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Six Sigma Programs • Students should be able to: • Describe the key elements of a Six Sigma program and how they can be applied to any business process. • Explain the five-step process for successful Six Sigma programs. • Identify the important drivers for successful implementations of Six Sigma.
What is Six-Sigma? A strategy. . . discipline. . . . a set of tools that: • Focus on and deliver what the customer wants • Simplify processes and close gaps in capabilities • Improve employee productivity and satisfaction • Achieve better business results…market share, revenue and income
Key Concepts of Six Sigma Six Sigma focuses first on reducing process variation and then on improving process capability.
Why Variability is Important Nominal value Six sigma Four sigma Two sigma Lower specification Upper specification Mean
Process Capability Nature of the Problem Six Sigma Methodology identifies Processes That Are Off-target, and/or Have a High Degree of Variation, and Corrects the Process
Six Sigma: A Five-Step Process D - M - A - I - C • Define--Identify the gaps between competitive priorities and competitive capabilities. • What is a defect? • Scope • Deliverables • Team composition • Steering committee • Goals
Six Sigma: A Five-Step Process D - M - A - I - C • Measure — quantify the work the process does that affects the gap. • Process flowchart
Six Sigma: A Five-Step Process D - M - A - I - C • Analyze—determine the drivers for optimal outcomes and establish procedures to make the outcome routine. • Process capability analysis • Cause and effect matrix
Incapable Processes Process average Nominal value Lower specification Upper specification Off Target Nominal value Lower specification Upper specification Too Variable
= x – Lower specification 3s , = Upper specification – x 3s Capability Measures Target Value Variability Capability 1.00 Three Sigma 1.33 Four Sigma 1.67 Five Sigma 2.00 Six Sigma Cpk = Minimum of Process Capability Index
Capability Measures Target Value Variability Capability 1.00 Three Sigma 1.33 Four Sigma 1.67 Five Sigma 2.00 Six Sigma Upper specification - Lower specification 6s Cp = Process Capability Ratio
Six Sigma: A Five-Step Process D - M - A - I - C • Improve—modify or redesign existing methods to meet new performance objectives • Decision guidelines • Escalation process • Exception codes
Six Sigma: A Five-Step Process D - M - A - I - C • Control—monitor processes to make sure high performance levels are maintained. • Monthly performance reviews
GE Early Dispute Resolution Process • What are the competitive priorities for the EDR process? • What is causing us to miss the competitive priorities? • What process measurements would you suggest?
GE EDR System Business Unit Attempts to Informally Resolve Conflict Yes Resolution Reached? No Further Action Necessary ConflictNoted No Refer to Legal Group: Level 1: Private Resolution • Form DR Team • Evaluate Case • Select DisputeResolution Vehicle/Review • Ongoing Discussionw/Opponents Resolution Reached? Yes No Further Action Necessary No Level 2: External Facilitation Yes ADR Process (Mediation, Negotiation, Arbitration; Mediation Preferred) Resolution Reached? No Further Action Necessary Convene for ADR No Yes Resolution Reached? Level 3: Public Adjudication No Further Action Necessary Litigation No Appeal
Summary • Everything we do is a process that can be defined. • Every process can be broken down, measured, and analyzed • into its component parts and therefore can be improved by • focusing on what is critical to the customer’s perception of quality. • To be successful, the entire process and any improvements must • be continually measured and controlled. • Drivers for success include a corporate culture institutionally • committed to the notion of change, a profound commitment to • quality in everything the business does, and strong leadership.