Demystifying Six Sigma
A company-wide approach to
continuous improvement
Alan Larson
Six Sigma at a Glance
• Alan Larson
– One of the original divisional quality directors
at Motorola
• Developing
• Training
• Deploying
the culture and methods of Six Sigma
– Achievement
• Reduce cost
– Cost of sales by 30 percent
• Improve efficiencies
– Cycle time and cost of administration and service by 90
percent
• Maximize customer satisfaction
in all operations at Motorola
• Critical Success Factors of six sigma
– Create a six sigma culture
• Goals and objectives are clearly defined and
communicated
– Create a continuous improvement models
• Utilize the JUSE seven problem-solving tools
– Effective management of changes
• Key elements of six sigma
–
–
–
–
–
–
–
Focused on customer satisfaction
Data
Reach-out goals
Team based
All employees involved
Clear definition and understanding of roles
Personal growth
• How to establish improvement programs
–
–
–
–
Customer focused
Team based
Deployed throughout the entire workforce
Applicable to
• Manufacturing
• Administrative
• Service
–
Six-step continuous improvement methods
1.
2.
3.
4.
5.
6.
Create the operational statement and metric
Define the improvement teams
Identify potential causes
Investigation and root cause identification
Make improvement permanent
Demonstrate improvement and celebrate
– JUSE seven tools
•
•
•
•
•
•
•
Pareto diagram 柏拉圖
Fishbone diagram 魚骨圖、石川圖、特性要因圖
Check sheet 查檢表
Histogram 直方圖
Stratification 層別法
Scatter diagram 散佈圖
Charting 管制圖
The Basics of Six Sigma
• What is
– Six sigma and continuous improvement
Tools and Techniques
• that can be learned
• and successfully used
• by all employees
• What is
– Six sigma and continuous improvement
Total Employee Involvement
• Utilize your most valuable resources
• The intelligence of your workforce
• What is
– Six sigma and continuous improvement
Building quality into all operations
• Manufacturing: inspection increase cost
• Service: every encounter is a moment of truth
• What is
– Six sigma and continuous improvement
Engaging the people who perform the work
• Ownership and pride
• High morale
Why Six Sigma had to be invented
• In the mid-1980s
– Motorola was losing ground to its Japanese
competitors
– Customer’s comments
• “Love, love, love the product; hate, hate, hate the
company”
– Motorola’s systems for doing business
–
–
–
–
Contract review
Response to requests for quote
Response to customer complaints
……
• Were not designed for customer satisfaction
• The internal bureaucracy fed on itself
– Motorola’s product suffers
• Too many out-of-box failures
• High level of early-life failure
– Warranty returns
– Were predominately units that
» Had failed at final test
» Had gone through a rework cycle
– Motorola’s reaction
• Benchmark those Japanese companies that were
destroying Motorola
– Senior managers and executives sent on a benchmarking
tour of Japan
» Operating methods
» Product quality method
• Discovered
– National program for employee involvement
» Use employee’s muscle and their brains and
knowledge
The Birth of Six Sigma
• Motorola learned
– From customers
• Need to change all systems to focus on total
customer satisfaction
– From Japanese
• Involvement all employees to increase efficiency
and moral
• Simpler designs result higher levels of quality and
reliability
– From early-life field failure study
• Products need to be built right the first time
• Motorola’s leader pulled this together to
– establish vision and
– set the framework for
– six sigma
• Six Sigma was launched in 1987
Mathematics of Six Sigma
• Opportunities-for-error
• DPMO: defect per million opportunity
• A way of leveling the playing field
– Manufacturing operations vs order-entry work
• Account for differing complexities
– An invoice consisting of 40 line items vs 2 line
items
• Sigma calculations are controversial
– Attribute data
– Go, no-go
• Utilizing normal curve and z-table violates many of
the rules of statistics
– Accounting for variation over time by adding
1.5 sigma to the actual z-table
Sigma calculations are developed empirically
• Sigma-scale measures
– Optional element of six sigma system
• “The six sigma way – Pande, et al.”
Black belts and Green belts
• Local statistical resources (LSR)
– Engineers trained in advanced form
• Experimental design
• Data analysis
• Process control
Black belt
• Total customer satisfaction (TCS) team
– Factory workers
– Received training and couching in problemsolving methods
Green belt
• “Black belts” and “Green belts” were not
applied to six sigma program at Motorola
until the 1990s
• Avoid special-assignment employee with
the title of “Black Belt”
– External to the operations that they support
• Expensive
• Less-than-optimum structure for six sigma
– Disenfranchise most employee
– Convenient way for employee to abandon their
responsibility
– Only result in short term benefits
Requirements for
Six Sigma Transformation
1. Reward and Recognition
•
•
Honor the achievement of teams or work unit
Executive bonus tie to six sigma
2. Training
•
Teach everyone the new skills
3. Uniform Measurement
•
Unacceptable deliveries (to the customers) are
counted and converted to a defect rate
measurement
4. Facilitators
•
Employees with aptitude and received
required training
5. Communication
•
Everyone understand what is expected
6. Senior executive behavior
•
Model the expectations of six sigma
Creating the Cultural Structure
The elements of a six sigma culture
Chapter 2
• “Six Sigma is a successful evolution of
total quality management systems.”
– Larson, p. 19, chapter 2
TQM definition
Total: Everyone committed
Quality: Meeting the customers’ expectation
Management: Collaborative focus
Six Sigma Definition
• “Within a Six Sigma system, everyone is
committed to meet the customers’
expectations through the use of a
collaborative focus.”
– Larson, p. 20, chapter 2
Senior Management Role
• Create Six Sigma culture
– Models new rules and norms
– Enable all the good things to happen
• Set the vision
– Framework of how the company will function to serve its
customer base
» Mission
» Objectives
» Strategies
» Tactics
• Mission
– Why company exist
and how customers
serves
•
•
•
•
•
“Ecomagination”
“First to know”
『世界工廠』
『亞太營運中心』
『研究型大學』
• Objectives
– Quantifiable high-level
goals
• Increase market share
• Reduce manufacturing
costs
• Zero safety incidents
(5 – 8 objectives)
• Strategies
– Means to accomplish
objectives
• Cross functional teams
• Continuous
improvement
• Clear and safe work
environment
• Tactics
– Actions
• Performance reviews
weekly, biweekly, or
monthly
– Provide feedback
– Identify barriers
– Resources needs
• All operations and functions concentrate on total
customer satisfaction
– Mechanism in place to determine customer satisfaction
levels
– Metrics in place to measure the quality level
• Suppliers relations
– Buying based on price only or
– Buying from the lowest-cost-to-do-business-with
• Employee empowerment
– Training, Training, Training
– People are challenged to work more efficiently
– Team are abundant
• Reward and recognition systems
Change Management
for transition to six sigma
vision + Skills + Incentive + Resources + Action plan = Change
Skills + Incentive + Resources + Action plan = Confusion
vision +
Incentive + Resources + Action plan = Anxiety
vision + Skills +
Resources + Action plan = Graduate
Change
vision + Skills + Incentive +
vision + Skills + Incentive + Resources
Action plan = Frustration
= False
Starts
Preliminary Tasks
Prior to creating Six Sigma program
Chapter 3
1. What will be accomplished
2. Who will be black belts and green belts
3. Training programs for black-belt and
green-belt candidates
4. Select the initial projects
5. The required data collection systems
6. Identify the required teams
• What do you want?
Commit for a very long period of time to make it work
– Six Sigma culture
• Focuses on the voice of the customer
• Includes teaming and empowerment
• Complete organizational development
–
–
–
–
–
Vision
Mission
Objectives
Strategies
Tactics
– Commits resources
• Time available during working hours
– Improvement
– Training
• Selects initial green belts and black belts
– Create an environment where everyone is a positive
change agents
• Identifies internal and external resources
– Phase out external as internal developed
• Select the initial projects
– Start with your customer data
• Complaints
• Returns
– Pareto Diagram
» Prioritize the chronic reasons for customer
dissatifactions
• Annual customer satisfaction survey
– Third party service providers
– Data of cost of poor quality
• Rework & repair cost
• In-process scrap cost
• Damage control cost
– Customer service
• Final inspection cost
• Lost business
• Collecting Data
– Six sigma culture
• Decisions are made
• Programs are established
based on DATA
– Establishes way to collect data
• If customer is lost, follow up
• Data to identify where your problems are
• Goal of Six Sigma
– Ten-fold improvement
– Every two years
• Ex: 不良率於 2 年內，從 12% 降到 1.2%
• Identify required teams
– Cross functional view
• Recruit team members from every units involved
• EX: parties involved in delivering products &
services late
–
–
–
–
–
Sales: receiving the orders
Order entry personnel
Production control
Manufacturing engineering
…….