Slide designed primarily for : 1. Beginners in Service Improvement arena 2. Aspirants of yellow and green belts 3. service excellence Mangers

1. Six Sigma Concepts for Beginners
(Yellow and Green Belt level)
Rajiv Kumar Tiwari

2. CONTENT
• Origin Of Six Sigma
• Overview Of Six Sigma
• Six Sigma Goals
• Basic Quality Concepts
• DPU & DPMO
• Cost of Quality – Impact on Sigma Level
• Seven Tools of Quality
• Six Sigma Components
• Project Selection

3. Origin of Six Sigma
 1987 Motorola Develops Six Sigma
 Raised Quality Standards
 Other Companies Adopt Six Sigma
 GE, Dow Chemical, Dupont, Honeywell, Whirlpool
Dr Mikel J Harry wrote a paper relating early failures to quality
1992
1987
1985
Motorola
Allied Signal
1995
General Electric
2002
Johnson & Johnson
Ford
Nissan
Honeywell

4. Current Leadership Challenges
 Delighting Customers
 Reducing Cycle Times
 Keeping up with Technology Advances
 Retaining People
 Reducing Costs
 Responding More Quickly
 Structuring for Flexibility
 Growing Overseas Markets

5. Six Sigma— Benefits?
 Generated sustained success
 Project selection tied to organizational strategy
 Customer focused
 Profits
 Project outcomes / benefits tied to financial reporting system.
 Full-time Black Belts in a rigorous, project-oriented method.
 Recognition and reward system established to provide motivation.
• Motorola:
– 5-Fold growth in Sales
– Profits climbing by 20% pa
– Cumulative savings of $14 billion over 11 years
• General Electric:
– $2 billion savings in just 3 years
– The no.1 company in the USA
• Bechtel Corporation:
– $200 million savings with investment of $30 million

6. Overview of Six Sigma
It is a Philosophy
Anything less than ideal is an
opportunity for improvement
Defects costs money
Understanding processes and
improving them is the most efficient
way to achieve lasting results
It is a Process
To achieve this level of
performance you need to:
Define, Measure, Analyse,
Improve and Control
It is Statistics
6 Sigma processes will
produce less than 3.4
defects per million
opportunities

7. Management involvement?
Executives and upper management drive the effort through:
 Understanding Six Sigma
 Significant financial commitments
 Actively selecting projects tied to strategy
 Setting up formal review process]
 Selecting Champions
 Determining strategic measures

8. Six Sigma Goals
Reduce defects
Eliminate Wasteful practices
Delight Internal & External Customer

9. Fitness for use (Juran principle)
Component said to possess good quality if they work well in equipment for which they
are meant
Quality Characteristics
 Appearance
 Performance
 Reliability
 Taste
 Maintainability etc
Voice Of Customer
Basic Quality Concepts
Quality is customer satisfaction, aimed at meeting:
Stated needs (Satisfiers) – Videos & Internet Facility in Cellphone
Unstated needs (Dis-Satisfiers) – Calling, SMS
Expectations (Delighters) – 100 free audio songs
CTQ - Measure of “What is important to Customer”
6 Sigma projects are designed to improve CTQ
Derived from VOC
Examples:
Waiting time in clinic
Spelling mistakes in letter
% of valves leaking in operation

10. Process Approach
A Process is a group of steps, tasks, or activities, which take inputs (People, Material,
Information …..) and in some way change them to produce an output (Service, Product……)
Transformation
(Using Resources & Management of Activities)
X1, X2, X3….Xn Output (Y)
Controllable (& Measurable) Factors
Non Controllable (Measurable or Not measurable) Factors
Inputs
If we understand X1, X3, X4 are causes, why do we constantly test Y
Y X1, X2, X3,……Xn
Dependent variable Independent Variable
Output Input & Controllable factors
Effect Causes
Sympton Problem
Monitor Monitor

11. Achieving Process Improvement
What we need?
 Identify Measurable Outputs – CTQs
 Identify Measurable & Controllable inputs/factor that affect CTQs - CTPs
 Assign a owner to the Process – Process Owner
 Ensure every step in process Adds value – Reduce Waste
How We Achieve?
Reduce Error – Increase Effectiveness
POKA YOKE :
RCO – Reduce chances of Occurrence – e.g. Microwave will shut down the moment we open the door
ICD – increase chances of detection – e.g. Alarms & Signals
Reduce Waste – Increase efficiency
Remove processes that's not adding value to CTQs
Use less resources

12.  Defective - A non-conforming unit
 Defect - A non-conformance on any of quality characteristics of a unit that may led to customer
dissatisfaction. Defect does not necessarily make the unit defective
 E.g. - Design issues in jewellary
DPO & DPMO
Defect Per Unit (DPU) – No. Of defects in a given unit of product or process
DPU = No. Of Defects detected (at given review point) / No. Of units processed at that review point
Defect Per Opportunity (DPO) - Circumstances in which CTQ can fail to meet
 E.g. - A units has 5 parts, and in each part there are 3 opportunities of defects –
Total defect opportunities are 5 x 3 = 15
Defect Per Million Opportunity (DPMO) - DPO multiplies by 1 million
E.g. - In previous case (15 defect opportunities), if 10 units have 2 defects.
DPU = Defects detected / no. of units = 2 / 10 = 0.2
DPO = DPU/ (Defect Opportunity *No. Of Units) = 2 / (15 x 10) = 0.0133333
DPMO = DPO * 1 million = 0.013333333 x 1,000,000 = 13,333

13. Defects, Units & Opportunities
Every process should have definitions for defect, unit and Opportunity
HOW TO IDENTIFY ?
 Start with Customer
1. Understand the need of your customer (VOC)
2. From VOC identify the critical to Quality – a product or service characteristics that must be met to satisfy a customer
requirement
 Define Product/Service Defects – Any part of product or service that:
1. Does not meet customer specifications or requirements
2. Causes customer dissatisfaction
3. Does not fulfil functional or physical requirements
 Define your Product/Service Units:
1. Measurable and Observable output of your business process
2. For product – must be seen as physical unit
3. For Service – Must have a specific start and end point
 Define your Product/Service Opportunities for error
1. Total number of chances per unit to have a defect
2. Each opportunity must be independent of other
3. It must be directly related to CTQs

14. DPMO & Sigma Level
Six Sigma performance is 3.4 DPMO
Sigma Level DPMO %Defects
One Sigma 690,000 69.0%
Two Sigma 308,000 30.8%
Three Sigma 66,800 6.68%
Four Sigma 6,210 0.62%
Five Sigma 230 0.023%
Six Sigma 3.4 0.0003%

15. COPQ (Cost of Poor Quality/Defects)
- Lost Opportunities
- The Hidden Factory
- More Setups
- Expediting Costs
- Lost Sales
- Late Delivery
- Lost Customer Loyalty
- Excess Inventory
- Long Cycle Times
- Costly Engineering
Changes
Average COPQ
approximately 15% of Sales
Hidden Costs:
Intangible
Difficult to Measure
Traditional Quality Costs:
Tangible
Easy to Measure
- Inspection
- Warranty
- Scrap
- Rework
- Rejects

16. 7 Tools of Quality
 Flow Chart
 Check Sheet
 Pareto Chart
 Histogram
 Cause & Effect (Ishikawa/Fishbone diagram)
 Scatter Diagram
 Control Chart
Note: Pareto Chart and Cause & Effect Diagram are widely used tools
Tools of Quality

17. Flow Chart:
Describe a process in as much detail by graphically displaying the steps in proper
sequence
How it helps in Six Sigma ?
 By Identifying critical process points that need to be controlled so that suitable appraisals
and preventions can be added
 Checking the value additions provided by each step in the process
Start/Finish Activity/Operation Decision
Link to ext
activity
A Document
Tools of Quality – Flowchart

18. A Typical Flow Chart
START
Customer Applied for Loan
Application Form Validated
Information
provided
Valid?
Sent to Audit depart for eligibility check
Eligible for
Loan?
Application Form Rejected
Loan Rejected
No
Yes
Yes
Loan Granted

19. Check Sheet:
It’s a data collecting device
How it Helps in Six Sigma ?
 Organizing the data by category
 Shows how many time each value occurred
 Setting priorities based on results shown on the check sheets
Tools of Quality – Check sheet

20. Pareto Chart:
Identify the factors which have greater effect on Service delivery challenges
How it Helps in Six Sigma ?
 Using 80:20 principle help user to focus on few important factors in a process
known as vital few
Example of Pareto
Tools of Quality – Pareto Chart

21. Histogram:
Displays the frequency of distribution of continuous/variable data
How it Helps in Six Sigma ?
 Provides a view of data distribution in a process
0
0.5
1
1.5
2
2.5
3
3.5
Frequency
Students Performance
Tools of Quality – Histogram

22. Measures of Central Tendency
 Mean = Provides the average of a data set
 Median = midpoint of the distribution of the data i.e. 50 % above and 50 % below
 Mode = Range with maximum observations
 Range – (Xmax – Xmin) = spread of the distribution
 Standard Deviation – Measure the variation in process represented by Greek letter б
Tools of Quality – Central Tendency
How it Helps in Six Sigma ?
 When mean median and Mode are closer to each other it represent less variation in process
 If bars are more spread out that means variation is high
 More than one Mode represent presence of another distribution imposing on main distribution
and need to be investigated

23. Cause & Effect (Fishbone) Diagram – ISHIKAWA
Provides a scope to brainstorm and identify failure areas related to 5 M’s
Men Money Machine
MaterialMethodEnvironment
Drunk Driving
Lack of Accident
proof mechanism
Signal failure
Railway TracksProper regulating
mechanism
Bad Weather
Obstruction on
Tracks
Rail Accidents
How it Helps in Six Sigma ?
 Most Effective tool for brainstorming
 Mapping of failures against 5 M’s
Tools of Quality – Cause & Effect Diagram

24. Co-Relation Diagram/Scatter Diagram
How it helps in Six Sigma ?
 To Find Critical parameters in Process
Y: dependent Variable
Xs (X1, X2, X3 …….Xn): Independent Variable
 Scatter diagram is drawn to see the kind of
relationship of Y with each of the Xs i.e. X1, X2, X3,
X4……Xn)
If Y increases as X1 increases, it’s a positive Co-relation
If Y decreases as X1 increases, it’s a negative Co-relation
Coefficient of Co-relation – denoted by ‘r’
a) If r>0.7 – Strong Co-relation – CTP
b) If r>=0.3 & r<=0.7 – Weak Co-relation – Not CTP
c) If r<0.3 – No Co-relation – Not CTP
Tools of Quality – Co-relation/Scatter Diagram

25. Tools of Quality – Co-relation/Scatter Diagram

26. Control Charts:
Displays statistically determined upper and lower limits drawn on either side of
process average.
Limits are:
Upper control Limit = X + 3σ
Lower Control Limit = X - 3σ
How it helps in Six Sigma?
 It reveals whether the data is within upper and lower control limit. If it is then the process is
said to be in Control
 It also can sense likelihood of process to go out of control.
Upper & Lower control limit must remain within the Upper Specification limit AND Lower Specification Limit, generally provided or
agreed with Customer
Tools of Quality – Control Charts

27. Characteristics of any process are dependent on 2 elements
 Mean i.e. X
 Standard Deviation i.e. σ
Calculating process Capability: Cp
a) Specification Width (SW) = USL-LSL
b) Process Width (PW) = UCL – LCL
= (X + 3σ) – (X - 3σ)
= 6σ
C) Process Capability index:
Cp = SW/PW = SW/6σ
Process is capable only is Cp>1
Control Charts

28. Tools of Quality – Control Charts

29. Causes Of Variation
Non-Assignable/Inherent Assignable/Special
Acceptable Variation
If UCL , LCL inside USL &
LSL
UnAcceptable Variation
If data point outside UCL
LCl
Need breakthrough
improvement
Corrective Action required
(By Employees)

31. Process Power People Power

32. Approach
Practical
Problem
Statistical
Problem
Statistical
Solution
Practical
Solution

33. DMAIC - simplified
 Define
 What is important?
 Measure
 How are we doing?
 Analyze
 What is wrong?
 Improve
 Fix what’s wrong
 Control
 Ensure gains are maintained to guarantee performance

34. DMAIC approach
M
Measure
A
Analyze
I
Improve
C
Control
Identify and state the practical problem
Validate the practical problem by collecting data
Convert the practical problem to a statistical one, define
statistical goal and identify potential statistical solution
Confirm and test the statistical solution
Convert the statistical solution to a practical solution
D
Define

35. Define
D
Define
M
Measure
A
Analyze
I
Improve
C
Control
VoC - Who wants the project and why ?
The scope of project / improvement (SMART Objective)
Key team members / resources for the project
Critical milestones and stakeholder review
Budget allocation
Key Output:
Project Charter
SIPOC

36. Measure
Ensure measurement system reliability
Prepare data collection plan
Collect data
- Is tool used to measure the output variable flawed ?
- How many data points do you need to collect ?
How many days do you need to collect data for ?
What is the sampling strategy ?
Who will collect data and how will data get stored ?
What could the potential drivers of variation be ?
D
Define
M
Measure
A
Analyze
I
Improve
C
Control Key Output:
Sigma Level
Pareto/Correlations

37. Analyze
How well or poorly processes are working compared with
- Best possible (Benchmarking)
- Competitor’s
Shows you maximum possible result
Don’t focus on symptoms, find the root cause
D
Define
M
Measure
A
Analyze
I
Improve
C
Control Key Output:
Control Chart
Fish Bone
SWOT Analysis

38. Improve
Present recommendations to process owner.
Pilot run
Formulate Pilot run.
Test improved process (run pilot).
Analyze pilot and results.
Develop implementation plan.
Prepare final presentation.
Present final recommendation to Management Team.
D
Define
M
Measure
A
Analyze
I
Improve
C
Control
Key Output:
Recommendations
Tested Solutuions

39. Control
Don’t be too hasty to declare victory.
How will you maintain to gains made?
 Change policy & procedures
 Change drawings
 Change planning
 Revise budget
 Training
D
Define
M
Measure
A
Analyze
I
Improve
C
Control
Key Output:
Sigma Level achieved
Documentation

40. People Power
Tell me, I forget.
Show me , I remember.
Involve me, I understand.

41. 6 s Training
Master
Black Belt
Black
Belts
Green Belts
Team Members /
Yellow Belts
Champions
Mentor, trainer, and coach of Black Belts and others
in the organization.
Leader of teams implementing the six sigma
methodology on projects.
Delivers successful focused projects using
the six sigma methodology and tools.
Participates on and supports the project teams,
typically in the context of his or her existing
responsibilities.

42. Champions
Champion
 Plans improvement projects
 Charters or champions chartering process
 Identifies, sponsors and directs Six Sigma projects
 Holds regular project reviews in accordance with project charters
 Includes Six Sigma requirements in expense and capital budgets
 Identifies and removes organizational and cultural barriers to Six
Sigma success.
 Rewards and recognizes team and individual accomplishments
(formally and informally)
 Communicates leadership vision
 Monitors and reports Six Sigma progress
 Validates Six Sigma project results
 Nominates highly qualified Black Belt and/or Green Belt candidates

43. Master Black Belt
 Enterprise Six Sigma expert
 Permanent full-time change agent
 Certified Black Belt with additional specialized skills or experience
especially useful in deployment of Six Sigma across the enterprise
 Highly proficient in using Six Sigma methodology (e.g.,
advanced statistical analysis, project management, communications,
program administration, teaching, project coaching)
 Identifies high-leverage opportunities for applying the Six Sigma
 Basic Black Belt training
 Green Belt training
 Coach / Mentor Black Belts
Master
Black Belt

44. Black Belt
 Six Sigma technical expert
 Temporary, full-time change agent (will return to other duties after
completing a two to three year tour of duty as a Black Belt)
 Leads business process improvement projects where Six Sigma
approach is indicated.
 Successfully completes high-impact projects that result in tangible
benefits to the enterprise
 Demonstrated mastery of Black Belt body of knowledge
 Demonstrated proficiency at achieving results through the application
of the Six Sigma approach
 Coach / Mentor Green Belts
 Recommends Green Belts for Certification
Black
Belts

45. Green Belt
 Six Sigma Project originator
 Part-time Six Sigma change agent. Continues to perform normal
duties while participating on Six Sigma project teams
 Six Sigma champion in local area
 Recommends Six Sigma projects
 Participates on Six Sigma project teams
 Leads Six Sigma teams in local improvement projects
Green Belts

46. Yellow Belt
 Learns and applies Six Sigma tools to projects
 Actively participates in team tasks
 Communicates well with other team members
 Demonstrates basic improvement tool knowledge
 Accepts and executes assignments as determined by team
Team Members /
Yellow Belts

48. Sources of Projects
 External Sources:
 Voice of Customer
 What are we falling short of meeting customer needs?
 What are the new needs of customers?
 Voice of Market
 What are market trends, and are we ready to adapt?
 Voice of Competitors
 What are we behind our competitors?
 Internal Sources:
 Voice of Process
 Where are the defects, repairs, reworks?
 What are the major delays?
 What are the major wastes?
 Voice of Employee
 What concerns or ideas have employees or managers raised?
 What are we behind our competitors?

49. What Qualifies as a Six Sigma Project
 Three basic qualifications:
 There is a gap between current and desired / needed performance.
 The cause of problem is not clearly understood.
 The solution is not pre-determined, nor is the optimal solution
apparent.