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Six Sigma
Six Sigma has become a metaphor for approaching perfection at all levels of process,delivery and service tocustomer.Six sigma is a statistical concept, coined by Phillip Crosby,used to describe the state of zero defects or asclose as it is possible to come to perfection.
Concept > Introduction to Six Sigma
 
"What Gets Measured Gets Done " 
 
In the late 1970's Motorola encountered the problem of poor quality products. Bill Smith an engineer in Motorola'sCommunication sector undertook a study to understand the causes. On the basis of this study he stated that Motorola'sproduct's reliability could be improved by
preventing
defects during the manufacturing process rather than by
detectingand fixing
them later.Meanwhile, Mikel Harry, an engineer in the Government Electronics Group of Motorola came out with a finding that anaverage company that followed traditional quality practices commits 66,800 errors in a million operations. Statisticians callthis a three-sigma error rate.Mikel and Bill Smith together set out on the difficult task of reducing the error percentage of Motorola's products to lessthan 3.4 mistakes in a million. This effort gave birth to the Six-Sigma quality initiative in Motorola.In 1989, Motorola announced that, within five years, it would achieve a defect rate of "not more than 3.4 parts per millionor 99.9996 percent perfection". Motorola framed this objective for perfection as "Six-Sigma" to motivate employees to aimfor a zero error rate in their operations.The introduction of Six-Sigma transformed the quality of operations at Motorola. It helped Motorola reduce the number of defects in products from 4 to 5.5 sigma yielding $US 2.2 billion in savings. Six-Sigma played a vital role in Motorola'ssurvival in the high-technology industry. Seeing the benefits gained by Motorola, other companies started implementingSix-Sigma. GE one of the well known Six-Sigma companies today, managed to gain $US 750 million in benefits in 1998,thanks to Six-Sigma.Six-Sigma quality implementation is no more limited to manufacturing today. It is applicable everywhere a process isinvolved. Thus all operations in any business can work towards Six-Sigma quality levels. This includes processes such aspreparing invoices, internal and external communications, information systems, sales, finance, HR processes, or customersupport. Even janitorial services can adhere to the quality standards of Six-Sigma.
What is Six-Sigma?
Six-Sigma has become synonymous to perfection at all levels of process, product or service quality.
But what is Six-Sigma?
It is a statistical concept, used to describe the state of zero defects or as close to it as possible. Sigma is a letter in theGreek alphabet used to denote the standard deviation of a process. Standard deviation measures the variation of a resultfrom the process average.A process with Six-Sigma capability implies having twelve standard deviations between the upper and lower specificationlimits. Essentially, process variation is reduced to no more than 3.4 parts per million falling outside the specification limits.The higher the Sigma number, the lesser the defects as the graph indicate.
 
A performance level of Six-Sigma equates to 3.4 defects per million opportunities - not zero, but pretty close. A defect isanything that causes customer dissatisfaction. According to Robert W. Galvin, Chairman of the executive committee of theMotorola Management Board, Six-Sigma is "near perfection".Apart from being a statistical concept, Six-Sigma has now evolved into a philosophy, a goal and a methodology. It is usedto drive out waste and improve quality, cost and time performance of any business.
Continue the tour:What Makes Six-Sigma WorkConcept > What makes Six-Sigma work
What differentiates Six-Sigma from other quality programmes? Though Six-Sigma seems similar to TQM in terms of qualitytools, techniques and principles, it is different in that it includes:
Metrics - the groundwork of Six-Sigma
The success of Six-Sigma depends entirely on the groundwork of quantifiable information. It deploys measures that purgesubstandard product quality and fallible activities involved in a process. These measures include customer satisfaction, andDefects Per Million Opportunities (DPMO). Prior to Six-Sigma these metrics were not applied much to measure quality.Any Six-Sigma implementation aims at identifying metrics that will reduce the cost of poor quality. Six Sigma companiesoften work backwards from the cost to the causes, to arrive at the right metrics. Six-Sigma directly works towardsreducing cost and improving profitability.
Management support
A Six-Sigma implementation ensures a greater commitment from the top management because of the quantifiable resultsit helps achieve. Top managements support Six-Sigma because the quantitative improvements in processes directly result
 
in better profits and greater competitive edge.
Problem solvers and team leaders
The Six-Sigma methodology requires the appointing of highly skilled workers as team leaders. It gets the executivechampion, deployment and project champions, master black belt, black and green belts to directly work towards betterperformance.
Intensive training
Six-Sigma employs rigorous training techniques. The training deals extensively in statistical, project management, andproblem solving methods. Costs per black belt are estimated to be around $15,000. However, these costs are soon realisedthrough savings per project.
Utilisation of team strengths
Teams involving employees across various functions drive Six-Sigma quality projects. These employees are empowered todo whatever is needed for making improvements. The Six-Sigma implementation includes training the black belts inmanaging teams for optimum results.
Healthy competition
Since performance of processes and projects are quantified, Six-Sigma helps teams across various processes to comparewith each other. This creates a healthy competition within the organisation. It also brings in a culture of ongoingimprovement.
How Does Six-Sigma Work?
Six-Sigma is implemented through projects. A project is defined as a structured and systematic approach to achieving Six-Sigma levels of improvement. Projects are categorised as
Traditional Quality Improvement Projects that solve chronic problems and improve existing processes.
Design For Six-Sigma projects, aimed at incorporating excellence into the design phase of new products orprocesses.To attain Six-Sigma levels of quality within any organisation, the following need to be identified in every improvementproject:
The customers (internal and external) and what they value.
The product or service provided to the customer.
What attributes in the product or service can satisfy the customer.
The process for performing the work. Make the process error free and eliminate wasted effort. To do this: identifythe potential errors that may occur at each level and lower their probability rate- by simplifying tasks, designingexperiments, standardising procedures, and training to eliminate specific errors. Also avoid duplication toeliminate wasted efforts.
Benefits that come only from innovation.
Ways to ensure continuous improvement. This is possible by measuring and analysing the improved process,formulating and publicising actual performance against defects targets and linking them to the reward structure.Six-Sigma is a disciplined approach to achieving excellence in quality. It is a challenging goal that motivates anorganisation to continuously strive for perfection.
Techniques and Methods > How to Calculate Six Sigma
Most companies are in awe of the idea of Six-Sigma and the perfection it stands for. They have always been inquisitiveabout the sigma levels their processes operate upon. The following is a simple illustration for calculating sigma levels of aprocess in a power company.
1.
Define what a process opportunity means:
Many processes and activities in a power company combined together help bring power to the customer. Hence,there are bound to be various kinds of defects and opportunities. However, for ease of understanding let usconsider an opportunity for the power company as
One Minute Of Continuous Power Supplied.
2.
Define what a process defect means:
Ideally a defect is something that a customer notices as influencing the process performance. Companies canidentify such defects through expert group surveys, operators' surveys, and Voice Of the Customer. For a powercompany a defect is assumed as
Every one minute for which power was down.
 
3.
Quantify The Process:
The next step is to measure and quantify the number of opportunities in the process within a stipulated time.Quantifying opportunities and defects may require standard statistical data collection methods. In the case of thepower company in the year 2002:
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