SIX SIGMA

Presentation Adapted from

Brian Ashley
Northrop Grumman Newport News
Shipbuilding

Six Sigma Overview

• History of Six Sigma
• Why Six Sigma?
• What Does Six Sigma Mean?
• The Six Sigma Methodology

1
 Six Sigma History
1. Motorola (1987)
2. Texas Instruments (1988)
3. Digital Equipment (1989)
4. IBM (1990)
5. ABB (1993)
6. AlliedSignal & Kodak (1994)
7. GE (1995)
… and now, many, many others.

Six Sigma Success

• Motorola: MBNQA winner (1989)
14$B savings over 10 years
• GE: $10-15B revenue & savings by 2000
• AlliedSignal (Honeywell): $2.2 B Cumulative Savings
• Other companies embracing Six Sigma :
Asea Brown Boveri Black & Decker Bombardier
Dupont Dow Chemical Federal Express
Gateway Johnson & Johnson Kodak
Navistar Polaroid Seagate Technology
Sony Toshiba Raytheon
Howmet Citigroup Northrup Grumman
Boeing Cessna Hyundai
Ford Kohler TI Automotive
Compaq Libby -Owens Ford GenCorp
Nokia Delphi Automotive NEC
Lockheed Martin Samsung Merck
Sequa

And the list keeps growing…and growing!

2
 What is Six Sigma?

• Philosophy

• Methodology

• Approach

• Goal

• Vision

• Culture

SIX SIGMA PHILOSOPHY OF EXCELLENCE

Measure
CUSTOMER E verything
FOCUSED T hat
R esults
I n
C ustomer DATA
S atisfaction DRIVEN

3
 Six Sigma Philosophy

• The goal of Six Sigma is to identify, isolate, and

eliminate variation
• Defect prevention versus defect detection
• Proactive problem-solving versus reactive fire-
fighting

Variation Defect
Prevention Continuous
Reduction
Improvement

Six Sigma Methodology

Define

Characterize Measure

Analyze

Improve
Optimize
Control
“Before we can improve any system one must listen to the voice of the system (the
voice of the process). Then one must understand how the inputs affect the outputs of
the system. Finally, one must be able to change the inputs (and possibly the system) in
order to achieve the desired results. This will require sustained effort, constancy of
purpose, and an environment where continuous improvement is the operating
philosophy.”
Donald J. Wheeler

4
 The Six Sigma Methodology

is based on

DATA
• You need baseline data to understand the process
• Don’t trust historical data!
If it’s all that’s available…question it!
• Analysis & improvement plans must be based on data!
• Improvements must be validated with data
• Monitoring & control plans require data
9

Six Sigma Methodology

(simplified)
Define

• Identify Customer and Requirements

Control
Measure

• Identify Opportunities
• Map the Process
Improve

• Perform Measurement System Evaluations

Analyze

(if needed)
• Perform Failure Mode and Effect Analysis
Control

• Reduce the Sources of Variation and their

Measure

contribution to Outputs
• Incorporate Controls on Critical Variables

5
 Six Sigma Approach

• 6σ uses problem solving tools that can vary

from Pareto charts to Designed Experiments.
• Causes for defects are searched out and
eliminated by taking appropriate action.
• Concentration on continuous improvement and
reduction of variation are key.

Applying Six Sigma to All Work

Define • Identify who your work is for (your Customer)
• Identify the work you do (your Product/Service)
• What do you need to do your work (your Suppliers)
• What are the ‘key characteristics’ of your product/service?
(i.e. ‘Critical To Quality’: those features/requirements that most
directly affect your Customer’s satisfaction with your product/service.)
Measure • Map the process.
• Evaluate the measurement system.
• Measure the current performance of the process.
Analyze • Analyze the capability of critical measurements in process.
• Analyze variation in key characteristics and determine what controls the
variation.
Improve • Reduce variation and/or eliminate defects in the process.
• Eliminate non-value-added steps/processes
Control • Implement control plans to monitor/maintain improvements over time.
• Continue to reduce variation and eliminate defects, toward Six Sigma
performance.
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6
 What is a Defect?

p A defect is any variation of a required characteristic of the product or

its parts, which is far enough removed from its target value to prevent
the product from fulfilling the physical and functional requirements of
the customer or internal quality standards.
p Anything not done right the first time.
p Anything requiring rework.
p Any variation of a required characteristic within a product preventing
that product from fulfilling the specific requirements of the customer
or quality standards.
Record a defect if:
• scrap is created,
• rework is necessary to correct the defect,
• work is required to adjust, correct, or modify the process.

Examples of Defects

p Purchase order Revisions p Quality Notifications

p Discrepancy Reports
p Excessive Grinding of Welds
p Late Job order releases
p General ledger entry errors
p Late Deliveries from Suppliers
p Late Response to Customer requests
p Material kitting errors
p shortages
p wrong parts
p Rework
p Time Card Errors
p Pre-Fixes
p Audit Findings
p Material cycle counts
p Inspection errors
p Material handling errors
p Packaging errors
p Safety errors
p Personnel record errors
p Training schedule revisions
p Forecasting errors
p Late product or service delivery
p Rework, Rework, Rework ...
p Maintenance errors
p Process instruction revisions
p Personnel policy errors

“Anything not done right the first time is a defect.”

7
Variation in Product Characteristics = Function (Variation in Process Parameters)
or

Y=f(x)

Variation is the enemy!

We must address all sources of variation!

Causes of Variation

• Organizations typically assign responsibility or

fault from defects and or errors to people
• A poorly designed process will allow errors to
occur
• According to Dr. Deming, 85% of defects are
caused by system errors and 15% of defects are
human errors
• Systematic faults and errors are common cause
events
• Specific or attributable faults and errors are
special cause events

The variation in the outputs is a function of the variation in the inputs: Y = f(x)

8
 The “Language of Variation”

Data can tell us . . .

1. The shape, or distribution, of the process output
2. Where, on average, the process is operating
3. How much the process “scatters”
4. How much variation is normal in the process
5. How well the process can meet customer needs

17

The Normal Distribution

µ = mu = mean σ = sigma = standard

deviation

6σ 3σ 2σ 1σ µ 1σ 2σ 3σ 6σ
68.26%
95.46%
99.73%
99.99999975%
Areas under the normal distribution curve

9
 Exercise
For each of the following samples of data, what shape of
distribution would you expect?
– Rolling a fair die
– Throwing darts at a target
– Dropping a handful of sand on the floor
– Machining a dimension on a lathe
– Measuring a single part many times with a single gage
– Mean time to component failure
– Cycle time to complete a work order
– Defects per length of weld
– Your commute time to work
Note: There are methods of mathematically transforming other types of populations into a normal distribution.

Six Sigma as a Goal

• Sigma (σ) is a term used to refer to standard deviation--a measure of

variation
• Six Sigma refers to a process having 6 standard deviations between the
process center and the nearest specification limit.
• Determining Sigma allows us to relate the voice of process to the voice
of customer
Process
Center

LSL USL
LCL UCL

6σ 6σ

10
 What a 2σ process looks like...

Process
Center

LSL USL
308,537 Defects
Per Million LCL UCL

• 308,500 Defects Per Million 2σ 2σ

• High Warranty Cost 2 standard deviations

• Poor Deliveries, High Inventories

• Hard-To-Build Designs
• 69.4% Rolled Throughput Yield

Profile of the Average Company

4σ
• Profitable and growing • Believes that a zero-defects goal
• Market prices declining is neither realistic nor achievable.
• Competitors increasing • Has 10X the number of suppliers
required to run the business
• Has a quality assurance program
• 5-10% of the firm’s customers are
• Spending 15-25% of sales dollars on dissatisfied with product, sales, or
repairing or reworking product service and will not recommend
before it ships that others purchase products or
• Unaware that best in class services
companies have similar processes
that are greater than 100X more
defect-free

11
 What a 6σ process looks like...

Process
Center

LSL USL
3.4 Defects
Per Million LCL UCL

• 3.4 Defects Per Million 6σ 6σ

• Agile & On-time, Low Inventories 6 standard deviations

• Integrated with Customer & Supplier

• Few Facilities, Low Overheads
• 99.9%+ Rolled Throughput Yield

The 1.5 Sigma Shift

SIGMA QUALITY LEVELS BEFORE AND
AFTER A SHIFT IN THE AVERAGE
DPMO*
SIGMA LEVELS WITHOUT SHIFT WITH SHIFT
1 317,400 697,700
2 45,400 308,537
3 2,700 66,807
4 63 6,210
5 0.57 233
6 0.002 3.4
To compensate for the inevitable consequences associated with process centering
errors, the distribution mean is offset by 1.5 standard deviations. This adjustment
provides a more realistic idea of what the process capability will be over repeated cycles.
* Defects per million opportunities

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 What Does Six Sigma Mean
In Your Daily Life ?

IRS - Tax Advice

PPM
Prescription Writing
1000000
Restaurant Bills

100000 Payroll Processing

10000
Baggage Handling

1000

100

10 Airline
Safety Rate

1
1 2 3 4 5 6 7
Sigma Level

It’s Not Easy!

80 Sigma ppm Reduced by

70
Rate of Change in Defects

60 2 308,538
Over the Previous Sigma

4.62X
50 3 66,807
40 10.76X
30 4 6,210
26.69X
20 5 232.7
10 68.42X
6 3.4
0

To: 3.0 4.0 5.0 6.0

From: 2.0 3.0 4.0 5.0
Sigma

13
 99% as a Goal

Is 99% good enough?

Real Data
• If 99% were good enough -- this means:
– 2,000 lost articles of mail per hour

– 5,000 incorrect surgical operations/week

– 2 short or long landings at most major airports each day

– No electricity for almost 7 hours each month

– Telephone would not work for 4 hours each month

– Unsafe drinking water for almost 15 minutes each day

– Your car wouldn’t run for about one hour each week

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 Definitions Of Yield

• First Pass Yield (FPY) -- Total parts accepted as

output from a process step the first time, divided
by the total started into the process step.

• Rolled Throughput Yield (RTY) -- Probability of

a part passing through all process steps the first
time without a defect

RTY = FPY1 * FPY2 * FPY3 * ….. * FPYn

n = number of processes

The Hidden Factory

93% 93% 93% 93% Output RTY= 74.8%

“the hidden factory”

15
 Hidden Factory Really Exists

90
80
70 Actual
60 Defects
Defects

50
40
30
20
Inspection
10 Defects
0
0 5 10 15 20 25 30 35 40

Time

Official Defects (Reported)

In Process Defects (Hidden Factory)

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