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ISix Sigma It is a Philosophy Anything less than ideal is an opportunity for improvement Defects costs money Understanding processes and improving them is the most efficient way to achieve lasting results It is a Process To achieve this level of performance you need to: D efine, M easure, A nalyse, I mprove and C ontrol It is Statistics 6 Sigma processes will produce less than 3.4 defects per million opportunities 13. Overview of Six Sigma PAIN, URGENCY, SURVIVAL COSTS OUT GROWTH TRANSFORM THE ORGANIZATION CHANGE THE WORLD 6 SIGMA AS A STATISTICAL TOOL 6 SIGMA AS A PHILOSOPHY 6 SIGMA AS A PROCESS 14. The Villain Cost of Poorly Performing Processes ï  ³ 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 15. C ost of Poorly Performing Processes The cost to deliver a quality product can account for as much as 40% of the sales price. For example, a laser jet printer purchased for $1,000 may have cost the manufacturer $400 in rework just to make sure that you took home an average-quality product. For a company whose annual revenues are $100 million and whose operating income is $10 million, the cost of quality is roughly 25% of the operating revenue, or $25 ... ...n - Warranty - Scrap - Rework - Rejects 30. COPQ v/s Sigma Level Cost of Quality % Sales Sigma Level 31. CTQ (Critical-To-Quality) CTQ characteristics for the process, service or process Measure of â€Å"What is important to Customer† 6 Sigma projects are designed to improve CTQ Examples: Waiting time in clinic Spelling mistakes in letter % of valves leaking in operation 32. Defect Opportunity Circumstances in which CTQ can fail to meet. Number of defect opportunities relate to complexity of unit. Complex units – Greater opportunities of defect than simple units Examples: A units has 5 parts, and in each part there are 3 opportunities of defects – Total defect opportunities are 5 x 3 = 15 33. DPO (Defect Per Opportunity) Number of defects divided by number of defect opportunities Examples: In previous case (15 defect opportunities), if 10 units have 2 defects. Defects per