Six Sigma

By: Jensen Agcaoili

What is Six Sigma?

Six Sigma Definitions:• A management driven, scientific methodology for

product and process improvement which creates breakthroughs in financial performance and Customer satisfaction. Source: Motorola

• A methodology that provides businesses with the tools to improve the capability of their business processes. This increase in performance and decrease in process variation lead to defect reduction and improvement in profits, employee morale and quality of product. Source: ASQ

History

1970’s - Motorola found itself unable to compete in the consumer products with Japanese companies.

1980’s – Bill Smith invented Six Sigma concept and was recognized as “The father of Six Sigma”

1987 – Motorola founded Six Sigma and received first Malcolm Baldrige National Quality Award in 1988.

Six Sigma Curve

Savings by Company

Company Savings ($billions)

Motorola

(1986-2001)

16

GE

(1996-1991)

4.4

Honeywell

(1999-2000)

1.8

Ford

(2000-2002)

1

Strengths & Goals

Simple and effective management structure Reduces variation in system process Ability to identify, analyze, and monitor errors Six Sigma Goal

• Near elimination of defects from any process

• Numerical goal of 3.4 defects/million opportunities

Six Sigma Implementation

CEO - The driving force

Champion - Responsible for the success of the project, providing

resources and breaking down organizational barriers Black Belt

- Project leader Green Belts

- Project team members Master Black Belts

- Train and mentor new Black Belts in the organization

Not only in manufacturing

Six Sigma has been successfully applied to many processes outside of manufacturing.

Transactional processes such as insurance, health care, software coding, billing, and customer support

Integrating Six Sigma With Total Quality Management: A Case Example for Measuring Medication Errors

Article provided by Journal of Healthcare Management by Revere and Black. (2003)

Background

The institute of Medicine estimated between 44,000 and 98,000 deaths occur each year from medical errors (2002)

Medical errors cost between $17 to $29 billion GE Medical Systems reported over 31% of

post-heart-attack patients receive improper medications and 30% percent of mammograms are incorrect (2001)

Sis Sigma in Healthcare

Reduce medication error Reduce inventory of surgical equipment Improve patient satisfaction Reduce length of stay Improve staff scheduling Reduce patient wait times Many more..

Case Example: Medication Error

Three categories of errors and opportunities• Prescribing

• Dispensing

• Administering

How to determine Sigma level

Use Medication Error Ratio to determine sigma level

Medication Error Ratio =Number of Medication Errors

Number of Opportunities for Error

Solution: Medication Error Ratio = Number of Medication Errors

Number of Opportunities for Error

Medication Error Ratio = 79/180,000 = 0.000439

Convert the number of medication errors per million opportunities

0.000439 x 1,000,000 = 439

Six sigma level = 4.7

Any Questions?