Monte Carlo Simulation: An Underutilized Six Sigma Tool

Lean six sigma projects are performed in many areas of business. There are a few that require an estimation of future performance when there is no chance to test or evaluate the new process. This free live webcast documents a case where a reliability testing effort provided a reliability model that needed to be extrapolated in order to estimate the total impact on warrantee costs.

The reliability model was developed through a logistic design of experiments. The resulting model was coded into an excel spreadsheet and then modeled using @RISK to answer questions of future failure percentages. The results were used as inputs to focus on the need for proactive actions by the supplier in order to maintain a good customer experience. In the end, no additional actions were taken by the supplier and business continued with a manageable liability rather than with an unknown future risk.