In statistics, the 68-95-99.

7 rule, or three-sigma rule, or empirical rule, states that for a normal

distribution, nearly all values lie within 3 standard deviations of the mean.

About 68% of the values lie within 1 standard deviation of the mean. In statistical notation, this
is represented as: .

About 95% of the values lie within 2 standard deviations of the mean. The statistical notation for
this is: .

Nearly all (99.7%) of the values lie within 3 standard deviations of the mean. Statisticians use the
following notation to represent this: .

This rule is often used to quickly get a rough probability estimate of something, given its
standard deviation, if the population is assumed normal, thus also as a simple test for outliers (if
the population is assumed normal), and as a normality test (if the population is potentially not
normal).

Recall that to pass from a sample to a number of standard deviations, one computes the
deviation, either the error or residual (accordingly if one knows the population mean or only
estimates it), and then either uses standardizing (dividing by the population standard deviation),
if the population parameters are known, or studentizing (dividing by an estimate of the standard
deviation), if the parameters are unknown and only estimated.

To use as a test for outliers or a normality test, one computes the size of deviations in terms of
standard deviations, and compares this to expected frequency. Given a sample set, compute the
studentized residuals and compare these to the expected frequency: points that fall more than 3
standard deviations from the norm are likely outliers (unless the sample size is significantly
large, by which point one expects a sample this extreme), and if there are many points more than
3 standard deviations from the norm, one likely has reason to question the assumed normality of
the distribution. This holds ever more strongly for moves of 4 or more standard deviations.

One can compute more precisely, approximating the number of extreme moves of a given
magnitude or greater by a Poisson distribution, but simply, if one has multiple 4 standard
deviation moves in a sample of size 1,000, one has strong reason to consider these outliers or
question the assumed normality of the distribution.

Six Sigma is a business management strategy originally developed by Motorola, USA in 1986.[1]
[2]
As of 2010, it is widely used in many sectors of industry, although its use is not without
controversy.

Six Sigma seeks to improve the quality of process outputs by identifying and removing the
causes of defects (errors) and minimizing variability in manufacturing and business processes.[3]
It uses a set of quality management methods, including statistical methods, and creates a special
infrastructure of people within the organization ("Black Belts", "Green Belts", etc.) who are
experts in these methods.[3] Each Six Sigma project carried out within an organization follows a
defined sequence of steps and has quantified financial targets (cost reduction or profit increase).
[3]

The term six sigma originated from terminology associated with manufacturing, specifically
terms associated with statistical modelling of manufacturing processes. The maturity of a
manufacturing process can be described by a sigma rating indicating its yield, or the percentage
of defect-free products it creates. A six-sigma process is one in which 99.99966% of the products
manufactured are statistically expected to be free of defects (3.4 defects per million). Motorola
set a goal of "six sigmas" for all of its manufacturing operations, and this goal became a byword
for the management and engineering practices used to achieve it.

METHODS

Six Sigma projects follow two project methodologies inspired by Deming's Plan-Do-Check-Act
Cycle. These methodologies, composed of five phases each, bear the acronyms DMAIC and
DMADV.[12]

 DMAIC is used for projects aimed at improving an existing business process. [12] DMAIC is
pronounced as "duh-may-ick".
 DMADV is used for projects aimed at creating new product or process designs. [12] DMADV is
pronounced as "duh-mad-vee".

[edit] DMAIC

The DMAIC project methodology has five phases:

 Define the problem, the voice of the customer, and the project goals, specifically.
 Measure key aspects of the current process and collect relevant data.
 Analyze the data to investigate and verify cause-and-effect relationships. Determine what the
relationships are, and attempt to ensure that all factors have been considered. Seek out root
cause of the defect under investigation.
 Improve or optimize the current process based upon data analysis using techniques such as
design of experiments, poka yoke or mistake proofing, and standard work to create a new,
future state process. Set up pilot runs to establish process capability.
 Control the future state process to ensure that any deviations from target are corrected before
they result in defects. Implement control systems such as statistical process control, production
boards, and visual workplaces, and continuously monitor the process.

[edit] DMADV or DFSS

The DMADV project methodology, also known as DFSS ("Design For Six Sigma"),[12] features
five phases:

 Define design goals that are consistent with customer demands and the enterprise strategy.
 Measure and identify CTQs (characteristics that are Critical To Quality), product capabilities,
production process capability, and risks.
  Analyze to develop and design alternatives, create a high-level design and evaluate design
capability to select the best design.
 Design details, optimize the design, and plan for design verification. This phase may require
simulations.
 Verify the design, set up pilot runs, implement the production process and hand it over to the
process owner(s).

[edit] Quality management tools and methods used in Six Sigma

Within the individual phases of a DMAIC or DMADV project, Six Sigma utilizes many
established quality-management tools that are also used outside of Six Sigma. The following
table shows an overview of the main methods used.

 5 Whys  Histograms
 Analysis of variance  Quality Function Deployment (QFD)
 ANOVA Gauge R&R  Pareto chart
 Axiomatic design  Pick chart
 Business Process Mapping  Process capability
 Cause & effects diagram (also known as  Quantitative marketing research through
fishbone or Ishikawa diagram) use of Enterprise Feedback Management
 Chi-square test of independence and fits (EFM) systems
 Control chart  Regression analysis
 Correlation  Root cause analysis
 Cost-benefit analysis  Run charts
 CTQ tree  SIPOC analysis (Suppliers, Inputs, Process,
 Design of experiments Outputs, Customers)
 Failure mode and effects analysis (FMEA)  Taguchi methods
 General linear model  Taguchi Loss Function
 TRIZ

DMAIC Process
Define the
Problem
Measure &
Analysis
Improve
Control
- Provide full information about the problem such as the
rejection %, Suspected sources of variations for the problem,
type of response
Apply DOE techniques and arrive at the “Root cause”
(Controllable cause) for the problem
Validate the Root cause using B vs C
Identify and Implement solution for eliminating the root causes
Identify and Implement control measures for the root cause to
make sure that the problem is prevented from occurring

D:

Define the Strategic Direction of the organization

M:
Set Measures for the strategic objectives of the organization
A:
On a continual basis collect data on the measures set and Analyze using Six Sigma tools and
techniques
I:
Identify the opportunities for Improvement and convert them to Lean Six Sigma projects for
improvement
C:
Set up a management Control action of continuous reviews on the improvements made on the
Lean Six Sigma Projects

Six Sigma is a proven disciplined approach for improving measurable results for any organization. Six
Sigma project success stories exist from organizations including manufacturing, service, nonprofit,
government, research and healthcare. The key to Six Sigma is the completion of leadership sponsored
projects. Six Sigma Certification requires completing an actual Six Sigma project. SixSigma.us offers both
live and online programs

Six Sigma – what does it mean?

Six Sigma at many organizations simply means a measure of quality that strives for near
perfection. Six Sigma is a disciplined, data-driven approach and methodology for eliminating
defects (driving toward six standard deviations between the mean and the nearest specification
limit) in any process -- from manufacturing to transactional and from product to service.

The statistical representation of Six Sigma describes quantitatively how a process is performing.
To achieve Six Sigma, a process must not produce more than 3.4 defects per million
opportunities. A Six Sigma defect is defined as anything outside of customer specifications. A
Six Sigma opportunity is then the total quantity of chances for a defect. Process sigma can easily
be calculated using a Six Sigma calculator.

The fundamental objective of the Six Sigma methodology is the implementation of a

measurement-based strategy that focuses on process improvement and variation reduction
through the application of Six Sigma improvement projects. This is accomplished through the
use of two Six Sigma sub-methodologies: DMAIC and DMADV. The Six Sigma DMAIC
process (define, measure, analyze, improve, control) is an improvement system for existing
processes falling below specification and looking for incremental improvement. The Six Sigma
DMADV process (define, measure, analyze, design, verify) is an improvement system used to
develop new processes or products at Six Sigma quality levels. It can also be employed if a
current process requires more than just incremental improvement. Both Six Sigma processes are
executed by Six Sigma Green Belts and Six Sigma Black Belts, and are overseen by Six Sigma
Master Black Belts.

According to the Six Sigma Academy, Black Belts save companies approximately $230,000 per
project and can complete four to 6 projects per year. General Electric, one of the most successful
companies implementing Six Sigma, has estimated benefits on the order of $10 billion during the
first five years of implementation. GE first began Six Sigma in 1995 after Motorola and Allied
Signal blazed the Six Sigma trail. Since then, thousands of companies around the world have
discovered the far reaching benefits of Six Sigma.

Many frameworks exist for implementing the Six Sigma methodology. Six Sigma Consultants all
over the world have developed proprietary methodologies for implementing Six Sigma quality,
based on the similar change management philosophies and applications of tools.

    

Six Sigma Green Belt Certificate Program Topics Covered in the Program

Six Sigma is a disciplined, data-driven approach and methodology for eliminating

defects in any process—from manufacturing to transactional and from product  Introduction to six sigma
to service.
 Define

It is a measurement-based methodology that focuses on process improvement  Measure

and variation reduction. It is based on the organized application of a set of  
statistical/analytical and problem solving tools/techniques.  Analyze

 Improve
Overview
 Control

Six Sigma is all about mindset and culture shift that eliminates the
marginal methods that have been used in the past and replacing them with a set
Six Sigma Green Belt Certifica
of simple yet sophisticated statistical/analytical tools that continually produce
exceptional results in how processes operate. It helps to create a high
 Program
performance organization.

This is a 4days certificate program consisting of 6 modules that is designed Course

PI 09
to teach the six sigma way of process improvement. Each module contains theory Code
followed by case studies These sessions include group time and teaching/applying
the Six Sigma body of knowledge including:
Term: 2006

 The identification of core processes

 Defining customer requirements
Qualificati DEGEREE/DIPLOM
 Measuring current performance
on NTS IN FINAL YEA
 Defining opportunities for improvement
 Measuring the relevant processes requiring improvement
 Gathering and analyzing the data required to investigate causes
Location BANGALORE
 Improving, controlling, and redesigning the processes.

Benefits to the individual 29 SEPTEMBER-2n

Dates
OCTOBER (4days)
 Acquire the necessary abilities and skills to implement six sigma
effectively and economically.
 Acquire certification in a set of management disciplines that are fast- Timing 8.30AM-5.30 PM
becoming indispensable to meeting world-class standards of
performance.
 In firms undertaking the six sigma transformation, this program equips Required Fees /CANDIDATE Rs 15
participants to play a major role in its initiation and implementation.
 Acquire the prerequisites for accepting a leadership role in six sigma
transformations.
 Acquire the understanding and skills required be a high impact player in
the six sigma transformations. Online Registration
 Become highly visible to top management as a result of participation in Limited seats register ear
successful six sigma transformations.

Benefits to the company

TOOLS
 Develop a core group of managers and professional personnel who can
work as a team in the implementation of six sigma.
 Develop a comprehensive and integrated approach to six sigma that  Brain storming
takes in to account the necessary training required in all functions and at
 Pareto chart
all levels within the organization.
 Project Charter
 Develop an approach to six sigma that is appropriate for the
management team, resources, technology, and work force of the  SIPOC
organization.  Stake holder analysis
 Develop a more accountable and responsible management group capable  Process mapping
of becoming industry leaders.
 Fish bone analysis
 Become more effective operationally in the following ways:
o Shorter cycle times for all key processes.  Measurement system anal
o Striving for and/or meeting six sigma quality standards gage R&R
o Continuous cost reduction based on continuous process  SPC
improvements  Control charts
o Increased productivity as both management, staff, and
 Process capability
workforce become more disciplined in the six sigma methodology
o Synchronous work flow based on more effective process linkage  Hypothesis testing
o Elimination of waiting time within and between processes  ANOVA
o Waste reduction resulting from meeting more demanding
 performance standards
o Improved customer service based on more robust and  DOE
dependable process designs
o More efficient use of resources resulting from both improved
 
process designs and better management practices
o Elimination of “silo management” in the organization structure

Topics

Introduction to six sigma

 Six Sigma and achieving competitive advantage

 Understanding roles of leadership and key players
 Overview of DMAIC methodology

Define

 Identifying customers and customer requirements

 Developing team objectives, goals and targets
 Process Mapping, SIPOC

Measure

 Process Analysis and documentation

 Determining measurements
 Probability and statistics
 Analyzing the measurement system
 Analyzing process capability
 Introduction to

Analyze

 Exploratory data analysis

 Sources of variation
 Hypothesis testing
 Introduction to ANOVA
 Regression Analysis

Improve

 Developing solutions
 Design of experiments
 Process Optimization
 Response Surface Methodology
 Evolutionary Operations

Control

 Statistical process control

 Advanced statistical process control
 Implementing process controls
 Attribute and variable control charts
  Monitoring progress

Project Work (Apply DMAIC)

Participants define a problem, perform , identify critical-to-quality (CTQ)

characteristics, establish a process map, analyze for root cause, improve the
process and implement process controls. At the end of the class, candidates
present their project work

Who Should Attend

 GENERAL MANAGERS
 FACTORY MANAGERS  MANUFACTURING
 BUSINESS MANAGERS  BPO
 FINANCE /COSTING  SOFTWARE
MANAGERS  MEDICAL
 PRODUCTION MANAGERS  HOTELS
 PROJECT MANAGERS  AIR LINES
 QUALITY MANAGERS  BANKING
 GROUP LEADS  CONSTRUCTION
 SERVICE MANAGERS  COLLEGES

    

    

What is Six Sigma?

Six Sigma is a management methodology meant to drive process improvements in the

organization through quantitative approach. Six Sigma has kept its edge while some other
management approaches are in perishable stage or already perished due to following reasons:

1. The quantitative analytics – that we cannot remove from the business environment
2. There is no other tangible benefits apart from the actual improvement which the
organization realizes during the Six Sigma journey.

The Six Sigma methodology is well rooted in statistics and statistical mathematics. Learn
why six standard deviations is worthwhile for your organization to measure

What does it mean to be "Six Sigma"? Six Sigma at many organizations simply means a
measure of quality that strives for near perfection. But the statistical implications of a Six
 Sigma program go well beyond the qualitative eradication of customer-perceptible
defects. It's a methodology that is well rooted in mathematics and statistics.

The objective of Six Sigma Quality is to reduce process output variation so that on a long
term basis, which is the customer's aggregate experience with our process over time, this
will result in no more than 3.4 defect Parts Per Million (PPM) opportunities (or 3.4
Defects Per Million Opportunities – DPMO). For a process with only one specification
limit (Upper or Lower), this results in six process standard deviations between the mean
of the process and the customer's specification limit (hence, 6 Sigma). For a process with
two specification limits (Upper and Lower), this translates to slightly more than six
process standard deviations between the mean and each specification limit such that the
total defect rate corresponds to equivalent of six process standard deviations.

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DFSS Technology Tips

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Design for Six Sigma (DFSS) Sections

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DFSS Project Examples
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Define, Measure, Analyze, Improve, Control. Incremental process improvement using Six Sigma
methodology. See DMAIC Methodology

Pronounced (Duh-May-Ick).

DMAIC refers to a data-driven quality strategy for improving processes, and is an integral part of
the company's Six Sigma Quality Initiative. DMAIC is an acronym for five interconnected
phases: Define, Measure, Analyze, Improve, and Control.

Each step in the cyclical DMAIC Process is required to ensure the best possible results. The process
steps:

Define the Customer, their Critical to Quality (CTQ) issues, and the Core Business Process
involved.
 Define who customers are, what their requirements are for products and services, and what their
expectations are

 Define project boundaries the stop and start of the process

 Define the process to be improved by mapping the process flow

Measure the performance of the Core Business Process involved.

 Develop a data collection plan for the process

 Collect data from many sources to determine types of defects and metrics

 Compare to customer survey results to determine shortfall

Analyze the data collected and process map to determine root causes of defects and opportunities
for improvement.

 Identify gaps between current performance and goal performance

 Prioritize opportunities to improve

 Identify sources of variation

Improve the target process by designing creative solutions to fix and prevent problems.

 Create innovate solutions using technology and discipline

 Develop and deploy implementation plan

Control the improvements to keep the process on the new course.

 Prevent reverting back to the "old way"

 Require the development, documentation and implementation of an ongoing monitoring plan

 Institutionalize the improvements through the modification of systems and structures (staffing,
training, incentives)
The Six Sigma methodology follows the Define, Measure, Analyze, Improve, Control (DMAIC)
roadmap for process improvement.

The Six Sigma DMAIC (Define, Measure, Analyze, Improve, Control) methodology can be
thought of as a roadmap for problem solving and product/process improvement. Most companies
begin implementing Six Sigma using the DMAIC methodology, and later add the DFSS (Design
for Six Sigma, also known as DMADV or IDDOV) methodologies when the organizational
culture and experience level permits. You can read the main differences between DMAIC and
DMADV, but we'll focus on the DMAIC in this article.

While the DMAIC methodology presented below may appear linear and explicitly defined, it
should be noted that an iterative approach may be necessary -- especially for Black Belts and
Green Belts that are new to the tools and techniques that make up DMAIC. For instance, you
may find that upon analyzing your data (Analyze phase) you did not gather enough data to
isolate the root cause of the problem. At this point, you may iterate back to the Measure phase. In
addition, prior knowledge of the tools and techniques is necessary in determining which tools are
useful in each phase. Remember, the appropriate application of tools becomes more critical for
effectiveness than correctness, and you don't need to use all the tools all the time.

DMAIC Phase Steps Tools Used

D - Define Phase: Define the project goals and customer (internal and external) deliverables.

 Define Customers and Requirements (CTQs)

 Develop Problem Statement, Goals and  Project Charter
Benefits  Process Flowchart
 Identify Champion, Process Owner and  SIPOC Diagram
Team  Stakeholder Analysis
 Define Resources  DMAIC Work Breakdown Structure
 Evaluate Key Organizational Support  CTQ Definitions
 Develop Project Plan and Milestones  Voice of the Customer Gathering
 Develop High Level Process Map

Define Tollgate Review

M - Measure Phase: Measure the process to determine current performance; quantify the problem.

 Define Defect, Opportunity, Unit and  Process Flowchart

Metrics
 Detailed Process Map of Appropriate Areas
 Develop Data Collection Plan
 Validate the Measurement System
 Collect the Data
 Begin Developing Y=f(x) Relationship
 Data Collection Plan/Example
 Benchmarking
 Measurement System Analysis/Gage
R&R
 Voice of the Customer Gathering
 Process Sigma Calculation
  Determine Process Capability and Sigma
Baseline

Measure Tollgate Review

A - Analyze Phase: Analyze and determine the root cause(s) of the defects.

 Histogram
 Pareto Chart
 Time Series/Run Chart
 Define Performance Objectives  Scatter Plot
 Identify Value/Non-Value Added Process  Regression Analysis
Steps  Cause and Effect/Fishbone Diagram
 Identify Sources of Variation  5 Whys
 Determine Root Cause(s)  Process Map Review and Analysis
 Determine Vital Few x's, Y=f(x) Relationship  Statistical Analysis
 Hypothesis Testing (Continuous and
Discrete)
 Non-Normal Data Analysis

Analyze Tollgate Review

I - Improve Phase: Improve the process by eliminating defects.

 Perform Design of Experiments  Brainstorming

 Develop Potential Solutions  Mistake Proofing
 Define Operating Tolerances of Potential  Design of Experiments
System  Pugh Matrix
 Assess Failure Modes of Potential Solutions  House of Quality
 Validate Potential Improvement by Pilot  Failure Modes and Effects Analysis
Studies (FMEA)
 Correct/Re-Evaluate Potential Solution  Simulation Software

Improve Tollgate Review

C - Control Phase: Control future process performance.

 Define and Validate Monitoring and Control  Process Sigma Calculation

System  Control Charts (Variable and Attribute)
 Develop Standards and Procedures  Cost Savings Calculations
 Implement Statistical Process Control  Control Plan
 Determine Process Capability
 Develop Transfer Plan, Handoff to Process
Owner
  Verify Benefits, Cost Savings/Avoidance,
Profit Growth
 Close Project, Finalize Documentation
 Communicate to Business, Celebrate

Control Tollgate Review

The DMAIC methodology should be used when a product or process is in existence at your
company but is not meeting customer specification or is not performing adequately. For DMAIC
milestone reviews, there are certain deliverables, checkpoints, questions and concerns that the
Black Belt and improvement team should be aware of prior to a tollgate/milestone review.

In lieu of or in addition to your Master Black Belt tollgate/milestone preparation review, the
following Six Sigma DMAIC quick reference sheets can help prepare for your milestone review.

Jump to: Define, Measure, Analyze, Improve, Control

Define Phase

Deliverables Of Phase: 

 Fully trained team is formed, supported, and committed to work on improvement project. 
 Customers identified and high impact characteristics (CTQs) defined, team charter developed,
business process mapped. 

Checkpoints For Completion: 

Team Readiness 

 Team is sponsored by a champion or business leader.

 Team formed and team leaders (MBBs/Coaches and BBs/Project Leads) assigned.
 Improvement team members fully trained on Six Sigma and DMAIC.
 Full participation by members in regularly held team meetings.
 Team members perform project work when assigned and in a timely fashion.
 Team members regularly document their project work.
 Team is equipped with available and reliable resources.   

Customers (and CTQs) 

 Customer(s) identified and segmented according to their different needs and requirements. 
 Data collected and displayed to better understand customer(s) critical needs and requirements. 

Team Charter 
  Project management charter, including business case, problem and goal statements, project
scope, milestones, roles and responsibilities, communication plan. 

Business Process Mapping 

 Completed, verified, and validated high-level 'as is' (not 'should be' or 'could be') business
process map. 
 Completed SIPOC representation, describing the Suppliers, Inputs, Process, Outputs, and
Customers.  

Questions To Determine Appropriate Application: 

Team Readiness 

 Who are the improvement project team members, including BBs/Project Leads and
MBBs/Coaches? 
 Has everyone on the team, including the team leaders, been properly trained (on DMAIC)? 
 Does the team have regular meetings? 
 How often are the team meetings? 
 Is there regularly 100% attendance at the team meetings? If not, have appointed substitutes
attended to preserve cross-functionality and full representation? 
 If substitutes have been appointed, have they been briefed on the project charter and goals and
received regular communications as to the project's progress to date? 
 Has the project work been fairly and/or equitably divided and delegated among team members
who are qualified and capable to perform the work? Has everyone contributed? 
 Are there any constraints known that bear on the ability to perform project work? How is the
team addressing them? 
 How is the team tracking and documenting its work? 
 Is the team adequately staffed with the desired cross-functionality? If not, what additional
resources are available to the team? 

Customers (and CTQs) 

 Has the customer(s) been identified? 

 Are there different segments of customers? 
 Has the improvement team collected the 'voice of the customer' (obtained feedback -
qualitative and quantitative)? 
 What customer feedback methods were used to solicit their input? 
 Have the customer needs been translated into specific, measurable requirements? How? 

Team Charter 

 Has a team charter been developed and communicated? 

 Has the charter changed at all during the course of the project? If so, when did it change and
why? 
 Does the charter include the following? 
 -  Business Case: What are the compelling business reasons for embarking on this project? Is the
project linked to key business goals and objectives? What key business process output
measure(s) will the project leverage and how? What are the rough order estimates on cost
savings/opportunities on this project?

-  Problem Statement: What specifically is the problem? Where does it occur? When does it
occur? What is its extent?

-  Goal Statement: What is the goal or target for the improvement team's project? Do the problem
and goal statements meet the SMART criteria (specific, measurable, attainable, relevant, and
time-bound)? Has anyone else (internal or external to the organization) attempted to solve this
problem or a similar one before? If so, what knowledge can be leveraged from these previous
efforts? How will the project team and the organization measure complete success for this
project?

-  Roles and Responsibilities: What are they for each team member and its leadership? Where is
this documented?

-  Project Scope: What are the boundaries of the scope? What is in bounds and what is not? What
is the start point? What is the stop point? How does the project manager ensure against scope
creep? Is the project scope manageable? What constraints exist that might impact the team?

-  Milestones: When was the project start date? When is the estimated completion date? Is the
project currently on schedule according to the plan? Has a project plan, Gantt chart, or similar
been developed/completed? How did the project manager receive input to the development of the
plan and the estimated completion dates/times of each activity? Is there a critical path to
complete the project? How will variation in the actual durations of each activity be dealt with to
ensure that the expected project completion date is met?

-  Communication Plan: What are the dynamics of the communication plan? What critical
content must be communicated - who, what, when, where, and how? When are meeting minutes
sent out? Who is on the distribution list? How do you keep key subject matter experts in the
loop? 
  
Business Process Mapping 

 Has a high-level 'as is' process map been completed, verified and validated? 
 Has a SIPOC diagram been produced describing the Suppliers, Inputs, Process, Outputs, and
Customers? 
 Is the improvement team aware of the different versions of a process: what they think it is vs.
what it actually is vs. what it should be vs. what it could be? 
 Is the current 'as is' process being followed? If not, what are the discrepancies? 
 Are different versions of process maps needed to account for the different types of inputs? 
 How was the 'as is' process map developed, reviewed, verified and validated? 
 What tools and roadmaps did you use for getting through the Define phase?
Measure Phase

Deliverables Of Phase: 

Key measures identified, data collection planned and executed, process variation displayed and
communicated, performance baselined, sigma level calculated. 

Checkpoints For Completion: 

Key Measures Identified 

 Key measures identified and agreed upon. 

 High impact defects defined and identified in the business process. 

Data Collection Planned and Executed 

 Solid data collection plan established that includes measurement systems analysis. 
 Data collected on key measures that were identified. 

Process Variation Displayed/Communicated 

 Process variation components displayed/communicated using suitable charts, graphs, plots. 

 Long term and short term variability accounted for. 

Performance Baseline/Sigma Calculation 

 Measure baseline process performance (capability, yield, sigma level). 

Questions To Determine Appropriate Application: 

Key Measures Identified 

 What are the key input variables? What the key process variables? What are the key output
variables? 
 What key measures identified indicate the performance of the business process? 
 What are the agreed upon definitions of the high impact characteristics (CTQs), defect(s),
unit(s), and opportunities that will figure into the sigma calculations and process capability
metrics? 

Data Collection Planning and Execution 

 Was a data collection plan established? 

 What data was collected (past, present, future/ongoing)? 
 Who participated in the data collection? 
 How did the team select a sample? 
 What has the team done to assure the stability and accuracy of the measurement process? 
 Was a gauge R&R conducted? 
  Was stratification needed in the data collection and analysis? 

Process Variation Displayed/Communicated 

 What charts has the team used to display the components of variation in the process? 
 What does the chart tell us in terms of variation? 

Performance Baseline/Sigma Calculation 

 What is the current process performance in terms of it capability indices? 

 What is the current process performance in terms of its yield or sigma level(s)? 
 How large is the gap between current performance and the customer-specified (goal)
performance? 
 Have you found any 'ground fruit' or 'low-hanging fruit' for immediate remedies to the gap in
performance? 
 What particular quality tools did the team find helpful in getting through the measure phase?

Analyze Phase

Deliverables Of Phase: 

Data and process analysis, root cause analysis, quantifying the gap/opportunity. 
 
Checkpoints For Completion: 

Data and Process Analysis 

 Identify gaps between current performance and the goal performance. 

Root Cause Analysis 

 Generate list of possible causes (sources of variation). 

 Segment and stratify possible causes (sources of variation). 
 Prioritize list of 'vital few' causes (key sources of variation). 
 Verify and quantify the root causes of variation. 

Quantifying the Gap/Opportunity 

 Determine the performance gap. 

 Display and communicate the gap/opportunity in financial terms. 

Questions To Determine Appropriate Application: 

Data and Process Analysis 

 What does the data say about the performance of the business process? 
  Did any value-added analysis or 'lean thinking' take place to identify some of the gaps shown on
the 'as is' process map? 
 Was a detailed process map created to amplify critical steps of the 'as is' business process? 
 How was the map generated, verified, and validated? 
 What did the team gain from developing a sub-process map? 
 What were the crucial 'moments of truth' on the map? 
 Were there any cycle time improvement opportunities identified from the process analysis? 
 Were any designed experiments used to generate additional insight into the data analysis? 
 Did any additional data need to be collected? 
 What model would best explain the behavior of output variables in relation to input variables? 

Root Cause Analysis 

 What tools were used to generate the list of possible causes? 

 Was a cause-and-effect diagram used to explore the different types of causes (or sources of
variation)? 
 What tools were used to narrow the list of possible causes? 
 Were Pareto charts (or similar) used to portray the 'heavy hitters' (or key sources of variation)? 
 What conclusions were drawn from the team's data collection and analysis? 
 How did the team reach these conclusions? 

Quantifying the Gap/Opportunity 

 What is the cost of poor quality as supported by the team's analysis? 

 Is the process severely broken such that a re-design is necessary? 
 Would this project lend itself to a DFSS project? 
 What are the revised rough order estimates of the financial savings/opportunity for the
improvement project?
 Have the problem and goal statements been updated to reflect the additional knowledge gained
from the analyze phase? 
 Have any additional benefits been identified that will result from closing all or most of the gaps? 
 What were the financial benefits resulting from any 'ground fruit or low-hanging fruit' (quick
fixes)? 
 What quality tools were used to get through the analyze phase?

Improve Phase

Deliverables Of Phase: 

Generate (and test) possible solutions, select the best solutions, design implementation plan. 

Checkpoints For Completion: 

Generating (and Testing) Possible Solutions 

 Possible solutions generated and tested. 

Selecting The Best Solution(s) 

 Optimal solution selected based on testing and analysis. 

 New and improved process ('should be') maps developed. 
 Cost/benefit analysis of optimal solution(s). 
 Small-scale pilot for proposed improvement(s). 
 Pilot data collected and analyzed.
 Improved process ('should be') maps modified based on pilot data and analysis. 
 Project impact on utilizing the best solution(s). 

Designing Implementation Plan 

 Solution implementation plan established, including schedule/work breakdown structure,

resources, risk management plan, cost/budget, and control plan. 
 Contingency plan established.  

Questions To Determine Appropriate Application: 

Generating (And Testing) Possible Solutions 

 How did the team generate the list of possible solutions? 

 What tools were used to tap into the creativity and encourage 'outside the box' thinking? 

Selecting The Best Solution(s) 

 What tools were used to evaluate the potential solutions? 

 Were any criteria developed to assist the team in testing and evaluating potential solutions? 
 What were the underlying assumptions on the cost-benefit analysis? 
 Are there any constraints (technical, political, cultural, or otherwise) that would inhibit certain
solutions? 
 Was a pilot designed for the proposed solution(s)? 
 Describe the design of the pilot and what tests were conducted, if any? 
 What conclusions were drawn from the outcomes of the pilot? 
 What lessons, if any, from the pilot were incorporated into the design of the full-scale solution? 

Designing The Implementation Plan 

 Is the improvement plan best served by using the DFSS approach? 

 What is the implementation plan? 
 What poka-yoke or error proofing will be done to address some of the discrepancies observed in
the 'as is' process? 
 What does the 'should be' process map/design look like? 
 How does the solution remove the key sources of variation discovered in the analyze phase? 
 What attendant changes will need to be made to ensure that the solution is successful? 
 What communications are necessary to support the implementation of the solution? 
 How will the team or the process owner(s) monitor the implementation plan to see that it is
working as intended? 
  What is the team's contingency plan for potential problems occurring in implementation? 
 How will the organization know that the solution worked? 
 What tools were most useful during the improve phase?

Control Phase

Deliverables Of Phase: 

Documented and implemented monitoring plan, standardized process, documented procedures,

response plan established and deployed, transfer of ownership (project closure). 

Checkpoints For Completion: 

Monitoring Plan 

 Control plan in place for sustaining improvements (short and long-term). 

Process Standardization 

 New process steps, standards, and documentation are ingrained into normal operations. 

Documented Procedures 

 Operating procedures are consistent. 

 Knowledge gained on process is shared and institutionalized. 

Response Plan 

 Response plans established, understood, and deployed. 

Transfer of Ownership (Project Closure) 

 Transfer ownership and knowledge to process owner and process team tasked with the
responsibilities. 

Questions To Determine Appropriate Application: 

Monitoring Plan 

 What is the control/monitoring plan? 

 How will the process owner and team be able to hold the gains? 
 What key inputs and outputs are being measured on an ongoing basis? 
 How will input, process, and output variables be checked to detect for sub-optimal conditions? 
 How will new or emerging customer needs/requirements be checked/communicated to orient
the process toward meeting the new specifications and continually reducing variation? 
 Are control charts being used or needed? 
  How will control chart readings and control chart limits be checked to effectively monitor
performance? 
 Will any special training be provided for control chart interpretation?
 Is this knowledge imbedded in the response plan? 
 What is the most recent process yield (or sigma calculation)? 
 Does the process performance meet the customer's requirements? 

Process Standardization 

 Has the improved process and its steps been standardized? 

Documented Procedures 

 Is there documentation that will support the successful operation of the improvement? 
 Does job training on the documented procedures need to be part of the process team's
education and training? 
 Have new or revised work instructions resulted? 
 Are they clear and easy to follow for the operators? 

Response Plan 

 Is a response plan in place for when the input, process, or output measures indicate an 'out-of-
control' condition? 
 What are the critical parameters to watch? 
 Does the response plan contain a definite closed loop continual improvement scheme (e.g.,
plan-do-check-act)? 
 Are suggested corrective/restorative actions indicated on the response plan for known causes to
problems that might surface? 
 Does a troubleshooting guide exist or is it needed? 

Transfer Of Ownership (Project Closure) 

 Who is the process owner? 

 How will the day-to-day responsibilities for monitoring and continual improvement be
transferred from the improvement team to the process owner? 
 How will the process owner verify improvement in present and future sigma levels, process
capabilities?
 Is there a recommended audit plan for routine surveillance inspections of the DMAIC project's
gains? 
 What is the recommended frequency of auditing? 
 What should the next improvement project be that is related to the process? 
 What quality tools were useful in the control phase? 

Integrating and Institutionalizing Improvements, Knowledge and Learnings 

 What other areas of the organization might benefit from the project team's improvements,
knowledge, and learning? 
  How might the organization capture best practices and lessons learned so as to leverage
improvements across the business? 
 What other systems, operations, processes, and infrastructures (hiring practices, staffing,
training, incentives/rewards, metrics/dashboards/scorecards, etc.) need updates, additions,
changes, or deletions in order to facilitate knowledge transfer and improvements? 

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Tools & Templates

 Building Valuable Process Maps Takes Skill and Time
Latest Discussion
A great process map should show where
improvements can be made, where cycle time  Re:Box Cox transformation
Stan 2.3.2011 0:16
delays exist and where smooth handoffs are not
 Box Cox transformation
taking place. Creating a process map should be
JCastillo 2.2.2011 10:51
the first act a company performs when seeking to  Re:Confidence intervals in order
make process improvements. statistics
Exiguus 2.2.2011 7:08
 Re:Full Factorial Design with 2
Factors and 5 ...
Robert Butler 2.2.2011 6:54
Read more...
More...


Six Sigma Quality Tools and

Templates
  5S
 Affinity Diagram/KJ Analysis
 Analysis of Variance (ANOVA)
 Analytic Hierarchy Process (AHP)
 Brainstorming
 Calculators
 Capability Indices/Process Capability
 Cause & Effect
 Control Charts
 Design of Experiments (DOE)
 FMEA
 Graphical Analysis Charts
 Hypothesis Testing
 Kano Analysis
 Measurement Systems Analysis (MSA)/Gage R&R
 Normality
 Pareto
 Poka Yoke
 Process Mapping
 Project Charter
 QFD/House of Quality
 RACI Diagram
 Regression
 Risk Management
 Sampling/Data
 Simulation
 SIPOC/COPIS
 Software
 Statistical Analysis
 Templates
 Value Stream Mapping
 Variation
 Wizards

Six Sigma Costs And Savings

In the world of Six Sigma quality, the saying holds true: it takes money to save money using the Six
Sigma quality methodology. You can't expect to significantly reduce costs and increase sales using Six
Sigma without investing in training, organizational infrastructure and culture evolution.
Many people say that it takes money to make money. In the world of Six Sigma quality, the
saying also holds true: it takes money to save money using the Six Sigma quality methodology.
You can't expect to significantly reduce costs and increase sales using Six Sigma without
investing in training, organizational infrastructure and culture evolution.

Sure you can reduce costs and increase sales in a localized area of a business using the Six Sigma
quality methodology -- and you can probably do it inexpensively by hiring an ex-Motorola or GE
Black Belt. I like to think of that scenario as a "get rich quick" application of Six Sigma. But is it
going to last when a manager is promoted to a different area or leaves the company? Probably
not. If you want to produce a culture shift within your organization, a shift that causes every
employee to think about how their actions impact the customer and to communicate within the
business using a consistent language, it's going to require a resource commitment. It takes money
to save money.

How much financial commitment does Six Sigma require and what magnitude of financial
benefit can you expect to receive? We all have people that we must answer to -- and rhetoric
doesn't pay the bills or keep the stockholders happy (anymore). I was tired of reading web pages
or hearing people say:

"Companies of all types and sizes are in the midst of a quality revolution. GE saved $12 billion over five
years and added $1 to its earnings per share. Honeywell (AlliedSignal) recorded more than $800 million
in savings."

"GE produces annual benefits of over $2.5 billion across the organization from Six Sigma."

"Motorola reduced manufacturing costs by $1.4 billion from 1987-1994."

"Six Sigma reportedly saved Motorola $15 billion over the last 11 years."

The above quotations may in fact be true, but pulling the numbers out of the context of the
organization's revenues does nothing to help a company figure out if Six Sigma is right for them.
For example, how much can a $10 million or $100 million company expect to save?

I investigated what the companies themselves had to say about their Six Sigma costs and savings
-- I didn't believe anything that was written on third party websites, was estimated by "experts,"
or was written in books on the topic. I reviewed literature and only captured facts found in
annual reports, website pages and presentations found on company websites.

While recent corporate events like the Enron and WorldCom scandals might lead us to believe
that not everything we read in a company's annual report is valid, I am going to provide the
following information based on the assumption that these Six Sigma companies operate with
integrity until proven otherwise.

I investigated Motorola, Allied Signal, GE and Honeywell. I choose these four companies
because they are the companies that invented and refined Six Sigma -- they are the most mature
in their deployments and culture changes. As the Motorola website says, they invented it in 1986.
Allied Signal deployed Six Sigma in 1994, GE in 1995. Honeywell was included because Allied
Signal merged with Honeywell in 1999 (they launched their own initiative in 1998). Many
companies have deployed Six Sigma between the years of GE and Honeywell -- we'll leave those
companies for another article.

Table 1: Companies And The Year They Implemented Six Sigma

Company Name Year Began Six Sigma

Motorola (NYSE:MOT) 1986

Allied Signal (Merged With Honeywell in 1999) 1994

GE (NYSE:GE) 1995

Honeywell (NYSE:HON) 1998

Ford (NYSE:F) 2000

Table 2 identifies by company, the yearly revenues, the Six Sigma costs (investment) per year,
where available, and the financial benefits (savings). There are many blanks, especially where
the investment is concerned. I've presented as much information as the companies have publicly
disclosed.

Table 2: Six Sigma Cost And Savings By Company

% Revenue % Revenue
Year Revenue ($B) Invested ($B) Savings ($B)
Invested Savings

Motorola

1986-2001 356.9(e) ND - 16 1 4.5

Allied Signal

1998 15.1 ND - 0.5 2 3.3

GE

1996 79.2 0.2 0.3 0.2 0.2

1997 90.8 0.4 0.4 1 1.1

1998 100.5 0.5 0.4 1.3 1.2

1999 111.6 0.6 0.5 2 1.8

1996-1999 382.1 1.6 0.4 4.4 3 1.2

Honeywell

1998 23.6 ND - 0.5 2.2

1999 23.7 ND - 0.6 2.5

2000 25.0 ND - 0.7 2.6

1998-2000 72.3 ND - 1.8 4 2.4

Ford

2000-2002 43.9 ND - 16 2.3

Key:
$B = $ Billions, United States
(e) = Estimated, Yearly Revenue 1986-1992 Could Not Be Found
ND = Not Disclosed
Note: Numbers Are Rounded To The Nearest Tenth

Although the complete picture of investment and savings by year is not present, Six Sigma
savings can clearly be significant to a company. The savings as a percentage of revenue vary
from 1.2% to 4.5%. And what we can see from the GE deployment is that a company shouldn't
expect more than a breakeven the first year of implementation. Six Sigma is not a "get rich
quick" methodology. I like to think of it like my retirement savings plan -- Six Sigma is a get
rich slow methodology -- the take-away point being that you will get rich if you plan properly
and execute consistently.
As GE's 1996 annual report states, "It has been estimated that less than Six Sigma quality, i.e.,
the three-to-four Sigma levels that are average for most U.S. companies, can cost a company as
much as 10-15% of its revenues. For GE, that would mean $8-12 billion." With GE's 2001
revenue of $111.6 billion, this would translate into $11.2-16.7 billion of savings. Although $2
billion worth of savings in 1999 is impressive, it appears that even GE hasn't been able to yet
capture the losses due to poor quality -- or maybe they're above the three-to-four Sigma levels
that are the average for most U.S. companies?

In either case, 1.2-4.5% of revenue is significant and should catch the eye of any CEO or CFO.
For a $30 million a year company, that can translate into between $360,000 and $1,350,000 in
bottom-line-impacting savings per year. It takes money to make money. Is investing in Six
Sigma quality, your employees and your organization's culture worth the money? Only you and
your executive leadership team can decide the answer to that question.

References:
1. Motorola Six Sigma Services. Motorola University. 22 July 2002
<http://mu.motorola.com/sigmasplash.htm>.
2. AlliedSignal Inc. 1998 Annual Report. Honeywell Inc. 22 July 2002
<http://www.honeywell.com/investor/otherpdfs/ALD98.pdf>.
3. GE Investor Relations Annual Reports. General Electric Company. 22 July 2002
<http://www.ge.com/company/investor/annreports.htm>.
4. Honeywell Annual Reports. Honeywell Inc. 22 July 2002
<http://investor.honeywell.com/ireye/ir_site.zhtml?ticker=HON&script=700>.
5. Better Understand Six Sigma Plus With Honeywell's Special PowerPoint Presentation.
Honeywell Inc. 22 July 2002 <http://www.honeywell.com/sixsigma/page4_1.html>.
6. Quality Digest, "Six Sigma at Ford Revisited", June 2003, p. 30.
<http://www.qualitydigest.com/june03/articles/02_article.shtml>.

Where did the name "Six Sigma" come from?

Wednesday, 25 February 2004 16:15

In my recollection, two recurring questions have dominated the field of six sigma.  The first
inquiry can be described by the global question: “Why 6s and not some other level of
capability?”  The second inquiry is more molecular.  It can be summarized by the question:
“Where does the 1.5s shift factor come from – and why 1.5 versus some other magnitude?”  For
details on this subject, reference: “Harry, M. J. “Resolving the Mysteries of Six Sigma:
Statistical Constructs and Engineering Rationale.” First Edition 2003. Palladyne Publishing.
Phoenix, Arizona. (Note: this particular publication will be available by October 2003).  But
until then, we will consider the following thumbnail sketch.

At the onset of six sigma in 1985, this writer was working as an engineer for the Government
Electronics Group of Motorola.  By chance connection, I linked up with another engineer by the
name of Bill Smith (originator of the six sigma concept in 1984).  At that time, he suggested
Motorola should require 50 percent design margins for all of its key product performance
specifications.  Statistically speaking, such a "safety margin" is equivalent to a 6 sigma level of
capability.

When considering the performance tolerance of a critical design feature, he believed a 25 percent
“cushion” was not sufficient for absorbing a sudden shift in process centering.  Bill believed the
typical shift was on the order of 1.5s (relative to the target value).  In other words, a four sigma
level of capability would normally be considered sufficient, if centered.  However, if the process
center was somehow knocked off its central location (on the order of 1.5s), the initial capability
of 4s would be degraded to 4.0s – 1.5s = 2.5s.  Of course, this would have a consequential impact
on defects.  In turn, a sudden increase in defects would have an adverse effect on reliability.  As
should be apparent, such a domino effect would continue straight up the value chain.

Regardless of the shift magnitude, those of us working this issue fully recognized that the initial
estimate of capability will often erode over time in a “very natural way” – thereby increasing the
expected rate of product defects (when considering a protracted period of production). 
Extending beyond this, we concluded that the product defect rate was highly correlated to the
long-term process capability, not the short-term capability.  Of course, such conclusions were
predicated on the statistical analysis of empirical data gathered on a wide array of electronic
devices. 

Thus, we come to understand three things.  First, we recognized that the instantaneous
reproducibility of a critical-to-quality characteristic is fully dependent on the “goodness of fit”
between the operating bandwidth of the process and the corresponding bandwidth of the
performance specification.  Second, the quality of that interface can be substantively and
consequentially disturbed by process centering error.  Of course, both of these factors profoundly
impact long-term capability.  Third, we must seek to qualify our critical processes at a 6s level of
short-term capability if we are to enjoy a long-term capbility of 4s.

By further developing these insights through applied research, we were able to greatly extend our
understanding of the many statistical connections between such things as design margin, process
capability, defects, field reliability, customer satisfaction, and economic success.

The History of Six Sigma

Six Sigma has evolved over time. The concepts behind Six Sigma can be traced through the
centuries as the method took shape into what it is today.

The roots of Six Sigma as a measurement standard can be traced back to Carl Frederick Gauss
(1777-1855) who introduced the concept of the normal curve. Six Sigma as a measurement
standard in product variation can be traced back to the 1920's when Walter Shewhart showed that
three sigma from the mean is the point where a process requires correction. Many measurement
standards (Cpk, Zero Defects, etc.) later came on the scene but credit for coining the term "Six
Sigma" goes to a Motorola engineer named Bill Smith. (Incidentally, "Six Sigma" is a federally
registered trademark of Motorola).
In the early and mid-1980s with Chairman Bob Galvin at the helm, Motorola engineers decided
that the traditional quality levels -- measuring defects in thousands of opportunities -- didn't
provide enough granularity. Instead, they wanted to measure the defects per million
opportunities. Motorola developed this new standard and created the methodology and needed
cultural change associated with it. Six Sigma helped Motorola realize powerful bottom-line
results in their organization - in fact, they documented more than $16 Billion in savings as a
result of our Six Sigma efforts.

Since then, hundreds of companies around the world have adopted Six Sigma as a way of doing
business. This is a direct result of many of America's leaders openly praising the benefits of Six
Sigma. Leaders such as Larry Bossidy of Allied Signal (now Honeywell), and Jack Welch of
General Electric Company. Rumor has it that Larry and Jack were playing golf one day and Jack
bet Larry that he could implement Six Sigma faster and with greater results at GE than Larry did
at Allied Signal. The results speak for themselves.

Six Sigma has evolved over time. It's more than just a quality system like TQM or ISO. It's a
way of doing business. As Geoff Tennant describes in his book Six Sigma: SPC and TQM in
Manufacturing and Services: "Six Sigma is many things, and it would perhaps be easier to list all
the things that Six Sigma quality is not. Six Sigma can be seen as: a vision; a philosophy; a
symbol; a metric; a goal; a methodology." We couldn't agree more.