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Unit 1 - Introduction to ‘Six Sigma’
The purpose of this unit:
• Welcome! This first unit provides a general background
and history regarding the beginnings of Six Sigma,
where it comes from, why it is used, and the foundation
concepts upon which it is built.
• This unit also provides a number of terms and phrases
used within Six Sigma. It is designed to provide a sound
foundation to understand the units that follow.
• Timing: 30 – 45 minutes
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Recommended Reading
This training includes everything you will need to study for
the certification exam. If you would like to further your
understanding of Six Sigma, we recommend these books:
• Michael L. George, John Maxey, David Rowlands, Mark Price (Sept 2004)
The Lean Six Sigma Pocket Toolbook: A Quick Reference Guide to 100
Tools for Improving Quality and Speed ISBN-13: 978-0071441193
• George Eckes (Jan 2003) Six Sigma for Everyone ISBN-13: 978-
0471281566
• Thomas Pyzdek (Mar 2003) The Six Sigma Project Planner : A Step-by-
Step Guide to Leading a Six Sigma Project Through DMAIC ISBN-13: 978-
0071411837
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The Basics of Six Sigma
• Six Sigma is an improvement methodology which uses
the following phases to make changes to any process:
Defining, Measuring, Analyzing, Improving, and
Controlling.
• “Six Sigma” measures the capability of a process to
perform defect-free work with a failure rate of 3.4 parts
per million or 99.9997%.
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The Basics of Six Sigma
• The Six Sigma methodology uses proven strategies,
tools, and statistical methodologies to improve virtually
any process.
• The goal of Six Sigma is improved process performance
and increased customer satisfaction through variability
and defect reduction, resulting in consistently producing
high quality services, products, or processes.
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The Basics of Six Sigma
• Six Sigma reduces costs and waste by determining the
Cost of Poor Quality.
• Reducing poor quality is accomplished by:
– Understanding who your customers are and what is
important to them
– Understanding customer feedback, called the Voice
of the Customer, and determining the necessary
requirements for your product
– Prioritizing issues related to your product
- Continued on next slide
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The Basics of Six Sigma
(Continued)
• Reducing poor quality is accomplished by:
– Determining internal processes and what causes
variation
– Determining what causes defects
– Developing ways to address the defects
– Developing metrics to standardize and measure the
changes made in the process
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The Basics of Six Sigma
• Although referred to regularly in today’s working world,
the Six Sigma methodology is a relative newcomer to
the landscape of theories and practices to work better.
• In 1986, Bill Smith was the first person to introduce the
principle. He was working for Motorola at the time and
had been fascinated with ways to improve working
practices. This included making them more efficient and
effective by pushing ahead with quality improvements
and trying to get the most from a manufacturing
production line.
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The Basics of Six Sigma
• Mr. Smith came up with the idea to work on a way to
minimize defects in production through continuous
improvements.
• He recognized that every manufacturing and business
process could be measured, analyzed, and improved
upon based on analysis and controlled to stay within that
new process.
• Continuing to do this would reduce variations in process
and produce output much more effectively, meeting the
desires of the customer.
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The Basics of Six Sigma
• Six Sigma clearly focuses on measuring and quantifying
the impact of an improvement project.
• It requires buy-in across the business for the project to
make changes based upon those measurements,
irrespective of personal views.
• Guesswork and assumptions have no place; it is a
precise process.
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The Basics of Six Sigma
• Six Sigma designates clear roles for people within the
project, using “belts” to define each role and contribution
as well as recognizing Six Sigma “champions.”
• Strong management to lead forward the required
changes is paramount to the process of a Six Sigma
project and key to the roles of black belts – who are the
highest level belts, akin to most martial arts. (unit 3
discusses the belts structure in more detail).
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The Basics of Six Sigma
• The term "Six Sigma" comes from statistics. A “sigma” is
a term used to denote variance from the mean average
of an event.
• It is perceived that for any event or activity, 3 measures
of these variances on either side of the mean average
will include almost all potential activities.
• So, Six Sigma originally referred to the ability of
manufacturing processes to produce a very high
proportion of output within specification.
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The Meaning of Six Sigma
• Processes that operate with "six sigma quality" over the short term are assumed to produce long-term defect levels below 3.4 defects per million opportunities. This is not strictly accurate as being within six standard deviations; only roughly 4.5 deviations cover this, but the accepted principle allowing for modifications over time is that Six Sigma will work to this level of accuracy. (unit 09 goes into greater detail on statistics).
• Six Sigma's implicit goal is to improve all processes to that level of quality or better.
• Six Sigma is a registered service mark and trademark of Motorola Inc.
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The Meaning of Six Sigma
• Sigma levels determine the rate of defects and are a
standardized measure of the error rate of a process,
based on the Defects per Million Opportunities (DPMO)
estimate.
• The Sigma Level estimate is a long-term estimate of the
process defect opportunities.
• At the Six Sigma level, a business process produces
only 3.4 defects per million opportunities.
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The Meaning of Six Sigma
• At the 5th Sigma level, 233 defective parts per million
occur.
• At the 4th Sigma level, 6,210 defective parts per million
occur.
• At the 3rd Sigma level, 66,807 defective parts per million
occur.
• At the 2nd Sigma level, 308,538 defective parts per
million occur.
• At the 1st Sigma level, 690,000 defective parts per million
occur.
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The Meaning of Six Sigma
• There are two common analogies you will see which
help to put Six Sigma into perspective. One deals with
surgeries, and the other deals with airplane crashes.
• They both put the criticality of Sigma performance levels
into perspective. An example follows:
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The Meaning of Six Sigma
• If you have a surgeon who is performing your surgery,
are you comfortable with a surgical infection rate or
negative outcome rate at the 2nd sigma level using this
chart?
• Are you comfortable with an airline that has a crash rate
at the 3rd sigma level? Probably not.
• We feel more comfortable with businesses and
companies functioning at the 5th or 6th level of sigma.
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General History of Six Sigma &
Continuous Improvement
• The history of performance and process improvement
dates back to the late 1880’s. This was in large part
related to the industrial revolution.
• With the invention of steam and the business need for
new manufacturing processes, companies noticed an
increasing need for standardization and later for
reducing variability.
• In 1798, Eli Whitney introduced mass production and
interchangeable parts, which was a pivotal point in the
emerging quality frontier.
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General History of Six Sigma &
Continuous Improvement
• Since then, a multitude of quality control methods have
been developed. Some come and some go but each of
them has brought a new way of looking at what we do as
a process, and each of them has added some new tool,
skill, or improvement opportunity.
• Total Quality Management (TQM) or (TQMS) provided a
good framework for continuous improvement in the late
1980’s and early 1990’s, but now industries rely more on
proven methodologies which rely on mathematical
substantiation and hypothesis testing.
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General History of Six Sigma &
Continuous Improvement
• As we evolve in quality improvement, organizations
such as the International Standards Organization,
develop standards to further refine and provide
framework for consistent quality management systems.
• Examples are the ISO 9000 (Quality Management) or
9001 (Quality Management Systems) standards.
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General History of Six Sigma &
Continuous Improvement
• As businesses move along the continuum of quality
improvement, they realize the value economically,
socially, and strategically for obtaining certifications such
as Six Sigma. For their organization and their
employees, it is a winning strategy.
• Great companies today realize that the money invested
in performance enhancement is returned exponentially
to the organization.
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General History of Six Sigma &
Continuous Improvement
• Six Sigma is the result of bits and pieces of many
individual contributions to the quality movement.
• The word “sigma” has been used for years by
mathematicians and engineers as a symbol for a unit of
measurement of variation called the standard deviation.
Understanding deviation in a process is important to
place it under control.
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General History of Six Sigma &
Continuous Improvement
• It is important to remember the Six Sigma methodology
is not a revolutionary way of thinking, but more of an
evolutionary development in the science of continuous
improvement.
• Six Sigma uses the best elements from historical quality
initiatives to provide a process of managing quality using
credible experience and proven tools.
• Business success depends on improving business
process and results in combination with great customer
service.
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General History of Six Sigma &
Continuous Improvement
• Here is a brief overview of some of the key contributions
to quality history and the quality movement over the last
100 years:
– In 1798, Eli Whitney introduced mass production and
interchangeable equipment parts. This led to
significant improvements in repair downtime.
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General History of Six Sigma &
Continuous Improvement
• In 1913, Henry Ford began the moving automobile
assembly line. This further exemplified the need for part
consistency. If something broke, it needed to be repaired
rapidly to eliminate assembly line delay.
• In the 1920’s, quality began to be driven by inspections.
• In 1924, Walter Shewhart introduced process control
charts and methods to collect and analyze data in ways
which could be displayed so employees could more
readily see the changes they made.
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General History of Six Sigma &
Continuous Improvement
• In the 1950’s, the U.S. military developed the military standard MIL-STD-105A, and the U.S. government required statistically-based levels of product quality from its vendors.
• In 1954, Joseph Juran began to introduce his concept of integration known as “Big Q” in Japanese factories. The Big Q involved quality through management’s active involvement and ownership. This led to the Japanese constantly improving quality and manufacturing capability in the 1970’s. Ultimately, their capabilities became more effective than those employed in the United States.
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General History of Six Sigma &
Continuous Improvement
• The key focus became defect elimination and cycle time
reduction. Both of these improvements resulted in
improved productivity and true success for Japanese
companies such as Toyota.
• By the 1980’s, American manufacturers realized if
Japanese companies did it, why couldn’t they; and so
they did, with companies such as Motorola and GE
leading the way.
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General History of Six Sigma &
Continuous Improvement
• In 1987, the International Organization for
Standardization (ISO) developed a series of quality
standards that were adopted by most of the
industrialized world to serve as a single global standard.
• In 1987, the U.S. Government introduced the Malcolm
Baldrige National Quality Award, presented annually by
the president and designed to provide an operational
definition of “business excellence.”
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General History of Six Sigma &
Continuous Improvement
• In 1987, Motorola adopted the concepts of Six Sigma
and shared the new methodology and philosophy with
their suppliers, engineers and managers. This resulted in
billions of tangible savings to Motorola.
• Other corporations began to engage in Six Sigma such
as Honeywell, Ford Motor Company, and General
Electric with the same results. They saved money by
reducing repair times, increasing customer satisfaction,
reducing order delays, reducing defects, increasing
productivity, and decreasing measurement error.
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General History of Six Sigma &
Continuous Improvement
• Shewart and Deming helped develop some key process
improvement ideas and theories.
• In 1920, Walter Shewart explained how three sigma or
three standard deviations is where a process needs to be
corrected. This is the point where a product will need to
be remade because it will not pass a quality inspection.
• Dr. W. Edwards Deming (1900–1993) is best known for
reminding management that most problems are systemic
and that it is their (management's) responsibility to
improve the systems so that workers can do their jobs
more effectively.
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General History of Six Sigma &
Continuous Improvement
• Deming's theories were taught as a part of his System of
Profound Knowledge. His knowledge system consists of
four interrelated parts:
(1) Theory of Optimization
(2) Theory of Variation
(3) Theory of Knowledge
(4) Theory of Psychology
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General History of Six Sigma &
Continuous Improvement
• In the theory of optimization, the objective of an organization is the
optimization of the total system and not the optimization of individual
subsystems.
• In the theory of variation, his philosophy focuses on improving the
product and service variability in design and manufacturing
processes.
• In the theory of knowledge, Deming emphasized that knowledge is
not possible without theory, and experience does not establish a
theory by itself. He says copying a best practice without
understanding the theory behind it could be devastating for an
organization.
• In the theory of psychology, he helped explain how to understand
people, interactions between people, and interactions between
leaders and employees in a system of management.
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General History of Six Sigma &
Continuous Improvement
• When developing better interactions between employees
and managers, he noticed that workers were responsible
for 10 to 20 percent of the quality problems in a factory,
and that the remaining 80 to 90 percent was under
management's control. It was their responsibility to
manage the programs accordingly.
• Deming knew higher quality leads to higher productivity,
and higher productivity leads to long term competitive
strength for businesses. Quality improvements result in
less rework, fewer mistakes, fewer delays, and better use
of time and materials. He taught quality and productivity
improvement for over fifty years. He also developed the
Deming Cycle.
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General History of Six Sigma &
Continuous Improvement
• The Deming Cycle is also known as the Plan-Do-Check-
Act (PDCA) Cycle or Plan-Do-Study-Act (PDSA) Cycle. It
was invented by Walter Shewhart, but popularized by and
significantly enhanced by Deming.
• PDCA and PDSA are cyclic processes for planning and
testing improvement activities prior to full-scale
implementation.
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• The steps in the Deming PDCA or PDSA Cycle are:
1. Plan a change or test it (P).
2. Do it (D) by carrying out the change or test on a small
scale.
3. Check it (C) by observing the effects of the change or
test.
4. Study it (S) by reviewing what you have done or
changed.
5. Act on what you have learned (A).
6. Repeat and continuously evaluate the process.
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General History of Six Sigma &
Continuous Improvement
Deliverables of a Lean Six Sigma Project
• There are several key deliverables for a Six Sigma
project. It is important to remember that Six Sigma is not
designed to be a quick fix to mask a business problem.
• Lean Six Sigma is more of a high level, intense system
to promote ongoing quality improvement. The ultimate
goal is continued improvement and sustained quality.
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Deliverables of a Lean Six Sigma Project
• Six Sigma focuses on reducing defects, preventing
rework, and eliminating waste in processes which
produce a customer’s product.
• By using research and data collection, organizations can
discover internal problems that may or may not be
apparent, allowing them to take action to reduce errors
and rework which cost time, opportunities, and money.
• Businesses should use Six Sigma and quality
management system standards to ensure that they
consistently produce products and services to meet the
critical to quality standards of the customer.
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Deliverables of a Lean Six Sigma Project
• In order for organizations to meet their goals for quality
improvement and Lean Six Sigma, they must meet
several key deliverables along the way under the DMAIC
model.
• First, the deliverables for the Define phase will include:
– Developing a fully-trained project team who is
committed to the improvement and has the full
support of management, including necessary
resources.
– Identifying what characteristics are Critical to Quality
for the customer, developing a project charter, and
mapping the known business processes.
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Deliverables of a Lean Six Sigma Project
• The deliverables of the Measure phase include
identifying key measures, developing and deploying a
data collection plan, developing a baseline for
performance, documenting variation, and communicating
it to team members and stakeholders.
• The deliverables of the Analysis phase involve a root
cause analysis for concerns, gap analysis, and a top-to-
bottom data and process analysis.
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Deliverables of a Lean Six Sigma Project
• The deliverables for the Improve phase involve
developing possible solutions, determining which ones
are the best solutions, and then developing a
subsequent implementation plan.
• The final deliverables in the Control phase include
standardizing processes, documenting procedures,
implementing the monitoring plan, and ultimately
transferring ownership of the project and closing the
project.
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Problem Solving Strategy Y=f(x)
• The problem solving strategy all begins with a simple
equation: y = f(x)
Although Six Sigma talks a lot about statistical analysis
and measurements and various other mathematical
applications, at the core of the process is one simple
equation:
y=f(x), or more accurately, y=f(x)+ Ɛ.
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Problem Solving Strategy Y=f(x)
• The core parts of this equation are described as
followed:
– ‘y’ represents the desired outcome, result, or goal you
want to achieve.
– ‘x’ represents the input, factors, variables, or elements
required to create the outcome.
– ‘f’ represents the function or process applied to the
variables, by which they are modified, changed, or
altered – the transformation processor.
– ‘Ɛ’ represents some level of error or the amount of
difference due to uncertainty or predictability when the
process is applied and how near or far it is from the
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Problem Solving Strategy Y=f(x) • This is perhaps easier to see as an example:
When you bake a cake, you take a set number of ingredients,
combine them in a certain way, bake the mixture, and after a
period of time, you get a cake ready to eat.
– ‘y’ is the cake that you desire
– ‘x’ represents the ingredients
– ‘f’ represents the mixing and baking process that is applied
to the ingredients to create the cake
– ‘Ɛ’ – If you made this cake several times, the outcome may
not always be identical. You may use a slightly lower heat
setting in the oven, a slightly differing amount of an
ingredient, and you may cook it for a few minutes more or
less. The end result will be broadly the same, but each will
have some variance from the others. That difference is
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Problem Solving Strategy
• This is referred to as The Principle of Determinism.
This principle explains that every outcome is the result of
a process being applied to it or determined by the
application of a function.
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Problem Solving Strategy
• The Principle of Determinism is a core belief running
through Six Sigma. All outcomes are determined by the
way inputs are transformed – according to some said
process.
• The cause and effect philosophy of Six Sigma means that
you look at a 'process' and see how the process allows
for variation. The inputs, process function, and errors
within that process all affect the outcome. They cause the
outcome to be a particular way – the cause and effect of
Six Sigma.
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Voice of the Customer, Business, and Employee
• Quite often, a customer is the person or group who
drives the project and is the focus of a project.
• Customers define requirements, needs, or wants. They
have a vested interest in a project. They also pay for the
project, support resource needs, and evaluate and use
the results of the project. They provide the “Voice of the
Project” and are considered the “Voice of the Customer.”
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Voice of the Customer, Business, and Employee
• Defining the Voice of the Customer (VOC) includes what
the customers’ requirements are for products and
services and what their expectations are: both positive
and negative, including likes, dislikes, problems, and
suggestions.
• It helps determine core business processes involved in
their needs and helps the project team develop the
Critical to Quality elements (CTQs) and develop key
process metrics (KPOVs). The VOC asks what each
customer desires; specifically, what is important to them,
and what do they perceive is a defect in a quality or
service.
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Voice of the Customer, Business, and Employee
• The purpose of the Voice of the Customer (VOC) survey is to
identify key business drivers of internal and external customer
satisfaction. The VOC is necessary to properly focus the Six
Sigma project and develop the right measures.
• The VOC asks what each customer desires, specifically what is
important to them and what do they perceive is a defect in a
quality or service.
• Once data is developed, it can be used to translate customer
feedback into project goals and objectives, including Critical to
Quality (CTQ) attributes and requirement statements.
• Voice of the Customer analysis tools such as quality function
deployment (QFD) translate customer requirements into
performance measures.
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Voice of the Customer, Business, and Employee
• CTQ flow-down is used to convert the voice of the
customer to specific needs using a tree map, where the
tree map is the voice of the customer and the branches
lead to the specific features.
• It helps determine the big Y’s and little y’s or the effects
of the causes.
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Voice of the Customer, Business, and Employee
• Several methods can be used to determine the voice of the employee, voice of the business, voice of the process, or voice of the customer.
• To do so, you can use various methods to collect customer feedback, wishes, and desires for products and services. These include surveys, focus groups, interviews, or observation. You can identify the key elements that make these tools effective.
• The collection of customer data through surveys, interviews, in person, focus groups, email, or phone help determine the needs of the customer and the voice of the customer.
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Voice of the Customer, Business, and Employee
• VOC data can be developed in two forms: those which
are reactive in nature and those which are proactive in
nature.
– Reactive examples include complaints, sales
reporting, or web page activity.
– Proactive examples include interviews, surveys,
market research, benchmarking, and quality
scorecards.
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Voice of the Customer, Business, and Employee
• The what and why indicate specifically what you want to
know about your customers.
• The customer survey was designed with these factors in
mind:
– What don’t you like?
– What are your expectations?
– What’s important to you?
– What’s a defect?
– How do we compare to our competitors?
– How are we doing?
– What do you like?
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Voice of the Customer, Business, and Employee
• The voice of the customer determines what
improvements are desired and need to be made. All
improvements are done with the goal of increasing the
quality of the business output.
• The three key input components of quality are the
customer, the employee, and the process. Once you
determine the customers’ requirements, you need to
determine what data is needed to make improvements.
There are several ways to display this data.
• The Six Sigma project team will develop primary and
consequential metrics such as quality, cycle time, or cost
and establish key project metrics that relate to the voice
of the customer.
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Six Sigma Roles and Responsibilities
• Six Sigma team formation typically consists of
stakeholders, executives, champions, and team
members (yellow belts) who are led by a green belt or
black belt.
• Project level membership may include master black belts,
black belts, green belts, or yellow belts who help in
management of the improvement initiative.
• Team members are obtained throughout the organization
for expertise and technical guidance.
• Executives provide the strategic alignment within the
organization for initiatives and Six Sigma projects.
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• Champions guide the team through organizational
support and resources, removing roadblocks.
• Master black belts train black and greenbelts and
manage the strategic direction of the Six Sigma program.
• Black belts lead problem-solving Six Sigma teams.
• Green belts assist with data collection and analysis for
black belt projects.
• Yellow belts review overall activities and participate as
project team members.
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Six Sigma Roles and Responsibilities
Six Sigma Roles and Responsibilities
Position Role Action
Executive Management Champions Sponsor the project
Black Belts Consultants Provide Guidance
Green Belts Consultants Operations
Yellow Belts Consultants Identify processes that need improvement
Project team Process Execute the Actual Work
Subject Matter Experts Expertise Provide Guidance
Position Roles and Responsibilities
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• This chart provides an “at a glance” overview of the
different positions and their roles in a project.
Six Sigma Terminologies
• As you progress through the units, you will learn a
number of terms, words, and phrases that may be
unfamiliar to you.
• Some words you may know, but within a different
context. When a term is used for the first time, it will be
highlighted and an explanation will be given for it within
the context of that section.
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Six Sigma Terminologies
• Throughout all units, you will need to be aware of some of the following terms and phrases. Understanding them now will help you as you build up your knowledge through the subsequent units.
– ‘function’ relates to a process or application – e.g., the manufacturing process is a function.
– ‘variation’ refers to a difference from the expected or likely outcome.
– ‘variance’ and ‘standard deviation’ are statistical terms of measuring such variations.
– ‘error’ refers to the amount of difference or variation from the perfect expected outcome.
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Unit Summary
In this unit, you have learned about:
• The historical context of Six Sigma being developed
• What Six Sigma as a term means and the levels of Sigma
• The y=f(x) + Ɛ function
• The Principle of Determinism
• Cause and Effect
• Deliverables of a Lean Six Sigma Project
• Voice of the Customer, Business, and Employee
• Six Sigma Roles and Responsibilities
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Six Sigma Opportunities
The purpose of this unit:
• This unit will look at quality appraisal tools and how they
relate to Six Sigma.
• It will also help you consider when Six Sigma projects
are appropriate and how to decide when to move
forward with the opportunity.
• Timing: 40 – 50 minutes
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Unit 2 - Fundamentals of Six Sigma
• Fundamentally, the training and use of Six Sigma
philosophies and principles will allow employees and project
teams to understand how systems interrelate and how to use
the application of quality improvement methodologies which
complement Six Sigma, such as Lean.
• Six Sigma relies on a Body of Knowledge (BOK) that contains
information on general content and topical areas users should
know and pursue in their initiatives. Key fundamentals are that
users should be able to:
– Master data collection techniques, project charter
development, and document usage
– Apply and use Six Sigma tools and process analysis
– Understand team dynamics and apply project
management skills
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Fundamentals of Six Sigma
• Implement statistical process control (SPC).
• Strategically plan improvements.
• Understand tactical design principles for organizational application.
• Perform hypothesis testing.
• Perform statistical and process capability calculations.
• Perform and analyze the results of correlation and regression.
• Analyze and interpret risk studies and implement improvement processes.
• Deploy control plans and sustainment opportunities.
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Managing Quality
• Depending on what sort of business you work in or have
experience with, the nature of quality will be different.
• The general assumption across all businesses is that
quality products are products meeting the needs or
expectations of the customer.
• In effect, quality is not about what you produce being
accurate as you see it, but rather as the customer
sees it.
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Managing Quality
• The customer is the person receiving the output
produced from the product – the ‘y’ in the equation we
discussed in the previous unit.
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Managing Quality
• How quality is achieved within the workplace is
examined by a raft of philosophies and practices, not
least of which is Six Sigma.
• First, it’s worth looking at a few other approaches to
quality:
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Managing Quality
• ISO9000 series of certifications are governed by the
“International Standards Organization” – ISO. They
cover a range of methods for documenting quality
standards and approaches within the workplace.
• However the ISO certification only confirms correct and
proper documentation is maintained, kept accessible,
and held by a business.
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Managing Quality
• In itself, it does nothing to improve quality and in effect
gives quite a high level approach to the documentation
of a process and practice within a business.
• Certification can be obtained by any business that can
provide evidence of the required documentation and
does nothing to improve quality.
• ISO is however a well-respected and acknowledged
business benchmark that demonstrates intent with
regards to quality production.
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Managing Quality
• Lean Methodology works on the basis of improving
quality by eliminating waste within the business.
• Credited with coming out of Toyota in the 1970’s, it is
sometimes referred to by the term Muda, which is the
Japanese name for it.
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Managing Quality
• Three Forms of Waste
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Mura
Muri
Muda
Managing Quality
• In Lean, you have three types of waste:
– Mura is unevenness in work demand or work flow.
– Muri is having a greater demand than capacity in any given time or overburdening the process, series of processes, or system. We can all relate to making mistakes when we are rushed or stressed; this is caused by Muri. We establish the capacity for work and then ensure we do not try and force more into the system than it can handle.
– Muda waste has two types: type 1 is the necessary but non value adding waste. This is where, from a business perspective, we do it to meet regulations.
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Managing Quality
• Lean has some very useful applications in reducing
waste and improving quality by reducing excess or
ensuring that the product meets the customer
expectations without wasting effort in exceeding that
expectation.
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Managing Quality
• Many tools within the Lean practice have moved across
to Six Sigma, and their correlations have become so
noticeable that ‘Lean Six Sigma’ has become a practice
in itself.
• We will touch on this in a later unit for those studying to
Black Belt level. However, by itself, it has limitations in its
applications.
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Managing Quality
• Total Quality Management – or TQM, is one of the most
popular quality methodologies around. Next to Six
Sigma, it is probably one of the most tool-driven
methods, but does not have the mathematical or
statistical relations found within Six Sigma.
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Managing Quality
• TQM relies on examining problems and proposing
solutions that need to be accepted by the populous – in
effect, a democratized solutions process.
• It identifies ‘good ideas,’ but does not necessarily identify
the best.
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Managing Quality
• That said, it will normally make improvements in quality
as part of its process of further reviews.
• Its cause and effect analysis ensures that better-than-
existing processes are put forward at all times.
• One issue is that its lack of measurement doesn’t
indicate how much better the new process is or if the
best option is being adopted.
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Starting Six Sigma
• When thinking about Six Sigma in any business, it can
be a bit daunting.
• If you’ve been told that your business is going to start
adopting Six Sigma methodology and the business will
be better because of it, it can all feel a little
overwhelming.
• How do you know when to consider a process for
improvement, how to identify it, and what to do …..
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Starting Six Sigma
• Six Sigma is a top-down methodology – that means that
the decision to implement comes from the top – whether
that is the top of the business, your division of the
business, or some other production unit.
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Starting Six Sigma
• The decision to take forward an improvement review
within the business has to come from executive buy-in.
• But, what if you are one of the leaders within the
business, how do you suggest or recommend Six
Sigma? Well, the simple answer is… You just do.
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Starting Six Sigma
• One of the key considerations of Six Sigma is the desire
to meet the needs of the customer.
• So, consider the business and its customers – and
remember the definition of a customer is someone who
receives the product (the ‘y’). They can be internal or
external customers.
• You’ll need to consider if there is any place where the
business is not meeting its customers’ needs. Or more
likely, where you think it is not meeting their needs.
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Starting Six Sigma
• This is where you need to focus your opportunity for
deployment.
• Deployment is the use of Six Sigma in examining the
quality of an area of the business.
• Six Sigma projects should be selected on the basis of
their cost-benefit analysis.
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Starting Six Sigma
• Every business has limited resources, and no matter
how many people you have trained within the business,
and to whatever level they are trained, there are only a
finite number of resources available to you.
• You’ll need to learn to maximize their application.
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Starting Six Sigma
• A simple method of evaluating projects uses the Pareto
Priority Index (PPI):
PPI = Savings ($) x Probability of Success
Cost x Completion Time
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Starting Six Sigma
• The PPI increases as the probability of success or
savings value increases, but decreases as the cost to
implement or the completion time becomes greater.
• How you calculate each of these values is open to
interpretation, but what is important is that no matter how
you choose to measure (as is evident through Six Sigma
as a whole), that measurement is accepted as accurate
by the business and is consistently applied.
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Starting Six Sigma
• An example of comparisons between projects can be
seen in the table below:
Project | Savings ($,000) | Probability of Success | Cost ($,000) | Completion (months) | PPI
A 250 95% 25 4.5 2.1
B 400 75% 12 10 2.5
C 700 50% 8 6 7.3
D 1500 60% 42 9 2.4
• In this table, the outcomes of the PPI for A, B & D are
broadly in line with each other, but Project C is
significantly higher. Therefore, Project C would be a first
choice to deploy.
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Starting Six Sigma
• This is not the only method and is not infallible as it does
not consider a number of important variables that may
be considered when deploying a project.
• Consideration of business reputations, customer or
stakeholder weight, supplier timing, or even staffing
impact are not taken into account here. Yet, these may
all be valid areas of consideration when deciding on a
deployment.
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Starting Six Sigma
• Applying a relatively simple formula like this can help to
focus opportunities of deployment and decision making
on which projects to fully deploy.
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Starting Six Sigma
• When you have decided upon project deployment, it is worth your time to get a rough idea of what resources you need for the project. Then, recruit a deployment leader.
• This scoping will put a very loose framework around the intended project. It need say nothing more than a few descriptive words (e.g., “Looking at the way we package our sandwiches,” “Should we consider emailing our customers,” or “Do customers need the tennis balls in a box?”)
• These may seem like strange little questions on their own, but they just start the process of focus prior to deployment.
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Starting Six Sigma
• We will come back to the role of the deployment leader
in the next unit when we look at how the team is made
up.
• We will also look into far more detail at focusing the
deployment activity when we look at the intrinsic
principles of Six Sigma in later units.
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Unit Summary
In this unit, you have learned about:
• Other Quality methodologies: ISO, Lean, and TQM
• What to consider before deploying a Six Sigma Project
• How to choose potential projects
• The Pareto Priority Index (PPI)
• Initial scoping questions of the project
• Managing Quality
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