Professional Documents
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SIX - SIGMA
Presented by :
http://www.QualityGurus.com
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Agenda
0750 - 0800 Participants introduction
0800 - 0930 Introduction to Six Sigma concept
0930 - 0945 Key
Tea /Concepts
Coffee Break
0945 - 1200 Forms of waste
What is Sigma
Components of Six Sigma
1200 - 0100 Lunch Break
0100 - 0200 Selecting a Project
0200- 0300 Open session / Q&A
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Participants
Introduction
• Your Name
• Department
• Your job profile
• Your exposure to Quality Management/ Six
Sigma
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Ground Rules
• Program success depends on your participation. Actively
participate.
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Introduction to Six Sigma
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Origin of Six Sigma
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Time Line
Allied Signal
Johnson & Johnson,
Ford, Nissan,
Motorola Honeywell
General Electric
1985
1985 1987
1987 1992
1992 1995
1995 2002
2002
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Pilot’s Six-Sigma
Performance
Width of landing
strip 1/2 Width
of landing
strip
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Current Leadership
Challenges
• Delighting Customers.
• Reducing Cycle Times.
• Keeping up with Technology Advances.
• Retaining People.
• Reducing Costs.
• Responding More Quickly.
• Structuring for Flexibility.
• Growing Overseas Markets.
•
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Six Sigma— Benefits?
• Generated sustained success
• Project selection tied to organizational
strategy
– Customer focused
– Profits
• Project outcomes / benefits tied to
financial reporting system.
• Full-time Black Belts in a rigorous,
project-oriented method.
• Recognition and reward system
established to provide motivation.
•
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Management involvement?
• Executives and upper management drive
the effort through:
– Understanding Six Sigma
– Significant financial commitments
– Actively selecting projects tied to strategy
– Setting up formal review process
– Selecting Champions
– Determining strategic measures
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Management Involvement?
•Key issues for Leadership:
–How will leadership organize to support Six
Sigma ? (6 council, Director 6 , etc)
–Transition rate to achieve 6 .
–Level of resource commitment.
–Centralized or decentralized approach.
–Integration with current initiatives e.g. QMS
–How will the progress be monitored?
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What can it do?
Motorola:
–5-Fold growth in Sales
–Profits climbing by 20% pa
–Cumulative savings of $14 billion over
11 years
General Electric:
–$2 billion savings in just 3 years
–The no.1 company in the USA
Bechtel Corporation:
–$200 million savings with investment of
$30 million
• QualityGurus.com
GE Six Sigma
Economics
(in millions) 6 Sigma Project Progress
2500
2000
1500
Cost
1000 Benefit
500
0
1996 1998 2000
2002
Source: 1998 GE Annual Report, Jack Welch Letter to Share Owners and Employees - progress based upon
total corporation cost/benefits attributable to Six Sigma.
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Overview of Six
Sigma
CHANGE
6 SIGMA AS A THE
PHILOSOPHY WORLD
TRANSFORM THE
ORGANIZATION
6 SIGMA AS
A PROCESS GROWTH
COSTS OUT
6 SIGMA AS A
STATISTICAL TOOL
PAIN, URGENCY, SURVIVAL
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Overview of Six
Sigma
It is a Process
–To achieve this level of
performance you need
It is a Philosophy to:
–Anything less than ideal Define, Measure, Analyse,
is an opportunity for Improve and Control
improvement •
–Defects costs money
–Understanding
processes and
improving them is the
most efficient way to It is Statistics
achieve lasting results –6 Sigma processes will
• produce less than 3.4
• defects per million
opportunities
–
•
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Philosophy
•Know What’s Important
to the Customer (CTQ)
•Reduce Defects
(DPMO)
•Center Around Target
(Mean)
•Reduce Variation
(Standard Deviation)
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Critical Elements
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Data Driven
Decision
Y= f(X)
Y X1 . . . Xn
Dependent Independent
Output Input-Process
Effect Cause
Symptom Problem
Control
Monitor
Define Define
Measure Measure
Analyze Analyze
Improve Design
Control Verify
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Key Concepts
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COPQ (Cost of Poor
Quality)- Inspection
- Warranty
- Scrap
- Rework Traditional Quality Costs:
- Rejects -Tangible
-Easy to Measure
- More Setups
- Expediting Costs
Hidden Costs:
- Lost Sales -Intangible
- Late Delivery -Difficult to Measure
- Lost Customer Loyalty - Lost Opportunities
- Excess Inventory
- Long Cycle Times - The Hidden Factory
- Costly Engineering Changes
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COPQ v/s Sigma
Level
50%
Cost of Quality % Sales
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
2 3 4 5 6
Sigma Level
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CTQ (Critical-To-
Quality)
• CTQ characteristics for the process,
service or process
• Measure of “What is important to
Customer”
• 6 Sigma projects are designed to improve
CTQ
• Examples:
– Waiting time in clinic
– Spelling mistakes in letter
– % of valves leaking in operation
•
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Defective and Defect
• A nonconforming unit is a defective unit
• Defect is nonconformance on one of many
possible quality characteristics of a unit that
causes customer dissatisfaction.
• A defect does not necessarily make the unit
defective
• Examples:
– Scratch on water bottle
– (However if customer wants a scratch free bottle,
then this will be defective bottle)
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Defect Opportunity
• Circumstances in which CTQ can fail to
meet.
• Number of defect opportunities relate to
complexity of unit.
• Complex units – Greater opportunities of
defect than simple units
• Examples:
– A units has 5 parts, and in each part there are 3
opportunities of defects – Total defect
opportunities are 5 x 3 = 15
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DPO (Defect Per
Opportunity)
• Number of defects divided by number of
defect opportunities
• Examples:
– In previous case (15 defect opportunities), if 10
units have 2 defects.
– Defects per unit = 2 / 10 = 0.2
– DPO = 2 / (15 x 10) = 0.0133333
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DPMO (Defect Per Million
Opportunities)
• DPO multiplies by one million
• Examples:
– In previous case (15 defect opportunities), if 10
units have 2 defects.
– Defects per unit = 2 / 10 = 0.2
– DPO = 2 / (15 x 10) = 0.0133333
– DPMO = 0.013333333 x 1,000,000 = 13,333
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Forms of Waste
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What are the forms of
waste?
1.Waste of Correction
2.Waste of Overproduction
3.Waste of processing
4.Waste of conveyance (or transport)
5.Waste of inventory
6.Waste of motion
7.Waste of waiting
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1. Waste of correction
• Repairing a defect wastes time and
Hid
resources (Hidden factory) den
Fact
Rework Rework ory
Failure Failure
Investigatio Investigatio
n n
Operatio Operatio
n Test n Test Pro
1 2 duct
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2. Waste of
Overproduction
• Producing more than necessary or
producing at faster rate than required
– Excess labor, space, money, handling
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3. Waste of processing
• Processing that does not provide value to
the product
– Excess level of approvals
– Tying memos that could be handwritten
– Cosmetic painting on internals of equipment
– Paint thickness more than specific values
–
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4. Waste of conveyance
• Unnecessary movement of material from
one place to other to be minimized
because -
– It adds to process time
– Goods might get damaged
• Convey material and information ONLY
when and where it is needed.
–
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5. Waste of inventory
• Any excess inventory is drain on an
organization.
– Impact on cash flow
– Increased overheads
– Covers Quality and process issues
• Examples
– Spares, brochures, stationary, …
–
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6. Waste of Motion
• Any movement of people, equipment,
information that does not contribute value
to product or service
–
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7. Waste of Waiting
• Idle time between operations
• Period of inactivity in a downstream
process because an upstream activity
does not deliver on time.
• Downstream resources are then often used
in activities that do not add value, or
worst result in overproduction.
–
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Some more sources of
Waste
• Waste of untapped human potential.
• Waste of inappropriate systems
• Wasted energy and water
• Wasted materials
• Waste of customer time
• Waste of defecting customers
–
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What is Sigma?
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Have you ever…
• Shot a rifle?
• Played darts?
•
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Have you ever…
• Shot a rifle?
• Played darts?
•
Jack
Jill
8 8 - 8.4 = -0.4
8 8 - 8.4 = -0.4
7 7 - 8.4 = -1.4
averages 8.4 0.0
Jill
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Variability
• Deviation = distance between
observations and the mean (or
average)
•
Observations Deviations
Jack
7 7 - 6.6 = 0.4
7 7 - 6.6 = 0.4
7 7 - 6.6 = 0.4
6 6 - 6.6 = -0.6 7
6
6 6 - 6.6 = -0.6
7
averages 6.6 0.0 7
6 Jill
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Variability
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Variance
Variability
• Standard deviation =
square root of
variance
Jack
•
Average Variance Standard
Jack
Jill 8.4
6.6 1.0
0.24 1.0
Deviation
0.4898979
Jill
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Variability
0.2
0.15
Probability
1 die
0.1 2 dice
0.05 3 dice
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
Sum of dots
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“Normal” bell shaped
curve
Normal distributions are divide up
into 3 standard deviations on
each side of the mean
• Special Causes
– Non-random variation (unusual)
– May exhibit a pattern
– Assignable, explainable, controllable
– Adjusting the process decreases its variation
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Limits
• Process and Control limits:
– Statistical
– Process limits are used for individual items
– Control limits are used with averages
– Limits = μ ± 3σ
– Define usual (common causes) & unusual (special
causes)
• Specification limits:
– Engineered
– Limits = target ± tolerance
– Define acceptable & unacceptable
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Usual v/s Unusual,
Acceptable v/s Defective
Another View
Off-Target Large Variation
On-Target
Center Reduce
Process Spread
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More about limits
Poor quality:
defects are
common (Cpk <1)
Good quality:
defects are μ
target
rare (Cpk >1)
μ
target
If process limits and control limits are at the same location, Cpk = 1. Cpk ≥ 2 is exceptional.
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Process capability
Good quality: defects are rare (Cpk>1)
Poor quality: defects are common (Cpk<1)
• =
USL – x
= 24 – 20 =.667
3σ 3(2)
Cpk = min
=
x - LSL
= 20 – 15 =.833
3σ 3(2)
14 20 26
= = 15 24
3σ = (UPL – x, or x – LPL)
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A Six Sigma Process –
Predictably twice as good as what
the customer wants
1 2 3 4 5 6 7 8 9 10 11 12
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3 σ v/s 6 σ
6 Sigma curve
LSL USL
3 Sigma curve
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
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Process shift
allowed
1.5 SD 1.5 SD
LSL USL
SD = 1
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
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Six Sigma
Measurement
Sigma
7
6
5
4 0.02
3 DPMO
3.4
On one condition :
Calculate the defects 233
and estimate the 6210
opportunities in the
same way... 66810
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Six Sigma
Measurement 600,000
Sigma Defects 500,000
numbers per million
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Components of Six Sigma
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Components
1. Process Power
2. People Power
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Process Power
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P-D-C-A
Act Plan
A P
Act on what Plan the change
was learned
Check C D Do
Check the results Implement the
change on a small
scale.
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Approach
Practical
Problem
Statistical
Problem
Statistical
Solution
Practical
Solution
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DMAIC - simplified
• Define
– What is important?
• Measure
– How are we doing?
• Analyze
– What is wrong?
• Improve
– Fix what’s wrong
• Control
– Ensure gains are
maintained to
guarantee
performance
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DMAIC approach
D
fin
e Identify and state the practical problem
D
rM
su
a
e
M Validate the practical problem by collecting data
A
lyze
a
n Convert the practical problem to a statistical one, define
A statistical goal and identify potential statistical solution
veIm
ro
p
I Confirm and test the statistical solution
C
n
o
trl
C Convert the statistical solution to a practical solution
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Define
D
fin
e VoC - Who wants the project and why ?
D
rM
su
a
e
M The scope of project / improvement (SMART Objective)
A
lyze
a
n
A
Key team members / resources for the project
veIm
ro
p
I
Critical milestones and stakeholder review
C
n
o
trl
C
Budget allocation
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Measure
D
fin
e Ensure measurement system reliability
D - Is tool used to measure the output variable flawed ?
rM
su
a
e
M
A
lyze
a
n
A Prepare data collection plan
- How many data points do you need to collect ?
-How many days do you need to collect data for ?
veIm
ro
p
I -What is the sampling strategy ?
-Who will collect data and how will data get stored ?
-What could the potential drivers of variation be ?
C
n
o
trl
C
Collect data
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Analyze
D
fin
e
D
rM
su
a
e How well or poorly processes are working compared with
M - Best possible (Benchmarking)
- Competitor’s
A
lyze
a
n
A Shows you maximum possible result
veIm
ro
p Don’t focus on symptoms, find the root cause
I
C
n
o
trl
C
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Improve
D
fin
e Present recommendations to process owner.
D
Pilot run
-Formulate Pilot run.
rM
su
a
e
-
M
-Test improved process (run pilot).
A
lyze
a
n -
A -Analyze pilot and results.
-
Develop implementation plan.
veIm
ro
p
I -Prepare final presentation.
-
C
n
o
trl -Present final recommendation to Management Team.
C
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Control
D
fin
e Don’t be too hasty to declare victory.
D
rM
su
a
e
M
A
lyze
a
n
A
How will you maintain to gains made?
veIm
ro
p - Change policy & procedures
- Change drawings
I
-Change planning
C
n
o
trl -Revise budget
C -Training
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Omitting a step in
Step
DMAIC?
Consequences if the step is omitted
1. Define
2. Measure
3. Analyze
4. Improve
5. Control
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Tools for DMAIC
Contract / Charter Data Collection, Failure Models & Modelling Time Series
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Components
1. Process Power
2. People Power
Tell me, I forget. Show me , I remember. Involve me, I understand.
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6σ Training
Mentor , trainer , and coach of Black Belts and othe
in the organization .
Master
Black
Belt
Green Belts
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Six Sigma
Organization
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6σ Training
Position in Six Sigma
Typical Training Expected Role
Organisation Post Training
Champions Champions
Champions /
Process owners Training - I + Training –II
Process Mgmt. &
Project
2 days 3 days
champion
(Total 5 days)
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Champion
•Plans improvement projects
•Charters or champions chartering process
•Identifies, sponsors and directs Six Sigma
projects
•Holds regular project reviews in
accordance with project charters
•Includes Six Sigma requirements in
expense and capital budgets
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Champion
•Identifies and removes organizational and
cultural barriers to Six Sigma success.
•Rewards and recognizes team and
individual accomplishments (formally and
informally)
•Communicates leadership vision
•Monitors and reports Six Sigma progress
•Validates Six Sigma project results
•Nominates highly qualified Black Belt
and/or Green Belt candidates
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Master Black Belt
Roles Responsibilities
Enterprise Six Sigma expert - Highly proficient in using Six Sigma
Permanent full-time change methodology to achieve tangible business
agent results.
Certified Black Belt with Technical expert beyond Black Belt level on
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Black Belt
Roles Responsibilities
Six Sigma technical expert Leads business process improvement
Temporary, full-time change agent projects where Six Sigma approach is
(will return to other duties after indicated.
completing a two to three year tour Successfully completes high-impact
of knowledge
Demonstrated proficiency at achieving
Certification
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Green Belt
Roles Responsibilities
Six Sigma Project originator Recommends Six Sigma projects
Part-time Six Sigma change agent. Participates on Six Sigma project teams
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Yellow Belt
Roles Responsibilities
Learns and applies Six Sigma tools Actively participates in team tasks
to projects Communicates well with other team
members
Demonstrates basic improvement tool
knowledge
Accepts and executes assignments as
determined by team
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Financial Analyst
•Validates the baseline status for each
project.
•Validates the sustained results / savings
after completion of the project.
•Compiles overall investment vs. benefits
on Six Sigma for management reporting.
•Will usually be the part of Senior
Leadership Team.
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Thought of the day
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Project Selection
•External Sources:
–Voice of Customer
•What are we falling short of meeting
customer needs?
•What are the new needs of customers?
–Voice of Market
•What are market trends, and are we ready
to adapt?
–Voice of Competitors
•What are we behind our competitors?
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Sources of Projects
•Internal
Sources:
–Voice of Process
•Where are the defects, repairs, reworks?
•What are the major delays?
•What are the major wastes?
–Voice of Employee
•What concerns or ideas have employees or
managers raised?
•What are we behind our competitors?
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Project Selection
• As a team List down at least 20 improvement
projects related to your work areas …….
•
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Harvesting the Fruit of Six
Sigma
Sweet Fruit
Design for Repeatability
Process Enhancement
Bulk of Fruit
Process Characterization
and Optimization
------------------------------------
------------------------------------
Ground Fruit
Logic and Intuition
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Types of Savings
•Hard Savings:
–Cost Reduction
•Energy Saving
•Raw Material saving
•Reduced Rejection, Waste, Repair
–Revenue Enhancement
•Increased production
•Yield Improvement
•Quality Improvement
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Types of Savings
•Hard Savings:
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Types of Savings
•Soft Savings:
–Customer Satisfaction / Loyalty
–Employee Satisfaction
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Cost of implementing
•Direct Payroll
–Full time (Black Belts, Master Black Belts)
•Indirect Payroll
–Time by executives, team members, data
collection
•Training and Consulting
–Black Belt course, Overview for Mgmt etc.
•Improvement Implementation Costs
–Installing new solution, IT driven solutions
etc.
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What Qualifies as a
Six Sigma Project
•Three basic qualifications:
–-There is a gap between current and
desired / needed performance.
–The cause of problem is not clearly
understood.
–The solution is not pre-determined, nor
is the optimal solution apparent.
•Get Started
•Look for low hanging fruits
•Even poor usage of these tools will get
results
•Learn more about Six Sigma
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