I.            Overview: Six Sigma and the Organization (15 Questions)

                              A.            Six sigma and organizational goals

                                                       1.            Value of six sigma
Recognize why organizations use six sigma, how they apply its philosophy and goals, and the origins of six sigma (Juran, Deming, Shewhart, etc.). Describe how process inputs, outputs, and feedback impact the larger organization. (Understand)

What is Six Sigma?

Conceptually, Six Sigma is:

·         A system of practices originally developed by Motorola to systematically improve processes by eliminating defects

·         A data-driven management philosophy developed by Motorola for eliminating defects, waste and quality control problems in manufacturing.

• A management improvement methodology based on a heavy use of statistical tools to reduce errors and gain measurable cost savings.
• A management philosophy that has transformed organizations helping them become more effective and efficient.

·         In the words of Jack Welch, former CEO of GE, it is a method to develop the future business leaders of an organization.

·         A methodology that provides businesses with the tools to improve the capability of their business processes.

• A rigorous and a systematic methodology that utilizes information (management by facts) and statistical analysis to measure and improve a company's operational performance, practices and systems by identifying and preventing 'defects' in manufacturing and service-related processes in order to anticipate and exceed expectations of all stakeholders to accomplish effectiveness.
• And, Motorola University describes Six Sigma as a metric, a methodology, and as a management system, all at the same time.

As a metric, Six Sigma equals 3.4 defects per million opportunities (DPMO).

As a methodology, it is a business improvement method focusing on the DMAIC model to manage customer requirements.

As a management system, it is a top-down strategy that prioritizes resources for projects.

Origins of Six Sigma:

In 1985, Bill Smith, a quality engineer for Motorola, coined the term Six Sigma to describe improvement metrics. Motorola CEO Bob Galvin sponsored the quality improvement initiative, and Mikel Harry formulated the MAIC methodology and the subsequent Motorola University. At Motorola, Six Sigma began as a metric to improve product quality in manufacturing and evolved beyond measuring product defects to a management philosophy of quality and value creation.

Six Sigma as a metric can be traced back to Carl Frederick Gauss (1777-1855) who introduced the concept of the normal curve, and Six Sigma as a metric in product variation is traced back to the 1920's when Walter Shewhart showed that three sigma from the mean is the point where a process requires correction.

In 1988, Motorola was the first winner of the Malcolm Baldridge Quality Award chartered in the mid-1980s by President Reagan. This led to the evolution of the Six Sigma quality improvement methodology. In 1993, the CEO of Allied Signal, Lawrence Bossidy formally committed to Six Sigma as a business enabler and focused the methodology on improving operating margin, improving processes, and focus on customer needs and requirements. Lawrence Bossidy had worked for GE and was very friendly with the CEO, Jack Welch. Welch invited Bossidy to speak to the GE organization, which led to Welch adopting Six Sigma as a business culture within GE.

Prominent Figures in Six Sigma:

Foundation Gurus:

Philip Crosby (1928-2001)

• Senior management involvement
• Four absolutes of quality management

Dr. W. Edward Deming (1900-1993)

• 14 obligations of top management
• 7 deadly diseases

Dr. Armand Feigenbaum (1920)

• Total Quality Control (TQC)

Dr. Kaoru Ishikawa (1915-1989)

• 4M (5M) or cause-and-effect diagram
• Fishbone diagram
• 2 – 5 years for Company Wide Quality Control (CWQC)

Dr. Walter Shewhart (1891-1967)

• Control chart
• Shewhart Cycle - PDCA (Plan, Do, Check, Act)
• Assignable cause variation vs. chance cause variation.

Dr. Joseph Juran (1904)

• Quality Trilogy – planning, control, improvement.
• Quality Control Handbook
• Pareto analysis

Dr. Genichi Taguchi (1924)

• Design of Experiments (DOE)
• Loss function

Others:

Peter S. Pande

·         Reasons a company should NOT undertake Six Sigma

Kaplan, R.S. and Norton, D.P.

·         Balanced scorecard

Michael Porter

·         Five forces of competitive strategy

Yoshinobu Nayatani

·         7M Tools - Pareto diagram, cause and effect diagram, stratification, check sheet, histogram scatter diagram, graphs and control charts.