8/24/2025

Six Sigma and Applied

Statistics

ESET 329
Wei Zhan

Discussion items
• Syllabus (pre-reqs)
• HW
• Quizzes
• Labs can be done at home, but must do
in-person demo during lab time
• Extra Credit: Course evaluation
• Lecture Notes
• Textbook
• Students retaking the course: Contact me 2

Famous Quotes
• I am not much given to regret, so I puzzled over this one a
while. Should have taken much more statistics in college,
I think. –Max Levchin, Paypal co-founder, Slide
Founder. Nov. 23, 2010 (quote of the week, website of
American Statistical Association)
• I keep saying that the sexy job in the next 10 years will be
statisticians, and I am not kidding. --Hal Varian, Chief
Economist at Google, August 6, 2009, The New York
Times.
• It's easy to lie with statistics; it is easier to lie without
them.
-- Frederick Mosteller
• In God we trust, all others must bring data!
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More Famous Quotes

• …the statistician knows…that in nature there never was a
normal distribution, there never was a straight line, yet with
normal and linear assumptions, known to be false, he can
often derive results which match, to a useful approximation,
those found in the real world. -- George Box (JASA, 1976,
Vol. 71, 791-799)
• While the individual man is an insoluble puzzle, in the
aggregate he becomes a mathematical certainty. You can,
for example, never foretell what any one man will be up to,
but you can say with precision what an average number will
be up to. Individuals vary, but percentages remain constant.
So says the statistician.
--Arthur Conan Doyle
• "Data do not speak for themselves - they need context, and
they need skeptical evaluation” 4

Ethics in Data Collection &

Analysis
• Ethics are a branch of philosophy that
investigates questions such as “What is good
and what is bad?”
• Ethics focuses on applying reason and logic to
determine what is considered morally good/bad.
• Intentionally manipulate data or the way data are
collected can have legal consequences.
• We will have a lab on this subject.

Question 1:
If one measurement for a variable was taken
in each day. In day 1, the value was 10.1. In
day two the value was 12.5. Can we say that
the variable has a larger value in day 2 than
in day1?

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Question 2:

If 10 measurements for a variable were

taken each day. In day 1, the average value
is 10.1. In day 2 the average value is 12.5.
Can we say that the variable’s value was
larger in day 2 than in day 1?

A conclusion based on statistical

analysis:

With 95% confidence level, the variable’s

value is larger in day 2 than in day 1.

Chapter 1. Introduction: What is Lean Six Sigma?

▪ “Six Sigma is a structured, disciplined, data-driven methodology and process with
the focus on improving business performance by reducing variation through VOC
analysis and statistical analysis.”
▪ “Six Sigma is a management strategy to use statistical tools to achieve better
quality in product or service.”
▪ Dr. Ronald D. Snee: Six Sigma is “A business improvement approach that seeks
to find and eliminate causes of mistakes or defects in business processes by
focusing on outputs that are of critical importance to customers.”
▪ “Six Sigma is a process that produces 3.4 defective parts per million
opportunities.”
▪ “Six Sigma is TQM (Total Quality Management ) on steroids.”
▪ https://www.youtube.com/watch?v=c6-ybCfU6Zc (MIT course)
▪ Lean manufacturing is method for process flow improvement and waste
reduction.
▪ In recent years, some practitioners have combined Six Sigma with lean
manufacturing to create a methodology called Lean Six Sigma to promote
business and operational excellence.
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Introduction: Lean Six Sigma

▪ emphasizes the Voice of Customer (VOC) and statistical
data analysis;
▪ includes many existing tools such as project management,
Quality Function Deployment, Cause and Effect Diagram,
Gauge R&R, DOE, SPC etc.
▪ changes the way people think and work;
▪ changes the culture in corporations;
▪ has become a business model and a culture.
▪ focuses on reducing the variation in processes/products and
waste elimination.

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Introduction: History of Lean Six Sigma

▪ 1920s: Use of statistics in manufactured products at Bell Labs. (Dr. Walter A.
Shewhart, Dr. Harold Dodge, and Dr. Harry Romig among others).
▪ 1940s: More widely used (during WWII) in the military.
▪ 1950s: Drs. Edwards Deming, Joseph M. Juran, and Armand V. Feigenbaum
(the quality gurus) made significant contributions to the quality field (the Total
Quality Management). The Japanese were the first ones to embrace TQM
taught to them by Deming.
▪ 1950s: Dr. Genechi Taguchi popularized the Design of Experiments to improve
product quality.
▪ The Japanese were so successful that customers preferred to buy products
made in Japan. Japanese products had large market share of the US market in
automotive and consumer electronics.
▪ 1980 NBC documentary: “If Japan Can…Why Can’t We?”
https://www.youtube.com/watch?v=vcG_Pmt_Ny4
▪ Lean: Toyota created the Toyota Production System (TPS) to deliver products of
right quality, in right quantity, at the right price, to meet the customer needs.
▪ www.youtube.com/watch?v=tDu47czfwiI
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Introduction: History of Lean Six Sigma (continued)

▪ 1980s: Six Sigma was first introduced by Motorola (William Smith & Mikel
Harry).
▪ Late 80s and early 90s: GE, Honeywell (previously known as AlliedSignal),
Black & Decker, DuPont, Dow Chemical, Federal Express, Boeing, Johnson
& Johnson, Ford, GM, and many other companies followed suit.
▪ As the methodology has progressed, the companies that use this
improvement method are not limited to manufacturing companies or
technology sector.
▪ Today, Six Sigma is popular in hospitals, financial institutes, toy makers,
clothing retailers, and the military.
▪ By the late 1990s, about two-thirds of the Fortune 500 organizations had
deployed Six Sigma initiatives with the aim of reducing costs and improving
quality.
▪ 2002: Michael George proposed to combine Lean and Six Sigma.
▪ Many companies now require their employees to go through Lean Six Sigma
training.
▪ Lean Six Sigma has become a world-wide accepted management system, a
global common language across different sectors. 12

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Introduction: Financial Benefit

▪ “GE announced savings of $350 million thanks to Six
Sigma in 1998. GE saved $12 billion over five years
and added $1 to its earnings per share.”
▪ “In 2005 Motorola attributed over US$17 billion in
savings to Six Sigma over the years. ”
▪ “Honeywell (AlliedSignal) recorded more than $800
million in savings in one year.”
▪ An average return of more than $2 in direct savings
for every dollar invested on Six Sigma. (ASQ report).
▪ Other companies and organizations reported positive
influence of Six Sigma in employee turnover,
employee satisfaction, and customer satisfaction.
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Introduction: Myths
▪ Lean Six Sigma only finds application in large organizations.
Lean Six Sigma, however, contains a large number of tools and
techniques that work well in small to mid-size organizations.
▪ Lean Six Sigma is only suitable for manufacturing sector.
Lean Six Sigma has been successfully implemented in many
other sectors. Lean Six Sigma can be used as long as there is a
process.
▪ Introduction of Lean Six Sigma has the effect of stifling creativity
and is inappropriate to use in the research function.
R&D and other creative work can be rigorous and follow
systematic approaches. Creativity and Lean Six Sigma do not
have to be contradictory (Case study).
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Introduction: Myths (continued)

▪ Software group does not need Lean Six Sigma, because

there is no variation in the result of any software.
The input to the software has variation, that causes the
variation in the output. The development of software is a
process that has variation.
▪ Lean Six Sigma is for incremental improvement, not for new
products.
Design for Six Sigma (DFSS) is specifically for new product
development.

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Introduction: Why Lean Six Sigma?

▪ To improve quality of products;

▪ To improve the process;
▪ To maintain competitiveness;
▪ To improve the bottom line and/or service.
▪ To survive today’s global market, companies must
continuously improve. (quality, price, service). No
company is too big to fail.

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Introduction: Optimal Quality Cost

J.M. Juran, 1993, Quality Planning and Analysis.

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Introduction: Product Quality

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Introduction: Impact of Lean Six Sigma on

Companies/Organizations

▪ Continuous efforts to achieve stable and predictable

process results are of vital importance to business
success.
▪ In order to achieve the benefits from Lean Six Sigma,
businesses have to invest in training, change
organizational infrastructure, and shift the corporate culture
within the organization.
▪ Every employee will think about how they can impact the
customer and to communicate within the business using a
common language.
▪ All these require a resource commitment from management
and the entire organization.
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Introduction: What is unique about Lean Six

Sigma?
1. Strong emphasis on defining the project with special
focus on what the customer wants.
2. Focus on validating the measurement system.
3. Use of data & statistical tools to identify root causes.
4. Increase creativity in developing solutions.
5. Emphasis on establishing controls to maintain
improvements.
6. Never ending effort to improve process.
7. Strong support from management.

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Introduction: Certificates
ASQ certification process:
▪ Yellow Belt: have basic knowledge of Six Sigma.
▪ Green Belt: be able to use Six Sigma tool and work on Six
Sigma projects.
▪ Black Belt: have expert knowledge in Six Sigma and be
able to train and mentor Green belts.
▪ Master Black Belt: manage Black belts and Six Sigma
projects, develop Six Sigma deployment strategy, train and
mentor.

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Introduction: What is Six Sigma as a

statistical measure?

▪ Sigma is the Greek symbol for standard deviation,

as a measurement of variation;
▪ Every process/procedure has an expected
outcome called a “mean”;
▪ Every outcome/measurement has some variation;
▪ To increase a process performance, you have to
decrease variation.
▪ “A Six Sigma process is a process that produces
3.4 defective parts per million opportunities.”

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Introduction: Average

Average is important, but may not be enough.

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