Six-Sigma-Introduction.ppt

client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho ix customer competitiveintelligence forsystemsinnovation design s igma s departmentofstatistics dr rickedgeman professor chair sixsigmablackbelt redgeman uidaho eduoffice 1 208 885 4410 client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho ix s igma s departmentofstatistics introductiontosixsigma client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho ix s igma s departmentofstatistics ahighlystructuredstrategyforacquiring assessing andapplyingcustomer competitor andenterpriseintelligenceforthepurposesofproduct systemorenterpriseinnovationanddesign client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho often problemsareknotswithmanystrands andlookingatthosestrandscanmakeaproblemseemdifferent mr rogers client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho ahighlystructuredstrategyforacquiring assessing andapplyingcustomer competitor andenterpriseintelligenceforthepurposesofproduct systemorenterpriseinnovationanddesign innovationalgorithmdmaic define measure analyze improve control designforsixsigmaalgorithmdmadv define measure analyze design verify makesintegrativeuseof variousstrategiesandtoolsfromstatistics quality business engineeringand is client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho sixsigmaorganizations ge all300 000 geemployeesmustbesixsigmacertified allnewgeproductsdevelopedusingthe designforsixsigma dfss approach 3m newceo fromge requiresall3memployeestobecomesixsigmacertified dupontalliedsignalsunmicrosystemsraytheonmotorolaboeinglockheed martinbank of americaamericanexpresshsbcsasinstitute rapidlyincreasingareasofapplication healthcare geheathcare slcfinancial military nswc pentagon etc fueledby strategiccontexts notoriousbottom lineorientation results adaptabletomultiplebottomlines processorientation rigorousandsystematicapproachestoinnovationanddesign focusonthecustomer successfultrackrecordelsewhere industrybuzz whilesixsigmaisnewat forexample 3m itsbenefitsatothersoftheseorganizationsismeasuredinthemulti billionsofusdollars client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho qualityisastateinwhichvalueentitlementisrealizedforthecustomerandproviderineveryaspectofthebusinessrelationship businessqualityishighestwhenthecostsareattheabsolutelowestforboththeproducer consumer sixsigmaprovidesmaximumvaluetocompaniesintheformsofincreasedprofitsandmaximumvaluetoconsumerswithhigh qualityproductsandservicesatthelowestpossiblecost client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho thevillain costofpoorlyperformingprocessessleveldpmocp32308 537notapplicable366 80725 40 ofsales46 21015 25 ofsales52335 15 ofsales63 4 1 ofsaleseachsigmashiftprovidesa10 netincomeimprovement costofpoorlyperformingprocesses cp3 sigma s isameasureof perfection relatingtoprocessperformancecapability the biggerthebetter aprocessoperatingata sixsigma levelproducesonly3 4defectspermillionopportunities dpmo foradefect withoutdedicationofsignificantandappropriateattentiontoaprocess mostprocessesinleadingcompaniesoperateatalevelbetween3and4sigma whyissixsigmaimportant client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho costofpoorlyperformingprocesses thecosttodeliveraqualityproductcanaccountforasmuchas40 ofthesalesprice forexample alaserjetprinterpurchasedfor 1 000mayhavecostthemanufacturer 400inreworkjusttomakesurethatyoutookhomeanaverage qualityproduct foracompanywhoseannualrevenuesare 100millionandwhoseoperatingincomeis 10million thecostofqualityisroughly25 oftheoperatingrevenue or 25million ifthissamecompanycouldreduceitscostofachievingqualityby20 itwouldincreaseitsoperatingrevenueby 5million or50 ofthecurrentoperatingincome client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho andthehero wedon tknowwhatwedon tknow wecan tdowhatwedon tknow wewon tknowuntilwemeasure wedon tmeasurewhatwedon tvalue wedon tvaluewhatwedon tmeasure typicalresults companiesthatproperlyimplementsixsigmahaveseenprofitmarginsgrow20 yearafteryearforeachsigmashift uptoabout4 8sto5 0s sincemostcompaniesstartatabout3s virtuallyeachemployeetrainedinsixsigmawillreturnonaverage 230 000perprojecttothebottomlineuntilthecompanyreaches4 7s afterthat thecostsavingsarenotasdramatic however improvedprofitmarginsallowcompaniestocreateproducts serviceswithaddedfeaturesandfunctionsthatresultingreatermarketshare whatdoessixsigmatellus client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho sixsigmaaffectssixareasfundamentaltoimprovingacompany svalue processimprovementproduct serviceimprovementinvestorrelationsdesignmethodologysupplierimprovementtraining recruitment client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho sixsigmavs tqm client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho valuesofsixsigmaorganizations issueclassicalfocussixsigmafocusanalyticalperspectivepointestimatevariabilitymanagementcost timequality timemanufacturabilitytrial errorrobustdesignvariablesearchone factor at a timedesignofexperimentsprocessadjustmenttweakingprocesscontrolchartsproblemsfixingpreventionproblemsolvingexpertbasedsystembasedanalysisexperiencedatafocusproductprocessbehaviorreactiveproactivesupplierscostrelativecapabilityreasoningexperiencebasedstatisticallybasedoutlookshort termlong termdecisionmakingintuitionprobabilityapproachsymptomaticproblematicdesignperformanceproducibility client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho valuesofsixsigmaorganizations issueclassicalfocussixsigmafocusaimcompanycustomerorganizationauthoritylearningtrainingluxurynecessitychain of commandhierarchyempoweredteamsdirectionseat of the pantsbenchmarking metricsgoalsettingrealisticperceptionreachout stretchpeoplecostassetcontrolcentralizedlocalizedimprovementautomationoptimization client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho thesipocmodel suppliers customers inputs outputs processsteps informloop client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho sixsigmacopismodel customers suppliers outputs inputs processsteps thevoiceofthecustomer voc isaggressivelysoughtandrigorouslyevaluatedandusedtodetermineneededoutputsandhencetheoptimalprocessconfigurationneededtoyieldthoseoutputsandtheirnecessaryinputsforwhichthebestsuppliersareidentifiedandalliedwith fromconcepttomarket thevoiceofthecustomer howdoessixsigmawork client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho thedmaicmodel define control measure improve analyze voiceofthecustomer institutionalization client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho kanocustomerneedmodel client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho kanocustomerneedmodel delighted disgusted absent fullyimplemented stakeholdersatisfaction time degreeofexecution client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho dimensionsofquality garvin seight qualityisusuallyabundleofcharacteristicsweneedtodisaggregatethiscompositenotionthisdecompositionwillhelpustomakeournotionofqualitymoreprecisemakecomparisonspossiblefacilitatemeasurementonlythecustomerdeterminestherelativeimportanceofthesedimensions client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho garvin seightdimensions performancefeaturesconformanceaesthetics reliabilitydurabilityserviceabilityperceivedquality client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho whatthetermsmean 1 performanceprimaryoperatingcharacteristicsofaproductfeaturesbells whistlessecondarycharacteristicsthatsupplementthebasicfunctioningconformancedegreetowhichproductmeetspre establishedstandards meetingspecs client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho whatthetermsmean 2 reliabilityprobabilityofproductremainingfunctionaloveraspecifiedperiodoftimedurabilityamountofuseonegetsoutofaproductbeforeitphysicallydeterioratesserviceabilityspeedandeaseofrepairs orresolutionofproblems client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho whatthetermsmean 3 astheticslook feel andsoundofaproductreflectsindividualpreferencesperceivedqualityperceptionsofqualitybasedonothercuesandindirectmeasuresreputationoraffiliationoftenkey client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho competingonquality itisnotoftenfeasibletopursueall8dimensionstrade offsarenecessaryqualitynichescanbedefinedanddefendedafirmcandefinewhatqualitymeansforitsproductmustfocusontherightqualitymeasure thoseone s thatmattertotheconsumer client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho dimensionsofservicequality reliability consistency error freedependabilityresponsiveness willingnesstohelpthecustomertangibles environmentfortheservicepresentedcompetence therightskillsandknowledgerequired client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho servicequality cont courtesy supplier sbehaviorsecurity freedomfromdangerorriskaccess easeofmakingcontactcommunication understandabletothecustomerempathy adoptingthecustomer sviewpoint client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho aggregation oftenneedtoreducethenumberofdimensions reducedlistis reliabilityresponsivenessempathytangiblesassurance client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho sixsigmaroadmap rdmaicsibreakthroughstagestrategyphaseobjectiveidentificationrecognizeidentifykeybusinessdefineissuescharacterizationmeasureunderstandcurrentanalyzeperformancelevelsoptimizationimproveachievebreakthroughcontrolimprovementinstitutionalizationstandardizetransformhowday tointegratedaybusinessisconducted breakthroughstrategy blackbeltprojects client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho define control improve analyze measure sixsigmainnovation thedmaicalgorithm definetheproblemandcustomerrequirements measuredefectratesanddocumenttheprocessinitscurrentincarnation analyzeprocessdataanddeterminethecapabilityoftheprocess improvetheprocessandremovedefectcauses controlprocessperformanceandensurethatdefectsdonotrecur commonsense doesn tmean commonlydone orwhendone donewell sixsigma howdoweinnovate client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho sixsigmafromthegeperspectivesixsigmaisahighlydisciplinedprocessthathelpsacompanyfocusondevelopinganddeliveringnear perfectproductsandservices why sigma thewordisastatisticaltermthatmeasureshowfaragivenprocessdeviatesfromperfection thecentralideabehindsixsigmaisthatifyoucanmeasurehowmany defects youhaveinaprocess youcansystematicallydeterminehowtoeliminatethoseandapproach zerodefects sixsigmahaschangedthednaatge itisthewaythatgeworks ineverythingthatgedoesandineveryproductgedesigns whatissixsigma theroadmaptocustomerimprovement client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho designforsixsigmaapplicationsofsixsigmathatfocusonthedesignorsignificantredesignofproductsandservicesandtheirenablingprocessessothatfromthebeginningcustomerneedsandexpectationsarefulfilledareknownasdesignforsixsigmaordfss thefocalaimofdfssistocreatedesignsthatareresourceefficient capableofexceptionallyhighyields andarerobusttoprocessvariations thisaimleadstothedfssalgorithmdefine measure analyze design verify dmadv client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho define verify design analyze measure designforsixsigma dfss allnewproductsatgearedesignedusingadfssalgorithm definecustomerrequirementsandgoalsfortheprocess productorservice measureandmatchperformancetocustomerrequirements analyzeandassessthedesignfortheprocess productorservice designandimplementthearrayofnewprocessesrequiredforthenewprocess productorservice verifyresultsandmaintainperformance sixsigma howdowedesign client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho designforsixsigmaatge dfssischangingge withitgecanbuildonallofitscapabilitiesandtakeallofitsproductandprocessdesignstoanewlevelofworld classperformanceandquality theessenceofdfssispredictingdesignqualityupfrontanddrivingqualitymeasurementandpredictabilityimprovementduringtheearlydesignphases amuchmoreeffectiveandlessexpensivewaytogettosixsigmaqualitythantryingtofixproblemsfurtherdowntheroad whatwedo gecorporateresearchanddevelopmentformerlypostedat client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho anotherviewofdesignforsixsigma dfssisthechangeintheproductdesignorganizationfromadeterministictoaprobabilisticculture ourpeopleweretrainedtoincorporatestatisticalanalysisoffailuremodes bothinproductsandprocesses theybegantoincorporatedesignchangesthatmodifyanddesignformaintainability designforsixsigma 15lessonslearned qualityprogress vol 35 no 1 pp 33 42 january2002 client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho improvement innovation focusesonhighpriorityproblemsinbusinessprocesses thisusesthedmaicmethodology define measure analyze improve andcontrol design designforsixsigma dfss addressesneworfundamentallypoorprocesses themethodologyiscalledthedmadvordmadovmodel define measure analyze design optimize andverify businessprocessmanagement aidsindefinitionandmanagementofoperationsandactivitiesintermsofcoreandenablingprocesses theresultingprocessmanagementsystemsprovideafoundationofprocessdefinitionandbaselinedataforallprocessdesignandimprovementactivities client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho sixsigmastrategy methods appendix1 corporateleadership client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho sixsigmaandgeneralelectric generalelectricceo jackwelch describessixsigmaas themostimportantinitiativegehaseverundertaken ge soperatingincome acriticalmeasureofbusinessefficiencyandprofitability hoveredaround10 fordecades in1995welchmandatedthateachgeoperationfromcreditcardservicestoaircraftengineplantstonbc tvworktowardachievingsixsigma gewasaveragingabout3 5 whenitintroducedtheprogram withsixsigmaembeddingitselfdeeperintoge sprocesses theyachievedthepreviously impossible operatingmarginof16 7 in1998 upfrom13 6 in1995 indollaramounts sixsigmadeliveredmorethan 300milliontoge s1997operatingincomeandmorethan 600millionin1998 client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho sixsigmaandraytheon formeralliedsignalexecutivedanielp burnham whobecameraytheon sceoin1998 hasmadesixsigmaacornerstoneofthecompany sstrategicplan bypursuingsixsigmaqualitylevelsthroughoutthecompany burnhamexpectsraytheontoimproveitscostofdoingbusinessbymorethan 1billionannuallyby2001 client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho sixsigmaandtheservicesectorrobertgalvin formermotorolaceo failingtoimplementsixsigmaincommercialareaswiththesameforcethatthecompanyimplementeditinitsindustrialsectorscostmotorola 5billionoverafour yearperiod client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho howbigistheservicesector 79 oftheu s workforceisemployedbycommercialbusinesses 90 ofthoseemployedinmanufacturingareactuallydoingservicework suchasfinance marketing sales distributionandpurchasing so 79 9 21 98 oftheu s workforceisinvolvedin servicework mistakenbeliefs somecompaniesstillbelievethatimprovingcommercialprocessesislessimportantthanimprovingindustrialprocessesorthatseeminglyintangiblecommercialprocessescan tbecontrolled botharewrong customersaremorelikelytotaketheirbusinesselsewherebecauseofpoorservicethanpoorproducts companieslikegehaveshownthatimprovinginternalandexternalcommercialprocessesaddstothebottomlineandtocustomersatisfactionsignificantly client enterprise competitiveintelligenceforproduct process systemsinnovation designdr rickl edgeman universityofidaho alliedsignal 70 000employeeschemicals fibers plastics aerospaceproducts automotiveproducts larrybossidycamefromgetobecomeceoin1991marketvalue 4billionin1991marketvalue 29billionbytheendof1998marketvalue 38billionby2000 client enterprise competitiveintelligenceforproduct process systemsinnovation de