Six Sigma Management

[Pick the date] Six Sigma Management A Comprehensive Ma na ger’s Guide [Organization Name] Authored by: Author’s name Six Sigma Management A Comprehensive Manager’s Guide Author’s name Six Sig ma M anage me nt A Comprehensi ve Manager’s Guide Tabl e of Cont ent s Overview of the Origin and History of Six Sigma .................................................................1 Six Sigma Doctrine Affirmations ........................................................................................2 What Makes Six Sigma Different .......................................................................................2 Methods .....................................................................................................................................2 DMIAC .................................................................................................................................3 DMADV ...............................................................................................................................3 Quality Management Tools and Methods used in Six Sigma................................................4 Thought Process Map ...............................................................................................................5 Implementation Roles ..............................................................................................................5 Six Sigma identifies several key roles for its successful implementation. .......................6 The Origin and Meaning of the Term "Six Sigma Process" ..................................................7 The Fundamental Objective of Six Sigma ..........................................................................7 Calculating the Cost and savings of Six Sigma Quality ....................................................8 Bank Deposits: A Black Belt Case Study ...............................................................................9 Sigma Costs and Savings .......................................................................................................11 References: ..............................................................................................................................14 Six Sig ma M anage me nt A Comprehensi ve Manager’s Guide Overvi ew of t he Orig i n and Hi st ory of Six S ig ma Six Sigma is a business management concept that was introduced by Motorola. It is a registered service and trademark of Motorola, Inc. In 1986, Bill Smith designed the specifics of the style. It started off as a set of procedures designed to The Six Sigma symbol improve manufacturing processes and eliminate defects. As of 2006, Motorola reported over US$17 billion in savings by putting Six Sigma into practice. 1 The name "Six Sigma" came from an array of statistics called process capability studies. At first the reference was to the ability of manufacturing processes to produce a high percentage of output that met specifications. The courses of action that function using "six sigma quality" over the short term are believed to produce long-term defect levels that are below 3.4 defects per million opportunities (DPMO). Six Sigma's inherent goal is to improve all practices to meet that level of quality or higher. The concept was triggered by six previous decades of quality improvement methodologies like quality control, TQM, and Zero Defects. It was based on the works of pioneers like Shewhart Deming, Juran, Ishikawa, Tagachi and others. Application of the concept was then broadened to include other kinds of business processes as well. In Six Sigma a defect is termed as anything that may possibly lead to customer dissatisfaction. The model continues to be widely used in a great many sectors of industry. The Six Sigma concept searches for ways to improve the quality of process outputs by recognizing and eliminating the sources of the shortcomings and the inconsistencies in manufacturing and business processes. Six Sigma employs a set of quality management techniques, including statistical processes. It builds a special infrastructure of people within the organization (“Black Belts”, “Green Belts”, etc.) who are experts in administering these techniques. Each Six Sigma project that is achieved by an organization is carried out by using a defined series of steps with quantified financial targets like reducing costs, or increasing profits. By the late 1990s, almost two-thirds of the Fortune 500 companies had started using Six Sigma initiatives with the intention of reducing costs and improving quality. Other early adopters of Six Sigma who achieved well-publicized success are Honeywell and General Electric. In recent years, some practitioners have combined Six Sigma ideas with the lean manufacturing concept to introduce a methodology called Lean Six Sigma. 1 Information source: http://en.wikipedia.org/wiki/Six_Sigma 1 Six Sig ma M anage me nt A Comprehensi ve Manager’s Guide Six Sigma D octrine Affirmat ions  Business and manufacturing practices have attributes that can be analyzed, measured, improved and controlled. Continuous efforts to achieve stable and predictable process results like those necessary for reducing process variations, are of vital importance to the success of the business. Realizing sustained quality improvement calls for commitment from the entire organization, and above all, from top-level management.   What Mak es Six Sigm a Different The characteristics that make the Six Sigma initiative different from predecessors’ initiatives are:  Six Sigma has a clear commitment to making decisions based on verifiable data, instead of on assumptions and guesswork. Six Sigma has a unique infrastructure made up of "Champions," "Master Black Belts," "Black Belts," etc. to lead and implement the Six Sigma ideology. Six Sigma projects provide a clear focus for achieving measurable and quantifiable financial returns. With Six Sigma, there is an increased emphasis on strong management and leadership with support that is passionate.    M et hod s Six Sigma projects follow two project principles that come from Deming’s “Plan-DoCheck-Act Cycle”. The standards are made up of five phases. Each phase contains the acronyms DMAIC and DMADV.   DMAIC is used for projects that have been designed to improve existing business processes. DMADV is used for projects intended to create new product or new process designs. 2 Six Sig ma M anage me nt A Comprehensi ve Manager’s Guide DMIAC DMAIC project methodology includes five phases: 1. Defin e high-level project goals and the current process. 2. Mea su re key aspects of the current process and collect relevant data. 3. An a lyze the data to verify cause-and-effect relationships. Determine what the relationships are, and attempt to ensure that all factors have been considered. 4. Imp ro ve or optimize the process based on data analysis, and using appropriate techniques. 5. Co n tro l to make certain that any deviations from goals are rectified before they result in defects. Set up pilot runs to ascertain: a. b. c. d. The processes capabilities and inadequacies. To confirm appropriate movement on to production. To confirm an established control of the control mechanisms. To verify a continuous monitoring of the entire process. DMADV DMADV project methodology, also known as DFSS (“Design for Six Sigma”) includes five phases: 1. Defin e design goals that are consistent with customer demands and with the policies of the enterprise. 2. Mea su re and identify CTQs (characteristics that are Critical To Quality), product capabilities, production process capability, and risks. 3. An a lyze to devise alternatives, create a high-level design and evaluate design capability to select the best design. 4. Desig n details, optimize the design and plan for design verification. This phase may require simulations. 5. Veri fy the design, set up pilot runs, implement the production process and hand it over to the process owners 3 Six Sig ma M anage me nt A Comprehensi ve Manager’s Guide Qual i t y M anagement T ool s and M et hod s used i n S ix Sig ma As a part of the individual phases of a DMAIC or DMADV project, Six Sigma also uses various established quality-management tools. These tools are also used o