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In This Chapter

► Understanding the fundamental principles that underlie Six Sigma ^ Mastering the basic equation of Six Sigma: Y = f(X) + I:

^ Knowing that all outcomes are determined by inputs and how they are processed ^ Recognizing that effective control requires understanding and managing variation

Seeing that you have to measure a process before you can manage it ^ Becoming aware of the power of "leverage"

Eneath all the statistical analyses, the equations of probability, the

^/charts and the experiments; below all the projects and plans, the tools and technologies; and beyond the colored belts, the catchy phrases, and

Dizzying arrays of terms lie several fundamental principles that beget the

Whole Six Sigma methodology.

Like all grand constructions, Six Sigma sits upon a solid foundation. In this

Chapter, you discover five basic principles. And in doing so, you will begin to

Think the Six Sigma Way.

All of Six Sigma begins with one general-purpose equation that shouldn’t intimidate even the least mathematically inclined, because of its elegant simplicity. This equation is Y = f(X) + z, Where

F*Y Is the outcome, the result you desire or need.

VX Represents the inputs, factors, or pieces that are needed to create the outcome. You can have several Xs.

VF Is the Function, The way or process by which the inputs are transformed

Into the outcome.

V IЈ is the presence of error, the uncertainty in depending upon the Xs and the transformation function to actually create the desired outcome.

This expression is called the Breakthrough equation. See Figure 2-1.

In other words, a certain set of inputs is transformed by some function (or process) into an output. The YResults from, or is a function of, the Xs. To determine a desired outcome, you apply a transformation process or function F On the inputs.

You make a loaf of bread by taking flour, yeast, salt, and the other ingredients and transforming them through mixing and baking into a desired outcome. The ingredients are the Xs, the mixing and the baking are the transformation process function F, And the resulting yummy loaf of bread is the Y.

Sound simple enough? Almost. In the real world, no matter how hard you try, there is also a degree of uncertainty or variation in the outcome. There is always some degree of uncertainty as to how well your actions produce the

Desired result.

Consider the loaf of bread. What if you used too little yeast, or if the oven wasn’t quite hot enough? Suppose you were baking ten loaves; would they all come out exactly the same? Most likely, there would be some variation from loaf to loaf. In Six Sigma, the little error that creeps in and produces this

The Principle of Determinism

F<3>

Variation is represented by the Greek letter Epsilon, or i:. Sometimes the error is your fault (you measured incorrectly), and sometimes it’s just truly random

Error, but either way, you have variation.

Everything is deterministic. All outcomes are a result of some process or

Function acting on the inputs. And no matter how hard you try, there’s always a little error.

Determine the Cause

We’re a results-oriented society: "How’d it turn out?" "What finally happened?" "What was the final score?" "How long did it take?" "What’s the bottom line?" We’re always looking at the results. We’re practically obsessed on them. After

All, that’s the whole point of all the toil and trouble in the first place, right?

But Ho© Did the results happen? Why Did they happen? What Specifically

Caused them to happen? You want to know the answers to these questions, because if good things happen, you want to know how to make them happen

Again. And if bad things happen, you just as surely want to know how to prevent them next time.

Cause and effect

All outcomes are the result of the inputs and the process that acts on them, plus the error that creates variation. A process simply operates on the inputs to create the outcomes; that is, it’s the fundamental action in changing from

One condition to another, in making any improvement, in adding value for yourself, your customers, and your company.

Inputs are transformed — by way of a process — into their outputs. This is how change happens. Therefore, when you understand the process, you can leverage the way the inputs are combined to produce the outcome.

Look behind every result (output) and examine the inputs, the process, and

The error that combined to produce it. Seek to understand what caused the

Outcome. When you know the cause, you can begin to put yourself in a position to control the outcome next time — and again and again in the future. Understanding root cause is the first step to controlling outcomes.

Here’s a simple example: The guy gets the girl. That’s the outcome. How did that outcome happen? Well, as all razor companies would have you know, it is because he has a smooth, sexy face. What caused that? It’s the result of his

Shaving process and choice of ingredients. What caused that? Combining hot

Water, shaving cream, a mirror, a particular razor, and a steady hand to get a close shave. If anything’s wrong with the outcome — if the girl doesn’t like the guy’s scruffy face — you examine the ingredients and shaving process to determine the root cause of the problem.

Regardless of complexity, literally every result has one or more causes. The

More you can single out these causes and understand them, the better your

Opportunity to change it for the better. In Six Sigma speak, you’d say that knowing the Xs, The function F, And the uncertainty T: Means you know what caused the outcome Y. Cause and effect.

There is a better ©a§

Many companies and organizations want to improve their performance. They recognize intuitively that their performance results are the outcome of all their business and work processes. These processes are quite literally "the way" business is done. So, to improve the outcomes, the company has to change the way it does business. They want to change the processes — the function F— And combine the business inputs in a way that produces a better outcome. It’s not a wishful notion and not a trick for getting everyone to work harder. The call to change the way you do business is a legitimate search for a better way, because there is a better way. There’s always a better way.

^BC» Determinism Is the principle that you can create a desired outcome by config-Y~f\ Uring and controlling the inputs in a specific manner. In Six Sigma, you ana-( 1M1 ) lyze the inputs, the process, and the variation, and then implement the best possible combination to achieve your objective. By doing so, you’re exercising

Direct control over your environment, rather than allowing your environment to control you. You are deterministic, not reactionary, in your thinking.

Beu/are superstitious delusions (that is, correlation doesn’t impl§ causation)

The more you understand the cause-and-effect relationship between inputs and outcomes, the better you can predict, determine, and control the results. Conversely, the less you understand the relationships between inputs and actions, the more difficult it is to determine and control the results.

Don’t confuse coincidence, or Correlation, With cause and effect. Just because

Two events happen together does not mean that one has caused the other. The Latin term for such an error is called Non causa pro causa, Which means,

"non-cause for the cause." People often assume that events which are closely connected — either spatially or temporally — are somehow also connected

Causally.

Determinism is proactive

Determinism is about taking control. It’s the opposite of believing that events unfold by chance, apart from one’s influence. Surely, you

Don’t control all the variables and processes

That affect our lives. But just as surely, success is not just random luck.

If you think there really isn’t much you can do to impact the world, or even your local surroundings, you’re wrong. You can influence most everything around you in some way. But

Determinism is proactive. You must try to initiate change and believe the forces within your control are much greater than the ones outside your

Control.

Let go of excuses about why you can’t do something —justifying a tendency to be mediocre — and realize that you can do much more than you may think! Proactivity — the willingness to do something — will fuel your determinism.

Consider this exchange between Homer and Lisa Simpson:

Homer: Not a bear in sight. The "Bear Patrol" must be working like a charm!

Lisa: That’s specious reasoning, Dad.

Homer: Thank you, dear.

Lisa: By your logic, I could claim that this rock keeps tigers away. Homer: Oh, how does it work?

Lisa: It doesn’t work. Homer: Uh-huh.

Lisa: It’s just a stupid rock. But I don’t see any tigers around, do you? Homer: Lisa, I want to buy your rock.

These confusions of cause versus correlation are also known as Superstitious

Delusions. This is the football coach who always wears red socks, because he

Once won a very important game when he was wearing them. Did the socks cause his team to win? Did clothing determine the outcome of the game, or was it some other input or set of inputs?

Businesses are known to confuse correlation with causation. What about the

Company that ramps up capacity after a great month or quarter of sales, because they think this indicates an economic expansion? Only later do they

Discover that no expansion was forthcoming and that, instead, increased sales were correlated to a different factor.

Even if two variables are legitimately correlated, there is not necessarily any particular causal relationship between them. One may fluctuate in relation to the other due solely to chance (this is called Coincidence) Or, as is often the case, each is strongly affected by one or more other outside (or Confounding) Variables that you hadn’t thought of.

A causal connection probably does exist if you can establish all three of the following:

There is a reasonable explanation for cause and effect

^ The connection happens under different environmental conditions

You’ve ruled out potential outside confounding variables

One way to determine these conditions is through a designed experiment where groups strongly similar to one another in terms of the most important

Variables are exposed to different conditions and then analyzed to see whether the variable of interest performs differently. One or more groups is also held constant and not subjected to treatment(s) as a "control" group(s). You can

Find out more about this in Chapters 7 and 8.

Variation Happens

You’re playing a great round of golf. Everything’s dropping. All you have to dois win the last hole, and you’re going to beat all your buddies for the first

Time ever. You step up on the 18th tee, cast an eye down the fairway, draw

Your club back, uncork your winning swing, and. . . splat! Right in the drink! You lose. What happened?

Variation happened. Error happened. Whatever you did seventeen times in a row, you didn’t do it the last time. Dang! Consistency is a bugger. How do the

Pros do it?

Professional results, in anything, demand consistency. That means you get

The variation in your inputs — the Xs — and the uncertainty in the transfer function — that little T: — Under control.

In general, variation is undesirable, because it creates uncertainty in our ability to produce a desired outcome. In the world of business and organizational life, the goal is to produce a work product or deliver a service in a predictable manner. Variation in your results — whether in time, specification, quality, cost, or something else — is going to happen; it’s inevitable.

Some variation — within limits — might be okay. A little too much variation

Here or there, and you might have some repairs or rework on your hands. And too much altogether, and you’re either out of a job or out of business.

Stf^tyfc The characterization, measurement, analysis, and control of variation is a central theme of Six Sigma. Reduction of unwanted variation is the key to Fijt|) ) Achieving Six Sigma improvements. To jump right into the statistics of variation, go to Chapter 5.

What is Variation?

Very simply, Variation Is deviation from expectation. If you toss a coin, what’s your the chance of it landing on heads? Fifty percent. Therefore, if you toss a coin ten times, you expect to get five heads and five tails. This is your Expectation. Take out a coin and toss it ten times. What happened? Did you meet your expectation?

Try it again. What happened the second time? Try performing successive sets of ten coin tosses. Every time you repeat your ten coin tosses, the output — the number of heads and tails — varies. The extent to which your experience

Deviates from expectation is the extent to which variation has occurred.

When you closely measure any output Y, You find that it varies — always. Every output varies. This is important to understand: Again, every output varies. Each time you park your car, it doesn’t fit exactly in the same place between the parking lines. Every single product a company makes varies from every other single instance of the same product on every dimension, such as weight, size, durability, and so on. Every time you call a company for

Help as a customer, you get a different level of service and you leave the call

With a varying degree of satisfaction. Here’s one you can probably relate to:

Each and every person arrives to work at varying times each day. Get (the) mean

If you measure the occurrence of something many times, it’s going to vary

Around some average — or Mean — value. The mean is the central tendency of your process. Flip that coin enough times, and you’ll see that the mean will

Tend toward 50 percent heads, and 50 percent tails. Variation obsession

Anytime you measure the value of a given occurrence or event, it’s going to

Vary from the mean. A player’s batting average may be.302 for the season, but Friday night he went 2-for-5 and batted.400, nearly 100 points above his average. And then Saturday he went 0-for-4. Why? The school bus usually arrives at the stop at 7:17, but today it came at 7:22; that’s five minutes later than normal. Yesterday it came early at 7:15, and the kids almost missed it. Why?

These are examples of variation — the variation of occurrence versus the mean. The size, trends, nature, causes, effects, and control of this variation

Are the undying obsession of Six Sigma. Nothing is more examined, or more addressed in Six Sigma than this.

Variation is a

Many parts have to fit together to make a product, like a cellphone. When engineers design the parts, they account for the fact that all parts will display some amount of variation as they are produced. Variation is the degree to which a part, product, service, or transaction differs from all others in the same class or category.

In the case of a phone, each class of parts, like the plastic casing, vary in size, weight, and even color. Just as the phone cases vary, so does the clear plastic display that covers the liquid crystal

Serious thing

Display. Then you have the many hinges, buttons, antenna, internal components, and so on. All these parts have to snap and fit together well if the phone is to perform its function to your satisfaction. In other words, you can only tolerate a certain amount of variation. A little too much variation and the phone won’t work properly. A little

More variation and it won’t work at all.

And we all know who’s going to end up with the bad phone, right?

Where does Variation come from?

Why does Every Output vary? Because all the input Xs vary, and because the transformation function F Also varies. So how do they vary? And what makes

Them vary?

All variation is caused by something. Remember cause and effect: If you’re

Going to control the outcome, you have to control the cause. Therefore, if you’re going to control variation, you’d better understand what’s causing it.

Causes of Variation: Common Versus special

Some variation is just natural; you can’t eliminate it. The natural forces of

Nature work to mix things up. It’s simply part of the normal course of events.

Recall the coin-toss example; the variation in the number of heads from set to

Set is perfectly normal. Or consider the variation in the time between waves at the beach. Or the variation in the height of trees in a forest. These are all

Examples of naturally-occurring variation.

Now consider a few examples in human systems. Think about the time each day when the mailman comes. Or how long it takes to process a credit card application. Or the actual number of tiny time pills in one of those cold capsules. They all vary. And the variation is a natural part of their system.

This type of variation is called Common-cause variation. You can act to reduce common cause variation, but you can’t eliminate it. It’s natural, and it’s part

Of Every System. It’s in there and it’s not going away!

The other type of variation is known as Special-cause variation. Special cause variation is completely different — it’s directly caused by something special. If the mailman usually comes at about 11:30 each day, but he gets a flat tire and doesn’t come until noon, that’s a special cause of variation. If it normally

Takes 15 minutes to process a credit card application, but the network connection went down, that’s a special cause. And if there are supposed to be

600 tiny time pills in your cold capsule, but the white acetaminophen filler

Tube jammed and you have 550, that’s special. These special causes are specific things you can identify and do something about.

With Six Sigma, you spend particular effort to identify the difference between

Common-cause and special-cause variation, because they’re so different, and because you go to special effort to understand which type is causing the variation and how it’s affecting the outcome.

We’re adrift: Short-term and long-term Variation

Another important characteristic of variation is the way in which it changes

Over time. There are short-term variations and long-term variations. The difference is important.

Here’s an example: "That mailman used to come at 11:30, give or take a few minutes, but lately he’s been coming later and later, and now it seems he’s here closer to 12:15, which is really annoying because we’re at lunch and he has to leave the packages out in the rain." In this example, the short-term variation of a few minutes was inconsequential and well within our tolerance level, but when the mean time of arrival experienced a long-term variation (perhaps caused by a seasonal shift in weather or the holidays), drifting out by 45 minutes, there was a problem.

Getting Variation right is eVergthing

In general, it’s best to work on reducing special-cause variation before trying to reduce common-cause variation. The reason is because when you have special-cause variation, the process is not stable or predictable, and you can’t be sure of what is happening. But after you’ve taken the special-cause variation out of a system or process, you can then improve its common cause variability.

For example, if a coffee house first eliminates the special employee-to -

Employee differences in making a cup of coffee, it can then effectively work on improving the inherent, common-cause quality of the coffee itself. If, however, the coffee house tries to fix the inherent quality of the coffee first, the

Special employee-to-employee differences will cloud the situation, blocking

All efforts to decipher the what’s really going on.

The goal is to control variation, understand it, and minimize its impact, while

Accepting that it is part of everyday life and a part of every organization. Just like you can understand and characterize the relationship between Xs and Y you can characterize variation and error in the ability to produce desired outcomes consistently over time. This provides the foundation and framework for implementing real changes in the way you do what you do — changes that have the greatest probability of yielding positive results.

Thou Shalt Measure

In 1891, a British scientist named William Thompson, also called Lord Kelvin, said, "When you can measure what you are speaking about, and express it in

Numbers, you know something about it. But when you cannot express it in

Numbers, your knowledge is of a meager and unsatisfactory kind." Some

Wisdom is timeless, and the principle of measurement is one of the fundamental tenets of Six Sigma.

Lord Kelvin continued by saying that your opinions and ideas may be the beginning of knowledge, but they have "scarcely, in your thoughts, advanced to the state of science." Until you include measurement and numbers in your

Knowledge, you’re bound to the world of gut-feel, guessing, and marginal improvement.

You may work very hard, and even bring significant resources to a performance problem or improvement goal, but without measuring your Ys And Xs, your ability to improve will only be, "meager and unsatisfactory."

At first, it may seem impossible to measure many of your inputs and outputs. While it may be easy at first to rationalize yourself into believing some things

Just aren’t measurable, it’s going to be much more difficult in the long term to

Try and achieve your goals without the data that can help you.

Mind your l/s and Xs

Measurement is the practice of collecting the data that relates to the inputs (Xs) and the given outcome (Y) That results from your process function F. Measurement is what enables you to gain a quantitative grasp on the characteristics of your various inputs and how they relate to your desired outcome.

Measuring the inputs is what gives you the profile of the way your process is

Playing out relative to a goal or objective. Measurement begins with the YS, and then extends to the XS to understand the causes.

For example, you’d probably love to have $1,000 in your wallet (the output Y). To measure how they’re doing on this objective, a person could open his wallet each day and count how much money is there. He’d probably discover that his performance towards this objective is well below what he wanted.

The person could then analyze the situation and discover that the amount of

Money in his wallet is a function of how much money he earns, how much is taken out in taxes, and how much he spends on necessities. These are the Xs.

The person can’t affect the amount of money in his wallet directly. He has to do something to the identified Xs to make Y Change. To affect a change in the

Output Y, The person would start to measure and control the performance of the causal XS (perhaps earn more and spend less).

Many people never get past the Y. They watch it, like the money in the wallet, hoping that it will change simply by measuring it. It’s easy to be guilty of such Y-dominated thinking and measurement. Consider the company that continues to work harder and force productivity in an attempt to improve results (the Y), Without quantitatively investigating the contributing factors to success

(the XS of scrap, excess inventory, poor quality, and so on). This approach

Has a tendency to self destruct in its blind push toward a goal.

The answer begins ©ith the data

It’s easy to understand how to measure certain input and output variables because they are, by their very nature, accommodating of such measurement.

Examples of this include number of calories, your weight, and the time it takes to complete a run or walk, or in business, the time it takes to complete

A certain job, the number of days that transpire between a customer order, the delivery of the product, and so on. These are all numerically quantifiable measures.

Such measurement-friendly events, processes, variables, and transactions are well supported by certain measurement tools, like a bathroom scale, software, a spreadsheet, a clock, and so on. Using various quantitative scales like width, length, time, rigidity, and density, it’s possible to quantify the behavior of

Many YS and XS, and their relationships.

Other YS and XS, however, are not so easy to measure, because they’re not as

Easily quantified, or because the time, cost, and effort involved in doing so is extreme. How, for example, do you measure customer satisfaction — or a customer’s opinions?

In these cases, measurement instruments have to be specifically designed,

Like a survey question that ranks responses. When such instruments are developed and employed, you can make otherwise qualitative data much more quantitative in nature.

The bottom line on measurement

Taking measurements is a matter of using information and data to quantify

The relationship between inputs, outputs, and error in a given system, process, or operating model.

Even when numbers or direct measurements aren’t available, there are ways to create them indirectly. In this sense, you take a deterministic approach to measurement: You don’t give in to the lack of data, but you find the data you

Need or create estimates in accordance with sound practice.

About 100 years ago, H. G. Wells said that, "statistical thinking will one day be as necessary for efficient citizenship as the ability to read and write." We are now well into that day. Politicians don’t make a statement anymore

Without first assessing people’s opinions through polls. Businesses don’t make decisions without first slicing and dicing the data. Facts and numbers are everything.

Measuring your Ys and Xs is your first step toward greater efficiency and effectiveness. It’s your first step toward citizenship in the Six Sigma world of

Data-oriented thinking.

The Power of LeVerage

If you’ve ever tried to move a huge rock or boulder, or even your washing machine, you can appreciate the meaning of Leverage. While you might lift and pull on it with all your strength, the boulder won’t budge. But if you use a long metal pole and an object for a fulcrum, you maximize the force of your limited

Strength. You use leverage to move the rock and accomplish your goal.

Life is like that: you have to expend a little effort to find the leverage. When you do, it catapults you over your problems and through the obstacles that

Stand between you and your goal. In Six Sigma terms, leverage is the ability to apply the critical few Xs that have the greatest impact on your desired Y.

The vast majority of leverage, or impact power, in creating any desired outcome, comes from a surprisingly small number of contributors. This is true for the simplest of goals as well as for the most complex systems. Typically, only a few select variables determine the quality of a given outcome! It all comes down to finding those critical few that give you the leverage. These vital few will enable you to move the "boulders" in your life, your process, or

Your organization.

L,\NG/

The "Vital fe©" Versus the "triVial many"

The law of the "vital few versus the trivial many" comes from the work of early 20th century Italian sociologist and economist Vilfredo Pareto. You may also know this law as the 80-20 rule, Where 20 percent of the inputs in any

System account for 80 percent of the influence on that system.

In his dedication to exploring the nature of individual and social action, Pareto determined mathematically that, while a great number of factors are connected to a given outcome, only a few carry the weight to change that

Outcome in a significant way.

In a process, a few key variables are the cause of most performance problems

Or defects. This principle holds true even when you analyze the impact of dozens upon dozens of variables involved in complicated assemblies and sub-assemblies with hundreds of separate parts. When you look for leverage

In business, you search for the minority of variables that provide the majority

Of power in solving problems in manufacturing, assembly, distribution, procurement, accounting, finance, customer service, and so on.

While businesses often employ sophisticated statistical tools to find leverage,

You may or may not need such tools for finding leverage as individuals. The

Key is to know with certainty that, whatever your goal or situation, leverage does exists; some factors in a given situation are more powerful than others.

Leverage may not exist where you think it does; the obvious is not always the answer. Look closely, apply tests, and challenge your assumptions to find the

Sources of leverage.

Note also that the factors that represent leverage in one situation may not

Represent leverage in another similar situation. Each process or problem has its own unique dynamics and interactions.

The high road

There are more factors, contingencies, and dynamics to manage than possible when trying to break through to new levels of performance and success. The natural tendency is to try and manage and control every detail, but this is a slippery slope. The trivial many will bury you in a pile of unnecessary cost, trouble, worries, wasted energy, and valueless action.

No one, and no company, has the luxury or reason to manage all the details. Instead, the right path is to manage only those that are critical to producing the outcomes you desire.

Focus on the inputs that really matter. All the rest, leave alone unless they become significant.

After you determine that a factor is insignificant, don’t waste time and energy putting attention on it. This spreads your energy too thin and minimizes your ability to create positive change. The key is to engage in a filtering process by which you weed out the many trivial variables that compete for your time but offer no real advantage. By doing so, you disable the force of confusion and achieve clarity of focus around your efforts to resolve an issue, solve a problem, or reach a goal.

Finding the better ©ay

The way you find the critical few is to follow a structured process for defining, measuring, and analyzing all the cause-and-effect relationships. In Six Sigma, structured and powerful tools help you brainstorm the possible causes (Xs) of performance problems and operational issues. Collect performance data that reflects the behavior of the many Xs, as well as the behavior of your Y Of concern. Analytical tools enlighten you as to which XS are the critical ones, and which are the trivial.

The results of these operations tell you — and show you clearly — which Xs you need to focus on to impact your Y. They also show you which Xs are Out of control, Or behaving too erratically. Such variation is the primary cause of

Problems when it comes to performance predictability.

Having your baseline of measurements and understanding numerically

How your Xs interact and impact your Y, You can then implement countermeasures — different X-related actions that ultimately improve your Y.

Using your same data framework, you can take new measurements to test theimpact of your countermeasures. You have established a data-oriented

Baseline against which to prove that the new way of doing business is truly

Abetter way.

You have validated that the critical few Xs are truly the critical few. This is the essence of the Six Sigma principle of finding the leverage.

In This Chapter

► Summarizing the Define-Measure-Analyze-Improve-Control (DMAIC) project methodology

Understanding the many areas of Six Sigma application ^ Reviewing roles and responsibilities in a Six Sigma deployment

Following the deployment and implementation process

Ix Sigma affects the lives of individuals and the conduct of organizations.

W Unlike most other business improvement initiatives, Six Sigma isn’t like

Vitamins; it’s not "feel good" stuff. It’s an aggressive, targeted regimen. Six

Sigma is a pervasive, challenging, systematic eradication of waste and inefficiency and of defects and problems that develop and hide in organizations.

This chapter discusses the five phases of the Six Sigma DMAIC project methodology. You also find out how that methodology is applied in specific areas of the organization by individuals who take on roles and responsibilities as disciplined practitioners. Finally, you see that the deployment and implementation processes follow a prescriptive roadmap.

At the business level, Six Sigma projects are the players in the overall game

Plan of a breakthrough performance improvement initiative. The business perspective is that a Six Sigma project is the agent of action that executes the

Business strategy and returns the results.

Every Six Sigma project follows a standardized and systematic method known as DMAIC (Define-Measure-Analyze-Improve-Control), A formalized problem -

Solving process. The DMAIC process can improve any type of process in any

Organization to improve its efficiency and effectiveness.

The

Project Strategy: DMAlC

V Define: Set the context and objectives for the project.

F Measure: Get the baseline performance and capability of the process or system being improved.

Is Analyze: Use data and tools to understand the cause-and-effect relationships in the process or system.

V Improve: Develop the modifications that lead to a validated improvement in the process or system.

F Control: Establish plans and procedures to ensure the improvements

Are sustained.

DMAIC is applied by highly trained practitioners who complete improvement projects that are managed to financial targets. In DMAIC, business processes are improved by following a structured method with set steps, or Tailgates. Only as you start and complete one step are you ready to move on to the next. After moving through all the steps, and only when you can show that the DMAIC project has generated breakthrough benefit, can you then say you’ve completed a Six Sigma project.

Part II of this book covers the details of executing each of these phases in detail, including the methods and tools you need to complete a DMAIC project.

No matter how hard you try to accomplish anything, it’s always easier when you follow a proven methodology. DMAIC (shown graphically in Figure 3-1) is

Aproven solution for process problems and improving business performance.

DMAIC Improvement Methodology

Figure 3-1:

The Six Sigma breakthrough strategy.

Define

Inn

Measure

Analyze ~T~

Improve

Control

Write the problem statement, the objective statement, prioritize, and launch the project.

Understand the process, validate the data accuracy, and determine process capability.

Determine the relationship of

Y=/(X)+.- And screen for the potential causes.

Determine, validate, and

Implement solutions to achieve the objective statement.

Implement process control

Methods and monitor performance to sustain results.

Each phase of the methodology has been thoughtfully designed to create a logical progression of finding the the

Practical solution of the problem for breakthrough rates of improvement.

A Structured Approach for Breakthrough Results

2 3

Time

Some companies and Six Sigma practitioners place an R for "recognize" before the D for define, indicating that you must first recognize and choose the right problem to solve or need to improve Before You can define what the problem

Or need is.

Domains of Activity

There are four areas or domains of activity to which Six Sigma can be applied (each is discussed in the following sections):

Thinking: The domain of thinking focuses on improving the reasoning and efficiency of Every Employee.

Processing: The domain of processing focuses on improving existing

Processes, and a large number of employees are involved in this.

Is Designing: Fewer people are directly involved in designing, which focuses

On improving the designs of new processes.

F Managing: A small number of business and quality leaders are responsible for managing the overall Six Sigma initiative.

Thinking for breakthrough

Thinking for breakthrough Is the realm of activity focused on the underlying principles of Six Sigma, because the performance of a business isn’t guided

Only by directives and procedures. Improvement projects and initiatives aren’t just about methods and tools. And wholesale change isn’t driven by a

Minority but by large masses of people who together constitute real and lasting culture change.

Sweeping culture change and improvement is a function of getting everyone

In an organization aligned to the same direction, values, and way of thinking.

Thinking for breakthrough is a set of guiding principles that fuel culture

Change and get many people speaking the same language of performance

Improvement.

The traditional path of Six Sigma has been to first lead, and then do: First stimulate change, and then execute according to a stepwise methodology. Only

After years of experience do Six Sigma change agents internalize the guiding principles of Six Sigma and apply those principles as second nature in everything they do.

Thinking for breakthrough emerged only after Six Sigma was proven and became pervasive, and only after its underlying principles were well understood by so many practitioners. Whereas processing for breakthrough and

Designing for breakthrough are methodology – and tool-driven, thinking for breakthrough is mind-driven.

Processing for breakthrough

Processing for breakthrough Is the realm of activity that focuses on optimizing the performance of existing business and operational processes. Any process is theoretically capable of operating at its Entitlement Level, which is defined

As the performance level the process has demonstrated it can operate at,

Even if it doesn’t perform to that level all the time. See Chapter 4 for more on

Entitlement.

VcN-Styj,. If a budgeting process was capable of operating at a 95 acceptance level for §f&3\ Several weeks out of the year, you can say that 95 percent is the entitlement ISTO ) level for that process. Generally speaking, Entitlement Is the very best a process, product, service, or transaction can do without redesigning it.

When you are processing for Six Sigma, you take actions and implement

Improvements that enable your process to perform to its utmost potential all

The time, not just part of the time, within the limitations of its current design. You do this by applying the DMAIC methodology through Six Sigma improvement projects — all of which are focused on improving processes that are focused on business priorities set by management.

The people who are directly responsible for processing for breakthrough are called project Champions, Master Black Belts, Black Belts, Green Belts, Yellow Belts, process owners, and sometimes White Belts. You can get a full description of who these people are and what they do in the "The People: Who You Need to Know" section in this chapter.

Designing for breakthrough

Designing for breakthrough Is the realm of activity focused on optimizing the

Design process prior to manufacturing products, delivering services, or conducting transactions for customers. Design for Six Sigma (DFSS) is an approach

For planning, configuring, qualifying, and launching products, services, transactions, processes, systems, and events that move quality upstream in an

Organization.

By Upstream, We mean that DFSS methods and tools enable you to anticipate

The source of development, manufacturing or performance problems before

They occur so that you can design and plan in a way that allows you to avoid them. Designing quality into products, services, transactions, processes, systems, and events from the beginning is what prevents the "hidden factory" from arising (see Chapter 1), eroding value, and, ultimately, eating away at

Profits.

First, DFSS reduces the risk in the performance and attributes of a design

(customer satisfaction issues). Second, it reduces the risks associated with the

Business and operational viability of a design (provider satisfaction issues). DFSS maximizes the confidence that a product, service, transaction, processes,

System, or event design will perform to its entitlement level in the presence of

Uncertainties that cannot be feasibly managed.

DFSS is not just an area of focus for design engineers in a company, but is

Applicable to the design process within any domain. DFSS enables the building of quality into processes and outcomes such that the opportunity for damaging variation and defects never occurs.

Managing for breakthrough

Managing for breakthrough Entails all the plans, systems, and processes for leading a Six Sigma deployment and implementing it in an organization. This is the mechanism by which an organization drives and supports the activities in the domains of thinking, processing, and designing for breakthrough.

Because Six Sigma is an intervention that sets an organization on a new performance path, managing for breakthrough is a matter of Leadership. Positive leadership moves people and organizations in a new direction, disrupting the status quo.

Managing for breakthrough involves selecting and training the right people; installing an improvement infrastructure; assimilating certain software tools; and establishing a management system, methods, and practices that are robust enough to set an organization on a new performance path. More information on the management aspects of selecting Six Sigma projects is in Chapter 4, and a complete run down on all the important tools for managing Six Sigma is in Chapter 12.

The executives, champions, and deployment leaders are directly responsible

For managing the Six Sigma initiative. Sometimes a Six Sigma role called a

Master Black Belt is also involved in managing for breakthrough. You can get

A full description of who these people are and what they do in "The People:

Who You Need to Know" section in this chapter.

The People: Who \!ou Need to Kno©

The full deployment and implementation of a Six Sigma initiative in an organization requires the collective participation of numerous people, each of whom is responsible for fulfilling specific roles and obligations at both the managerial and technical levels. Most often, these people are drawn from within the

Ranks of the company and are specially trained to the requisite skills.

The rigorous nature of a Six Sigma deployment compels an organization to call on its very best people to participate. When you’re involved in a Six

Sigma initiative, you’re working with the best and brightest, and you’re part

Of a structured assembly of talent that works together in lockstep to achieve the breakthrough goals of Six Sigma improvement.

Six Sigma requires energized thinking, an open mind, and an unquenchable thirst for truth and betterment. The Six Sigma mindset is one that initiates change, sees problems as opportunities, and formally questions fundamental

Assumptions until the root causes are characterized, optimized, and controlled.

These are principles and practices of leadership, and they are a fundamental part of the character of everyone who carries the Six Sigma flag.

‘Ј» For every participant, Six Sigma is a breakthrough leadership initiative. Just ~i\ like the breakthrough performance returns realized by the organization, every -

One involved in Six Sigma realizes a nearly unbounded sense of potential.

Barriers and limitations melt away. Anything is possible. After you drink the

Six Sigma elixir, there’s no turning back — you’re transformed. Energized

Thinking and thirst for truth become part of your being. You feel naturally compelled to question assumptions, search for root causes, and to characterize and optimize things. You become a leader.

One of the single greatest characteristics of Six Sigma is that it develops

Leaders. Regardless of your role or function, you develop leadership characteristics you didn’t have before. Your personal and professional life will have

New potential and new meaning. From the top

A Six Sigma initiative begins with a team of executives and business-unit leaders who approve the Six Sigma deployment program, endorse projects, and are accountable for achieving the results. They inject the initial dose of vision and ambition into the organization and apply the business savvy and people

Skills to stimulate the drive for change.

In Six Sigma, everyone’s a leader

Six Sigma is a top-down initiative. While the methods and tools of Six Sigma

Are applicable at all levels, breakthrough organizational performance requires

A full coordinated commitment — and that can only come from the top.

You may be tempted to try to introduce a Six Sigma initiative from the bottom -

Up, perhaps because you see the potential of and have control over your area of business, or maybe because your senior management "just doesn’tget it."

And you may be successful in applying the Six Sigma methodology in your local business area to achieve a significant level of process improvement, but for the rest of the organization to embrace Six Sigma, it will have to come

From the top. Prepare yourself to take your success to senior management and take it from the top going forward.

The Six Sigma deployment leader

The Six Sigma deployment leader is the single most important individual in the deployment process. The deployment leader is often a senior manager or executive who reports directly to the corporate-level person responsible for launching and sustaining Six Sigma.

The deployment leader ensures the effective alignment of corporate strategic

Goals with business unit deployment plans. They monitor progress and sustain performance at target levels, as Six Sigma is executed throughout the organization. In this role, the deployment leader develops the Six Sigma rollout plan; helps select Champions, Black Belts, Green Belts, and Yellow Belts; and ensures proper training. The deployment leader also works closely with the Six Sigma Champion, and serves as a conduit between Champions and

Executive management, as higher-level goals and objectives are communicated downward, and as goals and plans are aligned with implementation actions.

Specific responsibilities of the deployment leader also include

F Holding accountability for the results of Six Sigma

Is Driving the vision and mission for Six Sigma into the organization

Removing barriers to successful implementations

V Internally publicizing Six Sigma goals, plans, progress, results, and best

Practices

F Creating and maintaining passion and commitment to Six Sigma goals

Updating executive leadership on the progress of the business units

In large corporations made up of many business units, there may be a need for business unit level deployment leaders. Reporting directly to a business

Unit executive leader, the business unit deployment leader is responsible for

The initialization and implementation of Six Sigma within their particular organization. In smaller organizations, the roles of the deployment leader and the Six Sigma champion may be combined and filled by a single individual.

Naturally, the Six Sigma deployment leader has a great deal of rapport among his or her peers and has typically functioned as a manager or team leader. He or she is responsible for developing and communicating the corporate vision for Six Sigma and ensuring that appropriate resources and support structures are in place.

The Six Sigma Champion

Six Sigma Champions are responsible for the dissemination and successful application of Six Sigma technical know-how. They develop a plan for transforming their organizations to "Six Sigma as the way we think and work." They are also responsible for ensuring the success of Black Belts and Green Belts, through day-to-day coaching, mentoring, resource provisioning, and removal of barriers. Champions have long-standing rapport with key managerial and staff people, and a demonstrated ability to pull people and resources together on short notice to achieve key objectives. The Six Sigma Champion:

Identifies, selects, scopes, prioritizes, and assigns projects, and aligns projects to business strategies

Selects Black Belts, Green Belts, and Yellow Belts, and ensures that they are appropriately trained, tasked, and deployed

Supports Black, Green, and Yellow Belts through the removal of organizational barriers, securing necessary resources, coaching, and reviewing

Project implementation status

Establishes an adequate backlog of projects and ensures that all Belts

And Master Black Belts are fully dedicated to Six Sigma activities

Reports progress against target metrics to Champions

Promotes best-practices sharing and leverages solutions and improvements across organizational boundaries

In large corporations made up of many business units, there may be a Senior

Champion, as well as business-unit-level Champions. In smaller organizations,

The roles of the deployment leader and the Six Sigma Champion may be combined and filled by a single individual.

The core team

We can’t overemphasize the critical importance of a cross-functional core leadership team in ensuring the efficient and effective rollout of a Six Sigma initiative. The core team is a unified body whose members perform an organizational assessment, benchmark products and services, conduct detailed gap

Analyses, create the operational vision, and develop implementation plans. The core team ensures completeness of deployment throughout the organization, by:

V Making the initiative highly visible through active and personalized leadership, commitment, and passion for change

Installing the measurement system that will track the progress, install

Accountability into the initiative, and provide a visible dashboard of

Progress and efforts

Benchmarking of products, services, and processes so that the organization can truly understand its relative position in the marketplace

F Setting stretch goals that focus on changing the process by which work

Gets done rather than tweaking existing processes, leading to leap-frog rates of improvement

Providing knowledge and education to all levels of people, because

Certain methods and tools are necessary to initiate and sustain breakthrough improvement

F Evangelizing success stories that demonstrate how Six Sigma methods,

Technologies, and tools have been applied to achieve dramatic operational and financial improvements

Developing and implementing a supporting infrastructure that enables

Six Sigma to naturally occur and flourish in a company

Core team members include the following people and departments:

V Six Sigma deployment leader Is Business unit Six Sigma leaders

Key executive representatives Functional representatives Human Resources Finance

Information Technology Training

Communications

Functional representatives are senior corporate staff members who run their

Respective departments or have large responsibility in those departments. They are well respected leaders who can drive short-cycle change initiatives because they know the people and have the knowledge they need to set new

Initiatives in place.

Finance representative:

• Determines how project costs and savings will be defined, valued,

And reported

• Develops a project savings audit process and leads finance participation in the project selection and review processes

• Is the single point of contact for Six Sigma finance issues and

Coordinates all project auditing and validation activities

• Defines accounting and budgeting requirements for Six Sigma -

Related expenses

V Training representative:

• Is the single point of contact for Six Sigma training issues and coordinates Six Sigma training activities for the entire corporation

• Configures all training curricula and courseware for the Six Sigma

Initiative, including executive, Champion, Master Black Belt, Black

Belt, Green Belt, Yellow Belt, Design for Six Sigma, awareness training, and thinking for Six Sigma

• Schedules and coordinates all Six Sigma training courses, logistics,

Materials, and supplies and also develops training sign-up, tracking, and reporting processes

F Information Technology representative:

• Is the single point of contact for Six Sigma IT issues and coordinates

Six Sigma IT activities in all organizations

• Arranges for purchase and distribution of Six Sigma software, along with the hardware necessary to support it, for training and knowledge transfer, analytical work, project management, and process improvement

• Prepares and executes plans for providing end-user support for Six Sigma software

Human Resources representative:

• Is the single point of contact for Six Sigma human resources and coordinates all Six Sigma-related HR activities

• Writes job descriptions for all Six Sigma positions and prepares an

Organizational chart that identifies the roles

• Develops compensation packages for all Six Sigma positions and

Works with business leadership to configure reward, recognition, and career development plans

Communications representative:

• Is the single point of contact for all Six Sigma communication

Activities and leads the development and implementation of communication plans

• Organizes a process for communicating internal successes and coordinates communication with stock analysts, suppliers, customers, partners, and investors

• Arranges for the distribution of reference, informational, educational, and background material throughout the company

Number-crunching karate: Black Belts and their brethren

Solving problems the Six Sigma way requires varying degrees of skill in applied statistics:

F Solving complex problems requires considerable statistical expertise.

Solving problems of moderate complexity, or assisting in the solution of

Complex problems, requires a medium level of skill. F Regular application of simple statistics to everyday routine work requires

Even less.

In Six Sigma, the highest level of skill is called Black Belt, The medium skill level is Green Belt, And the everyday level is Yellow Belt.

<j,*10RK In the early 1990s, Motorola was assisting Unisys in solving complex prob-Ff/^jft\ Lems associated with the production of large-scale multilayer printed circuit (JsL ) boards for military applications. Applying the advanced statistical analysis M/jTy tools of Six Sigma solved the problem. The managers wanted to promote the value of the expertise developed in the team. One evening, unwinding after a long day’s work at the Unisys facility in Salt Lake City, they hit on the idea of calling these engineers Black Belts — a term that captured the mystique of their discipline and skill. "Now that’s a name I can sell!" proclaimed the Unisys manager.

And it did. As the Six Sigma methodology flourished, so too did the title of Six Sigma Black Belt As the master of statistical problem-solving. Later, as the need for lesser degrees of skill was identified, the terms Green Belt and Yellow Belt were added. Across the global Six Sigma landscape, you’ll also find additional variants, including Blue Belt, Brown Belt, and even White Belt. You’ll even hear jokes about Chartreuse Belts (part Green, part Yellow), Polka

Dotted Belts, and more.

^BE» Here’s one part of the martial arts metaphor that fits perfectly: A Black Belt is so expertly skilled and so experienced that they understand the true nature

( IM ) Of their opponent, and they know how to apply the right skills and tools with grace and minimal effort to channel its energy and fully achieve their goals.

«j»NG/ The "Belt" terminology is not universally accepted. While universally under-^/~ik\ Stood and applied as a broad standard in many companies and industries, it’s I I downright unfashionable in some circles. But whatever your scale of measure -

Ment, Six Sigma practitioners have varying degrees of skill.

Master Black Belts are the trainers. They are accomplished Black Belts with

Teaching skills, who work with and mentor other practitioners. Black Belts

Are extensively trained and typically work full-time leading Six Sigma projects. Green Belts receive less training and work part-time on Six Sigma projects, either in support of Black Belt projects or leading less-complex projects of their own. Yellow Belts receive less training still, and while they may support a Green Belt or Black Belt project, they usually apply their Six Sigma knowledge in the course of their everyday work. The hierarchy of practitioners is shown in Figure 3-2.

The Hierarchy of Six Sigma Roles

Figure 3-2:

The hierarchy of Six Sigma roles.

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Antl champions althe Too, a sme<! number of. vatfe<Siiafi!! Jiflto, Fslaols RWfa, finrf rjnpp. r Belts in I.^e Middle, ami s isyffs mimiwrofifsHawhetts ami

In the following sections, the roles and skills of the Six Sigma practitioners

Are described in further detail.

Master Black Belts

Master Black Belts (MBB) are hands-on experts who teach and mentor Black,

Green, and Yellow Belts, and who often own the Six Sigma training curricula and Six Sigma knowledge content for their organizations. As mentors, MBBs

Consult other Belts on fundamental business issues as well as specific project application issues, challenges, and problems.

Black Belts

Black Belts are the most highly trained experts in the complete set of Six Sigma methods and tools. They are highly respected for possessing the knowledge

And skill required to facilitate breakthrough-level improvements in the most

Complex of processes. Black Belts typically number 1 to 2 percent of the organization and operate in a full-time capacity. The Black Belt

Implements Six Sigma projects that historically are advertised to return a bottom-line value of $150,000 or more to the organization. A Six Sigma Black Belt may implement as many as four such projects a year.

Is Mentors and coaches others in applying Six Sigma methods and tools

F Leads complex departmental, business unit, or cross-functional process

Improvement projects that require significant data and analytical skill.

Is Disseminates new strategies and tools via training, workshops, case

Studies, local symposia, and more

Discovers internal and external (suppliers and customers) opportunities

For new Six Sigma projects Green Belts

The Six Sigma Green Belt is trained and skilled to solve the majority of process

Problems in both transactional and manufacturing environments. Green Belts

Are process leaders, process owners, professional staff, operational specialists,

Managers, and executives who have a significant degree of business, leadership, statistical, and problem-solving skills. Green Belts typically number 5 to 10 percent of the organization. The Green Belt

Is Implements about two projects per year that historically are advertised

To return an average bottom-line value of $35,000

F Teaches local personnel to apply Six Sigma strategies and tools and

Coaches local personnel through one-on-one support

Leads departmental, business unit, or cross-functional process improvement projects in environments that don’t require complex data or heavy

Statistical analyses

Is Disseminates new strategies and tools via training, workshops, case

Studies, local symposia, and more

Discovers internal and external (that is, suppliers and customers) opportunities for Six Sigma projects

\lello© Belts

Everyone in the organization can apply elements of the Six Sigma methodology

And improve their work environments. Everyone can assist Green Belts and Black Belts in completing projects. But not everyone needs to be immersed in

The details or challenges to the extent that requires the level of training or skill

Of the Green Belt or Black Belt.

The Six Sigma Yellow Belt is "everyone else." Yellow Belts are staff members,

Administrators, operations personnel, project team members, or anyone else —

Technical or non-technical. Nearly anyone can identify measurement scales, define critical process factors, collect some data, characterize a process, make

Easy improvements, and cultivate opportunities.

The goal of the Yellow Belt is to think in a data-driven, cause-and-effect process manner, and apply this thinking to their areas of work. Yellow Belts

Support Black Belt and Green Belt projects, and can even take on small projects of their own.

Be careful not to make generalizations about the average value of a Black Belt, Green Belt, or Yellow Belt project. Projects have a broad distribution

Of returns. Small projects can escalate, while high-value projects may never

Reach their potential. The averages we’ve indicated in the preceding lists are based on long-term experience across multiple companies and industries.

Bringing the team together

Each Six Sigma role-player works with other members of the team, as shown in Figure 3-3, keeping the project as the central focus.

Role Relationship Map

Ths puwer o<SU Sigma rnvoivss around black heft nud ijreeu bell, fsmjiicls, anil Twelves many

Figure 3-3:

The project is the center point of SixSigma activity.

T t

T

T

Master Black Belt

Project Support

Financial Rep

Project Support

Subject/Process Experts

BLACK BELT GREEN BELT

The Lifecjcle of a Six Sigma Initiative

A Six Sigma initiative occurs in five major stages (see Figure 3-4).

1. First, you Initialize Six Sigma by establishing goals and installing infrastructure.

2. Second, you Deploy The initiative by assigning, training, and equipping the staff.

3. Third, you Implement Projects and improve performance, yielding

Financial results.

4. Fourth, you Expand The scope of the initiative to include additional organizational units.

5. Fifth, you Sustain The initiative, through re-alignment, re-training, and

Evolution.

Each is discussed in the following sections.

Figure 3-4:

Six Sigma progresses in distinct stages.

The Lifecycle of Six Sigma

Initialize

^> Deploy ^> Implement^ Expand ^> Sustain ^

Initialize: Readj… Aim…

Six Sigma initiatives are programs. They require programmatic-type preparation and planning, beginning with a proscriptive set of readiness tasks. The

Initialization stage includes selecting the core team, preparing the supporting

Infrastructure, and enabling the processes, which must be in place to facilitate

The deployment activities of the next stage (see Table 3-1).

As part of initialization, executive training prepares the executive staff and senior leaders by providing a comprehensive overview of the Six Sigma deployment process and what to expect. The executives also agree on macro items

Including scope, timeframes, goals, and objectives, and they issue a formal

Commitment statement to all employees and constituents.

The scope of the first deployments should be kept in check. The most successful Six Sigma initiatives begin with the deployment scope limited to a

Selected line of business or division of activity.

Deploy: Setting it all in motion

With a supporting infrastructure, corporate goals, and metrics established, the deploy stage begins with the selection of the Champions and the first candidate Black Belts, Green Belts, and Yellow Belts.

Champions are trained in the Six Sigma methodology, the principles of implementing Six Sigma, and in project selection, practices and tools, and begin the critical work of selecting the first Six Sigma projects.

Also, the infrastructure is deployed by the core team. This includes finance practices, including guidelines for auditing project financials; software tools for statistical analyses, project management, and process optimization; training materials, curricula, and schedules for all Belt training; and motivational

Communications from management. A project tracking and performance

Dashboard system is deployed.

According to the deployment plan, the first waves of Black Belts, Green Belts, and Yellow Belts are trained and assigned to projects.

Six Sigma deployments include the practice of conducting projects as part of

The Belt training. All types of Belt training include the definition, characterization, and improvement of a work process as part of the training regimen. Although this extends the training period, trainees deliver results to the

Bottom line as they complete their initial training. The training has immediate-term ROI.

Implement: Forging first successes

Upon completion of the first waves of Belt training, the early successes create momentum and the Six Sigma initiative begins to gather traction. As successes continue, the initiative can become infectious and turn around even the skeptics.

In this stage, the practitioners are defining and mapping processes, identifying

Critical-to-quality indicators, collecting performance data, and characterizing process performance. They are conducting statistical analyses, discovering

The root causes of problems and improving performance levels. Your company has begun to root out waste, increase productivity, lower costs, and decrease

Cycle time. Six Sigma is working!

^BЈ» It’s important to watch the process closely. Black Belts must be assigned full time to their projects and given leverage to perform. Green Belts and even

I iMJi I Yellow Belts must be supported in their projects. Technical issues must be addressed head-on with appropriate skill to ensure success.

«j»NG/ Not all first projects go well — for a variety of reasons. If early high-profile ^/~ik\ Projects sputter, it can threaten the success of the initiative. For this reason, (/AT ) be sure to choose early projects that have a manageable scope, moderate risk, and the promise of reasonable returns. Leave the big risk/high reward

Projects for a little later.

Expand: Taking it everywhere

Following the first successful waves of implementation, the organization

Expands Six Sigma into new geographies, functional areas, and lines of

Business.

The introduction of Six Sigma into each new line of business is an initiative

Unto itself and includes the stages of initialization, deployment, and implementation. The lessons learned from the first deployment are included in revisions to the implementation plans going forward.

Some form of tailoring or customization of Six Sigma is required to deploy into each new business or functional area. Examples include

V Six Sigma in engineering and design areas would employ methods and tools of a sub-field known as Design for Six Sigma (DFSS — see the "Designing for breakthrough" section), and tools like Axiomatic Design.

Six Sigma in manufacturing includes lean practices.

F Highly computerized environments may incorporate automated process

Execution management tools.

Deployment into foreign countries requires internationalization and localization of materials and tools.

Also, as the portfolio of projects grows and diversifies, it’s important to apply

Enterprise-class tracking and management tools. Read more about these in

Chapter 12.

The first few waves of projects in any given function or business area harvest what is known as the low-hanging fruit — the obvious opportunities with big returns. As the Six Sigma initiative matures, two phenomena occur:

The biggest projects have all been completed.

^ The Yellow-Belt culture is curing little problems before they become big

Problems.

At this point, the project-oriented Six Sigma culture begins to give way to the

Sustaining culture.

Sustain: The self-healing culture

Six Sigma is a problem-solving methodology. A Six Sigma deployment applies the Six Sigma suite of problem-solving tools to business challenges in a series

Of projects, each of which addresses technical, performance, quality, and other problems in core and enabling processes of the organization.

Through expansion, typically over a period of several years, the initiative

Reaches the four corners of the enterprise. Soon thereafter, all the biggest problems have been solved, and the associated big returns have come in.

The first full cycle is complete. What’s next?

At this point, the Six Sigma initiative changes character. The deployment leader and Champion shift the sustaining direction away from a project orientation into a process-management approach, where the tools of Six Sigma move to a supporting role — as part of how business and work processes execute most efficiently and effectively. The Six Sigma tools take their place

In the organization’s methodological toolbox, along with other selected tools of business performance operations.

In the sustain phase, the culture is self-healing. The Six Sigma project is used as a hot-shot tool for addressing flare-up issues that emerge from new initiatives and outside forces. Six Sigma training supports these project needs and

Is also integrated with other methods to support process needs. Training is used as a refresher for existing staff and to enable new hires, contractors, and acquisitions.

In this part

Six Sigma is an applied methodology for improving business and organizational performance. But before you apply the Six Sigma methodology, you can benefit from knowing what it is, where it came from, why it works and who uses it. This part provides all this so you can understand the basics of Six Sigma.

■ m

In This Chapter

► Looking at a problem-solving methodology ^ Reviewing the precise statistical term

^ Recognizing that Six Sigma isn’t just another initiative-du-jour ^ Identifying a formidable business force

/t’s not often that a For Dummies Book topic first needs a formal definition. After all, you know in general what gardening, dating, and even marathon training are. But "Six Sigma"? Even if you remember that sigma is the 18th letter of the Greek alphabet, why six of them? What happened to the first five sigma?

It’s okay if you don’t know what "Six Sigma" is at all, or don’t understand every aspect of it. That’s because Six Sigma — once a precise, narrowly-defined term — has grown over time to represent a number of concepts:

Is Six Sigma Is a problem-solving methodology. In fact, it’s the most effective problem-solving methodology available for improving business and

Organizational performance.

Is Six Sigma performance Is the statistical term for a process that produces fewer than 3.4 defects (or errors) per million opportunities for defects.

Is A Six Sigma improvement Is when the key outcomes of a business or work process are improved dramatically, often by 70 percent or more.

V A Six Sigma deployment Is the prescriptive rollout of the Six Sigma methodology across an organization, with assigned practices, roles, and procedures according to generally accepted standards.

Is A Six Sigma organization Uses Six Sigma methods and tools to improve performance: Continuously lower costs, grow revenue, improve customer satisfaction, increase capacity and capability, reduce complexity, lower

Cycle time, and minimize defects and errors.

No pain, no gain

The Six Sigma approach is not for the faint of heart, nor the unprepared organization. It’s intense and rigorous, and it entails a thorough inspection of the way everything is done. Six Sigma sets ambitious business objectives and

Measures performance in a way that forces

Accountability. It doesn’t allow a management

Team to become complacent, but, rather, it exposes waste that otherwise would remain

Largely invisible.

Six Sigma takes a business out of its comfort zone — but for a relatively short time. After the first project gains are made and the money starts flowing to the profit margin, a cultural change

Takes hold. The early discomfort of changing

Business processes gives way to success, problems become opportunities for improvement, and the organization begins to enthusiastically leverage the methods and tools of Six Sigma — more pervasively and with a keen eye on value.

Six Sigma is a methodology for minimizing mistakes and maximizing value. Every mistake an organization or person makes ultimately has a cost — a

Lostcustomer, the need to do a certain task over again, a part that has to be

Replaced, time or material wasted, efficiency lost, or productivity squandered. In fact, waste and mistakes cost many organizations as much as 20 to 30 percent of their revenue! That’s a shocking number. Imagine throwing 20 to 30 percent of your money away in the garbage every time you cash a check. It may sound ludicrous, but that’s what many organizations do.

All businesses, organizations, and individuals have room to improve. No operation is run so tightly that another ounce of inefficiency and waste can’t be squeezed out. By their nature, organizations tend to become messy as they grow. Processes, technology, systems, and procedures — the ways of doing business — become cluttered with Bottlenecks, Meaning work piles up in one

Part of the organization while other parts sit idle with nothing to do.

Work is often performed incorrectly, or the outcome is flawed in some way. When this happens, you scrap products and services and have to do the work

Over again: You consume additional resources to correct a problem before it’s delivered to the customer, or the customer asks later for a "redo" — a new product or a more satisfactory service.

Sometimes, flaws and defects aren’t the problem, but a product or service

Simply takes too long to produce and deliver. Think about the problems a mortgage company would have if it processed home loans perfectly, but did so 5 times slower than the competition. That’s a perfect disaster.

^BЈ» Six Sigma was once a quality-improvement methodology, but now it’s a general-purpose approach to minimizing mistakes and maximizing value: How many

( IM ) products can you produce, how many services can you deliver, how many transactions can you complete to an expected level of quality in the least

Possible amount of time at the lowest possible cost?

Six Sigma takes effort and discipline and requires you to go through the pain

Of change. But soon the pain is transformed into improved performance, happier customers, lower costs, and more success.

The Managerial Perspective

While Six Sigma has its many definitions, Six Sigma action occurs on two different levels: the managerial and the technical. At the managerial level, a Six

Sigma initiative includes many units, people, technologies, projects, schedules, and details to be managed and coordinated. There are also many plans to develop, actions to take, and specialized work to complete. For all of this to work in concert, and for the technical elements of Six Sigma to be effective,

You have to set the proper management orientation.

From good to great the Six Sigma way

In the best-selling business book Good to Great, Author Jim Collins studied companies that achieved a distinct break with the past by dramatically improving their performance, as

Reflected in market value appreciation. He set out to discover their secret—the stuff they held in the black box called "what we did to become great" and to beat the performance of the average company in their market by 3, 7, or even 18

Times.

Collins’ empirical research led him to several

Interesting conclusions. Greatness is not a function of larger-than-life leaders, exorbitant executive compensation, killer business strategies, advanced technologies, mergers and

Acquisitions, or big change initiatives. Over the long run, as it turns out, these are all collective crutches an organization leans on to prop itself

Up — but none of these enable a company to

Become great.

So what makes a company great? According to Collins’ research, it is this: disciplined people, disciplined thought, and disciplined actions over an extended period. Having "the right people on the bus," as Collins puts it, having the "discipline to confront the most brutal facts of your current reality," in thought and in action, is the recipe for greatness.

Simply, this good-to-great result comes from the right people applying the right principles in the best possible way. Interestingly, this is what Six Sigma is all about: selecting the right people to drive and lead systematic improvement in a prescribed, disciplined, measurable, and repeat -

Able manner.

StoBK Radical corporate success

Six Sigma performing companies realize staggering business success:

■ General Electric Profited between $7 to $10 billion from Six Sigma in

About five years.

■ Dupont Added $1 billion to its bottom line within two years of initiating its Six Sigma program, and that number increased to about $2.4 billion

Within four years.

Bank of America Saved hundreds of millions of dollars within three years of launching Six Sigma, cut cycle times by more than half, and reduced the number of processing errors by an order of magnitude.

Honeywell Achieved record operating margins and savings of more than

$2 billion in direct costs.

■ Motorola, The place where Six Sigma began, saved $2.2 billion in a four -

Year time frame.

Six Sigma helps organizations achieve breakthrough improvement, not incremental improvement. In short, Six Sigma is a path to dramatic improvement in value for your customers and your company.

Bridge between science and leadership

From a management standpoint, Six Sigma culminates in the predictability and control of performance in a business or a business process, by applying

The methods of science to the domain of leadership.

Early in the 20th century, Henry Ford applied the principles of science to the production of cars. By following set processes and by optimizing repeatable

Processes, Ford and others made goods that displayed little variation in their final states and could be mass-produced without requiring extensive education and years of finely honed skills among the assembly-line staff. We have

Witnessed how the achievements of machinery, technique, process, and specialization of labor collectively enable the explosion of mass-production and the consumer society. Science dictates how all the parts, materials, machines, and people on the assembly line interact to turn out many "widgets" at the

Highest possible speed and the lowest possible cost.

-ЈJ^E» Managerially speaking, the goal of Six Sigma is to inject similar control, pre-7~Ґ\ dictability, and consistency of results into the production of a successful ( IM ) Organization, such that the widget comes off the production line absolutely consistently.

Countless times every day in the United States, people open a water faucet

And experience the flow of clean, clear water. The reason is because reliable purification systems treat the water and pressure systems ensure the water is there. This is what Six Sigma does; it treats the processes in a business so that they deliver their intended results reliably and consistently.

The methodology of Six Sigma was first applied in a manufacturing company,

But it also works in service and transactional companies (like banks and

Hospitals), where it has been implemented many times with great success. Six Sigma dramatically improves the way any process works — whether that

Process is in the chemical industry, the oil industry, the service industry, the entertainment industry, or anything else.

Management system orientation

Six Sigma is so appealing to managers because it delivers management results. Clear Value proposition and ROl

Six Sigma is characterized by an unwavering focus on business return on investment (ROI). A Six Sigma project can improve a business characteristic by 70 percent or more, stimulating increased operating margins for businesses,

While at the same time increasing the value those businesses provide to their

Customers. Six Sigma initiatives and projects have a direct, measurable financial focus and impact.

Top commitment and accountability

A Six Sigma initiative begins at the top. The leadership and management of an organization must actively commit to the Six Sigma initiative, setting

Performance goals and developing tactical implementation plans. Management

Team members must be personally accountable for achieving the performance improvement goals they set for their respective organizations and business

Units.

Customer focus

Six Sigma, through its Voice of the customer (VOC) Tools, drives business

Processes through customer requirements. No operational, process, and

Business improvements can occur without a definitive understanding of who the customers are and what they need, want, and are willing to buy. Six Sigma managers become savvy about the needs and requirements of customers, in a way that also enables the business to become stronger and

More profitable.

Connected business metrics

You know by now that Six Sigma is different from other performance improvement approaches in its focus on business financials and measurable operational improvements. To support this, the Six Sigma management system must include performance measures that are readily accessible and visible to everyone whose actions or decisions determine performance levels and operational quality.

Process orientation

Six Sigma improves the performance of processes — any business or work process — in how those processes effectively and efficiently transform material and other inputs into the desired outputs. This is the focal point of using Six Sigma to improve performance: the design, characterization, optimization, and validation of processes.

Project focus

The Six Sigma project is the tool by which processes and systems are characterized and optimized. Program leadership identifies opportunities for Six

Sigma improvement projects and assigns Six Sigma specialists to execute them. We provide details about how to select Six Sigma projects in Chapter 4, how to implement projects in Chapters 5 through 10, and how to manage projects using tools in Chapter 12.

Enabling tools and technology

Properly managing a Six Sigma initiative that spans an entire organization or

A significant part of an organization requires the ability to simultaneously

Manage many projects, processes, analyses, data banks, training activities,

And people. Generally speaking, several classes of tools and technology are

Employed to accomplish this:

Tools for designing, modeling, managing, and optimizing processes

Tools for the broad-scale management of multiple projects across multiple organizational units

V Tools for collecting data, conducting analytical calculations, and solving

Performance problems

Tools and technologies for training, educating, transferring knowledge, and managing knowledge

We provide a comprehensive view of the many Six Sigma tools and technologies in Chapters 11 and 12.

The historical perspective

The Six Sigma methodology was formalized in the mid-1980s at Motorola. New theories and ideas were combined with basic principles and statistical methods that had existed in quality

Engineering circles for decades. The building

Blocks were enhanced with business and leadership principles to form the basis of a complete management system. The result was a staggering increase in the levels of quality for several Motorola products, and the inaugural Malcolm Baldrige National Quality Award was bestowed on the company in 1988.

Everyone wanted to know how Motorola had done it. Then-president Robert Galvin chose to share Motorola’s Six Sigma secret openly, and

By the mid-1990s, corporations like Texas Instruments, Asea Brown Boveri, Allied Signal,

And General Electric had begun to reap similar

Rewards. By 2000, many of the world’s top corporations had a Six Sigma initiative underway, and by 2003, over $100 billion in combined savings had been tallied.

Six Sigma became the global standard of quality business practice, embraced by the American Society for Quality. Universities worldwide now offer courses. Dozens of consulting and software companies have brought products and tools to market. By the end of 2004, over 200 books on Six

Sigma were in print, and entering the term "Six

Sigma" into Google returned some 2,320,000 hits.

An infrastructure for change

Installing and managing a Six Sigma management system require a certain infrastructure — an underlying set of mechanisms and structures upon which to develop the Six Sigma improvement strategies and enact the tactics of project implementation and process improvement. The key elements of an effective Six Sigma infrastructure include the following:

Is A fully documented Six Sigma leadership system, strategic focus, business goal configuration, deployment plans, implementation schedules,

And activity tracking and reporting techniques

A strategy, methodology, and system for training and preparing executives,

Managers, Champions, Black Belts, Green Belts, Yellow Belts, financial auditors, process owners, and all others involved in the Six Sigma initiative; we define and describe all the Six Sigma job roles in Chapter 3

V Competency models and compensation plans, Six Sigma participant and

Leader selection guidelines, position and role descriptions, reporting relationships, and career-advancement policies and plans

Guidelines for defining project-savings criteria, aligning accounting categories with Six Sigma goals and metrics, forecasting project savings,

Auditing and evaluating project ROI, validating project savings, and reporting project ROI

Hard criteria for selecting projects, designating project-type categories, developing project problem-definition statements, targeting intended project savings and ROI, approving selected projects, and managing projects through to completion; we give you more about project management in Chapter 4

Information-technology-related structures, procedures, dashboards, tools and systems for designing and managing processes, tracking project and initiative progress, reporting results, storing information and data, and performing analytical functions; we look at these in more depth in Chapters 11 and 12

A strategy for consistently communicating the Six Sigma initiative across the enterprise, and an Internet or intranet site that provides a common

Reference and knowledge base that contains important information,

Motivational content, recognition stories, educational material, contact information, and so on

F A management review process for assessing the effectiveness of Six

Sigma from the top to the middle to the bottom of the organization:

• At the top, the focus is on the aggregate process, projects, and

Results for entire implementation business units.

• In the middle, the focus is on the process and results of operational units with multiple Six Sigma projects.

• At the lower levels, the focus of management review is on making

Sure individual projects are on track and yielding their intended process-improvement and financial results.

Complete culture change

A Six Sigma initiative often begins with outside consultants providing methods,

Tools, and training, but over time, the knowledge is internalized and applied

Organically within the organization. The ultimate goal is for everyone in the organization to have a working ability to understand customers’ requirements, collect data, map processes, measure performance, identify threats and opportunities, analyze inputs and outputs, and make continuous improvements. In Chapter 3, we provide more details about culture change.

The Technical Perspective

Six Sigma performance Is the statistical term for a process that produces fewer than 3.4 defects or errors per million opportunities. Behind that single statistic lies a methodology that includes a plethora of data, measurement,

Analysis, improvement, and control tools and supporting technologies. This

Section is an overview of the technical side of Six Sigma.

Quality and grade

Quality Is different from Grade. A product can be low grade but high quality, such as 87 versus 91 octane gasoline. As long as the 87 octane gas

Meets its required specification, it is of high

Quality, even though it’s a lower grade. Only if a certain batch of low-grade gas doesn’t meet its 87 octane requirement can you say it is of low quality, or defective.

Therefore, quality is always relative to intent. A quality $12 haircut is different from a quality $30 haircut. A quality economy car is expected to be different from a quality luxury car. A discount online stockbroker can provide a higher-quality experience than a full-service broker, relative to the expectations attached to both, respectively.

Product, service, and transactional quality

The technical objective of Six Sigma is to ensure the high quality and reliability of products, services, and transactions — the lifeblood of all businesses

And organizations. Banks, government agencies, hospitals, car washes, toy

Makers, semiconductor plants, professional services firms — all organizations of any type — provide products, services, and transactions, or some combination of the three.

For example, most auto manufactures do much more than build cars. They

Also provides services, such as routine maintenance and warranty repairs, through their dealerships. Through their financing arms, they approve and

Process car payments, a transactional business activity.

The technical goal of Six Sigma is for products, services, and transactions all to be performed with the highest possible quality as efficiently and effectively as possible. This requires performance targets for all components in a system, and for each important characteristic of every component. For example, a car

Axle (component) has to have the proper form, fit, and function to perform as intended, and if it is to fit together with other components of the car.

Aiming for the target

In Six Sigma, important characteristics are referred to as CTXs, where the C Stands for "critical," the T Stands for "to," and the X Represents what the characteristic is linked to: quality, cost, time, satisfaction, and so on. For example,

A critical-to-quality characteristic would be called a CTQ. Graphically, you can depict the target values of any CTX in Figure 1-1.

Target

Figure 1-1:

Target of a

Generic CTX.

CTX Performance Scale

A performance scale in some kind of units, such as time, length, size, and so

On, indicates the measured value of your CTX. The goal of Six Sigma is to come as close to your performance target as often as possible. If you’re making an axle, your goal is to make all your axles for a certain car the same length every time. This is the consistency a customer needs, and the predictability a business needs.

The reality of Variation

But what really happens? In reality, you can’t hit the target value perfectly all the time, no matter how good you are or how hard you try. You can get close,

But you will always have some variation.

In other words, every instance of a product coming off of a production line is in some way different from every other instance. The thickness of a part is

Never exactly the same. The amount of time it takes to execute a certain business transaction varies from instance to instance.

In the world of making products, delivering services, and conducting transactions, there is always a distribution of performance around a target. Normally, that distribution takes on the shape you see in Figure 1-2. This famous shape is called the Normal distribution, And is also known as the Bell curve.

Figure 1-2:

Performance variation around a target.

Target

CTX Performance Variation

Notice the shape of the normal distribution. It’s symmetrical about the central line, with just as much area under the curve to the left as on the right. In

Six Sigma, you encounter the normal distribution curve repeatedly, because it reveals itself again and again in the course of natural events.

Specifications haVe their place, and only their place

Henry Ford knew about variation nearly 100 years ago when he was mass producing his Model T cars. There is variation in everything, and all the many car parts would vary in their CTX dimensions. So what did he do? How could Henry account for this annoying phenomenon of variation?

He and the other industrialists of his day incorporated specifications and standards into their businesses. Recognizing that parts would vary at the

Component characteristic level, Ford designated variation limits within which

To operate. By doing so, he could accept the inevitable presence of variation while not ignoring its tendency to create defects and cause business loss.

Figure 1-3 shows a performance CTX with a normal distribution and the

Acceptable upper and lower limits of performance. With these specifications

Defined, you have a way to measure quality. You have a way of bounding an

Acceptable extent of variation for your customers and for the business. Having performance specification limits for component characteristics gives you parameters for defining, measuring, analyzing, improving, and controlling quality.

Figure 1-3:

Performance specifications

Around a target.

Lower Spec Limit

Target

Upper Spec Limit

CTX Performance Specifications

Consider these examples: A mortgage company has a goal of refinancing

Loans within two weeks of receiving a completed application. A pest-control

Company believes it must arrive within 30 minutes of all scheduled appointment times. An office-furniture company determines that to be competitive, it must not produce more than two defective pieces of furniture for every 100 produced.

Here are more examples:

A automotive engineer designs an axle. She knows that for optimal

Performance within the power train, the axle needs to 3.325 inches in diameter. Realizing that there will be variation in the thousands of axles

That will be produced, the engineer places an upper diameter limit on

Her design at 3.330 inches and a lower diameter limit of 3.320 inches.

Inthe engineer’s judgment, axles that fall within this range will be

Acceptably close to the target.

Is The manager of a pizza company asks his employees to put between 7 and 9 ounces of cheese on each large pizza. His goal is 8 ounces, and

He knows that having a pizza with too much or too little will lead to customer complaints.

Quality is defined by Conformance to standards or specifications. When you operate or perform within the specification limits, you have quality. When

You fall outside the limits, you have defects.

An even better definition may be this: Get as close to the target with the least

Amount of variation as possible. While specification limits are important and necessary, you want to focus on trying to hit your performance target and minimizing variation, because variation leads to defects and errors, which lead to poor quality, which leads to dissatisfied customers and business loss.

The journey from one to many

In the preceding section, quality is defined in terms of aiming for a performance target and achieving the least amount of variation possible — for one characteristic or one component. Now you can talk about quality in the overall assembly of a product, service, or transaction.

Consider the company which must operate at high levels of quality at the level of individual characteristics and components, because so many of them have

To fit and work together to make a whole product. For example, the average

Car has about 10,000 individual quality characteristics, or CTXs. That’s a lot

Of stuff that has to work together. If you work at an automotive company, how

Many cars do you make? How many papers have to get processed every day? How much material and supplies are ordered and purchased in every month? Millions upon millions — billions.

^M-Stye,. Suppose you have a die, and every time you roll the die and get a 1, that’s considered a Defect. With a six-sided die, then, you have one chance in six Ј y) \$ ) (17 percent) of rolling a defect, or a five out of six chance (83 percent) of suc -

\JjL/ Cess. But imagine now you have a pair of dice, and you roll them both together.

Now the chance of success — no defects — is only 69 percent. (We show you

How to calculate these probabilities in Chapter 6.) With three dice, the chance of rolling defect-free further decreases to 58 percent. Now image rolling 20 dice or 50 dice or 100 dice. With a hundred dice, you are almost certain to have a defect. (The actual probability of never getting a 1 when rolling 100 dice is less than one in 82 million!)

In Six Sigma, we call this concept of compounding defect risk Rolled throughput yield, And we explain it mathematically in Chapter 6. In practical terms, the reality of rolled throughput yield means you have to establish an extremely high probability of success for each individual component characteristic if

You ever expect your final products, services, and transactions to be highly successful and defect-free.

Exposing the hidden factory

Very few companies can actually achieve Six Sigma (fewer than 3.4 defects per million opportunities) or even five sigma performance (fewer

Than 233 defects per million opportunities) in

Their final products, because there are so many critical processes, process activities, machines,

People, and materials that have to interact

Along a chain of causation and span of time. Here’s an example: The chemical properties of

The catalyst, that is combined with the base material, that is mixed by the processing

Machine, that is controlled by the in-line gauges, that is operated by John, that is inspected by Sally, that is packaged by robots, that is stored in the warehouse, that is shipped to the customer via FedEx — all these have to operate in synch within certain limits of variation if the system is to reliably yield its intended outcomes. Remembering, too, that before any of this, the whole

System, including the product itself, was

Designed by a team of engineers who are by no means infallible.

If any one of the many critical activities is compromised or doesn’t function to its expectation,

Risk and error are propagated throughout the entire system. The system itself is also an

Opportunity-rich environment for hiding risk and

Error, because problems arising in one place

And time are caused in another place and time, and the space between is extremely difficult to

Navigate without the proper methodologies,

Equipment, and people.

Among Six Sigma practitioners, this reality of

Fixing the results of propagated error is known as the Hidden factory Or Hidden operation. You can almost see the wheels turning, the rework and cover ups, the hours and days of wasted

Time in a company of people who constantly

Correct mistakes. Every time a corrective action

Is taken or a machine is re-run, or a warranty claim is processed, you incur unnecessary

Rework. When you accept these events as "that’s just the way it is," you’ve mentally hidden

All of these activities from your improvement potential.

This is the hidden factory that runs in the background of all organizations. It is the factory that

Fixes problems, corrects mistakes, and otherwise wastes both time and money — a company’s two most precious commodities. Six Sigma eliminates the hidden factory, and, as a

Result, returns precious time and money back to

The business.

Watch out {or the Wiggle, bump, and jitter

Humans aren’t the only ones with variable behavior. Machines vary, too. Process inputs and outputs vary, and single characteristics vary, which causes their assemblies to vary as well.

You can see variation. You can visually plot the behavior of people, processes, products, and systems and look at it like a picture. A plot like this helps you see immediately that every characteristic you can measure has a performance

Distribution.

Furthermore, you can plot behavior today, come back next week and plot it again, and compare the difference. What if you plotted behavior one day and it looked one way, and next week it looked different? Comparing a single snapshot to the accumulated variation over time is an example of the change in

Behavior from the short term to the long term. Figure 1-4 shows two probability distributions for a critical characteristic: short term (solid line) and long term (dotted line). As you can see, in the long-term the variation in the

Behavior of the characteristic expands.

Short Term

This is a common occurrence. Here’s what’s happening. The probability of a

Defect in the short term does not account for certain changes that take place

Over the long term. Examples include the variation among different batches of incoming material, the impact of seasonal road traffic on delivery time, the different working styles and habits of different personnel. Joe may be a great machine operator, but he can’t work 24 hours a day. Eventually, he has to be relieved by Jim, who works a little differently from Joe. Each one has their

Own performance variations, but combined together it enlarges the range.

Short-term variation doesn’t necessarily refer to a specified period of time for every type of performance distribution. The time period involved in short-term performance variation for a restaurant meal is different from the period involved for the performance of electricity delivered to your home by a power plant. Chapter 5 provides more detail and understanding on why this is the case and what it means for the Six Sigma practitioner.

Wh§ six and ©h,, sigma? (Putting the pieces together)

The two preceding sections describe two interesting phenomena. One is considering performance in terms of the hundreds and often thousands of

Separate characteristics in a product, service, transaction, process, or system. Two, whatever performance level you achieve in the short term will become

Eroded over the long term. The term Six Sigma comes from the statistical basis of the approach and methodology used to address these two concerns:

The roll-up of characteristic behaviors and the natural increase in variation in each characteristic over the long-term.

The sigma scale is a universal measure of how well a critical characteristic performs compared to its requirements. The higher the sigma score, the more capable the characteristic. For example, if a critical characteristic is defective 31 percent of the time, you say that this characteristic operates at two sigma. But if it runs at 93.3 percent compliance, you say that it operates at three sigma. Table 1-2 shows the sigma scale.

Table 1-2_The Sigma Scale

Sigma_Percent Defective_Defects per Million

1 69% 691,462

2 31% 308,538

3 6.7% 66,807

4 0.62% 6,210

50.023%233

60.00034%3.4

70.0000019%0.019

If a characteristic operates at three sigma, that means that, 6.7 percent of the

Time, the variation in its performance exceeds acceptable levels. This could be an invoicing process that goes longer than the company’s allowed time limit, or a forged bolt that is manufactured longer than customer requirements.

Whatever the critical characteristic may be, if it is three sigma, it is defective 6.7 percent of the time, or 66,700 times out of a million. In Chapter 6, we explain more detail of how the sigma scale is created and why its called "sigma."

What the originators of Six Sigma discovered is that when they worked to have each critical characteristic in the system — the product, the service, the transaction — perform at a Six Sigma level, the risk of the individual characteristics being incorrect was small enough (0.00034 percent or 3.4 defects per million opportunities) that when all the parts were assembled together,

The overall system still performed at an exceptional level. And even when

Long-term effects inevitably entered into each characteristic, the overall

System performance remained high. These companies now had a method

For competing at a whole new level on the global market. That’s why six is

Themagic number.

So why six and not five sigma? Good question. For the complex products on

Which this method was originated, there were enough characteristics rolled

Together and enough long-term degradation that only six would do. Four or five sigma just didn’t provide enough relief from these two constraints.

For transactional and service companies now adopting Six Sigma, their systems and environments are often less complex — they don’t have as many critical characteristics coming together. So they don’t necessarily need to have each critical characteristic operating at Six Sigma. In these cases, four or five may actually do.

But the magnitude of the earlier success of Six Sigma has made the name stick. And almost all companies, regardless of their size or complexity, recognize the benefits of aiming for a Six Sigma goal. Even if the milestone of Six Sigma is never reached, the act of working toward that goal drives

Breakthrough changes.

There are instances where great companies are able to produce Six Sigma quality in their final products, services, and transactions — especially when

Safety or human life is involved. For example, did you know that you are

About 2,000 times more likely to reach your destination when you fly than your luggage is? That’s because airline safety operates at a level higher than Six Sigma, while baggage reliability operates at about four sigma.

Table 1-3 How Good Is Good?

99% Good (3.8 Sigma)_99.99966% Good (Six Sigma)

20,000 lost articles of mail per hour 7 articles of lost mail per hour

Unsafe drinking water for almost One unsafe minute of drinking water every 15 minutes per day seven months

5,000 incorrect surgical operations 1.7 incorrect surgical operations per week per week

2 short or long landings at major 1 short or long landing at major airports

Airports every day every five years

200,000 incorrect drug 68 incorrect drug prescriptions each year

Prescriptions each year

No electricity for almost 7 hours One hour without electricity every

Each month 34 years

11.8 million shares incorrectly 4,021 shares incorrectly traded on the

Traded on the NYSE every day NYSE every day

3 warranty claims for every 1 warranty claim for every 980 new

New automobile automobiles

48,000 to 96,000 deaths attributed 17 to 34 deaths attributed to hospital to hospital errors each yearerrors each year