Six Sigma
By Daniel Wu
Ford Lio Ho Motor Company
1
Outline
Quality level
What is Six sigma?
Why we need Six sigma?
Development and Deployment strategy
How Six sigma merges into our daily
business?
2
Overview-Four Quality Gurus
Historically companies have focused on quality
issues for customer satisfaction
Prior to six sigma there were four key quality
gurus that most companies’ quality programs
followed
Deming
Juran
Crosby
Taguchi
3
Deming
Deming taught:
• Importance of understanding variation in work
processes
• Role of management in leading for quality
• Application of statistics
• Plan-Do-Check-Act
4
Deming’s Contribution to Profitability
EXTERNAL
INTERNAL
CUSTOMER
SATISFACTION
MARKET
SHARE
PROFITPRODUCTIVITY
QUALITY
-Better products & services
-Improved processes
-Compete with value
PRICE
-Compete with Price
-Decreased cycle time
-Eliminate set-up times
COST
-Opportunity for profit
PRODUCT QUALITY
PROCESS QUALITY
-Reduce rework
-Eliminate in-process inspection
-Reduce scrap
-Increase product life
-Eliminate incoming testing
Plan Do
CheckAct
5
Juran
Juran taught:
• Breakthrough performance
• Pareto effect
• Importance of management principles
• Quality by design and planning
6
Juran’s Contribution
Planning
C
os
t o
f P
oo
r
Q
ua
lit
y
(P
er
ce
nt
o
f o
pe
ra
tin
g
co
st
s)
P
ro
du
ct
io
n
B
eg
in
s
Original zone of process control
New zone of process control0
20
40
0
Control
Time
Improvement
Lessons Learned
Sporadic
spike from
observed
problem
Chronic Waste
(an opportunity
for improvement)
Control
Special cause variation
Common cause variation
7
Crosby
Crosby taught:
• Customer requirement is performance
standard
• Quality maturity is a journey
• Preventive action as basic approach
8
Taguchi
Taguchi taught:
• Cost of poor quality is loss to society as a
whole
• Robust quality is designed for consistent
production
• Design control is more important than
production control
9
Taguchi’s Contribution
Lower Specification Limit Upper Specification LimitNominal Value
Region of
Customer
Complaints
Region of
Customer
Complaints
Region
of
Questionable
Performance
Region
of
Questionable
Performance
Region of
Specified
Performance
Mean
Lower
Control
Limit
Upper
Control
Limit
Region of
Desired
Performance
C
os
t
10
What Are the Limits to Improvement?
2 Sigma 3 Sigma 4 Sigma 5 Sigma 6 Sigma
Basic Quality
Tools
Statistical
Tools
Design for Six
Sigma (DFSS)
Basic Tools Wall Design Wall
Clean
Sheet
11
Challenge in the millennium
Question confronting business leaders
and managers:
It is not: “How do we succeed?”
It’s: “How do we stay successfully?”
12
Change
“It is not the strongest that survive, nor the
fittest,
but those
most able to adapt to change.”
Charles Darwin
The Origin of Species
“People do not resist change, people
resist being changed.”
Beckhard
13
Challenge
Resistance-the universal reaction to
change.
Technical resistance
Political resistance
Organizational resistance
Individual resistance
14
Six Sigma?
Six Sigma is not a business fad tied to a
single method or strategy, but rather a
flexible system for improved business
leadership and performance.
It is not about theory, it’s about action.
15
Passion + Execution = Fast and Lasting Results
Six Sigma Focus
Delighting the customer through flawless
execution
Rapid breakthrough improvement
Advanced breakthrough tools that work
Positive and deep culture change
Real financial results that impact the bottom
line
Sigma is a statistical unit of measure that reflects process
capability. The sigma scale of measure is perfectly correlated to
such characteristics as defects-per-unit, parts-per million
defective, and the probability of a failure/error
(Distribution Shifted ± )
2 308,537
3 66,807
4 6,210
5 233
6
PPM
Process
Capability
Defects per
Million Opp.
Six Sigma corresponds to parts per billion if process is centered
Six Sigma - Goal
3 Sigma
6 Sigma
5 Sigma
4 Sigma
%
%
%
%
Historical
Current
Intermediate
Long-term
Sigma Long-Term Yield Standard
Six Sigma - Performance Target
.... To Produce
Improved Rolled Throughput Yield, Defects Per Unit, &
Defects Per Million Opportunity
Reduced Cost of Poor Quality (COPQ)
Improved Capacity and Productivity
Reduced Variation In Our Processes / Products
$$’s
A Problem Solving Methodology
• Characterize
• Optimize
• Breakthrough
USL
T
LSL
USL
T
LSL
T
USLLSL
USL’LSL’
The Strategy
Customer Focused - Both Internally & Externally
Which Business Function Needs It?
As long as there is a process that produces an output whether it is
a manufactured product, data, an invoice, etc... we can apply the Six Sigma
Breakthrough Strategy. For these processes to perform to a customer
standard they require correct inputs!!!
6 Sigma
Methods
MFG..
DESIGNSERVICE
ENG
MAINT.
ADMIN.
QA
PURCH.
Data is derived from objects, situations, or phenomenon in
the form of measurements. Data is used to classify, describe,
improve, or control objects, situations, or phenomenon.
1. We only use experience, not data.
2. We collect data, but just look at the numbers.
3. We group the data so as to form charts and graphs.
4. We use census data with descriptive statistics.
5. We use sample data with descriptive statistics.
6. We use sample data with inferential statistics.
Levels of Analysis:
What level are we??
The Foundation of the Six Sigma Tools
The Role of Six Sigma
Six sigma is the best means to realize
the philosophy, values, and goals
associated with your business
initiatives.
Region
BA
6
Linking
Pins
Business Area Initiatives
It unifies the initiatives and
provides a common language
which all people can
understand and speak.
23
How Do We Improve Capability
• Our Outputs (Y’s) are determined by our Inputs (X’s). If we
know enough about our X’s we can accurately predict Y
without having to measure it.
• If we don’t know much about our X’s, then we have to
resort to inspection and test (non value added operations).
• By knowing and controlling the X’s, we reduce the
variability in Y, which decrease the number of defects,
improves RTY, cycle time, etc. We can also eliminate or
reduce inspection, test, and rework.
The Sources of Six Sigma Quality…
by controlling...by designing...
Continuously
Reduce
Process
Variability
Tighter Upper
& Lower Limits
Target values
Lower Limits
1. Design best
target for
performance
2. Design
system values
to reduce
variability of
performance
• ----------------------
• ----------------------
• ----------------------
Attractive
Implicit
Waste
Expressed
Q1. If provided would you be...
...indifferent?...happy?
Q2. If not provided...
...indifferent?
...unhappy?
Q3. If not provided...
...indifferent?
...unhappy?
• ----------------------
• ----------------------
• ----------------------
• ----------------------
• ----------------------
• ----------------------
• ----------------------
• ----------------------
• ----------------------
by listening...
...to what the
customer says he/
she wants
...performance tolerant
to real world
...process variability, not
by inspection of
defective output
25
Developing and Reinforcing Values
Cycle of
Refinement
VALUESVALUES
BEHAVIORBEHAVIOR
ATTITUDESCULTURE
26
The Role of Leadership
New
Questions
New
Values
New
Measures
Leadership(Humility/Listening)
New
Behaviors
27
Leadership plays the role
Values are a function of behaviors
Measuring the right things is key
Change must be supported and driven
from the top
Will is a key element for a successful
deployment
28
Why are we here?
“There is a recognition that leadership
needs to be a key component of
Consumer Driven 6-Sigma within any
organization trying to undertake 6-
Sigma deployment.”
Mikel Harry / Richard Schroeder
29
What’s In It For Me?
“… the best statistical analysis in the
world is useless if those handling the
information are paralyzed by corporate
fear. When data suggests one direction
but corporate culture or convention
dictates another, fear can rule and the
potential for change is lost. Only strong
leadership can eradicate the fear factor
and allow an organization to realize its
potential. Statistics alone cannot
achieve breakthrough.”
Mikel Harry / Richard Schroeder
30
Define Future State
Leadership in Six Sigma
Orientation
Present State
Future
State
PTS
Le
ad
er
sh
ip
S
ki
lls
Business
Basics
Project Management
Personal
Development
PTS PTS PTS PTS
DEFINE MEASURE ANALYZE IMPROVE CONTROL
Define Plan Manage Close
Team Management
Team Development
Meeting Facilitation
Team Management
Develop Transition Plan
Change Management
Analyze Present State
31
Six sigma structure
Strategy— Consumer-driven, focus on
product, process, and service.
Organization—All-function involvement and
Personal Development.
Policy—Company-wide engagement,
HR,IT,and Finance support.
Management—Project, Team, and Change
Management.
32
Deployment Structure
Master Black Belts (Full-Time)
Project Champions (Part-Time)
Black Belts (Full-Time)
Green Belts (Part-Time)
Executive Leadership (Part-Time)
Deployment Directors (Full/Part-Time)
33
6 Project
Champions
6
Deployment
Champion(s)
SM
Business Unit Leader
CEO
Corporate 6
Senior ChampionSM
HR
Deployment
Champion
SM
IT
Deployment
Champion
SM
Finance
Deployment
Champion
SM
PR
Deployment
Champion
SM
Business
Operations
Leaders
6
HR
Manager
6 Financial
Manager
Green Belts
SM
6
IT
Manager
Training
Deployment
Champion
SM
6 Master
Black Belts
SM
6
Comm.
Manager
6
Training
Manager
6 Project
Champions
SM
6 Black Belts
SM
6 Deployment Infrastructure
6 Executive Council
Six Sigma Deployment Roles
34
Phase I—Cascading
Establish deployment structure
Executive, top management, champion
awareness training
Black Belt training
Tools implementation training
Leadership training
35
Phase II—Accelerate development
Deployment structure implementation
and disposition in each function.
Every salary is GB.
Begin to implant into current quality
system.
ISO14000 and QS9000 integration.
36
Phase III—Integration
Implant six sigma methodology in other
quality tools
Partnership with other quality system.
Six sigma training to supplier and
franchise.
Six sigma in daily business.
DFSS(Design for Six Sigma).
BB/MBB in leadership position.
37
It is All about Value
The Customer Value Proposition
Defines
Business Strategy
Customers choose to buy from us because...
Investors entrust their money to us
because...
Employees choose to work for us because...
38
Three Customer Value Proposition Strategies…
Product differentiation
Operational excellence
Customer partnerships
Competitive advantage!
39
Consumer . Producer
Customers – higher expectation
Defect-free quality
Product
Service
Producer -planning for changes to meet customer
requirements.
Strategic: changing the way every level of a business is managed
on a daily basis.
Tactical: six sigma methodology and cross-functional.
Cultural: out of box thinking, everyone involved and common
language is data.
Customers want to purchase high quality products and services at
the lowest cost, just as companies want to produce high quality
goods and services at the lowest possible cost.
40
Maximizing Customer Value
Deriving value from the Need - Do
Interaction Model
Need Do
Customers and suppliers exchange value
through the Need-Do interaction.
Customer Supplier
Interaction
41
Value-Capturing the voice of Customers
Partial Kano Analysis
Degree of Achievement
Cu
st
om
er
S
at
is
fa
ct
io
n
Surprise:
“Ergonomically Delighting”
Desire:
“Operate Quietly”
Necessities:
“Doesn’t Fail Mechanically”
“Doesn’t Fail Electrically”
“Is Durable”
Basic
Quality
Performance
Quality
Excitement
Quality
42
Business initiatives
Delivery Cost
Customer requirements
Quality
• When we say something is a CTQ, can we describe it from
– Customer’s perspective?
– Our perspective?
• Can we demonstrate the relationship?
PRODUCT
QUALITY
SHIPMENT
ACCURACY
CONDITION
FILL RATE/
ON-TIME DELIVERY
ORDER SERVICE/
INFORMATION
PROFITABLE
CUSTOMER
GROWTH
Customer Satisfaction
43
Building the relationship
Internal Others
External
Segment
Databases
from VOC
Data extraction &
transformation
Departmental
data mart
Intelligence
reports for
projects
Correlation
analysis
44
Data transformation
What should we do to make it easily
accessible as information to managers and
subordinates?
What sort of analysis can we conduct?
How does that analysis add value?
How can we further extend the value of our
data analysis?
45
Opportunity and alternative
Focus on the best opportunities
Stratify to define target arenas
Define real options
Build a portfolio of opportunities to
pursue
Meet customer requirements by running
the business as we do?
Or need to change to get prodigious
improvement? Six sigma?
46
Consumer-driven six sigma
Requires consumer strategy, product
strategy, and infrastructure strategy and
link them inextricably together.
Conducts business through the
consumers’ eyes and shares unfiltered
insight within the enterprise.
Creates a compelling consumer
experience and innovates services as well
as products.
Adds value in the eyes of the consumer.
Integrates the product and information.
47
Transforming Customer Feedback Into SAQ
and then Six sigma Projects
Single Agenda for Quality
and Customer Satisfaction
Top 25 issues
Develop
Actionable Projects
Identify Generic
Critical X’s
High
Mileage DFSS
New
Product Content
Measure and
Monitor Critical X’s
Identify Critical X’s
Out of Specification
Develop Action to
Restore Critical X’s
MBB
Action
VRT
(Process owner)
Black Belt
Project Leader
FPS & Plant OperationsFPS & Plant Operations
QOS
DMAIC
Green Belt
Projects
48
Consumer Driven 6-Sigma
offers a structured problem
solving methodology to
achieve break-through
improvements by
systematically identifying root
causes and eliminating them
using an integrated set of
statistical tools, problem
solving techniques, data, and
disciplines.
Six Sigma in process improvement
Improve
Control
Define
Measure
Analyze
Modify
Design?
No
Yes
Redesign
49
Six Sigma Mindset
Define
Measure
Analyze
Improve
Control
What does the customer want?
What is the defect we want to reduce?
Are we sure we can trust the data?
What does the data tell us?
What are the main influencing factors?
Does the data confirm this?
What are we going to change?
Is improvement tangible and optimal?
How are we going to maintain the improvement forever?
How to cascade feedback to system?
Jonathan Holbrook
6 Sigma Deployment50
DEFINE PROBLEM / ISSUE
Strategy
Prevent defect(s) Eliminate defect(s)
CHARACTERIZE
DEFINE
OPTIMIZE
VERIFY
MEASURE
ANALYZE
IMPROVE
CONTROL
Black belt project to
improve mfg. capability
Mfg. process cannot
provide sufficient
improvement. Need
reduced product
sensitivity to mfg. noise.
The Overall Perspective: DMAIC and DCOV
51
Breakthrough Improvement
5 S workplace
Visual Factory
Standardized Work
DMAIC
Quality Tools Six Sigma Methodology
Phase
World
class
quality
We can’t sustain
a visual factory
without 5S
We can’t sustain
standardized work
without visual factory
We can’t sustain
six sigma without
standardized work
Quality tool is the engine, Six sigma is Turbo-charge
DFSS
We can’t meet six
sigma without six
sigma discipline
52
Is 6-Sigma a strategic
process for your business or
is it just one of several?
Is 6-Sigma a means to
transforming our culture or
just tool?
Do we want to use 6-Sigma
in the same disciplined
manner as we use our
financial operating system?
Do we want to take steps to
drive 6-Sigma accountability
deep into the organization
through 6-Sigma target
setting and incentives for
superior performance?
Does the data driven step-by
-step process show up in the
way we address most issues
and discussions?
Required Mgt. Confirmation
6-Sigma viewed as a strategic
initiative, driving major cultural
changes
Consistent view across
management
Accountability for results is
enforced by breaking down 6-
Sigma targets for each line
organization
Rewards and incentives are tied
directly to 6-Sigma bottom line
results
Adopted by all organizations and
functions as the “way we do
business” and consistently
applied – not an option
Standard problem solving
approaches and fact/data driven
business decisions – like a
disciplined financial operating
system
Best Practice
While leadership articulates 6-
Sigma as a strategic initiative,
does it show a mixed approach
to strategic intent, wide variability
Adoption based on interest of
individual line managers –
implies there is a choice to do it
or not
Accountability for 6-Sigma results
is not forced either through
breaking down to specific targets
for line organizations or through
incentives for superior 6-Sigma
performance
6-Sigma seen as primarily as a
tool and not yet as a “way of
doing business”
Observed Practice
Top leadership needs clearly and openly
confirm its strategic intent
53
Ending…..
Q&A
54
