Six Sigma
Evolving Process to
Achieve Better Quality
Discussion Topics
What is Six Sigma
99.9997%?!?!?
Elements of Six
Sigma
Six Sigma Lingo
Six Sigma Strategy
DMAIC
Case Study: PB
What is Six Sigma?
A metric, methodology and philosophy.
3.4 defects per million opportunities or being
99.9997% defect free in process and
product.
Measure how many "defects" are in a
process then systematically figure out how
to eliminate them and get as close to "zero
defects" as possible.
Should be in in everything we do and in
every product we design.
99.9997%?!?!?
3.4 million defects per opportunity
What’s the difference between 99% and
99.9997%
7 lost mail per hour instead 20000 per hour.
Unsafe drinking water for 2 minutes per year
instead of 15 minutes per day.
1 plane crash every 5 years instead 2 plane
crashes annually.
Elements of Six Sigma
The Customer
The Process
The Employee
The Customer
Customers are the center of
any company’s universe:
they define quality. They
expect performance,
reliability, competitive
prices, on-time delivery,
service, clear and correct
transaction processing and
more. Our customers’
satisfaction is priority
number 1. If we don't keep
them happy, someone else
will.
The Process
Outside-In Thinking
By understanding the
transaction lifecycle from
the customer's needs and
processes, we can discover
what they are seeing and
feeling. With this
knowledge, we can identify
areas where we can add
significant value or
improvement from their
perspective
The Employee
Employees must focus their talents and
energies on satisfying customers.
Employees are trained in the strategy,
statistical tools and techniques of Six
Sigma quality. Training courses are
offered at various levels:
Quality Overview Seminars: basic Six
Sigma awareness.
Team Training: basic tool introduction to
equip employees to participate on Six
Sigma teams.
Master Black Belt, Black Belt and Green
Belt Training: in-depth quality training that
includes high-level statistical tools, basic
quality control tools, Change Acceleration
Process and Flow technology tools.
Design for Six Sigma (DFSS) Training:
prepares teams for the use of statistical
tools to design it right the first time.
Six Sigma Lingo
Black Belt - Someone who has undergone intensive Six Sigma training, passed a certification exam,
becomes a full-time Six Sigma project leader and successfully implements Six Sigma projects with defined
business results within a certain time period. People who are taken out of their current roles, participate in
intense training, take the certification exam and lead two to four Six Sigma projects each year. At the end
of a two-year rotation, Black Belts will return to their business unit and continue to use their skills in new
assignments.
Champion - Business leaders and senior managers who identify Six Sigma projects and work with Black
Belts to promote successful implementation of Six Sigma methodology in their respective areas of
responsibility.
DMAIC - A Six Sigma methodology that involves five phases: Define, Measure, Analyze, Improve and
Control. Black Belts use DMAIC to improve processes, products and programs.
Green Belt - Unlike Black Belts, they do not leave their current work assignments or spend 100% of their
time on Six Sigma initiatives. Instead, they are trained in Six Sigma and then incorporate it into the way
work gets done in their current area of responsibility.
Master Black Belt - Someone who works with senior leaders to define Six Sigma projects, objectives, goals
and plans. Then, he/she works with Black Belts to track progress, continue training and coordinate efforts.
Root Cause - The fundamental cause of errors, which, if eliminated, would prevent recurrence of errors.
Six Sigma methodology strives to identify root causes of quality problems and implement plans to
permanently correct them.
Yellow Belt - Someone who typically has a basic knowledge of Six Sigma, but does not lead projects on
their own, like a Black Belt or Green Belt. A Yellow Belt often supports different phases of a Black Belt’s or
Green Belt’s project plan.
Six Sigma Strategy
To achieve Six Sigma quality, a process must produce no more
than 3.4 defects per million opportunities.
Critical to Quality (CTQ):Attributes most important to the customer
Defect:Failing to deliver what the customer wants
Process Capability:What your process can deliver
Variation:What the customer sees and feels
Stable Operations:Ensuring consistent, predictable processes to improve what
the customer sees and feels
Design for Six Sigma:Designing to meet customer needs and process capability
Customers don't judge us on averages, they feel the variance in each
transaction, each product we ship. Six Sigma focuses first on reducing process
variation and then on improving the process capability.
Customers value consistent, predictable business processes that deliver world-
class levels of quality.
DMAIC
Define
Measure
Analyze
Improve
Control
Define
Define the Customer, their Critical to Quality
(CTQ) issues, and the Core Business Process
involved.
Define who customers are, what their requirements
are for products and services, and what their
expectations are
Define project boundaries (scope) - the stop and
start of the process
Define the process to be improved by mapping the
process flow
Measure
Measure the performance of the Core
Business Process involved.
Develop a data collection plan for the
process
Collect data from many sources to
determine types of defects and metrics
Compare to customer survey results to
determine shortfall
Analyze
Analyze the data collected and process
map to determine root causes of defects
and opportunities for improvement.
Identify gaps between current performance
and goal performance
Prioritize opportunities to improve
Identify sources of variation
Improve
Improve the target process by designing
creative solutions to fix and prevent
problems.
Create innovate solutions using technology
and discipline
Develop and deploy implementation plan
Control
Control the improvements to keep the process on
the new course.
Prevent reverting back to the "old way"
Require the development, documentation and
implementation of an ongoing monitoring plan
Institutionalize the improvements through the
modification of systems and structures (staffing,
training, incentives)
Case Study: PB
Why customers place calls to our customer care centers? The company found that over 12,000 calls related to an inquiry or dispute
about sales and property taxes. Another audit revealed that the same issue was costing the company more than $500,000 annually in
uncollected taxes, interest and fines. A cross-enterprise team was assembled to resolve the problem, using a Six Sigma methodology
(DMAIC).
The team included: Bob Rosenblum, who championed the project, Janet Garner, Sandy Pfannkuch and Charlie Elms, who owned the
processes related to the project, Alan Daniels, the project’s Six Sigma Black Belt, Alan Carlo and Bill Gowrie, the project’s Six Sigma
Green Belts, (Yellow Belts) Pat Nissley and Dianne Askew, from our call center operations, Lynne Vidal and John McKenna from
Voyager, Dawn Hallaman, Kirti Bhardwaj and Mike Wilk from IT/Systems, Alesia Pratcher and Kathy Cracas from Tax
***Define The team defined the problem and scope of the project: inaccurate sales and tax exemption records resulted in over $500,000 in
uncollected taxes, interest and fines paid by Pitney Bowes in 2002. To resolve the issue, the team would look at the corporate, GMS and
IBS sales tax exemption processes and recommend changes/solutions that would permanently address the issue.
***Measure The team collected one month of data from the daily processes performed at the corporate and IBS tax
departments. They also took a random sampling of 200 customers who were coded as “tax exempt” in our databases to check if we had
valid certificates that proved their status. The team also looked at how many times we approved or rejected customers’ requests for tax
exempt status.
***Analyze· 83% of exemption requests rejected because no certificate was received
· When certificates are received, 78% of accepted result in a billing adjustment for taxes that billed on the first invoice
· 71% of IBS customers that require a certificate had one on file
· 24% of other customers that required a certificate had one on file
· No process existed to identify expired certificates and request new certificates from customers
The team also analyzed what actions were critical to ensure a new process would permanently resolve the problem. They
identified items like timely submission and delivery of certificates, prompt reviews of customers’ requests, closed loop communications with
customers and PB departments and more.
***Improve After all of this analysis, the team implemented a simpler, more disciplined process for managing tax exempt
requests. Now, the direct sales force and customers fax a tax exempt certificate directly to the Tax Department for review and imaging,
rather than sending it inter-office mail -- which caused a tremendous time and control delay. As a result, the process for handling tax
exempt requests takes just two days – that’s compared to 25 days under the old process.
***Control To ensure the improvements would work and be maintained, the team assigned clear accountabilities for each
part of the process, implemented metrics to measure results and identified what the company should do to keep the process in check,
should certain issues arise.
The Results: The number of customer calls related to tax exempt issues has decreased. The number of billing adjustments that have to be
made as a result of the tax departments not receiving certificates has decreased. The number of customer complaint letters about this issue
has decreased. And the new process is expected to save the company over $500,000 in 2004 and beyond.
Reference
http://www.ge.com/sixsigma/
http://eng-ed.ucsd.edu/six-sigma.html
Questions?