Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects (driving toward six standard deviations between the mean and the nearest specification limit) in any process – from manufacturing to transactional and from product to service.

1. Six SigmaSix Sigma asas
aa
Unit-V
Presented by
P.B.Narendra Kiran - M.B.A., M.A.(lit), M.Phil
CONTEMPORARY ISSUE IN MANAGEMENT

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Contents :Contents :
• Six Sigma : An OverviewSix Sigma : An Overview
• What is Six Sigma?What is Six Sigma?
• Why Six Sigma?Why Six Sigma?
• Six Sigma Phases : Define, Measure, Analyze, ImproveSix Sigma Phases : Define, Measure, Analyze, Improve
and Controland Control
• Tools and Key Roles for Six SigmaTools and Key Roles for Six Sigma

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Why Six Sigma?Why Six Sigma?

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What is Sigma ?What is Sigma ?
SigmaSigma
A term used in statistics to represent
standard deviation, an indicator of the
degree of variation in a set of a process

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What is Six Sigma?What is Six Sigma?
SixSix
SigmaSigma
A statistical concept that measures a
process in terms of defects – at the six
sigma level, there 3.4 defects per
million opportunities
A philosophy and a goal : as perfect as
practically possible
A methodology and a symbol of quality

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Sigma LevelSigma Level
Sigma Level
(Process
Capability)
Defects per Million
Opportunities
2 308,537
3 66,807
4 6,210
5 233
6 3.4

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Sigma LevelSigma Level
Six Sigma =
99,9997%

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Sigma LevelSigma Level
• Every hour the postal service
would lose 20,000 pieces of mail
• Every day our drinking water would
be unsafe for almost 15 minutes
• Every week there would be 5,000
surgical operations that go wrong
in some way
• Every month we would be without
electricity for almost seven hours
Why not Four
Sigma or
99.379% ?

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Why Six Sigma?Why Six Sigma?
Money
Customer
Satisfaction
Growth
Quality
Competitive
Advantage
Employee Pride

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• At GE, Six Sigma added more than $ 2 billion to theAt GE, Six Sigma added more than $ 2 billion to the
bottom line in 1999 alonebottom line in 1999 alone
• Motorola saved more than $ 15 billion in the first 10 yearsMotorola saved more than $ 15 billion in the first 10 years
of its Six Sigma effortof its Six Sigma effort
• Allied Signal reports saving $ 1,5 billion through SixAllied Signal reports saving $ 1,5 billion through Six
Sigma.Sigma.
Why Six Sigma?Why Six Sigma?

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Why Six Sigma?Why Six Sigma?
Six Sigma is about practices that help you
eliminate defects and always deliver products
and services that meet customer specifications

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Cost of Poor QualityCost of Poor Quality
What is cost of scrap?What is cost of scrap?
What is cost of rework?What is cost of rework?
What is cost of excessive cycle times and delays?What is cost of excessive cycle times and delays?

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Cost of Poor QualityCost of Poor Quality
What is cost of business lost because customersWhat is cost of business lost because customers
are dissatisfied with your products or services?are dissatisfied with your products or services?
What is cost of opportunities lost because youWhat is cost of opportunities lost because you
didn’t have time or the resources to takedidn’t have time or the resources to take
advantage of them?advantage of them?

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Critical-to-Quality (CTQ)Critical-to-Quality (CTQ)
Elements of a process that significantly affect the
output of that process. Identifying these elements is
figuring out how to make improvements that can
dramatically reduce costs and enhance quality.

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Six Sigma PhasesSix Sigma Phases

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Define Measure Analyze
Improve
Control
Six Sigma PhasesSix Sigma Phases
D M A I CD M A I C

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Define
Measure
Analyze
Six Sigma PhasesSix Sigma Phases
Define the project goals and customer
(internal and external) deliverables
Measure the process to determine current
performance
Analyze and determine the root cause(s)
of the defects

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Improve
Control
Six Sigma PhasesSix Sigma Phases
Control future process performance
Improve the process by eliminating defects

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Six Sigma PhasesSix Sigma Phases
Define
• 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

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Six Sigma PhasesSix Sigma Phases
Measure
• 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

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Six Sigma PhasesSix Sigma Phases
Analyze
• 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

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Six Sigma PhasesSix Sigma Phases
Improve
• 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

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Six Sigma PhasesSix Sigma Phases
Control
• 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

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Define Measure Analyze Improve Control
Deliverables :Deliverables :
• Fully trained team is formed, supported, and
committed to work on improvement project.
• Team charter developed, customers identified and
high impact characteristics (CTQs) defined, business
process mapped.

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Checkpoints for ReadinessCheckpoints for Readiness
Team Readiness :Team Readiness :
• Team is sponsored by a champion or business leader.
• Team formed and team leaders assigned.
• Improvement team members fully trained on Six Sigma and DMAIC.
Define Measure Analyze Improve Control
Team Charter :Team Charter :
• Completed project management charter, including business case,
problem and goal statements, project scope, milestones, roles and
responsibilities, communication plan.

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Define Measure Analyze Improve Control
Checkpoints for ReadinessCheckpoints for Readiness
CustomersCustomers
• Customer(s) identified and segmented according to their different
needs and requirements.
• Data collected and displayed to better understand customer(s) critical
needs and requirements.
Business Process MappingBusiness Process Mapping
• Completed, verified, and validated high-level 'as is' (not 'should be' or
'could be') business process map.
• Completed SIPOC representation, describing the Suppliers, Inputs,
Process, Outputs, and Customers.

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Define Measure Analyze Improve Control
Deliverables :Deliverables :
• Key measures identified, data collection planned and
executed, process variation displayed and communicated,
performance baselined, sigma level calculated.

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Define Measure Analyze Improve Control
Checkpoints for ReadinessCheckpoints for Readiness
Key Measures IdentifiedKey Measures Identified
• Key measures identified and agreed upon.
• High impact defects defined and identified in the business process.
Data Collection Planned and ExecutedData Collection Planned and Executed
• Solid data collection plan established that includes measurement
systems analysis.
• Data collected on key measures that were identified.

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Define Measure Analyze Improve Control
Checkpoints for ReadinessCheckpoints for Readiness
Process Variation Displayed/CommunicatedProcess Variation Displayed/Communicated
• Process variation components displayed/communicated using
suitable charts, graphs, plots.
• Long term and short term variability accounted for.
Performance Baseline/Sigma CalculationPerformance Baseline/Sigma Calculation
• Measure baseline process performance (capability, yield,
sigma level).

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Define Measure Analyze Improve Control
Deliverables :Deliverables :
• Data and process analysis, root cause analysis,
quantifying the gap/opportunity.

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Define Measure Analyze Improve Control
Checkpoints for ReadinessCheckpoints for Readiness
Data and Process AnalysisData and Process Analysis
• Identify gaps between current performance and the goal
performance.
Root Cause AnalysisRoot Cause Analysis
• Generate list of possible causes (sources of variation).
• Segment and stratify possible causes (sources of variation).
• Prioritize list of 'vital few' causes (key sources of variation).
• Verify and quantify the root causes of variation.

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Define Measure Analyze Improve Control
Checkpoints for ReadinessCheckpoints for Readiness
Quantifying the Gap/OpportunityQuantifying the Gap/Opportunity
• Determine the performance gap.
• Display and communicate the gap/opportunity in financial terms.

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Define Measure Analyze Improve Control
Deliverables :Deliverables :
• Generate (and test) possible solutions, select the best
solutions, design implementation plan.

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Define Measure Analyze Improve Control
Checkpoints for ReadinessCheckpoints for Readiness
Generating (and Testing) Possible SolutionsGenerating (and Testing) Possible Solutions
• Possible solutions generated and tested.

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Define Measure Analyze Improve Control
Checkpoints for ReadinessCheckpoints for Readiness
Selecting The Best Solution(s)Selecting The Best Solution(s)
• Optimal solution selected based on testing and analysis.
• New and improved process ('should be') maps developed.
• Cost/benefit analysis of optimal solution(s).
• Small-scale pilot for proposed improvement(s).
• Pilot data collected and analyzed.
• Improved process ('should be') maps modified based on pilot data and
analysis.
• Project impact on utilizing the best solution(s).

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Define Measure Analyze Improve Control
Checkpoints for ReadinessCheckpoints for Readiness
Designing Implementation PlanDesigning Implementation Plan
• Solution implementation plan established, including schedule/work
breakdown structure, resources, risk management plan,
cost/budget, and control plan.
• Contingency plan established.

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Define Measure Analyze Improve Control
Deliverables :Deliverables :
• Documented and implemented monitoring plan, standardized
process, documented procedures, response plan established and
deployed, transfer of ownership (project closure).

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Define Measure Analyze Improve Control
Checkpoints for ReadinessCheckpoints for Readiness
Monitoring PlanMonitoring Plan
• Control plan in place for sustaining improvements (short and long-
term).
Process StandardizationProcess Standardization
• New process steps, standards, and documentation are ingrained into
normal operations.
Documented ProceduresDocumented Procedures
• Operating procedures are consistent.
• Knowledge gained on process is shared and institutionalized.

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Define Measure Analyze Improve Control
Checkpoints for ReadinessCheckpoints for Readiness
Response PlanResponse Plan
• Response plans established, understood, and deployed.
Transfer of Ownership (Project Closure)Transfer of Ownership (Project Closure)
• Transfer ownership and knowledge to process owner and process
team tasked with the responsibilities.

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Tools and Roles forTools and Roles for
Six SigmaSix Sigma

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• Creating flowcharts of the step in a process –
operations, decision points, delays, movements,
handoffs, rework, loops, and controls or
inspections.
• A process map is illustrated description of how
a process work.
Tools for Six SigmaTools for Six Sigma
ProcessProcess
MappingMapping

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• DOE is a structured, organized method for
determining the relationship between factors
(Xs) affecting a process and the output of that
process (Y).
Tools for Six SigmaTools for Six Sigma
Design ofDesign of
ExperimentsExperiments
or DOEor DOE

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• A group of rows and columns, with one set of
increments marked along the X (horizontal) axis
and another set of increments marked along the Y
(vertical) axis.
• The purpose of using XY matrix is to study and
understand the relationship between what you are
putting into a process and what your customer is
getting out of it.
• The XY matrix allows the team to identify gaps,
areas for improvement.
Tools for Six SigmaTools for Six Sigma
XY MatrixXY Matrix

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• The goal of this tool is to ensure that your
measurement system is statically confident –
that it’s both accurate and precise each and
every time it is used.
• Undertaken during Measure phase, your MSA
determines whether or not you can take a
certain measurement and repeat or reproduce it
among different people who take the same
measurement.
Tools for Six SigmaTools for Six Sigma
MeasurementMeasurement
SystemSystem
AnalysisAnalysis

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• Process capability tool is the measure of a
process being able to meet specification
requirements and fulfill customer CTQ needs on
a long term basis.
Tools for Six SigmaTools for Six Sigma
ProcessProcess
CapabilityCapability
ToolTool

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• Investigating a theory about the suspected cause
(s) of a particular effect in a process to
determine if it is correct.
• It’s a compass that points you directly to the
vital few factors that are most affecting your
process.
Tools for Six SigmaTools for Six Sigma
HypothesisHypothesis
TestingTesting

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• The manner in which a part or process can fail
to meet a specification, creating a defect or non-
conformance, and the impact on the customer if
that failure mode is not prevented or corrected.
Tools for Six SigmaTools for Six Sigma
FailureFailure
Mode EffectMode Effect
AnalysisAnalysis

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• A detailed assessment and guide for
maintaining all the positive changes you, your
black belt, and the project team have made.
• It ensures that all your analysis and efforts stay
in effect and that you have information at your
disposal to prevent backsliding or a return to
less than optimal performance standard.
Tools for Six SigmaTools for Six Sigma
ControlControl
PlanPlan

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ChampionsChampions Are responsible for the Six Sigma implementation
across the organization in an integrated manner.
Champions also act as mentor to Black Belts.
Includes CEO and other key top management team
members. They are responsible for setting up a vision
for Six Sigma implementation.
Key Roles for Six SigmaKey Roles for Six Sigma
ExecutiveExecutive
LeadershipLeadership

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Black BeltsBlack Belts Operate under Master Black Belts to apply Six
Sigma methodology to specific projects. They
primarily focus on Six Sigma project execution.
Identified by champions, act as in-house expert coach
for the organization on Six Sigma. They devote 100%
of their time to Six Sigma.
Key Roles for Six SigmaKey Roles for Six Sigma
MasterMaster
Black BeltsBlack Belts

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Are the employees who take up Six Sigma
implementation along with their other job
responsibilities. They operate under the guidance of
Black Belts and support them in achieving the overall
results.
Key Roles for Six SigmaKey Roles for Six Sigma
Green BeltsGreen Belts

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Six Sigma Do’sSix Sigma Do’s
• Do communicate the commitment company-wideDo communicate the commitment company-wide
• Do demonstrate the commitment of company leadersDo demonstrate the commitment of company leaders
• Do empower your key human resourcesDo empower your key human resources
• Do provide on-site mentoring for black beltsDo provide on-site mentoring for black belts

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Six Sigma Do’sSix Sigma Do’s
• Do be patient at the inception of you six Sigma initiativeDo be patient at the inception of you six Sigma initiative
• Do claim and advertise early “wins”Do claim and advertise early “wins”
• Do benchmarkDo benchmark
• Do establish project baseline and goalsDo establish project baseline and goals

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THANK YOU
Presented by
P.B.Narendra Kiran - M.B.A., M.A.(lit), M.Phil