Six Sigma Cases (Most Desired)

1. 1
Six Sigma
Experience sharing
&
Cases
Six Sigma is a Performance Target
• Six Sigma is a PERFORMANCE TARGET that applies
to a single Critical-to-Quality (CTQ) characteristic – not
to the total product.
What is Six Sigma?
• Six Sigma is a business process that allows companies to drastically
improve their bottom line by designing and monitoring everyday business
activities in ways that minimize waste and resource use while increasing
customer satisfaction.
• Six Sigma guides companies into making fewer mistakes in everything they
do and eliminating lapses in quality at the earliest possible occurrence.
• Quality Control programs have focused on detecting and correcting
commercial, industrial, and design defects and on conformance to standards.
• Six Sigma encompasses something broader: It provides specific methods to
re-create the process so that defects and errors do not arise in the first place.
• Some companies using Six Sigma: Motorola, AlliedSignal, General
Electric, American Express, Sony, Honda, Maytag, Raytheon, Texas
Instruments, Bombardier, Canon, Hitachi, Lockheed Martin, and Polaroid.
CASE 1
Motorola
Six Sigma Origins
• “The real problem at Motorola is that our quality
stinks!” (Motorola Executive, Art Sundry in 1979)
• Led to discovery of the crucial correlation between
higher quality and lower development costs in
manufacturing products of all kinds.
• This “pre-dates” the “rediscovery by America of Dr. W.
Edwards Deming” that occurred in the 1980 White
Paper, If Japan Can, Why Can’t We?
Six Sigma Origins
• At a time when most American companies believed that quality
cost money, Motorola realized that – done right – improving
quality would actually reduce costs and that the highest-quality
producer could and should be the lowest-cost producer.
• Motorola was then generally spending 5%-10% (sometimes as
much as 20%) of annual revenues correcting poor quality –
that is -- $800 million to $900 million. With higher-quality
processes this money could be returned to the bottom line.
Within the first four years MOTOROLA SAVED $2.2 BILLION.
• Ultimately, this led to a focus on PROCESS (design &
production), rather than simply PRODUCT quality. … That is, a
PROACTIVE, rather than simply REACTIVE approach to
quality.

2. 2
SIX SIGMA QUALITY
DEFINITION
•Quality is a state in which value entitlement is realized for the
customer and provider in every aspect of the business relationship.
•Business Quality is highest when the costs are at the absolute
lowest for both the producer & consumer.
•Six Sigma provides maximum value to companies in the forms of
increased profits and maximum value to consumers with high-
quality products and services at the lowest possible cost.
● At the beginning of 80’s, In the Japanese
market, Motorola’s beeper lost its name
value because of the quality difference
compared to Japan’s
● In 1981 they tried to meet a challenge to
improve quality 5 times in 5 years and they
couldn’t.
● They developed a consistent process base
on statistical knowledge.
● In 1987, they established 6σ goal
as a key initiative.
● Quality Cost Down by
$3.2billion
● Origin of 6σ
●(Quality level elevated 100
times in 4 years)
●Culture harmony Western &
Oriental
4. 6s Case StudyⅡ. Why 6s?
Start : Motorola OUTCOME
Start & Prosperity
Motorola reached 5.5σ level in 1992.
Outcome is $3.2billion from1987 to 1992.
MotorolaMotorola
Robert W. Galvin,
former Motorola CEO
Failing to implement Six Sigma in
commercial areas with the same force
that the company implemented it in its
industrial sectors cost Motorola $5
billion over a four-year period.
How Big is the
Service Sector Anyway?
 MISTAKEN BELIEFS:
 Some companies still believe that improving commercial processes is less
important than improving industrial processes
 or that seemingly intangible commercial processes can’t be controlled.
 BOTH ARE WRONG:
 Customers are more likely to take their business elsewhere because of poor
service than poor products.
 Companies like GE have shown that improving internal and external
commercial processes adds to the bottom line and to customer satisfaction
significantly
Case 2: Six Sigma and General
Electric
 General Electric CEO, Jack Welch, describes Six Sigma as “the most
important initiative GE has ever undertaken.” GE’s operating income, a
critical measure of business efficiency and profitability, hovered around
10% for decades.
 In 1995 Welch mandated that each GE operation from credit card services
to aircraft engine plants to NBC-TV work toward achieving Six Sigma. GE
was averaging about 3.5s when it introduced the program.
Case 2: Six Sigma and General
Electric
 With Six Sigma embedding itself deeper into GE’s processes, they
achieved the previously “impossible” operating margin of 16.7% in 1998 –
up from 13.6% in 1995.
 In dollar amounts, Six Sigma delivered more than $300 million to GE’s
1997 operating income and more than $600 million in 1998.

3. 3
● Quality Cost Down
by $3.8 billion
● Adopt to all Biz.
●Train and do
projects
4. 6s Case StudyⅡ. Why 6s?
Prosperity :GE OUTCOME
Start & Prosperity
● In 1995 GE launched 6σ process
to overcome a difficult business
environment and to challenge
World Class Quality.
● They made new processes such as
Productivity,Inventory Return etc,
but improvement was delayed
because of defects in processes.
● GE thinks World Class Quality is
big challenge. GE now focuses on
6σ process for next generation .
G EG E
Case 3: AlliedSignal
• 70,000 Employees
• Chemicals, Fibers, Plastics, Aerospace Products,
Automotive Products.
• Larry Bossidy came from GE to become CEO in 1991
• Market Value = $4 billion in 1991
• Market Value = $29 billion by the end of 1998
• Market Value = $38 billion by 2000.
AlliedSignal
• 1996 GOALS:
• 6% productivity increase
• Reduced Inventory
• Full-Capacity Utilization
• Little or no Overtime
• Reliable Products
• 5s Manufacturing
• 5s Designs
• Predictable Cash Flow
• 5s Suppliers
• BY END OF 1998:
• Total Impact of Six
Sigma Within
AlliedSignal Reached $2
Billion.
• Six Sigma Profits in
Service Areas including:
– Order Processing
– Shipping
– Procurement
– Product Innovation
We can’t tell other organizations how to do Six Sigma, but we can tell
them how not to do it. Allied has made mistakes along the way and, in
the process, learned some tremendous lessons.
• LESSON 1: The Organization’s
Leadership Must Own Six Sigma
• Upper management supported Six
Sigma, managers below those at
the top saw it as a “flavor of the
month”.
• Black Belts seen as a nuisance.
• Black Belts were using “Six Sigma
jargon” while managers were using
business vocabulary. This led to
confusion.
• SOLUTION: Introduce ALL levels
of management to Six Sigma.
• Management had weeklong training
sessions to understand the
methods of the Breakthrough
Strategy and how Black Belt
training and experience could be
leveraged. ALSO … how various
initiatives “fit together”.
• BEGAN TO FOCUS ON
PROCESSES – NOT PEOPLE as
the source of problems. Also,
understanding of the Breakthrough
Strategy provided a “plan of action”,
rather than just a “command” to
make something happen.
Six Sigma Changed the Company Culture and
 One of the flaws at Allied is that we had too much vertical mobility.
Managers inch up the same smokestack, learning more and more
about less and less. But companies that train promising individuals
as Black Belts circumvent the vertical flow and move people
around horizontally, having them serve time in as many major
businesses or divisions as possible to give them a kaleidoscopic
view of the organization and the benefit of being mentored by a
variety of new blood.
Linked AlliedSignal’s
Goals, Vision & Activities.
Lesson Two: A Beginning Without an End
 Having recognized the need to train
managers in the Six Sigma
Breakthrough Strategy, Allied dedicated
the next year to training 1,000 leaders in
the organization in how Six Sigma
worked, and in its potential financial
impact.
 Training sessions lasted 3.5 days and
emphasized Six Sigma’s impact on:
 Profitability through improved
processes;
 The Crucial role of Black Belts,
RATHER THAN teaching statistical
processes involved in achieving Six
Sigma.
 Initially trained top managers at each
of Allied’s 11 Strategic Business
Units and gradually worked their way
down the organization to middle
management, line supervisors, and
so on.
 COMPLAINTS FROM BLACK
BELTS WITHIN SIX MONTHS:
Management turnover and too much
promotion of Black Belts into
management before benefit from the
training and skills could be realized.
SO … training had to be ongoing.
Allied is not in the business of measuring activity. We are in the business of measuring results.
IF something doesn’t have a positive impact on customer satisfaction, our shareholders, and employees,
and in the process makes a lots of money, THEN we just flat out aren’t going to do it.”
RICHARD A. JOHNSON, Director of Six Sigma at AlliedSignal

4. 4
Lesson Three: Black Belt Retention
 AlliedSignal’s goal: send Black Belts with a minimum of 18-24 months
experience mastering the Breakthrough Strategy back into the
organization to create Six Sigma behavior & thinking.
 40% of Black Belts were promoted to departmental or plant managers.
Others left AlliedSignal for higher-paying jobs at suppliers. Others
completed only one or two projects before they were pulled back into
their previous assignments with leadership not properly reviewing
projects and properly acting upon financial opportunities created by
Black Belts so that managers felt that Six Sigma wasn’t particularly
important.
 50% of Black Belts were absorbed back into the organization within six
months.
 NOW … BLACK BELTS must work at least 18-24 months on a series of
Six Sigma projects prior to a change of roles. TIME & EXPERIENCE
ARE VIEWED AS CRITICAL TO SIX SIGMA SUCCESSAND THE
MATURITY OF THE BLACK BELT.
Lesson Three - Continued
 AlliedSignal’s Champions & Master
Black Belts
 3.5 Day Executive Overview followed
by the traditional Four-Month Black
Belt training process.
 MASTER BLACK BELTS are selected
from the best of the Black Belts.
 Each of these trains and mentors 10
Black Belts
 Each Black Belt trains and mentors 10
Green Belts.
 NOW: All Salaried Employees are
Expected to Undergo the 26 Hours of
Training Required for Green Belt
Certification by 2000.
 CHAMPIONS 20
 Master Black Belts 70
 Black Belts 2000+
 Green Belts 18,000
 Total # of Employees 70,000
Lesson Four: Supplier Capability is Critical to the
Success of the Breakthrough Strategy
 The Majority of AlliedSignal’s
Suppliers were operating at
about three sigma.
 This prevented the company
from realizing the full benefits of
Six Sigma.
 AlliedSignal recognized that
they needed to view suppliers
as their partners.
 AlliedSignal began TRAINING
its suppliers and offering other
technical assistance.
 To achieve Six Sigma it is
important to minimize the number
of suppliers, limiting these to
those that have been trained in
the Breakthrough Strategy.
 Not only does AlliedSignal
provide training, BUT then
follows up by dedicating ITS
OWN BLACK BELTS to mentor
and work with critical suppliers.
AlliedSignal estimates that for
every 300 Black Belts it trains,
100 are either customers or
suppliers.
Deming: End the Practice of Awarding Business on Price Tag Alone.
Lesson Five:
There is No Such Thing as Operator Error
 It is PROCESSES – not
PEOPLE that Fail.
 This maps to one of
Deming’s 14 Points for
Management: “DRIVE
OUT FEAR”.
 Focus on Processes
implies that people are not
accused, but rather, that
they are able to investigate
processes and be “part of
the solution”.
Lesson Six:
Focus on Bottom-Line Improvement
 The number one source of failure in deploying Six Sigma is the result of
LACK OF COMMITMENT FROM THE ORGANIZATION’S LEADERSHIP.
 The FINANCE DEPARTMENT must be involved so that the impact of Six
Sigma Projects on the Bottom-Line is apparent.
 Black Belts, the Finance Department, and Executive Leadership must
work in tandem.
 While BLACK BELTS create opportunities for cost reduction and
increased profitability, the company’s LEADERSHIP must make sure that
Black Belts focus on the right projects and take action on the savings
opportunities they generate. FINANCE provides closure to the effort by
ensuring that the savings are returned to the organization’s bottom line.
Lesson Seven: Initiative Overload
• LARRY BOSSIDY, CEO:
• One of the things I have trouble with is
… nonfinancial objectives. Often
they’re just as obscure and vacuous as
they sound.
• FIVE ACTIONS TO PERPETUATE
SIX SIGMA:
• 1. TRAINING: Allied’s employee base
changes enough every nine to ten
months that maintenance of Six Sigma
culture requires that new employees
be trained in the Breakthrough
Strategy.
• 2. Senior management
involvement.
• 3. Continued on-site leadership
training, and alignment of goals
among divisions to reinforce
Breakthrough Strategy thinking
and goals.
• 4. Requiring Black Belts to
dedicate a minimum of two years
to working on Six Sigma
projects.
• 5. Supplier involvement and
improvement in Six Sigma
initiatives.
Products and services should be improved ONLY to the degree that customer value is increased.
Six Sigma is a program designed to generate money for the company, either through savings
resulting from reduced costs, or from boosting sales by increasing customer satisfaction.

5. 5
AlliedSignal:
Hindrances to Six Sigma Success
 Working on too many improvements at the same time.
 Not having someone accountable for the problem.
 Not being a process-based company.
 A lack of trained and experienced people.
 Middle managers who fear uncertainty about future roles.
 Lack of metrics focused on customer value-added processes.
 Lack of integrated information and financial systems.
 Fragmented, staff-driven approaches.
Six Sigma
Six Sigma is a way
of achieving world class
performance by focusing on
customers' needs and
eliminating defects
Six Sigma is a quantitative
statistical measurement
that means not more than
3.4 defects
per million opportunities
Case Study :
Tata Chemical
Failure Mode & Effects
Analysis
Process Mapping & Failure Mode
and Effects Analysis
Agenda
• Introduction to TCL
• Context and Need for FMEA
• Introduction to FMEA
• Definition of terms
• Steps in performing an FMEA
• Introduction to the FMEA & S-O-D Tables
• Methodology Adopted
• Deliverables from FMEA
• Action Plan

6. 6
GEOGROPHICAL LOCATION
OF MITHAPUR
GEOGROPHYCAL MAP
Where
We are
PROFILE
• One of the major units of TATA Group
• Started in 1939
• Largest Inorganic Chemical Complex in ASIA
• Largest manufacturer of Soda Ash in INDIA
• Other products are
Sodium Bicarbonate, Vacuum Iodised Edible Salt, Caustic Soda Lye,
Liquid Chlorine, Hydrochloric Acid, Liquid Bromine, Inorganic
Bromides, Portland & Pozzolana Cement
• Gas based fertilizer complex at Babrala U.P.
• Extensive rail siding within Mithapur works.
• Produces wealth from waste
• Acquired Certification of
– ISO - 9001 : 2000 ; ISO - 14001
– Commendation for NQ Award
The New
Economy
Competitive Environment
• Gradual evolutionary
change
• Stability
• Clearly defined
industry boundaries
• Power from
incumbency
• Domestic markets
• Employee loyalty
Competitive Environment
• Frequent,
discontinuous change
• Creative destruction
• Competitive
advantage hard to
sustain
• Global markets
• Instant access to
unlimited employment
opportunities
The Old Economy
Winds of Change in Tata Chemicals
Winds of Change in Tata
Chemicals
Customised demands
on product specs
More players crowd
the marketplace
Environment laws
Become more stringent
ANSAC targets India
Chinese start dumping SA
Import duties
keep dropping
Customer does
backward integration
Competitor
enhances capacity
Govt. committed to
deregulate Urea in
the next five years
Unstable national policy/
environment - Urea
Intense price competition
Our
Cultural
Pillars
SpeedyExecution
CollaborativeResponsiveness
RelentlessCostFocus
CompetitiveExcellence
TATA CHEMICALS LIMITED
Cost of Poor Quality
Hidden
Failure
Costs
Commonly
measured
failure costs
Scrap,
Rework
Warranty
Engineering Time
Management Time
Shop & Field Downtime
Increased Inventory
Decreased Capacity
Delivery problems
Lost orders

7. 7
6s
8-D Problem Solving Tech.
S P C
F M E AD O E
(Statistical Process Control)
Process MappingBench Marking
Failure ModeandEffects Analysis
(FMEA)
• Structured analysis for identifying ways & methods in
which the product or processes can fail and then plan
to prevent those failures.
• FMEA is a proactive tool for reducing defects and non-
conformities.
• A “before-the-event” action, not an “after-the-fact”
exercise.
Advantages of FMEA
1. Identifies process deficiencies
2. Identifies the critical characteristics and helps
in developing control plans
3. Establishes a priority of corrective actions
4. Assists in the analysis of the process
5. Documents the rationale for changes
Introduction
FMEA is a structured approach in :-
• Identifying ways in which a product / process can fail
to meet critical customer requirements.
• Estimating the risk of causes with regard to these
failures.
• Preparing control plan for preventing these failures.
• Prioritizing the actions for improving the process.
• FMEA is an extremely important tool for each phase of
Six Sigma strategy viz. Measure, Analyze, Improve,
Control.
Definition of terms
• Failure Mode : It is a manner in which a part or a
process can fail to meet specifications. It is usually
associated with defect or non-conformities.
• Examples : Missing part, Off specification parts
(Oversized, Undersized) etc.
Definition of terms
• Cause : Causes are sources of variation which are
associated with key process inputs. Cause can be best
defined as a deficiency which results in a failure mode.
• Examples : Instructions not followed, Lack of
experience, incorrect documentation, Poor handling
etc.

8. 8
Definition of terms
• Effect : Effect is the impact on the customer (both
internal & external) if the failure mode is not prevented
or corrected.
• Examples : Customer dissatisfaction, Frequent product
breakdowns, Customer downtime.
Relationship of Cause, Failure mode
& Effect
Cause
Failure
Mode Effect
(Failure)
Failure
Mode
Causes Causes Causes
Causes CausesCauses
Effect
(Failure)
Prevent
or Detect
Stepsin FMEAprocess
• Develop a process map & identify process steps.
• List key process inputs for each process.
• List key process outputs for satisfying process
requirements.
• List ways the process inputs can vary (causes) and
identify associated failure modes & effects.
• Assign severity occurrence and detection rating for
each cause.
Stepsin FMEAprocess
• Calculate risk priority number ( RPN) for each
potential failure mode.
• Determine recommended actions to reduce RPN’s.
• Establish time frame for corrective actions.
• Take corrective actions.
• Put all controls in place.
Ranking Parameters
employed
• Severity (SEV) : Severity indicates how severe is the
impact of the effect on the customer.
• Occurrence (OCC) : This indicates the likelihood of
the cause of the failure mode to occur.
• Detection (DET) : This indicates the likelihood of the
current system to detect the cause or failure mode if it
occurs.
• Risk priority number : This number is used to place
priority to items for better quality planning.RPN = SEV X OCC X DET

9. 9
Severity-Occurrence-DetectionTables
Rating Degree of Severity Likelihood of Occurrence Ability to detect
1 Customer will not at all observe Very remote possibility Sure that the potential failure
the adverse effect will be detected & prevented
before reaching next customer
2 Customer will experience Low failure with supporting Almost sure that the potential
slight discomfort documents failure will be detected before
reachig the next customer
3 Customer will experience Low failure without supporting Less chances that the
annoyance because of slight documents potential failure will reach the
degradation of performance next customer undetected
4 Customer dissatisfied due to Occasional failures Some controls may detect
reduced performance the potential from reaching the
next customer
5 Customer is uncomfortable Moderate failure rate with Moderate chances potential
supporting documents failure reach next customer
Rating Degree of Severity Likelihood of Occurrence Ability to detect
6 Warranty repairs Modearate failure rate without Controls are not likely to detect
supporting documents or prevent the potential failure
from reaching the next
customer
7 High degree of customer High failure rate with supporting Less chances that the potential
dissatisfaction documents failure will be detected or
prevented before reaching
the next customer
8 Vey high degree of customer High failure rate with supporting Very less chances that the
dissatisfaction documents potential failure will be detected
or prevented before reaching
the next customer
9 Negative impact on the Failure is almost certain
Remote chances of Existing
controls will not detect
customer the potential failure
10 Negative impact on the Assured failure
It is certain Existing controls will
not detect
customer, people & society the potential failure
1 2 3 4 5 6 7 8 9
Process
Potential
failure mode
Potential
failure effect
SEV
Potential
causes
OCC
Current
Controls
DET RPN
Part No.
1
2
3
4
5
List failure
modes for each
step
List effects
of each
failure mode
List causes
for each failure
mode
Rank severity
on 1 to 10
scale
Rank occurrence
on a 1 to 10
scale
List how the cause
is presently
being controlled
RPN=
SEV*OCC*DET
Rank how well
cause/failure
can be detected
on 1 to 10 scale
FMEA Table: ( Column 1 to 9 )
10 11 12 13 14 15
Actions
Recommended
Responsib
ility
SEV OCC DET RPN
List actions
recommended
on RPN pareto
Designates people
responsible for
corrective action
RPN is recalculated
on completion of
corrective action
Methodology Adopted
• Step-1
• Identification of processes.
• Step-2
• Walking the process.
• Step-3
• Generation of Process Flow Diagram.
PROCESS FLOW DIAGRAM
• Step-4
• Validation of Process Flow Diagram.
Methodology Adopted
Step-5
Listing the Potential Failure Modes, Effects, Causes and
Current Controls.
Step-6
Determining the ratings for Severity, Occurrence and
Detection.

10. 10
PROCESS
FUNCTION
REQUIRE
MENTS
POTENTIAL
FAILURE
MODES
POTENTIAL
EFFECTS OF
FAILURES
SE
V
POTENTIAL
CAUSES OF
FAILURES
O
CC
CURRENT
PROCESS
CONTROLS
DE
T
RP
N
POTENTIAL FAILURE MODE AND EFFECT ANALYSIS
Kiln
Operation
Refractory
lining
failure
-Improper
firing;
-Abnormal
flame
propagation
4 2 64
Shell temp.
scanning,
Pyrometer
& visual
inspection
8
Kiln
Shutdown;
Process
failure
Improper
air
supply
excessive
CO
formation
7
Low air flow
rate & hence
low O2
3
monitoring
of air flow
rate in DCS
2 42
Improper
clinker
formation
6
Low ID Fan
Step &
Damper
Position
3
monitoring
of air flow
rate in DCS
2 36
PROCESS
FUNCTION
REQUIRE
MENTS
POTENTIAL
FAILURE MODES
POTENTIAL EFFECTS
OF FAILURES
SEVE
RITY
POTENTIAL
CAUSES OF
FAILURES
OCC
URE
NCE
CURRENT
PROCESS
CONTROLS
DE
TE
CTI
ON
RPN
Refractory lining
failure
plant shutdown 8
improper firing,
abnormal flame
propagation
4
Shell temp.
scanner, visual
and pyrometer
inspection
2 64
excessive CO formation 7
Low air flow rate
and hence low O2
3
DCS monitoring
air flow rate
2 42
Improper clinker
formation
6
Low ID Fan Step &
Damper Position
3
DCS monitoring
air flow rate
2 36
Main drive hang up Plant shutdown 8
electrical/mechanic
al/instrumental
3 DCS Monitoring 2 48
Pier support
malfunction
Plant shutdown 8 Mechanical 3
Creep
measurement
every shift
3 72
Limited fuel stock plant shutdown 7 Improper planning 4
Daily inspection &
stock checking
1 28
ESP failure
Environmental hazards
leading to plant shut
down
10
Mechanical /
electrical
3
DCS monitoring &
interlocking, PM
schedule
2 60
Improper air
supply
Kiln operation
POTENTIAL FAILURE MODE AND EFFECT ANALYSIS
Methodology Adopted
Step-7
Find out Critical Tasks on the basis of RPN.
FMEA Table
Step-8
Preparing the critical task table and identification of KPM’s for the
Critical Tasks.
CRITICAL TASK TABLE
DepartmentsCovered
• Cement Plant (10)
• Salt Vacuum (5)
• Power Plant (4)
• Soda Ash (9)
• Analytical Lab (5)
• Marine (7)
• SAMG (5)
• CCG* (6)
• SCM* (5)
* Processes are mapped,FMEA to be performed
Deliverablesof FMEA
-A list of potential failure modes ranked by the RPN.
-A list of critical and/or significant parameters to track.
-A list of recommended actions to address the critical
tasks and failure modes.
-A potential list to eliminate the cause of failure modes,
reduce their occurrence, and improve defect detection.
Action Plan
• Critical tasks that have been identified for each process
should be targeted for improvement.
• Recommendation & implementation of actions to
reduce the occurrence of the cause of failure and/or
improving the current controls for detection of cause or
failure mode
• Track the Key Performance Indicators (KPI’s) of the
critical tasks.

11. 11
Action Plan
• Identify causes creating disturbances in the process
based on the analysis of the charts.
• Once the actions implemented yield satisfactory results,
the next iteration of the FMEA is to be performed.
Case: Shipping logistics
• Situation:
– GE Appliance products, such as microwave ovens and air
conditioners, are being produced in Asia and shipped to US
customers, such as Wal-Mart
– Delivery performance is very erratic and the average on-time
delivery is about 85%
Source: Yan Wang, University of Iowa
Shipping logistics (cont.)
• Situation:
– Product arrives in the US
at Los Angeles
– From the port, the
product is taken either to
a GE distribution center
or to a customer
designated forwarder
– Product is then cross
docked and sent on to
final distribution centers
via rail, truck-on-rail, or
truck
Shipping logistics (cont.)
Process map
Shipping logistics (cont.)
DMAIC steps
Define
Phase
 A team is assembled to attack this problem. The
team includes suppliers, 3rd party vendors, GE
logistics people, finance, sales, and customers
 The supply chain process is mapped from the
supplier to the end customer
Measure
Phase
 The current performance is measured by looking at
data from the previous 6 months. Capability of this
process is 1.5 sigma currently
Analyze
Phase
 All of the many inputs are examined and it appears
that 2 areas are the vital inputs, the shipping
decision by the supplier and getting the product
through the port of LA
Improve
Phase
 Further investigation by the team yields some
changes in procedure that reduces the problem
Control
Phase
 Documentation and procedures are updated
Shipping logistics (cont.)
Process improvement
Old Procedure New Procedure
GE specifies when products
produced and shipped
GE specifies when products
produced and delivered to US
Supplier would comply by selecting
first ship going to the US
Supplier complies by selecting
the “right” ship
Shipping time 8 to 18 days Shipping time 8 days
Supplier notifies GE system (often
delayed) and freight forwarder with
paperwork
Supplier notifies freight
forwarder with paperwork, and
freight forwarder communicates
through GE system

12. 12
Shipping logistics (cont.)
• Results:
– On time delivery increased to
97%
– Transportation costs reduced
by $300,000
– Inventory (cash flow) reduced
by $1,000,000
– Capability Raised to 3.5
sigma
What’s the point? There are two aspects to six sigma – the
statistical aspect and the business aspect. Both are important
and complementary.
“Typical” costs/benefits w.r.t. 6s
So what is 6s?
• Fundamentally, it is an old idea –
consistent with TQM.
• It is a culmination of
– Continuous improvement (no
organization is 6s); Get it right the first
time; Share and learn and do that
transparently and collectively; It is
usually the “next step” in quality;
Customer focused (remember defects?);
Very well packaged; No particular
certification process (if you looking for a
normative framework, you may end up
being disappointed)
• I like it because it covers the entire
gamut of
– Philosophy, methodology, technique and
tool
• A measure of
capability of a process
• A goal for
improvement
• A system of
management to
achieve lasting
business leadership
and top performance
Six sigma is
Six Sigma Applies to Products & Services,
Not the Companies Who Create Them
• A company with six sigma is not
assured financial success.
• We must distinguish between six
sigma products and processes, and
six sigma companies.
• The six sigma strategy creates
specific improvement goals for
every process within an
organization, allowing them to
understand and incorporate
technological advances lurking on
the horizon.
• Six Sigma forces organizations to
reexamine the way in which work
gets done, rather than tweaking
existing systems.
It simplifies systems and processes,
improves capability, and ultimately finds a
way to control systems and processes
permanently.
Even a six sigma product will fail if brought
to market too late or into a market with no
demand.
THIS IS WHY companies must achieve Six
Sigma in everything they do.
Quality Function Deployment
• Is a structured method that is intended to
transmit and translate customer requirements,
that is, the
• Voice of the Customer
• through each stage of the product development
and production process.
• These requirements are the collection of
customer needs, including all satisfiers,
exciters/delighters, and dissatisfiers.
The House
of Quality
Quality Function Deployment’s
House of Quality
Customer
Perceptions
Relationships
between
Customer Needs
and
Design Attributes
ImportanceRankings
Customer
Needs
Design
Attributes
Costs/Feasibility
Engineering Measures
Correlation
Matrix
1
2
3
4
5
6
7
8

13. 13
Building the House of Quality
1. Identify Customer Attributes
2. Identify Design Attributes / Requirements
3. Relate the customer attributes to the design attributes.
4. Conduct an Evaluation of Competing Products.
5. Evaluate Design Attributes and Develop Targets.
6. Determine which Design Attributes to Deploy in the
Remainder of the Process.
1. Identify Customer Attributes
 These are product or service requirements IN THE
CUSTOMER’S TERMS.
Market Research;
Surveys;
Focus Groups.
 “What does the customer expect from the product?”
 “Why does the customer buy the product?”
 Salespeople and Technicians can be important sources of
information – both in terms of these two questions and in
terms of product failure and repair.
 OFTEN THESE ARE EXPANDED INTO Secondary and
Tertiary Needs / Requirements.
2. Identify Design Attributes.
Design Attributes are Expressed in the Language of
the Designer / Engineer and Represent the
TECHNICAL Characteristics (Attributes) that must
be Deployed throughout the DESIGN,
MANUFACTURING, and SERVICE PROCESSES.
These must be MEASURABLE since the Output will
be Controlled and Compared to Objective Targets.
The ROOF of the HOUSE OF QUALITY shows,
symbolically, the Interrelationships between Design
Attributes.
3.Relating Customer & Design Attributes
 Symbolically we determine whether there is NO relationship, a
WEAK one, MODERATE one, or STRONG relationship
between each Customer Attribute and each Design Attribute.
 The PURPOSE it to determine whether the final Design
Attributes adequately cover Customer Attributes.
 LACK of a strong relationship between A customer attribute
and any design attribute shows that the attribute is not
adequately addressed or that the final product will have
difficulty in meeting the expressed customer need.
 Similarly, if a design attribute DOES NOT affect any customer
attribute, then it may be redundant or the designers may have
missed some important customer attribute.
4. Add Market Evaluation & Key Selling Points
This step includes identifying importance ratings for
each customer attribute AND evaluating existing
products / services for each of the attributes.
Customer importance ratings represent the areas of
greatest interest and highest expectations AS
EXPRESSED BY THE CUSTOMER.
Competitive evaluation helps to highlight the absolute
strengths and weaknesses in competing products.
This step enables designers to seek opportunities for
improvement and links QFD to a company’s strategic
vision and allows priorities to be set in the design
process.
5. Evaluate Design Attributes of
Competitive Products & Set Targets.
 This is USUALLY accomplished through in-house testing and
then translated into MEASURABLE TERMS.
 The evaluations are compared with the competitive evaluation of
customer attributes to determine inconsistency between customer
evaluations and technical evaluations.
 For example, if a competing product is found to best satisfy a
customer attribute, but the evaluation of the related design
attribute indicates otherwise, then EITHER the measures used are
faulty, OR else the product has an image difference that is
affecting customer perceptions.
 On the basis of customer importance ratings and existing product
strengths and weaknesses, TARGETS and DIRECTIONS for each
design attribute are set.

14. 14
6. Select Design Attributes to be Deployed
in the Remainder of the Process
This means identifying the design attributes that:
have a strong relationship to customer needs,
have poor competitive performance,
or are strong selling points.
These attributes will need to be DEPLOYED or
TRANSLATED into the language of each function in
the design and production process so that proper actions
and controls are taken to ensure that the voice of the
customer is maintained.
Those attributes not identified as critical do not need
such rigorous attention.
Using the House of Quality
The voice of the customer MUST be carried
THROUGHOUT the production process.
Three other “houses of quality” are used to do this and,
together with the first, these carry the customer’s voice
from its initial expression, through design attributes,
on to component attributes, to process operations, and
eventually to a quality control and improvement plans.
In Japan, all four are used.
The tendency in the West is to use only the first two.
1
CustomerAttributes
Design Attributes
2
DesignAttributes
Component Attributes
3
Component
Attributes
Process Operations
4
Quality Control Plan

15. 15
The Cascading Voice of the Customer
Product or Service
Start
Date
Business
Areas of
Emphasis
Metrics Supplier
Involvement
Training
Emphasis
Reward
System
Amount of
Cultural
Change
Return on
Investment
Motorola 1987 Production Defects Intimidation Six Sigma
Basics and
Statistics
Black Belt
Recognition
Low £1.4 Billion
in 7 Years
DSEG
(Raytheon/TI)
1990 Production Defects and
Cycle Time
Training
Suppliers
in the Tools
Low Not
Published
AlliedSignal 1992 Production
and Design
Training
Suppliers
Black
Belts
Six Sigma
Basics,
Statistics,
KISS for
Suppliers
General
Electric
1995 Production,
Design,
R&D, and
Transactional,
i.e., the whole
organisation
Training
Suppliers
Black Belts
Black Belt,
Green Belt,
and
Management
Promotions,
Bonuses,
and
Stock
Options
High
Black Belt
Recognition
Black Belt
Recognition
Monetary
Rewards
Six Sigma
Basics,
Statistics,
and Soft
Skills
Defects,
Cycle Time,
COPQ,
Cost
Reduction
Six Sigma
Basics,
Statistics,
Soft Skills,
Finance
Skills,
Defects,
Cycle Time,
Cost Reduction,
Stable
Operations,
Annual
Operating ROI
(Intellectual
Capital)
Medium £1.4
Billion in
4 Years
Evolution of Six Sigma
£3 +
Billion in
4 Years
(Taken
from
1999
Annual
Report)
What Six Sigma Tells Us
• We don’t know what we don’t know.
• We can’t do what we don’t know.
• We won’t know until we measure.
• We don’t measure what we don’t value.
• We don’t value what we don’t measure.
• TYPICAL RESULTS: companies that properly implement Six Sigma
have seen profit margins grow 20% year after year for each sigma
shift (up to about 4.8s to 5.0s. Since most companies start at about
3s, virtually each employee trained in Six Sigma will return on
average $230,000 per project to the bottom line until the company
reaches 4.7s. After that, the cost savings are not as dramatic.
• HOWEVER, improved profit margins allow companies to create
products & services with added features and functions that result in
greater market share.
TQM Focus vs. Six Sigma Focus
• Total Quality Management
• TQM programs often focus on
improvements in individual
operations with unrelated
processes.
• The consequence is that with
many quality programs,
regardless of how
comprehensive they are, it
takes many years before all
the operations within a given
process are improved.
• Six Sigma
• Six Sigma architects focus on
making improvements in all
operations within a process,
producing results more rapidly
and effectively.
A process is any activity or group of activities that:
* takes an input, * adds value to it,and
* provides an output to an internal or external customer.
An industrial process is any process that depends on machinery for its
creation and comes into physical contact with materials that will be
delivered to an external customer. It does not include shipping,
distribution, or billing processes.
A commercial process, such as ordering materials, payroll, or processing
customer orders, supports industrial processes, or may stand on its own as a
separate and unique business.
When at least 80% or more of a process depends on human activity, we
consider this a commercial process.
•What is a Process?
Roles of Six Sigma Champions
 Create the vision of Six Sigma for the company.
 Define the path to implement Six Sigma across the organization.
 Develop a comprehensive training plan for implementing the Breakthrough
Strategy.
 Carefully select high-impact projects.
 Support development of “statistical thinking”.
 Ask Black Belts many questions to ensure that they are properly focused.
 Realize the gains by supporting Six Sigma projects through allocation of
resources and removal of roadblocks.
 Hold the ground by implementing Black Belt recommendations.
 Make sure that project opportunities are acted upon by the organization’s
leadership and the finance department.
 Recognize people for their efforts.
 Champion training is one week.

16. 16
Roles of Master Black Belts
Understand the big business picture.
Partner with the Champions.
Get certified as Master Black Belts.
Develop and deliver training to various levels of the organization.
Assist in the identification of projects.
Coach and support Black Belts in project work.
Participate in project reviews to offer technical expertise.
Help train and certify Black Belts.
Take on leadership of major programs.
Facilitate sharing of best practices across the corporation.
Master Black Belt training consists of two one-week sessions.
Roles of Black Belts
 Act as Breakthrough Strategy experts and be Breakthrough Strategy
enthusiasts.
 Stimulate Champion thinking.
 Identify the barriers.
 Lead and direct teams in project execution.
 Report progress to appropriate leadership levels.
 Solicit help from Champions when needed.
 Influence without direct authority.
 Determine the most effective tools to apply.
 Prepare a detailed project assessment during the Measurement phase.
 Get input from knowledgeable operators, first-line supervisors, and team
leaders.
 Teach and coach Breakthrough Strategy methods and tools.
 Manage project risk.
 Ensure that the results are sustained.
Black Belts Perform the Following Tasks
MENTORS: Cultivate a network of Six Sigma individuals at the local
organization or site.
TEACH: Provide formal training of local personnel in new strategies
and tools.
COACH: Provide one-on-one support to local personnel.
TRANSFER: Pass on new strategies and tools in the form of
training, workshops, case studies, and local symposia.
DISCOVER: Find application opportunities for Six Sigma strategies
and tools, both internal and external (e.g. suppliers and customers).
IDENTIFY: Highlight / surface business opportunities through
partnerships with other organizations.
INFLUENCE: Sell the organization on the use of Six Sigma
strategies and tools.
Characteristics of Six Sigma Black Belts
 Highly respected by superiors, peers, and subordinates.
 Understands the “big picture” of the business.
 Focuses on results and understands the importance of the bottom line.
 Speaks the language of management (money, time, organizational dynamics, etc.)
 Committed to doing whatever it takes to excel.
 Sponsored by a vice president, director, or business unit manager.
 Is an expert in his or her specific field.
 Possesses excellent communication skills, both written and verbal.
 Inspires others to excel.
 Challenges others to be creative.
 Capable of consulting, mentoring, and coaching.
 Drives change by challenging conventional wisdom, developing and applying new
methodologies, and creating innovative strategies.
 Possesses a creative, critical, out-of-the-box intellect.
 Allows room for failures and mistakes with a recovery plan.
Characteristics of Six Sigma Black Belts
 Accepts responsibility for choices.
 Views criticism as a kick in the caboose that moves you a step forward.
 Encourages commitment, dedication, and teamwork.
 Unites and inspires a team to a core purpose.
 Able to communicate all sides of an issue.
 Solicits diverse ideas and viewpoints.
 Empathizes.
 Promotes win-win solutions.
 Disagrees tactfully and does not overreact.
 Acts decisively under pressure.
 Anticipates and confronts problems early and corrects causes..
 Effectively identifies priorities from a business standpoint.
 Manages limited resources in a highly efficient and effective manner.
 Careful not to assign an unrealistic number of tasks to any team member.
Characteristics of Six Sigma Black Belts
Understands and respects that people have limitations.
Displays a genuine concern and sensitivity toward others.
More concerned about business success than personal gain.
Does not lord her or his expertise over others.
Recognizes that results count more than fancy titles.
How Many Black Belts Does an Organization Need?
•Revenues/(1 million) = Number of Black Belts
•Number of Black Belts/(10) = Number of Master Black Belts

17. 17
A Black Belt’s Course of Study
The Twelve M-A-I-C Objectives
 MEASURE Select CTQ Characteristics;
the frequency Define Performance Standards; of
defects Validate Measurement Systems.
 ANALYZEEstablish Product Capability; when and
where Define Performance Objectives; defects
occur Identify Variation Sources.
 IMPROVE Screen Potential Causes;
the process Discover Variable Relationship;
Establish Operating Tolerances.
 CONTROL the Validate the Measurement System;
process so that Determine Process Capability;
it stays fixed Implement Process Controls.
Roles of Green Belts
Function as Green Belts on a part-time basis, while
performing their regular duties.
Participate on Black Belt project teams in the context of
their existing responsibilities.
Learn the Six Sigma methodology as it applies to a
particular project.
Continue to learn and practice the Six Sigma methods and
tools after project completion.
Green Belt training consists of two three-day sessions with
three weeks in between.
Thank You !