Six Sigma Basics

一, Motorola's Six Sigma Perspective
OBJECTIVES: After completing this learning object, you will be able to explain the differences between sigma and Six Sigma, identify the reasons for a renewed interest in Six Sigma, and determine the primary objectives for the Six Sigma Business Improvement Campaign.

二, Measurement and Methodology
2.1, ONE TERM, TWO MEANINGS
What is Six Sigma? You may hear the term used in a couple of ways -- both as a measure and as a methodology. Distinguishing between the two is vital to understanding Six Sigma.
Six Sigma Measurement: Level on a sigma scale, where sigma is a measure of goodness Equates to 3.4 defects per million opportunities Six Sigma Methodology 
Overall business improvement methodology: Drives improvement in business processes by reducing defects, cycle time, impact to the environment, and other undesirable variations

2.2 SIGMA:
Start off with Six Sigma as a measurement. Sigma is a measurement of "goodness" using a universal measurement scale. Sigma provides a relative way to measure improvement.
Sigma is measured in defects per million opportunities (DPMO). For example, a level of sigma can indicate how many defective coffee mugs were produced when one million were manufactured.
Universal means sigma can measure anything from coffee mug defects to missed chances to close a sales deal. It simply measures how many times a customer's requirements were not met (a defect), given a million opportunities. Fortunately, one million is a scaling factor. You don't have to wait until one million mugs are manufactured before calculating sigma.

2.3 LEVELS OF SIGMA:
Levels of sigma are associated with improved levels of goodness. To reach a level of Three Sigma, you can only have 66,811 defects, given a million opportunities. A level of Five Sigma only allows 233 defects.
The difference between sigma levels is not simply cutting the amount of defects in half. With each rise in sigma level, the number of defects is reduced exponentially.

2.4 SIGMA LEVEL DIFFERENCES:
So what does this mean in terms of the real world?
Take a look at the difference between a Three Sigma and a Six Sigma quality level.

Three Sigma 
At least 500,000 wrong drug prescriptions a day (based on 2,730,000,000 prescriptions per year) 
11 hours of dead air time per TV channel each week
80 short or long landings at O’Hare airport each day

Five Sigma
1,700 incorrect prescriptions a day (based on 2,730,000,000 prescriptions per year)
2 minutes of dead air per TV channel each week
9 short or long landings a month

Six Sigma 
Only 25 incorrect prescriptions per day (based on 2,730,000,000 prescriptions per year) 
Less than 2 minutes of dead air per TV channel each year 
Only 2 short or long landings per year

2.5 VIRTUAL PERFECTION:
"Six" sigma then is a description of virtual perfection, allowing only 3.4 defects per million opportunities. Reaching Six Sigma is one of Motorola's ultimate goals -- allowing only 3.4 defects per million opportunities in the products, services, and processes that matter the most to customers and shareholders.

Think about how this "virtual perfection" would affect your customers. Only three customers out of a million would ever find a defect in Motorola products or services. That's 999,997 happy customers telling all their friends wonderful things about your organization. Think about how that would translate into dollars. Six Sigma quality has a significant impact for everyone involved.

2.6 AN OVERALL METHODOLOGY:

2.7 MINIMIZING VARIATION:
Minimizing variation is a key focus of Six Sigma. Variation leads to defects, and defects lead to unhappy customers. 
Anytime Motorola delivers a product or service off-target from what a customer wants, even if it's within what the customer is willing to accept, the customer is less satisfied and less loyal.
To keep customers satisfied, loyal, and coming back, you have to eliminate the sources of variation. 
Whenever a product is created or a service performed, it needs to be done the same way every time, no matter who is involved. Only then will you truly please the customer.
In an effort to permanently minimize variation, Motorola has evolved the Six Sigma methodology to use information systems tools to make business improvements absolutely permanent. Motorola calls this effort Digital Six Sigma.

2.8 THE SIX SIGMA METHODOLOGY:

三, Why a Renewed Interest in Six Sigma?

3.1 SIX SIGMA SUCCESS
How would your boss react if you mentioned you've found a way to save a million dollars in the next year? Would your boss immediately offer to increase your salary or offer you a percentage of the savings?

Probably none of those things, but a person can dream. At the least, your boss would be ecstatic. Savings of a million dollars in a year seems impossible. But Motorola's Personal Communications Sector's Six Sigma experts achieve over a million dollars a year with Six Sigma.

Six Sigma is so powerful, it's led to significant improvements wherever it's been properly implemented. That's one reason why Motorola has renewed its interest in Six Sigma.

3.2 SIX SIGMA RESULTS
Motorola isn't the only one having success with Six Sigma. The following is just a sample of results from Six Sigma projects across the business spectrum.*

Waste reduction saved $120,000 
Reduced costs by $50,000 per year 
On-time delivery improved to 97%; yields improved to 97% 
Reduced scrap by 15%; reduced rework by 25% 
Reduced downtime by 30% 
Improved production throughput by 43%; reduced the No. 1 defect in the plant by 50% 
Increased production capability 12 - 16% 
No. 1 customer complaint 99% eliminated, saving more than $1 million per year 
Reduced manufacturing defects by 67% 
30 Black Belt and Green Belt projects completed; saved $14,625,800 
Increased productivity of call center analysts by 23% 
Customer service incidents reduced more than 50% 
More than $7 million in savings in six months 
*Taken from the November, 2001, Quality Digest article "Six Sigma Survey: Breaking Through the Hype."

3.3 THE NEW REALITY
Today's business leaders face a new reality. They must consistently:

Generate month-to-month financial results (profit) 
Build a long-term, sustainable business model 
Fight for talent, customers, market share, and investors 
Provide superior customer service and performance

By building Six Sigma process and people capability, they can accomplish all of these things at the same time.

Past management approaches, such as Total Quality Management (TQM), have failed in many businesses. After initial successes, these approaches have not yielded sustainable business results.

Only Six Sigma has produced results that have been sustained over time. It consistently delivers on its promise because the metric and method drive a reduction of variation that results in near-perfect business results -- permanently. That's another reason Motorola has renewed its interest in Six Sigma.

3.4 REFINING THE METHODOLOGY
Six Sigma may be powerful, but that's not to say Six Sigma has always had all the answers. Even a business improvement methodology is not immune to improvement.

Through hard experience, Motorola has learned Six Sigma is about more than:
How many people are trained 
Initiating projects for the sake of getting a Green or Black Belt 
The number of projects initiated

Six Sigma is about delivering sustainable business results. Motorola ensures sustainable results through a top-down approach that integrates improvement projects with specific business strategies. Leadership must drive this effort.

3,5 ROBUST
As Motorola continues to learn, it continues to improve Six Sigma. The Six Sigma methodology continues to increase its power.
Today’s Six Sigma involves: 
   To learn more about the characteristics of Six Sigma, click each item.

Executive ownership: Executive ownership: Since Six Sigma involves a top-down approach, leadership is actually 
Business strategy: Business strategy: Six Sigma is more than just a quality initiative. All projects are linked to a specific business strategy, providing demonstrable business results.
An established infrastructure: An established infrastructure: Six Sigma teams are set up with established leaders and roles, including company executives.
Truly cross-functional improvement: Truly cross-functional improvement: Six Sigma provides results in all areas of a company, including transactional and services areas. It's about far more than just preventing manufacturing defects. Six Sigma drives reduced variation around goals, which results in virtual perfection.
Permanent improvement: Permanent improvement: Through Digital Six Sigma, improvements are permanent since they do not rely on any one person to carry them out. Digital Six Sigma also uses a new method to drive cost efficiency in processes by automating manual tasks.
Training with ROI (return on investment): Training with ROI (return on investment): Within Six Sigma, training occurs on an "as required" basis. Team members receive training that can be applied directly to the project they are currently working on.
Digital cockpit: Digital cockpit: This is a tracking tool for the major metrics. It allows leaders to govern the progress of Six Sigma projects toward driving the big outcome measures.

3.6 DIGITAL SIX SIGMA
Motorola has discovered another way to improve Six Sigma -- Digitization. Digital Six Sigma involves three improvements to “classic” Six Sigma:

Digitization uses information technologies to permanently remove targeted sources of variation that cause defects 
Digitization automates non-value-added human tasks to improve efficiency 
Digital cockpits show the progress of important measures over time

3.7 DIGITIZATION
Motorola's Digitization improvement effort adds a whole new set of improved methods, tools, and techniques. These efforts include:
To learn more about these methods, tools, and techniques, click each item.

e-Training: e-Training: The ability to train and test thousands of people in months rather than years
e-Processes: e-Processes: Digitized improvement actions stay in control
e-Tools: e-Tools: e-Surveys, simulators, and modeling tools improve many phases of Six Sigma processes 
e-Tracking: e-Tracking: The ability to monitor all vital business metrics and the improvement projects attached to them
e-Visibility: e-Visibility: The ability to monitor all vital business metrics and sectors or functions driving those results, both good and bad

With these refinements, Six Sigma is more powerful today than ever before, making it even more relevant in today's turbulent business climate.

四 The Keys to Six Sigma Business Improvement

4.1 WHAT IS MISSING?
Six Sigma is a powerful business improvement methodology that transforms, refines, and redefines companies. But if Six Sigma is so powerful, why hasn't it always been successful?

In the end, it comes down to one thing: time. More than 70 percent of improvement initiatives fail to produce results in time to make a difference. Motorola has learned through experience that Six Sigma is about timely execution of the most important projects. A company may be great at implementing improvement projects, but what good does it do if those projects don't produce results in time?

The real measure of success is not about how many improvements are implemented, the amount of people trained, or the process you're using. The real measure of success is the results these efforts yield and the time it takes to accomplish those efforts.

4.2 BUSINESS IMPROVEMENT OBJECTIVES
This is where Six Sigma comes into the picture. Six Sigma lists the following as primary objectives:

Rapid business improvement: The Six Sigma methodology focuses on speed, accelerating the improvement process so enhancements can be implemented before it’s too late. 
Sustainable results

Sustainable results: Six Sigma results are sustainable because each project creates an experienced group of quality employees who can use their new skills to improve additional processes in their functional areas.

4.3 REACHING THE OBJECTIVES
Through years of experience, Motorola has identified five key elements that must be present for Six Sigma to work:
The Six Sigma principles of leadership 
An integrated approach to leading improvement efforts 
Driving results through engaged teams 
The Six Sigma analytic tools and a disciplined, standardized methodology for their use 
Digital improvements, including hard-coded improvements that utilize reusable web tools to eradicate defects from the face of the earth

Typically, you will spend the majority of your training time learning to use the Six Sigma analytic tools. But don't forget that this is just one part of the whole picture. You also need to keep in mind the other key elements. Without all of them, Six Sigma will not work effectively.

4.4 THE SIX SIGMA EQUATION
For those who like math, think of the Six Sigma methodology this way. 
If any items are missing from the equation, you won't get the answer you want. Motorola has learned this from experience.

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