Six Sigma is a data-driven methodology for process improvement that aims to reduce defects. It was developed by Motorola in the 1980s and involves defining, measuring, analyzing, improving, and controlling processes to minimize errors. The goal of Six Sigma is to operate processes with as close to zero defects as possible by focusing on reducing variation. It uses statistical tools to measure a process's capability and identify sources of defects. Implementing Six Sigma can help companies achieve significant cost savings, quality improvements, and increased customer satisfaction.

1. Six Sigma

2. Six Sigma -- Practical Meaning
99% Good (3.8 Sigma) 99.99966% Good (6 Sigma)
• 20,000 lost articles of mail per • Seven articles lost per hour
hour
• Unsafe drinking water for • One unsafe minute every seven
almost 15 minutes each day months
• 5,000 incorrect surgical
operations per week • 1.7 incorrect operations per week
• Two short or long landings at • One short or long landing every
most major airports each day five years
• 200,000 wrong drug
• 68 wrong prescriptions per year
prescriptions each year
• No electricity for almost seven • One hour without electricity
hours each month every 34 years

3. World Class Performance
With 99 % Quality With Six Sigma
Quality
For every 300000 letters 3,000 misdeliveries 1 misdelivery
delivered
For every week of TV 1.68 hours of dead air 1.8 seconds of dead air
broadcasting per
channel
Out of every 500,000 4100 crashes Less than 2 crashes
computer restarts
Source: The Six Sigma Way by Peter Pande and Others

4. Cost of Poorly Performing Processes
σ level DPMO CP3
Cost of Poorly Performing 2 308,537 Not Applicable
Processes (CP3) 3 66,807 25%-40% of sales
4 6,210 15%-25% of sales
5 233 5%-15% of sales
6 3.4 < 1% of sales
Each sigma shift provides a 10% net income improvement
Sigma (σ) is a measure of “perfection” relating to process
performance capability … the “bigger the better.”
A process operating at a “Six Sigma” level produces only
3.4 defects per million opportunities (DPMO) for a defect.
Without dedication of significant and appropriate attention to
a process, most processes in leading U.S. companies operate
at a level between 3 and 4 sigma.
Why is Six Sigma Important?

5. What is Six Sigma ?
• Based on teachings of Dr. Walter Shewhart,
Dr. W. E. Deming & Dr. J. Juran.
• Process Control;
• Plan Do Check Act;
• Common and Special Causes;
• Improvement can be done project by project
• Statistical tools
• Hawthorne Plant Experiences
• Developed by Bill Smith at Motorola in 1980s

6. Six Sigma
Is a management methodology
• Customer focused
• Data driven decisions
• Breakthrough performance gains
• Validated bottom line results

7. JURAN SAID…
“All quality improvement occurs
on a project-by-project basis and
in no other way.”

8. Who is Implementing Six Sigma
At least 25% of the fortune 200 claim to have a
serious six sigma program - Michael Hammer.
Financial - Bank of America, GE Capital, Electronics
- Allied Signal, Samsung, Sony
Chemicals - Dupont, Dow Chemicals
Manufacturing - GE Plastics, Johnson and Johnson,
Motorola, Nokia, Microsoft, Ford.
Airline - Singapore, Lufthansa, Bombardier
And hundreds of others in Americas, Europe, Sub
Continent.

9. Six Sigma Results
Company Annual Savings
General Electric $2.0+ billion
JP Morgan Chase *$1.5 billion (*since inception in
1998)
Motorola $ 16 billion (*since inception in 1980s)
Johnson & Johnson $500 million
Honeywell $600 million
Six Sigma Savings as % of revenue vary from 1.2 to 4.5 %
For $ 30 million/yr sales – Savings potential $ 360,000 to $
1.35 million.
Investment: salary of in house experts, training, process
redesign.

10. Customer Focused
Our Performance Compared to Competitors
• Complete
Importance to Customers
• Quality • OTD
High
• Training
Moderate-
• Price
• Shared Goals • Complaints to-’Low’
We’re Better They’re Better

11. Data Driven Decisions
Y= f (X)
To get results, what should we focus on - Y or X ?
• Y • X1 . . . XN
• Dependent • Independent
• Output • Input-Process
• Effect
• Symptom • Cause
• Monitor • Problem
• Response • Control
• Factor

12. Six Sigma Methodology
Define
Measure
Analyze
Improve
Control

13. Six Sigma Project Methodology
Project Phases
Define
Define Measure
Measure Analyze
Analyze Improve
Improve Control
Control
Identify, Collect data Analyze data, Improvement Establish
evaluate and on size of the establish and strategy standards to
select projects selected confirm the “ Develop ideas maintain
for problem, vital few “ to remove root process;
improvement identify key determinants causes Design the
Set goals customer of the Design and controls,
Form teams. requirements, performance. carry out implement and
Determine key Validate experiments, monitor.
product and hypothesis Optimize the Evaluate
process process. financial
characteristic.
characteristic Final solutions impact of the
project

14. The Normal Curve and Capability
Performance
Limit
Area of Yield Probability
of a Defect
Units of Measure
Excellent
Poor Process Process
Capability Capability
Very High Very High Very Low Very Low
Probability Probability Probability Probability
of Defects of Defects of Defects of Defects
LSL USL LSL USL
Low Sigma
Low Sigma High Sigma
High Sigma

15. Process Capability Indices
USL − LSL
Cp =
6σ
where LSL and USL are the lower and upper
specification limits, respectively.

16. K-sigma
 USL - LSL 
 
Half Range  2 
k= =
σ σ

17. The Sigma Scale
Sigma % Good % Bad DPMO
1 30.9% 69.1% 691,462
2 69.1% 30.9% 308,538
3 93.3% 6.7% 66,807
4 99.38% 0.62% 6,210
5 99.977% 0.023% 233
6 99.9997% 0.00034% 3.4

18. Sigma Defects Per Million Rate of
Level Opportunities Improvement
1σ 690,000
2σ 308,000 2 times
3σ 66,800 5 times
4σ 6,210 11 times
5σ 230 27 times
6σ 3.4 68 times

19. Process Capability Ratio
Off-Center Process
Cp does not take into
account where the
process mean is located
relative to the USL − µ
specifications. C pu =
A process capability ratio
that does take into
3σ
account centering is Cpk
defined as µ − LSL
Cpk = min(Cpu, Cpl) C pl =
3σ

20. Bank of America – SS Experience
Goals
# 1 in Customer Satisfaction
Worlds’ most admired company
Worlds’ largest bank
Strategy - “ Develop business process excellence by
applying voice of the customer to identify and
engineer critical few business processes using Six
Sigma
Created Quality & Productivity Division
Source: Best Practices Report

21. Bank of America – SS Experience
Wanted results in 1 year;
Hired more than 225 MBB & BBs from GE, Motorola, Allied
Signal for rapid deployment
Developed 2 week Green Belt training programs
Introduced computer simulation of processes
Trained 3767 Green Belts, certified 1230 - Minimum value
target per GB project – $ 250K
Trained 305 Black Belts, certified 61 - Minimum value target
per BB project – $ 1 million
Trained 43 MBB,
1017 in DFSS
80 % of Executive Team trained in GB and 50 % Certified

22. Bank of America – SS Experience
Results of first 2 years:
Reduced ATM withdrawal losses by 29.7 %
Reduced counterfeit losses in nationwide cash vaults
by 54%
Customer delight up 20%;
Added 2.3 million customer households
1.3 million fewer customer households experienced
problems
Stock value up 52%
Y 2002 – BOA named Best Bank in US & Euro
money's Worlds Most Improved Bank

23. Six Sigma – Case Study
Service Organisation
Background
M/s Alpha Inc. manages out bound cargo from a
distribution centre to different stores.
Deliveries made on trucks - owned and hired.
Customers dissatisfied at delivery schedules.
Leadership decision to deploy Six Sigma;
Team of 1 Black Belt and 3 Green Belts formed
Sponsor of the project – Distribution Manager

24. Define - Critical to Quality (CTQ)
Focus on customers generating annual
revenue of USD 400,000/-.
Customer Improved delivery performance
needs
Level 1 CTQ Timely delivery
Level 2 CTQ On time delivery to schedule
Level 3 CTQ Delivery within +/- 1 hour of
scheduled delivery time
Current process sigma level - 2.43 or 175889 DPMO

25. Define - Goal Statement
Reduce number of delayed deliveries by 50 %
by 31st December Y 2002 to better meet
customer requirement of timely delivery defined
as within +/- 1 hour of scheduled delivery.

26. Define - Performance Standards
Output unit A scheduled delivery of freight
Output characteristic Timely delivery
Project Y measure Process starts when an order is received
Ends when goods are received & signed for
at customers desk.
Process measurement – Deviation from
scheduled delivery time in minutes.
Specification limits LSL = -60 minutes
USL= +60 minutes
Target Scheduled time or zero minutes deviation
Defect Delivery earlier or later than 1 hour.
No. of defect 1 opportunity for a defect per scheduled
opportunities per unit delivery of freight.

27. Define - SIPOC Diagram
Supplier Stores Manager
Input Stores Order
Process Steps (high Receive order
level) Plan delivery
Dispatch Driver with goods
Deliver goods to stores
Receive delivery
Output Received freight with Documents
Customer Store Manager

28. Measure and Analyze
Driver and Distance identified as key factors
influencing delivery performance.
Driver selected for focus.
Potential root causes as to why Driver
influenced the time:
Size of the vehicle
Type of engine
Type of tyres
Fuel capacity

29. Improve
Experiments designed and conducted using
truck type and tyre size.
Findings:
Larger tyres took longer time at certain routes
where area was cramped and time lost in
maneuvering.
High incidence of tyre failures since tight turns
led to stress on tyres thus increasing number of
flat tyres.
Team modified planning of dispatch process by
routing smaller trucks at more restrictive areas.

30. Control
Test implementation.
Process sigma level up from 2.43 or 175889 DPMO to 3.94
or 7353 DPMO.
Performance still fell short of best in class 4.32 or 2400
DPMO.
Improvement led to significant customer satisfaction.
Process continually monitored and data on new cycle times,
tyre failure collected as per defined methods and frequency,
analysed and monitored.
Customer satisfaction measured and monitored.

31. Some Common Challenges in
Implementation
Define
Difficulty in identifying the right project and
defining the scope;
Difficulty in applying statistical parameters to
Voice of the Customers;
Trouble with setting the right goals;
Measure
Inefficient data gathering;
Lack of measures;
Lack of speed in execution;

32. Some Common Challenges in
Implementation
Analyse
Challenge of identifying best practices
Overuse of statistical tools/ under use of practical
knowledge
Challenge of developing hypotheses
Improve
Challenge of developing ideas to remove root causes
Difficulty of implementing solutions
Control
Lack of follow up by Managers/ Process Owners
Lack of continuous Voice of the Customer feedback
Failure to institutionalize continuous improvement.

33. Points to remember…
“ Define “ ranked most important step but often gets
the lowest resource allocation
Project scoping and its definition is critical to its
success/ failure;
“Measure” is considered most difficult step and also
gets the highest resources
Source: Greenwich Associates Study Y 2002

34. Benefits of Six Sigma
Generates sustained success
Sets performance goal for everyone
Enhances value for customers;
Accelerates rate of improvement;
Promotes learning across boundaries;
Executes strategic change

35. Which Business Function Needs It?
SERVICE DESIGN
PURCH.
ADMIN.
6 Sigma
Methods Marketing
QA MFG.
MAINT.
As long as there is a process that produces an output, whether it is
a manufactured product, data, an invoice, etc…, we can apply the
Six Sigma Breakthrough Strategy. For these processes to perform
to a customer standard they require correct inputs!!!

36. Education
Mentor, trainer, and coach of Black Belts and others
Master in the organization.
Black
Belt
Leader of teams implementing the six sigma
methodology on projects.
Black Belts
Champions
Delivers successful focused projects using
the six sigma methodology and tools.
Green Belts
Participates on and supports the project
Team Members teams, typically in the context of his or
her existing responsibilities.
Quality Fundamentals/ Kaizen Now
Deployment Responsible for supporting the Deployment
Champions Strategy within Line of Business/Customer
Segment or Golden Thread

37. Six Sigma & Leadership
Six Sigma only works when Leadership is
passionate about excellence and is willing
to change.
Leadership in Six Sigma context
Challenge the process
Inspire a shared vision
Enable others to act
Model the way
Encourage the heart
Six Sigma is can be a catalyst for leaders to
accomplish change

38. Role of Champions
Promote awareness and execution of Six Sigma
within lines of business and/or functions
Identify potential Six Sigma projects to be executed
by Black Belts and Green Belts
Identify, select, and support Black Belt and
Green Belt candidates
Participate in six sigma workshop trainings

39. Role of Black Belts
Use Six Sigma methodologies and advanced tools (to
execute business improvement projects
Are dedicated full-time (100%) to Six Sigma
Serve as Six Sigma knowledge leaders within
Business Unit(s)
Undergoes periodic training on advanced methods of
data analysis

40. Role of Green Belts
Use Six Sigma DMAIC methodology and basic tools
to execute improvements within their existing job
function(s)
May lead smaller improvement projects within
Business Unit(s)
Bring knowledge of Six Sigma concepts & tools to
their respective job function(s)
Undergoes periodic training in statistical methods for
quality improvement

41. Other Roles
Subject Matter Experts
Provide specific process knowledge to Six Sigma
teams
Ad hoc members of Six Sigma project teams
Financial Controllers
Ensure validity and reliability of financial figures used
by Six Sigma project teams
Assist in development of financial components of initial
business case and final cost-benefit analysis

42. Thank You