Introduction Six sigma.

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Presented By
Dr. Niraj Chaudahri
Assistant Professor,
Sanjivani College of Engineering ,
Dept.of MBA,
Kopargaon
1
Sanjivani College of Engineering, Kopargaon
Department of MBA
www.sanjivanimba.org.in
307 – Six Sigma For Operation
Introduction of six sigma

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WHAT IS SIX SIGMA?
• Six Sigma is a rigorous, focused and highly
effective implementation of proven quality
principles and techniques.
• Incorporating elements from the work of
many quality pioneers, Six Sigma aims for
virtually error free business performance.
Sigma, s, is a letter in the Greek alphabet used
by statisticians to measure the variability in
any process. A company’s performance is
measured by the sigma level of their business
processes.

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Why Six Sigma?
• Six Sigma is about helping the organization make more
money by improving customer value and efficiency. To
link this objective of Six Sigma with quality requires a
new definition of quality. For Six Sigma purposes I
define quality as the value added by a productive
endeavor. Quality comes in two flavors: potential
quality and actual quality. Potential quality is the
known maximum possible value added per unit of
input. Actual quality is the current value added per
unit of input.

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Why Six Sigma?
• The difference between potential and
actual quality is waste. Six Sigma focuses
on improving quality (i.e., reducing
waste) by helping organizations produce
products and services better, faster and
cheaper. There is a direct
correspondence between quality levels
and ‘‘sigma levels’’ of performance.

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The Six Sigma philosophy
• The scientific method works as follows:
• 1. Observe some important aspect of the
marketplace or your business.
• 2. Develop a tentative explanation, or
hypothesis, consistent with your
observations.
• 3. Based on your hypothesis, make
predictions.

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The Six Sigma philosophy
• 4. Test your predictions by conducting
experiments or making further careful
observations. Record your observations.
Modify your hypothesis based on the new
facts. If variation exists, use statistical tools
to help you separate signal from noise.
• 5. Repeat steps 3 and 4 until there are no
discrepancies between the hypothesis and
the results from experiments or
observations.

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The change imperative
• In traditional organizations the job of management is
to design systems to create and deliver value to
customers and shareholders. This is, of course, a
never ending task. Competitors constantly innovate
in an attempt to steal your customers. Customers
continuously change their minds about what they
want. Capital markets offer investors new ways to
earn a return on their investment. The result is an
imperative to constantly change management
systems

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Change agents and their effects on organizations
• Leadership Some organizations choose to maintain
product or service leadership as a matter of policy.
Change is a routine Competition When competitors
improve their products or services such that their
offering provides greater value than yours, you are
forced to change. Refusal to do so will result in the
loss of customers and revenues and can even lead to
complete failure. Technological advances Effectively
and quickly integrating new technology into an
organization can improve quality and efficiency and
provide a competitive advantage.

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Change agents and their effects on organizations
• For example, a company that provides employees with
SPC training should be prepared to implement a
process control system. Failure to do so leads to morale
problems and wastes training dollars. Rules and
regulations Change can be forced on an organization
from internal regulators via policy changes and changes
in operating procedures. Government and other
external regulators and rule-makers (e.g.,ISO for
manufacturing, JCAHO for hospitals) can also mandate
change. Customer demands Customers, large and
small, have the annoying habit of refusing to be bound
by your policies

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IMPLEMENTING SIX SIGMA
The steps required to successfully implement Six Sigma are
well-documented.
1. Successful performance improvement must begin with
senior leadership. Start by providing senior leadership
with training in the philosophy, principles, and tools
they need to prepare their organization for success.
Using their newly acquired knowledge, senior leaders
direct the development of a management
infrastructure to support Six Sigma.

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IMPLEMENTING SIX SIGMA
2. Systems are developed for establishing close
communication with customers, employees, and suppliers.
This includes developing rigorous methods of obtaining
and evaluating customer, owner, employee, and supplier
input. Base line studies are conducted to determine the
starting point and to identify cultural, policy, and
procedural obstacles to success.
3. Training needs are rigorously assessed. Remedial basic
skills education is provided to assure that adequate levels
of literacy and numeracy are possessed by all employees.
Top-to-bottom training is conducted in systems
improvement tools, techniques, and philosophies.

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IMPLEMENTING SIX SIGMA
4. A framework for continuous process improvement is
developed, along with a system of indicators for
monitoring progress and success. Six Sigma metrics
focus on the organization’s strategic goals, drivers, and
key business processes.
5. Business processes to be improved are chosen by
management, and by people with intimate process
knowledge at all levels of the organization. Six Sigma
projects are conducted to improve business
performance linked to measurable financial results.
This requires knowledge of the organization’s
constraints.

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IMPLEMENTING SIX SIGMA
6.Six Sigma projects are conducted by individual
employees and teams lead by Green Belts and
assisted by Black Belts.

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Time table
• Six Sigma’s timeline is usually very aggressive.
Typically, companies look for an improvement rate of
approximately 10 every two years, measured in
terms of mistakes or errors using defects per million
opportunities (DPMO).

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DEPLOYMENT TIMELINE

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Infrastructure
• A very powerful feature of Six Sigma is the
creation of an infrastructure to assure that
performance improvement activities have t
• Companies that did an excellent job of
operational principles of TQM obtained
excellent results, comparable to the results
reported by companies implementing Six
Sigma.

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Benefits of Six Sigma

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Advantage of Six Sigma
• The main advantage of Six Sigma compared to other
approaches to quality control is that Six Sigma is
customer driven. Six Sigma is defined as a limit of 3.4
defects per one million products or service
processes, where anything not acceptable to the end
customer is considered a defect.
• Six Sigma addresses the entire process behind the
production of an item or completion of a service,
rather than just the final outcome. It is proactive
rather than reactive, as it sets out to determine how
improvements can be made even before defects or
shortcomings are found

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Disadvantage of Six Sigma
• Because Six Sigma is applied to all aspects of the
production and planning process, it may create
rigidity and bureaucracy that can create delays and
stifle creativity. In addition, its customer focus may
be taken to extremes, where internal quality-control
measures that make sense for a company are not
taken because of the overlying goal of achieving the
Six Sigma-stipulated level of consumer satisfaction.
• For example, an inexpensive measure that carries a
risk of a slightly higher defect rate may be rejected in
favor of a more expensive measure that helps to
achieve Six Sigma, but adversely affects profitability