Six Sigma

Prof Archana Deodhar

What is six sigma?

Sigma is a measure of goodness: the capability
of a process to produce perfect work.

A defect is any mistake that results in customer

dissatisfaction.
Sigma indicates how often defects are likely to
occur.
The higher the sigma level, the lower the defect
rate.
The lower the defect rate, the higher the quality.

Concept & Definition

GE claims that the concept was developed
by them
Motorola gives proper definition &
application.
It defines six sigma at three levels

As a metric
As a methodology
As a management system.

Prof Archana Deodhar

Basics
A new way of doing business
Wise application of statistical tools within a
structured methodology
Repeated application of strategy to
individual projects
Projects selected that will have a
substantial impact on the bottom line

Why six sigma?

Sigma allows comparison of products and services

of varying complexity

Also, it provides a common basis for benchmarking

(competitors and non-competitors).
The higher the sigma level, the better your
operation
is performing.
Sigma measures how well youre doing in getting
to zero defects.

The Six Sigma metric

Consider a 99% quality

level
5000 incorrect surgical operations per
week!
200,000 wrong drug prescriptions per year!
2 crash landings at most major airports
each day!
20,000 lost articles of mail per hour!

Six Sigma

A scientific and practical method to achieve improvements in a

company

Scientific:
Structured approach.
Assuming quantitative data.
Show me
the money

Practical:
Emphasis on financial result.
Start with the voice of the customer.

Show me
the data

Where can Six Sigma be applied?

Service
Management

Design

Purchase

Administration

Six Sigma
Methods

Production

IT

Quality
Depart.
HRM

M&S

The Six Sigma Initiative

integrates these efforts
SPC

Improvement teams
Problem
Solving teams
Knowledge
Strategic ISO 9000
Management
planning
DOE

and more

Benchmarking

The Six Sigma Evolutionary Timeline

1818: Gauss uses the normal
curve to explore the
mathematics of error analysis for
measurement, probability
analysis, and hypothesis testing.
1736: French
mathematician
Abraham de
Moivre
publishes an
article
introducing the
normal curve.

1924: Walter A. Shewhart

introduces the control chart and
the distinction of special vs.
common cause variation as
contributors to process problems.
1896: Italian sociologist Vilfredo
Alfredo Pareto introduces the
80/20 rule and the Pareto
distribution in Cours dEconomie
Politique.

1949: U. S. DOD issues Military

Procedure MIL-P-1629,
Procedures for Performing a
Failure Mode Effects and
Criticality Analysis.

1960: Kaoru Ishikawa

introduces his now
famous cause-andeffect diagram.

1941: Alex Osborn, head

of BBDO Advertising,
fathers a widely-adopted
set of rules for
brainstorming.

1970s: Dr. Noriaki Kano

introduces his twodimensional quality model
and the three types of
quality.

1986: Bill Smith, a senior

engineer and scientist
introduces the concept of Six
Sigma at Motorola

1995: Jack Welch

launches Six Sigma at
GE.
1994: Larry Bossidy
launches Six Sigma at
Allied Signal.

Six Sigma companies

Companies who have successfully adopted

Six Sigma strategies include:

GE Service company examples

Approving a credit card application
Installing a turbine
Lending money
Servicing an aircraft engine
Answering a service call for an
appliance
Underwriting an insurance policy
Developing software for a new CAT
product
Overhauling a locomotive

General Electric
In 1995 GE mandated each employee to
work towards achieving 6 sigma
The average process at GE was 3 sigma in
1995
In 1997 the average reached 3.5 sigma
GEs goal was to reach 6 sigma by 2001
Investments in 6 sigma training and
projects reached 45MUS$ in 1998, profits
the
most
initiative
increased
by important
1.2BUS$

GE has ever undertaken.

Jack Welch

Chief Executive Officer

General Electric

MOTOROLA
At Motorola we use statistical methods
daily throughout all of our disciplines to
synthesize an abundance of data to
derive concrete actions.
How has the use of statistical methods
within Motorola Six Sigma initiative, across
disciplines, contributed to our growth?
Over the past decade we have reduced inprocess defects by over 300 fold, which
Robert W. Galvin
has resulted in cumulative
manufacturing
Chairman of the Executive Committee
cost savings of over Motorola,
11 billion
Inc. dollars*.
*From the forward to MODERN INDUSTRIAL STATISTICS by Kenett and Zacks, Duxbury, 1998

Barriers to implementation
Barrier #1: Engineers and managers are not interested in
mathematical statistics
Barrier #2: Statisticians have problems communicating with
managers and engineers
Barrier #3: Non-statisticians experience statistical anxiety
which has to be minimized before learning can take place
Barrier # 4: Statistical methods need to be matched to
management style and organizational culture

Focus of Six Sigma*

Accelerating fast breakthrough
performance
Significant financial results in 4-8 months
Ensuring Six Sigma is an extension of the
Corporate culture, not the program of the
month
Results first, then culture change!

*Adapted from Zinkgraf (1999), Sigma Breakthrough

Technologies Inc., Austin, TX.

Six Sigma as a Metric

The term is used as a scale for levels of
goodness or quality.
Using the scale, it equates to 3.4 defects per
one million opportunities (DPMO)
It is treated as a defect reduction effort in
manufacturing.
Later applied to other business processes for
same purpose.

Prof Archana Deodhar

18

Six sigma as a
Methodology

Six sigma is a business improvement

methodology that focuses an organization on
Understanding
and
managing
customer
requirements.
Aligning key business processes to achieve those
requirements.
Utilizing rigorous data analysis to minimize
variation in those processes.
Driving rapid and sustainable improvement to
business processes.

Prof Archana Deodhar

19

Process
1.Define high-level project goals and the current process.
2.Measure key aspects of the current process and collect relevant
data.

3.Analyze the data to verify cause-and-effect relationships.

Determine what the relationships are, and attempt to ensure that
all factors have been
considered.
4.Improve or optimize the process based upon data analysis using
various tools
5.Control to ensure that any deviations from target are corrected
before they result in defects.

DMAIC model

At the heart of methodology, is the DMAIC

model for process improvement.

D Define opportunity
M Measure Performance
A Analyze opportunity
I Improve performance
C Control Performance

Prof Archana Deodhar

21

Six-Sigma - A Roadmap for improvement

Define

Select a project

Measure

Prepare for assimilating information

Analyze

Characterise the current situation

Improve

Optimize the process

Control

Assure the improvements

DMAIC

Alternative interpretation
Prioritise (D)

Measure (M)

Hold
gains (C)

Improve (I)

Interpret
(D/M/A)
Problem (D/M/A)
solve

Define opportunity
Define goals to improve the overall process
between a companys strategy and the
demands of its customers.
It can also be referred to the group and the
groups or individuals that one has to support.

Prof Archana Deodhar

24

Measure correctness
Measure the correctness of the current
processes.
Collection of relevant data on the current
process and then
Use this data as a baseline for future
comparisons.

Prof Archana Deodhar

25

Analyze opportunity
Analyze the companys relationship with
process.
The relationship between the factors that
ensure to keep the companys strategy in
with the customer demands should
understood well.

Prof Archana Deodhar

the
can
line
be

26

Improve performance
It is important to constantly improve and
optimize the process, using analysis and other
techniques.
One
often used technique is Design of
Experiments.
This is a technique that can help to test a
hypothesis, using acceptable experimental
design.

Prof Archana Deodhar

27

Control performance
Control ensures that one can control and
correct any variances avoiding possibly costly
defects and loss of quality.
Many times pilot runs are set up to study
process capability and production transition.
Pilot runs can help fine tune or add additional
control mechanisms.

Prof Archana Deodhar

28

Six sigma Management System

It is a high performance system for executing
business strategy.
It helps organizations to

Align their business strategy to critical improvement

efforts
Mobilize teams to attack high impact projects
Accelerate improved business results
Govern efforts to ensure improvements are
sustained

Prof Archana Deodhar

29

Key personnel in successful

Six Sigma programmes

The six sigma

organization.
The six sigma team has five levels
of hierarchy

What is a BELT?
Belt refers to the level or the position, of a person in an
organization at the time of performing a work or at the
time of implementation of a project.

There are four Belt levels :1. Champion

2. Master black belt(MBB)
3. Black belt(BB)
4. Green belt(GB)
5. Yellow belt(YB)

Champion
Lay down policies and guidelines regarding
functioning of six sigma teams
Approves six sigma projects
Removes road blocks in the path of six
sigma implementation
Receives presentations
Monitors project
Make available necessary resources
Sort out conflicts

Master black belts

The highest level of Six Sigma expertise;

All duties involve implementation of Six

Sigma,
including
statistical
analysis,
strategic
and
policy
planning
and
implementation, and training and mentoring
of Black Belts.

Black belts
a Six Sigma-trained professional who has usually
completed an examination and been certified in its
methods;

all job duties include implementation of Six

Sigma methodology throughout all levels of the
business,
leading teams and projects, and providing Six
Sigma training and mentoring to Green and Yellow
Belts.

Green belt
In many organizations, Six Sigma's "entry
level";

a Six Sigma-trained professional who does

not work on Six Sigma projects exclusively,
but whose duties include leading projects
and teams and implementing Six Sigma
methodology at the project level

Yellow belt

The lowest level of Six Sigma expertise;

applies to a professional who has a basic working

knowledge and who may manage smaller process
improvement projects,
but who does not function as a project or team
leader.

Number game In hierarchy

one
15 - 20

100-5GB

20

Team
members

Champions or enablers
High-level managers who champion Six
Sigma projects
they have direct support from an executive
management committee
orchestrate the work of Six Sigma Black
Belts
provide Black Belts with the necessary
backing at the executive level

Champions Role
Communicate vision and progress
Facilitate selecting projects and people
Track the progress of Black Belts
Breakdown barriers for Black Belts
Create supporting systems

Champions Role
Measure and report Business
Impact
Lead projects overall
Overcome resistance to
Change
Encourage others to Follow

Further down the line - after initial

Six Sigma implementation
package

Master Black Belts

Black Belts who have reached an acquired
level of statistical and technical competence
Provide expert advice to Black Belts

Green Belts
Provide assistance to Black Belts in Six
Sigma projects
Undergo only two weeks of statistical and
problem solving training

Six Sigma instructors

(ISRU)
Aim: Successfully integrate the Six Sigma
methodology into a companys existing culture
and working practices
Key traits
Knowledge of statistical techniques
Ability to manage projects and reach closure
High level of analytical skills
Ability to train, facilitate and lead teams to
success, soft skills

The right support

+
The right projects
+
The right people
+
The right tools
+
The right plan
=
The right results

Example : Dabbawalas