Arbitration; Mediation Mediation Preferred)Preferred)

Yes

No

Summary

• Everything we do is a process that can be defined.

• Every process can be broken down, measured, and analyzed into its component parts and therefore can be improved by focusing on what is critical to the customer’s perception of quality. • To be successful, the entire process and any improvements must be continually measured and controlled.

• Drivers for success include a corporate culture institutionally committed to the notion of change, a profound commitment to quality in everything the business does, and strong leadership.

six sigma programs

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