SIX SIGMA

1
SIX SIGMA
Presented by JOHN A. LUPIENSKI
2
What We Will Cover

• Motorola Overview
• Quality Journey
• Six Sigma The Concept
• Deployment
• Results
• The Future
• Lessons Learned

3
Motorola Statistics

• 1997 Sales 29.8 Billion (42 / 58)
• 24th in Fortune 500
• 1st in Electronics Manufacturing
• 7th in Total Exports
• 142000 Employees in 53 countries

4

1997 Sales
By Product
By Region
5
The Rules of Engagement
The Past
The Future
Customer/Consumer
Enterprise (Motorola)
Business Unit/Product
6
Communications Enterprise

• Cellular Phones
• Pagers
• Consumer 2-Way Products
• Accessories

• Terrestrial Network Operators
• Satellite Network Operators

• Systems
• Equipment
• Software
• Services
• Applications
• Content

• Cellular Infrastructures
• Satellite Infrastructures

• Global Network Operator Solutions
• Integrate PCS NSS Products

• Servers
• S/W Applications
• Internet Solutions
• Data Networking

7
ACCES

• Powertrain Controls
• Autobody Controls
• Sensors
• Telematics

• Ceramics
• Lighting
• Quartz Products
• Oscillators
• SAWs

• Battery Products
• Battery Chargers
• Power Supplies

• Flat Panel Displays

• Embedded Systems
• Single Board PCs

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SPS

• Systems Electronics
• Transportation Technology
• Industrial

• Imaging
• Displays Modems
• Storage
• Entertainment
• Consumer Media

• Telephony
• Messaging
• Wireless
• New Media

• Modems
• Switching
• Networking
• Customer Equipment
• Base Stations
• PC Technology

• Key Components
• Distribution
• Contract Manufacture
• Emerging Markets

9
Motorola Products

• Cellular Telephones
• Two Way Communications
• Pagers
• Semiconductors
• Automotive Electronic Modules and Components
• Modems and Integrated Management Systems
• Cellular and Satellite Infrastructure Systems

10
Global Facilities
GERMANY
UNITED KINGDOM
Flensburg Munich Taunusstein Dresden
Basingstoke Stotfold Swindon
Easter Inch East Kilbride
Cork Swords
DENMARK
FRANCE
Copenhagen
CANADA
Angers Bordeaux Toulouse
Brampton North York
CHINA Tianjin
JAPAN
Aizu Wakamatsu Tokyo Sendai
Richmond
SOUTH KOREA
Seoul
TAIWAN
Chung-Li
HONG KONG
MEXICO
Kowloon
Guadalajara Mexico City Chihuahua
PHILIPPINES
ISRAEL
SINGAPORE
Manila
COSTA RICA
Tel Aviv Arad
Guadeloupe
AUSTRALIA
MALAYSIA
INDIA Bangalore
Melbourne Adelaide
BRAZIL Sao Paulo
Kuala Lumpur Penang Seremban
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Quality Journey
12
Changing Motorolas Quality Culture
1979 Our Quality Stinks. The
environment - A U.S. Centered Company -
Japan Inc. Attacking - Quality Control Mindset
13
Changing Motorolas Quality Culture
1980 Corporate Quality Officer
named Business Leadership - Senior Business
Leader - Change in focus
1979 Our Quality Stinks.
14
Changing Motorolas Quality Culture
1979 Our Quality Stinks. 1980 Corporate
Quality Officer named
1981 Motorola Training Center established 5
year 10X improvement goal Corporate Quality
Council - Senior Leaders - Common culture -
Lead Teach Audit
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The Corporate Quality Office
Suppliers
Customers
Business Units

Education
Assess
Quality Reviews Short term results
Motorola University
QSR Process
CQO
Quality Council
Courseware
- Lead - Teach - Audit
Recommendations on vision and direction
Lead Teach Audit
Management Board
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Changing Motorolas Quality Culture
1979 Our Quality Stinks. 1980 Corporate
Quality Officer named 1981 Motorola Training
Center established 5 year 10X improvement
goal MCQC
Quality System Review - Common audit
tool - Set Standards of Excellence -
Process oriented - Set direction not methods
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QSR Manual
Guidelines
April 1998
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Assessment Vehicle for Total Organization

• Sets a common goal of perfection
• Drives progress to world class standards
• Provides an awareness of quality process
  requirements
• Cross-fertilization of ideas (knowledge sharing)
• Teaching tool (auditors and auditees)

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1981 Began focus on Quality 1982 MCQC
began a process of biennial QSRs 1986 Six
Sigma Quality and Total Customer Satisfaction
introduced 1987 Software subsystem was
added 1988 QSR was established for surveying
suppliers quality systems ISO 9001
Mapped unto QSR 1989 Weight of scores
changed to emphasize Malcolm Baldrige
criteria 1990 MCQC approved the use of
cross-functional survey teams 1991 Internal
and supplier QSRs are combined into the current
QSR forms and the QSR Guidelines 1994
Updated to include 1994 Revision of ISO 9001
Significant revisions to Subsystem 9
System 7 1995 Corporate Quality System
Department formed 1996 Revision 4 includes
Registrars Certification Subsystem 11
and QS 9000 Supplement 1997 Revision 5 -
Business Process Focus QS 9000 approach
SEI Certification of SS 10
Q S R H I S T O R Y
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Quality Subsystems
1. Quality System Management 2. New
Product / Technology / Service Development
Control 3. Supplier (Internal or External)
Control 4. Process Operation and Control
5. Quality Data Programs 6. Problem
Solving Techniques 7. Control of Quality
Measurement Equipment and Systems 8. Human
Resource Involvement 9. Customer
Satisfaction Assessment 10. Software Quality
Assurance 11. Legal and regulatory 12. QS
9000 checklist
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Changing Motorolas Quality Culture
1979 Our Quality Stinks. 1980 Corporate
Quality Officer named 1981 Motorola Training
Center established 5 year 10x quality
improvement goal set QSR Implemented
1985 Communications Sector begins total
defect per unit measurement July -
Manufactured Products November - Sales Orders
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A Common Metric
Total defects per unit
Count Defects
Independent variable
Ownership
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Benchmarking
IRS - Tax Advice (phone-in)
100K
(66810 ppm)
Restaurant Bills
Doctor Prescription Writing
Payroll Processing
10K
Order Write-up
Average Company
Journal Vouchers
Wire Transfers
(6210 ppm)
1K
Purchased Material Lot Reject Rate
Air Line Baggage Handling
(233 ppm)
100
10
Best in Class
Domestic Airline Flight Fatality Rate
(3.4 ppm)
1
2
3
4
5
6
7
(0.43 ppm)
SIGMA
(with 1.5 Sigma Shift)
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The Quality Evolution Continues!
1987 Corporation adopts Six Sigma 2 year
10x 4 year 100x quality improvement Six
Sigma by 1992 goal is set
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The Motorola Card
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The Quality Evolution Continues!
1987 Corporation adopts Six Sigma 2 year
10x 4 year 100x quality improvement Six
Sigma by 1992 goal is set 1988 Malcolm
Baldrige National Quality Award U.S.
Government sponsored Privately funded
Promote excellence in business
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The Quality Evolution Continues!
1987 Corporation adopts Six Sigma 2 year
10x 4 year 100x quality improvement Six
Sigma by 1992 goal is set 1988 Malcolm
Baldrige National Quality Award Mapped ISO
9001 into QSR 1990 TCS Team process starts
Corporate wide
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Total Customer Satisfaction Teams
TDU focused problem solving QCC/PPS provided
platform - QCC JUSE - PPS Government
Narrow teams vs. broader virtual -
Multifunctional - Virtual problem centered
Competition National scoring 1990 First
Sector competition 1991 Corporate
Today 6000 Teams - Customers Suppliers
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Other Quality Awards Received
1992 - Winner Malaysia National Quality Award -
Winner NY State Excelsior Quality Award
- 1994 - Winner Israel National Quality
Award 1996 - Winner Singapore National Quality
Award
All Patterned after MBNQA
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Six Sigma The Concept
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A Traditional View
Market Share
Sales Growth

Output Variables
Profitability
Manage the outputs.
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A Non-traditional View
Product Quality
Service
COQ

Input Variables
On-Time Delivery
Relationships
Credit Terms
Customer
Training
Customer Satisfaction
Market Share
Sales Growth

Output Variables
Profitability
Manage the inputs respond to the outputs.
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The Concept of Six Sigma at Motorola

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Normal Distribution - Gaussian Curve
CENSORED


Sigma Deviation
( Square root of variance )
Axis graduated in Sigma
68.27
between / - 1
result 317300 ppm outside (deviation)
between / - 2
45500 ppm
95.45
between / - 3
99.73
2700 ppm
between / - 4
63 ppm
99.9937
0.57 ppm
between / - 5
99.999943
99.9999998
between / - 6
0.002 ppm
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Six Sigma...And the Statistics



Cp 2
Reduce the variation when specification width / 12



Stabilize the process without affecting the
variance to limit the maximum process shift to
/- 1.5
Cp 2 and Cpk 1.5



Under these conditions and in the worst case
there will be no more than a 3.4 ppm defect
(reject) level with specification limits at 4.5
on one side and 7.5 on the other.




Note One can see that the point corresponding to
6 on the graduated performance scale above is
measured in Sigmas (with 6 corresponding to a
3.4 ppm defect level).



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Six Sigma...And Capability
With a maximum process shift of /- 1.5
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The Opportunities...
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Some Examples of Opportunity
Customer Perspective 1 opportunity per product
delivered ex. 1 regulator
1 opportunity 1
controller 1 opportunity
Production lines Regulator 160
opportunities Controller 1200 opportunities
Form( Payment Purchase Order .. ) Number of
fields
Expedite / Delivery 1
opportunity / packaging unit
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Sigma and Opportunities
A quality level of 6 corresponds to less
than 3.4 defects per million Opportunities
( i.e. correct 99.99966 of the time )
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A Universal Measurement Scale ...
On one condition Calculate the defects and
estimate the opportunities in the same way...
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Measurement With SIGMA Is Simple !!!
Estimate the
Opportunities

Follow the Indicator

Defects
per million
Opportunities
Conversion into Sigma can
be accomplished with the help
of a statistical table
.
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Converting Defect Levels to..... Sigma !
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Six Sigma An Ambitious Objective

Accurate to 99.99966 ( less than 3.4 defects
for each million
opportunities ) could appear excessive....!


99.9 is already VERY GOOD
!
But what could happen at a quality level of 99.9
(i.e. 1000 ppm)

in our everyday lives (about
4.6)



4000 wrong medical prescriptions each year

More than 3000 newborns accidentally falling
from the hands of nurses or doctors each year

Two long or short landings at American airports
each day

400 letters per hour which never arrive at their
destination
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The Impact of Quality 6 Sigma Suppliers

• 13 wrong drug prescriptions per year
• 10 newborn babies dropped by doctors/nurses per
  year
• Two short or long landings per year in all the
  airports in the U.S.
• One lost article of mail per hour

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Six Sigma and Continuous Improvement
Feedback
Enter
Process

Exit
Supplier
Customer
Activity
Needs
Product/Service
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Defect Reduction Peeling the Onion

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Advantages of This Type of Approach

Have a common language

Sensitize the organization in the use of
statistical tools

Develop the internal supplier/customer
relationship

Benchmarking

Work on the most significant objectives

Promote working in teams
T C S

Culture
of
Excellence
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Deployment
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The Process for Deployment

• Management involvement
• Empowered teams
• Statistical black belts

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Why Have We Been Successful...The Management
Process!

• High level of management commitment and
  involvement.
• Aggressive improvement goals set by Management
  Board and driven down through the organization.
• Measurement of the total process from end to end.
• Corporate-wide uniform goals and common metrics.
• Management accountability for quality improvement.

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Management Leadership
DATED JAN 15 1987 IMPROVE PRODUCT AND
SERVICES QUALITY     Ten times by 1989 and
at least 100 fold by 1991 Achieve SIX SIGMA
CAPABILITY by 1992 With a deep sense of
urgency spread dedication to every facet of the
corporation and achieve a culture of continual
improvement to ASSURE TOTAL CUSTOMER
SATISFACTION. There is only one ultimate goal
zero defects - in everything we do.
Signed MOTOROLA EXECUTIVE COMMITTEE
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Why We Have Been Successful...The Management
Process!

• Quality improvement goals and plans integrated
  into business plans.
• No formal organization changes to implement.
• Part of everyones job.
• Employee empowerment and involvement.
• Extensive education and training support.
• Recognition and awards.

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Management of the Improvement Process

• Corporate review of Sectors quarterly
• Sector review of Group monthly
• Group review of products monthly
• Plant review of manufacturing lines weekly
• Manufacturing line review of processes daily
• Same measurement - same improvement goal

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Employee Involvement Requires

• Awareness
• How are we doing
• How are the best in class doing
• Training
• Tools Methodology Metrics
• High expectations
• Team goal setting
• Communication
• Progress and recognition

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Empowered Teams

• Its a business-driven process not a human
  relations program
• It starts with senior management - cant be
  delegated
• Employees want to take ownership and become world
  class producers
• You dont need a crisis to get started
• Empowerment affects all functions not just
  factories
• Done right its an irreversible process

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Worldwide TCS Team Count
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A Black Belt Is . . .

• An Individual from Any Discipline with Advanced
  Statistical Quality and Interpersonal Skills
• An Experienced and Proven Leader in the use Six
  Sigma Strategies and Tools

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A Black Belt Will . . .

• Drive the Effective Use of Statistical Methods
  through Leadership Training and Consultation
• Identify Develop and Communicate New Six Sigma
  Strategies and Tools
• Actively Identify and Mentor Future Black Belts

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Use of Six Sigma Black Belts

• Highly trained in statistical tools
• Act as consultants / change agents
• Recognized as skilled in an engineering
  discipline
• Strong interpersonal and communication skills
• Significant experience with demonstrated results
• Continuous learning aptitude

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Black Belt Training

• Green Belt
• Utilize Statistical Quality Techniques
• 2-5 of Time (1-2 hrs/week) Consulting/Training
• Min. 2 Projects per Year
• Black Belt
• Lead use of Statistical Quality Techniques
• Mentor Green Belts Communicate New Techniques
• 5-10 of Time (2-4 hrs/week) Consulting/Training
• Min. 4 Projects per Year
• Master Black Belt
• Mentors Green Black Belts
• 80-100 of Time Consulting/Mentoring/Training

Projects training classes or project
consultations
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Corporate Commitment

• Motorola is committed to developing these
  leaders. We owe it to our customers and to our
  stockholders. Through IDE we seek to identify
  those who have the potential to grow into agents
  of change. We provide these people with
  extensive training in statistical and
  interpersonal tools and we provide skilled
  guidance and management support to assure that
  they are able to build and integrate their
  capabilities.
• Once their development has achieved a level
  worthy of recognition we even have a term for
  those exceptional individuals whose talent
  dedication and courage enable them to accelerate
  our progress into and beyond the next century.
• We call these people Six Sigma Black
  Belts.Chris Galvin

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History of Six Sigma Black Belt Program

• 1990 - Motorola DOE Symposium Committee organized
• 1991 - Motorola Six Sigma Research Institute
  established
• 1991 - Corporate Six Sigma Black Belt Steering
  Committee formed
• 1992 - Initiated an effort between Motorola TI
  IBM Kodak and others to jointly develop the Six
  Sigma Black Belt Program
• 1992 - Six Sigma Technical Institute (SSTI)
  developed as a required training vehicle for
  Black Belt candidates
• 1992 - First Six Sigma Black Belts recognized in
  Asia and US
• 1993 - First Six Sigma Black Belt symposium held
• 1996 - SPS Six Sigma Black Belt Steering
  committee formed
• 1996 - Intro. to Black Belt Program replaces
  SSTI as required course
• 1998 - Motorola Elma leads AIEG/ACCES group wide
  push for Black Belts - Reintroduces program

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Expectations of Six Sigma Black Belts

• Problem solving leadership
• Improvement change agents
• Drive use of statistical methods
• Integrate statistics into discipline area
• Network for solution reuse
• Mentor future Belts
• Continue personal development

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Barrier Breakthrough Plan
Pareto Brainstorming CE BvC
8D 7D TCS Teams SPC
DOE DFM PC
RenewBlack Belt Program (Internal Motorola)
Black Belt Program (External Suppliers)
Proliferation of Master Black Belts
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How does one become Belted

• Phase 1 Candidate Identification and Mentor
  Structure
• Identify candidate
• Management sponsorship
• Master Black Belt Mentor
• Define Black Belt responsibilities
• Phase 2 Skill Development
• Black Belt Orientation Class
• Personal Skill Development
• High Impact Improvement Project
• Phase 3 Recognition
• Application for recognition
• Black Belt Recognition
• Continuous Improvement

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Six Sigma Black Belt Mentor Structure
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Black Belt Roadmap

• Express interest in the program with your
  managements approval
• Complete application for candidacy
• Interview for program
• 5-7 Black Belts in Training
• First 4 months 50-60 during training process
  starting May 4th
• See detailed Black Belt Roadmap Development
  Process
• Complete Project assigned (4/year)
• Sponsor 2 Green Belts

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Do other companies have Six Sigma Black Belt
Programs

• GE has very successfully instituted this program
• 4000 trained Black Belts by YE 1997
• 10000 trained Black Belts by YE 2000
• You havent much future at GE unless they are
  selected to become Black Belts - Jack Welch
• Kodak has instituted this program
• CEO and COO driven process
• Training includes both written and oral exams
• Minimum requirements a college education basic
  statistics presentation skills computer skills
• Other companies include
• Allied Signal -Texas Instruments
• IBM - ABB
• Navistar - Citibank

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Discussion
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The Cost/Quality Relationship
Six Sigma has shown that the Highest Quality
Producer is also the Lowest Cost Producer
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Results
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And the Results
1997
5.6
Products Manufactured
Billion
16
1986
4.2
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FINANCIAL
QUALITY
















A decade of product quality and productivity
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Cost of Poor Quality Elements

• Inspection and Test
• Rework/Repair
• Scrap
• Warranty

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The Cost of Poor Quality
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Companies Adopting the 6 Culture

• General Electric
• Eastman Kodak
• Allied Signal
• Texas Instruments
• Citibank
• Sony
• ABB
• plus 30 others who have licensed 6 training

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The Future
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Six Sigma Renewal

• Six Sigma the Improvement Process
• Drive Quality from the Customer In
• Customer Factory and Field Returns
• 5-Nines Reliability

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Hierarchy Of Customer Satisfaction
Gain Customer Loyalty
Innovation Implementation
VISION
Anticipate Customer Needs
Exceed Customer Expectations
Meet Customer Requirements
MISSION
Determine Customer Requirements Expectations
Identify Customers by Organization by Key
Contacts
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Top Box Products and Service
Noncompetitive Zone
High
Telephone Company
Regulated monopoly or few substitutes
Dominant brand equity  High cost of switching
Powerful Loyalty program Proprietary
technology
Loyalty
ACCESHighly Competitive Zone
Commoditization or low differentiation
Consumer indifference Many substitutes Low
cost of switching
Low
AECS

Completely Satisfied
Completely Dissatisfied
Satisfaction
HARVARD BUSINESS REVIEW Nov./Dec. 1995
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The Customer Speaks
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LESSONS LEARNED
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Benchmarking Tells Us

• There are no secrets to quality.
• There are no Silver Bullets or short cuts to
  good quality.
• Quality doesnt take time it saves time.
• It is not only free it pays dividends.
• Average company spends close to 25 of its
  revenue on waste -- non-value added.
• Quality process applies to the administrative
  side of business as well.
• Service companies are not different from
  manufacturing.

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A Quality Plans Key Requirements

• A methodology
• A metric
• Measure a complete product/service
• Accountability
• (Application -- The Customer View)
• and ... Reach Out Goals!!!

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Actions Required to Institutionalize a Quality
Process

• TOP DOWN COMMITMENT AND INVOLVEMENT
• Set the example be active in the audit process
• MEASUREMENT SYSTEM TO TRACK PROGRESS
• At both macro and micro levels
• TOUGH GOAL SETTING (REACH OUT!!)
• Benchmark Best-In-Class -- audit often
• PROVIDE THE REQUIRED EDUCATION
• The Why and How To
• SPREAD THE SUCCESS STORIES

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Other Lessons Learned

• Be careful that you dont get too focused on
  winning the metric game.
• Be careful that you dont loose sight of the
  customers priorities.
• Be careful that you dont become arrogant.
• Look at the cost of defects not just the number.

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Quality
is not an Assignable Task
it must be Rooted and Institutionalized
Within every Step of the
Business Process
IT IS EVERYONES RESPONSIBILITY
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Questions