Information United System Consulting Group

(Member of Tariq Alghanim Holding)

Six Sigma – An Introduction
Program : 6th September 2007 By: Ravi Kalimuthu Specially Designed for Tamilnadu Engineers Forum

Venue: Caesars Restaurant. Fahaheel
copyrights- IC Group 2007

About the Tutor.
Business Development Manager & Management Consultant 20 Years experience in Industrial & Management Sector Certified Si Si C tifi d Six Sigma Green belt & ISO G b lt 9001:2000 Lead Auditor Conducted More than 40 Training Programs in Several titles in Management & Technical

Ravi K li th R i Kalimuthu

About Information United System Consulting Group. (IUSC Group)
(A Member of Tariq Al Ghanim Holdings)

Provides Management Consultancy Services One stop solution for any business needs Consultancy provided >40 clients

Services offered… Certification related services Value added services Trainings / seminars .

Certification related services ISO 9001:2000 – Quality Management System ISO 14001:2004 – Environmental Management System OHSAS 18001:2002 – Safety Management System ISO 22000:2005 – Food Safety Management System ISO 27001:2005 – Information Security Management System and more…… d .

Value added services Training & Implementation of Six Sigma Establishing KPIs Performance KPIs. measurement system & Balanced Scorecard Development of vision & values Business Plan l Business Process Re-engineering .

Implementing 5 ‘S’ Consultancy on CE marking .Value added services Support services for effective p y implementation of ISO systems Implementing total quality management Implementing cost management concepts like activity based costing and quality costing etc..

Training services Support for sustaining International standards certification Tailor made in-house programs Knowledge reach to 175 topics specially g p p y designed for improving business .

Before we start !!! Your participation is key to success… If any doubts. and Contribute to make this program successful . stop & clarify… Share your thoughts… Get involved… Switch off / Silent your mobile phones… Participate.

Six Sigma .A Breakthrough Strategy .

Contents What is Six Sigma? Why Six Sigma? Comparison of various management initiatives Overview of six sigma and lean principles Role of Green Belt Project Management Idea Process Mapping & Process Management Team Dynamics and Techniques y q Appreciating the use of QFD .

Six Sigma is a system of practices originally developed by Motorola to systematically improve processes by eliminating defects The process was defects.4 defects per one million opportunities ( (DPMO). pioneered by Bill Smith at Motorola in 1986 and was originally defined as a metric for measuring defects and improving quality. and a methodology t reduce d f t i i lit d th d l to d defect levels below 3.What is Sigma (σ) The Th term ‘Si ‘Sigma’ taken f ’ k from the G k alphabet. p mean (average) of any parameter of product. ) . i h Greek l h b is used to designate the distribution or spread about the ( g ) y p p . process or procedure.

.4 parts per million defects or has a yield of 99.9997%.What is Six Sigma (6σ) Level of process performance equivalent to producing only 3.

While traditional quality programs have focused on detecting and correcting defects. forward-thinking initiative designed to fundamentally change the way corporations do business. Six Sigma encompasses something broader: It provides specific methods to re recreate the process itself so that defects are never produced in the first place. improving quality. and eliminating defects or mistakes in everything a company does." .What is Six Sigma (6σ) Six Sigma is a long-term. It is first and foremost "a business process that enables companies to increase profits dramatically by streamlining operations.

definitions Six Sigma can be taken at three different levels: As a metric As a methodology As a management system Essentially.What is Six Sigma (6σ) Six Sigma has evolved over the last two decades and so has its definition. and practical definitions. Six definition Sigma has literal. conceptual. . Six Sigma is all three at the same time.

Using this scale. . Therefore (DPMO) Therefore. "Six Sigma" equates to 3 4 scale 3.4 defects per one million opportunities (DPMO). Six Sigma started as a defect reduction effort in manufacturing and was then applied to other business processes for the same purpose.Six Sigma as a Metric The term "Sigma" is often used as a scale for levels of "goodness" or quality.

there has been less emphasis on the literal definition of 3.Six Sigma as a Methodology As Six Sigma has evolved. or counting defects in products and processes. 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 .4 DPMO.

DMAIC i is commonly used by Six Sigma project teams and is an acronym for: y -Define opportunity -Measure performance -Analyze opportunity A l t it p performance -Improve p -Control performance .Six Sigma as a Methodology 2 At the heart of the methodology is the DMAIC model f process i d l for improvement.

and it leverages g p . top-down to help organizations: •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 The Six Sigma Management System drives clarity around the business strategy and the metrics that most reflect success with that strategy. and improved business results. . sustainable. leaders who will manage the efforts for rapid.Six Sigma Management When practiced as a management system. Six Sigma is a high performance system for executing business strategy Six Sigma is a top down solution strategy. It provides the framework to prioritize resources f projects h f k for that will improve the metrics.

p 1 Sigma = 690.8% 99 8% 6 Sigma = 3. Sigma is a statistical term that measures how i ti Si i t ti ti l t th t h much a process varies from perfection.4 DPMO = 99.000 DPMO = 69. 6 Sigma etc) allows process performance to compared throughout the organization.9% Final yield 2 Sigma = 308. based on the number of defects per million units.3% 4 Sigma = 6.000 DPMO = 30.4% 5 Sigma = 320 Si DPMO = 99.Determining Sigma Level g g Determining sigma levels of processes (1 sigma.2% 3 Sigma = 66.9997 .800 DPMO = 93.210 DPMO = 99.

( competitive companies) 66.The Cost of Quality Sigma level DPMO Cost of Quality 2 3 4 5 6 308.4 ( 3 4 (world class) ld l ) NA 25 – 40% of Sales 15 -25% of Sales 5 – 15 % of sales <1% of sales 1% f l Each sigma shift provides a 10% net income improvement. .807 6.507(non .210 (Industry Average) 233 3.

Working capital turns have risen sharply to 9. up 13% .2%.80.R Revenues have risen to $100 billion.4 . up 14% .7% .3 billion.Earnings have increased to $9.Impact of six sigma implementation at GE (results achieved over first 2 years 1996-1998) ( lt hi d fi t 1996 1998) .Operating margin has risen to a record 16.Earnings per share have grown to $2. up from 1997's record of 7. up 11% h i t billi .

Why Six Sigma? Is it necessary to go for zero defects? Why isn’t 99.000 CHECKS DEDUCTED FROM THE WRONG BANK ACCOUNT EACH HOUR .22.3.000 MISSED HEARTBEATS PER PERSON PER YEAR -1 .400 LETTERS PER HOUR WHICH NEVER ARRIVE AT THEIR DESTINATION .500 INCORRECT SURGICAL OPERATIONS EACH WEEK .9% were "good enough:" HOUR OF UNSAFE DRINKING WATER EVERY MONTH .2 LONG OR SHORT LANDINGS AT EVERY AMERICAN AIRPORTS EACH DAY .9% defect-free good enough? Here are some examples of what life would be like if 99.4.000 INCORRECT DRUG PRESCRIPTIONS PER YEAR .000 NEWBORNS ACCIDENTALLY FALLING FROM THE HANDS OF NURSES OR DOCTORS EACH YEAR .32.

Why Six Sigma? Is it necessary to go for zero defects? Here are some examples of what life would be like at Six Sigma -13 WRONG DRUG PRESCRIPTIONS PER YEAR 13 -10 NEWBORNS ACCIDENTALLY FALLING FROM THE HANDS OF NURSES OR DOCTORS EACH YEAR .1 LOST ARTICLE OF MAIL PER HOUR .

Various Management Initiatives TOTAL PRODUCTIVE MAINTENANCE SIX SIGMA ISO 9001:2000 TOTAL QUALITY MANAGEMENT .

Various Management Initiatives THE FOCUS IN TOTAL PRODUCTIVE MAINTENANCE (TPM) IS MINIMISATION OF LOSSES .

Various Management Initiatives THE FOCUS IN SIX SIGMA IS MEASUREMENT .

Various Management Initiatives THE FOCUS IN ISO 9001 IS SYSTEMS .

Various Management Initiatives THE FOCUS IN TOTAL QUALITY MANAGEMENT (TQM) IS PEOPLE .

Various Management Initiatives CAN ONE INITIATIVE WORK WITHOUT THE OTHER 1. For Losses (TPM). People (TQM) are essential . Systems (QMS) are essential 3. Measurements 1 F L (TPM) M t (Six Sigma) are essential 2. For Systems (QMS). For Measurement (Six Sigma).

Summary y All the initiatives are complementary to each other. It is prudent to integrate each initiative with the fundamental QMS like ISO 9001:2000 The ff 9001 2000 Th effort should b to take the people along h ld be k h l l the process . .The continued focus is the key factor.

Five Pillars of TQM Q PRODUCT EFFECTIVENESS WASTE ELIMINATION PROCESS SYSTEM PEOPLE SUITABILITY CULTURE & MATURITY RE-ENGINEERING LEADERSHIP .

Six Sigma Process standard Vs Performance Standard Six Sigma Vs ISO 9001 Is I process and performance related d f l t d What is important in business Performance should consider both internal and external needs Measurement is the key. Measure what is important or what is needed M h ti i t t h ti d d Measurement without a target is meaning less Deviation from target is defect Defect is more important to customer than reject .

DPMO Vs PPM Six Sigma demands 3.4 Defects per Million Opportunity .

. Both Karate and Six Sigma depend on mental discipline and systematic.Why the name “Green Belts”? The name Green belts comes from the sport of Karate. Six Sigma green belts should also depend on the same qualities. Just as black belts in Karate depend on power. Six Sigma Green belts also must be able to reposition themselves as they move from one project to another. speed and decisiveness. intensive training.

Anticipates and confronts problems proactively and solves them. Proper Understanding of DMAIC steps Speaks the language of money time organizational money. Understands Project Charter and base line performance An expert in SPC and continuous improvement tools. objectives. . Capable of i l C bl f implementing standardization methods ti t d di ti th d Drives change by challenging conventional wisdom. time.Characteristics of Six Sigma Green Belt Proper understanding of Deliverable & CTQ.

What is DMAIC ? .

. It id tifi critical the j t identifies iti l customer requirements and links them to business needs. It also defines a project charter and the business processes to be undertaken for Six Sigma. Note: This phase is extensively covered in a separate chapter “Define phase”.Define phase This h Thi phase d fi defines th project.

Measurement phase

This phase involves selecting product characteristic characteristic, mapping respective process, making necessary measurements and recording the results of the process. This is essentially a data collection phase. Note: This phase is extensively covered in a separate chapter “Measurement phase”.

Analysis phase
In this phase an action plan is created to close the p p “gap” between how things currently work and how the organization would like them to work in order to meet the goals for a particular product or service This phase service. also requires organizations to estimate their short term and long term process capabilities. Note: This phase is extensively covered in a separate chapter “Analysis phase . Analysis phase”

Improvement phase
This phase involves improving processes/product p p g p /p performance characteristics for achieving desired results and goals. This phase involves application of scientific tools and techniques for making tangible improvements in profitability and customer satisfaction. Note: This phase is extensively covered in a separate chapter “Improvement phase”.

. Depending upon the results of such a follow-up analysis. it may be sometimes necessary to revisit one or more of the preceding phases phases. After a “settling in” period. the process capability should be reassessed.Control phase This phase requires the process conditions to be properly documented and monitored through statistical process control methods. Note: This phase is extensively covered in a separate chapter “Control phase”.

B. B Develop team charter / action plan. Define process map. Each t E h step is discussed i detail in the following i di d in d t il i th f ll i slide.Key steps of the define phase A. A Identify project which are critical to customers. . plan C.

Deliverable & CTQ Department/ Function : Accounts 1 S.no Deliverables 1 Customer reconcilations CTQ Correct statement of accounts Timely updation Measurement method Acceptable criteria Agreement with customer book Every month Respective date for various submission as 2 Fili of various returns Filing f i s t s Timely s b issi Ti l submission Accuracy y Branch and profit-centre wise 3 profitability fit bilit Timely submission of statements Accuracy of report By 25th of every month per matrix i No penalty Late fees p y Interest to the company Remarks .

Reduction of cost through material handling equipments 3. Use of floor space 4.Deliverable & CTQ S. Recycling of cotton waste 5.Re use warranty material 2.no Deliverables 1 Receipt of material CTQ Correct inwarding of quantity Reduction in unloading time Timely issue of documents Accuracy of information y 3 Cost Optimization 1. 5 Reduction of non moving material non-moving Measurement method Acceptable criteria Delivery challan Visual SAP SAP warranty claim Visual Store Layout VSM SAP Zero Variance 30% reduction from present condition 1 Day Zero Variance To be decided 30% reduction in present situation Improve 50% floor space 10% cost savings To b d id d T be decided Remarks Documentation flow to 2 excise department .

Marketing 1. Warranty cost as a percentage of sales. t k d fi ld li 4. Contract errors. 6. Number of incorrect order entries. 5. 6 Customer complaints. 3. Accuracy of forecast assumptions. Late deliveries. 2. complaints 7. O 3 Overstocked field supplies.Operations related :. .

Cycle time from start of purchase request until items in house. Excess inventory. 3. Premium freight cost/ demurrage charges. Down . Number of Off specification parts used to keep line going. 5. 4. 6. Percentage of purchased material rejected on receipt. 2.time because of parts shortages.Purchase 1. .Operations related :.

5. p . Percentage of parts scrapped. 4. 6. Percentage of parts reworked.Operations related :Manufacturing 1. Percentage of parts accepted on concession. 2. Yield per ton of raw materials. 3. Percentage of final p g product g graded as seconds. Production per man / machine.

N 3 Number of errors found in design evaluation test.Operations related :. Percentage of cost over . Number of errors found during design review. b f f di d i l ti t t 4. f d l t 5.Product engineering 1. l t 6. 3. Percentage of time over. 2. Number of engineering changes per document. Number of tooling redesign after trial production.run compared to planned ti l d time for development.run over estimated cost of d f development. .

5 C l ti to t ti ti 6. Percentage of lots rejected due to errors. Cycle time t get corrective actions. 2. Number of engineering changes that should have been detected in design review.Operations related :. 3. 4. Percentage of production cost. Percentage of products having defects detected by customers. Errors in inspection / test reports. 5. d ti t appraisal cost compared to .Quality Assurance 1.

Probability of failure occurrence during given time interval.Operations related :. interval Probability of failure non-occurrence during given time interval. Mean time to repair.Product reliability Mean time to failure. Mean time to first generate overhaul. Failure rate rate. repair . i e ti e i te l Mean life time.

6.Ope at o s e ated Operations related :. Payroll errors.Accounting ccou t g 1. i t ti t . Percentage of late payments. E 6 Errors in cost estimates. Billing errors. Incorrect accounting entries. Time to respond to customer request for information. 5. 2. 4. 3.

Customer related Market share Market penetration New markets identified Overall customer satisfaction Customer complaints Customer retention R&D expenditure as a percentage of sales New products and services introduced p Sales per employee .

Six Sigma – Tools and Techniques Quality Q li Function i Deployment Design of experiments 7 QC tools New 7 tools Measurement system analysis Process mapping Project Management FMEA SPC T–T t Test Analysis f A l i of variance i Correlation and Regression Chi-Square q Control charts Control plans Robust design Cost of quality Reliability Engineering Quality Q lit systems t Fault tree analysis .

It demonstrates that the q y y p . Certification is an investment in your career and in the future of your employer. certification is a mark of excellence. The Six Sigma Green Belt operates in support of or under the supervision of a Six Sigma Black Belt. In today’s world. certified individual has the knowledge to ensure the quality of products and services.Certification of Six Sigma Option I – Certification as Six Sigma Green Belt Becoming certified as a Six Sigma Green Belt confirms your commitment to quality and the positive impact it will have on your organization. Option II – Certification as Six Sigma Black Belt Becoming certified Six Sigma Black Belt leads the quality or core process team involve in the data analysis. The Six Sigma Black belt guides the green belt in taking the decisions with respect to quality problems and direct quality improvement projects Certification procedure: ASQ (American Society for Quality) offers the certification programmes in various field of discipline. analyzes and solves quality problems and is involved in quality improvement projects. The training avenues could be as follows: •In-house training can be conducted within the premises of any Company •External training . where competition is a fact of life and the need for a work force proficient in the principles and practices of quality is a central concern of many companies. Training procedure: The Information United System Consulting Group offers extensive training for management staffs in order to achieve the certification for Six Sigma black belt and Six Sigma green belt.

95 40059 35930 32157 28717 25588 22750 20182 17865 15778 13904 12225 10724 9387 8198 7143 .55 3.45 933193 903199 841345 697700 500000 308537 291160 274253 257846 241964 226627 211856 197663 184060 171056 2.Sigma Conversion Table SIGMA VALUE DPMO SIGMA VALUE DPMO SIGMA VALUE DPMO 0.25 2.00 3.40 2.15 3.80 2.50 2.30 2.95 3.35 2 35 2.20 0.60 2.00 1.20 2.05 3.60 3.00 0.35 3.05 2.75 3.30 3.45 3.55 2.65 2.70 3.90 3.10 3 10 3.80 3.40 3.50 2.90 2.65 3.70 2.00 2.75 2.25 3.85 3 85 3.50 3.15 2.20 158655 146859 135666 125072 115070 105650 96800 88505 80757 73529 66807 60571 54799 49471 44565 3.85 2.10 2.50 1.

40 4 40 4.00 72 59 48 39 32 26 21 17 13 11 9 5 3 .50 5.30 4.25 4.25 816 687 577 483 404 337 280 233 193 159 131 108 89 5.55 4.95 5.15 4.65 4.55 5.10 4.50 4.15 5.05 5 05 5.90 6.85 4.00 5.20 4.45 5.45 4.65 5.75 5.10 5.00 4.Sigma Conversion Table SIGMA VALUE DPMO SIGMA VALUE DPMO SIGMA VALUE DPMO 4.20 5.35 5 35 5.75 4.80 5.70 5 70 5.35 4.90 4.05 4 05 4.80 4.60 5.70 4 70 4.60 6210 5386 4661 4024 3467 2980 2555 2186 1866 1589 1350 1144 968 4.40 5.30 5.

80 4.50 4.Sigma Conversion Table SIGMA VALUE DPMO SIGMA VALUE DPMO SIGMA VALUE DPMO 4.95 5.25 4.55 4.10 5.45 5.00 72 59 48 39 32 26 21 17 13 11 9 5 3 .80 5.70 4 70 4.85 4.60 5.35 5 35 5.10 4.40 4 40 4.90 6.40 5.20 4.30 4.15 4.60 6210 5386 4661 4024 3467 2980 2555 2186 1866 1589 1350 1144 968 4.75 5.55 5.20 5.30 5.05 4 05 4.15 5.00 4.70 5 70 5.35 4.65 5.25 816 687 577 483 404 337 280 233 193 159 131 108 89 5.00 5.45 4.65 4.90 4.75 4.50 5.05 5 05 5.

Project Charter .

Our Training Programs *October 3rd Week 2007 – Six Sigma Green Belt Certification Program ( A 3 Day Program) *November 3rd Week 2007 – ISO 9001:2000 Lead Auditor Certification Course (A 5 Day program) Please enroll in our training programs to attain career development and call us for any of your training & Management consultancy needs… needs * Tentative Schedule .

km@usa.Thank you for your Time & Involvement If need any clarifications or for assistance.net . please feel f f l free to conduct me on M bil +965 9529846 t d t Mobile: or write to me in email: Ravi.