Your SlideShare is downloading. ×

six sigma

2,229

Published on

Published in: Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
2,229
On Slideshare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
80
Comments
0
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. SIX SIGMA "Sigma" is a letter of the Greek alphabet and is used in statistics as a measure of variation. Sigma is a statistical unit of measurement reflective of-- * Process capability. * Process performance, i.e. variation. Joining customer specifications and variation provides the method to evaluate defects per million opportunities (DPMO). The higher the Sigma value, the lesser the chance of a defect. • Six Sigma level—A process produces less than 3.4 defects in a million opportunities. • Five Sigma level—233 defects in a million opportunities. • Four Sigma level—6,210 defects in a million opportunities. • Three Sigma level—66,807 defects in a million opportunities. • Two Sigma level—3,08,537 defects in a million opportunities. • One Sigma level—6,97,672 defects in a million opportunities. An improvement of one Sigma means a quantum leap forward in quality. For example, a mail delivery system that operates at Four Sigma loses 20,000 pieces of mail per hour. A Six Sigma mail delivery system loses only 7 pieces of mail per hour. An improvement from Three Sigma to Six Sigma represents a 20,000-fold improvement in quality. 4 Sigma 6 Sigma 5,000 incorrect surgical operations per week 1.7 incorrect operations per week Two short or long landings per day at major airports One short or long landing every five years 200,000 wrong drug prescriptions each year 68 wrong prescriptions per year 54 hours of computer system downtime per year 2 minutes of downtime per year One missed putt per 9 rounds of golf One missed putt every 163 years
  • 2. What is Six Sigma? "Six Sigma" means a failure rate of 3.4 parts per million or 99.9997% perfect; however, the term in practice is used to denote more than simply counting defects. It literally, refers to the reduction of errors to six standard deviations from the mean value of a process output or task opportunities, i.e. about 1 error in 3,00,000 opportunities. In modern practice, this terminology has been applied to a quality improvement methodology for industry. Six Sigma can now imply a whole culture of strategies, tools, and statistical methodologies to improve the bottom line of companies. In all, six sigma is a rigorous analytical process for anticipating and solving problems. The objective of six sigma is to improve profits through defect reduction, yield improvement, improved consumer satisfaction and best-in-class product / process performance. This leads to defect reduction and improvement in profits, employee morale and quality of product. Six Sigma is both a management practice as well as a capability measure. The fundamental definition of Six Sigma capability refers to a process where "the center of the process is away from the nearest specification limit by six standard deviations of the process". The customer of that process determines the specification limits within which the process has to perform. Sigma capability of a process is a measure and therefore can assume any integer value - "doing six sigma" implies that we move towards this level of sigma capability, not as a pre-requisite, but more as a target destination on a journey. Six Sigma as a management practice refers to the business initiative undertaken at an enterprise to systematically enhance the capability of its business processes to better meet/exceed customer specifications, resulting in a tangible business gain. Six Sigma has evolved into something that’s more than a quality system like Total Quality Management or ISO. It’s also a way of doing business. "Six Sigma is many things, and it would perhaps be easier to list all the things that Six Sigma quality is not. Six Sigma can be seen as: a vision; a philosophy; a symbol; a metric; a goal; a methodology." Using the Six Sigma initiative companies will focus on achieving specific Primary Performance Drivers. These may include resource use, technical advancement, risk management, speed to market technical performance. The goal is for these Primary Performance Drivers to become core competencies.
  • 3. "Six Sigma is the relentless quest for perfection through the disciplined use of fact-based, data-driven decision making. Six Sigma is the way to take the collective intelligence and abilities of the employees, dealers, and suppliers and channel them to the highest priorities to satisfy all the stakeholders." It uses a set of strategies, statistics and methods to improve the processes from designing to manufacturing a product; from marketing products and services to providing business information to the internal and external customers. By applying the rigorous practices of Six Sigma one can achieve breakthroughs in financial and quality performance that would otherwise be unattainable. Six Sigma is "Helping People Solve Problems with Unknown Solutions" Six Sigma gets to the root of the problem by recreating processes so that the defects are never produced in the first place. Six Sigma approach is the ability to express a business issue in statistical terms. A statistical solution is then developed to solve the business problem. Six Sigma also extends metrics and measurement that makes it easy to define the base line, goal line and the distance that needs to be covered to reach the goal. This results in the creation of a new or significantly improved process that statistically meets your business requirement on a sustained basis. In short, Six Sigma brings a combination of process transformation and continuous improvement to an organization's drive towards quality. In 1891, British physicist Lord Kelvin wrote, “When you can measure what you are speaking about, and express it in numbers, you know something about it.” Mikel Harry, a noted Six Sigma authority, extends the thought as, “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.” Both imply that if one failed to quantify the results of what one was doing, in a way, it means that one might not understand what one was really doing. Hence, organizations that are unable to track the impact of quality improvements on profitability cannot know what changes need to be made to improve their profit margins. And most importantly, profitability is the natural concern of management in organisations. If a quality initiative failed to present its quantitative bottom-line value to the management, it will lose the management's commitment to it and, eventually, fade away. In contrast with other quality initiatives, Six Sigma recognizes that there is a direct correlation between the number of product defects, wasted operating costs, and the level of customer satisfaction. In the short term, Six Sigma is a method to eliminate defects and the opportunity for defects. It utilizes a statistical unit of measurement to measure the capability of the process, then achieve defect free performance, and ultimately increase the bottom-line and customer satisfaction.
  • 4. Six Sigma refers to the overall strategy to improve growth and productivity as well as a measurement of quality. As a strategy, Six Sigma is a way to achieve performance breakthroughs. And it encompasses tools from all of the improvement initiatives, including those in Operational, Technical and Customer Excellence. It applies to every function in the company i.e. Marketing, Finance, Product Development, Business Services, Engineering, etc and not just those on the factory floor. Six Sigma makes the bottom line grow by zeroing on those costs of the organization, which add no value for customers, shareholders, or employees, i.e., waste costs. When waste costs are reduced, the results flow directly to the bottom line. Both manufacturing and service organizations are turning to Six Sigma to identify new opportunities for efficiency and effectiveness. Six Sigma is a comprehensive and flexible system for achieving, sustaining, and maximizing business success. It is uniquely driven by a close understanding of customer needs; disciplined use of facts, data, and statistical analysis; and diligent attention to managing, improving, and reinventing business processes. Six Sigma is comprised of three basic elements. First, it represents a statistical measurement on how error free products, services, and processes actually are. Second, it’s a business strategy. If one improves the sigma rating of a process, product or service quality improves and costs go down. Third, it’s a philosophy for working smarter, not harder, through reducing variation, improving process capability, and having fewer defective products or services. Thus Six Sigma is a highly structured program for improving business processes and represents the latest incarnation of the quality movement. Six Sigma is not TQM Six Sigma employs some of the same tried-and-true tools and techniques of TQM. Both Six Sigma and TQM emphasize the importance of top-down support and leadership. Both approaches make it clear that continuous improvement of quality is critical to long- term business success. The PDSA cycle used in TQM is not fundamentally different than the Six Sigma DMAIC cycle. But there are Critical differences. And these differences explain why the popularity of TQM has waned, while Six Sigma's popularity continues to grow. The difference, in a word, is management. TQM provided only very broad guidelines for management to follow. Guidelines so abstract and general that only the most gifted leaders were able to knit together a successful deployment strategy for TQM. Business magazines and newspapers reported widespread failure of TQM efforts. True, solid research showed that organizations which succeeded in successfully implementing TQM reaped substantial
  • 5. rewards. But the low probability of success deterred many organizations from trying TQM. Instead, many organizations opted for ISO 9000. ISO 9000 promises not world-class performance levels, but "standard" performance. But it provides clear criteria and a guarantee that meeting these criteria will result in recognition. In contrast, TQM offered a mushy set of philosophical guidelines and no way to prove that one had accomplished their quality goals. Unlike TQM, Six Sigma was not developed by people who only dabbled in management. Six Sigma was created by some of America's most gifted CEOs. People like Motorola's Bob Galvin, AlliedSignal's Larry Bossidy, and GE's Jack Welch. These people had a single goal in mind: to make their businesses as successful as possible. Once they were convinced that the tools and techniques of the quality profession could help them do this, they developed a framework to make it happen- Six Sigma. • Six Sigma extends the use of the improvement tools to cost, cycle time, and other business issues. • Six Sigma discards the majority of the quality toolkit. It keeps a subset of tools that range from the basic to the advanced. Six Sigma discards esoteric statistical tools and completely ignores such staples of the quality professional as ISO 9000 and the Malcolm Baldrige criteria. Training focuses on using the tools to achieve tangible business results, not on theory. • Six Sigma integrates the goals of the organization as a whole into the improvement effort, but not independent of other business goals. It creates top-level oversight to assure that the interests of the entire organization are considered. • Six Sigma strives for world-class performance. The Six Sigma standard is 3.4 PPM failures per million opportunities. It goes beyond looking at errors. The best of the Six Sigma firms try to meet or exceed their customer's expectations 999,996.4 times out of every million encounters. • Six Sigma creates an infrastructure of change agents who are not employed in the quality department. These people work full and part-time on projects in their areas or in other areas. Six Sigma Black Belts do not make careers in Six Sigma. Instead, they focus on Six Sigma for two years and then continue their careers elsewhere. Green Belts work on Six Sigma projects while holding down other jobs. These subject matter experts are provided with training to give the skills they need to improve processes. Six Sigma "belts" are not certified unless they can
  • 6. demonstrate that they have effectively used the approach to benefit customers, shareholders, and employees. History of Six Sigma Bill Smith, an engineer and a scientist at Motorola came up with the concept of Six Sigma in 1986. He introduced it with an aim to standardise the way defects are counted. The roots of Six Sigma as a measurement standard can be traced back to Carl Frederick Gauss (1777-1885) who introduced the concept of the normal curve. Six Sigma as a measurement standard in product variation can be traced back to the 1920s when Walter Shewhart showed that three Sigma from the mean is the point where a process requires correction. Six Sigma provided Motorola the key to addressing quality concerns throughout the organisation, from manufacturing to support functions. Under the chairmanship of Bob Galvin, in the mid 1980s Motorola engineers decided that the traditional quality levels measuring defects in thousands of opportunities didn’t provide enough granularity. Instead, they wanted to measure the defects per million opportunities. Motorola developed this new standard and created the methodology. It was Motorola, which conceptualised six sigma as a quality goal in the mid 1980s and first recognised that modern technology was so complex that old ideas about acceptable quality levels were no longer applicable. But the term, and the company's innovative six sigma programme, only came to real prominence in 1989 when Motorola announced it would achieve a defect rate of not-more-than 3.4 parts per million within five years. This claim effectively changed the focus of quality within the US, from one where quality levels were measured in percentages (parts per hundred) to a discussion of parts per million or even parts per billion. Motorola admits it wasted more than $7 million dollars trying to train from the bottom up in their organization. Many workers were unable to understand statistical thinking; others found resistance in the middle management ranks due to ignorance. Recognizing their mistake, the company established “Motorola University” and put thousands of Motorola executives through training. Today, Motorola leads its industry in pagers, cell phones, and mobile communications. When it comes to making it all work, the bottom line is the top line -– management needs to drive the organization through the journey ahead, constantly leading by example and empowering those throughout the organization to power the vehicle. Six Sigma helped Motorola realise powerful bottom line results; it documented more than $16 billion in savings as a result of its Six Sigma efforts. The application of Six Sigma also contributed to Motorola winning the Malcolm Baldrige National Quality award in 1988.
  • 7. It was not long before many of the US giants - Xerox, Boeing, GE, Kodak - were following Motorola's lead. When Motorola publicised the success of Six Sigma in 1995, Allied Signal was one of the first to grab the concept. Allied Signal is reported to have saved $175 million in bottomline revenues in 1995 itself. However, the final push to this movement was achieved when Mr Jack Welch made Six Sigma a religion at GE. Jack Welch claims that by 1998, they had generated $750 million in Six Sigma savings over and above their investment and would get $1.5 billion in savings the next year. Their operating margins went from 14.8 percent in 1996 to 18.9 percent in 2000. Since then, hundreds of companies around the world have adopted Six Sigma as a way of doing business. This is a direct result of many of America's leaders openly praising the benefits of Six Sigma
  • 8. The Six Sigma philosophy Some companies simply see six sigma as a measure of quality that should just be used to strictly control the delivery of defect-free product. However this is not the view held by those organisations, such as Motorola, that have driven forward the six sigma approach, and have gained the major benefits from it. Rather than a random application of a quality measure, these leading companies see six sigma as the basis of a best-in-class philosophy, and a long-term business strategy. As such, six sigma becomes an evolutionary phase of a company's quality strategy, serving to further enhance the results of existing programs. The fundamental objective of this approach to six sigma is the implementation of a measurement-based strategy that focuses on process improvement and variation reduction, often through the application of improvement projects. In this way, waste and cost are driven out of the organisation as quality improves, and customer satisfaction is increased through the continuous improvement in quality. Moreover, while efforts have concentrated on Design for six sigma or project-based manufacturing improvements, there is a growing realisation that six sigma is effectively applicable in every process and transaction within a company. Using the common measurement index of 'defects per unit', where a unit can be virtually anything including a line of code or an administrative form, companies have started to utilise the approach to reduce defects in non- manufacturing operations. Six Sigma uses the very best from Total Quality Management, Process Control, Statistical Analysis and Control, and a new paradigm of Total Customer Satisfaction to deliver almost zero defects - and it can also deliver a dramatic increase in profits. • Six Sigma is a management strategy for change. • A key focus is the end customer and their specific needs. • Financial return and gains for the bottom line are also emphasised. • Statistics and a data and fact driven decisions are central. • The target of perfection is 3.4 defects in every million opportunities. • Six Sigma has its own methodology - DMAIC - for process improvement. • Design of new products and services is also catered for. The main objective behind Six Sigma is to provide businesses with tools to improve the capability of their business processes, thus
  • 9. increase profits and eliminating unwanted factors like variability, defects and waste. It covers all types of processes, whether it is manufacturing, transactional, production, customer service, etc. Six Sigma is a rigorous and a systematic methodology that utilizes information (management by facts) and statistical analysis to measure and improve a company's operational performance, practices and systems by identifying and preventing 'defects' in manufacturing and service-related processes, in order to anticipate and exceed expectations of all stakeholders to accomplish effectiveness. Six Sigma is a Four Dimension Performance Ethic – a way to achieve breakthrough performance and bottom-line results through a more rigorous and profound approach to understanding and meeting customer expectations. The main four components of Six Sigma are Metric, Philosophy, Methodology and Tools: 1. Metric: For a process to achieve Six Sigma quality levels, the process should not produce more than 3.4 defects per million opportunities (DPMO). In Six Sigma, a defect is anything that falls outside customer specifications. The Sigma Metric measures variation relative to customer expectations. It helps to quantify quality, to benchmark every product and process and to establish measurable stretch goals. 2. Philosophy: The main philosophy behind Six Sigma is to reduce variation in the business as well as to take customer-focused data driven decisions. 3. Methodology: The Six Sigma Methodology gives a common problem-solving framework and language that helps both- to improve existing processes, and to achieve the level of process performance. The techniques used for problem solving roadmaps and tools in Six Sigma are as follows: A: DMAIC— The central theme in the application of Six Sigma is DMAIC, which stands for: Define – Select the problem or area to be improved. Define the project goals and customer (internal and external) deliverables.
  • 10. * Define Customers and Requirements (CTQs) * Develop Problem Statement, Goals and Benefits * Identify Champion, Process Owner and Team * Define Resources * Evaluate Key Organizational Support * Develop Project Plan and Milestones * Develop High Level Process Map A quality team identifies a suitable project based on business objectives, customer needs and feedback. The team identifies Critical to Quality (CTQ) characteristics and items that will have an impact on quality. Measure – Measure the process to determine current performance; quantify the problem. * Define Defect, Opportunity, Unit and Metrics * Detailed Process Map of Appropriate Areas * Develop Data Collection Plan * Validate the Measurement System * Collect the Data * Begin Developing Y=f(x) Relationship * Determine Process Capability and Sigma Baseline The team identifies the key internal processes that influence CTQs and measures the defects related to those processes. Analyze – Analyze and determine the true root causes of the problem, eliminating the assumptions of the past. * Define Performance Objectives * Identify Value/Non-Value Added Process Steps * Identify Sources of Variation * Determine Root Cause(s) * Determine Vital Few x's, Y=f(x) Relationship The team discovers why the defects are generated and identifies key variables. Improve – Improve the process by eliminating defects. * Perform Design of Experiments * Develop Potential Solutions * Define Operating Tolerances of Potential System * Assess Failure Modes of Potential Solutions * Validate Potential Improvement by Pilot Studies * Correct/Re-Evaluate Potential Solution The team confirms the key variables and quantifies their effects on the CTQs. The team identifies the maximum acceptable ranges of key variables and validates a system for measuring deviations and variables. The team modifies the process to stay within the acceptable ranges.
  • 11. Control – Continuous improvement is employed through sustained control and monitoring. Control future process performance. * Define and Validate Monitoring and Control System * Develop Standards and Procedures * Implement Statistical Process Control * Determine Process Capability * Develop Transfer Plan, Handoff to Process Owner * Verify Benefits, Cost Savings/Avoidance, Profit Growth * Close Project, Finalize Documentation * Communicate to Business, Celebrate The tools are put in place to ensure the key variables remain within the maximum accept-able ranges. The methodology focuses mainly on the strategically important outputs of an organisation that affect customer satisfaction. The most critical to quality features are attacked first and the rest follow in order of importance. A Six Sigma scale provides a means of establishing a measure of performance for any tangible and intangible outputs. Master Black Belts, Black belts and green Belts do these improvement projects. Other than these, companies create their own titles to describe the work done by people. In six sigma terminology the top management people or functional leaders are known as champions. They ensure smooth progress of six sigma projects. B: DFSS (Design for Six Sigma)-- DFSS is about developing a new product or service that is defect free. DFSS combines many of the tools that are used to improve existing products of services and integrates voice of the customer and simulation methods to predict new process and product performance. Six Sigma training for new products is called Design for Six Sigma Training or DFSS Training. 4. Tools: Six Sigma utilizes and integrates a broad range of tools– from statistical tools such as design of experiments and hypothesis testing to process design tools such as process mapping and simulation, and change management tools such as facilitation techniques. Some of the “hot topics” that have direct application or can complement a Six Sigma initiative include: 1: e-Commerce and Services. 2: Enterprise Resource Planning. 3: Lean Manufacturing. 4: Customer Relationship Management systems. 5: Strategic business partnership. 6: Knowledge management. 7: Activity-based management. 8: The “process-centered organization”. 9: Globalization. 10: Just-in-time inventory/production.
  • 12. Six Themes of Six Sigma 1: A Genuine Focus on the Customer, backed by an attitude that puts the customers’ needs first, as well as by systems and strategies that serve to tie in the business to the “Voice of the Customer”. 2: Data-and fact driven Management, with effective measurement systems that track both results and outcomes (Ys) and Process, Input and other predictive factors (Xs). 3: Process focus, Management and Improvement, as an engine for growth and success. Processes in Six Sigma are documented, communicated, measured and refined on an ongoing basis. They are also designed or redesigned at intervals, to stay current with customer and business needs. 4: Proactive Management, involving habits and practices that anticipate problems and changes, apply facts and data, and question assumptions about goals and “how we do things”. 5: Boundary less collaboration, featuring cooperation between internal groups and with customers, suppliers and supply chain partners. 6: A drive for Perfection, and yet a tolerance for failure, that gives people in a Six Sigma organization the freedom to test new approaches even while managing risks and learning from mistakes, thereby “raising the bar” of performance and customer satisfaction.
  • 13. Road Map for an organisation adopting Six Sigma standards Step1-- The organisation charters a diagnostic assessment. The aim of the diagnostic assessment is to assess the organisational SWOT (Strengths, Weaknesses, Opportunities and Threats). From this it finds the best opportunities to apply Six Sigma and calculates the potential benefits Six Sigma can bring in—both financial savings and other non-quantifiable benefits; also finds out what is the roadmap for the deployment of Six Sigma—the who/what/when action plan. Another key benefit of this step is that the organisation gets to know the most promising Six Sigma projects they must embark on immediately. This assessment typically is done by a senior QAI consultant and takes 1 week for a 300- member group/location. Step 2-- Based on the above assessment, the organisation appoints a champion for Six Sigma deployment. The champion reports to the CEO, who in turn acts as the ‘sponsor’. Step 3-- The champion selects Black Belt and Green Belt participants, who in turn go through training and Six Sigma project execution. Step 4— The training lasts five days for Green Belts and 20 days for Black Belts. These methodologies have five clear phases or milestones to go through. The Six Sigma training teaches the participants more than 80-120 tools—statistical, quantitative and qualitative in nature. The training covers the DMAIC and DFSS methodologies of Six Sigma. DMAIC is a Process Improvement Methodology while DFSS is a product or Process Design Methodology. The training for Black Belts is spread across 4-6 months: 1 week of training, (first week for D&M phases, second for A phase, third for I phase, fourth for C phase respectively) followed by a four-week gap. During this gap the team performs the tasks they are supposed to do; and creates the ‘deliverables’ for that particular phase. Step 5— During this training, the participants form Six Sigma project teams. These teams are led by Black Belts with two to three Green Belts as team members. Step 5A: During the define phase, The team writes ‘Project Charters’ which enumerate the business case of their Six Sigma project, when they intend to complete it, and what benefits the organisation can achieve.
  • 14. Step 5B: During the measure phase, the team converts the business problem into a statistical problem. That is, the team collects data on the Project Y or CTQ (Critical to Quality) parameter they are targeting for improvement. The team computes the Z or Sigma Level for the CTQ. Step 5C: During the analyse phase, the team brainstorms for causal factors (Xs) for the effect—i.e. the Project Y. The team uses several statistical tools to come up with a mathematical / statistical equation which links the Y with the Xs as Y=F (x). Step 5D: During the improve phase, based on the results of analysis of Y=F (x) equations the team could fit, the team suggests improvement plans; i.e. the team converts the statistical or mathematical solution into a practical solution. The best possible solution is chosen for piloting. The team proves that the situation has improved by collecting and measuring the Sigma value once more. Step 5E: During control phase, the team optimises the process and goes ahead to implement the new process (Standard Operating procedures) on a large scale, organisation-wide. Control and sustenance mechanisms are put in place. Step 6— By the end of approximately four to six months the organisation completes several projects it had undertaken. The champion is involved in each phase of the project—D, M, A, I and C—to monitor the progress of each project. Learnings from these projects are collated and evaluated. Financial benefits are calculated. The teams get certified as green Belts and Black Belts upon writing a certification exam and successfully completing these projects. Learning experience from the projects is spread across the organisation. The organisation gets ready for the next ‘round’ of projects. Implementing Six Sigma Six Sigma focuses on business bottomline. An organisation operating at Six Sigma would save megabucks that would otherwise go into
  • 15. inspection, rework, warranties, etc. A world-class organisation would operate between 4 and 5 sigma. This would mean defect rates of less than 6,200 per million. One can expect most Indian companies to be operating at 3 sigma levels and below. Therefore, one can imagine, the massive savings potential for almost all organisations in this country, be it a manufacturing or a service industry. The basic approach to Six Sigma is no different from what stalwarts like Deming, Juran and Shewhart preached several decades ago. In fact Dr Juran's statement that "all quality improvement occurs on a project-by-project basis and in no other way" can be considered an essential element of Six Sigma. The Six Sigma methodology also uses a modified Shewhart cycle, (Plan-Do-Check-Act) which is called DMAIC (Define-Measure-Analyse-Improve-Control). Six Sigma is a vision, a tool for quality improvement, a benchmark and a profit improvement methodology all rolled into one. While implementing Six Sigma the first task at hand is identifying the factors critical to quality and pinning down defects that put a question mark on quality. Six Sigma converts a business problem into a statistical problem and finds a statistical solution. It then converts the statistical solution into a business solution. This is the basic template for all the Six Sigma project methodologies. There are tools and techniques at different stages that help one understand the problem, diagnose root causes, validate critical root causes and implement corrective action. For example, a tool like the Design Customer Satisfaction and Manufacturing (DCAM) would be used for designing and manufacturing new products, while the cross-functional process mapping (CFPM) would be used for large processes that run through the business. The most interesting part of the Six Sigma implementation is the team formation. Technical leaders, ranked according to the 'belt' system, head six Sigma projects. There are three levels (or Belts) of Six Sigma practitioners based upon the level of competence in understanding and applying related tools-- Green Belt – A person trained in the Six Sigma methodology who is a team member of six sigma process improvement action teams is a green belt. They work on less complex projects. Green Belts are employees trained in Six Sigma who spend a portion of their time completing projects, but maintain their regular work role and responsibilities. Depending on their workload, they can spend anywhere from 10% to 50% of their time on their project(s). Black Belt – A person that is part of the leadership structure for process improvement teams are called "Black Belts" (just as Total Quality utilized "Quality Improvement Team Leaders" to provide structure). Black Belts are highly-regarded, technically-oriented
  • 16. product or line personnel who have an ability to lead teams as well as to advise management. The Certified Six Sigma Black Belt is a professional who can explain Six Sigma philosophies and principles, including supporting systems and tools. The Black Belt should demonstrate team leadership, understand team dynamics, and assign team member roles and responsibilities. They have a thorough understanding of and can use all aspects of the DMAIC model in accordance with Six Sigma principles. They have basic knowledge of lean enterprise concepts, are able to identify non-value-added elements and activities, and are able to use specific tools. Black Belts are the heart and soul of the Six Sigma quality initiative. Their main purpose is to lead quality projects and work full time until they are complete. Black Belts can typically complete 4-6 projects per year. Black Belts also coach Green Belts on their projects, and while coaching may seem innocuous, it can require a significant amount of time and energy. Master Black Belt – A person trained in the six sigma methodology who acts as the organization-wide Six Sigma director or a program manager is a master black belt. He oversees Black Belts and process improvement projects and provides guidance to Black Belts as required. A Master Black belt teaches other six sigma students and helps them achieve Green belt and Black belt status. He thus, understands application and statistical theory behind application; trains other belts; leads project reviews. Master Black Belts are Six Sigma Quality experts that are responsible for the strategic implementations within an organization. Master Black Belt’s main responsibilities are helping to prioritize, select and charter high-impact projects; maintaining the integrity of the Six Sigma measurements, improvements and tollgates; and developing, maintaining and revising Six Sigma training materials. The Master Black Belt should be qualified to teach other Six Sigma facilitators the methodologies, tools, and applications in all functions and levels of the company, and should be a resource for utilizing statistical process control (typically just outside the Black Belt's knowledge base) within processes. Master Black Belts are typically assigned to a specific area or function of a business or organization. It may be a functional area such as human resources or legal, or process specific area such as billing or tube rolling. They work with the owners of the process to ensure that quality objectives and targets are set, plans are determined, progress is tracked, and education is provided. In the best Six Sigma organizations, process owners and Master Black Belts work very closely and share information daily. All the three belts are just members of a Six Sigma team. Actual definition and competencies for each belt can vary by organisation and training institutions. They all have one common objective: To dramatically improve business bottomlines through defect reduction.
  • 17. The highest-ranking belt among all the leaders is the Master Black Belt. After this come the black belt and the green belt leaders. The belt system is basically used to denote technical and organizational capability. The teams also have Champions and Sponsors who are generally from the top management. They drive various improvement projects. While six sigma programme implementation need not require any significant capital expenditure (other than for training), it does warrant a long-term vision, management commitment and commensurate attention and resources. It is also essential that investment is made in training designated staff in the appropriate methods, tools and techniques, and then enabling them to manage the programme and guide improvement projects. These people, particularly those now commonly referred to as master black belts, black belts and green belts, are the core of the six sigma programme. Companies might train and maintain ten black belts per 1000 employees, and one master black belt per 1000 employees. Crucially, because a six sigma programme in essence means overall excellence, implementation requires more than simply explaining what six sigma means and expecting everyone to begin doing it immediately. Companies implementing six sigma may: • adopt a systematic approach. • define and establish roles and responsibilities within design, manufacturing and throughout the organisation • identify methods and techniques for the defining of processes and customer requirements, and the identification of critical steps and key measures • introduce practices for benchmarking performance and processes for prioritising improvement opportunities • use a standard format to identify, reduce and control the sources of variation, allowing individuals or project teams to focus on reducing the standard deviation within the process, rather than obsessing over method. This also helps ensure the correct application of the powerful tools - such as statistical analysis, experimental design and project management - that speed up the execution of improvement activities One established framework for this is the 'six steps towards six sigma'. There are actually various versions of the six steps, which primarily change depending on the process being improved, but all are aimed at ensuring that improvement activities maintain the link between
  • 18. customer quality requirements, parts and processes. In general terms the steps are: • identify requirements of end product • determine the characteristics of the product components that are key to meeting the end product requirements (applicable techniques include: cause and effect diagrams, failure mode effects and criticality analysis (FMECA), quality function deployment (QFD), methodology/design of experiments) • determine for each key characteristic, the process step that effects or controls it • identify target value for each characteristic that minimises the impact of variation upon the end product, and determine maximum allowable range or tolerance of that characteristic. • identify actual or expected variation in each characteristic and determine capability of relevant process step for that characteristic • ensure that process steps are in statistical control and centred around the targets to be achieved Achieving six sigma is a challenge to any company and not all implementations succeed. Failure results from weak leadership, slack goal setting, poor project management, and inadequate resources and training. Moreover, establishing six sigma throughout an organisation is a long term programme - essentially it is an ongoing process of continuous improvement where even the most dedicated company sets goals of achieving six sigma within six to ten years. However, if properly introduced, companies should experience financial benefits shortly after they begin. A six sigma company substantially saves money by focusing on key customer critical issues and functioning on a higher level of efficiency. Reduced defects, scrap and re-work lead to immediate bottom-line benefits, and as production line waste drops off the company can make more efficient use of all resources. Improved design processes lead to better quality and more reliable products with reduced lead times, and better transactional processes reduce errors and increase productivity. As a result new customers begin purchasing from a company known for its high quality goods, and so revenues increase. To implement Six Sigma philosophy successfully, the following have to be taken care of: • Defect reduction resulting in cost reduction. • Projects should be tied in with business strategies.
  • 19. • Project progress should be monitored and reported. • Everyone should be involved with Six Sigma and speak the same language. • Infrastructure must be improved to measure and control the Six Sigma process. • Comfort level of the employees must be enhanced through preliminary training classes. • Total top management commitment and visibility of this commitment. • A well implemented customer management system. • A continuous education & training system. • A well-organized information & analysis system. • A well-implemented process management system. • A well-developed strategic planning system. • A well-developed supplier management system. • A well-developed competitive benchmarking system. • A well-developed human resource management system. • Equipping everyone in the organization, from top management to employees, with a working knowledge of the quality tools. • And last but not least, patience. Driving a business toward Six Sigma is not a one-time effort; it is about producing products and services that continue to meet customer and market requirements. This requires organizational agility and constant vigilance to changes in the marketplace. Thus, the real challenge with Six Sigma is getting to the point where one can meaningfully measure a business' current performance against dynamic customer requirements while developing the internal organizational abilities to response to changing marketplace conditions. Doing this well means aligning organizational components inside the company (leadership, strategy, people, and technology) to give Six Sigma efforts the momentum and staying power they need to succeed. Six Sigma for manufacturing and non-manufacturing processes
  • 20. Six Sigma is a quality improvement and business strategy. Emphasis is on reducing defects to less than 4 per million, reducing cycle time with aggressive goals such as 30-50% reduction per year, and reducing costs to dramatically impact the bottom line. The statistical and problem solving tools are similar to other modern day quality improvement strategies. However, Six Sigma stresses the application of these tools in a methodical and systematic fashion to gain knowledge that leads to breakthrough improvements with dramatic, measurable impact on the bottom line. The secret ingredient that really makes Six Sigma work is the infrastructure that is built within the organization. It is this infrastructure that motivates and produces a Six Sigma culture or "thought process" throughout the entire organization. The power of a Six Sigma approach is best described by proven return-on-investment (ROI). Bob Galvin, former President and CEO of Motorola, has stated that the lack of initial Six Sigma emphasis in the non-manufacturing areas was a mistake that cost Motorola at least $5 Billion over a 4-year period. It is common these days to hear comments like, "Yes, Company X has a great product, but they sure are a pain to do business with!" Consequently, Jack Welch is mandating Six Sigma in all aspects of his business, most recently in sales and other transactional (non- manufacturing) processes. A process is a process, regardless of the type of organization or function. All processes have inputs and outputs. All processes have customers and suppliers, and all processes exhibit variation. Since the purpose of Six Sigma is to gain breakthrough knowledge on how to improve processes to do things Better, Faster, and at Lower Cost, it applies to everyone. Furthermore, since processes such as sales have historically relied less on scientific methods than engineering and manufacturing, the need for Six Sigma (i.e., a structured and systematic methodology) is even stronger. The method to implement Six Sigma for non-manufacturing processes is simple: the same way we implement it for engineering and manufacturing processes with only slight modifications. These modifications are typically confined to the type and depth of statistical tools that need to be included in the training. Obviously, the slant on applications must also be directed toward the non-manufacturing processes. A specific strategy for Six Sigma manufacturing and non- manufacturing processes would look similar to what is shown below:
  • 21. The executives must have a total commitment to the implementation of Six Sigma and accomplish the following: 1. Establish a Six Sigma Leadership Team. 2. Identify key business issues. 3. Assign Masters to each key business issue. 4. Assist the Masters and Leadership Team in identifying critical projects that are tied to the key business issues and in selecting Expert candidates. 5. Allocate time for change agents (Experts) to make breakthrough improvements. 6. Set aggressive Six Sigma goals. 7. Incorporate Six Sigma performance into the reward system. 8. Direct finance to validate all Six Sigma ROI. 9. Evaluate the corporate culture to determine if intellectual capital is being infused into the company. 10. Continuously evaluate the Six Sigma implementation and deployment process and make changes if necessary. Six Sigma in Service Industries To be successful Six Sigma must seek compatibility with the company’s: • values and beliefs • current ideas and philosophies • perceived needs
  • 22. Business leaders must evaluate where they stand in regard to commitment and support. Strategic initiatives must be aligned to support the transformation made possible by Six Sigma projects. Six Sigma should not be pigeonholed as a “manufacturing-centered” discipline. Its implementation in the service sector is rapidly accelerating. Here are some examples of how Six Sigma is being applied in the service arena. 1: City Transportation Department - developed a strategy for monitoring and reducing congestion at the airport pick-up/drop-off point. Results: A Statistical Process Control methodology identifies the magnitude and improvement opportunities during peak traffic periods. 2: Medical Center - developed a unique employee feedback survey. Results: Executives get a direct measure assessment of positive and negative change during last 12 months. Opportunities for improvement are prioritized through the ranking of lists for "gripes" and improvement suggestions. 3: Customer Service Department - created a strategy to reduce the warranty return rate after servicing products. Results: Control chart techniques monitor the proportion of returns over time, while Pareto charts monitor the types of failures. Efforts are directed by teams to improve processes that most likely affect the big hitter items. Six Sigma for Sales Forward-thinking companies know that getting the focus right is key. Their underlying sales strategy is to determine what few things will have the greatest leverage, and to focus scarce resources on these critical areas. One way to accomplish this is to close the gap between what customers value and what the company provides using the Six Sigma methodology. Six Sigma is a disciplined methodology that begins and ends with the Voice of the Customer (VOC). It has its roots
  • 23. in manufacturing but is proving equally effective in sales and marketing. Many companies which have reaped the benefits of applying Six Sigma to increase productivity and the bottom line are now using it to create top line growth by applying it in the areas of: • Client relationship management • Sales effectiveness • New market development • Pricing process improvement • Advertising/communication improvement • Branding effectiveness • Channel effectiveness • Lead management • Service improvement • Product development General Electric, entering the ninth year of its Six Sigma journey, began using Six Sigma to improve sales effectiveness in year five. Jack Welch said, "We found that Six Sigma isn't only for engineers. Regional sales managers can use it to improve forecast reliability, pricing strategies, or pricing variation." DuPont, in its fourth year of integrating Six Sigma, began using Six Sigma for top line growth in year two. "Six Sigma brought a new focus on the voice of the customer. Customer input is valuable in driving research development, product development, and applications," said Don Linsenmann, DuPont vice president and corporate champion-Six Sigma. Bombardier, now in its seventh year of implementing Six Sigma, initially focused its business improvement efforts on cash flow, cost reduction, cost improvement, cost avoidance and efficiency improvement. Today, many of their Six Sigma projects are focused on growth projects to increase sales volume and sales margins. With today's global marketplace, coatings companies face three competing demands - maximize margins, ensure product performance and comply with environmental regulations. To meet these demands, companies are seeking quality- and process-control systems that enable them to advance product quality and improve responsiveness to customer needs, while lowering costs. One such system is Six Sigma. In 1988, based largely on its work with the then-unique quality-control process, Motorola became one of the first companies to receive the Malcolm Baldrige National Quality Award. Since then, awareness of Six Sigma and its benefits have grown steadily.
  • 24. Dow, in its 1998 annual report, candidly acknowledged the dramatic impact of Six Sigma, observing that: " is a high-impact, all- encompassing effort that will literally change the way we operate. Six Sigma will not only increase the bottom line by achieving greater efficiencies, but will grow the top line by accelerating the introduction of new products, and developing those products with the direct participation of our customers." Can Six Sigma guarantee results in administrative areas? The payoff in non-production areas is at least as great as in production areas, and often more so. Production areas are generally more advanced in the application of science to their work than administrative areas. Most administrative processes have not even been mapped or measured in the past. When Six Sigma methods are applied it is common to find enormous opportunities for improvement. For example, a purchasing team identified that over 95% of the time it took for processing a typical purchase order was non-value-added. Savings of this magnitude are rare in production areas. By the way, these comments also apply to service businesses. Six Sigma cannot “guarantee” savings. The Six Sigma approach is a proven success in hundreds of organizations in all types of industries, including services, but it is not a panacea. However, any one company’s experience might be less than expected due to a variety of conditions. These conditions include the organization’s culture, its customers, its leadership, unique market conditions, etc. Alternatives In past years, there have been many instances and evolutions of quality improvement programs. Scrutiny of the programs will show much similarity and also clear distinctions between such programs and Six Sigma. Similarities include common tools and methods, concepts of continuous improvement, and even analogous steps in the improvement framework. Differences have been articulated as follows:
  • 25. • Six Sigma speaks the language of business. It specifically addresses the concept of making the business as profitable as possible. • In Six Sigma, quality is not pursued independently from business goals. Time and resources are not spent improving something that is not a lever for improving customer satisfaction. • Six Sigma focuses on achieving tangible results. • Six Sigma does not include specific integration of ISO900 or Malcolm Baldridge National Quality Award criteria. • Six Sigma uses an infrastructure of highly trained employees from many sectors of the company (not just the Quality Department). These employees are typically viewed as internal change agents. • Six Sigma raises the expectation from 3-sigma performance to 6-sigma. Yet, it does not promote "Zero Defects" which many people dismiss as "impossible." Complementary Technologies It is difficult to concisely describe the ways in which Six Sigma may be interwoven with other initiatives (or vice versa). There are some of the possible interrelationships between initiatives. Six Sigma and improvement approaches such as CMM (Capability Maturity Models), CMMISM , PSPSM (Personal Software Process) /TSPSM (Team Software Process) are complementary and mutually supportive. Depending on current organizational, project or individual circumstances, Six Sigma could be an enabler to launch CMM® , CMMISM , PSPSM , or TSPSM . Or, it could be a refinement toolkit/methodology within these initiatives. For instance, it might be used to select highest priority Process Areas within CMMISM or to select highest leverage metrics within PSPSM . Examination of the Goal-Question-Metric (GQM), Initiating-Diagnosing- Establishing-Acting-Leveraging (IDEALSM ), and Practical Software Measurement (PSM) paradigms, likewise, shows compatibility and consistency with Six Sigma. GQ(I)M meshes well with the Define- Measure steps of Six Sigma. IDEAL and Six Sigma share many common features, with IDEALSM being slightly more focused on change management and organizational issues and Six Sigma being more focused on tactical, data-driven analysis and decision making. Lean Sigma Lean Sigma also known as Lean Manufacturing and Lean Flow is about creating a series of value- added processes in plain view of the complete supply chain. Lean Manufacturing Flow is about the customer and creating an "Optimized Flow." Lean Flow is about challenging current business practices and processes to create a less error prone, faster, cheaper, leaner and less variable supply chain. Six Sigma complements the Lean Flow or Lean Sigma process.
  • 26. Lean focuses on reducing non-value added steps in a process, and Six Sigma focuses on reducing variation from the remaining value-added steps. Lean makes sure we are working on the right activities, and Six Sigma makes sure we are doing the right things right! By achieving the fastest rate of improvement in customer satisfaction, quality, process speed, and invested capital in both manufacturing and transactional processes. Lean Six Sigma combines the speed and agility of Lean with the statistical predictability of Six Sigma to create solutions for better business practices and dramatic bottom line results. Lean Flow is a natural complement to Six Sigma. The data gathered in lean flow implementation will help identify the highest impact Six Sigma opportunities, and every process improvement made with Six Sigma will make it easier and cheaper to achieve optimum flow. There are as many different approaches to Lean Manufacturing or Lean Flow manufacturing as there are consultants, and proponents of each style will eagerly tell that theirs is the only way. There are basic concepts and methods like Kanbans that apply to all processes, but each business is unique, and there is no ‘one size fits all’ solution. The simplest versions of lean involve little more than a quick look around followed by an immediate re-arrangement of the process – based mainly on gut feel. While this produces change very quickly, only occasionally does it generate long-lasting results. At the other extreme is a massive data collection and flow analysis effort that takes one to two years before one makes any actual change. This approach can
  • 27. give a tremendous wealth of information about the processes, but most of the clients prefer to see results sooner than this approach allows. It is critical to do enough data collection and analysis to optimize the process based on facts, not opinions. The amount of data required will depend on the nature and condition of the processes. Fundamentally, ‘going lean’ or ‘implementing flow’ is a simple procedure: 1. Analyze the steps of the process, determining which steps add value and which do not. 2. Quantify the business plan and marketing strategy. 3. Calculate resource requirements for each value added step to support the business needs. 4. Link the value added steps to optimize process flow, eliminating the unnecessary steps. Optimized Lean Manufacturing flow comes from having the right data and knowing how to use it. It is necessary to quantify all aspects of the business, and use that data to ensure we are investing in the right places. Then one will see significant improvements in productivity and working capital, plus increase confidence that one has the capability to meet the customer needs, now and into the future. This approach can be applied to almost any manufacturing or administrative process, and is most effective when done throughout the organization. This program is highly recommended for professionals in operations, engineering, IT, administration, and those in management positions who are responsible for high-impact projects that will incorporate Lean Six Sigma methodology. Small, medium, and large organizations in industries such as biotech, health care, pharmaceuticals, service, public sector, and the military are all prime candidates for this program. ServiceSigma— ServiceSigma focuses Lean and Six Sigma especially in the area of business process improvement. This unique program is designed for driving results in non-manufacturing environments. ServiceSigma is not, like many others, a Six Sigma program with a business process flavor. It is completely designed with the improvement of business processes in mind. This program is based on the experience working large-scale business process projects such as: Post-merger integration, Supply chain redesign, cash conversion, compliance assurance. ServiceSigma allows aiming the entire business towards customer and shareholder value creation. It teaches key six sigma and lean improvement principles, provides a robust and comprehensive
  • 28. improvement model and trains the use of tools to achieve tangible results. Expanding on traditional lean manufacturing and kaizen approaches, participants of the workshops not only know how to transition the enterprise to lean manufacturing by applying tools, they will also understand the fundamental principles of lean manufacturing at a technical level. This will lead to employees being able to design work management models with total product delivery cost minimization in mind – from the start. The deliverables WILL NOT BE REPORTS, THEY WILL BE RESULTS! Six Sigma Training and Six Sigma Quality Kit Six Sigma is essentially a comprehensive yet flexible system for achieving, supporting, and maximizing business profits. It is a methodology driven by understanding customer needs, and the disciplined use of data, facts, and statistical analysis to improve and reinvent organizational processes. The Six Sigma Training and Quality Toolkit is designed to help address all these issues and more. It contains a whole series of resources to help explain, simplify, and sets one on the right path to implementation of Six Sigma. Six Sigma Quality Management Kit: In this each item is of the highest quality made to cover a different aspect and issue. It includes presentations, questionnaires, fact sheets, guidelines-- a whole range of materials specifically put together to both introduce, and take one through, Six Sigma. Unless otherwise stated, each element is provided in MS-Word format for flexibility, control and ease of use. The kit includes the following: A Six Sigma Beginners Guide: This is a comprehensive introduction to, and overview of, Six Sigma. It explains the concepts, the statistical practicalities, the training regime, and much more. A Management Presentation: This PowerPoint presentation is designed to explain the key concepts and benefits to management/executives and provide guidance on how to avoid the common pitfalls.
  • 29. The Six Sigma Calculator: This simple to use but powerful Excel based calculator allows one to enter values into cells and see the equivalent Six Sigma result. The Six Sigma Fact Sheet: This is a most concise summary of the Six Sigma method and process and is a handy reference guide for everyday use. It includes explanations of: why it exists, the sigma objectives, the statistical basis (in easy to understand language), the certifications, and how to use it to improve. The Six Sigma Training Tutorial: This extensive document is nothing short of a full tutorial on the topic. Sections include: The History of Six Sigma; Six Sigma Costs and Savings; What is Six Sigma?; Critical to Quality—CTQ; Why is DMAIC Significant in Six Sigma?; Benefits of Implementing Six Sigma; Who Are the Six Sigma Practitioners?; Design for a Six Sigma Roadmap. A Requirements Template: One of the most important aspects in undertaking any major initiative is to understand what the requirements for the initiative are. This excellent template document is designed specifically to assist with this task. The Six Sigma 'Top Down' Notebook: This document is designed to explain how to approach Six Sigma within an organization. It offers guidelines for a top-down approach, presented in a colorful and pleasing manner. A Six Sigma Workshop Presentation: This is a full and detailed presentation, giving a detailed appreciation of Six Sigma for the practitioner. It includes both speaker notes and exercises. Six Sigma and ITIL (IT Infrastructure Library): Within IT, ITIL has emerged to define best practice through a detailed set of processes. As there is sometimes seen to be considerable theoretical commonality with Six Sigma, this substantial document is included for those specifically considering IT. As a bonus, an ITIL assessment kit is also included. This comprises a detailed Excel questionnaire and scoring mechanism.
  • 30. Six Sigma is a quality initiative that can transform an organization to a globally competitive one. With businesses striving to focus on the customer and achieve competitiveness through consistently reliable products and services, it should be no surprise that the issue of six sigma quality is now attracting increasing attention from manufacturers and service providers. In the past few years, major US corporations have made public the benefits attributed to their six sigma programmes. Allied Signals saved $175 million in 1995, and nearly double that in 1996. In 1997, General Electric announced that it would save $500 million that year because of six sigma and by 1998 the programme savings had risen to $1.2 billion. The bottom line is that corporations moving toward six sigma levels of performance have saved billions of dollars, and boosted their stock values. However, while the dollar signs do help to highlight the potential of this quality approach, they do little to resolve the confusion that often surrounds all such 'quality movements' or explain how the benefits are achieved. Some adopters of Six Sigma 1: Wipro-- Initiatives-- One of the earliest Indian IT companies to adopt Six Sigma in India in 1996. Has put in substantial effort into it as no management review can start without the Six Sigma practice. Has covered almost 35 percent of its employees under the Six Sigma initiative. Has successfully undertaken around 2,000 projects on Six Sigma so far. It also has a Six Sigma consulting practice running. It has 15 Master Black Belts, 160 Black Belts and 800 Green Belts. As the pioneers of Six Sigma in India, Wipro has already put in around five years into process improvement through Six Sigma. Wipro's Six Sigma experience has peaked with the indigenous development of new methodologies that they take to their customers. As they continue
  • 31. their Six Sigma journey, they build on their expertise and experience - to bring continuous process improvement to your organization. Benefits-- Has become a lot more efficient, improved its overall productivity and reduced cycle time. Baseline productivity has improved. 2: Tata Consultancy Services-- Initiatives-- Started the Six Sigma initiative in 1999 due to its close relationship with GE, which was one of the early adopters and propagators of the Six Sigma practice in the world. TCS has spread the practice across the organisation worldwide. Even today GE reviews some of its projects. In 2003 GE and TCS started their own Six Sigma self-assessment certification. Has carried out about 300 projects using Six Sigma practice. It has 15 Master Black Belts, 190 Black Belts and 700 Green Belts. Benefits-- Has resulted in more business for the company, even from the existing customers. Has also resulted in the enhancement of the process capability baseline. 3: iGATE Global Solutions— Initiatives— Started the Six Sigma practice in early 2002. iGATE decided to go in for Six Sigma as GE is one of its major customers. It has executed around 150 projects using Six Sigma practice. The company has 3 Master Black Belts, 32 Black Belts and 85 Green Belts. Benefits-- Has helped it develop an analytical approach in problem solving and for fine-tuning delivery processes. 4: EXL Services (BPO)— Initiatives— Started the Six Sigma initiative in 2001 and spread it across the organisation. Its Process Excellence programme based on Six Sigma influences each stage of the client process, to offer quality service delivery geared towards the creation of an exceptional customer experience. It is a continuous programme, which has led to improved customer satisfaction, and long-term competitive advantage, focusing on cost, speed and accuracy. EXL has 2 Master Black Belts, 15 Black Belts and 30 Green Belts. Benefits-- Has made its quality management processes more robust. After adopting to Six Sigma the company has been successful in exceeding its client service agreements. It has also been able to demonstrate direct savings to its clients.
  • 32. 5: ICICI OneSource (BPO)— Initiatives— Launched the Six Sigma initiative in Jan 2003, has now spread it across processes in the organisation. Has 1 Master Black Belt. Benefits-- Has been able to influence its clients and has acted as a value accelerator to its services. 6: Citibank— Initiatives— Citibank, the international financial division of Citicorp, undertook six sigma in spring 1997 with the aim of reducing defects in its various divisions by ten times over the following three years. It started training senior management in April 1997, and so far has trained 2,000 people around the world. Benefits-- Five and ten-times defect reductions have already been realized with a decreased response time for credit card applications and fewer errors in customer statements 7: Microsoft India— Microsoft India launched Accelerator, a framework developed for Six Sigma, the highest possible degree of quality certification that can be attained by any company. Accelerator is an integrated set of products and services that leverages the company’s existing software products like Project and SQL servers, Visio, Office, Tarun Malik, product manager-business tools at Microsoft said. The product, customised for Six Sigma practitioners, combines Microsoft’s enterprise product management (EPM) and business process management (BPM) solutions thereby helping organisations to effectively manage Six Sigma projects, easily measure their financial impact, optimally utilise and track manpower resources. The Accelerator comprises three components namely Web Access (a communications tool), Portfolio Analyzer that determines productivity per employee and Portfolio Manager which details the changes required to attain Six Sigma levels. Accelerator is essentially an intelligence tool to help organisations improve return of investments (RoI), enhance functionality and competitiveness by reducing the time to market. Although even global companies are struggling to attain Six Sigma levels, Microsoft, through the Accelerator, plans to exploit Indian companies that are competing
  • 33. on a global platform. Such companies need to show the same level of quality initiatives to clients as their global counterparts. 8: General Electric— GE undertook the programme in late 1995, with 200 projects and massive training, then moved to 3,000 projects and further training the following year. In 1997, 6,000 projects were started. The $200 million invested in 1996 returned nearly that much in quality-related savings. GE estimates the additional $300 million invested in 1997 will deliver some $400-500 million in savings, producing an additional $ 100-200 million in incremental margins. The popularity of Six Sigma is growing. Companies such as Texas Instruments (1988), IBM (1990), Asea Brown Boveri (1993), Allied Signal/Kodak (1994), Whirlpool, PACCAR, Invensys, & Polaroid (1996/98), Ford, DuPont, Dow Chemical, Microsoft, American Express and many other companies worldwide have successfully implemented Six Sigma. Mumbai Dabawala’s The world renowned Forbes magazine has selected Mumbai dabawala’s as a colossal example of six sigma's success. Around 5000 Tiffinwallas deliver 175,000 lunches everyday. Lunch is in a tin container consisting of a number of bowls, each containing a separate dish, held together in a frame. The meals are prepared in the homes of the people who commute into Mumbai each morning and delivered in their own Tiffin carriers. After lunch, the process is reversed. And what a process - in it's complexity, the 5,000 tiffinwallahs make a mistake only about once every two months, according to Ragunath Medge, 42, president of the Mumbai Tiffinmen's Association. This means there is one Error on every 16 million transactions. This is thus a 6 Sigma performance (a term used in quality assurance if the percentage of correctness is 99.999999). Mumbai's "tiffinwallahs" have achieved a level of service to which Western businesses can only aspire. "Efficient organization" is not the first thought that comes to mind in India, but when the profit motive is given free rein, anything is possible.
  • 34. What Is IT's Role In Six Sigma? Six Sigma literally means reducing defects per million to 3.4 or 99.999966% good. There are two challenges implicit in Six Sigma. The first, obviously, is to achieve the 3.4 defects per million goal. A second, and equally important, challenge is maintaining Six Sigma once that defect goal is achieved. Information technology (IT) plays a crucial role in helping companies meet both challenges. Heavily driven by quantitative analysis and the assumption that all processes must, to be efficient, be repeatable - a lynch pin of Six Sigma is process control and consistency. And one can gain this consistency and create control through the integration of sophisticated, well-tailored IT solutions into key processes. Today, an organization's product development information is often scattered across many geographically separate R&D facilities, in paper-based systems such as notebooks and files, or in isolated stand-alone computer systems that are cumbersome or impossible to use effectively. Product development knowledge that is crucial to creating a controlled and consistent product development process is inaccessible, unknown and unleveraged by the company. Skilled R&D, marketing and manufacturing professionals, because they are isolated from each other and unable to access and share this valuable intellectual asset store - are forced to constantly reinvent the wheel each time they create a new formula or product. The result is an inconsistent and inefficient process prone to error. Thus there’s more to six sigma than statistics and hence implementing it into R&D environment requires analyzing the organization’s management structure and procedures and deciding if six sigma designs are really within the reach or needs. Six sigma has come to be known, just as much as a statistical quality measurement specification, as an enabling process for fully meeting a customer’s needs and expectations and the creation of a culture that supports breakthrough improvements. Management has no consistent visibility into the product development process, making it difficult to problem solve, do risk analyses and
  • 35. make quality, strategic decisions. Fresh, potentially profitable market opportunities go untapped - because new products and technologies are either not consistently developed - or may be late to market. The integrity of R&D and new product information are put at risk due to the need for manual entry of approved formula and product data. Through IT, companies can maximize the performance of product development resources and bring them in-line with Six Sigma. For example, at the beginning of a product development project, Marketing creates a "profile" for a new product that includes all the aesthetic and functional performance benefits the product must deliver. Those requirements can be linked to technical parameters and specifications stored in a centralized relational database. The database then links these parameters to formulas that have been previously developed and tested. Rather than spending hours, or in some cases days, searching through lab notebooks and paper files, lab personnel can instantaneously search all existing formulas for one that satisfies the marketing profile requirements. They are able to review all associated formula data and significantly advance the development process in a matter of minutes. A guidelines and restrictions database saves additional time and effort by enabling staff to ensure new formulas meet all regulatory requirements and internal corporate policies. All laboratory work adds value. The system also makes R&D and new product specification data available enterprise wide, and provides sophisticated workflow management tools that automate approval processes and notification of key staff. This speeds the approval of new formula variations and eliminates the need to re-conduct expensive testing programs - saving both time and money and accelerating speed-to-market. Approved formulas and product information are accurately communicated to the manufacturing or enterprise resource planning systems by a direct interface. Costly data entry errors are prevented and complete, accurate bills of material are easily generated. As a result, costly data entry errors that, in many cases may not be discovered until production is under way are prevented. Most importantly, an IT-driven product development system creates, and puts in place, the crucial infrastructure needed to effectively manage, in a controllable, consistent and repeatable manner, the complex processes associated with product development - enabling it to be successfully integrated into the greater corporate Six Sigma effort. At the heart of this integration is a stage-gate process that companies use to monitor the product development process and make go-no-go decisions about the development of specific new product. The goal is to ensure the efficiency of the product development process at its genesis, by green lighting the bring-to-market
  • 36. development of only those new products with the highest odds of success. Six Sigma adopted by Indian IT companies India’s IT industry is respected globally for its focus on quality. While SEI-CMM and other ISO standards are quite common, Six Sigma is now becoming popular amongst Indian IT and ITES companies. Some have already started reaping the benefits of adopting Six Sigma. Indian companies are adopting it to gain an edge over the others in the pack. Six Sigma’s adoption has resulted in the improvement of business processes for many companies. While Six Sigma adoption is still in a nascent stage and challenges remain, it is expected to take off amongst Indian IT and ITES companies in the years to come. One of Indian software’s biggest customers, General Electric (GE), is a big proponent of Six Sigma. Many Indian IT and ITES players believe that Six Sigma is more result-oriented than other quality and improvement standards and therefore it helps them streamline their processes, bringing about all-round organisational improvement. As Six Sigma practices aim at quantifying each and every process in numbers, it is easier to measure improvement. In most other standards it is very difficult to measure quality as everyone has a different definition of quality. However, Six Sigma practices underline defects in a process, thereby making it easy to improve upon it by eliminating the defect from its root. After adopting Six Sigma, many organisations have found that their delivery processes have become sustainable and continuous. For call centres in particular, and IT companies in general, the prospect of improving HR processes using Six Sigma is a big draw. Several Indian IT and ITES companies have adopted Six Sigma in order to gain customer acceptability and improve client satisfaction. It has helped them create and deliver value and demonstrate direct savings to their customers. Some IT companies like TCS and iGATE Global Solutions went in for Six Sigma as a result of their long- term relationship with General Electric one of the pioneers in spreading and adopting the concept of Six Sigma. Indian IT and ITES companies have adopted Six Sigma across their organisations and have tried to incorporate most of the processes running in their set-ups. As Six Sigma aims at continuous improvement it has resulted in changing the complete mindset of employees as per its procedures. The change in the overall mindset of the organisation has resulted in greater efficiency and productivity as well as a reduction in cost and cycle time. The adoption of Six Sigma has been largely confined to large IT and ITES players in the country as they have a large number of repeatable processes that can be improved over a given time period. They also have a large number of projects that
  • 37. follow a similar process. Large IT and ITES companies also have multiple quality standards running across the organisation and it is easier for them to integrate Six Sigma practices along with other standards. In some SMEs there are hardly 10 projects running and they aren’t many repeat processes in them. In such cases it becomes very difficult to adopt Six Sigma practices. Hence SMEs are struggling to adopt Six Sigma. Indian IT and ITES companies adopting Six Sigma already have a quality standard like a CMM Level 5 certification or an ISO certification. It is easier to integrate Six Sigma practices when there are also practices like CMM or ISO running in a set-up. Some organisations like Wipro, TCS and iGATE Global Solutions in the IT field and EXL Services and 24/7 Customer in ITeS already had other quality programmes running successfully before they went in for Six Sigma. Six Sigma Drives IT Quality Efforts Now that top management views information technology as a critical business function, IT organizations must deliver high performance and continuous availability around the clock. In this pressurized environment, it is no surprise that the idea of quality, already proven effective in manufacturing and industry, has become the yardstick for measuring and managing IT services. Management and end users depend upon IT to live up to the service level agreements (SLAs) they have signed. In response, service level management (SLM) has become a strategic tool for IT organizations tasked with keeping systems always up and running and aligned with business goals. Leading businesses worldwide have applied the venerable quality initiative Six Sigma to their IT operations. They are using it to ensure that business processes are fully optimized and aligned with business goals. The Dow Chemical Company was a pioneer in the application of Six Sigma-based quality principles to business management and IT services. The company uses Topaz for SLM to help IT meet its Six Sigma goals. According to Art Eberhart, Director of Global IT Services in the last five years or so, IT at Dow has been elevated to a position of value creation and value opportunity that is highly leveraged within the company. Previous to that, IT was viewed as a cost to the company. Now it is viewed as a value and a service provider for the company. This is due in large part to the company’s focus on quality and Six Sigma, and the resulting need to measure and manage IT services to meet those goals. The practice of Six Sigma goes hand-in-hand with taking a business- centric view of monitoring and managing their IT services. They were one of the first IT organizations to adopt the Six Sigma quality methodology. In doing so, they created a standardized, customer- centric discipline and a common language with which to communicate across their company, instead of a systems-centric point of view. In fact, most of their scorecards and their IT measurement systems use Six Sigma terminology. For example, using Mercury Interactive’s
  • 38. Topaz for SLM for end-to-end measurement and management, they are able to generate reports that use Six Sigma terminology. As a result, IT and business units alike get answers to the same, quality- centric questions, such as “Am I in Six Sigma compliance? What defects or variations exist in my IT systems? What steps are we taking to reduce those defects or variations?” Six Sigma Within Software Development-- Increasingly IT Departments are under pressure to cut costs, to deliver more reliably, and to increase the impact their services have on the organisation as a whole. Six Sigma can be applied successfully even at the micro team level with dramatic effect, helping to: o Reduce overall development time by over 50% - delivering software in some cases in a third of the expected time o Reduce reworking of code by over 60% o Deliver cost savings in terms of development time and effort of over 60% o Increase the project success rate (on time, on budget, to client’s expectations) to over 90% - the industry average is around 55% In the software and systems field, Six Sigma may be leveraged differently based on the state of the business. In an organization needing process consistency, Six Sigma can help promote the establishment of a process. For an organization striving to streamline their existing processes, Six Sigma can be used as a refinement mechanism. Many techniques in the Six Sigma toolkit are directly applicable to software and are already in use in the software industry. For instance, "Voice of the Client" and "Quality Function Deployment" are useful for developing customer requirements (and are relevant measures). There are numerous charting/calculation techniques that can be used to scrutinize cost, schedule, and quality (project-level and personal-level) data as a project proceeds. And, for technical development, there are quantitative methods for risk analysis and concept/design selection. The strength of "Six Sigma" comes from consciously and methodically deploying these tools in a way that achieves (directly or indirectly) customer satisfaction. As with manufacturing, it is likely that Six Sigma applications in software will reach beyond "improvement of current processes/products" and extend to "design of new processes/products." Named "Design for Six Sigma" (DFSS), this extension heavily utilizes tools for customer requirements, risk analysis, design decision-making and inventive problem solving. In the software world, it would also heavily leverage re-use libraries that consist of robustly designed software.
  • 39. Challenges faced while adopting Six Sigma * Customising Six Sigma: Customising Six Sigma to an organisation’s requirements is a big challenge. The whole mental attitude of the organisation has to change in order to adopt Six Sigma and realise its benefits. Quick adoption of Six Sigma depends on how mature an organisation is and where it is headed. During the initial stage of adoption strategic directions are not very clear as to how to go about adopting the practice but once they are clear Six Sigma can be customised and adopted throughout the organisation across departments. Freshers in an organisation are more open to the Six Sigma practice. Besides this it is important to train people to adapt to change and new practices. Considerable resources have to be pumped into training employees on Six Sigma. Applying Six Sigma in the software development process is very challenging, as it is important to identify and quantify each and every project in terms of the number of defects. * Identifying areas for improvement: It is equally challenging for companies to identify projects and areas that need immediate improvement. It is also challenging to identify projects and pain areas in those areas where Six Sigma has never been adopted before, like some areas in the sales and marketing operations. * Statistically measuring every process: Since Six Sigma is heavily dependent on numbers to underline the number of defects it becomes difficult to measure each and every process mathematically and statistically. It is easier to measure each and every process in a production environment but when it comes to software there is this problem of lack of repeatability. A lot of dedication is required, especially while measuring people processes, as it means a complete change in the attitude of the employees. * No proper assessing body: The absence of any assessing body to monitor the applicability of the Six Sigma process is also a major challenge which Indian IT and ITES companies face. The lack of good consultants in the space who can assess and monitor the adoption of the Six Sigma practice has compelled companies to go in for self-assessment of the practice, which at times may not be accurate. The road ahead Many think that Six Sigma is just a repackaging of old tools, coupled with a new implementation paradigm, that is bringing dollars to the bottom line for companies. The fact of the matter is that Six Sigma is continually bringing on new tools and techniques, specifically because our hardware and software is becoming better, faster, and can be obtained at lower cost. This roundtable will present a new technique called High Throughput Testing (HTT) and also discuss DFSS with Multidiscipline Design Optimization Using High Performance Computing (DFSS/MDO/HPC). These techniques provide a glimpse of what the future of Six Sigma will look like. With Indian IT and ITES companies concentrating their energies to tap global markets and compete with MNCs most of them have adopted some quality standard or the other. But how far they go about adopting Six Sigma, which is a highly complex standard, is yet to be seen. So far Indian players have been effectively playing the cost game but it is equally important for them to adhere to world-class quality standards like Six Sigma to achieve perfection and excellence in their work. There are promising days ahead for Six Sigma in India.
  • 40. Hard and Soft Savings: What Counts Can Be Counted Six Sigma is all about what can be quantified and measured. So it is not surprising that organizations, which utilize Six Sigma often prefer to measure success in terms of hard savings – dollars to the bottom line now – and are less impressed with soft savings– the possibility of dollars to the bottom line in the future. But it pays any organization to consider both hard and soft savings when evaluating the merits of a Six Sigma project. Sometimes soft savings are harder than management realizes. The word 'savings' is too limited to describe what Six Sigma can deliver. The preferred term is 'benefits,' in that the bottom line can be affected both by reduction in cost (savings) and by increasing the revenue. The word savings implies reduction, which suggests that "I-have-to-cut-something" mentality. The term benefits has more positive connotation, and shifts the focus to growth, not reduction. Many organizations prefer "benefits" because of its broader and more positive focus. Common Hard Savings 1. Reduction in unit cost of operations and production 2. Reduction in transaction cost 3. Reduction in overhead cost 4. Reduction in transportation cost 5. Reduction in manpower 6. Increased throughput, resulting in increased sales or revenue
  • 41. Hard savings or hard benefits still receive most of the attention in companies because it has to do with the culture. One reason is the focus of our society in measuring the success of companies by hard numbers. Analysts, the stock market and investors all use financial performance as a primary assessment tool of a company's success. Companies are expected to show revenue increases and cost savings that affect the bottom line. Six Sigma is typically associated with cost reduction efforts, and so by natural deduction and association, the focus also tends to be on hard savings. Common Soft Savings 1. Reduction in cash flow 2. Reduction in need for working capital 3. Avoidance of capacity enhancement 4. Conformation to changes in the law 5. Increased safety in the workplace 6. Increased employee and customer satisfaction Softest savings are "market opportunities" or "operating risks." Most companies don't have a great appetite for risk. Managers are generally risk averse – they don't want to embark on a cultural change (like Six Sigma) without some hard evidence, and preferably a major dollar impact. Six Sigma Project Management The main features of the Global Six Sigma Project Management system are the following: 1: Web-enabled software to monitor progress of each project. This feature helps sort out the project progress by champions, mentors and business unit leaders. 2: Flexibility of operating from multiple sites. This helps the Six Sigma practitioner to keep track of his project, even if he is relocated in any facility around the globe. 3: Security features i.e. Network ID authentication enables users to keep their data secure. The project data can be updated/modified by the respective practitioner only. Role-based permissions keep this system fully independent. System generated pop-ups and mail alerts. These features make the system very interactive with users. 4: System Initiated reviews make users plan their activities efficiently and complete the task on time. 5: Compilation of data across various businesses This supports Six Sigma leaders to take decisions efficiently and effectively. 6: Knowledge sharing whereby practitioners can post their documents related with their projects and the same can be viewed by anybody in the organization.
  • 42. This system was implemented by Owens Corning (India) Ltd with a $130million investment to manufacture glass fibers at Taloja, Maharashtra and represents the single largest investment made by Owens Corning outside the USA. It is a joint venture between Owens Corning, USA and Mahindra & Mahindra, India. This system is used across various facilities of Owens Corning, located in different countries. Developed at the Taloja facility, the project is rolled out through the world headquarters server at Toledo, US. Every facility accesses the system from there. This site enhances the knowledge sharing among the 19,000 employees of Owens Corning worldwide. OCIL's Global Six Sigma Management system proves that an efficient and superior system does not need to be technically very complicated to provide the necessary functions. The front end of the system is provided using ASP. The system's back end is provided using MS SQL. Since the main system will reside on the Toledo server, all the users will be provided with a web interface to help them use the system. In every facility, there are shared resources that can be accessed. Earlier, the server had to be mapped by other facilities to gain access to the resources. With the present system, the users don't need to go and map all the servers. The system provides a web-based interface to view the data, using various criteria based on business, location, site, category, keyword, etc. Users can gain access and search for data on the website. The capabilities of the system ensure that it occupies a very important position in the field of knowledge management systems. Initially, the interfaces are developed as a prototype, which should be accepted by the different facilities, after which the coding process is undertaken. Training of the users is important and it is a hectic affair because the facilities lay within different time zones. Benefits of the system The benefits that Owens Corning has achieved with the system have been worthy of the time and effort put into its development. For eg. Supposing that a project to increase the life of a particular component is done in India, the project will be completed within six months. Earlier, the information would have remained just within the system. If the Korean team wanted to do the same project, they would have had to spend six months to come to the same conclusions. With the implementation of the present system, all that a person has to do is to input the keyword into the system and immediately know if others are doing projects related to that particular topic. Once he knows that, he can read the entire documentation of each project. It is possible to see elements like what precautions were taken in a particular project, how he succeeded, etc. Knowing all this at the beginning of the project help a lot in increasing productivity. Teams doing a Six Sigma project will be able to access and modify the data. Those who are not members of the project will just be able to have a look at the data and the projects going on. These are controlled
  • 43. using network ID. Users cannot go into other people's areas and input data on their sections. Owen Corning's Global Six Sigma System is a perfect example of how companies can develop and deploy world-class systems on their own, rather than going in for ready-made packages costing a fortune. The Six Sigma Wave A number of prominent companies in industries from financial services to transportation to high-tech are quietly embarking on six sigma efforts. They, re joining others who have been more vocal about their efforts, including asea brown boveri, black and Decker, bombardier, Dupont, Dow chemical, federal express, Johnson & Johnson, Kodak (which had taken in $85 million in savings as of early 2000), Navistar, Polaroid, Seagate technologies, siebe appliance controls, Sony, Toshiba, and many others. From these and other six sigma companies come a wide variety of other impressive improvements, benefiting both customers and shareholders. A sample from the hundreds of six sigma projects underway at organizations around the world includes the following: Developing New Products: A telecommunication products company used Six Sigma Design techniques to enable greater flexibility and faster turnaround at a key manufacturing facility. At the plant, several specialized products are built on a single production line. Since each customer’s order may require different circuit boards, the need to avoid retooling was critical. Working through alignment of customer needs, product design, and process specifications, retooling was dramatically reduced. The plant was also able to institute parallel processing so that if one area of the line wasn’t functioning, work-in-process could easily rerouted without adding to cycle time.
  • 44. Under the new plant design, customer orders are transmitted electronically, where “virtual design” applied to speed quick response. Altogether, these innovative changes improved overall cycle time from days to hours, as well as improving productivity and resource management. Sending Message Faster and Cheaper: Customers of a telecommunications service company were dismayed over the handling of their orders. Every request- for a few minutes of satellite time to a long-term, dedicated up-link-passed through several levels of legal and technical review before being approved. The process not only upset customers, but wasted resources and money. A Six Sigma team measured and analyzed the problem. While proposed solutions were counter to the “tried and true” way of doing things, the team was able to sway opinions from solid data and knowledge of customer needs. After 6 months of effort the process was streamlined and 1$ million in savings was tallied. Providing a Prompt Answer: A credit financing center used a Six Sigma team approach to analyze and improve call center operations. The focus was on two objectives (1) reducing average call answer time; and (2) increasing the percentage of customer issues and questions resolved in the initial call. The team “centralized and simplified” the call answering system, cutting average times from 54seconds to 14 seconds. “First Call Resolution” jumped from 63 percent to 83 percent. Thinking outside the Box: The spare parts marketing and logistics group for an aerospace manufacturing company was looking for ways to take costs and time out of their service to customers. One major cost element was parts packaging: Bulk parts shipments from manufacturing plants were unpacked, placed on warehouse shelves, then picked and repackaged for shipment to customers. By focusing the process design on customer needs and value-adding activities, the spare parts packaging operation was moved from the warehouse to the plants. Packaging material cost savings alone were cut by half-a-million dollars per year. The change also contributed to major improvements in on-time-delivery, which have jumped from less than 80% to over 95% in about three years.
  • 45. Six Sigma Plus Honeywell developed a new generation of Six Sigma. It's a proprietary system called Six Sigma Plus. This powerful quality strategy was developed through the 1999 merger of the two technology giants, AlliedSignal and Honeywell, both long-time leaders in applying modern methodologies to meeting customer needs. Many in business already understand Six Sigma as a measure of excellence. Honeywell used the merger to combine the best practices of both companies, add capability and take its continuous process improvement methods to a new level of excellence which it calls "Six Sigma Plus." Six sigma plus is a planned use of strategy, total quality management and leadership development. It is the “plus” in six sigma plus that cause people to align for goal accomplishment. This is a major difference between six sigma plus and a statistical approach or a teaching of total quality management tools. The plus is often the catalyst that allows all other concepts to be a success. Six Sigma Plus focuses on implementing high impact projects that drive results consistent with the needs and priorities of a business. Its rigorous project selection process is linked to a company's annual operating plan and strategic planning process, with senior management actively involved in project and goal deployment. Issues are selected for special attention as six sigma plus projects. Projects with significant importance are assigned to Black Belts as six sigma projects. Thus each six sigma plus project is assigned a leader trained in six sigma and total quality management tools. These Six Sigma Plus Black Belts' duties include teaching other members of the six sigma
  • 46. plus project team appropriate total quality management philosophy, interfacing with management, coaching, leadership skills, teaching total quality management tools and changing systems to sustain six sigma plus projects improvements. To emphasize its conviction that the strategy will accomplish high-impact business results, all the managers, supervisors and other professionals are required to become certified, at least, at the Six Sigma Plus expert level of "Green Belt." Six sigma training is recommended for the management and champions as well as for any six sigma black belt or green belt. Senior Leadership is responsible for the strategic plan, and selecting potential six sigma plus project areas. Once a six sigma plus project is understood using total quality management tools, total quality management techniques generate alternatives. Improvements are then implemented. Six sigma plus projects maintain improvements using control tools of total quality management. This is the define, measure, analyze, improve and control sequence (DMAIC) of six sigma. DMAIC is applied to a wide variety of projects -- not only to the elimination of variation in processes. Six Sigma Plus includes Lean Enterprise, Activity Based Management, Quality Value assessment, Total Productive Maintenance and Growth projects. Through Six Sigma Plus, a company can empower its employees with the skills and tools necessary to create more value for its customers; improve its processes, products, and services, and grow the company by capitalizing on the power of the Internet through e- Business. Honeywell infuses and sustains Six Sigma Plus in the culture at each of its work sites around the world. That is why it invests heavily in Six Sigma Plus learning for its employees. This is a huge commitment that fuels customer-driven process improvements as well as new products and services in each of Honeywell's businesses everywhere. Honeywell customers and suppliers can have traditional and/or interactive access to the company's proven Six Sigma Plus methodologies. Whether they seek a full corporate deployment, want to consult with a Six Sigma Plus expert about a particular problem, attend training classes, participate in an interactive seminar, deploy Master Black Belts at their company to improve their processes, or restructure their business around Honeywell's powerful cost-saving principles, Honeywell's Six Sigma Plus can steer them to increased revenue and productivity.
  • 47. Six Sigma - Friend or Foe? The Six Sigma improvement methodology has received considerable attention recently, not only in the quality literature, but also within general business and management literature. Today, Six Sigma is arguably the hottest contemporary topic in quality. After all, which company would not be interested in reducing the defects to nearly non-existent levels? However, and as with any 'hot' management topic, there is a lot of hype surrounding Six Sigma, and many great promises of massive savings and formidable success fail to fully materialize. Six Sigma is described as a philosophy, methodology, and a breakthrough strategy to solve problems. However, it comes at a price, as deploying Six Sigma is both time and money consuming. Moreover, and while it promises massive savings and benefits, not all organizations that pursued it have achieved their goals. One of the major issues facing Six Sigma stems from prevailing corporate cultures where most organisations are not designed nor led to allow such scientific management to be applied. The key to sustainable Six Sigma is the development of a supportive work environment, a culture that welcomes Six Sigma Black Belts into operational teams and encourages the active participation of all employees in business process improvement using the scientific
  • 48. methods of Six Sigma. Achieving this kind of work environment is not a natural process, and in most cases is resisted by employees at all levels alike. It requires active leadership to create the change that brings an organization to new levels of learning and develops a consistent process that turns an organization into a performer by applying the methods of Six Sigma. This change needs committed and trained leadership, and also requires the creation of new organisational positions. Critical in this transition is the role of the change agent who drives the Six Sigma deployment; usually called the Six Sigma Deployment Champion. A more direct criticism is the 'rigid' nature of Six Sigma with its over- reliance on methods and tools. In most cases, more attention is paid to reducing variation and less attention is paid to developing robustness (which can altogether eliminate the need for reducing variation). This taps into the argument of whether Six Sigma inhibits organizational innovation when it becomes part of the culture. For example, Six Sigma has been indisputably successful in eliminating waste, reducing variance and increasing productivity and profits. But its potential to create new business models for growth and innovation is barely tapped. To deal with this aspect, some practitioners have deliberately introduced Innovation as an extra element in their Six Sigma methodology. They took the original DMAIC (Define, Measure, Analyse, Improve, and Control) and introduced DMAI2C (Define, Measure, Analyse, Innovate, Improve, and Control). The need for such flexibility and innovativeness is not only essential in the solutions proposed, but also in the way the tools are used to identify these solutions. When learning the Six Sigma methodology, one often gets caught up in the 'rules' and the 'correct' use of quality tools. In a true Six Sigma project, the methodology provides an important framework to follow to achieve the best improvement results. However, within this framework and equipped with a thorough understanding of the principles behind the methodology, one should feel able to use and modify quality tools as necessary to make progress. Thus, the appropriate application becomes more critical for effectiveness than correctness. The mantra should be 'make the tools work for you'. Six Sigma professionals should ensure that outside the bounds of a rigorous project, there is unlimited opportunity to apply concepts or tools from Six Sigma. Another issue to consider is the more general point of relying on a 'model-based' approach to quality which Six Sigma advocates. There are several points that have been identified over time as shortcomings of such model based improvements, namely: - Models are simplifications of the real world. - Models are not comprehensive.
  • 49. - Model interpretation and training must be aligned to business objectives. - Judgment is necessary to use models correctly and with insight. Giving these restrictions, Six Sigma, is not, and should not be taken as, a substitute for a good Quality System. Deming's point number 5 (part of his well known 14 point system for quality management) noted that organizations should "improve constantly and forever the system of production and service". In that context, Six Sigma does map sub processes, evaluates the measurement system of sub processes, and puts training, procedures, metrics, and so on in place where they are found to be lacking. However, a good quality system is more comprehensive and should demand an accurate map of every critical process and demand that every measurement system is qualified prior to use, and should have training as a disciplined practice already in place. On the whole, the overall thinking seems to be that 'all models are wrong but some models are useful'. The argument for using the 'model-based' improvement highlights that they: - Provide common language. - Forge a shared vision. - Are based on best practices proven to work elsewhere. - Provide a framework for prioritizing actions. - Provide a framework for performing reliable and consistent appraisals. - Support industry-wide comparison (benchmarking). The reality is, within today's dynamic change environment, there is no escaping the model-based improvements, least of all for the benefits they provide, and the potential ease and speed of their application. However, when one relies on such approaches, it is prudent to keep in mind their shortcomings to avoid falling into being 'model-driven' as opposed to 'using and tailoring' the model to fit the context. A more controversial criticism area is the effect of Six Sigma on organisational culture when adopted organisation-wide. It has been noted that in some cases, employees complained of the 'Six Sigma
  • 50. Bureaucracy'. Organisations that adopted Six Sigma as a way of life made it essential for all organisational projects and improvement initiatives to fit within the 'standard Six Sigma' format. While these were seen as useful and structured in many cases, there were cases that claimed this added unnecessary burdens and even stifled some ideas and initiatives. Moreover, and due to such rigid procedures, many complained that Six Sigma, in some cases, created a roadblock for 'doing things fast'. Within the set corporate Six Sigma procedures, every idea has to go through the methodology and be subjected to tools and analysis. While this might have been a useful filter to scrutinize new initiatives, having to submit every idea through standard forms and subject to strict methodologies might have caused a few good ideas from being implemented, or at least delayed them. In an age were we live 'instant' change, this might prove a vital point to consider. Along the same lines, Six Sigma has its strength in being data driven. While this is crucial, being data driven advocates that 'if you can't prove it, do not use it'. This begs the question: what happened to creativity and management from the gut. Management has never been a complete science as many successful cases prove and the 'art' side must be kept alive in a dynamic environment. The principle issue here is that organisations should use Six Sigma as a tool to solve problems rather than make it a way for the whole organisation to live by the code-book. Keeping the discussion within the organisational culture but on another front, it has been argued by some that Six Sigma caused some talent drain from certain organisations. The fact that everyone in the organisation had to go through a Six Sigma programme or another, and the fact that promotion was tied to Six Sigma achievement(s) made some very talented individuals leave such organisations. While they were otherwise excellent employees, they neither developed a liking or a deep understanding for the science and art of Six Sigma, and not everyone should be expected to. A more technical point of criticism is about the trend of reporting improvement(s) in Sigma levels. While this is a common language and accepted within Six Sigma professionals, it might actually confuse rather than improve. This approach might give the sense that something good is happening: "surely we are doing much better as we are now operating at 4 Sigma from operating at 3 Sigma five months ago". It might be more useful for organisations to actually report the picture before and after in operational terms to give a realistic picture and a clear measure of improvement.
  • 51. On the positive side, Six Sigma does provide a rigorous methodology and unlike mindless cost cutting programmes, which reduce value and quality, Six Sigma focuses on defect prevention, cycle time reduction, and cost savings by eliminating what adds no value to the customer. This, in fact, is the secret to Six Sigma's massive success in an age of management fads and approaches that, while looking good on paper, are yet to prove any value added to the organisations. With this in mind, it must be remembered that Six Sigma is not enough. Defining quality as only the lack of nonconforming product reflects a limited view of quality. The notion of 'critical-to-quality' (CTQ) characteristics in a product or service are those that customers expect and consider explicitly when evaluating product or service quality. It must be kept in mind that while Six Sigma can ensure customer being not 'dissatisfied' by focusing on these CTQ's, no customer dissatisfaction does not equate to customer satisfaction. One final criticism, probably more to the Six Sigma literature than concepts, relates to the evidence for Six Sigma's success. So far, documented case studies using the Six Sigma methods are presented as the strongest evidence for its success. However, looking at these documented cases, and apart from a few that are detailed from the experience of leading organizations like GE and Motorola, most cases are not documented in a systemic or academic manner. They provide no mention of any specific Six Sigma methods that were used to resolve the problems. It has been argued that by relying on the Six Sigma criteria, management is lulled into the idea that something is being done about quality, whereas any resulting improvement is accidental (Latzko 1995). Thus, when looking at the evidence put forward for Six Sigma success, mostly by consultants and people with vested interests, the question that begs to be asked is: are we making a true improvement with Six Sigma methods or just getting skilled at telling stories? Everyone seems to believe that we are making true improvements, but there is some way to go to document these empirically and clarify the casual relations. In summary, there is no doubt that Six Sigma is a powerful approach to eliminate defects and improve performance. Moreover, there is no disputing that the rigor of the Six Sigma methodology must be adhered to for maximum results when improving processes. However, within the methodology, there are often opportunities to make discretionary choices as to the appropriate application or modification of a particular quality tool. Six Sigma will prove useful only when used as a tool and within context of the overall complex system that is an organisation, and not be allowed to take over the organisational culture and creativity. Based on a rigour of measurement, analysis, and use of statistical methods for process improvement and control, it
  • 52. has gained more general and widespread use as a highly effective management programme for strategic and cultural change, as well as dramatic process improvement. Today we can add much from Lean methods and e-commerce supply chain as well as TRIZ systematic problem solving and innovation tools to provide the next generation Six Sigma approach for excellence in business quality and productivity. Six Sigma Case Study: Converting Paper to Electronic Documents Converting Printed Paper from US customers to Electronic Documents was carried out in a large company based in the US and India. The material was quite heterogeneous in nature - consisting of assorted magazines and legal papers. It is part of an ongoing operation that services several customers. The results obtained have wide applicability in the back rooms of industries processing large amounts of data - IT enabled services, banks, insurance companies, hospitals etc. - and computer based office processes. This project was taken up as a demonstration example within the framework of building a Six Sigma mind-set in the organization, while training a core group in the use of the techniques and the teamwork required. The problem solving methodology consisted of seven steps, combined with quality tools to create a dramatic improvement in the quality of the output far beyond the expectations of anyone in the organization.
  • 53. 1. Selection Of The Problem 1) A meeting of the senior management of the company was held and a brainstorming session produced a list of over 30 problems. These were affinitized into two categories: • "End result" problems faced by the external customers • Internal problems that were causes of customer problems rather than basic problems themselves. The realization that the first category of problems was the one to be attacked (customer focus) came spontaneously. Then prioritization was done to select the most important problem using the weighted voting system followed by a quick discussion to produce a consensus. The theme (CTQs) selected was "Consistency of Quality and Timeliness". 2) The problem area: Within the theme, intuitively the management recommended a particular customer line. When asked to collect data for different customer lines and present it, to their surprise they found that another major line had a bigger problem. This was the line selected. The realization of the importance of data based had begun! 3) Definition of the problem: Data (including errors) was collected for 30 days. During this exercise it was realized that different auditors were classifying the same error in two different ways, leading to measurement system discrepancies. This led to a reclassification of the errors, and training of the auditors. From the data then collected and analysed the problem was defined as follows: Customer requirement: <50 ppm errors Current process average errors: 510 ppm Variability (sigma): 710 ppm (Average + 3 sigma): 2640 ppm Errors were collected before rework to ensure that the root causes would be exposed. Problem definition: Reduce error density to assure 3-sigma quality under 50 ppm from the current 2640 ppm (i.e. 98%). 2. Finding The Vital Few To Attack The errors collected were categorized using a Pareto diagram. Prioritization was required at three levels: Level 1: Four categories, C1 to C4 - one category (C1) constituted 85% of the errors Level 2: C1 into 4 categories, C11 to C14 - one (C11) category constitutes 98% of the errors
  • 54. Level 3: C11 into 4 categories, C111 to C114 - one (C111) constituted 85% of the errors Category C111 was attacked as it constituted approximately 65% of the total problem. 3. Idea Formulation For Countermeasures Seven error types were found in C111 in two broad categories. They were examined to determine why each one could have occurred, and a brainstorm for possible countermeasures was done. The most likely measures to "Kill the Problems" were selected for trial implementation. 4. Idea Testing And Modification The selected countermeasures were analyzed and tested for each error type and the successful countermeasure was short-listed for implementation. 5. Implementation Of Countermeasures Training instructions were prepared for the new procedures and all the operators were trained. Implementation of all the countermeasures was done across the system from a particular date. 6. Confirming The Results The team was trained in control charts and the X bar-sigma charts were introduced to monitor the results. A dramatic reduction occurred from the day of implementation ,and the first three weeks confirmed that a drop of 90% in error density had been achieved from 2640 ppm to around 300 ppm. Tremendous enthusiasm was generated in the team as the result of this project far exceeded their expectation. 7. Maintenance Of Continuous Small Improvements Standard operating procedures (SOP) were drawn up for the process changes. A special session with the operating personnel emphasizing regular review, and killing any abnormal peaks that may have occurred in the control chart was explained. An SOP covered the frequency of review meetings for each level of supervision and management and a review format was introduced. The line supervisor who was part of the team became the enthusiastic owner of quality and the control chart, as well as the leader of the team charged with maintaining quality and continuously improving it. The slogan "If you do not improve, you deteriorate" was introduced. This effort gradually brought down the (average + 3 sigma) error density further from 300 ppm to <50ppm. A QI Story was prepared for presentation to senior management detailing the improvements that occurred: Tangible
  • 55. 1. Customer delight: Customer reported 100% quality in his sampling consistently over six months. He could not find errors at such a low density. 2. Productivity and Cost: Inspection and rework reduced to almost zero. 99.7% first pass efficiency. Sampling sizes were reduced. These resulted in savings of US $ 50000 per annum at Indian wage levels (in US equivalent US $ 300,000 per annum). 3. Volume Increase: Approximately 50% by the customer. The production went through without increased manpower. 4. Turnaround of the documents was improved dramatically due to no rework and started meeting customer requirements. Intangible 1. Senior management time saved 2. Motivation of the operations personnel very high 3. Team work between Operations, Instruction and tool development and QA personnel 4. Mind-set Changes 5. Producing quality saves money 6. The importance of data and six sigma techniques. Future plans for improving the turnaround by 50% using just in time methods are being implemented now. The case here emphasizes the importance of Six Sigma techniques implementation being accompanied by building a culture and mind-set of continuous improvement and change in all employees. It is the creation of synergy between people and techniques that ensures maximum and continuing benefits from a Six Sigma/TQM initiative. Benefits of Six Sigma 1: Generates sustained success: The only way to continue double- digit growth and retain a hold on shifting markets is to constantly innovate and remake the organization. Six Sigma creates the skills and culture for constant revival. 2: Set a performance goal for everyone: in a company of any size- let alone a multibillion-dollar global corporation-getting everyone working in the same direction and focusing on a common goal is pretty tough. Each function, business unit, and individual has different objectives and targets. What everyone has in common, though, is the delivery of products, services, or information to customers (inside or outside the company). Six Sigma uses that common business framework-the process and the customer-to create a consistent goal: Six Sigma performance, or a level of performance that’s about as close to perfect as most people can imagine. 3: Enhances value to customers: with tighter competition in every industry, delivering just “good” or “defect-free” products and service
  • 56. won’t guarantee success. The focus on customers at the heart of six sigma means learning what value means to customers (and prospective customers) and planning how to deliver it to them profitably. 4: Accelerates the rate of improvement: Motorola’s goal of “100x improvement in four years” set an example for ambitious, driven organizations to emulate. With information technology setting the pace by doubling its performance to cost ratio every 18 months, the customer expectation for improvement gets even more demanding. The competitor who improves the fastest is likely to win the race. By borrowing tools and ideas from many disciplines, six sigma helps a company not only improve performance, but improve improvement. 5: Promotes Learning and “cross-pollination”: six sigma is an approach that can increase and accelerate the development and sharing of new ideas throughout an organization. Even in a company as diverse as GE, the value of six sigma as a learning tool is seen as critical. Skilled people with expertise in processes and how to manage and improve them can be shifted from, say, GE plastics to GE capital, not only with a shorter learning curve but actually bringing with them better ideas and the ability to apply them more quickly. Ideas can be shared and performance compared more readily. GE’s vice president for six sigma, Piet Van Abeelen, has noted that in past, a manager is one part of organization could discount input from a counterpart in another area: “your ideas won’t work, because I’m different.” van Abeelen says six sigma eliminates those defenses: “Well, cry me a river. The commonalities are what matter. If you make the metrics the same, we can talk.” 6: Executes strategic change: introducing new products, launching new ventures, entering new markets, acquiring new organizations- what were once occasional business activities are now daily events in many companies. Better understanding of a company’s process and procedures will give a greater ability to carry out both the minor adjustments and the major shifts that 21st –century business success will demand.
  • 57. Conclusion: Six Sigma is, both from an organizational and rupee standpoint, a significant investment. Institutionalizing Six Sigma into the fabric of a corporate culture can require significant investment in training and infrastructure. The infrastructure needed to support the Six Sigma environment varies. The evidence strongly suggests that for large companies the benefits of Six Sigma dramatically outweigh the costs. GE has publicly stated that they expect to save more than $6 billion by way of their Six Sigma initiative. For mid-sized companies, particularly those with a healthy growth trajectory, Six Sigma's potential is also strong. Modest-growth mid-tier companies, and smaller organizations, may still want to consider a Six Sigma initiative, but before doing so should do a careful cost analysis. A primary cost of Six Sigma is the personnel charge involved in identifying and training Black Belts. Initially, because Six Sigma itself was so new, the supply of available Six Sigma trainers was very limited, making training extremely expensive. Today, numerous organizations, usually owned and staffed by Black Belt-level veterans of the early Six Sigma efforts, exist. Companies are failing to achieve adequate return on their Six Sigma investment. And the reason a program doesn't achieve targeted returns is a lack of senior management commitment. Invariably when
  • 58. this is lacking, the initiative becomes a training exercise characterized by poorly conceived or poorly supported projects rather than a plan to drive business results with projects based on relevant business cases. Training is expensive. A big expense with no focus on results yields little or no returns. No matter what the organization's size, the real question for any company considering Six Sigma is this: In today's increasingly competitive world economy, can you afford not to be 99.999966% good? Achieving six sigma is a challenge to any company and not all implementations succeed. Failure results from weak leadership, slack goal setting, poor project management, and inadequate resources and training. Moreover, establishing six sigma throughout an organisation is a long term programme - essentially it is an ongoing process of continuous improvement where even the most dedicated company sets goals of achieving six sigma within six to ten years. However, if properly introduced, companies should experience financial benefits shortly after they begin. US companies have reported that a typical black belt is expected to carry out four to six projects per year, and when deployed on high leverage projects can achieve cost reductions. Through ongoing deployment, a six sigma company generates and substantially saves money by focusing on key customer critical issues and functioning on a higher level of efficiency. Reduced defects, scrap and re-work lead to immediate bottom-line benefits, and as production line waste drops off the company can make more efficient use of all resources. Improved design processes lead to better quality and more reliable products with reduced lead times, and better transactional processes reduce errors and increase productivity. As a result new customers begin purchasing from a company known for its high quality goods, and so revenues increase. Six Sigma differs from other quality initiatives in terms of its structured approach to achieve profitability improvement through the competitive advantage. Importantly, while other quality initiatives take an operations point of view, Six Sigma approaches problems from the customer’s side. There are a few companies in the world where six sigma is a culture rather than a problem-solving tool. These organizations have moved away from instinct based decision making to one of data-based- decision-making. When six sigma became a way of life at many international giants like GE, Motorola, Dow Chemicals and Johnson Controls profits amounting to billions of dollars were raked in. Six sigma as an initiative can be integrated into any other quality initiative like ISO, TPM, TQM, QS and so on. Six sigma as a business- strategy-enabler far outweighs the benefits of any of the existing models of quality or process improvement. With the Indian business sector proposed to grow at a steady pace it will be up to every entrepreneur to look inwards, spruce up the performance and meet competition head-on. Six Sigma is simply the next step or 'evolution'
  • 59. of the continuing cultural change on quality journey to 'World Class' service. Six Sigma will enable to take greater pride in the work. It reduces the need for to repeat a task, allowing one to spend more time on performing value-added tasks and enhancing skills and talents. Six Sigma has been the flavour of the last decade and continues to be so. Six Sigma can't guarantee success in the marketplace. But engaging in truly risky behavior, such as ignoring Six Sigma, can greatly increase the chances of failure.

×