Chapter 1: What is Six Sigma?

A Six Sigma culture is about ___ improvement.

Continuous

In applying Six Sigma, organizations, teams, and project managers seek to implement strategies that are based on ___ and ___. Historically, many business leaders made decisions based on ___ or ___.

Measurement and metrics. Intuition or experience.

Common Six Sigma Principles: Continuous Process Improvement

Once one area is improved upon, the organization moves on to improving another area.

Challenges of Six Sigma: Concerns about Using Six Sigma in a Specific Industry

Organizations often discount the methods or believe they will be too difficult to implement in other industries. In reality, Six Sigma can be customized to any industry.

Sigma Level is not a final indicator in determining which particular process an organization should improve first. Leadership should also consider ___, ___, and ___.

Costs, resources, and the estimated impact of improvements. Sometimes, a process might have a low sigma level, but it wouldn't be worth improving because it is too costly to improve.

The purpose for determining a value stream for a process is that

you can identify areas of concern, waste, and improvement.

How to calculate the sigma level of a product or process

( (# of opportunities - # of defects) / # of opportunities ) x 100 = Yield

The Six Sigma method lets organizations ___, ___, ___, and ___ to avoid unintended consequences.

Identify problems, validate assumptions, brainstorm solutions, and plan for implementation

Six Sigma (6σ)

both a methodology for process improvement and a statistical concept that seeks to define the variation inherent in any process, while also prioritizing a culture of continuous improvement - Variation in a process leads to opportunities for error. - Opportunities for error then lead to risks for product defects. - Product defects lead to poor customer satisfaction. - Therefore, Six Sigma reduces process costs and increases customer satisfaction.

Beta testing

the act of implementing a new idea, system, or product with a select group of people or processes in as controlled an environment as possible. - After beta testers identify potential problems and those problems are corrected, the idea, system, or product can be rolled out to the entire population of customers, employees, or processes. - The purpose of beta testing is to reduce the risks and costs inherent in launching an unproven product or system to a widespread audience.

For organizations, it's not just about the rate of error - it's also about

the costs associated with each error.

Define the statistical concept represented by 6σ.

6σ is a statistical representation for what many experts call a "perfect" process. Technically, in a Six Sigma process, there are only 3.4 defects per million opportunities. In percentages, that means 99.99966 percent of the products from a Six Sigma process are without defect. At just one sigma level below—5σ, or 99.97 percent accuracy--processes experience 233 errors per million opportunities.

Challenges of Six Sigma: Lack of Resources or Knowledge

Lack of knowledge about how to use and implement Six Sigma is one of the first issues small- and mid-sized companies face. Smaller businesses can't always afford to hire dedicated resources to handle continuous process improvement, but the availability of resources and Six Sigma training makes it increasingly possible for organizations to use some of the tools without an expert or to send in-house staff to be certified in Six Sigma.

Challenges of Six Sigma: Lack of Support

Leaders and executives must be willing to back initiatives with resources—financial and labor related. Subject-matter experts must be open to sharing information about their processes with project teams, and employees at all levels must embrace the idea of change and improvement and participate in training.

Defects per Million Opportunities for each Sigma Level

One Sigma - 690,000 Two Sigma - 308,000 Three Sigma - 66,800 Four Sigma - 6,200 Five Sigma - 233 Six Sigma - 3.4

The disadvantage of launching ideas into beta—or to an entire population--without going through a Six Sigma methodology is that

Organizations can experience unintended consequences from changes, spend money on ideas that don't end up working out as planned, and impact customer perceptions through trial-and-error periods rife with opportunities for error.

Challenges of Six Sigma: Poor Project Execution

Proponents of Six Sigma within any organization really have to hit it out of the ballpark with the first project if leadership and others are on the fence about the methodology. Teams can help avoid poor project performance by taking extreme care to execute every phase of the project correctly. By choosing low-risk, high-reward improvements, teams can also stack the deck in their favor with first-time projects. The only disadvantage with such a tactic is that it can be hard to duplicate the wow factor with subsequent improvements.

Common Six Sigma Principles: Reduce Variation

Reducing variation leads to product/service consistency.

Common Six Sigma Principles: Remove Waste

Removing waste (items, actions, or people that are unnecessary to the outcome of a process) reduces processing time, opportunities for errors, and overall costs.

Common Six Sigma Principles: Equipping People

After implementing an improved process, employees who work directly with the process are equipped to control and manage the process in its improved state.

Common Six Sigma Principles: Customer Focused Improvement

Understanding the customers and their desires, improving processes based on what the customers want.

By applying tools such as statistical analysis and process mapping to problems and solutions, teams can

Visualize and predict outcomes with a high-level of accuracy, letting leadership make decisions with less financial risk.

Value Streams

the sequence of all items, events, and people required to produce an end result. For ex. If you combine all of the processes in making a hotdog (supplier, buns, ketchups, someone to serve hotdog, etc.) into a pictorial representation of exactly how these elements become the served hotdog, then you have a value stream map.

List the Common Six Sigma Principles

Customer Focused Improvement - Understanding the customers and their desires. Continuous Process Improvement - Once one area is improved upon, the organization moves on to improving another area. Reduce Variation - Reducing variation leads to product/service consistency. Remove Waste - Removing waste (items, actions, or people that are unnecessary to the outcome of a process) reduces processing time, opportunities for errors, and overall costs. Equipping People - After implementing an improved process, employees who work directly with the process are equipped to control and manage the process in its improved state. Controlling the Process - The goal of improvement is to bring a process back within a state of statistical control. Then, after improvements are implemented, measurements, statistics, and other Six Sigma tools are used to ensure the process remains in control.

Challenges of Six Sigma: Data Access Issues

Gaining access to consistent and accurate data streams—and applying statistical analysis to that data in an appropriate manner—is difficult.

List the Challenges of Six Sigma

Lack of Support - Leaders and executives must be willing to back initiatives with resources—financial and labor related. Subject-matter experts must be open to sharing information about their processes with project teams, and employees at all levels must embrace the idea of change and improvement and participate in training. Lack of Resources or Knowledge - Lack of knowledge about how to use and implement Six Sigma is one of the first issues small- and mid-sized companies face. Smaller businesses can't always afford to hire dedicated resources to handle continuous process improvement, but the availability of resources and Six Sigma training makes it increasingly possible for organizations to use some of the tools without an expert or to send in-house staff to be certified in Six Sigma. Poor Project Execution - Proponents of Six Sigma within any organization really have to hit it out of the ballpark with the first project if leadership and others are on the fence about the methodology. Teams can help avoid poor project performance by taking extreme care to execute every phase of the project correctly. By choosing low-risk, high-reward improvements, teams can also stack the deck in their favor with first-time projects. The only disadvantage with such a tactic is that it can be hard to duplicate the wow factor with subsequent improvements. Data Access Issues - Gaining access to consistent and accurate data streams—and applying statistical analysis to that data in an appropriate manner—is difficult. Concerns about Using Six Sigma in a Specific Industry - Organizations often discount the methods or believe they will be too difficult to implement in other industries. In reality, Six Sigma can be customized to any industry.

Common Six Sigma Principles: Controlling the Process

The goal of improvement is to bring a process back within a state of statistical control. Then, after improvements are implemented, measurements, statistics, and other Six Sigma tools are used to ensure the process remains in control.