Six

Sigma

Kokopelli

Sam Tomas, CFPIM, CRM,

C.P.M.

What is Six Sigma?

Number of Defects

Six Sigma is a reference

to
a
particular goal of
reducing
Sigma
is the Greek letter that
defects to near
zero.
represents
the standard
deviation or
variability of a group of items from
their average value.
A Six Sigma program is therefore a
variability reducing program.

The key objectives include improved

processes, product performance, and
reliability

What Else is Six

Sigma?

A concept that provides a relatively

new way to measure how good a
product is. It relates to a
manufacturing or service failure rate
of only 3.4 rejects per million
or
a
yield
of
99.99
99
99
operations,
When a product is six
8%.
sigma,
it
tells us that the quality
level is excellent.
3

Why Six Sigma?

Why spend money to achieve six sigma
quality when perhaps 99% or 98% perfect
would be totally adequate?
The inadequacy of 99.9% accuracy can be
illustrated as follows:

22,000 checks will be deducted from the wrong

bank accounts in the next 60 minutes
880,000 credit cards in circulation will have
incorrect cardholder information on their
magnetic strips
268,500 defective tires will be shipped this year
18,322 pieces of mail will be mishandled the
next hour
4
14,208 defective computers will be shipped this

But With Six Sigma

Quality -

Drug prescriptions

One incorrect drug

prescriptions every 25 years.

Surgical operations
One incorrect surgical
operation every 20 years

Mail Delivery
Only one article of mail
lost every 35 years
5

The Bathtub Curve

Shows reliability of a product in terms of
failure rate per month
The curve presents two shaded areas
Latent defect rate
Causes early failure after a product is delivered

Inherent failure rate

Function of product design, materials, processes, and
technologies used in manufacturing.

Defects in manufacturing are caused by:

Narrow design margins for the product
Insufficient manufacturing process controls
Poor incoming materials/parts quality
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Failure Rate

Failure Rate

The Bathtub Curve

I
Infant
Mortality

II
Useful
Life

Latent
Defects
Overall Life Characteristic curve

III
Wear
out

Inherent Failure Area

Time
Quality Failures due to
Process & Material

Wear out
Failures

Design-Related (Inherent) Failures

Time

6 Sigma Versus 4
Sigma
Why attempt to achieve 6 sigma

when 4 sigma (99.9937%) may be

adequate?
Even
well controlled processes
experience shifts in the mean as
great as 1-1/2 standard
deviations.
A normal 4 sigma process plus a 11/2 sigma shift in the process
average would result in 4 sigma
variations of 6,210 defects per

Yield Rates of
Six Sigma Products
It is possible to build a product in
which each component is a six sigma
component and yet have the product
exhibit yields of only 90%, 80%,
etc.
70%,
What 60%
we are
talking about is rolledthroughput yield or the probability
that all product, process and
material characteristics will
simultaneously conform to their
respective standards.

Improvement Efforts
Required to Reach Six
66,810 dpm 3 Sigma
6,210 dpm
223 dpm
3.4 dpm

4
5
6

10 X Improvement
30 X Improvement
70 X Improvement

Dpm = defects per

million
10

10

Where are Average

Companies in Quality?
Approximately 2 Sigma
IRS Tax advice over the phone

Approximately 4 Sigma (Average)

Restaurant bills
Doctor prescription writing
Payroll processing
Order write-ups

Approximately 6 Sigma
Best in class Seiko, HP Inc., etc.

6.5 Sigma

4
6
6.5

Domestic flight fatality rate (0.43 ppm)

11

Relationship of
Defects to Other
Factors
The 6 sigma concept
indicates there are
strong relationships between product
defects and such factors as:

Reliability
Product yields
Cycle times
Inventories
Schedules

The higher the sigma value, the more

reliable the process being monitored and
the higher the improvement in all areas.
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Financial Implications
of Low Sigma
The lower the sigma level, the
higher the repair costs
A 4 sigma company spends more
than
15% of its sales
dollars for internal and external
repairs
A 6 sigma company spends about
1%
Over the long run, a 4 sigma
company will not be able to

13

What is the Cost of

Quality?

Goal: Improve cost, quality, and

schedule performance via process
improvement and reduction of process
variations.

Sigma Level

Defects Per Million Opportunities

Cost of Quality

308,537 (Noncompetitive companies)

N/A

66,807

25-40% of sales

6,210 (Industry average)

15-25% of sales

233

5-15% of sales

3.4 (World Class)

1% of sales

Note: Each sigma improvement

represents a 10% net
improvement in income.

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The Tools of Six

Sigma
Design to standard parts/
materials
Design to standard processes
Design to known capabilities
Design for assembly
Design for simplicity
Process optimization
Process
characterization
Process
standardization
Short-cycle
manufacturing
Statistical process
control

Proce
ss

Desig
n

Material

Parts
standardization
Supplier SPC
(SSPC)
Supplier
certification
ERP/MRP

Region of
Six Sigma Synergy
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Overcome Process
Variation:
Anticipate
problems
develop
First
Strategy

controls during the design cycle for both

the product and the manufacturing
process steps to include the following:
Define 6 sigma tolerances on all critical
product and process parameters
Minimize the total number of parts in the
product
Minimize the number of process steps
Standardize on parts and procedures
Use SPC during initial design and prototype
design phases
16

Overcome Process
Variation:
Use statistical
control
Secondprocess
Strategy

(SPC) on the process to continually

isolate, control and eliminate
variation resulting from people,
machines and the environment.

17

Overcome Process
Variation:
Third
Strategy
The third
strategy
addresses
suppliers
Institute a supplier qualification
program using SSPC techniques
Require suppliers to provide process
control plans and process control charts
Minimize the number of suppliers used
Work towards a long term win-win
partnership with all selected suppliers
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Five Steps to Six Sigma

for product
Manufacturing
1. Identify
characteristics

necessary to satisfy customers (Use

QFD)
2. Determine if characteristics are
controlled by part, process or both
3. Decide max allowed tolerance for
correct performance
4. Determine existing process
variations
5. Change product design, process, or

19

What Are Some

Possible Applications
In the stockroom
for
Six
Sigma?
Used to reduce parts counts that are found to be
inaccurate
In personnel
Used to reduce the number of requisitions unfilled after
30 days

In customer service
Used to measure number of calls unanswered on the 2nd
or 3rd ring

In sales
Used to track errors in completing order forms

In order fulfillment
Used to eliminate returns because of wrong product
being shipped

In finance
Used to reduce the instances of accounts being paid

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Six
Sigma

Dilbert