Business, Personal + Finance

Tuesday, January 22, 2008

Six Sigma Appreciation

Tuesday, January 22, 2008 Posted by Vernon Go No comments

Last January 16, 2008, we had a seminar on
“Appreciation of Six Sigma” in our schools hosted by the Industrial Engineering Department and with volunteers such as myself as part of the organizing committee. I was not able to blog about it since it was my blog schedule on the Sinulog and talking about six sigma all of a sudden would ruin the momentum of the Sinulog Celebration Feature.

Our speaker was a female (I won’t mention her name, only her credentials) Magna Cum Laude BSIE Graduate, a Manufacturing Supervisor (Damn, Cant mention the Company either but it’s a well known Co. here in cebu) and a practicing Green Belter. We only had an Overview since it would become a workshop if went into details.

What is Six Sigma?

Six Sigma is a set of practices originally developed by Motorola to systematically improve processes by eliminating defects. A defect is defined as nonconformity of a product or service to its specifications. While the particulars of the methodology were originally formulated by Bill Smith at Motorola in 1986, Six Sigma was heavily inspired by six preceding decades of quality improvement methodologies such as Quality Control, TOtal Quality Management (TQM), and Zero Defects. Like its predecessors, Six Sigma asserts the following:

  • Continuous efforts to reduce variation in process outputs is key to business success

  • Manufacturing and business processes can be measured, analyzed, improved and controlled

  • Succeeding at achieving sustained quality improvement requires commitment from the entire organization, particularly from top-level management

Six Sigma's implicit goal is to improve all processes to that level of quality or better. At many organizations, it simply means a measure of quality that strives for near perfection. Six Sigma is a disciplined, data-driven approach, systematic approach to problem solving, with a focus on customer impact and methodology for eliminating defects (driving towards six standard deviations between the mean and the nearest specification limit) in any process -- from manufacturing to transactional and from product to service.

The statistical representation of Six Sigma describes quantitatively how a process is performing. To achieve Six Sigma, a process must not produce more than 3.4 defects per million opportunities. A Six Sigma defect is defined as anything outside of customer specifications. A Six Sigma opportunity is then the total quantity of chances for a defect.

The fundamental objective of the Six Sigma methodology is the implementation of a measurement-based strategy that focuses on process improvement and variation reduction through the application of Six Sigma improvement projects. This is accomplished through the use of two Six Sigma sub-methodologies: DMAIC and DMADV. The Six Sigma DMAIC process (define, measure, analyze, improve, control) is an improvement system for existing processes falling below specification and looking for incremental improvement. The Six Sigma DMADV process (define, measure, analyze, design, verify) is an improvement system used to develop new processes or products at Six Sigma quality levels. It can also be employed if a current process requires more than just incremental improvement. Both Six Sigma processes are executed by Six Sigma Green Belts and Six Sigma Black Belts, and are overseen by six Sigma Master Black Belts.

According to the Six Sigma Academy, Black Belts save companies approximately $230,000 per project and can complete four to 6 projects per year. General Electric, one of the most successful companies implementing Six Sigma, has estimated benefits on the order of $10 billion during the first five years of implementation. GE first began Six Sigma in 1995 after Motorola and Allied Signal blazed the Six Sigma trail. Since then, thousands of companies around the world have discovered the far reaching benefits of Six Sigma.

Six Sigma is a registered service mark and trademark of Motorola, Inc.. Motorola has reported over US$17 billion in savings from Six Sigma as of 2006. In addition to Motorola, companies that also adopted Six Sigma methodologies early-on and continue to practice it today include Bank of America, Caterpillar, Honeywell International (previously known as Allied Signal), Ratheon, Merrill Lynch, 3M and General Electric.

Six Sigma as a problem-solving approach has traditionally been used in fields such as business, engineering, and production processes.

She also mentioned that Six Sigma is expensive since all Formal Training are all offered outside the country and a company must invest for there employees’ training. The success of Six Sigma depends on implementation with initiative from the Top Management, without it six sigma would be useless (In short, Continuous Improvement initiative from the top), she said.

Also, I’ll be blogging later about the Welcoming Remarks of our Department Chair in relation to Six Sigma and the other Current Industry Trends and Practices.



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