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Organizing Six Sigma

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Organizing Six Sigma

  1. 1. Organizing Six Sigma Christopher J. Zampogna Operations Management 380 Boise State University
  2. 2. What will be covered <ul><li>The History of Six Sigma </li></ul><ul><li>Six Sigma Defined </li></ul><ul><li>Brainstorming Exercise </li></ul><ul><li>The Six Sigma Roadmap </li></ul><ul><li>Organizing Six Sigma </li></ul><ul><li>A Real-World Example </li></ul><ul><li>An Exercise </li></ul><ul><li>Summary </li></ul><ul><li>Reading List </li></ul><ul><li>References </li></ul>
  3. 3. The History of Six Sigma <ul><li>“ Six Sigma” originated at Motorola in 1982 </li></ul><ul><li>Early adoptors </li></ul><ul><ul><li>Allied Signal (Honeywell) </li></ul></ul><ul><ul><li>General Electric </li></ul></ul><ul><li>Six Sigma management philosophy today </li></ul><ul><ul><li>A well-developed, thorough approach to quality improvement </li></ul></ul><ul><ul><li>Uses statistics and management by fact </li></ul></ul><ul><ul><li>Is effective in manufacturing and services firms </li></ul></ul>
  4. 4. Defining Six Sigma ( 6 ) <ul><li>“ 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.” </li></ul><ul><li>- Peter S. Pande 6 </li></ul>
  5. 5. Defining Six Sigma ( 6 ) <ul><li>The Greek symbol (sigma) refers to the amount of variation in a process around the mean value for that process </li></ul><ul><li>Processes have acceptable upper and lower limits </li></ul><ul><li>Six Sigma is concerned with reducing the variations to get more output within those limits </li></ul>
  6. 6. Defining Six Sigma ( 6 ) <ul><li>In the chart below, 64.6% of the measures are between the upper and lower limits </li></ul><ul><li>This is a 1 process </li></ul><ul><li>Reducing the variations in the process will bring a higher percentage within the acceptable limits </li></ul>
  7. 7. The 6 Difference <ul><li>What is the Six Sigma difference ? </li></ul><ul><li> </li></ul><ul><li>one typo per page (3 sigma) </li></ul><ul><li>vs. </li></ul><ul><li> one typo per library (6 sigma) </li></ul><ul><li>playing golf at a 6 sigma level means missing </li></ul><ul><li>one putt every 163 years </li></ul>
  8. 8. Brainstorming Exercise: Where are the variations? <ul><li>Identify six processes in your business that have variations in the output. </li></ul><ul><li>(HINT: manufacturing, purchasing, inventory, forecasting, </li></ul><ul><li>product design, customer service, accounting...) </li></ul>
  9. 9. The Six Sigma Roadmap <ul><li>Five steps to implementing Six Sigma 9 </li></ul><ul><ul><ul><li>Identify core processes and key customers </li></ul></ul></ul><ul><ul><ul><li>Define customer requirements </li></ul></ul></ul><ul><ul><ul><li>Measure current performance </li></ul></ul></ul><ul><ul><ul><li>Prioritize, analyze, implement improvements </li></ul></ul></ul><ul><ul><ul><li>Expand and integrate the Six Sigma system </li></ul></ul></ul>
  10. 10. Organizing Six Sigma <ul><li>Key Roles 10 </li></ul><ul><ul><li>Leadership Team </li></ul></ul><ul><ul><li>Champions </li></ul></ul><ul><ul><li>Mentors (master black belts) </li></ul></ul><ul><ul><li>Experts (black belts) </li></ul></ul><ul><ul><li>Participants (green belts) </li></ul></ul>
  11. 11. Key Six Sigma Roles <ul><li>The Leadership Group </li></ul><ul><ul><li>Be actively involved from outset </li></ul></ul><ul><ul><li>Develop a strategic plan </li></ul></ul><ul><ul><li>Establish Roles and Infrastructure </li></ul></ul><ul><ul><li>Establish supporting policies </li></ul></ul><ul><ul><ul><li>Job descriptions </li></ul></ul></ul><ul><ul><ul><li>Reward/Compensation systems </li></ul></ul></ul><ul><ul><ul><li>Career paths </li></ul></ul></ul>
  12. 12. Key Six Sigma Roles <ul><li>The Leadership Group (cont’d) </li></ul><ul><ul><li>Select projects </li></ul></ul><ul><ul><li>Prioritize projects and allocate resources </li></ul></ul><ul><ul><li>Facilitate, guide, manage </li></ul></ul>
  13. 13. Key Six Sigma Roles <ul><li>The Champions 17 </li></ul><ul><ul><li>Find appropriate projects </li></ul></ul><ul><ul><li>Represent projects to the leadership </li></ul></ul><ul><ul><li>Provide coaching </li></ul></ul><ul><ul><li>Ensure allocation of resources </li></ul></ul><ul><ul><li>Resolve issues </li></ul></ul>
  14. 14. Key Six Sigma Roles <ul><li>Master Back Belts </li></ul><ul><ul><li>Coach and support project leads </li></ul></ul><ul><ul><li>Work as a change agent </li></ul></ul><ul><ul><li>Train others in the use of six sigma tools </li></ul></ul>
  15. 15. Key Six Sigma Roles <ul><li>Black Belts </li></ul><ul><ul><li>Highly trained experts </li></ul></ul><ul><ul><li>Manage project leaders </li></ul></ul><ul><ul><li>Lead project teams </li></ul></ul>
  16. 16. Key Six Sigma Roles <ul><li>Green Belts </li></ul><ul><ul><li>Trained in the use of statistical tools </li></ul></ul><ul><ul><li>Lead project teams </li></ul></ul><ul><ul><li>Participate on project teams </li></ul></ul>
  17. 17. A Real-World Example <ul><li>General Electric’s 6 results: </li></ul><ul><li>- reduced invoice defects and disputes with a key customer by 98% </li></ul><ul><li>- saved $1 million annually in contract review process (GE Capital) </li></ul><ul><li>- developed breakthrough technology that reduced medical scan times to 30 seconds from 3 minutes </li></ul><ul><li>- improved a key call center performance measure from 76% 99% </li></ul><ul><li>- reduced vibrations in Power System rotors by 300% </li></ul><ul><li>- saved $320 million in less than two years, $750 million in three years </li></ul>
  18. 18. Exercise <ul><li>If you have a 2 sigma process, what percentage of the output is within spec ? </li></ul><ul><li>Six Sigma originated at Honeywell –T/F </li></ul><ul><li>Six Sigma focuses on the customer –T/F </li></ul><ul><li>What does the Greek symbol sigma represent? </li></ul><ul><li>Six Sigma utilizes fact-based decision making – T/F </li></ul><ul><li>Continuous improvement requires feedback and adjustments to ensure achievement of business objectives – T/F </li></ul><ul><li>ANSWERS: 1) 94.38%, 2) False, 3)True, 4)Standard deviation, 5) True, 6) True </li></ul>
  19. 19. Six Sigma Summary <ul><li>Project-driven management philosophy </li></ul><ul><li>Relies on fact-based decision making (statistical tools) </li></ul><ul><li>Requires top-down support </li></ul><ul><li>Requires an infrastructure that can support quality project management </li></ul><ul><li>Has been shown to have markedly positive impacts on business performance </li></ul>
  20. 20. Suggested Reading <ul><li>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. </li></ul><ul><li>Eckes, George. (2001) The Six Sigma Revolution: How General Electric and Others Turned Process into Profits. New York, New York: John Wiley & Sons. </li></ul><ul><li>  </li></ul><ul><li>Eckes, George. (2003) Six Sigma for Everyone. New York, New York: John Wiley & Sons. </li></ul><ul><li>Foster, S. Thomas. (2004). Managing Quality: An Integrative Approach . Upper Saddle River, New Jersey: Pearson Prentice Hall. </li></ul><ul><li>Kerzner, Harold. (2003). Project Management: a systems approach to planning, scheduling, and controling. Upper Saddle River, New Jersey: Pearson Prentice Hall. </li></ul><ul><li>Kinicki, A, & Kreitner, R. (2003). Organizational Behavior: key concepts, skills & best practices. New York, New York: McGraw Hill. </li></ul><ul><li>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. </li></ul>
  21. 21. Bibliography <ul><li>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. </li></ul><ul><li>Eckes, The Six Sigma Revolution. p.6. </li></ul><ul><li>Ibid . </li></ul><ul><li>Eckes, The Six Sigma Revolution. pp.9-10. </li></ul><ul><li>Costanzo, Chris. (2002). At Suntrust, Six Sigma is Middle Management’s Baby. American Banker, June 12, 2002, Vol. 167, Issue 112. </li></ul><ul><li>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. </li></ul><ul><li>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. </li></ul>
  22. 22. Bibliography <ul><li>8) Vasilash, Gary S. (1999). Missing One Putt Every 163 Years. Automotive Manufacturing and Production , Dec99, Vol. 111, Issue 12. </li></ul><ul><li>Pande, p.67. </li></ul><ul><li>Eckes, The Six Sigma Revolution. p.25. </li></ul><ul><li>Pande, chapters 7 and 8. </li></ul><ul><li>Pande, p.110. </li></ul><ul><li>Eckes, George. (2003) Six Sigma for Everyone. pp.15-26. New York, New York: John Wiley & Sons. </li></ul><ul><li>14) Pande, pp. 96-103. </li></ul><ul><li>15) Gale, Sara F. (2003). Building Frameworks for Six Sigma. Workforce, May2003, Vol. 82, Issue 5. </li></ul>
  23. 23. Bibliography <ul><li>Kerzner, Harold. (2003). Project Management: a systems approach to planning, scheduling and controlling. Upper Saddle River, New Jersey: Pearson Prentice Hall. </li></ul><ul><li>Pande, p.119. </li></ul><ul><li>Eckes, The Six Sigma Revolution. p.43. </li></ul><ul><li>Pande, pp.123-127. </li></ul><ul><li>Ibid. </li></ul><ul><li>Foster, S. Thomas. (2004). Managing Quality: An Integrative Approach . P.404. Upper Saddle River, New Jersey: Pearson Prentice Hall. </li></ul><ul><li>Eckes, The Six Sigma Revolution. p.43. </li></ul><ul><li>Foster, pp.404-405. </li></ul><ul><li>Breyfogle, p.146. </li></ul>

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