The Six Sigma Black Belt Handbook

561 Pages·2005·10.19 MB·english

by  Thomas McCarty

Source: The Six Sigma Black Belt Handbook
Part One:
The Six Sigma Management System
This first part of The Six Sigma Black Belt Handbook focuses on the
extension of Six Sigma into a management system that encompasses all
levels of an organization. Motorola University consultants have found
that while implementing Six Sigma through individual projects has pro-
duced significant results in many organizations, sustainable, breakthrough
improvements are realized by those organizations whose leadership has
embraced Six Sigma and incorporated it into their vision, strategies, and
business objectives - in short, adopted Six Sigma as the system for man-
aging their organizations. The Six Sigma Management System enables a
leadership team to align on their strategic objectives, establish their criti-
cal operational measures, and determine their organizational performance
drivers and then use those to implement, drive, monitor, and sustain their
Six Sigma effort.
The four chapters in this part of the book will:
Introduce the Six Sigma Management System, and distinguish it from
(cid:122)
the Six Sigma metric and Six Sigma methodology
Explain the background (Chapter 1), principles, and
(cid:122)
elements of the Six Sigma Management System (Chapter 2)
Describe the Six Sigma leadership modes (Chapter 3)
(cid:122)
Provide insights into Six Sigma leadership (Chapter 4)
(cid:122)
Illustrate key tools used to implement the Six Sigma Management
(cid:122)
System
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The Six Sigma Management System
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Source: The Six Sigma Black Belt Handbook
Chapter
1
(cid:127)
Introduction to Six Sigma
Six Sigma has been labeled as a metric, a methodology, and now, a man-
agement system. While Green Belts, Black Belts, Master Black Belts,
Champions and Sponsors have all had training on Six Sigma as a metric
and as a methodology, few have had exposure to Six Sigma as an overall
management system. Reviewing the metric and the methodology will
help create a context for beginning to understand Six Sigma as a man-
agement system.
Management System
(cid:121)SixSigma drives strategy execution
(cid:121)Leadershipsponsorship and review
(cid:121)Metricsdriven governance process
(cid:121)Engagementacross the organization
MMMMMMaaaaaannnnnnaaaaaaggggggeeeeeemmmmmmeeeeeennnnnntttt ttSSSS SSyyyyyysssssstttteeeetteemmmmmm
Methodology
MMMMMMeeeeeetttthhhhtthhooooooddddddoooooolllloooollooggggggyyyyyy (cid:121)Consistentuse of DMAIC model
(cid:121)Teambased problem solving
MMMMMMeeeeeettttrrrrttiiiirrcccciicc (cid:121)Measurement-based process
analysis, improvement, and control
Metric
(cid:121)Measureprocess variation
Figure 1-1 Six Sigma as a Metric, Methodology, Management System
Six Sigma as a Metric
Sigma is the measurement used to assess process performance and the
results of improvement efforts - a way to measure quality. Businesses use
sigma to measure quality because it is a standard that reflects the degree
of control over any process to meet the standard of performance estab-
lished for that process.
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Introduction to Six Sigma
4 Chapter One
Sigma is a universal scale. It is a scale like a yardstick measuring inches,
a balance measuring ounces, or a thermometer measuring temperature.
Universal scales like temperature, weight, and length allow us to compare
very dissimilar objects. The sigma scale allows us to compare very differ-
ent business processes in terms of the capability of the process to stay
within the quality limits established for that process.
The Sigma scale measures Defects Per Million Opportunities (DPMO).
Six Sigma equates to 3.4 defects per million opportunities. The Sigma
metric allows dissimilar processes to be compared in terms of the number
of defects generated by the process in one million opportunities.
7 0.02
6 3.4
DPMO
Sigma (Defects Per
5 233
Million
Opportunities)
4 6210
3 66810
Figure 1-2 Sigma Scale
Aprocess that operates at 4.6 Sigma is operating at 99.9% quality level.
That means:
4000 wrong medical prescriptions each year
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More than 3000newborns being dropped by doctors/nurses each year
(cid:122)
2 long or short landings at American airports each day
(cid:122)
400 lost letters per hour
(cid:122)
A process that operates at the 6 Sigma level is operating at 99.9997%
quality level. At 6 Sigma, these same processes would produce:
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Introduction to Six Sigma
Introduction to Six Sigma 5
13 wrong drug prescriptions per year
(cid:122)
10 newborns dropped by doctors/nurses each year
(cid:122)
2 long or short landings at U.S. airports each year
(cid:122)
1 lost letter per hour
(cid:122)
Mikel J. Harry, one of the developers of Six Sigma at Motorola, has esti-
mated that the average company in the Western world is at a 4 Sigma
level, while 6 Sigma is not uncommon in Japan.1 Dave Harrold, in
Control Engineering 2 cites benchmark sigma levels broken down by
industry and type of process:
IRS phone-in tax advise - 2.2
(cid:122)
Restaurant bills, doctors prescription writing, and payroll processing - 2.9
(cid:122)
Average company - 3.0
(cid:122)
Airline baggage handling - 3.2
(cid:122)
Best in class companies - 5.7
(cid:122)
U.S. Navy aircraft accidents - 5.7
(cid:122)
Watch off by 2 seconds in 31 years - 6
(cid:122)
Airline industry fatality rate - 6.2
(cid:122)
Clearly, the value of sigma is its universal application as a measuring stick
for organizational and process quality. With sigma as the scale, measures
of as-is process quality and standards for should-be process targets for
quality improvement can be set and understood for any business process.
Six Sigma as a Methodology
The Six Sigma methodology builds on the Six Sigma metric. Six Sigma
practitioners measure and assess process performance using DPMO and
sigma. They apply the rigorous DMAIC (Define, Measure, Analyze,
Improve, Control) methodology to analyze processes in order to root out
sources of unacceptable variation, and develop alternatives to eliminate or
reduce errors and variation. Once improvements are implemented, con-
trols are put in place to ensure sustained results. Using this DMAIC
methodology has netted many organizations significant improvements in
product and service quality and profitability over the last several years.
The Six Sigma methodology is not limited to DMAIC. Other problem-
1Harry, Mikel. "Six Sigma: The Breakthrough Management Strategy Revolutionizing the World's
Top Corporations." New York, N.Y. Random House Publishers, 2000.
2Harrold, Dave, "Designing for Six Sigma Capability", Control Engineering, January 1, 1999
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Introduction to Six Sigma
6 Chapter One
solving techniques and methodologies are often used within the DMAIC
framework to expand the tool set available to Six Sigma project teams.
These include:
Theory of Inventive Problem Solving (TRIZ)
(cid:122)
Lean
(cid:122)
Ford 8Ds (Disciplines)
(cid:122)
5 Whys
(cid:122)
Is/Is Not Cause Analysis
(cid:122)
Utilizing the sigma metric and marrying this variety of approaches with
the DMAIC methodology, the Six Sigma methodology becomes a power-
ful problem-solving and continuous improvement methodology.
Clearly, the use of a consistent set of metrics can greatly aid an organiza-
tion in understanding and controlling their key processes. So too, the var-
ious problem-solving methodologies significantly enhance an organiza-
tion's ability to drive meaningful improvements and achieve solutions
focused on root cause. Unfortunately, the experience of Motorola
University consultants has demonstrated that good metrics and disciplined
methodology are not sufficient for organizations that desire breakthrough
improvements and results that are sustainable over time.
In fact, conversations with organizational leaders who report dissatisfac-
tion with the results of their Six Sigma efforts have shown their Six Sigma
teams have sufficient knowledge and skill related to good use of metrics
and methodology. However, all too often, these teams have been apply-
ing the methodology to low level problems, and have been working with
process metrics that don't link to the overall strategy of the organization.
It is this recurring theme that has driven Motorola University to develop
the concept of Six Sigma as a management system, first introduced in the
book "The New Six Sigma".
Six Sigma as a Management System
Six Sigma as a best practice is more than a set of metric-based problem
solving and process improvement tools. At the highest level, Six Sigma
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Introduction to Six Sigma
Introduction to Six Sigma 7
has been developed into a practical management system for continuous
business improvement that focuses management and the organization on
four key areas:
understanding and managing customer requirements
(cid:122)
aligning key processes to achieve those requirements
(cid:122)
utilizing rigorous data analysis to understand and minimize variation
(cid:122)
in key processes
driving rapid and sustainable improvement to the business processes.
(cid:122)
As such, the Six Sigma Management System encompasses both the Six
Sigma metric and the Six Sigma methodology. It is when Six Sigma is
implemented as a management system that organizations see the greatest
impact.
These organizations are among those that have demonstrated that break-
through improvements occur when senior leadership adopts Six Sigma as
a management system paradigm.
In 1999, ITT Industries implemented Value-Based Six Sigma
(cid:122)
(VBSS), the company's "overarching strategy for continuous
improvement" (source: ITT Industries website). In the 2003 letter
to the shareholders, the then-Chairman, President, and CEO, Louis J.
Guiliano, wrote, "VBSS gives us the tools and discipline we need to
make fact-based decisions, to solve problems and to find solutions in
a systematic and measurable way. Now in its fourth year, the VBSS
strategy is already making a huge difference to our customers. The
thrust of our VBSS projects has shifted from simple initial short-
term projects that drive out costs and waste, to more comprehensive
projects that focus on making improvements that mean the most to
our customers. VBSS is generating many new ways of growing our
business and increasing our capacity, as well as saving millions of
dollars. It is a key contributor to our robust cash flow performance.
As our VBSS project leaders grow in numbers and in expertise -
more than 10 percent of our 39,000 employees are now certified as
Champions, Black Belts or Green Belts - they are increasingly
focused on projects that are changing the way we do business in
profound and enduring ways. Through the combined efforts of the
Champions, Black Belts, Green Belts, and the teams they lead, we
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Introduction to Six Sigma
8 Chapter One
are seeing real progress in the quality of the products and services
we are providing to customers. We are shortening cycle times,
reducing lead times, and eliminating excess inventories; we are
meeting or exceeding on-time delivery commitments, and dramati-
cally reducing defect rates. Our customers have noticed these
improvements, and we see this reflected in enhanced customer loyal-
ty and market share position. More than that, our employees gain
satisfaction from working on these teams."
General Electric started its quality focus in the 1980s with Work-
(cid:122)
Out. Today, Six Sigma is providing the way "to meet our customers'
needs and relentlessly look for new ways to exceed their expect-
ations. Work-Out® in the 1980s defined how we behave. Today, Six
Sigma is the way we work. Six Sigma is a vision we strive toward
and a philosophy that is part of our business culture. It has changed
the DNAof GE and has set the stage for making our customers feel
Six Sigma." (source: General Electric website)
Raytheon has used Six Sigma to cut billions of dollars in costs,
(cid:122)
improve cash flow and profits by millions, improve supplier and
customer relationships,and build internal knowledge networks.
"Raytheon Six Sigma™ is the philosophy of Raytheon management,
embedded within the fabric of our business organizations as the
vehicle for increasing productivity, growing the business, and build-
ing a new culture. Raytheon Six Sigma is the continuous process
improvement effort designed to reduce costs." (source: Raytheon
website)
Honeywell views its Six Sigma initiative (called Six Sigma Plus) as
(cid:122)
the way to maintain its position with its customers as a premier
company. "At Honeywell, Six Sigma refers to our overall strategy
to improve growth and productivity as well as a measurement of
quality. As a strategy, Six Sigma is a way for us to achieve perform-
ance breakthroughs." (source: Honeywell website)
Valley Baptist Medical Center (Harlingen, TX) has incorporated Six
(cid:122)
Sigma Quality as one of its Seven Strategic Initiatives. The hospital
has been recognized with a number of national awards, including the
"Top Performer" in the country for the overall quality of physician
care in the emergency room. (Award presented by independent
marketing research firm Professional Research Consultants.) James
G. Springfield, President and CEO of Valley Baptist Health System,
says they have made Six Sigma the company's system for
operations. (source: Valley Baptist Health System website).
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Introduction to Six Sigma
Introduction to Six Sigma 9
These and other organizations have discovered that successful practice of
Six Sigma requires the adoption of a management system to strategically
guide their Six Sigma programs. The next chapter will explore the prin-
ciples behind the Six Sigma Management System, as developed by
Motorola University consultants to guide their clients to build strategic
management systems and achieve breakthrough results.
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