24 D.A. Desai
improvement approach that seeks to find and eliminate causes of mistakes or defects in
business processes by focusing on process outputs that are of critical importance to
customers (Snee, 2004).
In statistical terms, Sigma (σ), as we know, is a letter in the Greek alphabet
that has become the statistical symbol and metric of process variation. The sigma
scale of measure is perfectly correlated to such characteristics as defects-per-unit,
parts-per-million defectives and the probability of a failure. Six is the number of sigma
measured in a process, when the variation around the target is such that only 3.4 outputs
out of one million are defects under the assumption that the process average may drift
over the long term by as much as 1.5 standard deviations. The technical concept of
Six Sigma is to measure current performance and to determine how many Sigmas exist
which can be measured from the current average until customer dissatisfaction occurs.
On the occurrence of customer dissatisfaction, a defect results (Eckes, 2001).
Over the relatively short interval of time since Six Sigma was first conceived at
Motorola, its application has been principally within large manufacturing companies and
the question therefore remains how best to apply Six Sigma elsewhere, especially, in
small- and medium-scale enterprises. Although Six Sigma has been implemented with
success in many large corporations, there is still less documented evidence of its
implementation in smaller organisations (Antony et al., 2005). Each organisation will
have its own strengths and difficulties, some of which may only become apparent during
the implementation of the Six Sigma improvement drive. One of the major advantages of
Six Sigma as an improvement drive is the ability to introduce a common metric
of customer-perceived quality, which should be applicable to any size and type of
The contribution of small scale industries (SSI) to the Indian economy cannot be
ignored. SSI sector is strategically placed in the industrial population of the country and
in the global economy as a whole. Owing to growing importance of supply-chain
management issues in the global market environment, large firms are heavily dependant
on small- to medium-sized enterprises (SMEs) for the provision of high-quality products
and/or services at low costs. The increasing demand for high-quality products and highly
capable business processes by large organisations has left no choice on the SMEs to
consider the introduction of Six Sigma business strategy (Antony et al., 2005).
This paper is an attempt to introduce the Six Sigma business strategy to small scale
sectors in India and remove the fallacy that it involves lots of statistics and immense
implementation costs. The paper is in the form of case study illustrating the real-life case
where define-measure-analyse-improve-control (DMAIC) methodology of Six Sigma
strategy has been introduced at one of the small scale units to attack their chronic
problem of failing to meet customer delivery commitments.
The case has been presented in the following sequence
• challenges and advantages of SSI sectors on Six Sigma initiatives compared to large
• selection of Six Sigma over TQM and other business improvement strategies
• management approval on the Six Sigma project
• case explanations
Improving customer delivery commitments the Six Sigma way 25
• benefits of the project to the company
• lessons learned, things went great and difficulties faced
• next phase of the study.
2 Small scale industries
Small scale industries are at a pivotal position in the economic development of countries
such as India. Their contributions in the employment generation as well as in exports are
quite considerable. This is a growing sector of industrial population. Few highlights of
the SSI sectors in India are listed below (Economic Survey, 2001–2002).
• Employment generation in SSI sectors has increased from 1.6 million in the year
1996–1997 to 2 millions in the year 2002–2003.
• The number of registered SSI sectors in the year 1996–1997 was 2.8 millions. This
has increased to 3.6 millions during the year 2002–2003.
• It is also observed that the number of SSI units is growing at the average annual rate
The definition of small industry is an important aspect of government policy as it
identifies the target groups. The operational definition is based on investment criterion
and according to this criterion, small scale industries are defined in terms of the value of
fixed assets, excluding land and building, although the initial definition was based on the
number of workers. The cut off investment limit for defining a small scale industry at
present is rupees 10 million (Verma, 2005).
Small- and medium-sized enterprises are the life-blood of modern economics.
The importance of SMEs to the economy of UK and the industrialised world as a whole
cannot be over emphasised (Antony et al., 2005). Japan is the outstanding example of
those countries, which have achieved rapid industrialisation through the small and
medium industries. Likewise, Taiwan has produced 90% of its industrial output, coming
out of small scale industries employing not more than 15 workers each. In India, this
sector contributes 45% of the industrial production, 80% of industrial employment and
35% of total exports (Verma, 2005).
The contribution of SSI to GDP (gross domestic product) of India was to the tune of
37.94% in 1999–2000. While small scale industries have shown impressive growth, a
disquieting feature is the growing sickness and non-performing assets in the sector
(Kulkarni, 2002). Apart from the remedial measures of financial aids and government
help suggested by Kulkarni (2002), something concrete need to be attempted by the
respective industrial units for overall operational excellence and sustainable growth, to be
competitive globally. Break through achievement strategy like Six Sigma is probably the
need of the hour for the SSI sectors. Nevertheless, generally, Six Sigma is considered out
of the reach of small scale industries. Lack of patience and resources to implement this
strategy are the prime reasons for the same.
26 D.A. Desai
3 Literature survey
Before taking up the case explanations, let us take a brief review on the contemporary
researches supporting the project in question in one-way or other.
Kuei and Madu (2003) suggest a novel perspective of Six Sigma saying that it is not
only a quality management tool, but also an effective way to win customer satisfaction.
They call it customer–centric Six Sigma quality and reliability management (CCSSQM),
which is an extension of the traditional Six Sigma way. It views product quality and
process reliability as keys to achieve Six Sigma and adopts a holistic view
of quality. They indicate that by bringing product and process quality together, a
customer-centric Six Sigma can be achieved. They define Customer–centred Six Sigma
Quality management with three equations as below.
Customer–centred = Stakeholder focus
Six Sigma Quality = Meeting customer needs consistently and perfectly
Management = Increasing cultural acceptance, enhancing process capabilities and
people capacities for Six Sigma.
This approach advocates Six Sigma drive purely based on customer requirements.
Achieving product quality as per the specified standards alone would not be sufficient.
For overall competitiveness and meeting customer requirements, the Six Sigma way
would be the need of the hour.
The project of SSI in question has adopted this concept and applied DMAIC
methodology on one of the most critical requirements of the customer, which is, getting
product as per committed delivery schedules. Here, the stakeholder focus is on both the
customer and the company. By solving the delivery commitment problem, both are going
to be benefited.
Edgeman and Bigio (2004) modified the conventional aspect of SIPOC
(supplier-inputs-processes-outputs-customers) business model in the context of
Six Sigma improvement drive and presented as the reverse view of the SIPOC that
regards it as COPIS in the following manner:
• the voice of the customer (VOC) is used to identify the needed outputs
• knowledge of those outputs is used, in turn, to configure process capable of
providing those outputs
• those processes require specific inputs
• knowledge of the needed inputs assists in identifying appropriate suppliers.
As per them, following that line, Six Sigma emphasises acquisition of the clear VOC and
distillation of it into critical to quality characteristics, translation into actionable
information and ultimately delivery of superior processes, products and services that
fulfil the VOC. The problem selected for the subject Six Sigma improvement drive, has
this concept at the centre.
Apart from its break through impacts on the overall bottom-line, Six Sigma is still not
penetrating the way it should be. Some of the researches in India and Singapore are
highlighting this fact.
Improving customer delivery commitments the Six Sigma way 27
Kumar et al. (2002) have provided the exhaustive list of various quality management
techniques, which the Indian industries are following at present. The list of techniques is
divided in to four categories such as Management techniques, Analytical techniques,
Idea-generation techniques and Data-collection techniques. It is observed that the
application of Six Sigma problem-solving approach is very less. This shows
the immediate need to make the SSI sectors aware of Six Sigma business improvement
strategy by removing the misconception about it, that it is highly mathematical and costly
Khanna et al. (2002) highlighted the survey results and analysis of TQM status
and quality tools being followed by Indian automobile sector. The survey focused on
23 key quality improvement drives. The weakest among these is Six Sigma. Only 5% of
the respondents in Indian automobile organisations claimed to follow Six Sigma.
The foremost reason for low implementation of Six Sigma in Indian automobile sector
has been identified as lack of top management commitment. Seventy percent of top
management teams have not shown interest in the implementation of Six Sigma approach
because of the high cost involved in training the people for Green Belt, Black Belt and
Master Black Belt. This is not confined to automobile sector only. The scenario at the
industries as a whole, especially, small- and medium-scale units, is the same.
Man (2002) highlights the responses of Six Sigma in Singapore. He points out that a
leading semiconductor foundry proclaims the ideology ‘Six Sigma in everything that we
do’: that the basic work value is to achieve the Six Sigma standard. The proclamations
are grand and well documented in the organisation’s corporate vision and mission
statements and corporate business plan. The decisive moment comes when measurements
are required on the key performance indicators, defects per opportunities and sigma
levels. At this point the same organisation explains that Six Sigma is used to get people to
adopt the mindset and that it is not ready to use the measurements and rigour of data to
define sigma levels and standards. The contradiction is obvious indeed. Another
semiconductor organisation at Singapore announces that Six Sigma is much too technical
and encompasses the need for tracking data that are much too time consuming. As per
Man (2002), in most cases the project is an evaluation of known solutions. The learning
dimension is clouded by assumptions and judgments rather than clear measurements and
facts. The project selection is based on direction from the upper management who prefer
to explore their intuitions rather than use an intelligent questioning process to identify
critical design and process issues. A study of the organisations that are recognised
annually for their productivity and quality achievements in Singapore show that in
87% of cases the projects are based on low levels of analysis of equipment and
With this much background, the following text illustrates the case in question.
4 Case study
4.1 Challenges and advantages of SSI sectors on Six Sigma initiatives
compared to large organisations
Table 1 illustrates challenges and advantages of the Indian SSI sector in taking up the
Six Sigma drive for improvements compared to large organisations.
28 D.A. Desai
Table 1 Challenges and advantages of the Indian SSI sector
Lack of time and resources for implementing Complete involvement of top management in
the drive the implementation drive
Ignorance about the strategic gains Ease of locating and arriving at the consensus
of Six Sigma as one of the most effective for the most problematic area for initial trial of
improvement methodologies Six Sigma improvement drive
Misconception that Six Sigma involves lots of Convenience of keeping a close watch on the
statistics which is beyond the range of processes and experimenting with variables
common industrialists and it is a sort of
luxury, which is being sold by the
Management Consultants at very hefty fees
Comfortable with tradition of resorting to Easier and faster response to change
quick-fix solutions and curing the problems as management program in the context
and when encounter. That means, usually of Six Sigma implementation. The benefits
indifferent about investing time and money in small size brings are speed, leanness and
the long term, permanent and strategic flexibility in responding to change
solutions Ease of keeping close to the customers and
locating the vital few Critical to Quality
(CTQs), which matter most or can most easily
Edgeman and Bigio (2004) argued the following points as the answer to why many
industries are apathetic about Six Sigma:
• they believe that their existing culture and system, such as ISO 9000 and continuous
improvement are sufficient to meet their needs
• they do not believe the managerial benefit to the organisation of adopting Six Sigma
justifies its cost
• they do not understand Six Sigma or have the internal capability to assess its
potential value to their organisation
• they regard the cost of hiring, training and retaining Six Sigma talents as prohibitive
in view of what they believe the returns will be.
These points are strengthening the standpoint made above regarding challenges faced by
SSI sector in implementing Six Sigma improvement drives.
The argument presented by Antony et al. (2005) in support of four major
requirements for successful implementation of Six Sigma in any origination, regardless of
size, as given by Waxer (2004) are matching with the challenges and advantages of
Indian SSI sectors for implementing Six Sigma.
4.2 Selection of Six Sigma over TQM and other business improvement
As the basic objective was to introduce the Six Sigma improvement drive to the concern,
it was advisable to select one of the most chronic problems faced by them and then apply
Six Sigma tools and techniques, step by step, to exhibit their application and finally arrive
at the desired results.
Improving customer delivery commitments the Six Sigma way 29
Selecting the project for Six Sigma implementation generally needs brainstorming
session and then approval by the top management. Accordingly, while discussing with
key operative personnel and chief of the concern, the problem of their failure to keep
delivery commitments to their customers emerged out unanimously. This was the chronic
problem faced by them. While verifying on hard-core quality front, it was learnt that they
are well placed. They have recently conducted a pilot run of calculating their cost of
poor quality (COPQ) and it was found the figure was well within the recommended
world-class level when expressed as percentage of sales. Their COPQ for the pilot run
was 1.97% of their total sales. They have adopted the conventional quality costing
approach of categorising quality costs as Prevention-Appraisal-Internal failure-External
failure, as suggested by ISO 9004-1:1994.
As the need was to locate the root causes of failure in meeting delivery schedules, at
first instance, this seemed to be a Production Planning problem and the best tool available
could be theory of constraints (TOC) since it will help pinpoint the bottlenecks, and
ultimately to streamline the production. But then, it needs to be assumed that there exist
some bottlenecks in the system. This is rather perceiving the cause of the problem
On the other hand, total quality management (TQM) is one of the most popular
management strategies and a dream of most of the small and medium concerns.
The fallacy prevailing among them is that it is the quick fix for all sort of problem and by
TQM business grows magically. Nevertheless, the basic shortcoming of TQM as an
improvement drive is its inability to show distinct results in numbers. Problem definition
and improvements both remain intangible. Secondly, TQM is widespread, that is, it can
be applied with out pinpointing any specific problem area. This generalised nature makes
its impact weak and the fruits cannot be realised truly in relations to the efforts put in.
Looking to the nature of the problem here, TQM would not prove appropriate since it is a
long-term measure and rather a philosophy, not a strategy.
Lucas James (2002) strengthens the above argument by mentioning that a major
advantage of Six Sigma is it does not have ‘quality’ or ‘statistics’ in its name. It is
perceived to be a business system that improves the bottom line and only brings in
technical details as needed; TQM is perceived to be a technical quality system owned by
technical specialists rather than all employees. Six Sigma is simple and effective
management structure is one of its strengths; management structure used by TQM cannot
be described in such a succinct fashion. As an example of the operational effectiveness of
Six Sigma, it is worthwhile to point out that GE‘s implementation is being widely
imitated, while there was little copying of Kaizen programme, it tried to implement
between 1988 and 1992.
Basu (2001) highlights the key success factors differentiating Six Sigma from TQM
• emphasis on statistical science and measurement
• rigorous and structured training deployments plans (Champion, Master Black Belt,
Black Belt and Green Belt)
• project-focused approach with a single set of problem-solving techniques such as
• reinforcement of Juran tents (top management leadership, continuous education and
annual savings plan).
30 D.A. Desai
Further, Snee (2004) illustrated following four aspects of the Six Sigma method that are
not emphasised in TQM and many other improvement approaches.
• It places a clear focus on getting bottom line results.
• It builds on improvement methods that have shown to be effective and integrates the
human and process elements of improvement.
• It sequences and links the improvement tools into an overall approach, through
DMAIC improvement process.
• It creates an infrastructure of Champions, Master Black Belts, Black Belts and Green
Belts that lead, deploy and implement the approach.
JIT and Lean Manufacturing could also be the candidates for the subject problem.
However, once again here too we are fixing the cause without investigating it and then
trying to design an improvement drive.
Before deciding on the improvement drive, the basic need is to locate the root causes
and then accordingly attack the problem areas. For this, the DMAIC methodology of
Six Sigma proved to be the best-fit technique. This methodology makes quantitative and
specific definition of the problem, measures the present performance, analyses the root
causes, decides on appropriate improvements based on root causes and maintains the
improvements by suitable controls. The most prominent part of this methodology is that it
does not assume the causes and design the solutions. It rather, makes systematic
investigations based on the facts and figures to uncover the problem areas and then
decides on the appropriate improvement drives.
4.3 Management approval on the Six Sigma project
Six Sigma implementation is a top-down approach. The CEO is usually the driving
force; Lucas James (2002). As small companies are more agile, it is much easier
to buy-in management support and commitment, as opposed to large organisations
(Antony et al., 2005). As highlighted in the advantages (Table 1), in small industries,
since the top management is involved right from the problem selection stage, it becomes
rather easy to get final approval from them in starting the project. The company in
question being small scale in nature, managed by a chief of the operations and couple of
qualified and experienced executives, all were involved right from the problem selection
As discussed in the challenges faced by SSI regarding Six Sigma (Table 1), here too
the concern involved was having misapprehension that Six Sigma is purely a quality
engineering technique involving much statistics, which is beyond their understanding.
Further, since they believed that Six Sigma is only for hard-core quality improvement, it
cannot be applied for the operational problem like not meeting delivery schedule, which
was their chronic problem. Hence, they were unenthusiastic to go for Six Sigma to tackle
their problem in question. On quality front as discussed above, they were quite
comfortable but they were not enjoying the benefits of world-class quality and
competitive and state of the art infrastructure what they were already having owing to the
problem of failure in meeting delivery commitments.
Improving customer delivery commitments the Six Sigma way 31
A brief summary of all the measure they tried until now to tackle their problem in
question was presented to them. They had tried many quick-fix solutions such as close
control on the movement of materials on the shop floor, frequent follow-ups with the
suppliers and sub-contractors etc., but could not get the expected results. The basic lacuna
in all the improvement efforts they were putting was that they were assuming the causes
of the problem and then attacking them. They never tried to dig into the real cause of the
problem. They stick to the general belief that since delivery is the problem then solution
lies in the production planning and control only.
On appraising the basics of DMAIC methodology, they realised that the chronic
problem being faced by them needs the systematic treatment involving exact definition of
the problem, analysis of facts and figures, uncovering the real root causes and then
charting the suitable solution and ultimately holding the gains. It was appraised to them
that for overall operational excellence and long-term sustainability, Six Sigma is the right
4.4 Case explanations
4.4.1 The company
The company selected for the study is a small scale general engineering firm engaged in
manufacturing a variety of products falling under a broad product range of Sanitary
Stainless Steel Valves and Fittings, catering to the demands of industries such as Dairy,
Brewery, Winery, Cosmetics, Biotech, Pharmaceuticals etc. Operation is mainly of
‘Made to Order’ nature. Design and specifications as demanded by the customers are
being met and the company reiterated that their capability is to provide a solution to a
special need of the customer by modifying standard products and create new, tailor made
design to fit specific and unique application. Around 90% of the company’s output is
being exported, especially to USA.
4.4.2 DMAIC methodology
The original problem-solving process for Six Sigma developed from Motorola was
MAIC which means Measurement-Analysis-Improvement-Control. Later, DMAIC
instead of MAIC was advocated from GE where D stands for Definition. DMAIC is
mostly used as a unique problem-solving process in manufacturing areas (Park, 2002).
This phase defines the project. It identifies critical customer requirements and links them
to business needs. It also defines a project charter and the business processes to be
undertaken for Six Sigma. The saying that ‘well begin is half done’ is true in case of
DMAIC methodology of Six Sigma drive also. The first phase ‘Define’ is one of the most
critical phases of the whole technique. It defines the problem with specifications and
time-period. This makes it clear to visualise the magnitude and intricacy of the problem.
Therefore, if required, maximum time and efforts should be allocated to this phase in the
The following techniques were adopted in the subject project at Define stage
32 D.A. Desai
a creating the team charter
b identifying the customers of the project, their needs and requirements
c creating a high-level process map for the project.
a Creating team charter
The team charter is the most important element of any methodology. For the problem in
question, following elements were considered in team charter
• the business case
• the problem statement
• goals and objectives.
The business case
A common problem with many initial Six Sigma drives is the project’s lack of impact on
business. The proposed improvement drive should have strong impact on the strategic
business objectives. The business case for the company in question is created keeping the
following strategic business objective at the centre.
“To grow in business by satisfying customers on quality and delivery and
adding more products and customers.”
For this strategic business objective, project of improving on customer delivery
commitments was chosen as a result of the discussions held with the chief of the
company and other senior executives.
The problem statement
As the problem area was well identified during business case discussions, now it was
time to decide on the qualified problem statement. At first instance, it appeared that
production planning and control (PPC) is the problem area and hence the problem
statement should be …
“PPC is the problem area causing failure in meeting delivery commitments.”
As can be seen, this statement is violating many characteristics of a good problem
statement as suggested by Eckes (2001). Here the most important elements of specificity
and measurability are missing. Moreover, the statement is jumping directly to the
perceived cause by saying that PPC is causing problem. What is causing problem is
the truth that is to be uncovered by the project. If we know the real root cause, then the
problem would not have been existed.
On further brainstorming, a second statement emerged as …
“Not meeting internal production planning targets is causing failure in meeting
This too is not a qualified problem statement as many of the important characteristics of a
good problem statement are missing here.
Consequently, a statement ‘Not meeting customer delivery commitments’ agreed upon
as the preliminary statement. Here the aspects of time-period, specificity and
measurability need to be built up on to make it a qualified problem statement.
Improving customer delivery commitments the Six Sigma way 33
As there were no data available regarding performance of the previous delivery
commitments, a rigorous search was inevitable to define the problem statement
appropriately. Therefore, the last five years data were searched meticulously, tapping all
the communications regarding making commitments, agreement of the customers with it
and then real dispatches of the committed items. Based on this search and the analysis
thereafter, the problem statement was refined as below.
“Since last five years average success rate of meeting customer delivery
commitments are 38% with average delay of 48 days from the date of
Goals and objectives
It is important to set goals and objectives that are achievable within a 120–160-day
period. A typical rule of thumb is to reduce the problem by 50% in the 120–160-day
window (Eckes, 2001).
Accordingly, goals and objectives worked out for the problem in question and as per
the rule of thumb, it is decided to have 50% improvement in the success rate of delivery
commitments. Hence, a goal of 50% reduction in the total numbers of items delayed is
b Identifying the customers, their needs and requirements
Depending upon the nature of the problem, customers of the project in question are the
ultimate customers who are receiving the products of the company and paying the bills.
For identifying requirements of the customers, the critical to quality (CTQ) tree being the
most effective one, is applied here (Figure 1). This simple tool helps to move from
general needs of the customers to the more specific requirements.
c Creating the High-Level Process Map
Here, in this last area of Define phase, a high-level picture of how the affected process
currently operates is created. This helps in determining what in the process is not
operating, as it should be. The High-Level Process Map is as shown in Figure 2.
Figure 1 CTQ tree
34 D.A. Desai
Figure 2 High-level process map
This high-level process map was created based on Suppliers-Inputs-Process-Outputs-
Customers (SIPOC) model. The guidelines for creating high-level process map are as
below (Eckes, 2001).
1 Define the process to be mapped. It is an obvious choice for the problem in question
here, that the process to be selected for high-level mapping should be the one having
direct impact on making delivery commitments to the customers. Hence, the decision
for high-level process mapping was ‘The process of making delivery commitments
to the customers’.
2 Establish the start and stop points of the process (process boundaries). As the
process is of making delivery commitments, it is decided, after brainstorming with
all involved, to have the following start and stop points.
“Start Point: Receipt of order and Stop Point: Dispatch of product”.
3 Determine the output of the process. It is obvious choice here that the output should
be the ‘product’ dispatched to the customers.
4 Determine the customers of the process. Here, customers are the real customers of
the firm who are paying the bills.
5 Determine the requirements of the customers. This is done in previous step of Define
Improving customer delivery commitments the Six Sigma way 35
6 Identify the suppliers to the process and obtain agreement on the inputs to the
process. Depending upon the process selected for high-level mapping and based on
the discussions with all involved, the following suppliers and their respective inputs
are fixed relevant to the process being mapped. This is shown in the Table 2.
7 Agree on the 5–7 high-level steps that occur between the start and stop points of the
process: These steps were decided through brainstorming.
Table 2 Suppliers and inputs for high-level process map
Customer Order quantity and delivery dates
Company (The firm in question) Present load and inventory details
Vendors Delivery status of bought out items and row materials
This phase involves selecting product characteristic, mapping respective process, making
necessary measurements and recording the results of the process. This is essentially a
At this phase, the following two important aspects were addressed.
a relevant data collection
b calculation of present sigma level (Baseline Six Sigma).
a Data collection
Here, the data were lying in the bunch of correspondence files and also in the memory of
the concerned executives. Data of prime importance were the items, order quantity,
delivery date as per the order and delivery date as committed by the firm and actual
dispatch date. Formats used for data collection are illustrated as below (Tables 3–5).
Table 3 Initial data collection format
Delivery date as committed
Sr. no. Item P.O. qty. Delivery date as per P.O. by the firm
This format was used separately for each purchase order, year wise, starting from the year
1999–2000 until January 2004. (P.O. = Purchase Order).
After this initial data collection, the following format was used for recording the delay or
otherwise in the items dispatched, year wise.
Table 4 Subsequent data collection format
Sr. no. Item Qty. dispatched Delay in no. of days
This format was prepared for each year starting from 1999–2000 covering all the
purchase orders as entered in the initial data collection form.
Further, for the calculation of present sigma level, one more format is designed to have
data extracted from above formats. This refined format was having details as shown
36 D.A. Desai
Table 5 Refined format for present sigma level calculation
Sr. no. Item Qty. delayed Delay in no. of days
This format was prepared for each year as well as for overall data of last five years
The operational definitions of quantity dispatched and quantity delayed were decided
collectively as below:
• quantity dispatched: number of items, from respective purchase order, dispatched
from the factory premises to the customer destinations.
• quantity delayed: number of items not dispatched on committed dates.
These data then were used for present sigma level calculation through DPMO
methodology as explained below.
b Baseline Six Sigma calculations
Present sigma levels were calculated for regular and urgent items based on DPMO
method since the data were discrete.
Accordingly, for the project in question, the following items were identified for baseline
Six Sigma calculation using DPMO methodology
• unit: items dispatched
• defect: items delayed with respect to commitments made by the firm
• opportunity: CTQ as arrived in Define phase. (Success rate of all the items and
urgent items – two CTQs).
Accordingly, DPMO numbers were calculated and the corresponding sigma levels were
traced out from the DPMO-Sigma level relation table.
The work of Measure phase ended here, after the calculation of the present
performance level. Table 6 summarises this phase.
Table 6 Summary of measure phase
What to Type of Data collection Sampling Baseline Six
measure? data Operational definition formats (%) Sigma
Success rate of Discrete Dispatch of the As shown above 100 2σ
the items products from factory
dispatched premises on the date as
committed to the
Success rate of Discrete Dispatch of the urgent As shown above 100 1.65σ
the urgent items from factory
items premises on the date as
dispatched committed to the
Improving customer delivery commitments the Six Sigma way 37
In this phase, an action plan is created to close the ‘gap’ between how things currently
work and how the organisation would like them to work in order to meet the goals for a
particular product or service.
During this phase, a two-fold analysis was conducted as explained below.
a data analysis
b process analysis.
a Data analysis
Data collected during Measure phase were analysed on the following criteria for the last
• overall delivery success rate, that is, the ratio of total numbers of items dispatched on
time over total items dispatched during that year
• overall average delay in numbers of days year wise
• product category-wise delivery success rate
• contribution of different product groups in last five years sales
• product category-wise contribution in delay year wise
• product category-wise average delays in numbers of days year wise.
This analysis threw light on the problematic items in terms of their contribution to the
delay. The problem product group was also having major share in sales turnover. This
was the clear indication that improvement in the success rate and reduction in average
delay in these categories can dramatically improve overall performance.
b Process analysis
In process analysis, the following tools and techniques were adopted
• sub-process mapping
• root-cause analysis (Open – Narrow – Close)
• open root cause analysis – Cause effect diagram
• narrow root cause analysis – Multi voting and Pareto charting
• close root cause analysis – Five-why technique.
Sub-process map was created for the step of ‘comparing requirements with present load’
since this step was found the most critical in deciding the delivery dates and then
committing the same to the customers. Since more thrust is on the data analysis, in this
project, detailed sub-process mapping for each high-level step was eliminated.
Figure 3 shows ‘as is’ process steps. As the steps indicate, the process on arriving on
the overall time of the product is dependant on the internal process time of the product as
well as the lead-time of the bought out items. On further investigation, it was learnt that
the internal processing times of different products are arrived based on the past
experience and not with the help of any time-study records of the respective products.
38 D.A. Desai
Further, present machine availability is not playing vital part in deciding overall time for
the products. Generally, it is assumed that relevant machines will be available as and
when required during the processing of the components. Depending up on customer
urgency and availability of raw materials and bought out parts, machine loading is altered
quite frequently. Production plans are thus kept fluid, which can be altered as per the
requirements. Machine loading is decided daily morning, depending upon the factors as
described above. Change in priority by the customers is also a frequently happening
phenomenon. This further leads to alterations in machine loading and daily production
planning. Commitments once made to the customers are generally not reviewed
periodically and successful completion of the production within the dates committed are
left to natural processing. Effect of frequent alterations in planning is not linked with
previously committed dates through any scientific calculations. These observations
created a strong base for improvement in the existing process of making delivery
Figure 3 Sub-process map: Giving delivery commitments to the customers
Improving customer delivery commitments the Six Sigma way 39
Root cause analysis: open
After rigorous brainstorming, 14 ideas were generated as the probable causes for the
problem of ‘not meeting customer delivery commitments’. These initial ideas were
categorised as shown in the Cause-Effect Diagram in Figure 4.
Root cause analysis: narrow
During this stage of analysis, multi-voting was done. Approach to multi-voting is
subjective. Here, the team members were asked to vote each cause based on their
understanding of the most probable to least probable root cause for the problem at hand.
The causes were voted by the team on a scale of 1–5, with 5 as the most probable root
cause for the problem at hand and 1 as the least probable cause.
Based on the result of multi-voting, the list of the probable root causes was reduced to
ten from 14 causes. The causes that got average ranking 2 and below were dropped from
the list. A revised list was then prepared as shown below in Table 7 and based on this
result Pareto chart (Figure 5) was drawn for further analysis.
Figure 4 Cause-effect diagram
40 D.A. Desai
Table 7 Multi-voting result
Cause no. Cause Average ranking
1 No evaluation of past commitments 2.3
2 No scientific basis for commitments 2.7
3 No time-study data for commitment 2.7
4 Delay owing to raw materials 2.7
5 Developmental items 3
6 Frequent alterations in planning 3.3
7 P.O. wise status not readily available 3.3
8 Production capacity unknown for different product mix 3.3
9 Delay owing to bought out items 3.7
10 DMC is the bottleneck machine 4.3
Figure 5 Pareto diagram of probable root causes – multi-voting results
Root cause analysis: close
All the root causes as short-listed after multi-voting were scrutinised individually through
the ‘five-why’ technique. A list of questionnaire was prepared for each cause asking why
it occurred and then capturing the as many answers as possible for each question.
Improving customer delivery commitments the Six Sigma way 41
Questionnaire for ‘Five-Why’ technique
1 why DMC is becoming bottleneck?
2 why bought-out items are being delayed?
3 why frequent alterations in planning are made?
4 why P.O. wise status is not readily available?
5 why monthly/yearly production schedule is unknown for different product mix?
6 why developmental items are being delayed?
7 why commitments are given without the help of time-study data of the products?
8 why commitments are given without any scientific basis?
9 why raw materials are being delayed?
10 why there is no system for the evaluation of the past commitments?
Answers to the questions of five-why technique formed the basis for improvement efforts.
This phase involves improving processes/product performance characteristics for
achieving desired results and goals. This phase involves application of scientific tools and
techniques for making tangible improvements in profitability and customer satisfaction.
At this phase, the following procedures were adopted.
a setting improvement targets
b designing improvement measures
c drawing improved process.
a Setting improvement targets
Present sigma level for overall delivery commitments was 2 as worked out during
Measure phase. The approved thumb rule of 50% improvement in the first effort of
Six Sigma drive was applied here to set targets which should result from the Improve
measures. Accordingly, based on the last years sales data (9000 items dispatched, and
total items delayed were 5580) targets worked out for 50% improvement, keeping the
sales figures same for the following year (that is, total dispatch of 9000 items). As per the
50% improvement criteria, the total items allowed to be deled for next year would be
2790 (half of 5580). This is equivalent to 2.5 Sigma level based on DPMO calculations.
Accordingly, target for urgent items were also set which turned out as 2.3 Sigma level.
b Designing improvement measures
Based on the root causes and the answers emerged from the five-why technique, the
following improvement measures were worked out.
1 preparing Master Record of each product: it will have details pertaining to time and
method study and process engineering
2 regular vendor rating
42 D.A. Desai
3 vendor development
4 conveying annual requirements, procurement patterns and pipeline requirements in
advance to the vendors for effective planning at their end
5 keeping provision to stock raw materials and bought out items for the two most
critical product categories, Butterfly Valves and Ball Valves, as identified in analysis
6 for developmental items, delivery commitments for the bulk lot should not be given
until they converted into regular item
7 design and implement P.O. analysis as per the specially designed formats
8 production planning should be done as per Master Production Schedule and Machine
A correlation was drawn indicating which improvement measure will address which
route cause as shown in Table 8.
Table 8 Improvement measures and their relation with root causes
Root cause Addressed by the measure no.
Delay owing to bought out items 2,3,4 and 5
Production capacity unknown for different product mix 1
P.O. wise status not readily available 7
Frequent alterations in planning 8
Developmental items 6
Delay owing to raw materials 2,3,4 and 5
No time-study data for commitment 1
No scientific basis for commitments 1,7 and 8
No evaluation of past commitments 7
The problem of one of the machines, DMC, becoming a bottleneck was addressed since
the company installed a second machine of the same capacity. Hence, that root cause has
been eliminated from the improvement drive.
c Drawing improved process
The ‘as is’ sub-process in the Measure phase modified incorporating the improvement
measures and the revised sub-process drawn for the step of ‘comparing requirements with
present load’ as in Figure 6.
The basic objectives of this phase are to ensure that our processes stay in control after the
improvement solution has been implemented and to quickly detect out of control state
and determine the associated causes so that actions can be taken to control the problem
before non-conformances are produced. Depending up on type of the problem and
operating system of the concern, the following control measures were recommended:
• periodic review of the various solutions
• continuous watch on the success rate of meeting delivery commitments.
Improving customer delivery commitments the Six Sigma way 43
Figure 6 Improved process of making delivery commitments
4.5 Benefits of the project to the company
The objective of introducing the Six Sigma -DMAIC methodology to the firm by
applying it on the most chronic problem faced by them was successfully achieved.
The implementation of it resulted in understanding the problem from all facets,
qualitatively as well as quantitatively, and laying out the improvements through effective
analysis of the roots of the problem.
The firm has set up a dedicated Industrial Engineering Department to implement and
maintain the improvement measures laid down. The target set for improvement, that is,
allowing 50% less quantity to be delayed, fetched multiple benefits to the concern, such
as, converting developmental products into regular production, taking up new products
development and expanding customer bases. These were not possible earlier since they
were fully engrossed in pushing the items on committed dates and shortening the gaps
between committed and actual dispatch schedules. All these put together, the firm
reported around 25% increase in their turnover by satisfying existing customers and
developing new business.
Apart from the primary benefit of introducing Six Sigma business improvement
strategy to the firm, other major secondary benefits are summarised as below:
44 D.A. Desai
• The existing problem of poor performance in meeting customer delivery
commitments was quantified making the reflections of the efforts put in by the firm
clear on meeting delivery commitments for the period of last five years
• The problem that existed at the back of the mind of the chief of operations was made
crystal clear with multidimensional datum
• The major ‘culprits’ causing the problem of failing in meeting delivery commitments
• The approach of DMAIC methodology was applied successfully to the existing
problem and even though the grounds were not conducive for the full utilisation of
different tools of the technique, effective improvements were drawn out compatible
with the present operating system
• A wide-ranging system of effective planning of production, keeping the entire
infrastructure in view, was set up leading to higher success rate of meeting delivery
• Targets for the next year were set up for the overall success rate as well as for the
4.6 Lessons learned, things went great and difficulties faced
One of the most important lessons learned, as agreed by the chief of the operations and
others too was that never try to device corrective actions based on perceived causes. Until
the application of DMAIC methodology, they were putting rigorous efforts to reduce the
cycle time of the individual product. They were thinking that they must squeeze the total
time to convert the raw material into finish products. This may improve the success rate
of meting delivery commitments. However, the real causes were totally different, as
uncovered through the project.
Moreover, the firm understood what makes a good Six Sigma project? As pointed out
by Snee (2001) that project selection is the Achilles’ heel of Six Sigma. One quickly
learns that if projects are not selected properly the Six Sigma initiatives can be at risk:
Projects don’t deliver the expected bottom-line results, the organisation becomes
frustrated with the effort, and, slowly but surely, attention and resources are focused on
other initiatives. Selection of the chronic problem of not meeting delivery commitments
and aligning it with the top most business objective, made the impact of project selection
for Six Sigma crystal-clear to the firm.
The dimensions to successful Six Sigma projects, apart from project selection,
as pointed out by Snee (2001) such as, baseline, goal and entitlement are well
defined; support and approval of the top management, completion in a timely fashion
(3–6 months), support and involvement in the project by a variety of functions and
management review to keep the project focused on schedule were all incorporated in the
project in question. This made the Six Sigma more clearly understood by the firm.
Apart from this, the fear regarding involvement of extensive statistics in Six Sigma
was diluted and this breakthrough strategy, which was initially thought out of reach of the
small scale entrepreneurs, appeared at top in the list of problem solving and improvement
Improving customer delivery commitments the Six Sigma way 45
Involvement of the chief of the operations throughout the project was one of the great
things, since without top management commitment and devotion any improvement drive
will not succeed in its true sense.
The firm being small scale engineering industry and operations purely of jobbing in
nature, some of the typical hindrances that came across were lack of proper
documentations, intractability of past records, unavailability of technical details and
records of the products, such as bill of materials, processing time etc. These inherent
limitations made the work of data collection quite cumbersome and made the Define
phase tedious and lengthy. Much effort was diverted to proper data collection initially
making the contribution of time and efforts at other phases limited. However, this was
necessary as the authentic and sufficient data are the backbone of success of DMAIC
Validation of root causes that were fixed was done based on the approval of the chief
of the operations and other key personnel. Ideally, brainstorming session need to be
conducted for the same, but looking at number of root causes, time proved to be the
major constraint. Each root cause fixed could not be examined for its occurrence
frequency and therefore its impact on the problem. This is once again owing to fixing of
large number of root causes. However, this was necessary as the problem was of such a
nature requiring consideration on all the causes for overall improvement.
4.7 Next phase of the study
Application of Six Sigma methodology on one of the chronic problems uncovered the
scope of following further study and research in the firm.
• The root causes fixed during this project can be taken up separately one by one and
their individual impact on the problem can be further analysed with tools such as
frequency distribution of occurrence of each root cause, correlation and regression
analysis and design of experiments.
• Application of tools involving more statistical analysis. Since this was the
introductory initiative, rigorous statistical analysis was not adopted.
• Application of DMAIC methodology at other areas such as, accounts receivable,
shortening development time of the new products, reducing customer complaints etc.
and ultimately deploying Six Sigma company-wide.
Overall, operational excellence is the basic success factor for SSI sectors to be
competitive globally. They need to drop the slogan of satisfying customers and rigorously
strive for customer delight. At the same time, overall economics also need to be kept
under constant watch. SSI sectors are constantly on the alert to gain a competitive edge,
using the many tools and techniques that have long been flaunted as a way to beat the
competitions. Yet, there remain one basic constraint, that is, organisations that produce
better quality products and services, on time, than their rivals beat the competition time
and again. For global competitiveness, many techniques, such as Quality Circles, TQM,
ISO Certifications, etc. are being tried. But still, the focus remains on specific problem
46 D.A. Desai
solving. The need of the hour is to strike global optima and not to waste time, money and
energy in finding local optima. The SSI sectors need a breakthrough strategy, which can
have multidirectional benefits in shorter duration.
Six Sigma has already immerged as one of the most effective business strategies in
the large organisations, worldwide. Small industries are inherently capable of adopting
Six Sigma as breakthrough strategy but they need to show the roadmap. The multiple
gains achieved by this initial effort of Six Sigma on one of the problems of the company
are attractive enough for them to deploy Six Sigma company-wide. Project by project
application of Six Sigma in SSI sectors can strengthen their understanding about this
strategy along with consolidating on the gains from it. Six Sigma among the small
industries is a much-awaited movement, which can strengthen their bottom lines vis-à-vis
contribute in uplifting global economy.
I would like to thank the editor and the reviewers for their creative comments, which
helped me to formulate this paper in better shape. I would also like to thank the concern
where the subject study was undertaken.
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