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6? Overview ? Six Sigma: A Definition Applied to GE GE Quality Initiative Why This Approach? Origin of Six Sigma The “Breakthrough Strategy” Arriving at Sigma ? Six Sigma Structure ? Key Concepts Tools ? A Practical Example An Overview....Not a lot of Details!! 6? Overview “ Six Sigma” ? If we can’t express what we know in the form of numbers, we really don’t know much about it. ? If we don’t know much about it, we can’t control it. ? If we can’t control it, we are at the mercy of chance. Mikel J. Harry President CEO Six Sigma Academy, Inc. A Rigorous Method for Measuring Controlling Our Quality “ ...will bring GE to a whole new level of quality in a fraction of the time it would have taken to climb the learning curve on our own.” John F. Welch, Jr. 1995 GE Annual Report 6? Overview What Does “Sigma” Mean? Sigma is a Measure of the Consistency of a Process It (???is Also the 18th Letter in the Greek Alphabet! Why Does GE Need A Quality Initiative? GE Raising The Bar – New Goal to be “Best in the World” vs. 1 or 2 – Customers are Expecting More, we Must Deliver – “Shipandfix” Approach no Longer Tolerated in the Market – Aim to Speed Past Traditional Competitors in 5 Years – Goal Consistent with Reduced Total Costs We Must Acknowledge Our Vulnerabilities ? Poor Quality That Impacts Customers ? Problems with NPI ? Too High Internal Costs 6? Overview We Need a Major Initiative to Move From Where we Are to Where we Want to be 6? Overview Why Does GE Need A Quality Initiative? 40% 35% 30% 25% 20% 10% 15% 5% Cost of Failure (% of Sales) Defects per Million 233 6210 66,807 308,537 500,000 Sigma 6 5 4 3 2 1 Estimated Cost of Failure in US Industry is 15% of Sales。 Taking GE From a 3? to a 6? Company Will Save ~ $ Billion per Year! Why “Six Sigma”? ? Proven Successful in “QualityDemanding” Industries ., Motorola, Texas Instruments (many process steps in series) ? Proven Method to Reduce Costs ? Highly Quantitative Method – Science and Logic Instead of Gut Feel ? Includes Manufacturing Service (close to customer) and Provides Bridge to Design for Quality Concepts ? Has Support and Commitment of Top Management It Works!!! 6? Overview Sigma 3??4??5??6??Spelling Money Time Misspelled Words per Page in a Book 1 Misspelled Word per 30 Pages in a Book 1 Misspelled Word in a set of Encyclopedias 1 Misspelled Word in all of the Books in a Small Library $ Million Indebtedness per $1 Billion in Assets $570 Indebtedness per $1 Billion in Assets $63,000 Indebtedness per $1 Billion in Assets $2 Indebtedness per $1 Billion in Assets 3 1/2 Months per Century 2 1/2 Days per Century 30 Minutes per Century 6 Seconds per Century 6? is Several Orders of Magnitude Better Than 3?!!! Sigma: A Measure of Quality 6? Overview Where Does “Six Sigma” Come From? ? Mikel J. Harry one of the Original Architects ? Previously Headed Quality Function at ABB and Motorola ? Now President/CEO of Six Sigma Academy in Phoenix, Arizona ? Has Consulted for Texas Instruments, Allied Signal (and others) ? Currently Retained by GE to Teach the Implementation, Deployment and Application of Six Sigma Concepts Tools Learning from Those Who Have had Success With 6??Will Accelerate its Implementation at GE 6? Overview So...What is Six Sigma? ? A Measurement System ? A ProblemSolving Approach ? A Disciplined Change Process “ THE SIX SIGMA BREAKTHROUGH STRATEGY” Measure Analyze Improve Control 6? Overview How Do We Arrive at Sigma? Measuring Eliminating Defects is the “Core” of Six Sigma Measurement System Identify the CTQs Look for Defects in Products or Services ? “ Critical to Quality” Characteristics or the Customer Requirements for a Product or Service ? Count Defects or failures to meet CTQ requirements in all process steps Define Defect Opportunities ? Any step in the process where a Defect could occur in a CTQ Arrive at DPMO ? Use the SIGMA TABLE Convert DPMO to Sigma ? Defects Per Million Opportunities 2 3 4 5 6 308,537 66,807 6,210 233 PPM ?? Defects per Million of Opportunity Sigma Level 6? Overview Measurement System 2 3 4 5 6 308,537 66,807 6,210 233 PPM SIGMA LEVEL DEFECTS per MILLION OPPORTUNITY ?? IRS Tax Advice Best Companies Airline Safety Average Company GE Airline Baggage Doctor?s Prescription Restaurant Bills { { { { Average Company in 3? to 4??Range Some Sigma “Benchmarks” 6? Overview Measurement System A Graphic/Quantitative Perspective on Variation Average Value Many Data Sets Have a Normal or Bell Shape Number of People Arriving at CRD Time 7:00 7:15 7:30 7:45 8:00 8:15 8:30 8:45 9:00 9:15 6? Overview Problem Solving Approach Center Process Reduce Spread X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X OffTarget Unpredictable OnTarget 6??Helps us Identify and Reduce VARIATION due to: Insufficient Process Capability