SECTION 2

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Section 2-1 Date : Aug 2003

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To discuss the key concepts in Six Sigma To explain how to calculate process Sigma level To highlight the conditions for breakthrough improvement
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MKS/MKPI SIX SIGMA

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Section 2-2 Date : Aug 2003

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What is Sigma?
Sigma is the Greek letter that is a statistical unit of measurement used to define the standard deviation of a population. In technical term, Standard Deviation or Sigma is a measure of variability of data from the mean In Six Sigma program, sigma is an index for measuring the capability of a process to produce Defect free products or services. Sigma indicates how often defects are likely to occur. The higher the sigma level, The less likely a process will produce defects. Thus, as sigma increases, costs go down, cycle time goes down and customers satisfaction level goes up
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MKS/MKPI SIX SIGMA

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Section 2-3 Date : Aug 2003

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Sigma and Process Variation

Inputs Suppliers Process Outputs Customers

Every business consists of interconnected processes Variation exists in all processes Understanding and reducing process variability is the key to improve Customer satisfaction and reducing losses
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MKS/MKPI SIX SIGMA

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Section 2-4 Date : Aug 2003

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Measuring Process Output Variation

Distribution curve

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Mean ( ) = Measure of location Standard Deviation ( ) = Measure of Variability

Slide No Issue : 5 : A Section 2-5 Date : Aug 2003

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Measuring Process Output Variation

Definition :
The Number of standard Deviations that can be fitted into the space between the Process center and the nearest specification limit
Lower Spec Limit Upper Spec Limit

Defectives

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A Six Sigma Process

Lower Spec Limit Upper Spec Limit

Process Center

1 2 3 4 5 6
Defective
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0.002 DPPM ( 2 sides) Process Center on Target

Section 2-7 Date : Aug 2003

Defective

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A Six Sigma Process

Lower Spec Limit
1.5 Sigma Shift

Upper Spec Limit

Process Center

Defective
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3.4 DPPM after 1.5 Sigma shift in Process Center ( Average Shift Over-Time )
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Defective

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Section 2-8 Date : Aug 2003

Sigma Level Company

Sigma Defect Per Million Percent Level Opportunities Good 2 3 4 5 6
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Cost of Poor Quality > 40% of Sales 25-40% of sales 15-25% of sales 5-15% of sales < 1% of sales
AVERAGE COMPANIES WORLDCLASS COMPANIES NONCOMPETITIVE COMPANIES

308,538 66,807 6,210 233 3.4

69.2% 93.3% 99.4% 99.98% 99.9997%

Green Belt Training

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Section 2-9 Date : Aug 2003

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Determining Sigma Level

1. Determine an appropriate process output unit 2. Decide the definition for defect 3. Determine the number of opportunity for defect 4. Count the number of units and defects 5. Calculate defect per unit & defect per million opportunities 6. Correlate the figure to the Sigma level using the Sigma conversion table
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MKS/MKPI SIX SIGMA

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Section 2-10 Date : Aug 2003

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Sigma & DPMO Comparison chart

Sigma 6 5.9 5.8 5.7 5.6 5.5 5.4 5.3 5.2 5.1 5 4.9 4.8 4.7 4.6 4.5 4.4 4.3 4.2 4.1 4 3.9 3.8 3.7 3.6 3.5 3.4 3.3 3.2 3.1 3
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DPMO 3.4 5.4 8.5 13 21 32 48 72 108 159 233 337 483 687 968 1,350 1,866 2,555 3,467 4,661 6,210 8,198 10,724 13,903 17,864 22,750 28,716 35,930 44,565 54,799 66,807
Section 2-11 Date : Aug 2003

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MKS/MKPI SIX SIGMA

Percent Good 99.99966% 99.99946% 99.99915% 99.99866% 99.9979% 99.9968% 99.9952% 99.99% 99.9892% 99.984% 99.977% 99.966% 99.952% 99.931% 99.90% 99.87% 99.81% 99.74% 99.65% 99.53% 99.38% 99.18% 98.9% 98.6% 98.2% 97.7% 97.1% 96.4% 95.5% 94.5% 93.3%

Sigma 2.9 2.8 2.7 2.6 2.5 2.4 2.3 2.2 2.1 2 1.9 1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1

DPMO 80,757 96,801 115,070 135,666 158,655 184,060 211,855 241,964 274,253 308,538 344,578 382,089 420,740 460,172 500,000 539,828 579,260 617,911 655,422 691,462 725,747 758,036 788,145 815,940 841,345 864,334 884,930 903,199 919,243

Percent Good 91.9% 90.3% 88.5% 86.4% 84.1% 81.6% 78.8% 75.8% 72.6% 69.1% 65.5% 61.8% 57.9% 54.0% 50.0% 46.0% 42.1% 38.2% 34.5% 30.9% 27.4% 24.2% 21.2% 18.4% 15.9% 13.6% 11.5% 9.7% 8.1%

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Determining Sigma Level

Definition : 1) Unit : The item produced or being serviced 2) Defect : Any event that does not meet the customers requirements 3) Opportunity : A chance for a defect to occur ( CTQs - Critical-to-quality characteristics ) The formula :
Number of defects X 1,000,000 Number of opportunities X Total Number of units

Example : The Westin hotel measured 520 room service orders and set, a) 3 major CTQs : [ 1) Speed of delivery 2) food quality 3) menu variety ] b) Define defects as any meal delivered > 30 mins and rated food < 3 out of 5 Results : 3 were late and 1 person gave food quality a 2 on the food survey 4 X 1,000,000 Defects Per Million Opportunity 3 X 520 = 2,564 DPMO or 4.3 sigma
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Why 99.0% is not good enough ?

20,000 lost articles of mail per hour
6 Sigma = Seven articles lost per hour

NOTE : 99.4% IS ONLY 4 SIGMA 99.98% IS ONLY 5 SIGMA 99.9997% IS 6 SIGMA

No electricity for almost 7 hours per month

6 Sigma = 1 Hour without electricity every 34 years

5,000 incorrect surgical operations weekly

6 Sigma = 1.7 incorrect surgical operations per week

2 short or long landings at most major airports per day

6 Sigma = One short or long landing every five years

200,000 wrong drug prescriptions each year

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MKS/MKPI SIX SIGMA

6 Sigma = 68 wrong prescriptions per year

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Green Belt Training

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Section 2-13 Date : Aug 2003

Why Adopt Six sigma ?

Most Companies operate at 3 - 4 sigma A step change of 1 sigma will yield
- 20% improvement in Profit margin - 12 - 18% increase in capacity - 10 - 30% reduction in capital expenditure
Statistically speaking :-6 Sigma Process is equivalent to Cp=2.0, Cpk=1.5 and DPPM=3.4
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(Motorola University)
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Difference in 1 Sigma level

( DPPM ) 100,000
66,810 DPPM

10 X Improvement 30 X Improvement
6,210 DPPM

10,000

1,000 500

70 X
Improvement
233 DPPM

10 5 0
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MKS/MKPI SIX SIGMA

3.4 DPPM

2 Sigma

3 Sigma

4 Sigma

5 Sigma

6 Sigma

Sigma Quality Level

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Section 2-15 Date : Aug 2003

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Cost of Poor Quality (COPQ)

DIRECT COST OF POOR QUALITY

The COPQ Iceberg

4 - 8% of Sales

- Scraps - Reworks - Warranty - Inspection INDIRECT COST OF POOR QUALITY - More Setups - Expediting Cost - Lost of customer loyalty - Long cycle time - Engineering change - Late Delivery - Excess inventory

20 - 25 % of Sales

Opportunity for increasing Profit Margin

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Section 2-16 Date : Aug 2003

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Process Variation and COPQ

40%

30%

COPQ
% 20% of Sales

10%

2
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MKS/MKPI SIX SIGMA

4
Sigma Level (Variation)

5
(233 dppm)

6
(3.4 dppm)

(308,538 dppm) (66,807 dppm) (6,210 dppm)

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Reducing the COPQ

High Hanging Fruits Bulks of Fruits Six Sigma Approach

Low hanging Fruits

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MKS/MKPI SIX SIGMA

Quality control circles / Basic tools Common Sense and Intuition

Ground Fruits
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Section 2-18 Date : Aug 2003

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Mindset
1. Desire for Excellence 2. Process Perspective 3. Measure and Evaluate 4. Quantitative Data Analysis 5. Challenge Conventional Thinking
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MKS/MKPI SIX SIGMA

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Section 2-19 Date : Aug 2003

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Identifying Projects
1) Business Objective Deployment Approach
Sub-CTQ 1 CTQ 1 Sub-CTQ 2 Objective A CTQ 2 Business Plan Objective B Sub-CTQ 3 Sub-CTQ 4 Project 3 Project 4 Project 2 Project 1

Role & Responsibility Executive Team Champion Black Belts

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Green Belts
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Section 2-20 Date : Aug 2003

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Identifying Projects
2) Process Management Approach : SIPOC Diagram
( Suppliers - Inputs - Process - Outputs - Customers )

Inputs
Suppliers

Process

Outputs Customers

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Section 2-21 Date : Aug 2003

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Critical Success Factors for Implementation

Establishing these factors provides the seeds of success. They need to be integrated uniquely to fit each business. The most powerful success factor is committed leadership. They are all necessary for the best result.
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Six Sigma is a Management Tool

A Comprehensive System encompassing a broad array of best practices and the latest Know-how for improving processes thereby increasing profits.
Panasonic
MKS/MKPI SIX SIGMA

Green Belt Training

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Section 2-23 Date : Aug 2003

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