1. business and industrial
2. business operations
3. management
4. business process

The Six Sigma Approach
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2
Changes in the Business Environment

Pace of Market maturity Increasing exponentially

Shorter product life cycle

Balance between technological advancements and market needs (direct/latent)
New Products and Services
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3
Changes in the Business Environment
• Speed of technological evolutions greater than speed of consumer adaptation/acceptance
• New technology applications cannot be evaluated in terms of acceptance and diffusion
prior to market availability
• Customer needs time to create expectations for new goods
• Product/service reliability can be improved drastically (See number of recalls during the
previous two years (2000-2001))
• Organizational structure/procedures must be flexible enough to follow new products and
services offered
• Cost control is a fundamental need in order to exist in a quickly changing market
Cash Burn Rate
Costs
Revenues
Bankruptcy
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4
Six Sigma Key Features

Six Sigma is a business strategy which translates external and internal
priorities into improvement programs and products/services/processes
reengineering

Six Sigma approach allows resources to move forward the mission and
priorities of the companies to drastically improve their bottom line.

Improved profit margins allow companies to create products and
services with added features and functions that result in greater market
share.
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5
Six Sigma Key Features
An objective of six sigma is to reduce variation and move product or
service outputs permanently inside customer requirements.
(Curve A to B)
Critical Customer Requirement
B
A
Defects: Service
unacceptable to
customer
Produce or Service Output
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6
Six Sigma Key Features
A Critical Delivery Process is
Measured at 2.5 Sigma
Critical
Customer
Requirement: 10 days or less
Delivery
Process
Output
Frequency
0
Defects
10
Distribution of delivery times
for most recent month in days
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7
Six Sigma Key Features
Six Sigma Teams Improve
Deliveries to 6.0 Sigma
Critical
Customer
Requirement: 10 days or less
Delivery
Process
Output
Frequency
Defects
0
10
Distribution of delivery times
for most recent month in days
pc
8
Six Sigma Key Features
How Close Are You to Consistently
Meeting Your Customer’s Needs?
2 sigma:
69.146% of products and/or services meet customer requirements with
308,538 defects per million opportunities.
4 sigma:
99.379% of products and/or services meet customer requirements ...
but there are still 6,210 defects per million opportunities.
6 sigma:
99.99966% – As close to flaw-free as a business can get, with just 3.4
defects per million opportunities in your product or service.
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9
Six Sigma Key Features
Six Sigma Applies to the Whole Business
Six sigma has the greatest impact when it
is applied across all core processes.
Marketing
Sales
A core business process is a set of
interrelated, cross-functional processes
that have a profound impact on customer
satisfaction - either positive or negative
Product Development
Product Manufacturing
Customer Service
Logistics
Right are some core processes that are
common to many businesses.
Accounts Receivable
Billing/Contracts
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10
Six Sigma Key Features
Six Sigma Focus
Culture



« Statistical Thinking »
« Focus » on the market
 actual and potential
clients
 actual and hidden needs
Continuous training
Strategy
Capability



Understand when continuous
improvement is needed and when to
look for a breakthrough

Spread innovation results

Design processes and products able
to assure results in every condition
« Focus » on the value
for the client and not on
the product
Continuous
Reengineering /
Re-shaping
Results
+ profit
- cost
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11
Six Sigma Key Features
What differentiates Six Sigma Methods from TQM?
• The hard tie to business strategy and business results
• The required commitment of top leadership up front and continuously through years
of implementation
• The extensive focus on continuous definition of customer and market requirements
• Each project delivers bottom line results in a relatively short time
• The rigorous methods based on measurement and analysis.
• Full time six sigma team leaders (black belts) who are extensively trained in
statistical thinking as well as team and project skills
• The integration of six sigma thinking into the business infrastructure through regular
project reviews by senior leaders, incentives, and rewards
• The exponential nature of the improvement required - from 3 sigma to 6 sigma is a
20,000 times improvement
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Six Sigma Key Features
What differentiates Six Sigma Methods from
Business Process Redesign?
• Six sigma is applied to continuous improvement of existing processes as well as to
the design of completely new processes
• A rigorous definition of measurable customer requirements as a prerequisite to the
design of a new process
• The benefits from redesign are sustainable: It requires process control measures,
process ownership, and continuous improvement after the redesign is implemented
• Transformational change: It changes the way the company does business…. How
it thinks about its customers
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Six Sigma Key Features
Relationship Between Six Sigma and Lean Manufacturing
Six Sigma and Lean Manufacturing can be considered as complementary in three
basic areas.
• To achieve an efficient lean manufacturing state, the manufacturer must focus on
reduction of waste and defects. From this perspective, Six Sigma may be viewed
as an enabler of lean manufacturing. Projects aimed at understanding root causes
of process failures and defects will support the transition from traditional to lean
manufacturing. Since lean manufacturing attempts to minimize inventory, it relies
on defect free parts and components. Six Sigma is a systematic statistically based
method of eliminating defects.
• Through its focus on designing products and services that meet customer needs,
Six Sigma supports the “Specify Value” element of lean manufacturing. Six Sigma’s
design method includes the development of Critical to Customer Requirements
(CCRs) that represent the translation of customer needs to product or service
requirements.
• The Six Sigma model develops “Belts” with skills in process analysis. With these
core skills and associated project experience, the Black Belts’ skills can be easily
extended to include the lean manufacturing concepts. For example, GE has trained
Black Belts to implement lean manufacturing techniques in their own production
plants and is currently expanding this application to their suppliers and customers.
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14
Six Sigma Key Features
Typical Improvement Areas
• Defects and rework reduction (both in manufacturing and in
transactional environment)
• Down time reduction and efficiency enhancement
• Internal procedures development
• New products and services development
• Complete re-engineering of the organization
• New business model definition
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Six Sigma Applications
Organizations Already Using the Six Sigma Approach
• General Electric
• Ford Motor Company
• Johnson & Johnson
• Allied Signal (Honeywell)
• Dow Chemical
• Philips
• Caterpillar
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Six Sigma Applications
- General Electric
Results
3.0
Annual Net
Benefit from
Six Sigma
$ in Billions
$2.6B
$2.0B
2.0
1.0
$400M
0
$750M
$-30M
1996
1997
Annual Net Benefit
1998
1999
2000 (est.)
Source: 1998 and 1999 GE Annual Report
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17
G.E. Six Sigma Program Evolutions

95-96:

Incremental improvement

“Campaign”

Internal focus

5% of personnel involved

97-98:

Incremental and breakthrough improvements

Focus on priorities

From customers to suppliers

Structured management of the program

99-00:

Focus on “value”

Reactivity and proactivity

Innovation

On the job Six Sigma
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Six Sigma Applications
- Johnson & Johnson

Worldwide program diffused throughout all business processes

Main focus on technical areas, specifically new product platform development

Consistent application of DFSS(Design Excellence) in product development

Quality Function Deployment

Benchmarking (Both internal knowledge sharing and other industry best
practices)

Design of Experiment(DOE)

Reliability Techniques

Cross-Functional Teams

Main Focus on Process Streamlining and Standardization; reduction in time to
market, defects and in-field problem prevention
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Six Sigma Applications
- Dow Chemical Results
• Dow expects to achieve $1.5 Billion (EBIT) by 2003.
• Dow is achieving over $250,000 in net results per project.
• Why did Dow adopt Six Sigma?
To accelerate implementation of their global business strategies.
• Dow has targeted 3% of its employee population as full time black belts
Over 1000 Six Sigma Black Belts are currently delivering
project results across all parts of Dow’s business.
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20
Six Sigma Applications
- Caterpillar
•
Worldwide consistency in co-ordination efforts and initiatives
•
Challenging objectives, in the following areas:
• Quality and Reliability Improvement (50% reduction in defect rate)
• Cost Reduction (10% reduction)
• Increase in Sales Growth
•
Immediate deployment of DFSS methodology
•
Highly effective human resource allocation
•
Highly diffused in corporate culture, a change in mentality
•
Co-ordination between sites in order to maximize project results
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Six Sigma Applications
- Ford Motor Company
“We now have more than 1,800 full-time, trained problem-solvers called Black Belts leading
customer satisfaction team projects. The 215 projects they completed last year have already saved
us $52 million, and will save us more than $200 million in the next two years. More importantly,
these projects made a real difference to our customers by eliminating high priority concerns and
increasing satisfaction.”
Jacques Nasser
Ford Motor Company
Source: 2000 Annual Report
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22
Six Sigma Applications
- Allied Signal

Has accumulated savings of $1.5 Billion since 1994

Achieved annual savings of $32 million while avoiding capital
outlays of $35 million in one plant

Past-due bills have been reduced by 20%, resulting in a substantial
improvement in cash-flow

Shorter turnaround times have led to more satisfied customers
and more business

Application of Six Sigma has liberated “phantom capacity”,
eliminating costly investments for additional capacity
“The fact is, there is more reality with this than anything that has come down in a long time in
business.”
- Larry Bossidy, CEO, AlliedSignal
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Six Sigma Applications
- Allied Signal

Actual focus

Success rate improvement in new product development

Time to market reduction and wide improvement of cycle time for the relevant
processes

Overhead reduction

Suppliers capability (critical to the success of the six sigma breakthrough strategy)
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24
Six Sigma Applications
- Allied Signal
Annual TQ Focus
Area
Six Sigma Breakthrough Mgmt
Breakthru Mgmt.
Assessment to Baldrige Award
Customer Focus
‘9
7
Baldrige
Customer Excell.
‘9
6
Technical Excell.
Six Sigma Product
Development
Six Sigma, Lean Mfg.
Goal Alignment &
High Performance Teams
Operational Excell.
TQL II
Manage by Fact
Baseline Assessment
TQMP
Cycle Time &
Process Focus
TQ Speed
Foundation
TQL
‘9
5
‘9
4
‘9
3
‘9
2
pc
BKTH
Pilots
on value
drivers
25
Six Sigma Applications - Philips
STAKEHOLDERS NEEDS ANALYSIS
IMPROVEMENT PLAN
PRIORITIES SELECTION
APPROACH CONFIGURATION
Six Sigma
Approach
PROCESS APPROACH
PERFORMANCE
IMPROVEMENT
(Line Management)
(Day to day improvement)
PROCESS
BREAKTHROUGH
(DFSS)
PROCESS
IMPROVEMENT
(DMAIC)
STANDARDISATION
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26
DMAIC/DFSS Methodologies
Two Approaches
• Process Improvement (DMAIC)
• Process Redesign (DFSS)
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27
Six Sigma Methodologies
DMAIC (Define, Measure, Analyze, Improve, Control)

Analytical approach to eliminate weaknesses of the current processes,
products and services (Incremental improvement).
DFSS (Design For Six Sigma)

Creative approach to design new robust processes,products and
services and to obtain competitive advantages (Quantum leap).
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Determining Whether to Improve or Redesign
Six Sigma Improvement Process
Design for Six Sigma
Define Business
Improvement Opportunity
Does Process
Currently Exist?
No
Yes
Measure Current Performance
Measure Market Requirements
Analyze Root Cause
of Current Performance
Explore Design Alternatives
Develop Detailed Design
Is Current Process
Capable of Meeting
Customer Reqts?
No
Implement New Design
Yes
Improve Performance
Control Performance
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DMAIC Methodology
1.0 Define Opportunities
1.0
2.0
Measure
Performance
Define
Opportunities
Objective
To identify and
validate the
improvement
opportunity,
develop the
business
processes, define
critical customer
requirements, and
prepare themselves
to be an effective
project team.
Main Activities
3.0
Analyze
Opportunity
5.0
Control
Performance
4.0
Improve
Performance
Potential Tools and Techniques
Key Deliverables
BRM Checklist
• Introduction to Six
•
•
•
•
•
Sigma
Introduction to
software tools
Develop Project
Charter
Incorporate
Business Risk
Management (BRM)
framework into
project
Develop team
guidelines and
ground rules
Develop project
tracking and
scheduling
TASKS
TASKS
ACTIVITIES
ACTIVITIES
RESP.
RESP.
START
START
DUE STATUS &ACTIONS
•
•
•
•
DUE STATUS &ACTIONS
Project Charter
Action Plan
Process Maps
"Quick-Win"
Opportunities
• Critical
Requirements
(CR)
• BRM CRs
• Prepared Team
Gap
Project Focus
$$
Sigma Goal (CCR)
CCRs
Team Charter
Business Case
Opportunity Statement
Goal Statement Project Scope
Project Plan
Team Selection
Action Plan
TASKS
TASKS
ACTIVITIES
ACTIVITIES
RESP.
RESP.
START
START
DUE STATUS &ACTIONS
DUE STATUS &ACTIONS
Project Tracking
TASKS
TASKS
ACTIVITIES
ACTIVITIES
RESP.
RESP.
START
START
DUE STATUS &ACTIONS
DUE STATUS &ACTIONS
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30
DMAIC Methodology
2.0 Measure Performance
1.0
Define
Opportunities
Objective
To identify critical
measures
necessary to
evaluate success
meeting critical
customer
requirements.
To begin developing
a methodology to
collect data to
measure process
performance.
To understand the
elements of the sixsigma calculation
and establish
baseline sigma for
the processes the
team is analyzing.
2.0
3.0
Analyze
Opportunity
Measure
Performance
Main Activities
• Collect baseline
performance data
• Identify VOC
• Develop measurement
plan
• Determine if special
cause exists
• Introduction to Quality
Loss Function
• Complete BRM
checkpoint
5.0
Control
Performance
4.0
Improve
Performance
Potential Tools and Techniques
Key Deliverables
• As-Is Process
Map
Checksheets
Input
Process
Output CCR
A1
A1
A1
D1
D1
D1
D2
D2
D2
A2
A2
A2
Input
Indicator
A
A
A
B
B
• Operational
B
Definitions
• Data Collection
•
Process
Indicator
Process Indicator
UCL
Sigma=
Output Indicator
•
•
X
Sigma=
CCR
•
LCL
X
Gap
pc
Formats and
Plans
Validate
Measurement
System
Qualified
Measurement
System
Baseline
Performance
Productive
Team
Atmosphere
31
DMAIC Methodology
3.0 Analyze Opportunity
2.0
Measure
Performance
Main Activities
Objective
To stratify and
analyze the
opportunity to
identify a specific
problem and define
an easily
understood problem
statement. To
identify and validate
the root causes that
assure the
elimination of “real”
root causes and
thus the problem
the team is focused
on.
3.0
Analyze
Opportunity
Potential Tools and Techniques
Indicator
s&
Problem
Stateme
nt
(effect)
Specific Problem
•
•
•
•
•
Map
Quantified Root Causes
• Determine common vs
•
•
•
•
Key Deliverables
• Data Analysis
• To-Be Process
• Stratify Process
• Stratify Data & Identify
special cause
Understand probability
Hypothesis testing
Components of variation
Develop Problem
Statement
Identify Root Causes
Design Root Cause
Verification Analysis
Validate Root Causes
Application of Design of
Experiments
Enhance Team
Creativity & Prevent
Group-Think
5.0
Control
Performance
4.0
Improve
Performance
• Validated Root
Causes
50%
Problem
Statement
25%
Shanin Tools
Product Type
65
Consumer
Manufacturer
Avg days Ord
1.0
Define
Opportunities
55
45
35
1
2
3
Customer Typ
pc
• Refine Problem
Statement
32
DMAIC Methodology
4.0 Improve Performance
1.0
Define
Opportunities
Objective
To identify,
evaluate, and select
the right
improvement
solutions. To
develop a change
management
approach to assist
the organization in
adapting to the
changes introduced
through solution
implementation.
2.0
Measure
Performance
Main Activities
4.0
3.0
Analyze
Opportunity
Improve
Performance
Potential Tools and Techniques
•
•
•
•
•
Key Deliverables
• Implemented
Quality Functional Deployment
• Generate Solution
Ideas
Determine Solution
Impacts: Benefits
Evaluate and Select
Solutions
Develop Process
Maps & High Level
Plan
Develop and Present
Storyboard
Communicate
Solutions to all
Stakeholders
5.0
Control
Performance
Solution
BRM Checklist
TASKS
TASKS
ACTIVITIES
ACTIVITIES
RESP.
RESP.
START
START
• Process Maps and
DUE STATUS &ACTIONS
DUE STATUS &ACTIONS
Documentation
QFD
• Implementation
Milestones
• Improvement
Solution
Sigma
Impact
Time
Impact
2
1
CostBenefit
Impact
1
Other
Impacts
Total
Impacts and
Benefits
• Storyboard
• Change Maps
Gantt Chart (Pilot)
Rank
What
When
Who
1
Task
Jan
Feb
Mar
Apr
May
A
Responsibility
Jim
B
Sue
C
Lynn
D
Bill/Jim
Forcefield Analysis
Forces Working for
Idea
Cost Benefit
Costs
Energy-saver light bulbs
Installation by employee
Cost of lost production
Total cost
Benefits - Year 1
Reduce electric bill by 8%
Warranty for 5 years
Total benefits
Forces Working
against Idea
$9,000
500
1,500
$11,000
$5,000
1,800
$6,800
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33
DMAIC Methodology
5.0 Control Performance
2.0
Measure
Performance
Main Activities
Objective
5.0
4.0
Improve
Performance
Control
Performance
Potential Tools and Techniques
Error Modes and Effects Analysis
Solution
• Verify Reduction in Root
•
•
•
•
•
Cause Sigma
Improvement Resulted
from Solution
Identify if Additional
Solutions are Necessary
to Achieve the Goal
Identify and Develop
Replication &
Standardization
Opportunities
Integrate and Manage
Solutions in Daily Work
Processes
Integrate Lessons
Learned
Identify Team’s Next
Steps & Plans for
Remaining Opportunities
Assemble all
outbound
4.2.1 containers in
staging area
4.2.2
Determine
correct
pallet size
Description:
• Back injury
during lift
• Foot and toe
injury from
dropped
cont.
• Carry-all
• Back
not available injuries,
• Lifting
lost time,
guidelines
insurance
not followed expense
• Non-standard • Vendor
pallets kept
pallet used
• Full pallets
are rotated
90° by hand
Stack
outbound
containers on
4.2.4
pallet not to
exceed two
high
• First layer
not
completed
before
starting
second layer
• Container
stack over
end of
pallet and
fall when
being lifted
• Pallet set 90° • Back and
off when
hand injuries,
positioned lost time,
lift truck
insurance
can’t access
expense and
rework
• Stack
• Containers
guidelines
fall while
not used
being lifted
• Tie down
Load pallets in • Tie down
guidelines
vehicle with
lines
not clear
lift truck and
damage bulk
4.2.5 secure
mail when
tightened
• Injured
fingers,
damaged
outbound
mail
• Purchase two new carry-alls for
mailroom
• Include topic in new safety film
0
+
2
2
4
3
9
2
+
2
4
1
1
6
2
+
3
5
4
1
10
0
+
1
1
1
1
3
0
+
1
1
2
1
4
TASKS
Occurrence Prevention
(Countermeasure)
Total
Effect
Severity
Cause
Position
empty pallet
in marked
area of
loading dock
4.2.3
TASKS
Degree of Effect
Error
Frequency
• Develop Pilot Plan & Pilot
Process
Step
Key Deliverables
• Process Control
BRM Checklist
Error Modes and Effects Analysis
Error Mode Effect Analysis
(EMEA)
Detection
To understand the
importance of
planning and
executing against
the plan.
To determine the
approach to be
taken to
achievement of the
targeted results.
To understand how
to disseminate
lessons learned,
identify replication
and standardization
opportunities/
processes, and
develop related
plans.
3.0
Analyze
Opportunity
Step#
1.0
Define
Opportunities
ACTIVITIES
ACTIVITIES
RESP.
RESP.
START
START
Systems
DUE STATUS &ACTIONS
DUE STATUS &ACTIONS
• Standards and
Process Control
System
Procedures
• Training
• Team Evaluation
• Change
• Inspect for non-standard pallets and
return to vendors
• Update and clarify pallet placement
procedures
• Include topic in new safety film
• Update and clarify loading guidelines
Implementation Plans
• Update and clarify loading guidelines
• Potential Problem
Implemented Solution
Analysis
Project Workplan
• Pilot and Solution
Results
• Success Stories
• Trained Team
CCR
Gap
CCR
•
•
X
Sigma Goal (CCR)
•
Gap
pc
Members (Black
Belts, Green Belts)
Replication
Opportunities
Standardization
Opportunities
Project Completion
34
DMEDI Methodology
1.0 Define
1.0
2.0
Measure
Define
Objective
• Understand the
Purpose
and the Outputs of
Define
• Develop a Charter
for the Project
• Develop a Multi-
Main Activities
Plan
to Manage the
Project
5.0
Implement
4.0
Develop
Potential Tools and Techniques
Key Deliverables
Charter
• Form Stakeholder
•
•
•
•
Generational
Product/Service Plan
• Develop a Project
3.0
Explore
•
•
•
•
•
Review Team
Develop Business
Case
Develop Opportunity
Statement
Develop Goal
Statement
Develop Project
Scope
Develop MultiGenerational Plan
Develop Project
Plan
Develop Preliminary
Project Charter
Identify Team and
Support Resources
Develop
Communication and
Change
Management Plan
Multi-Generation Plan
Vision
Generation #1 Generation #2 Generation #3

Business Case

Portable, storable method of sealing a tire puncture and re-inflating
the flat tire.

Preliminary Customers: Passenger Car Drivers

Preliminary Needs: A quick, easy method of recovering from a flat
tire and driving until permanent repair is possible.

Market: 50 Million Automobiles (US, Canada)

Revenue potential: $60 Million

Opportunity Statement

The “graying” of US and Canada populations provides an opportunity
to develop & market a product that will allow drivers to easily seal
and re-inflate a punctured tire (rather than change the tire
themselves). Over 65 population will grow at a rate of 12% per
annum for the next
10 years.
• Draft Project
Charter

Goal Statement

Achieve a Market Share of 30% (1st Year)

Product Sales Price < $4 US

Minimum ROI: 15%
Project Plan

Activity
• Product/Service

Project Scope

The project includes design of the TireFlator product/delivery
platform as well as production and distribution process design. The
first generation of this product is aimed at passenger cars, light
trucks & sport utility vehicles
Concept
• Problem/Goal
Team Members

Time

Apr May Jun Jul Aug Sep
P. Mondavi
B. Lamp
E. Stakeholder
S. Adams
Champion
H. Dunn
MBB
BB
P. Freely
Chemistry
Marketing
R. Norris
Production
Engineering
E. Philips
Distribution
Engr.
•
Communications Plan
Communication Desired
Stakeholder Objective Response
What Do
They Already
Know?
Current
Attitudes
Communications Timing Who Prepares
Channel
and Delivers
•
•
•
Gantt Chart
In-and-Out-of-Scope Tool
Qtr 4, 1999
In Scope
New IS
platform
Out of
scope
INFRA
Adding
personnel
Out of
scope
ID
Task Name
1
ID Customers
2
ID Needs
3
ID CCRs
4
Review
5
Develop Concepts
6
High-Level Design
7
Capability
8
Design Review
9
Develop Details
10
Simulation
11
Cost Analysis
12
Design Review
13
Procurement
14
Implementation
Qtr 1, 2000
Qtr 2, 2000
Sep Oct Nov Dec Jan Feb Mar Apr May Jun
•
•
Qtr 3, 2000
Jul
Aug Sep
pc
Statement
Project Scope
Definition
Product/Service
Generation Plan
Project Plan
Team & Design
Resources
Design Controls
Communications &
Change
Management Plan
35
DMEDI Methodology
2.0 Measure
2.0
1.0
Define
Objective
• Understand the
•
•
•
•
•
purpose and outputs
of Measure
Understand how to
develop and specify
CCRs using QFD
and other methods
Begin QFD work for
one project
Understand how to
collect and use VOC
& benchmarking
information for design
Begin work on VOC
plan for one project
Synthesize
information and create
output from Measure
3.0
Explore
Measure
Main Activities
• Research Customers
• Identify Customer,
•
•
•
•
•
•
•
•
Environmental/Health/
Safety (EHS), and
Business Needs
Translate needs into
Critical to Customer,
EHS, and Business
Requirements
Benchmark competitor
performance
Organize information
using QFD Matrix
Prioritize CCRs
Establish CCR upper
and lower
specifications
Establish Target Sigma
Performance
Complete CCR Matrix
Project Review
5.0
Implement
4.0
Develop
Potential Tools and Techniques
Voice of the Customer
Affinity Diagram
Key Deliverables
• Customers/
Structure Tree
Theme 1
Need 1
Theme 3
Need 2
•
•
Need 7
Theme 2
Need 3
Need 4
Need 8
Need 5
•
Quality Functional Deployment
•
QFD
Benchmarking
Critical Customer Requirements Matrix
Customer
Needs
CCR/Measure
LSL
USL
Priority
Sigma Target
pc
Stakeholders &
Segmentation
Voice of Customer
Competitive
Benchmarking
Product/Service
Requirements
Definition
Critical-to-Customer
Requirements (CCR)
Definition
36
DMEDI Methodology
3.0 Explore
Objective
• Understand the
Main Activities
•
•
•
F(T)
USL
Functional Specifications
F(T)
LSL
R(filter)
CCR’s
F(T)
Benchmarking
Reliability
LSL
LSL
Creativity Tools
USL
F(T)
LSL
•
LSL USL
Reliability
F(T)
Functional Importance
Design Concepts
• “Best-Fit” Concept
LSL USL
Sigma
R (Pumps)
USL
F(T)
LSL
USL
LSL
USL
USL
USL
•
LSL
Capability Assessments
Functional Specifications
Sigma
Functional Importance
Simulation
Inputs
USL
Flow Up
Flow Down
(TARGET )
Flow Up
•
LSL
F(T)
F(T)
VS
LSL
USL
Sigma
F(T)
Flow Down ( TARGET )
LSL
USL
LSL
USL
F(T)
Functional
Deployment Map
LSL
Pugh Matrix
Key Criteria
•
F(T)
X=
LSL
99.5
Concept 7
•
Simulation
Reliability
Reliability
USL
•
USL
s= 0.0045
S = 0.001
X = 99.7
Importance
Rating
•
CCR
Specifications
CCR’s
Concept 5
•
Functions
Concept 6
•
•
CCR/Function QFD Matrix
Concept 3
•
•
•
• Product/Service
Design Element
Concept 4
•
•
Key Deliverables
Function/Design Element QFD Matrix
• Translate CCRs into
Concept 2
•
Potential Tools and Techniques
Function Structure Tree
Functions
Identify Conceptual
alternatives
Select best fit concept
Develop functional
deployment map
Evaluate CCRs vs.
Functions with QFD
matrix
Perform Functional
Capability Assessment
Translate Functional
Requirements into High
Level Design Elements
Evaluate Functional
Requirements vs. High
Level Design Elements
using QFD matrix
Perform Sigma
Capability Assessment
Project Review
5.0
Implement
4.0
Develop
Explore
Concept 1
•
purpose and the
outputs of Explore
Step
Use a House of
Quality to deploy
CCRs to design
“pieces”
Use creative
techniques to
develop alternative
concepts
Evaluate conceptual
designs
Develop high-level
designs
Assess and select
the best high-level
design
Assess the risk of
your high-level
design
3.0
CCR Importance
2.0
Measure
CCR Importance
1.0
Define
Score Card
Customer
Needs
CCR/Measure
LSL
USL
Priority
Sigma Target
1
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Selection
High-Level Production
Process Design
Design Elements
Definition
Functional Capability
Assessment
Performance (Sigma)
Capability
Assessment
Score Card
37
DMEDI Methodology
4.0 Develop
2.0
Measure
1.0
Define
Main Activities
Objective
• Understand the
•
•
•
•
•
purpose and
outputs of Develop
Begin work on
planning detailed
design step
activities
Develop a detailed
product, service, or
process design
Refine capability
predictions begun
in the Explore step
Develop process
control methods for
the “production”
process
Develop pre-pilot
and pilot test plans
for the new
product/service
4.0
3.0
Explore
5.0
Implement
Develop
Potential Tools and Techniques
Key Deliverables
• Translate High Level
•
•
•
•
•
•
•
•
Design Elements into
Detailed Design
Elements
Develop Detailed
Designs
Optimize design
using
parameter/tolerance
design
Perform Capability
Assessments
Revise design based
on Capability
Assessment
Perform / Improve
FMEA & EMEA on
design
Develop PCP
Develop Pilot and
Validation Plans
Project Review
Simulation
• Detailed
R (Pumps)
Structure Tree
Detailed Designs
USL
LSL
USL
Reliability
R(filter)
F(T)
F(T)
LSL
Reliability
Reliability
Reliability
F(T)
F(T)
F(T)
LSL USL
Simulation
Inputs
LSL
USL
F(T)
LSL
USL
LSL
USL
•
Flow Down
(TARGET )
Flow Up
F(T)
F(T)
LSL
VS
LSL
Design Element QFD’s
DOE
F(T)
USL
USL
LSL
USL
•
Capability Assessments
Flow Up
Flow Down
•
Weibull
FMEA / EMEA
Robust
Design
•
Tolerance
•
Design
Process Control Plans
Fault Tree
Score Card
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Product/Service/Pro
cess/ Plant Design
Refined Functional
Capability
Assessment
Refined
Performance
(Sigma) Capability
Assessment
Pilot and Validation
Plans
Process Control
Plan
Scorecards
38
DMEDI Methodology
5.0 Implement
1.0
Define
Objective
• Understand the
purpose and the
outputs of
Implement
• Develop and
execute the pilot
and analyze the
results
• Develop full-scale
implementation
plans and
transition to
process owners
• Evaluate the
design process
and make
improvements
2.0
Measure
3.0
Explore
• Execute the Pilot and
•
•
•
•
•
•
•
•
•
•
•
•
Implement
Potential Tools and Techniques
Main Activities
Validation Plans
Analyze Results
Revise/Confirm Design
Scale Up Decision
Develop Detail
Implementation Plans
Develop
Communications Plans
Transition Design
Develop Process Owner
Transition Plan
Develop
Communications Plans
Complete Project
Documentation
Document Lessons
Learned
Rewards and
Recognition
Project Review and
Closure
5.0
4.0
Develop
Key Deliverables
Gantt Chart
Qtr 4, 1999
ID
Task Name
Qtr 1, 2000
Qtr 2, 2000
Sep Oct Nov Dec Jan Feb Mar Apr
May Jun
Qtr 3, 2000
Jul
Aug Sep
1
2
3
Pilot Validation
Assessment
• Validation Testing
4
Complete
5
6
• Gap
7
8
9
10
Analysis/Redesign
11
12
• Scale-Up Decision
• Full-Scale
13
14
Process Control Plans
Score Card
•
•
Communications Plan
Communication Desired
Stakeholder Objective Response
What Do
They Already
Know?
Current
Attitudes
•
Rewards & Recognition
Communications Timing Who Prepares
Channel
and Delivers
•
•
•
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Implementation
Plan
Process Owner
Transition Plan
Build & Control
Documentation
Design
Transitioned
Team Lessons
Learned
Reward &
Recognition
Score Card
Six Sigma How Do I Incorporate It Into My
Organization?
pc
40
Approach -Overall Overview
Black Belt Training and Projects
Implementation with Coaching
Business Alignment
Planning
Infrastructure Development to
Sustain the Continuous Improvement Culture
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Business Alignment Planning and Projects
Implementation
41
Six Sigma guides you from strategy..through implementation..to results
I. ANALYZE(situation assessment)
Conduct business diagnostics to assess
overall readiness, potential rewards, and
identify gaps.
II. PLAN
Discover opportunities and develop a plan to
close gaps and integrate PwC’s SIGMA
Breakaway Performance.
III. FOCUS
Close gaps and collaborate on the best
opportunities to drive out costs and increase
revenues.
IV. BUILD(projects implementation)
Enable and motivate an organization to
sustain and multiply improvements.
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42
Business Alignment Planning - ANALYZE
Leadership Processes
ANALYZE
Business
Strategy
Key Performance
Indicators
Marketplace
Core
Business
Processes
Process
Output
Measures
Critical
To Satisfaction
Support Processes

Business Alignment Planning

Evaluate position in the marketplace

Estimate breakthrough potential

Evaluate the readiness of organization

Profile the organization alignment with the marketplace
Gap
Analysis

Establish benchmarks

Executive Ownership of Findings

Identification of barriers to implementation
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Business Alignment Planning - PLAN-FOCUS
Leadership Processes
PLAN-FOCUS
Business
Strategy
Key Performance
Indicators
Core
Business
Processes
Process
Output
Measures
Support Processes
Deploy Key Improvement Areas
into potential projects
Prioritize potential projects
•Select projects that will have the greatest impact on driving
the businesses key performance indicators, strategy, and
critical customer requirements.
Marketplac
e
Critical
To Satisfaction
Gap
Analysis
Key Improvement Areas
A
Potential
Projects
________
________
B
Potential
Projects
________
________
________
C
D
E
Potential
Projects
________
________
________
Potential
Projects
________
________
________
Potential
Projects
________
________
________
Active Projects
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Infrastructure Development
BUSINESS STRATEGY
SIGMA Implementation linkage to strategy
PROCESS MANAGEMENT
Management of business processes
CHANGE MANAGEMENT
Committed leadership, communication, incentives, training
Supported by Change Management Approach
KNOWLEDGE MANAGEMENT & TECHNOLOGY
Enabler of process improvement and flow of data
Development of the managerial talent pool
INTERNAL BENCHMARKING SYSTEM
Enabler of best practices diffusion inside the
Organization
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Infrastructure Development Articulate Vision, Strategy, and Desired Culture

45
Leaders must develop strategies and focus resources on work which contributes the
most to the achievement of the vision, then communicate their expectations clearly:

Identify business strategies and measures

Identify priority improvement focus areas

Identify how six sigma
strategy integrates with
other business strategies

Identify desired leadership
behaviors

Communicate
Business
Alignment
Vision
Strategies
Improvement
Focus Areas
Culture
Alignment
Values
Desired Leadership
Behaviors
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Accelerating Results through
Infrastructure Development
46

Six Sigma project selection is the responsibility of the business unit leadership team

Regular project “gate” or milestone reviews are conducted by the business unit leadership
teams at each phase of the project

Developing and retaining qualified “black belt” through incentives and advancement
opportunities

Setting six sigma business targets and establishing executive incentives to deliver results

Establishing six sigma as part of the corporate and business unit scorecard

Establishing routine reviews by key customers of product and service performance

Establishing routine assessments of the overall implementation for continuous improvement
of the six sigma process
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47
Six Sigma - Organizational Structure and
typical Program
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48
Six Sigma - Organizational Structure
Typical Six Sigma Leadership Structure (Corporate)
Executive Leadership
Quality Council
Six Sigma Office
CEO
• Strategic
Direction
Corporate
Master Black Belts
• Communication
• Infrastructure
Development
Division Executives
(Champions)
Divisional
Quality Councils
• Training
• Knowledge
Transfer
• Overall Project
Management
Master Black
Belts
• Technical
Training and
Coaching
Black Belts
• Key Improvement
Area Identification
• Black Belt
Selection and
Development
• Project Selection
and Review
• Sponsor Projects
• Project Leaders
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Typical Six Sigma Deployment Timeline
Year 1
Executive
Strategic Direction
& Communication
Mth 1
Mth 2
Mth 3
Mth 4
Mth 5
Mth 6
Mth 7
Mth 8
Mth 10 Mth 11
Leadership
Workshops
Business Leader
Planning & Mgmt
Black Belt/MBB
Skill Development
Executive Leadership Review and Support
of Six Sigma Deployment and
Implementation
Champions
Workshops
BB Wave
1
BU Leadership Participation and
Review of Black Belt Projects
Coaching
Coaching
Coaching
Coaching
BB Wave
2
Awareness/Team
Skill Development
Planning &
Program
Team
Mobilizatio Configuration
n
Change
Infrastructure
Mth 9
Green Belt
Waves
Coaching
Six Sigma
Process
Coaching Centered
Enterprise
Coaching
Coaching
White Belt
Sessions
Project Management
HR Infrastructure Development
Communication
Change Management
Process Management
Assessment
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Typical Mistakes

Projects chosen are not congruent with corporate strategy and goals

Employees view six sigma as a second class initiative

Employees question the program’s importance

Six Sigma Program lacks appropriate leadership

Best and Brightest are not involved in six sigma program

Six Sigma viewed and managed as a classic quality program
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Typical Mistakes

Management system becomes to bureaucratic


Fail to use correct mix of theory and practical application in training


Fail to identify correct level of formalization
Excessive use of statistical theory
Six Sigma viewed as a cost reduction program

Must be used to cut costs WHILE boosting revenues
REVENUES
PROFITS
+
COSTS
pc
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The Never Ending Story...


Create sustainable business model

Profitability

Market focus

Flexibility
Robust design for processes, products, and services

Remember, the main focus is on business processes, the real source of added
value!
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