Six Sigma(1)

IME412TPBagchi1SixSigmaIME412TPBagchi2SixSigmaisabusinessprocess,notahumanrelationsprogramIME412TPBagchi3Sixσisprovingtobethemosteffectivebreakthroughstrategycreated!SixSigmaisthemosteffectivebreakthroughbusinessstrategydevisedsofar.Itenablescompaniestomakesubstantialimprovementsintheir$bottom-linebydesigningandmonitoringeverydaybusinessactivitiesinwaysthat●Minimizealltypesofwasteandnon-valueaddingactivitiesand●MaximizecustomersatisfactionIME412TPBagchi4HierarchyOfCustomerSatisfactionIdentifyCustomersbyOrganizationbyKeyContactsGainCustomerLoyaltyInnovation&ImplementationExceedCustomerExpectationsMeetCustomerRequirementsAnticipateCustomerNeedsDetermineCustomerRequirements&ExpectationsMISSIONVISIONDefensiveStrategyMeetCommitmentsOffensiveStrategyWinTrustIME412TPBagchi5RoutineManufacturing:Ford’sTransmissionExampleIME412TPBagchi6Wouldyourecommendusforfuturebusinesstoothers?AreyousatisfiedtodaywithcurrentMotorolaPerformance?Wouldyourepeat/redobusinessagainwithus?YES!YES!??????HowMotorolareHowMotorolare--definedCustomerdefinedCustomerLoyalty...Loyalty...IME412TPBagchi7Limitationsofothertools‰Downsizing,Outsourcing,Activitybasedcosting,Businessprocessreengineering,JIT,Kaizen&TQMalonedonotsustainbusinessresults‰Usefulintheirownways,thesetoolsoftenfailtomakebreakthroughimprovementsinbottomlineandquality‰Kaizen,forexample,meansdoinglittlethingsbetterandcontinuouslyreachingforbetterstandards—workswelltill3or4σ.‰Smallimprovementsmaynotnecessarilytranslateintooverallbusinessimprovement—ifonlythebasictoolsareused‰Toreach5or6σ,oneneedstomeasureperformanceandusesophisticatedtools—QFD,FMEAandDOE—toachieveoptimumthroughputatminimumcost.IME412TPBagchi8Whatissigma?‰Theterm‘sigma’(σ)takenfromtheGreekalphabet,isusedtodesignatethedistributionorspreadaboutthemean(average)ofanyparameterofproduct,processorprocedure.‰Inthecontextofbusinessormanufacturingprocess,Sigmacapabilityisametricwhichindicateshowtheprocessisbehaving.‰HighertheSigmavalue,betteristhecapabilityoftheprocesstoproducedefectfreeworkandviceversa.σ3σ3σIME412TPBagchi9SixSigmaanderrorordefectrate‰Mostcompanies,whentheirprocessesareundercontrol,achieve3σcapabilityor99.7%performance,i.e.,3defectsper1000.‰Withconsumersbecomingsophisticatedtechnologicaladvancesanddevelopmentofcomplexproducts,thislevelofqualityisnolongeracceptable.‰Manufacturingofmostoftheproductsinvolveslargenumberofprocesses;ifeachprocessstephasaqualitycapabilityofonly99.7%,thequalityoffinishedproductwouldbeconsiderablyworse‰Therefore,tocompeteintheglobalmarkets,businesshastoachieveamuchhigherlevelofqualitycapabilityIME412TPBagchi10LevelsofSigmaanddefectrateQualitylevel%QualityDefectivePPM*3Sigma99.73668074Sigma99.993762105Sigma99.9999432336Sigma99.99999983.4*PartsPerMillionIME412TPBagchi11IRS-TaxAdvice(phone-in)SIGMA(with±1.5SigmaShift)234567100K10K1K100101(233ppm)BestinClassPurchasedMaterialLotRejectRateDomesticAirlineFlightFatalityRate(0.43ppm)PayrollProcessingJournalVouchersWireTransfersAirLineBaggageHandlingOrderWrite-upAverageCompanyRestaurantBillsDoctorPrescriptionWriting(6210ppm)(3.4ppm)PerformanceBenchmarks(66810ppm)IME412TPBagchi12DifferentNumbersofOpportunities...ManufacturingProcessCustomersorSuppliersAdministrativeAreas6σSixSigmametric:The“Opportunities”...‰CustomersorSuppliers:Oneopportunityperproductdeliveredorpercomponentpurchased‰Manufacturingprocess:Opportunitiesateachprocessstep‰Administrativeareas:NumberofopportunitiesforerrorforeachactivityperformedIME412TPBagchi13SomeExamplesof“Opportunity”CustomerPerspective:1opportunityperproductdeliveredex.1cellphone=1opportunity1car=1opportunityProductionlines:Cellphone=17opportunitiesCar=223opportunitiesForm(Payment,PurchaseOrder,...):NumberoffieldsfilledExpedite/Delivery:1opportunity/packagingunitIME412TPBagchi14MeasurementwithsigmaissimpleEstimatetheOpportunitiesCounttheDefectsFollowtheIndicator:DefectspermillionOpportunitiesConversionintoSigmacanbeaccomplishedwiththehelpofastatisticaltable6σ=3.4dpmoIME412TPBagchi15IsSixSigmaanambitiousobjective?•Accurateto99.99966%(lessthan3.4defectsforeachmillionopportunities)couldappearexcessive....!“99.9%isalreadyVERYGOOD”Isitreally?!Whatcouldhappenataqualitylevelof99.9%(1000ppm)inoureverydaylives(about4.6σ)?•4000wrongmedicalprescriptionseachyearMorethan3000newbornsaccidentallyfallingfromthehandsofnursesordoctorseachyearTwolongorshortlandingsatAmericanairportseachday400lettersperhourwhichneverarriveattheirdestinationIME412TPBagchi16TheImpactonQuality:“6σSuppliers”•13wrongdrugprescriptionsperyear•10newbornbabiesdroppedbydoctors/nursessomewhereintheUSperyear•TwoshortorlonglandingsperyearinalltheairportsintheUS•OnelostarticleofmailperhourIME412TPBagchi176σ=Astructuredapproachtocontinuousimprovement1-Identifytheproductorserviceyouprovide2-Identifythecustomer&theirrequirements3-Determineyourneeds&suppliers4-Definetheprocessfordoingwork5-Eliminatedefectsources/optimizetheprocess6-ContinuouslyimprovetheSigmalevel(or”Sixstepstowardexcellence)SixSigmaandContinuousImprovementSupplierCustomerEnterNeedsExitProduc