Six Sigma can benefit your company

Part Three Implementing Six Sigma The Roadmap and the Tools

This section focuses on the How-to of the major components and tools in the Six Sigma system. For those who want to begin doing the work of making Six Sigma gains or just want to know more about what's really involved in the effort this section should answer many of your questions. If your concern is about measurement, for example, you can concentrate on Chapter 14 if you're looking at redesigning a process, Chapter 16 will be your focus. We cover some of the more important advanced tools of Six Sigma in this section as well. As a conclusion, we offer a list of 12 Keys to Success for your Six Sigma journey.

Six Sigmas Hidden Truthsand Potential Payoff Hidden Truth

Six Sigma encompasses a broad array of business best practices and skills (some advanced, some common sense) that are essential ingredients for success and growth. Where it's shown the most impressive impact, Six Sigma is much more than a detailed statistics-based analytical method. We'll address the full range of Six Sigma as it's being applied in these diverse and growing organizations. The Payoff You'll be able to apply Six Sigma to many different business activities and challenges from strategic planning to operations to customer service and maximize the impact of your efforts.

So What Is Six Sigma

If you've read this far, you already know that Six Sigma is not some kind of new sorority or fraternity. On the other hand, there are different perspectives on what Six Sigma is. Business media often describe Six Sigma as a highly technical method used by engineers and statisticians to fine-tune products and processes. True, in part. Measures and statistics are a key ingredient of Six Sigma improvement but they are by no means the whole story. Another definition of Six Sigma is that it's a goal of near-perfection in meeting customer requirements. This also is accurate in fact, the term Six Sigma itself refers to a statistically derived performance target of operating with only 3.4 defects for every million activities or opportunities. It's a goal few companies or processes can claim to have achieved. Still another way to define Six Sigma is as a sweeping culture change effort to position a company for greater customer satisfaction, profitability, and competitiveness. Considering the...

Six Sigma Changing Business Habits

A story from our early experiences implementing Six Sigma illustrates how this new approach to business impacts the very habits that drive an organization. We were working with leaders and Six Sigma project teams at one of largest business units of GE Capital (the first totally service-based company to launch Six Sigma). At that moment, in an act of corporate courage, one of the firm's Black Belts, a financial services manager we had trained to coach Six Sigma teams, literally stepped between the CEO and the team's charts. He declared, in so many words We're not going to jump to a solution because we're using the Six Sigma process Immediately the company leader recognized his mistake. Instead of getting angry, he laughed and apologized. Later, speaking to the entire group, he related the story and gave credit to the Black Belt for defending the Six Sigma Way. We're not in the 'Just Do It' mode anymore, he noted. Taking the time to understand a problem and process before we fix it is...

Implementing Six Sigma

Six Sigma is a business initiative first espoused by Motorola in the early 1990s. Recent Six Sigma success stories, primarily from the likes of General Electric, Sony, AlliedSignal, and Motorola, have captured the attention of Wall Street and have propagated the use of this business strategy. The Six Sigma strategy involves the use of statistical tools within a structured methodology for gaining the knowledge needed to create products and services better, faster, and less expensively than the competition. The repeated, disciplined application 5. Adapted from Forrest W. Breyfogle, III, Implementing Six Sigma (New York Wiley, 1999), pp. 5-7. of the master strategy on project after project, where the projects are selected based on key business issues, is what drives dollars to the bottom line, resulting in increased profit margins and impressive return on investment from the Six Sigma training. The Six Sigma initiative has typically contributed an average of six figures per project to...

Six Sigma For Improvement

How does Six Sigma play a role with BPM It all depends on how Six Sigma is positioned and viewed within an organization. As part of achieving business excellence, Six Sigma is viewed here from a problem-solving, project-by-project perspective. The benefits in integrating BPM with the Six Sigma problem solving and design methodology are operational in nature faster and cheaper. This includes root cause elimination with statistical rigor and hard dollar improvements. The integration of BPM and Six Sigma provides a continuous improvement loop that generates a 'pipeline' for problem solving projects (Figure 11A-3) from core business process measurement and then improves the processes for continued operations and monitoring. In using a statistical approach, however, it is necessary to weigh the depth and breadth of the use of statistics within the organization. The seven basic continuous improvement tools9 are often more than sufficient for an organization to start with. As the...

Improving Six Sigma Projects Results Through Project Management Processes

Whenever there are process changes and improvements to be made, they have to be managed as projects, undertaken to create a new different situation. A Six Sigma project is commonly associated with a business case based on some measurable and representative need for improvement in a process. Any deviation from the achievement of the expected results of this business case implies an unsuccessful Six Sigma project. The success criteria for any Six Sigma project is to achieve the committed goals in a sustainable way under a planned schedule, budget, and technical performance. Both models add significant value for the achievement of company strategies and can be viewed in a complementary way. Some companies like GE and NCR have indeed customized the DMAIC model as a proprietary structured methodology, adding project management processes to the Six Sigma project life cycle phases.

The Tools and Themes of Six Sigma

Like most great inventions, Six Sigma is not all new. While some themes of Six Sigma arise out of fairly recent breakthroughs in management thinking, others have their foundation in common sense. Before you dismiss that origin as no big deal, we'd remind you of a saying we picked up once while working in Europe Common sense is the least common of the senses. From a tools perspective, Six Sigma is a pretty vast universe. Figure 1.2 summarizes many but by no means all of the most important Six Sigma methods. The more we have learned over the years about the Six Sigma system, the more we have come to see it as a way to link together and even to implement many otherwise disconnected ideas, trends, and tools in business today. Some of the hot topics that have direct application or can complement a Six Sigma initiative include Figure 1.2 Essential Six Sigma methods and tools Figure 1.2 Essential Six Sigma methods and tools

Is Six Sigma Really Different

Some people, when first exposed to Six Sigma concepts, complain that it's similar to the Total Quality efforts of the last 15 to 20 years. Indeed, the origins of many Six Sigma principles and tools are found in the teachings of influential quality thinkers like W Edwards Deming and Joseph Juran. In some companies GE and Motorola among them the terms quality and Six Sigma often go together. So it's true that in some ways Six Sigma's expansion is heralding a rebirth of the quality movement. Cynics who gave up on TQM might choose to think of Six Sigma as that generic horror movie plot the beast that wouldn't die. But as we'll see, Six Sigma makes for a new and very much improved beast. If you've been through TQM, CQI, BPR, ABC, LMNOP (that's a joke), etc. you'll probably find some familiar material in The Six Sigma Way. However, we're sure you'll also find a lot that's new, and that you'll see familiar tools applied with greater impact on the business's competitiveness and bottom-line...

Six Sigma and Project Management

Six Sigma is just making its appearance in project management. Six Sigma is the name coined by Motorola in the 1980s for a process and throughput improvement strategy it developed from some of the process control work done originally in the Bell Laboratories in the 1920s and later taken to Japan in the 1950s by W. Edwards Deming. Six Sigma's goal is to reduce the product errors experienced by customers and to improve the quality of products as seen and used by customers. Employing Six Sigma throughout Motorola led, in part, to its winning the prestigious Malcolm Baldrige National Quality Award 1988. The name Six Sigma has an origin in statistics. The word sigma we recognize as the Greek letter s which we know as a. From our study of statistics, we know that the standard deviation of a probability distribution is denoted by s . Furthermore, we know that the confidence measures associated with a Normal distribution are usually cast in terms of so many s from the mean for example, as...

Cp Cpk Figure Statistical Background Of Six Sigma Process Capability

DMAIC provides orientation and tools to be executed, aiming to plan, implement, and standardize highly significant process improvements (Six Sigma), which are almost always associated with financial and or customer's loyalty gains. DMAIC consolidates the using of formal logic reasoning it is based on experimental data collection and analysis, as well as specific and proven statistical and process-oriented tools. Ultimately, DMAIC represents the transition from statistical concept goals (the Six Sigma fundamentals) to a practical step-by-step method, focused on process improvements and business results. Six Sigma (implemented through DMAIC) is, therefore, not another quality or training program or a quick-fix approach with some statistical complexity. It is rather an added-value strategy able to impact positively the company's financials, eliminate defects problems to ensure products and services align to the customer's expectations, and sustain improvements and gains over time, based...

Key Features of the Six Sigma

This book is designed with maximum customer satisfaction in mind. We hope that by reading it you'll gain a complete picture of what's behind the Six Sigma movement, how it's paying off, and how you can implement the system so as to best fit your circumstances. Our goal is to provide a flexible resource and reference, whether you've been engaged in Six Sigma for several years or are just starting to learn and apply it. 2. Practical implementation guidelines. Whether it's fixing a process problem or implementing Six Sigma companywide, we'll review important information to help you get started and keep moving. 3. Insights, comments, and examples from real people business leaders, experts, and managers who are using Six Sigma in their organizations. These thoughts have helped reinforce and refine our ideas we're confident you'll learn a lot from them, too. 4. Checklists for a number of the essential steps in Six Sigma improvement. We hope to prepare you to go out and do Six Sigma...

Motorolaand Some Six Sigma History

Today, the very existence and success of electronics leader Motorola is tied to Six Sigma. It's the company that invented the concepts that have evolved into this comprehensive management system. And while GE has used Six Sigma to strengthen an already thriving company, for Motorola it was an answer to the question How do we stay in business. In the 1980s and early 1990s, Motorola was one of many U.S. and European corporations whose lunch (along with all other meals and snacks) was being eaten by Japanese competitors. Motorola's top leaders conceded that the quality of its products was awful. They were, to quote one Motorola Six Sigma veteran, In a world of hurt. Like many companies at the time, Motorola didn't have one quality program, it had several. But in 1987, a new approach came out of Motorola's Communications Sector at the time headed by George Fisher, later top exec at Kodak. The innovative improvement concept was called Six Sigma. What Six Sigma offered Motorola though it...

The Phase Review Methodology Framework for Six Sigma Projects

Figure 30-5 illustrates a suggested generic methodology framework for managing Six Sigma according to modern project management processes. It's made up of five stages and four gates, representing the reasoning and the totality of work that consolidates the mixed approach between DMAIC and the PMBOK Guide. Gate 3 is a formal review the detailed project plan, validating it (or not), and deciding whether to continue the project to the next stage. If the project plan is considered unfeasible, some rework can be required, or simply, the project can be canceled or frozen. It's interesting to observe that only after the project plan and the project budget are concluded can the company review the project's benefit costs figures and decide about its gains. It isn't uncommon for most of the companies implementing Six Sigma strategy to arrive in this project phase and decide for project cancellation, absorbing the sunk costs and impacts. Figure 30-5 still shows a correspondence between the DMAIC...

Six Sigma and Process Capability

Six Sigma is a process capability (Cp) technique. What is meant by process capability Every man-made process has some inherent errors that are irreducible. Other errors creep in over time as the process is repeated many times, such as the error that might be introduced by tool wear as the tool is used many times in production. The inherent errors and the allowable error creep are captured in what is called the engineering tolerance of the process. Staying within the engineering tolerances is what is expected of a capable process. If the Normal distribution is laid on a capable process, as shown in Figure 8-8, in such manner that the confidence limits of the Normal distribution conform to the expectations of the process, then process engineers say with confidence that the process will perform to the required specification.

Bpm Six Sigma And Project Management

So how does project management fit into the discussion Business Process Management (BPM) and Six Sigma Implementing the Baldrige Criteria, business process management, or Six Sigma problem solving requires specific skill sets from black belts or quality professionals involved in these efforts. Typical training for these individuals includes project management skills. BPM and Six Sigma are dependent on the project leads possessing the skills to successfully manage the lifecycle of projects. Delivering results are absolutely critical to a program launch in order to gain credibility to the quality system initiative. Project management discipline enables project leads to successfully complete the projects, and therefore, demonstrate the much needed credibility or value to the business leaders.

Six Sigma quality template

Six Sigma quality is defined as an organized process of continuous improvement by private defense contractors and DoD activities aimed at developing, producing, and deploying superior material. The primary threat to reaching and sustaining this superiority is failure to manage with a purpose of constantly increasing intrinsic quality, economic value, and military worth of defense systems and equipments. Note the focus on management first, not technical risk. The Armed Forces and defense industrial entities may not attain a lasting competitive military posture and long-term competitive business stature without a total commitment to quality at the highest levels. Six Sigma is applicable to all functions concerned with the acquisition of defense material, supplies, facilities, and services. Being satisfied with suboptimum, short-term goals and objectives has adverse impacts on cost, schedule, and force effectiveness. A short-term approach leads to deterioration in the efficacy of...

Six Sigma Where Does It Fit In Project Management

Six Sigma talks about reducing defects to parts per million. Another way to view Six Sigma is that it will increase predictability of the results your customers expect. Already this implies that we are dealing with a repetitive process (e.g., manufacturing parts or handling service calls, making pizzas, taking mortgage applications, etc.). The Critical Chain approach, described earlier, is designed to bring the project management system into control, according to Deming's criteria. The Buffer Management can then be used to recognize where the system needs to improve. This is one obvious place where Six Sigma thinking can play an important role. In project management, the Six Sigma approach begins with the definition that there are three states we are seeking for requirements definition. (1) We want the requirements to be free of defects (which we would need to define, as not all rework is a result of defects). (2) We want the requirements to be delivered on time. (3) We want the...

The Six Sigma Wave

As we've noted, it might be easy to dismiss Six Sigma as a fad if it weren't for the caliber of the results it's producing and the companies adopting it. In almost an antifad mentality, in fact, a number of prominent companies in industries from financial services to transportation to high-tech are quietly embarking on Six Sigma efforts. They're joining others who have been more vocal about their efforts, including Asea Brown Boveri, Black & Decker, Bombardier, Dupont, Dow Chemical, Federal Express, Johnson & Johnson, Kodak (which had taken in 85 million in savings as of early 2000), Navistar, Polaroid, Seagate Technologies, Siebe Appliance Controls, Sony, Toshiba, and many others. From these and other Six Sigma companies come a wide variety of other impressive improvements, benefiting both customers and shareholders. A sample from the hundreds of Six Sigma projects underway at organizations around the world includes the following

Lean and Six Sigma

Lean Six Sigma and lean manufacturing are toolkits to reduce waste in business processes each is a proven concept that has saved practitioners millions of dollars. Lean manufacturing is a proven approach to reduce waste and streamline operations. Lean manufacturing embraces a philosophy of continually increasing the proportion of value-added activity of business through ongoing waste elimination. A lean manufacturing approach provides companies with tools to survive in a global market that demands higher quality, faster delivery, and lower prices. Lean manufacturing dramatically reduces the waste chain, reduces inventory and floor space requirements, and it also creates more robust production systems and develops appropriate material delivery systems while improving layouts for increased flexibility. Six Sigma is a business quality philosophy of doing business with a focus on eliminating defects through fundamental process knowledge. Six Sigma methods integrate principles of business,...

Six Sigma

Six Sigma, developed by Motorola but made famous by General Electric, adds to the approaches of TQM. The Malcolm Baldrige award represents the United States' symbol of highest achievement for business excellence. It grew out of a focus on TQM but today seeks to broaden its coverage. ISO 9000 is an international standard for quality performance, deployed by many companies. The Web site for the Malcolm Baldrige award 9 compares these approaches Although all three are quality measurement systems, the Baldrige Criteria for Performance Excellence, ISO 9001 2000 Registration, and Six Sigma each offer a different emphasis in helping organizations improve performance and increase customer satisfaction. Six Sigma The popular literature may lead you to believe that TQM was a management fad that failed to deliver on its promise and had outrun its applicability by the end of the century. A recent Six Sigma book asserts that it solves all of the problems that TQM experiences ( 10 , pp. 43-9). I...

Six Sigma Basics

In the early '80s Motorola pioneered the Six Sigma management approach to eliminate defects and waste from manufacturing processes. This strategy was based on understanding the customers' needs and expectations, knowledge of engineering, use of statistical data, and systems analysis tools. The Six Sigma concept has since left the manufacturing benches to reach the operational and administrative applications. Early adopters and followers as well as a large number of Fortune 500 companies, including General Electric, Seagate, Honeywell, JP Morgan, and Raytheon, became Six Sigma enthusiasts as a business strategy to improve financial businesses performance and increase customer loyalty. The Six Sigma concept comes from the standard deviation parameter of the probabilistic Gaussian normal curve, and it is related to the amount of variability observed in a process response. Figure 30-1 illustrates the bell shape characteristic and the location (mean) and dispersion (standard deviation)...

Design to Six Sigma

Six Sigma is a concept grounded in total quality and continuous improvement. The six sigma approach focuses on quality assurance in the design and development process, measuring for continuous improvement of product performance, and empowering the workforce to understand their systems and processes and fix them when appropriate. Six Sigma is a measure of quality that drives an organization to achieve near perfection through a management-by-fact and data-driven process that defines a defect as any product performance measurement that is outside customer specifications. A defect in Six Sigma terms is six standard deviations between the mean and nearest specification limit. Designing to Six Sigma means designing the product so that components, subsystems, total system, and interfaces all perform exactly to specifications directly linked to customer requirements. Designers and developers and partners work from the product breakdown structure up to total system performance to ensure that...

Theme Three Process Focus Management and Improvement

In Six Sigma, processes are where the action is. Whether designing products and services, measuring performance, improving efficiency and customer satisfaction or even running the business Six Sigma positions the process as the key vehicle of success. One of the most remarkable breakthroughs in Six Sigma efforts to-date has been convincing leaders and managers particularly in the service-based functions and industries that mastering processes is not just a necessary evil but actually a way to build competitive advantage in delivering value to customers. There are many more people to con-vince with huge dollar opportunities tied up in those activities.

Improvements from Services to Manufacturing

The financial big picture, though, is just a reflection of the many individual successes GE has achieved through its Six Sigma initiative. For example A Six Sigma team at GE's Lighting unit repaired problems in its billing to one of its top customers Wal-Mart cutting invoice defects and disputes by 98 percent, speeding payment, and creating better productivity for both companies. A group led by a staff attorney a Six Sigma team leader at one of GE Capital's service businesses streamlined the contract review process, leading to faster completion of deals in other words, more responsive service to customers and annual savings of 1 million. The Medical Systems business GEMS used Six Sigma design techniques to create a breakthrough in medical scanning technology. Patients can now get a full-body scan in half a minute, versus three minutes or more with previous technology. Hospitals can

Theme Two Data and Fact Driven Management

Six Sigma takes the concept of management by fact to a new, more powerful level. Despite the attention paid in recent years to measures, improved information systems, knowledge management, etc., it should come as no shock to you to hear that many business decisions are still being based on opinions and assumptions. Six Sigma discipline begins by clarifying what measures are key to gauging business performance then it applies data and analysis so as to build an understanding of key variables and optimize results. At a more down-to-earth level, Six Sigma helps managers answer two essential questions to support fact-driven decisions and solutions

Theme Five Boundaryless Collaboration

Boundarylessness is one of Jack Welch's mantras for business success. Years before launching Six Sigma, GE's chairman was working to break down barriers and improve teamwork, up, down, and across organizational lines. The opportunities available through improved collaboration within companies and with their vendors and customers are huge. Billions of dollars are left on the table (or on the floor) every day, because of disconnects and outright competition between groups that should be working for a common cause providing value to customers. As noted above, Six Sigma expands opportunities for collaboration as people learn how their roles fit into the big picture and can recognize and measure the interdependence of activities in all parts of a process. Boundaryless collaboration in Six Sigma does not mean selfless sacrifice, but it does require an understanding of both the real needs of end users and of the flow of work through a process or a supply chain. Moreover, it demands an...

Theme Six Drive for Perfection Tolerance for Failure

This last theme may seem contradictory. How can you be driven to achieve perfection and yet also tolerate failure In essence, though, the two ideas are complementary. No company will get anywhere close to Six Sigma without launching new ideas and approaches which always involve some risk. If people who see a possible path to better service, lower costs, new capabilities, etc. (i.e. ways to be closer-to-perfect) are too afraid of the consequences of mistakes, they'll never try. The result stagnation, putrefaction, death. (Pretty grim, eh ) make it a safe failure). The bottom line, though, is that any company that makes Six Sigma its goal will have to constantly push to be evermore-perfect (since the customer's definition of perfect will always be changing) while being willing to accept and manage occasional setbacks.

Theme One Genuine Focus on the Customer

In Six Sigma, customer focus becomes the top priority. For example, the measures of Six Sigma performance begin with the customer. Six Sigma improvements are defined by their impact on customer satisfaction and value. We'll look at why and how your business can define customer requirements, measure performance against them, and stay on top of new developments and unmet needs.

The Actions behind the Results

GE's successes are the result of a passionate commitment and effort. Notes Welch In nearly four decades with GE I have never seen a Company initiative move so willingly and so rapidly in pursuit of a big idea.2 Tens of thousands of GE managers and associates have been trained in Six Sigma methods a hefty investment in time and money (which is appropriately deducted from the gains cited earlier). The training has gone well beyond Black Belts and teams to include every manager and professional at GE and many front-line people as well. They've instilled a new vocabulary revolving around customers, processes, and measurement. While dollars and statistical tools seem to get the most publicity, the emphasis on customers is probably the most remarkable element of Six Sigma at GE. As Jack Welch explains it The best Six Sigma projects begin not inside the business but outside it, focused on answering the question how can we make the customer more competitive What is critical to the customer's...

Final Philosophical Word

Lastly, we'd like to offer you a theme that we think represents one of the most important aspects of Six Sigma and hence will be key to your success in applying it to your business. Six Sigma, we believe, depends on your business learning to exhibit the Genius of the And and it offers a way to unlock this genius in your own people and processes. Table P.1 provides some examples of those seemingly opposing ideas we encounter in this book that in fact are key to success. As you learn about the what, why, and how of Six Sigma in this book, try to remember that the success you're seeking will be based on your ability to focus on the And and not the Or. The key to unlocking the Genius of the And in you and your organization can be found in these pages____

Developing New Products

A telecommunication products company used Six Sigma Design techniques to enable greater flexibility and faster turnaround at a key manufacturing facility. At the plant, several specialized products are built on a single production line. Since each customer's order may require different circuit boards, the need to avoid retooling was critical. Working through alignment of customer needs, product design, and process

General Electric

Everyone -from the Six Sigma zealots emerging from their Black Belt tours, to the engineers, the auditors, and the scientists, to the senior leadership that will take this Company into the new millennium is a true believer in Six Sigma, the way this Company now works. GE Chairman John F. Welch1 * Since launching GE's effort in 1995, Jack Welch has urged his top lieutenants to become passionate lunatics about Six Sigma. He has described GE's commitment to Six Sigma as unbalanced. pany you might expect a plunge in the company's share price. At General Electric, however, that passion and drive behind Six Sigma have produced some very positive results. The hard numbers behind GE's Six Sigma initiative tell just part of the story. From an initial year or so of break-even efforts, the payoff has accelerated 750 million by the end of 1998, a forecasted 1.5 billion by the end of 1999, and expectations of more billions down the road. Some Wall Street analysts...

Hidden Truth

Following a fixed prescription, or modeling your effort after another company, is guaranteed to fail or The Payoff The benefits of Six Sigma will be accessible whether you lead an entire organization or a department. Moreover, you'll be able to scale your efforts, from tackling specific problems to renewing the entire business.

Where You Stand

We would be surprised if you weren't saying to yourself right about now We're already doing some of those things. But remember, we've already noted that much of Six Sigma is not brand-new. What is new is its ability to bring together all these themes into a coherent management process. As you review this introduction and guide to the Six Sigma way, we encourage you to take stock of what you are already doing that supports the themes or tools of Six Sigma and keep doing them. Meanwhile, be honest about your business's strengths and weaknesses. One thing we've noticed about Six Sigma is that results come much faster when an organization is willing to admit to its shortcomings, learn from them, and start setting priorities to correct them.

Alonso Mazini Soler Universidade De So Paulo Brazil

This methodological combination of the Six Sigma business strategy and the project management approach is aimed at Better understanding and effective selection of Six Sigma projects and their objectives (problems and or businesses opportunities to be attacked). Clear definition of business cases and chartering of Six Sigma projects. Increasing the rate of success of Six Sigma project goals through the use of a comprehensive standard methodology for project management. Completion of Six Sigma project in accordance with expected time, costs, and quality requirements, achieving their planned business targets.

Belts or Project Manager Professionals

The Black Belt is a role dedicated to the professional who successfully completed training in methods, practices, and tools of Six Sigma DMAIC, and has already experienced Six Sigma complex projects. Theoretically, he she is a full time professional working on selected projects, fixing the problems, and finding the hidden money. Black belts are the most representative and strongest role in the Six Sigma projects responsibilities chain that's the reason we are using them to represent the professionals who have the Six Sigma knowledge. FIGURE 30-7. STAGE GATE METHODOLOGY FOR SIX SIGMA PROJECTS knowledge and ability, and the commitment and motivation to conduct the project through its challenges towards the expected results. The preference should go to that professional who demonstrates better capacity to conduct that specific project, through the Six Sigma project management methodology, to the achievement of its expected goals.

USL Target Nominal Value Target Nominal Value LSL vj

The Six Sigma goal, therefore, represents a process capability performance defined by the efficiency of Cp 2.0 and, at least, Cpk 1.5. This means that the natural process variability represents no more than 50 percent of the target required process variability, while both of the nominal centers do not differ by more than 1.5 standard deviations. This Six Sigma performance represents, theoretically, no more than 3.4 defects per million opportunities (DPMO), which means an extraordinary process performance level and virtually zero defects. This is the reason for today's enthusiastic adoption of the Six Sigma approach for most process improvement initiatives. Figure 30-2 illustrates the statistical background of Six Sigma capability measurement.

Slipping into the sixth sigma

Unless you've been living in a cave or coding COBOL for the past few years, you've no doubt heard of Six Sigma. Six Sigma is a procedure that strives to reduce waste, errors, and constantly improve quality through the services and deliverables an organization produces. Six Sigma was developed by some really smart people at Motorola who received the Malcolm National Quality Award in 1988 for their Six Sigma methodology. Most software is created and tested, then the errors are fixed, patched, or ignored, and then the entire process starts over. Software development, for the most part, focuses on inspection to ensure quality this is quality control. Six Sigma, however, focuses on preventing the mistakes from entering the process at all this is quality assurance. The Six Sigma program was invented by the smart folks at Motorola during the 1980s. Their creation paid off with an increase in profits, customer satisfaction, and quality awards. Their program went on to be adapted as a standard...

Lean Quality Management

As mentioned earlier, in spite of the barriers, several cross-functional and cross-enterprise processes have been leaned in many emerging lean enterprises. Chief among them are the quality management processes. Quality is often defined as the meeting of standards (specifications or tolerances) at an acceptable level of conformance. This acceptable level is variously defined for example, as zero defects, Six Sigma, Lean Six Sigma, defective parts per million, etc. Quality management, not quality control or quality assurance, is the appropriate term to convey that the goal of achieving and improving quality is an area of management concern and responsibility. Most companies with Lean Production systems have developed quality management systems by following three lean business policies

DMAIC and Pmbok Guide Joint Potential Benefits

First of all, Six Sigma projects are, in fact, a project in the same sense defined by the PMBOK Guide, undertaken to create an unique product or service (a processes change) and restricted by resources, costs, and or time. Six Sigma projects should thus be managed appropriately in order to ensure performance, completion of the project in accordance with the committed time, cost and technical performance, achievement of better customer satisfaction, loyalty, and financial gains to the company. On the other hand, the PMBOK Guide offers a processes framework to describe, organize, and complete the work of the project. This means that it's reasonable to realize a consistent added value Six Sigma Strategy for the company that adopts the PMBOK Guide as its guide to project management, aiming to increase efficiency and predictability, eliminate defects problems in processes, and ensure the achievement of the company's strategic objectives.

Element Project Level Information

One business at Crompton currently implementing a portfolio management process has customized the form to capture Six Sigma or Design for Six Sigma critical to quality parameters as well. Exhibit 9.1-1 shows an example of the information that is covered. These project-level information forms can be evergreen, adding and

Integration Gateway Chassis Mechanical and Electronics Design and Development

Here, the hardware prototype components are produced with the support of the manufacturing engineering staff. Integration of manufacturing factors and design factors are assured by involving manufacturing engineers in producing prototypes for testing and user approval. Components include power assembly, chassis, computer package, exhaust and emission control, supply chain contract partnerships, electrical components, and necessary drawings and graphics. Components are tested against six sigma quality standards set in the design.

What Is the Virtual Lean Enterprise

The Virtual Lean Enterprise is an enterprise where a holistic application of kaizen, lean, Six Sigma, and various IT enablers have been implemented in all lean processes, including cross-functional and cross-enterprise processes. This enables the enterprise to link with other Lean Commerce practitioners to utilize lean practices to collaborate in processes including new product development, material planning and order fulfillment, supplier management, and sales force automation. A Virtual Lean Enterprise is enabled by a myriad of technologies, including

The Phase Review Model Concept

Six Sigma projects start with the perception that the company has a problem or opportunity for improvement, followed by a rough estimate of the potential financial benefits associated with the problem solving. In the beginning of the Six Sigma project, the information supporting the business case does not allow for precision of the figures. Precision comes later, as the project work advances. A company striving to execute a Six Sigma project should monitor closely project progress, along the DMAIC life cycle, in order to constantly evaluate the project benefits and cost deviations from the plan. This is to help them decide if they should continue or interrupt the project execution. Uncertainties, mostly in the beginning, are always characteristic of Six Sigma projects. A company must keep theses uncertainties under close control in order to avoid wasted time and money and, at the same time, capitalize on benefits from the project. For instance, a reduction in the energy consumption...

Michael Howell Bearing Point Global Solutions

In the last thirty years, there have been many buzzwords used to describe different approaches to achieving business excellence. Some of the more familiar names include Quality Improvement, Total Quality Control, Quality Management, TQM, Reengineering, ISO 9000, Six Sigma, Business Process Management, Digital Six Sigma, Baldrige, Lean, and even the more generic term Continuous Improvement. And there are many other names This article will address three approaches from the above list Baldrige, Business Process Management, and Six Sigma. Each brings a specific focus that overlaps and complements the other two to achieve business excellence. Whether called by these names or some other names, all three are needed. Project Management, while not in the above list, becomes an enabler to help implement the different methodologies. Business excellence can now be defined as a holistic, customer focused, process-based systems approach to successfully achieve the goals of the organization. The...

Software Quality Process The Early Days

The corporate quality improvement effort at Motorola had been well under way for years, but was only rarely being applied to such soft activities as administrative functions, personnel management, and software. This meant that there were few if any accepted models for developing high-quality software systems. The Motorola Six Sigma Quality program a statistical approach defining quality goals of fewer than 3.4 introduced errors per million opportunities was being applied to software in only a few remote areas within Motorola. Manufacturing improvement efforts undertaken at the time required massive amounts of production data to support measured Six Sigma improvements. Ironically, the subsequent drive for data often caused information systems to be developed rapidly and with little or no control, so that several poor-quality information systems were a legacy of production quality improvement efforts.

Statistical process control SPC

SPC is used to identify processes that are out of control, or are varying unac-ceptably from the standard. Process stability is important in project quality management because it indicates that a product is performing within customer expectations and requirements, and within specifications. SPC is also a way to educate the customer on how it can be used to help them articulate requirements right up to Six Sigma. It is a planning tool as well as a quality control tool.

System Development Improvement Methodologies within the DoD

There are many methodologies that are used specifically by the U.S. Department of Defense (DoD) that have application in the commercial world. Many of the tools and techniques described in this book can be attributed to the DoD or defense-related federal government agencies. Some examples of the more specific DoD TQM methodologies include Six Sigma, Computer-Aided Acquisition and Logistics Support (CALS) In-Plant Quality Evaluation Program, R& M 2000, and Value Engineering. This is not an all-inclusive list. The DoD has many TQM methodologies being used in all its agencies to continuously improve its processes focusing on customer satisfaction.

Blending Methodologies

In this chapter, we take a brief look at how the works of Deming and Goldratt converge in the project management arena. Each one contributed greatly to the problem analysis and solutions described below. We also offer our insights into where Six Sigma fits into this picture.

Customizing The Workspace

Customization is crucial, so that the project workspace can suit the needs of the project team and display the required information. Team sites are also easy to customize without expertise. A project manager may use a template to set up a site and then modify it, or start from a blank site. Either way, the site can be configured to the style the project manager prefers. For consistency purposes, you may require that certain key elements such as team member contact details and highlevel budget and scope details are displayed on the site, but beyond that, project managers can customize to their own style. Furthermore, different templates can support best practices within the organization, with a different template supporting a PRINCE2 or Six Sigma project depending on your organizational preferences. Also, just as the site can be accessed by drilling down from the portfolio site, so can the site contain summary information with drill-down information behind it.

Phases of Quality Function Deployment

That could be construed as buy-to or build-to. Certainly the process limits discussed in the section on Six Sigma would not ordinarily be in the customer specification. Thus, for example, the Six Sigma process limits need to be derived from the requirements by systematic decomposition and then assignment of specification to the lowest level requirements.

The Management Battlefield We Know

In your training and long experience as a veteran manager, what has given you the best return on your time, money, but mostly your emotional investment Or maybe I should ask, what has disappointed you the most I think I know. Your confidence has been abused and you will not be fooled again. Was it technology then that first broke your heart Was it other people, you know, that dry well that has been called empowerment Does your black belt in Six Sigma still leave you feeling vulnerable You know how that goes. It's OK. Or not.

The Measurement Phase

As noted above, the purpose of the measurement phase is to validate and quantify the problem statement by identifying and measuring the various steps in the current process. The XYZ team began by constructing a SIPOC chart. SIPOC is another Six Sigma acronym, this one for Supplier, Input, Process, Output, and Customer. Its purpose is to provide a high-level understanding of the problem and process. For this project, the SIPOC elements were as shown in Exhibit 4.

The Benefits of Formalizing Project Concept Management

Firms like General Electric, which have embraced the notion of Six Sigma quality (only three defects per million products), view project management as one of the necessary components to achieving that level of process predictability. These organizations have discovered that the lessons of the quality movement apply to projects and project management. They have learned that consistent, defined processes are a launching pad for improving productivity and profitability.

Growing Demand for Effective Project Managers

In addition, many organizations have either compliance or competitive drivers requiring them to make process improvements to meet process standards set forth by acts of Congress (Sarbanes-Oxley act), government agencies (such as the federal Food and Drug Administration or Environmental Protection Agency), industry standards bodies (such as International Organization for Standards), or industry process models (such as Six Sigma Quality Model, or the Capability Maturity Model Integration for software engineering or project management). In all these cases, effective project management is a requirement to ensure these process improvements are made, sustained, and can be repeated.

Extend Your Knowledge

Contact someone in an organization who is willing to talk to you about her experiences implementing a quality program such as Six Sigma, ISO, Ticklt, or the CMM. If this is not feasible, use the Internet or library to find an article. Prepare a short report that answers the following

Perform Quality Control

The tools and techniques for Quality Control read like the Who's Who of the Six Sigma toolkit. Kaoru Ishikawa, one of the earliest winners of the Deming Prize in Japan, published in 1968 seven basic statistical tools in his book, Guide to Quality Control. Ishikawa stated that if these tools were taught and correctly used by line workers, 95 of defects occurring in the work environment could be eliminated. The seven basic statistical tools are

Contingency time See reserve time

Continuous improvement Continuous improvement involves everyone in the organization watching for ways to improve quality, whether incrementally or by incorporating new ideas into the process. This involves taking measurements, improving processes by making them repeatable and systemized, reducing variations in production or performance, reducing defects, and improving cycle times. TQM and Six Sigma are examples of continuous improvement. The Kaizen approach is a quality technique from Japan (Kaizen means continuous improvement in Japanese).

Concurrent Engineering

The concurrent engineering philosophy emphasizes a customer focus. It advocates an organizationwide, systematic approach using a disciplined methodology. It stresses the never-ending improvements of product, processes, production, and support. It involves the concurrent, simultaneous, or overlapping accomplishment of the phases of the project. For instance, the concept and design phases are accomplished concurrently. The design and development phases are performed simultaneously. The development and production phases are done with some overlapping activities. In most cases of concurrent engineering, all the phases contain some overlapping activities. Concurrent engineering requires upper management's active leadership and support to be successful. It accents robust design that decreases loss. It aims at reducing cost and time while improving quality and productivity. It uses the latest engineering planning initiatives including automation. Concurrent engineering forges a new reliance...

Problem and Goal Statements

By making both the problem and the goal statements extremely specific, the team and anyone reviewing the project will have a clear understanding of why the team was chartered and what it intended to accomplish. Clarity and common goals are key tenets of Six Sigma. Developing the project plan, which is the next step in the definition phase, is frequently the easiest for IT staff because Six Sigma plans are no different from the project plans that IT professionals are used to creating. Like all project plans, the one the team developed included milestones, deliverables, and dependencies. To provide a clear linkage back to the process model, the team used the five phases of DMAIC as summary tasks, and broke down individual steps within them. This use of shared terminology helped non-IT staff understand the project plan.

Customers and Their Requirements

Similar to the creation of a project plan, identifying customer requirements is a task with which most IT departments are comfortable. Virtually every IT project has as one of its preliminary tasks the definition of requirements. Within Six Sigma organizations, however, this process includes additional steps that may not be part of the traditional requirements definition phase.

Case Study Building Consensus for a Project Management Tool

Richard has successfully driven project and portfolio management initiatives across several multinational organizations. He successfully builds executive support while creating a network of engaged project managers. The outcome is world-class project management skills and processes across the organization. In his experience, a key aspect is to recognize and harness the multitude of project management skills the organization already has, rather than coming in with a blank-slate approach and leaning on training, or defining one singular best practice for all to adhere to. Richard emphasizes that project managers may employee a variety of different methodologies, such as Agile, PRINCE2, PMBOK, or Six Sigma, but he sees merits in all of these and encourages communication across these groups. Richard finds that this can be very effective because project managers often say, I wish I had more contact with the PMs in group X. This inherent need for networking can create an opportunity to...

Total Quality Management and Project Management

All this unfocused energy can be characterized by the old story of several blind men trying to describe an elephant. As the story goes, each man's description was dependent upon which part of the elephant he was touching, resulting in an inaccurate description of the animal. The blind men identified each part of the elephant as an independent part having nothing to do with the rest of the elephant. Lack of communication between the men and an inability to see the whole produced a result that had no resemblance to an elephant. As in the story of the blind men, companies have made the same mistake, i.e., failure to see the whole picture. As a consequence, we have companies that emphasize the Deming, Juran, Crosby, Q101, Targets for Excellence, Pentastar, Six Sigma, and many more individual routes to improvement. We have failed to recognize the concept of quality in its totality. Rather, we have focused on the individual program to get us through this improvement process, as well as...

Quality and Process Improvement

The purpose of this chapter is to link new product development to quality and process improvement. New products create new processes and new business risks, and therefore new product development initiatives open up opportunities for continuous improvement and associated Six Sigma projects. Six Sigma is a measure of quality that drives an organization to achieve near perfection through a management-by-fact and data-driven process that defines a defect as anything outside customer specifications. A defect in Six Sigma terms is six standard deviations between the mean and nearest specification limit. In new product development this process is often called DMADC (define, measure, analyze, design, verify), an improvement program used to develop new products and new processes at Six Sigma levels. The objective is to target customer requirements nothing more and nothing less. The company goal is to avoid wasteful and expensive rework and processes, and produce a product as close to...

Project Portfolio The Second Pass Analysis

Notice that we still have a 50 million portfolio, but what a difference in its makeup and ranking. We deactivated some projects that are simply not going to help us address this company's constraint. The constraint is in the market, so we deactivated the projects to implement new financial software, to integrate a recently acquired cable company, to install the latest ERP upgrades, and a Six Sigma project.

Customer Driven Risk Management

One of the most effective ways to deal with risk is to develop customer-driven contingency plans, or parallel courses of action that come into play if the task cannot be accomplished as the customer sees it. In other words, if Six Sigma cannot be accomplished, alternatives are available. Contingency planning is based on satisficing, as Herbert Simon called it (Hebert A. Simon AI Pioneer Andresen S. IEEE Intelligent Systems & Their Applications 2001). Satisficing is finding solution that is most acceptable to all parties to the process.

The Normal Distribution

Theoretically, the Normal distribution's tails come asymptotically close to the horizontal axis but never touch it. Thus the integration of the PDF must extend to infinite values along the horizontal axis in order to fully define the area under the curve that equals 1. As a practical matter, project managers and engineers get along with a good deal less than infinity along the horizontal axis. For most applications, the horizontal axis that defines about 99 of the area does very nicely. In the Six Sigma method, as we will discuss, a good deal more of the horizontal axis is used, but still not infinity.

The Theory of Constraints Thinking Process Applied to Project Management

This chapter integrates the rest of this book and describes the process used to think through project management and develop the critical-chain process. It also provides some ideas for future directions. One of Dr. W. Edwards Deming's obstacles to improvement is a tendency on the part of many managers to search for examples. He states, My answer to such enquiries (i.e., for examples just like us) is that no number of examples of success or of failure in the improvement of quality and productivity would indicate to the enquirer what success his company would have 1 . He notes further, The question is not whether a business is successful, but why And why was it not more successful It is necessary to understand the theory of what one wishes to do or make. This text has presented the CCPM theory you need, including some of the supporting TOC, TQM, Six Sigma, Lean, Agile, and PMBOK principles. Dr. Eliyahu Goldratt's Thinking Process provides a tool to capture much of that reasoning.

Synthesizing the Principles

Figure 11.2 illustrates CCPM integration of the major management principles outlined in Chapter 2. The top rows again illustrate that CCPM is the combination of conventional project-management and critical-chain thinking from TOC. The key Lean elements in the table are from J. P. Womack and D. T. Jones 2 the Six Sigma principles are from P. S. Pande, R. P. Neuman, and R. R. Cavanagh 3 the TQM principles are Deming's points of Profound Knowledge and the TOC points listed are the five focusing steps. (Figure 11.1 lists the other relevant TOC tools that will be explored in this chapter.) The main purpose of this figure is to show that the synthesis is multifaceted. There are, or course, relationships between the ideas of

Integrating the Project Balance Sheet and Business Value Models

We will see in Chapter 3 that the best quantification tool for scope is the WBS. Time and cost can be estimated for the scope on the WBS somewhat independently, but ultimately they are tied together through the concept of value. Earned value is the preferred numerical analysis tool, and that will be discussed in Chapter 6. There are numerous ways to evaluate quality. One we will address in Chapter 8 is Six Sigma.

Whats Next

Six Sigma methodology is a corporate initiative, supported at all levels of the corporation. We have been implementing Six Sigma and Design for Six Sigma within our Stage-Gate and portfolio frameworks for about a year. These tool sets are providing an additional set of methodologies and tools to gather information and data, analyze those data, and promote decision making in our project teams, Stage-Gate activities, portfolio management activities, and frontend development activities. The metrics we use within Stage-Gate and portfolio management are easily rolled up into the Six Sigma dashboards. From a technology management perspective, we are training our teams on the various tool sets and methodologies in Design for Six Sigma. This training should strengthen our capabilities at the front end of the innovation pipeline where we need to be focusing our efforts for long-term success.

The Fivephase Model

IT organizations are accustomed to projects being broken into phases, typically those defined by a system development lifecycle (SDLC) model. Six Sigma initiatives are frequently described as using a DMAIC model, where DMAIC is an acronym for the five phases of a process improvement model. The phases and their primary objectives are listed in Exhibit 1. While these may appear to be similar to a traditional SDLC, there are some important differences. The following example illustrates the use of the DMAIC model and Six Sigma processes in IT systems analysis.

Kaizen Approach

Continuous improvement involves everyone in the organization watching for ways to improve quality, whether incrementally or by incorporating new ideas into the process. This involves taking measurements, improving processes by making them repeatable and system-ized, reducing variations in production or performance, reducing defects, and improving cycle times. TQM and Six Sigma are examples of continuous improvement.

The Grand Synthesis

Although each of the management theories devolves into considerable detailed complexity, two perspectives can bring the observed results into perspective. First, TOC provides a strategy and tool to focus any other management approach on the constraint. One can easily see how one company could have great success with TQM, Six Sigma, or Lean, and another very little success, simply by focusing on the constraint, or not. If you focus on something other than the constraint, you will invest the same effort but see little bottom-line result. I believe this to be the primary difference between those who succeed with any new management approach and those who do not. I think many have succeeded by stumbling onto the constraint, while others have not been so lucky. For this reason, I do not find that critical thinking or data supports either of the premises inherent in the title of P. Pande, R. Neuman, and R. Cavanagh's Chapter 3 10 , Why Is Six Sigma Succeeding Where Total Quality Failed Both...

Closing Thoughts

Companies are beginning to realize that they have to get a better return on their project management investment. Many have spent hundreds of thousands of dollars and thousands of hours of employee time building a project management methodology for their organization. They expect to get business value in the way of a higher success rate on the projects they undertake and a more effective and efficient execution of projects. When it does not happen, which is often the case, they need to aggressively develop a strategy to get that return. A continuous quality improvement program centered on project management is their best strategy. Some turn to a portfolio management approach, while others establish a PMO to support projects. Even others invest heavily in a six-sigma program. All of these are admirable initiatives and should be done but, in the end, all of these organizations will find that a continuous quality improvement program for project management is still a necessity.

Holistic Thinking

When conducting strategic planning, why make the same huge mistakes others have made A smart person learns from his mistakes. A wise person learns from other people's mistakes. There are two great geniuses of modern times who have a great deal to teach about strategic planning and holistic thinking. W. Edwards Deming and Eliyahu M. Goldratt, working with many organizations and industries, discovered, firsthand, the underlying root problems causing so much customer dissatisfaction. They analyzed problems, verified the root causes and invented solutions that brought companies to be first in their industry worldwide. Today, their knowledge can be readily combined with other powerful holistic approaches, such as Six Sigma, to exponentially move an organization toward its goals.

Schedule Control

Note that in statistics the analysis of variance is called ANOVA and is used in Six Sigma to perform sophisticated variance analysis. In this case, the concept of variance is an actual statistical term that defines a measure of statistical dispersion, indicating how possible values are spread around an expected value, such as the mean of a dataset. For a population sample, it is expressed in the following formula