"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
* 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
• 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
4 Sigma 6 Sigma
5,000 incorrect surgical operations
1.7 incorrect operations per week
Two short or long landings per day
at major airports
One short or long landing every
200,000 wrong drug prescriptions
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
One missed putt every 163 years
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.
"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.
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
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
• 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
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.
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
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-
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
• Statistics and a data and fact driven decisions are central.
• The target of perfection is 3.4 defects in every million
• Six Sigma has its own methodology - DMAIC - for process
• 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
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
2. Philosophy: The main philosophy behind Six Sigma is to reduce
variation in the business as well as to take customer-focused data
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.
* 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
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
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
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
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”.
10: Just-in-time inventory/production.
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
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
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.
Road Map for an organisation adopting Six Sigma
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-
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’.
The champion selects Black Belt and Green Belt participants, who in
turn go through training and Six Sigma project execution.
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
During this training, the participants form Six Sigma project teams.
These teams are led by Black Belts with two to three Green Belts as
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.
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.
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).
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.
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.
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
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
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
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
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.
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
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
• 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
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.
• Project progress should be monitored and reported.
• Everyone should be involved with Six Sigma and speak the same
• Infrastructure must be improved to measure and control the Six
• Comfort level of the employees must be enhanced through
preliminary training classes.
• Total top management commitment and visibility of this
• 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
Six Sigma for manufacturing and non-manufacturing
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-
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:
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
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
• values and beliefs
• current ideas and philosophies
• perceived needs
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
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
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
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
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
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.
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
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.
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:
• Six Sigma speaks the language of business. It specifically
addresses the concept of making the business as profitable as
• 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
• 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."
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),
(Personal Software Process) /TSPSM
Process) are complementary and mutually supportive. Depending on
current organizational, project or individual circumstances, Six Sigma
could be an enabler to launch CMM®
, 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
or to select highest leverage metrics within PSPSM
Examination of the Goal-Question-Metric (GQM), Initiating-Diagnosing-
), 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 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.
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
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
give a tremendous wealth of information about the processes, but
most of the clients prefer to see results sooner than this approach
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
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
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
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
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
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
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
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
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
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
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.
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
Benefits-- Has been able to influence its clients and has acted as a
value accelerator to its services.
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
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
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.
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
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
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
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
development of only those new products with the highest odds of
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
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
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
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
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
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.
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
* 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.
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
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
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.
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
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 $85 million in savings as of early 2000), Navistar,
Polaroid, Seagate technologies, siebe appliance controls, Sony,
Toshiba, and many others.
From these and other six sigma companies come a wide variety of
other impressive improvements, benefiting both customers and
shareholders. A sample from the hundreds of six sigma projects
underway at organizations around the world includes the following:
Developing New Products:
A telecommunication products company used Six Sigma Design
techniques to enable greater flexibility and faster turnaround at a key
manufacturing facility. At the plant, several specialized products are
built on a single production line. Since each customer’s order may
require different circuit boards, the need to avoid retooling was critical.
Working through alignment of customer needs, product design, and
process specifications, retooling was dramatically reduced. The plant
was also able to institute parallel processing so that if one area of the
line wasn’t functioning, work-in-process could easily rerouted without
adding to cycle time.
Under the new plant design, customer orders are transmitted
electronically, where “virtual design” applied to speed quick response.
Altogether, these innovative changes improved overall cycle time from
days to hours, as well as improving productivity and resource
Sending Message Faster and Cheaper:
Customers of a telecommunications service company were dismayed
over the handling of their orders. Every request- for a few minutes of
satellite time to a long-term, dedicated up-link-passed through several
levels of legal and technical review before being approved. The process
not only upset customers, but wasted resources and money.
A Six Sigma team measured and analyzed the problem. While
proposed solutions were counter to the “tried and true” way of doing
things, the team was able to sway opinions from solid data and
knowledge of customer needs. After 6 months of effort the process
was streamlined and 1$ 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.
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
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-
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.
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
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
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
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.
- Model interpretation and training must be aligned to
- Judgment is necessary to use models correctly and with
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
- 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
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.
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
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
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
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
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
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
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:
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.
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
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
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
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
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%
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
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'
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
Six Sigma has been the flavour of the last decade and continues to be
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.