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© QUALITY COUNCIL OF INDIANACSSBB 2007

II. ENTERPRISE-WIDE DEPLOYMENT

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SIX SIGMA HAS FOREVER CHANGEDGE®. EVERYONE... IS A TRUEBELIEVER IN SIX SIGMA, THE WAYTHIS COMPANY NOW WORKS.

JOHN F. WELCHFORMER GE CHAIRMAN


II. ENTERPRISE-WIDE DEPLOYMENTENTERPRISE-WIDE VIEW / VALUE OF SIX SIGMA

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Enterprise-Wide Deployment

Enterprise-wide Deployment is reviewed in the followingtopic areas:

C Enterprise-wide viewC Enterprise leadership

Enterprise-wide View is presented in the following topicareas:

C Value of six sigmaC Six sigma foundationsC Value and foundations of leanC Integration of lean and six sigmaC Business processes and systems

These topic areas vary somewhat from the wording andsequence of the ASQ BOK but the authors feel thecoverage is adequate.



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Value of Six Sigma

Six sigma is a highly disciplined process that focuseson developing and delivering near-perfect products andservices consistently. It is also a management strategyto use statistical tools and project work to achievebreakthrough profitability and quantum gains in quality.

Motorola®, under the direction of Chairman Bob Galvin,used statistical tools to identify and eliminate variation.From Bill Smith’s yield theory in 1984, Motorola®

developed six sigma as a key business initiative in 1987.



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-6 -4 -2 0 642

Value of Six Sigma (Continued)

Motorola® noted that many operations, such as complexassemblies, tended to shift 1.5 sigma over time. So aprocess, with a normal distribution and normal variationof the mean, would need to have specification limits of± 6 sigma in order to produce less than 3.4 defects permillion opportunities.

The ± 1.5 Six Sigma shift



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Sigma Level ppm6 sigma 3.4 ppm5 sigma 233 ppm 4 sigma 6,210 ppm3 sigma 66,810 ppm2 sigma 308,770 ppm1 sigma 697,672 ppm

Defect Levels

Note that Table II in the Appendix provides defect levelsat other sigma values. Various authors report slightlydifferent failure rates based upon rounding effects andslight miscalculations.

It should be noted that the term “six sigma” has beenapplied to many operations including those with non-normal distributions, for which a calculation of sigmawould be inappropriate. The principle remains thesame, deliver near perfect products and services byimproving the process and eliminating defects. The endobjective is to delight customers.



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The six sigma steps for many organizations aredescribed as DMAIC:

Define: Select the appropriate responses (the “Ys”)to be improved.

Measure: Data must be gathered to measure theresponse variable.

Analyze: Identify the root causes of defects,defectives, or significant measurementdeviations whether in or out of specifications.(The “Xs”, independent variables).

Improve: Reduce variability or eliminate the cause.

Control: With the desired improvements in place,monitor the process to sustain theimprovements.



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Because of the integration of a number of tools, such aslean manufacturing, DOE (design of experiments), andDFSS (design for six sigma), six sigma has beenreferred to as TQM (total quality management) onsteroids.

The business successes that result from a six sigmainitiative include:

C Cost reductionsC Market - share growthC Defect reductionsC Culture changesC Productivity improvementsC Customer relations improvementsC Product and service improvementsC Cycle - time reductions



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Motorola® credits the six sigma initiative for savings of$940 million over three years. AlliedSignal® (nowHoneywell®) reported an estimated $1.5 billion insavings in 1997.

Harry reports that the average black belt project willsave about $175,000. There should be about 5 to 6projects per year, per black belt. The ratio of one blackbelt per 100 employees can provide a 6% cost reductionper year. For larger companies, there is usually onemaster black belt for every 100 black belts.



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Snee provides some reasons why six sigma works:

C Bottom line resultsC Senior management is involvedC A disciplined approach is used (DMAIC)C Short project completion times (3 to 6 months)C Clearly defined measures of successC Infrastructure of trained individualsC Customers and processes are the focusC A sound statistical approach is used

When operations reach six sigma quality, defectsbecome so rare that when they do occur, they receivethe full attention necessary to determine and correct theroot cause. As a result, key operations frequently endup realizing better than six sigma quality.


II. ENTERPRISE-WIDE DEPLOYMENTENTERPRISE-WIDE VIEW / SIX SIGMA FOUNDATIONS

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Six Sigma Foundations

Listed below are some well-known gurus and what theyhave contributed to the business and technicalfoundations of six sigma. This list is far from inclusive.

Guru Contribution

Philip B.Crosby

Senior management involvement4 absolutes of quality managementQuality cost measurements

W. EdwardsDeming

Plan-do-study-act (wide usage)Top management involvementSystem improvementsConstancy of purpose

Armand V.Feigenbaum

Total quality control/managementTop management involvement

Kaoru Ishikawa 4M (cause-and-effect) diagramsCompanywide quality control Next operation as customer



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Six Sigma Foundations (Continued)

Guru Contribution

Joseph M.Juran

Top management involvementQuality trilogyQuality cost measurementPareto analysis

Walter A.Shewhart

Assignable cause vs. chance causeControl chartsPlan-do-check-act (in design)Use of statistics for improvement

GenichiTaguchi

Loss function conceptsSignal to noise ratioExperimental design methodsConcept of design robustness

Bill Smith First introduced six sigma

Mikel Harry The main architect of six sigma

ForrestBreyfogle III

Author of Implementing Six Sigma



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Philip B. Crosby (1928 - 2001)

Philip B. Crosby was vice-president of ITT for 14 years.In 1979, he founded Philip Crosby Associates, Inc. inWinter Park, Florida. Mr. Crosby consulted, spoke, andwrote about strategic quality issues throughout hisprofessional life.

The other quality deep thinkers could be viewed asacademicians, but Crosby was considered abusinessman. This explained the numbers of topmanagement that flocked to his quality college.

Crosby believed that quality was a significant part of thecompany and senior managers must take charge of it.He believed the quality professional must become moreknowledgeable and communicative about the business.Crosby stated that corporate management must makethe cost of quality a part of the financial system of theircompany.



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Philip B. Crosby (Continued)

One of Crosby’s most popular statements on qualitywas,

“Quality is conformance to requirements.”

Philip Crosby preached four absolutes of qualitymanagement:

1. Quality means conformance to requirements2. Quality comes from prevention3. The quality performance standard is zero defects4. Quality measurement is the price of nonconformance

The four absolutes of quality management are basicrequirements for understanding the purpose of a qualitysystem.



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Dr. W. Edwards Deming (1900 - 1993)

Dr. Deming was an honorary member of ASQ. He wasawarded the ASQ Shewhart Medal in 1955. During hislife Dr. Deming published over 200 papers, articles, andbooks.

W. Edwards Deming was the one individual who stoodfor quality and for what it means. He is a national folkhero in Japan and was perhaps the leading speaker forthe quality revolution in the world. At the Hawthorneplant he became acquainted with W. Shewhart andstudied Shewhart’s statistical methods.

Deming made several visits to Japan between 1946 and1948 for the purpose of census taking. JUSE invitedDeming back in 1950 for executive courses in statisticalmethods. He refused royalties on his seminar materialsand insisted that the proceeds be used to help theJapanese people. JUSE named their ultimate qualityprize after him.

His message to America is listed in his famous 14 pointsand 7 deadly diseases.



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Dr. W. Edwards Deming (Continued)

The Fourteen Obligations of Top Management:

1. Create constancy of purpose for improvement ofproducts and service

2. Adopt a new philosophy; we are in a new economicage

3. Cease dependence upon inspection as a way toachieve quality

4. End the practice of awarding business based onprice tag

5. Constantly improve the process of planning,production, and service, including people

6. Institute training on the job 7. Institute improved supervision (leadership) 8. Drive out fear 9. Break down barriers between departments10. Eliminate slogans/targets asking for increased

productivity without providing methods11. Eliminate numerical quotas12. Remove barriers that stand between all workers and

their pride of workmanship13. Institute programs for education and retraining14. Put all emphasis in the company to work to

accomplish the transformation



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Deming’s Seven Deadly Diseases

1. Lack of constancy of purpose to plan a marketableproduct and service to keep the company inbusiness and provide jobs

2. Emphasis on short-term profits

3. Personal evaluation appraisal, by whatever name,for people in management, the effects of which aredevastating

4. Mobility of management; job hopping

5. Use of visible figures for management, with little orno consideration of figures that are unknown orunknowable

6. Excessive medical costs

7. Excessive costs of warranty, fueled by lawyers thatwork on contingency fees

Among other educational techniques, Deming promotedthe parable of the red beads, the PDSA cycle, and theconcept of 94% management (system) causes versus6% special causes.



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Dr. W. Edwards Deming (Continued)

Deming’s Chain Reaction

Deming shared the following chain reaction with Japanin the summer of 1950:

Improve quality º Decrease costs (less rework, fewerdelays) º Productivity improves º Capture the marketwith better quality and price º Stay in business ºProvide jobs.



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Dr. Armand V. Feigenbaum (1920 - )

Mr. Feigenbaum is generally given credit forestablishing the concept of “total quality control” in thelate 1940s while he was at General Electric. His TQCstatement was first published in 1961, but, at that time,the concept was so new no one listened.

The TQC philosophy maintains that all areas of thecompany must be involved in the quality effort. Thequality effort has generally only affected the shop floorpeople, but must extend to all sections of the company.Products must not only be made quicker and faster, butalso sold faster. Feigenbaum noted that the qualityprofessional has an opportunity to become more than afunctional specialist.



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Dr. Armand V. Feigenbaum (Continued)

The success of TQC includes these principles:

C TQC is a company wide processC Quality is what the customer says it isC Quality and production costs are in partnershipC Higher quality will equate to lower costsC Both individual and team zeal are requiredC Management must relentlessly emphasize qualityC Quality and innovation must work togetherC All of management must be involved in qualityC Use new and existing technologiesC Quality is the cost-effective route to productivityC Quality involves both customers and suppliers



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Dr. Kaoru Ishikawa (1915 - 1989)

Kaoru Ishikawa was involved with the quality movementin its earliest beginnings and remained so until his deathin 1989. A review of Ishikawa’s training tapes, producedin 1981, contain many of the statements of quality thatare in vogue today. Subjects such as total qualitycontrol, next operation as customer, training of workers,empowerment, customer satisfaction, elimination ofsectionalism, and humanistic management of workers,are examples.

To reduce confusion between Japanese-style totalquality control and western-style total quality control, hecalled the Japanese method the companywide qualitycontrol (CWQC).



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Dr. Kaoru Ishikawa (Continued)

CWQC involves the participation of workers from the topto the bottom of an organization and from the start tothe finish of the product life cycle. CWQC requires amanagement philosophy that has respect for humanity.

One of the first concepts that western management tookback to their own shores was the quality circle. Thequality circle represents the bottom up approach.

Ishikawa also wrote that he originated the concept “nextoperation as customer” in 1950. Operators concernedabout their own defects were considered spieswhenever they traveled to the next department to viewtheir original work. The separation of departments wasreferred to as sectionalism.

Kaoru Ishikawa was known for his lifelong efforts as thefather of Japanese quality control efforts. The fishbonediagram is also called the Ishikawa diagram in hishonor.

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