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Six Sigma
2006 North American Young Generation in Nuclear Workshop
May 2006
Gianna C. ClarkManaging Director Six Sigma
Dominion Confidential & Proprietary
Manufacturing• E&P• Generation
Transportation• Pipeline and storage• Electric transmission
Retail• Electric & Gas Distribution• Unregulated Products & Services
Energy . . . Make It, Move It, Sell It
Dominion Confidential & Proprietary
Dominion’s Nuclear Fleet
North AnnaVirginia
SurryVirginia
MillstoneConnecticut
KewauneeWisconsin
North Anna: Two Units – 1786 MW
Surry: Two Units – 1625 MW
Millstone: Two Units – 2020 MW
Kewaunee: Single Unit – 568 MW
Dominion Confidential & Proprietary
Today’s Topics
• What is Six Sigma?
• Six Sigma Methodology - DMAIC
• Six Sigma Roles
• Six Sigma at Dominion
Dominion Confidential & Proprietary
Six Sigma
• Fact based methodology used to achieve,
sustain and maximize business success
• Understands customer needs
• Driven by a disciplined use of data and analysis
• Results in continually improving business
processes
• Brings the benefits of quality to the bottom line
Dominion Confidential & Proprietary
Why Six Sigma at Dominion?
Provides Dominion with an enterprise-
wide methodology for achieving and
sustaining excellence . . . in everything
we do
Dominion Confidential & Proprietary
Sigma
A letter in the Greek alphabet that describes the distribution of any process
Terms
Six Sigma
A philosophy that aims to increase the Sigma Value of all business processes
Sigma Value
A metric that indicates how well a business process is performing
Dominion Confidential & Proprietary
Terms
CustomerAnyone who receives products, service or information (internal or external)
Opportunity Every chance to do something either “Right” or “Wrong”
SuccessEvery result of an opportunity that meets the customer specification
Defect Every result of an opportunity that fails to meet the customer specification
Dominion Confidential & Proprietary
The Sigma Value is derived from the number of Defects Per Million Opportunities (DPMO)
Six Sigma as a Measure
Sigma
1
2
3
4
5
6
DPMO
691,462.1
308,537.5
66,807.2
6209.7
232.7
3.4
Yield (%)
30.854
69.146
93.319
99.379
99.977
99.9997
Isn’t 99% Good Enough?
Dominion Confidential & Proprietary
99.9997% Good (6 Sigma)
•Seven articles lost per hour
• 1.7 incorrect operations per week
• One short or long landing every five years
• 68 wrong prescriptions per year
• One hour without electricity every 34 years
99% Good (3.8 Sigma)
• 20,000 lost articles of mail per hour
• 5,000 incorrect surgical operations per week
• Two short or long landings at most major airports each day
• 200,000 wrong drug prescriptions each year
• No electricity for almost seven hours each month
Practical Meaning of Six Sigma
Dominion Confidential & Proprietary
Who’s Doing it?
Conoco Phillips*
Corning
Dominion*
Dow
Dupont
Entergy*
Home Depot
Allegheny*
Alliant*
American Express
Aquilla*
Bank of America
Carlson
Constellation*
ITT
JP Morgan Chase
Johnson & Johnson
Raytheon
SRS
Westinghouse
Xerox
*Energy/Gas companies
. . . Just to name a few
Bombardier
Caterpillar
General Electric
Honeywell
McKesson
Motorola
Dominion Confidential & Proprietary
Y = f(X)
Output VariableInput or Process Variable
YYProducts
Y
Y
X
X
XInputsX
What is Six Sigma About?
Six Sigma focuses on processes
Source: The Six Sigma Way by Peter S. Pande, Robert P. Neuman, and Roland R. Cavanagh
Dominion Confidential & Proprietary
LSL USL
Process Off Target
TargetMean
Precise
Defects
Good Processes Produce Good Results
LSL
Accurate and Precise
USL
Good Process Control
TargetMean
LSLLSL USL
Excessive Variation
Defects
Accurate
Defects
TargetMean
Dominion Confidential & Proprietary
We don't know what we don't know.
We can't act on what we don't know.
We won't know until we search.
We won't search for what we don't question.
We don't question what we don't measure.
Hence, we just don't know.
What Do We Know About Our Processes?
Ref: Six Sigma Academy
Dominion Confidential & Proprietary
Six Sigma Methodology can be applied to all functions, disciplines, and business processes.
Methodology
When there is an Output, there is a process.
When there is a Process, there is a Six Sigma Opportunity.
Dominion Confidential & Proprietary
Six Sigma Project Methodology“DMAIC”
Define: Identifies areas for making improvements and defines customers, service requirements, and processes
Measure: Evaluates current process performance
Analyze: Identifies where and why the defects or customer dissatisfaction areas occur
Improve: Determines how to improve a process with lasting results
Control: Ensures that the improvement is implemented and sustained
The phases of a Six Sigma Project are:
Dominion Confidential & Proprietary
Define25-50 Inputs Tools are applied
to drill down into a process and identify inputs that need further investigation and improvement
The DMAICDrilldown
Measure10-25 Inputs
Analyze5 -10 Inputs
Improve2-5
Inputs
Dominion Confidential & Proprietary
Blue Belts
• Work large projects • Focus on major process changes and optimization
• Work cross-functional multi-faceted projects
• Work small projects• Focus on incremental process improvementsGreen Belts
Black Belts
MBB
Six Sigma Roles “The Belts”
• Process Mapping• Focus on understanding & documenting processes
Dominion Confidential & Proprietary
More Than 2,000 “Belts” Have Been Trained
May 2006
25860
303
1365
86
0
200
400
600
800
1000
1200
1400
Black Belts /Master Black
Belts
Executive GreenBelts
Green Belts Blue Belts
# ac
tive
em
plo
yees
Dominion Confidential & Proprietary
What Makes Six Sigma Different?
LEADERSHIP
• Commitment
• Involvement
66 METHODOLOGY & TOOLS
• Driven by Data
• Statistically Validated
• Dedicated Resources
• Control Plans
• Financial Validation FOCUS ON THE
CUSTOMER
• Customer Involvement
PROJECTS • Tied to Strategic Objectives
Dominion Confidential & Proprietary
How Projects Create Value
Six Sigma Projects:• Reduce defects• Improve cycle time• Increase customer satisfaction
Which results in:• Improved Performance • Increased revenue• Reduced cost
Selecting projects that support Dominion’s
strategy and
goals ensures that process improvements and resources are focused in areas that maximize business results.
Dominion Confidential & Proprietary
Dominion has used Six Sigma to find innovative ways to:
• Improve customer reliability • Reduce lost day/restricted injuries • Reduce the number of non-economic wells drilled • Reduce gas losses• Increase megawatt-hour production• Recover megawatts• Reduce forced network outages
. . . and bring over $500 million of positive value to the bottom line
Dominion Results
Dominion Confidential & Proprietary
Nuclear Business UnitSix Sigma Project Results
Since deployment• Completed more than 260 projects• Improved hundreds of work processes• Increased production by over 1,000,000
megawatt-hours system-wide
– Reduced outage length by more than 600 hours
– Improved power ascension following outages
• Achieved over $61 million in positive P&L contribution
Dominion Confidential & Proprietary
Six Sigma is teaching our employees to:
. . . which will help us find better ways to make it, move it and sell it.
Six Sigma and Continuous Learning
• Measure what matters• Make data-based decisions• Analyze processes• Manage change• Continuously improve
Six Sigma
. . . It’s Just Good Business