ISix Sigma It's a philosophy Anything less than ideal is an opportunity for improvement Defects cost money Understanding processes and improving them is the most efficient way to achieve lasting results It's a process To achieve this level of performance required to: Define, Measure, Analyse, Improve and Control These are Statistics 6 Sigma processes will produce less than 3.4 defects per million opportunities13. Overview of Six Sigma PAIN, URGENCY, SURVIVAL COSTS GROWTH TRANSFORMING THE ORGANIZATION CHANGE THE WORLD 6 SIGMA AS A STATISTICAL TOOL 6 SIGMA AS A PHILOSOPHY 6 SIGMA AS A PROCESS14. The negative cost of poorly performing processes Level  DPMO CP 3 2 308,537 Not applicable 3 66,807 25%-40% of sales 4 6,210 15%-25% of sales 5 233 5%-15% of sales 6 3.4 < 1% of sales Each sigma shift provides a 10% net revenue improvement Cost of Poorly Performing Processes (CP 3) Sigma () is a measure of “perfection” relating to the process' ability to perform… “the greater the, the better." A process operating at a Six Sigma level produces only 3.4 defects per million opportunities (DPMO) for a defect. Without dedicating significant and adequate attention to a process, most processes in leading companies operate at a level between 3 and 4 sigma. Why is Six Sigma important?15. Cost of Poorly Performing Processes The cost of providing a quality product can account for up to 40% of the selling price. For example, a laser jet printer purchased for $1,000 may have cost the manufacturer $400 in rework just to ensure you take home an average quality product. For a company whose annual revenue is $100 million and whose operating profit is $10 million, the cost of quality is approximately 25% of operating revenue, or $25... half the paper ... n - Warranty - Scrap - Rework - Scrap30. COPQ v/s Sigma Level Cost of Quality % Sales Sigma Level31. CTQ (Critical-To-Quality) CTQ characteristics for the process, service or process Measure of “What is important to the customer” 6 Sigma projects are designed to improve CTQ Examples: Wait time in clinic Spelling errors in the letter % of valves leaking during operation32. Defect Opportunities Circumstances under which the CTQ may not be met. The number of defect opportunities refers to the complexity of the unit. Complex units – More defect opportunities than simple units Examples: A unit has 5 parts and in each part there are 3 defect opportunities – Total defect opportunities are 5 x 3 = 1533. DPO (Defect Per Opportunity) Number of defects divided by number of defect opportunities Examples: in the previous case (15 defect opportunities), if 10 units have 2 defects. Defects for