An Introduction LSSU - IAB 30 January 2002

1. creating value for our customers An Introduction LSSU - IAB 30 January 2002 creating value for our customers

2. What is it? creating value for our customers

3. “Six Sigma”: What is it? “A comprehensive and flexible system for achieving, sustaining and maximizing business success. Six Sigma is uniquely driven by close understanding of customer needs, disciplined use of facts, data and statistical analysis, and diligent attention to managing, improving and reinventing business processes.” -- The Six Sigma Way, by Pande, Newman and Cavanaugh creating value for our customers

4. Six Sigma: What is it? • Specifically – • Customer-focused, fact and data-based decision making driving out waste and defects which creates value for our customers. It is just NOT Supply Chain or Manufacturing creating value for our customers

5. Six Sigma: What is it? • A culture that rapidly drives our key activities* to be defect free 999,997 times out of 1,000,000. • < 3.4 defects per million opportunities. * Valued by or critical to our customer. creating value for our customers

6. What is Sigma? s Sigma - the lower case Greek letter that denotes a statistical unit of measurement used to define the standard deviation of a population. It measures the variability or spread of the data.

7. Lower Specification Limit (LSL) Upper Specification Limit (USL) Number of Samples Cure Time of Silicone Sealant

8. x x Lower Specification Limit (LSL) Upper Specification Limit (USL) Lower Specification Limit (LSL) Upper Specification Limit (USL)

9. Lower Specification Limit (LSL) Upper Specification Limit (USL) x

10. Putting Six Sigma in Perspective! • If you played 100 rounds of golf per year, and played at: • 2 sigma - you'd miss 6 putts per round • 3 sigma - you'd miss 1 putt per round • 4 sigma - you'd miss 1 putt every 9 rounds • 5 sigma - you'd miss 1 putt every 2.33 years • 6 sigma - you'd miss 1 putt every 163 years! creating value for our customers

11. Putting Six Sigma in Perspective! Four Sigma quality (6210 DPMO) means… 99.370% right…but….. • 20,000 lost articles of mail every hour. • Power outages seven hours each month. . • 5,000 incorrect surgical procedures each week for a major healthcare provider. • Unsafe drinking water nine minutes every day. • Two long / short airport landings every day. creating value for our customers

12. Putting Six Sigma in Perspective! Six Sigma quality (< 3.4 DPMO). • Airline passenger safety ~ 8.2 s • Currently at 2.6 DPMO (incidents per million takeoffs and landings). • Airline baggage handling ~ 3 s. creating value for our customers

13. Impact of Six Sigma creating value for our customers

14. It all began at…..Motorola…not G.E. • 1987 Motorola introduced Quality Program now known as Six Sigma. • Allied Signal picked it up. • G.E. Success…. • Capital Services • Medical Systems (CAT Scan) • Dozens of others…... • Learned the highest quality producer is also the lowest cost producer. • Learned customer loyalty of a Six Sigma company is ~3X that of the average company. creating value for our customers

15. Avery Dennison Dow DuPont Foxboro Sony Deere & Co. (John Deere) Delphi Allied Signal Ford Johnson & Johnson Caterpillar Lockheed Martin IBM CitiGroup (Visa/MasterCard) G.E. J.P. Morgan ServiceMaster Who else is doing Six Sigma? creating value for our customers

16. How does Six Sigma work? Why is it different? • Top down, executive led. • Customer focused (VOC). • Project oriented • Led by “Black Belts”. • 3-5 months long. • Ave. yearly impact $150-250K/project. • Consistent methodology. X1 X2 X3 Process Controls X4, X5, X6… Output Y Critical to Customer Six Sigma creating value for our customers

17. What is the “Methodology”? Define Measure Analyze Improve Control DMAIC creating value for our customers

18. What are the “The Tools”? • Six Sigma is a disciplineusing these tools: • 7 Tools of Quality • Advanced analysis tools (Design of Experiment, Linear Regression, etc.) • Re-engineering • Lean manufacturing • Supply chain improvements • Design for Six Sigma (DFSS) • For development of new products, new services, new processes, and new workflows. creating value for our customers

19. Who are the other “Key Players”? • Senior Champion – Owns Six Sigma for the Business. • Champion – Identifies and resources projects. • Master Black Belt – Serves as coach to the Black Belt and project team. • Black Belt – Leads the project team, full time. • Green Belts – Team members (part-time) from the organization sponsoring the project • Project Sponsors – Team leaders. • Process Owners – Owns the process / workflow. • Executive Six Sigma Steering Committee – Oversees progress, resolves issues, ensures success enterprise-wide. creating value for our customers

20. Summary “take aways” • Customer focused….Driven by the Voice of the Customer. • Strong top management leadership, commitment, and involvement. Very Key! • Project orientation with measurable financial results. • Consistent methodology for all work. Time driven. • Time driven….more accountable. • Six Sigma - is a discipline not an “add on” or “program”. - NOT a supply chain/manufacturing activity. - No new tools….new ways to apply them! • Goals • Value for the Customer (i.e. no defects or waste & low cost) • Improved productivity = profitability. • Customer success and satisfaction + Profitability = Growth creating value for our customers

21. References…… • The Six Sigma Way (ISBN 0-07-135806-4) by Pande, Neuman, and Cavanaugh • The Power of Six Sigma (ISBN 0-7931-4434-5) by Subir Chowdhury • Six Sigma (ISBN 0-385-49437-8) by Harry and Schroeder. • The Six Sigma Handbook (ISBN 0-07-137233-4) by Pyzdek is more technical and becoming the 'handbook' for Black Belts. • You can get them through Amazon, http://www.amazon.com/ in a couple of days. creating value for our customers

22. References…… • Also...you might consider: • www.6-sigma.com • www.sixsigma.co.uk • www.sixsigmasystems.com • www.isixsigma.com creating value for our customers