Organizing Six Sigma

1
Organizing Six Sigma

• Christopher J. Zampogna
• Operations Management 380
• Boise State University

2
What will be covered

• The History of Six Sigma
• Six Sigma Defined
• Brainstorming Exercise
• The Six Sigma Roadmap
• Organizing Six Sigma
• A Real-World Example
• An Exercise
• Summary
• Reading List
• References

3
The History of Six Sigma

• Six Sigma originated at Motorola in 1982
• Early adoptors
• Allied Signal (Honeywell)
• General Electric
• Six Sigma management philosophy today
• A well-developed, thorough approach to quality
  improvement
• Uses statistics and management by fact
• Is effective in manufacturing and services firms

4
Defining Six Sigma (6 )

• Six Sigma A comprehensive and flexible system
  for achieving, sustaining and maximizing business
  success. Six sigma is uniquely driven by a close
  understanding of customer needs, disciplined use
  of facts, data, and statistical analysis and
  diligent attention to managing, improving, and
  reinventing business processes.
• - Peter S. Pande6

5
Defining Six Sigma (6 )

• The Greek symbol (sigma) refers to the amount
  of variation in a process around the mean value
  for that process
• Processes have acceptable upper and lower limits
• Six Sigma is concerned with reducing the
  variations to get more output within those limits

6
Defining Six Sigma (6 )

• In the chart below, 64.6 of the measures are
  between the upper and lower limits
• This is a 1 process
• Reducing the variations in the process will bring
  a higher percentage within the acceptable limits

7
The 6 Difference

• What is the Six Sigma difference ?
• one typo per page (3 sigma)
• vs.
• one typo per library (6 sigma)
• playing golf at a 6 sigma level means missing
• one putt every 163 years

8
Brainstorming ExerciseWhere are the variations?

• Identify six processes in your business that
  have variations in the output.
• (HINT manufacturing, purchasing, inventory,
  forecasting,
• product design, customer service, accounting...)

9
The Six Sigma Roadmap

• Five steps to implementing Six Sigma9
• Identify core processes and key customers
• Define customer requirements
• Measure current performance
• Prioritize, analyze, implement improvements
• Expand and integrate the Six Sigma system

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Organizing Six Sigma

• Key Roles10
• Leadership Team
• Champions
• Mentors (master black belts)
• Experts (black belts)
• Participants (green belts)

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Key Six Sigma Roles

• The Leadership Group
• Be actively involved from outset
• Develop a strategic plan
• Establish Roles and Infrastructure
• Establish supporting policies
• Job descriptions
• Reward/Compensation systems
• Career paths

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Key Six Sigma Roles

• The Leadership Group (contd)
• Select projects
• Prioritize projects and allocate resources
• Facilitate, guide, manage

13
Key Six Sigma Roles

• The Champions17
• Find appropriate projects
• Represent projects to the leadership
• Provide coaching
• Ensure allocation of resources
• Resolve issues

14
Key Six Sigma Roles

• Master Back Belts
• Coach and support project leads
• Work as a change agent
• Train others in the use of six sigma tools

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Key Six Sigma Roles

• Black Belts
• Highly trained experts
• Manage project leaders
• Lead project teams

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Key Six Sigma Roles

• Green Belts
• Trained in the use of statistical tools
• Lead project teams
• Participate on project teams

17
A Real-World Example

• General Electrics 6 results
• - reduced invoice defects and disputes with a
  key customer by 98
• - saved 1 million annually in contract review
  process (GE Capital)
• - developed breakthrough technology that reduced
  medical scan times to 30 seconds from 3 minutes
• - improved a key call center performance measure
  from 76 99
• - reduced vibrations in Power System rotors by
  300
• - saved 320 million in less than two years,
  750 million in three years

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Exercise

• If you have a 2 sigma process, what percentage
  of the output is within spec ?
• Six Sigma originated at Honeywell T/F
• Six Sigma focuses on the customer T/F
• What does the Greek symbol sigma represent?
• Six Sigma utilizes fact-based decision making
  T/F
• Continuous improvement requires feedback and
  adjustments to ensure achievement of business
  objectives T/F
• ANSWERS 1) 94.38, 2) False, 3)True,
  4)Standard deviation, 5) True, 6) True

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Six Sigma Summary

• Project-driven management philosophy
• Relies on fact-based decision making (statistical
  tools)
• Requires top-down support
• Requires an infrastructure that can support
  quality project management
• Has been shown to have markedly positive impacts
  on business performance

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Suggested Reading

• Breyfogle, F.W., III, Cupello, J.M., Meadows,
  B. (2003). Managing Six Sigma A Practical
  Guide to Understanding, Assessing, and
  Implementing the Strategy that Yields Bottom-Line
  Success. New York, New York John Wiley Sons.
• Eckes, George. (2001) The Six Sigma Revolution
  How General Electric and Others Turned Process
  into Profits. New York, New York John Wiley
  Sons.
•  
• Eckes, George. (2003) Six Sigma for Everyone.
  New York, New York John Wiley Sons.
• Foster, S. Thomas. (2004). Managing Quality An
  Integrative Approach. Upper Saddle River, New
  Jersey Pearson Prentice Hall.
• Kerzner, Harold. (2003). Project Management a
  systems approach to planning, scheduling, and
  controling. Upper Saddle River, New Jersey
  Pearson Prentice Hall.
• Kinicki, A, Kreitner, R. (2003).
  Organizational Behavior key concepts, skills
  best practices. New York, New York McGraw Hill.
• Pande, P.S., Neuman, R.P., Cavanagh, R.R.
  (2000). The Six Sigma Way How GE, Motorola and
  other Top Companies are Honing Their Performance.
  New York, New York McGraw Hill.

21
Bibliography

• Eckes, George. (2001) The Six Sigma Revolution
  How General Electric and Others Turned Process
  into Profits. p.5. New York, New York John
  Wiley Sons.
• Eckes, The Six Sigma Revolution. p.6.
• Ibid.
• Eckes, The Six Sigma Revolution. pp.9-10.
• Costanzo, Chris. (2002). At Suntrust, Six Sigma
  is Middle Managements Baby. American Banker,
  June 12, 2002, Vol. 167, Issue 112.
• Pande, P.S., Neuman, R.P., Cavanagh, R.R.
  (2000). The Six Sigma Way How GE, Motorola and
  other Top Companies are Honing Their Performance.
  New York, New York McGraw Hill.
• 7) Breyfogle, F.W., III, Cupello, J.M.,
  Meadows, B. (2003). Managing Six Sigma A
  Practical Guide to Understanding, Assessing, and
  Implementing the Strategy that Yields Bottom-Line
  Success. p.6. New York, New York John Wiley
  Sons.

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Bibliography

• 8) Vasilash, Gary S. (1999). Missing One Putt
  Every 163 Years. Automotive Manufacturing and
  Production, Dec99, Vol. 111, Issue 12.
• Pande, p.67.
• Eckes, The Six Sigma Revolution. p.25.
• Pande, chapters 7 and 8.
• Pande, p.110.
• Eckes, George. (2003) Six Sigma for Everyone.
  pp.15-26. New York, New York John Wiley Sons.
• 14) Pande, pp. 96-103.
• 15) Gale, Sara F. (2003). Building Frameworks
  for Six Sigma. Workforce, May2003, Vol. 82,
  Issue 5.

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Bibliography

1. Kerzner, Harold. (2003). Project Management a
   systems approach to planning, scheduling and
   controlling. Upper Saddle River, New Jersey
   Pearson Prentice Hall.
2. Pande, p.119.
3. Eckes, The Six Sigma Revolution. p.43.
4. Pande, pp.123-127.
5. Ibid.
6. Foster, S. Thomas. (2004). Managing Quality An
   Integrative Approach. P.404. Upper Saddle River,
   New Jersey Pearson Prentice Hall.
7. Eckes, The Six Sigma Revolution. p.43.
8. Foster, pp.404-405.
9. Breyfogle, p.146.