Six Sigma and its Methodology

Six Sigma Concept, Tool And its Application
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Six sigma and Its methodology with
case studies
BY
Ravi Vaishnav

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CONTENT
ACKNOWLEDGEMENT
CERTIFICATE
CHAPTER 1st
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Abstract:- 3
1.1Introduction:- 3
1.1.1What is six sigma? 4
1.1.2The Origin ofSix Sigma :- 4
1.2Objective/Methodology: 5
1.3Outline ofReport:- 5
CHAPTER 2nd
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2.1OverviewofLiterature:- 7
CHAPTER 3rd
9
3.1Six sigma overview:- 9
3.4 Six Sigma Organistion And Training:- 12
Howdoes the Define step ofDMADVwork? 22
How does the Analyze step of DMADVwork? 24
Howdoes the Design step ofDMADVwork? 25
Howdoes the Verify Step ofDMADVwork? 26
CHAPTER 4th
28
Case studies
Erro
r! Bookmarknot defined.
4.1Motorola Application Of Six Sigma:- 28
4.2Allied Signal’s Application Of Six Sigma:- 28
4.3GE’s Application Of six sigma:- 29
CHAPTER 5th
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5.1CONCLUSION:- 30

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5.2REFRENCES:- 30

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CHAPTER 1st
Abstract:-
Purpose – To provide a sound discussion on the Six Sigma methodologies and see how it fits in with
other quality initiatives.
Design/methodology/approach – A conceptual paper that takes at in-depth look at the origins, pros and
cons of Six Sigma and how it relates to some of the other quality initiatives in industry.
Findings – The immediate goal of Six Sigma is defect reduction. Reduced defects lead to yield
improvement; higheryieldsimprove customer satisfaction. Six Sigma defect reduction is intended to lead
to cost reduction.It has a processfocus and aims to highlight processimprovement opportunities through
systematic measurement. Six Sigma implementation can have negative consequences if applied in the
wrong project.Six Sigma is a toolset,not a management systemand is best used in conjunction with other
more comprehensive quality standards such as the Baldrige Criteria for Performance Excellence or the
European Quality Award.
Research limitations/implications – This is a conceptual study and hence there are no hypotheses tested
as in an empirical study. It does provide a good foundation for future research.
Practical implications – A very useful source of information and impartial advice for practitioners
and researchers planning to practice the Six Sigma methodology and/or understand its pros and cons.
Originality/value – This report fulfils an identified information/resources need for Six Sigma
methodology. It is based on utilizing an extensive set of statistical and advanced mathematical tools,
and a well-defined methodology that produces significant results quickly. The success of this methodology
within an organization has significant momentum that can only lead to fundamental
organizational cultural transformation.
Keywords: - Quality improvement, Quality awards, ISO 9000 series, Quality programs
1.1Introduction:-
The introduction of Six Sigma into the manufacturing arena in the early 1980s by Motorola was
a step in revolutionizing the scope and use of quality systems in business today (Mayor, 2003).
To define Six Sigma in simple terms is not possible because it encompasses the methodology of
problem solving, and focuses on optimization and cultural change. Six Sigma accomplishes this
goal by utilizing an extensive set of rigorous tools, uncompromising use of statistical and
advanced mathematical tools, and a well defined methodology that produces significant results
quickly. The success of this methodology within an organization has significant momentum that
can only lead to fundamental organizational cultural transformation. The roots of sigma as a
measurement standard go back to Carl Fredrick Gauss (1777-1855), who introduced the concept
of the normal curve or distribution. Walter Shewhart introduced three sigma as a measurement of
output variation in 1922, and stated that process intervention was needed when the output went
beyond this limit.
The three sigma concept is related to a process yield of 99.973 per cent and represented a defect
rate of 2,600 per million, which was adequate for most manufacturing organizations until the
early 1980s. Two things occurred in the early 1980s that required a higher-level quality from
American manufacturers. One of these was the introduction of mass produced miniature
electronics, from transistor radios to televisions, which were produced in large quantities for

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mass-market consumption. The second and more compelling force for domestic quality
improvement was the opening of global markets and subsequent introduction of Japanese
electronics into foreign and American markets. The lower price and higher quality of the
Japanese goods made these imports attractive to the global consumer. In response to the threat to
American manufacturing from the Japanese, several quality initiatives were introduced starting
in the 1980s to help make domestic production of goods and services more competitive. “Quality
Circles” at Honeywell and Fairchild Electronics was implemented to make employees aware of
what was required in the output of their job by showing what their customers (i.e. The next level
in the process) required. Other quality systems were introduced such as “Zero Defects” at Ford
Motors, “Total Quality Management” or TQM at Boeing and Bell Telephone, and a national
quality award named Malcolm Baldrige National Quality Award or MBNQA (Vokurka, 2003)
was instituted to award those producers of goods and services that met the highest level of
standards.
The main goal of this approach is reaching level of quality and reliability that will satisfy and
even exceed demands and expectations of today’s demanding customer. A term Sigma Quality
Level is used as an indicator of a process goodness. Lower Sigma quality level means greater
possibility of defective products, while, higher Sigma quality level means smaller possibility of
defective products within process. If Sigma quality level equals six, chances for defective
products are 3.4 ppm. Achieving Six Sigma quality level involves leadership, infrastructure,
appropriate tools and methods, while quality have to become a part of corporate business plan .
The main objective of Six Sigma initiative is to aggressively attack costs of a quality. Overall
costs of quality are, usually, divided in tangible and intangible part. The tangible or visible part
of costs of quality, e.g. inspection and warranty costs, scrap, rework and reject, can be
approximated with only 10–15 % of overall costs of quality. Remaining 85-90 % of quality costs
are usually intangible and, therefore, overlooked and neglected in companies quality costs
analyses. Tools and methodology within Six Sigma deal with overall costs of quality, both
tangible and intangible parts, trying to minimize it, while, in the same time, increasing overall
quality level contribute to company business success and profitability.
1.1.1What is six sigma?-
First, what it is not. It is not a secret society, a slogan or a cliché. Six Sigma is a highly
disciplined process that helps us focus on developing and delivering near-perfect products and
services. Why “Sigma”? The word is a statistical term that measures how far a given process
deviates from perfection. The central idea behind Six Sigma is that if you can measure how
many “defects” you have in a process, you can systematically figure out how to eliminate them
and get as close to “zero defects” as possible.
1.1.2The Origin of Six Sigma:-
Motorola was facing the same problems as the industry at this time, but found that they were
losing a large portion of their business and productivity through the cost of non-quality. This
includes not only the 2,600 parts per million loss in manufacturing, but lost business due to
defective parts and support of systems in the field that were unreliable. Motorola’s chairman at

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the time, Bob Galvin, decided that a much more intense effort was needed to address their
problems. A Motorola engineer, Bill Smith, found that the quality level associated with a
measure of Six Sigma corresponds to a failure rate of two parts per billion and adopted this as a
standard. The program to achieve this lofty goal was developed at Motorola and coined “Six
Sigma”, which included many of the systematic and rigorous tools associated with the Six Sigma
programs of today. Incidentally, “Six Sigma” is a federally registered trademark of Motorola. To
illustrate why 99 per cent quality level is not acceptable, consider the following facts (Mcclusky,
2000; Rath and Strong.).
 At major airports, 99 per cent quality means two unsafe plane landings per day
 In mail processing 99 per cent quality means 16,000 pieces of lost mail every hour
 In power generation, 99 per cent quality will result in 7 hours of no electricity each
month
 In medical surgery, 99 per cent quality means 500 incorrect surgical operations per week
 In water processing, 99 per cent quality means one hour of unsafe drinking water per
month and
 In credit cards, 99 per cent quality will result in 80 million incorrect transactions in uk
each year.
1.2Objective/Methodology:
In this, we research and study the impact of six sigma and its tool , various application in
industry and its possible output to ceiling the quality at maximum .A conceptual paper that takes
at in-depth look at the origins, pros and cons of Six Sigma and how it relates to some of the other
quality initiatives in industry. The fundamental objective of the Six Sigma methodology is the
implementation of a measurement-based strategy that focuses on process improvement and
variation reduction through the application of Six Sigma improvement projects. This is
accomplished through the use of two Six Sigma sub methodologies: DMAIC and DMADV. The
Six Sigma DMAIC process (defines, measure, analyze, improve, control) is an improvement
system for existing processes falling below specification and looking for incremental
improvement. The Six Sigma DMADV process (define, measure, analyze, design, verify) is an
improvement system used to develop new processes or products at Six Sigma quality levels. It
can also be employed if a current process requires more than just incremental improvement. Both
Six Sigma processes are executed by Six Sigma Green Belts and Six Sigma Black Belts, and are
overseen by Six Sigma Master Black Belts.
1.3Outline of Report:-
The outline of report include following chapter are as follow
Chapter 1st:- We discuss the introduction of six sigma and its objective, what is six sigma and
its origin, all this stuff we discuss in this chapter.
Chapter 2nd:-This chapter include the overview of literature, means all new research or
definition on six sigma given by anybody which is useful for us from 1980s to till now.

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Chapter 3rd:- This chapter includes the detail information about six sigma, its tool and
application.
Chapter 4th:- This chapter includes the case study with help of six sigma may be case study on
construction, on educational institution etc.
Chapter 5th:- In this we conclude the conclusion from whole report , references which we used
to complete the report and final result which we are get from this report , Is six sigma is useful or
its mandatory to get best quality management.

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CHAPTER 2nd
2.1Overview ofLiterature:-
Review of literature related to Six-Sigma – Review of literature is done to understand the
concept of Six-Sigma, to understand the various phases of this approach, to find out the tools
used in all phases and to investigate the barriers in implementation.
Harry (1998) claimed that people in industries from manufacturing to service are witnessing the
growth of a strategic continuous improvement concept called Six-Sigma.
Edgeman (2000) defined that Six-Sigma of today speaks the language of management: bottom-
line results.
Henderson and Evans (2000) pointed out seven components of successful Six-Sigma
implementation as upper management support, organizational infrastructure, training, tools, link
to human resource based actions measurement system and information technology infrastructure.
Williams (2001) highlighted that continuous improvement techniques are the recognized way of
making significant reduction to production costs.
Tennant, Geoff (2001) concluded that the objective of Six-Sigma is to reduce the variation in
the process and also defects of the final product.
Coronado and Antony (2002) conducted a review of the literature related to the critical success
factors (CSF) that lead to effective implementation of Six-Sigma.
Antony (2002) concluded that Six-Sigma methodology aims to reduce the number of
mistakes/defects in a
manufacturing process and hence the manufacturing costs.
Goh (2002) concluded that Six-Sigma as a quality improvement framework has been gaining
considerable attention in recent years.
Thomas (2003) reviewed that the Six-Sigma is a financial improvement strategy for an
organization and now a day it is being used in many industries. Basically it is a quality
improving process of final product by reducing the defects
Kuei and Madu (2003) argued that quality leadership among top managers is one of the key
drivers of successful completion of the DMAIC project cycle.
Antony et al. (2005), based on their study of 11 success factors in small and medium
manufacturing industries of UK, it revealed that management involvement and participation,
linking Six-Sigma to customers and linking Six-Sigma to business strategy of the organization
are the most important factors for success of Six-Sigma.
Sokovic et al. (2005) discussed the application of Six-Sigma methodology in process design.
Mahesh RaiSinghani (2005) conclude that immediate goal of Six Sigma is defect reduction ,
reduced defects lead to yield improvement , higher yield improve customer satisfaction.
Bendell (2006) reviewed and compared Six-Sigma and the lean organization approaches to
process improvement.
Camgoz (2007) has defined Six-Sigma on the basis for a best-in-class philosophy and a long-
term business strategy that measures quality improvement.

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Cheng (2008) reviewed the literature related of TQM and Six-Sigma, and then constructed and
explored the conceptual framework via an empirical study.
Yang et al. (2008) concluded that Six-Sigma is a fashionable method of management, but if
organizations want to obtain dramatic benefits from the implementation, they must enhance the
implementation of the critical success factors but the more problematic area issue is presence of
a barrier, as barriers pull down the organization in negative direction. There are relatively less
reported studies about barriers.
Mandal et al. (2008) used statistical techniques to analyze significant relationship among key
parameters for success of US manufacturing sector based on empirical data.
Desai and Shrivastava (2008) performed a case study by applying Six-Sigma DMAIC (Define–
Measure-Analyze- Improve-Control) methodology in an industry which provides a framework to
identify, quantify and eliminate sources of variation in an operational process to optimize the
operation variables, improve and sustain performance and found that Six-Sigma improves the
process performance (process yield) of the critical operational process, leading to better
utilization of resources, decreases variations & maintains consistent quality of the process output.
Pranckevicius et al. (2008) discussed the application of the Six-Sigma DMAIC model to
improve the plastic cup manufacturing process.
Satish Kumar (2014) shows the impact of six sigma DMAIC approach on manufacturing
Industries
L Ramanan (2014) made attempt to deliver a broader framework of DMAIC approach to impact
quality of engineering education at micro level.

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CHAPTER 3rd
3.1Sixsigma overview:-
In 1987, Motorola developed and organized the Six Sigma process improvement Methodology to
achieve “world-class” performance, quality, and total customer satisfaction. Since that time, at
least 25% of the Fortune 200, including Motorola, General Electric, Ford, Boeing, Allied Signal,
Toyota, Honeywell, Kodak, Raytheon, and Bank of America, to name a few, have implemented a
Six Sigma program (Antony et al. 2008, Hammer, 2002). These companies claim that Six Sigma
has significantly improved their profitability (Hammer, 2002). For example, in 1998 GE claimed
benefits of $1.2 billion and costs of $450 million, for a net benefit of $750 million. The
company’s 1999 annual report further claimed a net benefit of more than $2 billion through the
elimination of all non–value added activities in all business processes within the company
(Lucas, 2002). Similarly, Allied Signal reported that Six Sigma was a major factor in the
company’s $1.5 billion in estimated savings (Lucas, 2002). Six Sigma has also enabled
Honeywell to reduce the development time required to redesign Web sites by 84% for its
specialty materials (Maddox, 2004b). Six Sigma has been defined as a management strategy for
improving product and process quality (Hahn et al. 2000, Harry and Schroeder, 2000, Sanders
and Hild, 2000). It is also a statistical term used to measure process variations, i.e., how far a
given process deviates from perfection, which causes defects. Six Sigma works to systematically
manage variation and eliminate defects--or to get them as close to zero as possible (Harrison,
2006). Six Sigma initiatives have typically been implemented on shop floors of manufacturing
firms to manage “process variations” (defects or errors), to improve quality and productivity
(Revere and Black, 2003), and as a result, to increase the profitability of a company (Aggogeri
and Gentili, 2008, Anand et al., 2007, Lucas, 2002).
Functional support areas such as finance, accounting, marketing, human resources, procurement,
and retail, however, have generally not kept pace with manufacturing in implementing Six Sigma
programs. In part, this is due to the rigorous statistical requirements of applications that were
considered too difficult to be applied within other functional areas or to predominantly service
organizations (Harrison, 2006, Pyzdek, 2003, Watson, 2004). For example, in the areas of
finance and accounting, Six Sigma has been used only to monitor and measure the financial
impact of a program on the shop floor, in spite of the fact that, according to a 2005 Ernst &
Young study (cited in Juras et al., 2007), 14% of public companies have ineffective internal
controls, which results in output errors, excessive cycle times, inefficient processes, and cost
overruns.
3.2 Defining six sigma:-
Over the past two decades Six Sigma has evolved from a focus on metric to the Methodology
level and finally to the design and development of entire Management Systems. As a Metric,
when a process is operating at Six Sigma level, it will produce nonconformance (i.e., defects or
errors) at a rate of not more than 3.4 defects per one million opportunities. As a Methodology,
Six Sigma leads to business process improvement by focusing on understanding and managing
customer expectations and requirements (Brewer and Eighme, 2005; Rudisill and Clary, 2004).

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As a Management System, Six Sigma is used to ensure that critical improvement opportunity
efforts developed through the Metrics and Methodology levels are aligned with the firm’s
business strategy. The focus of this paper, however, is on the application of Methodology for
business process improvement within the financial reporting process. The core of the Six Sigma
Methodology level is DMAIC which stands for define measure, analyze, improve, and control.
These are explained in detail in the following sections. In the Define phase, the project team
must work closely with stakeholders to clearly define the problem statement, project scope,
budget, schedule, and constraints. Understanding customer (internal and external) requirements
is the key to achieving the project’s goal. The team has to define problems and goals of the
project that are consistent with customer demands and with the firm’s business strategy. Process
mapping and “voice of the customer” (VOC) tools are iterative techniques recommended as a
means of incorporating customer requirements. During the Measure phase, the team creates a
value stream mapping (VSM) of the process, capturing the flow of information—where and what
information is needed. Then, based on the VSM, the team starts collecting data relevant to
measuring the current process performance relative to the project’s goals. The most important
activities in this phase are the identification and validation of data accuracy. The most widely
used tools are VSM, run charts, brainstorming, balanced scorecards, documentation tagging, data
collection check sheets, and decision metrics.
During the Analyze phase, the team needs to collect and analyze the data to understand the key
process input variables that affect the project’s goal, such as whether time spent on current
activities is value added or non–value added. A VMS may be used as part of the overall analysis
to generate a list of potential root causes for why the process is not performing as desired. The
tools that can be used are process flow chart, value stream mapping, cause-and effect diagram,
Pareto analysis, histograms, control charts, and root cause analysis. During the Improve phase,
the team needs to design and conduct experiments (DOE) on a small scale using a formal
evaluation process to identify and evaluate optimal or desired alternatives against the established
criteria. A list of all possible solutions should be developed, enabling the team to eliminate the
root causes of problems. The recommended tools include brainstorming, cost-benefit analysis,
priority metrics, failure mode and effect analysis, and process flow diagrams. Finally, during the
Control phase, the team should standardize and document the new process to support and sustain
desired improvements. To sustain long-term improvements, how the improved process is
expected to result in operational and financial improvements (Foster, 2007) should be transparent
to all employees. Tools used include statistical process control charts, flow diagrams, and pareto
charts
3.3 Application Of Six Sigma:-
In recent years, a number of manufacturing and service companies have realized that Six Sigma
Methodology is flexible enough to be applied throughout all business functions. Examples of Six
Sigma applications in different functional areas other than manufacturing operations are
discussed next.
Sale and marketing:-

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In recent years, several companies have considered using Six Sigma to improve marketing
processes. For example, the marketing and sales organizations at GE and Dow have been using
Six Sigma for new product development and customer support to reduce costs, improve
performance, and increase profitability (Maddox, 2004). Other companies use Six Sigma in
marketing and sales as a road map to capture market data and competitive intelligence that will
enable them to create products and services that meet customers’ needs (Pestorius, 2007;
Rylander and Provost, 2006). Rylander and Provost (2006) suggest that companies should
combine Six Sigma Methodology and online market research for better customer service, and
Pestorius (2007) noted that Six Sigma could improve sales and marketing processes.
Accounting and finance:-
The Six Sigma Methodology has made its way into the accounting function and has contributed
to reduced errors in invoice processing, reduction in cycle time, and optimized cash flow
(Brewer and Bagranoff, 2004). The accounting department at a healthcare insurance provider, for
instance, developed an applied Six Sigma Methodology to improve account withdrawal
accuracy. Prior to Six Sigma implementation, rectifying an error in the billing process involved a
number of reconciliation checkpoints and manual workflow, which resulted in 60% of customer
accounts being charged less than the amount due and about 40% being overcharged. After Six
Sigma implementation, the defect rate reached near zero and cycle times were reduced from two
weeks to three days (Stober, 2006). The U.S. Coast Guard Finance Center used Six Sigma to
create a new standardized process for accounts payable services, which improved customer
satisfaction levels (Donnelly, 2007).
A number of companies have applied Six Sigma to the finance process to reduce variability in
cycle times, error rates, costs, “days to pay” of accounts payable, and improve employees’
productivity ratios (Brewer and Bagranoff, 2004; McInerney, 2006). Other companies have used
Six Sigma to reduce the cycle time of the quarterly financial reporting process (Brewer and
Eighme, 2005) and to reduce the time needed to close books, reduce variability in financial
reporting, improve shareholder value, and increase the accuracy of the finance process (Gupta,
2004). Foster (2007) conducted a longitudinal study comparing the financial performance of
companies who had implemented Six Sigma programs with those who did not have such a
programs. He found significant effects for those firms using Six Sigma on free cash flow,
earnings, and asset turnover. Six Sigma, however, did not appear to affect sales return on assets,
return on investment, or firm growth. As a result, Foster (2007) suggested if firms want to
improve cash flow, earnings, or productivity in using assets, Six Sigma may of use. He also
found that the companies with low cash flow and no Six Sigma programs did better than
companies using Six Sigma. He suggested that for cash poor firms, Six Sigma may be a drain on
resources in that these companies may not have the cash and time necessary to sustain effective
Six Sigma results over time. In another industry level analysis, York and Miree (2004) studied
the link between quality improvement programs and financial performance. They studied the
financial performance of “quality award winning” companies against SIC control groups both
before and after winning the award. They found that quality award winning firms had better

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financial performance both before and after winning quality awards, suggesting that winning the
award was a covariate for financial success. Most studies have attempted to assess the impact of
Six Sigma on financial performance have occurred at the aggregate industry level of analyses.
Very few actual case studies have been reported of the impact of Six Sigma on the finance
process itself. That is, how Six Sigma can change the way in which finance conducts its various
work activities and the resulting impact has seldom been documented in the literature. This case
study attempts to address this gap at the more micro level of within firm process analysis.
3.4 Six Sigma Organization And Training:-
The implementation of Six Sigma in any organization is at first disruptive because it requires not
only the buy in of senior management, but an active role of management in project definition and
resource allocation. It also requires extensive training of some of the best people in the
organization with the understanding that their role will be 100 per cent devoted to deployment of
Six Sigma activities. The heart of these activities is projects that have been defined as critical
paths or breakthrough goals that affect the bottom line of the organization. The training required
to implement Six Sigma involves everyone in the organization. The basic training is one day and
covers process mapping, and an overview of designed experiments, hypothesis testing, metrics,
and process modeling. Green belt training is more extensive, including a week of statistical
analysis, SPC, and measurement systems analysis. The black belt training requires about one
month of training, including ANOVA, game theory, and multivariate regression. Workers trained
in Six Sigma have been compared to internal SWAT teams, forming to tackle a specific problem
and then breaking up and reforming once they achieve the desired results. The methodology
applied to each problem is taken from a standard methodology, but tailored for the specific
project or problem at hand. The methodology does not, fundamentally, focus on making higher
quality widgets; it focuses on making the process more robust and less subject to errors. It is then
applicable to areas outside of pure manufacturing organizations.
Evolution of quality initiative:-
Total Quality Management
Total quality management (TQM) refers to a management methodology to empower
organizations for self-improvement. The implementation, unlike many quality initiatives, is top
down starting with upper management. The evolution of TQM incorporated a Japanese style
technique called Hoshin, which defines the targets þ means of any project or problem. A target
statement is developed involving action(s), metrics, and a time period. Management’s role is to
provide the means to achieve the target. The hope for organizational cultural change is usually
high as an organization tries to embrace TQM, but in many cases, it is followed by
disappointment because implementation was not comprehensive enough to allow all the changes
to take place. These changes are both political and personal within the organization. In some
cases, leadership development for management is necessary for them to act as change agents
advocating TQM. TQEM refers to TQM that emphasizes environmental controls, prevalent in
industries that are associated with environmental waste, such as semiconductors and electronic
component manufacturing.

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Quality circle:-
Quality circles is a people oriented approach to quality improvement with a multi-faceted goal.
The approach is to take a small group of people working on related activities and empowers them
to make decisions and recommendations to improve their activities. Management’s role is to
provide a congenial atmosphere in which the group can make suggestions for improvement, even
if it leads to management making adjustments to their style and culture. A quality circle usually
involves between six and twelve people who meet voluntarily on a regular basis to identify
improvements in their areas and interactions. The benefit of this approach is that it recognizes
that the people in the organization are one of the most valuable assets and attempts to tap the
knowledge and insights of the employees. Organizational change due to the implementation of
quality circles is a result of several aspects including fostering a change in employees attitude,
development of individuals involved, creating a team spirit and positive working environment.
KAIZEN:-
Kaizen was developed by the Japanese to overcome the inferior quality of many manufactured
goods after the Second World War. The term Kai means change, and Zen means good, together
they stand for continuous improvement. The best way to characterize Kaizen is to think in terms
of process. The western management style focuses on results and is characterized as a result
oriented approach; Kaizen is a process-oriented approach and focuses on small continuous
improvements. Another key focus of Kaizen is to eliminate waste (or MUDA in Japanese).
Overproduction, scrap, unnecessary motion or tasks, excessive time setting up process and
breaking them down, and moving goods too frequently and too far are examples of MUDA.
Some Kaizen techniques to deal with these issues are Takt time and single minute exchange of
dies (SMED). Takt time is the time it takes a worker to perform his or her job function of one
unit of goods. SMED refers to the teardown of a tool configuration and set up of another
configuration in a different part on the same machine. Dr Shigeo Shingo was instrumental in
helping the car manufacturer Toyota overcome this problem on their auto production line by
using clamping mechanisms on tool heads instead of bolts. This reduced the time for re-
configuring the tool from 40 minutes to around one minute. This is where the term SMED came
from. Other contributions from Dr Shingo included concepts called just in time and zero quality
control. These were developed as part of a joint effort with Toyota and Mitsubishi, and later he
consulted with Bridgestone, Peugeot, and AT&T. The quality equation that he pioneered under
Kaizen was Poka-Yoke techniques to correct defects + source inspections to prevent defects =
Zero Quality Control.
ISO9000/QS9000:-
ISO9000 is not a quality system in itself, but it is a set of quality standards that are defined as
being necessary for manufacturers and service organizations to be effective competitors. The
standards are based on eight managerial principals that can be used by management to help their
organization toward improved performance and higher quality output. The eight principals are
customer focus, leadership, employee involvement, process approach to activities and resources,

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system approach to management, continuous improvement, and strategic supplier and customer
partnerships. Experts who participate in the International Standardization Organization Technical
Committee define these principals and auditing requirements. The Automotive Industry Action
Group (AIAG) has taken the ISO initiative and applied it to the automotive industry as QS9000.
They have made a requirement of their suppliers to become QS9000 certified (even though not
all of the QS9000 criteria are relevant to other industries, such as BRV – Buzz, Rattle, and
Vibration reduction). Current quality standards include ISO9001, ISO16949, OHSAS18001, and
ISO13485.
Malcolm Baldrige – MBNQA:-
The Malcolm Baldrige National Quality Award was established by congress in 1987 to enhance
the competitiveness of American companies by seeking out best know methods as examples for
others. The award is named for Mr. Malcolm Baldrige, who served as Secretary of Commerce
from 1981 to 1987 and is credited for making sweeping changes that improved efficiency and
effectiveness of government. There are five categories that are eligible to receive this award;
manufacturing, service, small business, education, and health care, although not every category
receives an award every year. There are seven categories that are assessed for excellence in the
selection process. The categories are leadership, strategic planning (Bai and Lee, 2003),
customer and market focus, information and analysis, human resource focus, process
management and business results. These criteria have been used by thousands of organizations to
improve their employee relations, improve customer satisfaction and productivity. According to
the National Institute of Standards and Technology, the stock of MBNQA winners has
consistently outperformed the S&P 500 by between 2.6 and 6.5 to 1 (National Institute of
Standards and Technology, 2001).
3.5 Six Sigma Methodology:-
3.5.1 Measurement system analysis: - Manufacturing process produces goods that have
physical characteristics that can be measured. The quality of the goods produced is based on their
usefulness to the end user or customer of the products. The definition of quality has evolved to
include the utility of that which is produced to the end customer. The measure of these
characteristics become the first concern of a manufacturing organization that employees a Six
Sigma quality system. The area responsible for determining the fitness of the measuring
equipment is called measurement system analysis (MSA). The first act in utilizing a Six Sigma
approach to a problem is to analyze the ability to measure the characteristics that need to be
optimized. The approach to MSA is to perform a gage study – this separates the repeatability
(due to the measuring instrument) and reproducibility (due to operator bias) into separate factors.
It can also determine relative accuracy between different measuring systems where there are
multiple gages to measure the same output. This activity always precedes any attempts to
optimize a manufacturing process to understand the accuracy of the measurements relative to the
desired range of control. Once this study has been completed, the process can be experimented
and the accuracy of the results can be understood.

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3.5.2Process control:-
Process control is a function in a production process that seeks to find deviations from the
optimum process outputs and also uses proactive means to look for any process shifts before the
product quality is compromised. Many well-documented techniques are used in this endeavor –
the most obvious is the use of statistical process control (SPC). In a simple manufacturing
process, the use of SPC will entail the use of control charts where the output of a given process is
measured and charted. Dr Walter A. Shewart (1891-1967) is credited for the development of the
control chart, where the upper and lower limits are set at ±3 times the standard deviation, based
on normal variation. When the process produces results outside these limits, it is said to be out of
control. Although Dr Shewart never received the recognition he deserved in his lifetime, he was
responsible not only for the concepts we use in modern process control, but also the concepts
that were developed by his student, W. Edward Deming based on Shewart’s original “Plan, Do,
Check and Act” cycle. His publications in 1931 and 1939 were the basis of the quality movement
that was taken to post war reconstruction in Japan by Deming, Ishikawa, Juran, and others. The
concept of SPC and the use of control charts are not complicated, but in real world application,
there are very few organizations that use and understand the concept correctly. Simply put, a
product or process has specific requirements and, as explained earlier, are related to the
functionality and usefulness to the end customer. These requirements are manifest in the product
specifications, outside of which the product is usually rendered worthless, creating scrap. This is
referred to as product control – not process control. Process control is unrelated to the product
requirements, but related to the production capability. An example of this would entail running a
process many times under normal conditions and measuring the output. After sufficient data are
collected – at least 30 runs, but not limited to 30 – the distribution parameters are calculated.
Limits are placed on the process output at the mean ± 3 standard deviations (sigma). Subsequent
runs are evaluated against these limits and not the specification limits. A measurement outside
these limits indicates that something has changed or drifted in the process and the output is
unusual. Actions must be taken at this point to bring the process or tool back into control. In
some large manufacturing operations, the number of control charts can be as high as 100,000 and
periodic checks of the control limits integrity must be preformed.
3.5.4Failure Mode And Analysis:-
Another quality tool used by a Six Sigma organization is the failure mode and effects analysis
(FMEA) methodology. This was initially developed by the AIAG in response to poor after-
market quality feedback from customers with respect to foreign competitors. This process
involves gathering a representative from all the stakeholder groups, such as manufacturing,
process engineering, equipment engineering, test or product engineering and a facilitator to
collectively complete the FMEA. The process starts with a tool or device schematic and a
process map (similar to the business process analysis). The process is carefully examined
systematically to proactively determine what could possibly happen detrimental to the product at
each step of the process. Depending on the severity, the possibility of occurrence and the ability
to detect the failure, a relative priority number (RPN) is assigned to each activity. If the

17
magnitude of the RPN is high, usually defined as greater than 120 (60 for a Six Sigma
organization), corrective actions must be undertaken to reduce it. A good FMEA can predict and
eliminate many sources of problems before they occur. The FMEA process may identify areas
that require a designed experiment for optimization or even require the purchase of new
metrology equipment if the exposure to potential problems is too great. A detailed FMEA for a
complex process may require a weekly meeting with five or six experts for a period of six
months.
3.5.5Quality and control analysis:-
After all the preventative measures are taken and corrective actions have been completed, a
measure of the final quality of any process or product must be taken to insure a level of Six
Sigma has been obtained .The standard measure of conformance to requirements is the process
capability (Cpk). This is a quantitative measure of how much variation there is in the product or
process with respect to the requirements/specifications (Table I). The process capability is
reported as an internal measure of goodness of any process or products and it is also required
from key suppliers. The manufacturing organization then reports the key characteristic Cpk to
their end customers. As with high RPNs from the FMEA, any parameter with a capability index
less than a certain threshold requires corrective actions; for Six Sigma organizations this
threshold is two
3.5.6 Design For six sigma:-
Innovative Design Drives Business Competitiveness
The best starting point for understanding Design for Six Sigma (DFSS) is by focusing on its
influence on business competitiveness. In DFSS business competitiveness is assured through the
design function – which is responsible for delivering continuous growth in shareholder value
through development of new products and services that generate future revenue flows and fulfill
the promises for both increased growth and continued profitability. What is design? Design is a
disciplined approach combining art and science to produce an innovative, technically correct
while also reproducible solution to a problem. Both an organization’s products and services may
be designed to resolve problems and, when the design is commercially viable, then the sustained
success of the business is assured.
Designs may be classified as either conceptually static or dynamic. A conceptually static design
has reached a plateau in terms of its innovative development. Such a design has been developed

18
in an iterative fashion and it has converged on a relatively fixed or static design concept that is
susceptible only to minor developments that will enhance capability for production, decrease
production cost, or correct minor defects in design or production. At this point major
investments in the continued refinement of the design result in diminishingly marginal returns.
Conceptually static design changes are often engineered by the production operations group as
part of their efforts at continuous improvement in the production process by reducing its cost and
cycle time while improving the quality of results. On the other hand, conceptually dynamic
designs are characterized by inherently instable technology that has not yet converged into an
industry standard based on stable design architecture. Examples of such convergence include
transitions to: IBM PC/Windows, VHS tape format, the internal combustion engine, etc. In each
of these cases, prior to market acceptance of the standard, there was a turbulent period of
dynamic design development in which alternative designs fought for customer and market
acceptance to become a dominant standard. Ideas that generate these standards come from the
whirlwind of dynamic conceptualization and are driven by a continuous stream of technological
innovation so that stability in design of product, service and production process cannot lie in a
dormant condition for long – they must adapt to changing conditions of the new reality or
become extinct in the competitive marketplace. An organization’s design strategy should use
“controlled dissatisfaction” as a means to challenge itself to continuously improve today’s design
to meet the customer needs of tomorrow. This strategy can work well with either conceptually
static or dynamic designs. In the case of dynamic designs this strategy challenges the
organization to actively search for the next innovative breakthrough in technology. In the case of
a static design, this strategy forces the need for incremental improvements that generate market
repositioning opportunities and refresh the image of the product among loyal customers to
encourage their continued commercial relationship.
Competitive Rhythm: Both Time to Market and Timing the Opportunity:- A major issue in
design is the selection of the design concept that is commercially viable, not commercially
vulnerable. This issue arises due to the extended time that it takes for “diffusion of innovation”
from ideation or its technical conceptualization to acceptance by the mass market. Rogers
hypothesized that about 2.5% of a market are pioneers who will try any new form of technology.
Such people are eager to discover better ways to do things, but their purchases do not drive
market penetration into the mass market. In a second category are the early adopter segment
(about 12.5% of the total market) that is between the pioneer segment and the early maturity
segment (35% of the market) that represents the mass market. Once a product has sales among
consumers in the early maturity segment, it may be considered a commercial success. Based this
trend, management may well decide that the key group for focusing design and marketing
attention upon is the early adopter segment. The design environment places significant emotional
pressure on a development team through the emphasis on “speed-to-market” and the need to
meet the perceived market window of opportunity to commercialize the product. However,
when observing how well new development projects perform relative to their initially-projected
shipment date, there is a one-word summary available – slippage!

19
Design Integrates Business Strategy and Technological Innovation: - Why is design so
important to business success? Design is a process that requires the integration of the marketing,
engineering, manufacturing, and purchasing disciplines to provide the best solution. While these
disciplines combine their operational efforts to produce current shareholder value, only design
focuses on development of future shareholder value – the ability to deliver future cash flows as a
result of the innovative products and services that are developed investing current resources to
find and fulfill anticipated market demands. It can be truly said that the design function is the
prime steward of future shareholder value. If the design function does not get design of new
products right, then it has not done its job of assuring the future success of the whole
organization. Cash may be generated by today’s products and services to meet the return needs
of current investors, but it the designs are not continuously delivered to the market – designs that
attract consumers – then the future strength is in jeopardy even if this problem is not observed in
today’s cash flow and balance sheet analyses.
How Does Six Sigma Contribute to Design?
What is Six Sigma? Six Sigma is a business improvement approach that seeks to find and
eliminate causes of mistakes or defects in business processes by focusing on outputs that are of
significance to customers. The concepts underlying Six Sigma deal with the fact that process
and product variation are strong factors affecting product production lead times, product and
process costs, process yields, and, ultimately customer satisfaction. One of the most important
aspects of the work of a Six Sigma “Black Belt” is to define and measure variation with the
intent of discovering its causes and to develop efficient operational means to control and reduce
variation. The heart of the fresh approach that is implicit in Six Sigma is three-fold: packaging
of the toolkit in a rigorous problem-solving approach, the dedicated application of trained
business analysts to well-structured process or product improvement projects, and the attention
to bottom-line results and sustaining those results over time. What is Design for Six Sigma
(DFSS)? DFSS is a special extension of the basic tools and methods of Six Sigma to the
preventive engineering of new products, services and processes. When an organization begins
working problems using the Six Sigma DMAIC process, it has the ability to achieve a local
maximum performance (the inherent process capability (Cp) that has been designed into a
product, service or process). However, if this performance is not sufficient to meet the
organization’s competitive requirement, then it must begin the DMADV (Define-Measure-
Analyze-Design-Verify) process to design the product, service or process to be more competitive
– designing to a goal of flawless execution against to both the market (targeted customer)
requirement and the organization’s desired competitive position. In this case the organization
designs its new product, service practice or business processes to become a ‘predictable factory’
– one that is able to flawless perform at a higher level of design capability. This design process
is called Design for Six Sigma. Design for Six Sigma has three major components: product line
management, design and new product development project management, and the Six Sigma tools
that are applied in the process of design as described by the DMADV analysis process. Much of
the thinking that is incorporated into DFSS owes a debt of intellectual gratitude to the late

20
Professor Stuart Pugh of the University of Strathclyde. Pugh differentiated between production
engineering-led design and design engineering-led design. The emphasis on corrective action
inherent in the DFSS DMAIC process is strongly related to the production engineering-led
design process that results in the developments of variants on the core conceptual design. Here,
the emphasis is on the incremental change that is required to make small improvements that
increase quality or enhance production capability, reduce cost or improve performance at the
margin of the core product. The emphasis on preventive action and clean sheet product
development is inherent in the R&D engineering-led design process that is identified in DFSS as
DMADV. Pugh observed that new products can fail in three ways – and that each type of failure
mechanism each produces a different type of business risk:
 Failure due to specification: vulnerability due to need interpretation – this type of failure
produces market risk.
 Failure due to design: vulnerability due to conceptual misalignment – this type of failure
produces design risk.
 Failure due to production: vulnerability due to implementation discipline – this type of
failure produces production risk.
How is DFSS achieved? DFSS methodology eliminates these three types of risk in its three
emphasis areas: Product Line Management methods reduce vulnerability due to the
misalignment about specified features and mitigates against market risk; DMADV provides a
toolkit that reduces vulnerability due to conceptual misalignment thereby mitigating against
design risk that is induced by conceptual misalignment or lack of a design performance
capability due to fuzzy or unclear requirements; and new product development project
management reduces vulnerability due to poor implementation discipline and mitigates against
risk that is induced from poor discipline in the process of implementing the design and
transitioning it into full production. DMADV incorporates many of the tools and methods that
Pugh emphasized: Kano model for feature analysis, enhanced QFD (Quality Function
Deployment), Theory of Inventive Problem Solving (TRIZ), Pugh concept selection matrix,
Taguchi experimental design, as well as statistical tolerance analysis. Even the controversy
about how to engage the computer aided design tools that was a core of Pugh’s design concept is
embedded into the DMADV where the use of CAD/CAM tools is focused in the last two steps of
the process, following the conceptual design and elimination of design vulnerability to error at
the level of the initial product design specification.
What is the DMADV innovation process in DFSS?
When an organization begins working problems using the Six Sigma DMAIC process, it has the
ability to achieve a local maximum performance (the inherent process capability (Cp) that has
been designed into the process). However, if this performance is not sufficient to meet the
organization’s competitive requirement, then it must begin the DMADV process to design the
process to be more competitive – designing to a goal of flawless execution against to both the
market (targeted customer) requirement and the organization’s desired competitive position. In

21
this case the organization designs its business processes to become a ‘predictable factory’ – one
that is able to flawless perform at a higher level of process capability. This design process is
called Design for Six Sigma and represented by the process steps DMADV.
What is the Six Sigma innovation process called DMADV and how does it work? While the
steps of the Six Sigma Innovation process (also called Design for Six Sigma (DFSS)) are named
in a similar way to those of the Six Sigma Problem Solving process, their set of objectives are
very different. DFSS is a comprehensive set of strategies, tactics and tools that enable an
organization to characterize, quantify, and mitigate the risk in all phases of development of its
products, processes and services. It is implemented as a part of an overall Six Sigma strategy
and relies on an infrastructure of Black Belts to support the design projects. DFSS supplements
an organization’s design process – it is typically developed as a customized application of the
organization’s product development process integrating Six Sigma methodologies into the
engineering and business requirements of product design. One way to stay ahead of your market
competitors is to Design for Six Sigma using the DMADV innovation process. The DMADV
objective is to assure that products are designed to meet current customer needs and requirements
and also anticipate the changing needs and requirements of the future market.
The overall objective of the Six Sigma innovation process is to design products, processes or
services to consistently meet customer expectations. This objective requires knowledge of both
the customer requirement and the organization’s inherent capability to produce results (such as
Define Measure Analyze Design Verify

22
process output) that meets that requirement. In order to meet the customer’s requirement (which,
once known, becomes a fixed variable) the process must be designed so that the variation in its
output is consistently better than this required performance level. If the design goal for this
process capability is specified to produce failures with a probability of less than six standard
deviations at this requirement, then the product can be declared to have a “Six Sigma design” –
and once statistical data has been presented to validate that the product meets this design goal
then the product can be described as a “Six Sigma product.” The process for creating such a
product, process or service is the following five-step sequence that called DMADV that is
described for a new product development process of a hardware product (DFSS applications for
software, process, and service are different):
 Define: - The Design step engages the program planning process to establish what is the
product concept? The design management team begins a project by developing a
business case for capitalizing on an opportunity that is presented from its technology
portfolio or its product line plan. They must determine through customer and market
research how this opportunity can address commercial needs of the marketplace. The
initial assessment of the product concept and its commercial viability is presented in the
business case along with the projected budget and a multi-generational product line plan
that identifies how features and concepts will be sequenced for introduction into the
market (as new product variants). Upon completion of the initial conceptual design
review the product budget and project plan are approved and a development team is
assigned to staff the project.Measure. The Measure step evaluates the market
requirements for both the product concept and the potential market demand for the
product. During this step research is planned to determine customer needs and
competitive performance as well as to identify those features and options that are
differentiators of the product. The team seeks to identify those design elements that are
critical-to-quality for the product in that they deliver satisfaction for identified customer
requirements. This step in the design process is documented using Quality Function
Deployment (QFD) matrices as well as design scorecards which are used to record the
progress of the project. Design control is managed through tollgate reviews of checklists
for critical activities to assure that adequate progress is made toward the planned product
launch date.
 Analyze. The Analyze step completes characterization of the product and includes the
following key activities: functional analysis of the features and their capability to address
the identified customer requirements, benchmarking of performance for these features,
conceptual design of the product, process maps of both the production and service
delivery processes, and a design requirement specification. The milestone or tollgate
review that completes the Analyze step evaluates the design scorecard along with a
comparison of the design requirements against the business plan to authorize the detailed
product design.
 Design. In the Design step detailed process maps are created for the production facility

23
layout, along with the engineering detail of the product specification. All the critical
process parameters are identified; failure analysis is conducted to determine the potential
risks; capability analysis is conducted to determine design robustness, and statistical
analysis is used to establish tolerances for critical parameters. Value analysis is
conducted to assure that the product value proposition is optimized. In this step
reliability testing of prototypes is conducted to demonstrate growth in the stability of the
design as well as its readiness for the commercial marketplace.
 Verify. The Verify step engages the customer in product testing through pilot tests that
demonstrate the marketability of the product as well as its production readiness. Pilot
tests are used to verify the details for transition to full production as well as the
implementation of the control procedures for routine production after ramp-up to the full
forecast volume is achieved. The control plan for the product is embedded in its
assembly procedures, test procedures and acceptance criteria. The product completes
development and transitions to full production upon completion of the Verify step that is
marked by an official product launch. Specific details about how each DMADV step
operates are presented in answers to the following five sections
How does the Define step of DMADV work?
 Define Step Objectives: Specify a business case and design concept for a new product
development, define how the product structure and its subsequent releases of variant designs
will change across your multi-generational product development plan, and then establish a
target competitive position for the new product in your product portfolio.
 Define Step Definition: The Define Step evaluates market feasibility and risk that is
associated with alternative concepts for new product development and establishes the scope
and the charter for selected projects.

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Define Thought Map
Define
Business Requirement
Market Imperative
Core Competence
Product Portfolio
Business Case
Design Concept
Project Budget
Multi-generational
Product Plan
Market Research
Customer Analysis
Competitor Analysis
Operational Definitions
Project Management
Customer Concern
Emerging Product Technology
Internal Intellectual Property
Process Technology Innovation
Product Application Analysis
Systematic Innovation Process
How does the Measure step of DMADV work?
 Measure Step Objectives: Translate a design concept into a product concept aligned with the
needs of customers in the targeted market segments for the product.
 Measure Step Definition: The Measure Step identifies expectations of targeted customers
through in-depth customer analysis, and determines which functions are aligned to these
customer needs while providing the most product competitiveness in from alternatives
designs.
 Measure Fundamental Questions:
o What are the specific product (or service) features that are required by specific customer
segments?
o How do requirements, needs and expectations differ according to the different types of
customer (market segment, application persona, decision level, etc.)?
o Which functions have the highest priority as customer requirements?
o Which functions provide competitive advantage according to a Kano analysis?
o How do the top priority customer-needs translate into CTQ product features?
o Where are there opportunities to develop performance advantages over competing
product features?

25
o How are high-level functions related to the CTQ priorities of customers?
o What types of risk are anticipated in the product development and where are these risks
most intensive?
Measure Thought Map
Measure
Product Quality History
Customer Relationship Management
Design Imperatives
Product Concept
Design Scorecard
Project Plan
QFD ‘A’ Matrix
Customer CTQ
Kano Analysis
Risk Analysis
Customer Segmentation
Customer Needs Analysis
Competitive Product Analysis
Product Portfolio
Business Case
Product Concept
Project Budget
Multi-generational
Product Plan
How does the Analyze step of DMADV work?
 Analyze Step Objectives: Translate a product concept into a high-level product design and
characterize technological and business risks associated with full-scale product development.
 Analyze Step Definition: The Analyze Step completes the high-level design of the product,
demonstrates market suitability of the design concept, determines the degree of technological
risk associated with further development, and develops initial plans for marketing the
product.

26
Analyze Thought Map
Analyze
Scientific Method
Design Rules
Variation Analysis
High-Level Design
Design Scorecard
Project Plan
QFD ‘B’ Matrix
Customer Surveys
Function Analysis
Customer Focus Groups
Failure Mode Effects Analysis
Pugh Concept Selection Matrix
TRIZ – Inventive Problem Solving
Computer-Aided Design (CAD)
Product Concept
Design Scorecard
Research Plan
QFD ‘A’ Matrix
How does the Designstepof DMADV work?
 Design Step Objectives: Translates a high-level design into an engineering detailed
design that is ready for hard tooling and preparation for full-scale production.
 Design Step Definition: The Design Step of DMADV develops the detailed product
design and control plans that assure robust performance in the eventual production
environment and also prepares the project for management’s final design decision to
implement the product in full-scale

27
 Design Step Fundamental Questions:
 How should the parts be designed to deliver the required functionality?
 How can the parts be designed for high reliability?
 What is the expected useful market life of this product?
 What is the best operating envelope for the critical design parameters?
 What is the tolerance limits will produce the most reliable product design?
 How can the parts fit together in a way that reduces production cycle time?
 Is the product ready to be considered for full-scale production?
 What is the plan for launching the product into the market place?
 What is the plan for tooling the product for full-scale production?
 Are the production facilities ready to accept the product?
 Have the production procedures been written so that all jobs are specified?
How does the Verify Step of DMADV work?

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 Verify Step Objectives: Translates a detailed engineering design into a product that is
offered to customers in the market.
 Verify Step Definition: The Verify Step of DMADV validates design plans and provides
formal documentation for full-scale production in order to transition the product design
from a development project to an operational owner for daily management oversight.
Verify Thought Map
Verify
Quality Management System
Work Content Analysis
Principles of Standardization
Full-Scale Design
Design Scorecard
Production Plan
Procurement Plan
Distribution Plan
Service Plan
QFD ‘D’ Matrix
FMEA - Process
Mistake Proofing
Work Standardization
Design for Service
Design for Logistics
Capability Analysis
Measurement Systems Analysis
Preventive Maintenance
Statistical Process Control
Computer-Automated Test Equipment
Detailed Design
Design Scorecard
Prototype Results
Budget Request
Launch Plan
QFD ‘C’ Matrix
 Analysis Tools: Techniques that support investigations of the Verify Step include:
 Six Sigma DMAIC toolkit.
 FMEA – process level.
 Poka-yoke mistake proofing.
 Work standardization.
 Design for service.
 Design for logistics.
 Preventive maintenance.
 Measurement system analysis (MSA).
 Statistical process control (SPC).
 Process capability analysis.

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CHAPTER 4th
Case studies:-
4.1Motorola Application Of Six Sigma:-
Six Sigma became a poster child for driving down cost and improving organizational bottom line
when Motorola won the Malcolm Baldrige National Quality Award in 1988, which was the first
year this award was presented. In 1987, Motorola was operating at a four sigma level. This
means that Motorola was running at defect rate of about 6,200 per million opportunities
compared to its Japanese counterparts that were running at 3.4 defects per million opportunities.
Motorola’s defect rates lead to increase cost to sales and diminished profits and contributed to
losing market share. Motorola’s customers included many police, fire, and emergency response
organizations that relied on radios and communication equipments manufactured by Motorola.
Losing these customer’s to foreign competition would be public relations and financial disaster
for Motorola. Table II illustrates the impact of sigma or quality level to product sales which
ultimately impacts profit margin. Given Motorola’s dire situation, Chairman Bob Galvin
mandated bold initiative for the company. This mandate could be summed up as:
(1) Improve product quality by ten times in two years;
(2) Improve product quality by 100 times in four years; and
(3) Reach Six Sigma quality level in five years.
The immediate goal of Six Sigma is to reduce defects. Reducing defects leads to yield
improvement. Higher yields improve customer satisfaction. The ultimate goal is enhanced net
income. Motorola’s focus on drastically reducing defects to the 3.4 DPMO level was quantified
in dollar terms at $2 billion over a four-year period (McClusky,2000). One area that Motorola’s
applied Six Sigma principles was the redesigned and manufacturing of its pagers in 1990. Pagers
were new technology in 1990 and Motorola’s pagers were highly priced – about $1,500 – and
took an average about 18 months to product. This process was redesign with Six Sigma
principles with dramatic improvements. The production lead time went from 18 months to just
about 72 minutes and cost went from $1,500 to just around $200 (McClusky, 2000). Information
Technical, which heavily slanted toward services, time and material charges, the company,
experienced 40 percent productivity improvements. Six Sigma applications brought process
focus to the company and resulted in tremendous cost and process improvements. In 2002, Six
Sigma application earned Motorola another Malcolm Baldrige National Quality Award in the
Government and Industrial Sector.
4.2Allied Signal’s Application Of Six Sigma:-
American corporations, in general, will always take notice of things or processes that can
demonstrate measurable results in a short amount of time. This was the case with Six Sigma
principles. With the documented productivity and process improvements by Motorola,
boardroom executives were captivated with this new process known as Six Sigma. One of these
was Larry Bossidy, CEO of Allied Signal. Allied Signal, a technology and manufacturing

30
company, applied Six Sigma principles in the 1990s to design and recertification of aircraft
engines. The redesign and certification of aircraft engine was reduced from 42 to 33 months
(Schwalbe, 2004). The company also started implementing Six Sigma principles in most of its
quality improvement processes. The company attributes Six Sigma applications to saving the
organization more than $600 million a year by 1999. Six Sigma teams were accounted for
dramatic defects reductions and improvement in design or redesign of new processes. Allied was
able to reach these improvements because Six Sigma relies on capable processes that do not
minimize defects coupled with disciplined approach to gather and analyze data and benchmark
against the best in the world. As one of the company’s director said, “Six Sigma changed the
way we think and the way we communicate. We never used to talk about the process or the
customer; now they are part of our everyday conversation” (Schwalbe, 2004).
4.3GE’s Application Of six sigma:-
After Motorola publicized the success of Six Sigma in 1995 and garnished believers like Larry
Bossidy of Allied Signal, Jack Welch, CEO of GE signed on to this new quality initiative and
has been widely credited wide ranging applications of Six Sigma principles. In 1995, Jack Welch
asked Larry Bossidy to address GE audience at the 1995 management meeting. His topic was Six
Sigma and how it dramatically improved Allied Signal’s bottom line and processes. Welch
signed on to Six Sigma from that point and made it a crusade for GE under his leadership. GE
Six Sigma initiatives included product globalizations, product services, and electronic
commerce. These initiatives complemented and extended each other and resulted in compound
savings in process improvements and cost (GE Annual Report, 1997). All operating and
divisional managers were tasked with implementing Six Sigma in their respective organizations.
Jack Welch took personal interest and often sits in on meetings and on presentations regarding
Six Sigma to monitor implementations and improvements. In his book Straight from the Gut,
Jack claims that by 1998, GE had generated $750 million savings over and above their
investments in Six Sigma. Mr Welch went on to say that the expected saving for 1999 was $1.5
billion, and attributed operating margin improvement from 14.8 per cent in 1996 to 18.9 per cent
in 2000 to the application of Six Sigma by GE. GE Plastics, with 30 plants worldwide, achieved
3 per cent compounded productivity improvements each year, effectively bring one new plant
online annually, with no capital outlay. In 1999, GE Annual Report highlighted $2 billion in
benefits and set the company’s sites on more improvement for the future.

31
CHAPTER 5th
5.1CONCLUSION:-
Six Sigma rose to national prominence when Motorola won the Malcolm Baldrige National
Quality Award in 1988, the first year of the award. Motorola’s documented productivity
improvement and financial success spurned many followers of well-known organizations as
Allied Signal and GE. GE, under Jack Welch, implemented Six Sigma in many of its processes
and documented significant gains in process and financial results. The immediate goal of Six
Sigma is defect reduction. Reduced defects lead to yield improvement; higher yields improve
customer satisfaction. The ultimate goal is enhanced net income. The dollars saved are often the
attention getter for senior executives. Many companies, such as Clark America, have chosen not
to go the Six Sigma route. Six Sigma implementation can have negative consequences if applied
in the wrong project. It has a process focus and aims to highlight process improvement
opportunities through systematic measurement. Six Sigma defect reduction is intended to lead to
cost reduction. Six Sigma is a toolset, not a management system and is best used in conjunction
with other more comprehensive quality standards such as the Baldrige Criteria for Performance
Excellence or the European Quality Award.
5.2REFRENCES:-
Bai, R-J. and Lee, G-G. (2003), “Organizational factors influencing the quality of the IS/IT strategic
planning process”, Industrial Management & Data Systems, Vol. 103 Nos 8/9, p. 622.
Davig, W., Brown, S., Friel, T. and Tabibzadeh, K. (2003), “Quality management in small
manufacturing”, Industrial Management & Data Systems, Vol. 103 Nos 1/2, pp. 68-78.
General Electric Annual Report (1997), “Letter to our share owners”, available at: www.ge.nl/
annual97/share/index.html (accessed 28 January 2004).
Getty, R.L. and Prybutok, V.R. (2003), “The effects of streamlined operations on the perceived
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