All entries for Saturday 23 November 2013

November 23, 2013

Why does industry need 6σ?

Six sigma was developed by Motorola engineers in 1980s. Motorola saved more than $ 16 billion as a result of six sigma effort. So how did Motorola save that much money? And what is the aim of the six sigma? Before Process Improvement using 6 sigma (PIUSS) lectures started completely, I always thought like that this 6 sigma methodology must be a miracle. The exact aim of the six sigma is reducing the defect levels by eliminating the variances in the system. By reducing the defects level on the production, we use Statistical Process Chart (SPC) in order to monitor the volume of production. Before we start to reduce common variances in the production, the system must be stable which means that there has to be no special cause. Special causes can be emerged by either passing the upper /lower control limits or stays on the almost same level for 8 measurements. After we understand special causes on the system and solve them by using cause and effect diagram (fish bone method), we are ready to investigate the common variances that affect system behaviour. We need at least 20 points for drawing a real SPC. I will talk about SPC more on the next post!

Industry needs 6 sigma, because it reduces defects by decreasing the variances. Moreover, the most important point on the six sigma ideology is that industry does not reduce its number of defected parts by producing more products (they do not affect to overproduction) and spending more money. On the contrary, 6 sigma helps company saves money by reducing the some types of wastes (defect, inventory, motion, etc). Actually six sigma creates by According to six sigma levels, if a typical industry reaches 6 sigma levels; it means that they can run maximum 3.4 defected parts into in a million! It sounds like a dream! For instance, one of the significant users of 6 sigma methodology in industry is General Electric. GE announced that they saved around $ 350 million in 1998. A Fortunearticle stated that “of 58 large companies that have announced Six Sigma programs, 91 percent have trailed the S&P 500since”.

By the way, I am really interested in 6 sigma methodology and I think that I will apply green belt to PMI in order to gain more knowledge about it.

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