Republic of the Philippines

Mindanao State University- General Santos City

COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY
Summer Class, AY 2018 – 2019

SIX SIGMA

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A Partial Requirement in
Operations Management

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by

Denise Melody Conlu

Joanna Mae Abranilla
Dianne Grace Jimenez
Joaennel Zhen Catolico
Princess Trishia Gumisad
BS Accountancy Students

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Submitted to:
PROF. JIBRAN TOMINDUG
Subject Teacher

July 2019
 MOTOROLA’S SIX SIGMA QUALITY

1920 - Motorola began as a small manufacturer of car radios. It was an engineering-

oriented company that focused on product development in order to create new market.

1970 - Motorola changed its focus from products to customers, with an objective of total
customer satisfaction.

1987 - Motorola announced its goal of “six sigma” quality. Six Sigma quality is a statistical
measure that equates to only 3.4 defects per million customer “opportunities” (in service
and products), or nearly perfect quality. The goal effectively changed the focus of quality
in the United States and became a benchmark standard that other companies began to
adopt the same goal.

1988 - Motorola was among the first group of winners in the prestigious Malcolm
Baldridge National Quality Award.

PRESENT - Motorola is now recognized as having one of the best quality management
programs in the world. Motorola has grown to a corporation with more than 132 000
employees at 50 factories around the world, manufacturing products such as
semiconductors, integral circuits, paging systems, cellular telephones, computer, and
satellite communications system.

What is Six Sigma?

Six Sigma is a problem solving methodology which is centred on defect reduction

and variation management; executed in the form of a disciplined, data given and time
bound project, always sponsored by the Top Management in an organization.

Overview of Six Sigma

 It is Statistics. Six Sigma processes will produce less than 3.4 defects per million
opportunities.
 It is a Process. DMAIC approach is used to achieve the higher level of
performance.
 It is a Philosophy. Anything less than ideal is an opportunity for improvement.
How come Six Sigma is applicable everywhere?

Start
S I P O C End

Supplier Input Process Output Customer

Supplier – the provider of inputs to process.

Input – materials, resources, and data required to execute the process.

Process – predefined set of activities that transform an input to a specified output.

Output – product or services that result from the process.

Customer – recipient of the process output.

Why Six Sigma?

The more number of standard deviations between process average and

acceptable process limits fits, the less likely that the process performs beyond the
acceptable process limits, and it causes a defect. This is the reason why a 6σ (Six Sigma)
process performs better than 1σ, 2σ, 3σ, 4σ, 5σ processes.

Obviously, 7 or more σ processes are even better than a 6σ process, and yet
throughout the evaluation and history of Six Sigma process, the practitioners gained the
belief that a 6σ process is good enough to be reliable in almost all major situations except
some systems whose defects can cause unrepairable consequences.
DEFINE MEASURE ANALYZE IMPROVE CONTROL (DMAIC) PROCESS

DMAIC is a data-driven quality strategy used to improve processes. It is an integral

part of a Six Sigma initiative, but in general can be implemented as a standalone quality
improvement procedure or as part of other process improvement initiatives such as lean.

What does DMAIC stands for?

D - Define

M - Measure

A - Analyze

I - Improve

C - Control

DMAIC Methodology

1. Define Phase– understand the need to change or transform and the current state.
This is the first phase where a company detects the problem causing the defect.

A. Flow

• Review Charter - focus, scope, direction, and motivation for the improvement team.

• Validate VOC - Voice of the customer to understand feedback.

• Plan Project –includes the goals of the business, selection of team to handle such
project and the process improvement needed to attain TQM.

• Project Scope – know the limitations of the projects.

• Value stream map - provide an overview of an entire process, starting and finishing
at the customer, and analyzing what is required to meet customer needs.

• Complete Define Gate

B. Questions to be answered

Defining the problem

• What is the problem?

• How often does it happen?

• What is the impact of the problem

Define Project Management

• Who is/are going to be in the project team?

• How is the project going to be run?

• Who are the key stakeholders?

2. Measure Phase – this is the phase of collecting the data and decide what to
measure and how to measure it. Setting of goals on current performance metrics to
achieve a future state. Measure process performance.

A. Flow

• Document the process – Creation of accurate model to be used.

• Collect Baseline Data – is a measurement of the behavior taken before

interventions are started.

• Narrow Project Focus – determining precisely of what is that you are being
entrusted to accomplish.

• Complete Measure Gate

B. Questions to be answered

• How do we measure the problem?

• What data do we collect to measure it?

• How reliable is that data?

• What is the current process performance?

3. Analyze Phase – determine optimum solution based on the data and information
to achieve the future state. Analyze the process to determine root causes of variation,
poor performance (defects).

A. Flow

• Analyze data – obtaining raw data and converting it into information useful for
decision making by users.

• Identify Root Causes – determine the main cause of why there is a defect.

• Identify and Remove Waste – identify which waste/s is/are to be removed from the
process.

• Complete Analyze Gate

B. Questions to be answered

Providing process based tools

• How does the process actually work?

• What does our existing knowledge of the process tell us?

Providing data based tools

• What does the data say?

• Can we use data to verify that the root cause affects the process output?

4. Improve Phase – implement solution and train skills required for the future state.
Improve process performance by addressing and eliminating the root causes.

A. Flow

• Generate Solutions - Design of experiments (DOE) to solve problems from

complex processes or systems. Brainstorming of solutions.

• Evaluate Solutions – Solutions may differ slightly in some ways, so to evaluate

effectively, construct a model of the ideal solution against which to measure them. Identify
and compare their relative values.
• Optimize Solution – finding the best solution from all feasible solutions.

• Pilot – Creating implementation plan.

• Complete Improve Gate

B. Questions to be answered

• What are all the possible solutions?

• Which ones will work best?

• When, where and how shall we implement the solutions?

5. Control Phase – sustain improvements, behaviors, skills, roles and outputs of the
new state

A. Flow

• Control the Process – carefully collecting of informations.

• Validate Project Benefits – reconcile tangible project benefits to the company’s

financial statement.

B. Questions to be answered

• Has the project goal been achieved?

• Have the improvements become ‘business as usual’?

Six Sigma Belts and Level Certification

Any Six Sigma effort will require the efforts and participation of people, they might
be the one to identify the problems, collect necessary data and create solutions and with
that effective people management is the key principle of Six Sigma.

Six Sigma Certification is a proof that an individual has the knowledge and training
to enhance and reduce unnecessary cost that will help push future growth. When a person
receive an six sigma certification it means she/he have the tools necessary for a specific
position and have knowledge to reduce cost, increase revenue and improve employee
buy-in.

Six Sigma methodology use colored belt tier system for its certification and to
receive Six Sigma Certification, you must follow hierarchical process.

 Six Sigma White Belt Certification– this is the first level of the Six Sigma
Certification process. It demonstrates an introductory level of knowledge to the
fundamental concepts of Six Sigma. White Belts start at the ground by solving
problems at local level and they connect to Green and Black Belt to solve
problems. Main goal is to understand fundamental concept of Six Sigma.
 Six Sigma Yellow Belt Certification- it indicates that you have learned the
specifics of how Lean Six Sigma works which includes all aspects of the phase of
D-M-C, how it can be applied to workplace and how you manage your time in
learning the process. Yellow Belt starts to eliminate defects in enterprise system
through data collection validation and monitoring. They are part time team member
and provide supporting roles.
 Six Sigma Green Belt Certification- focuses on advanced analysis and
resolution of problems related to quality improvement projects. They also review
data and suggestion given by lower belts and when green belts have enough
experience they can lead and manage a project. Green Belts will apply tools such
as the DMAIC method and they will also be able to assist Black Belt. They are part
time team member which is not full time position. Typical jobs: Compliance
structural engineer, operating system specialist, business process analyst and IT
project manager with average salary of $75,000.
 Six Sigma Black Belt Certification- signifies expertise in Six Sigma philosophies
and principles. This person demonstrates leadership and understands all the
aspect of DMAIC Model and equipped with statistics and quality control tool. Black
Belts are known as agent of change within organization. They are generally full
time person for Six Sigma projects and drive complex projects. They also train and
educate Green/Yellow Belts and communicate with Champion. Typical jobs:
Project Manager, Vice President of Operations and Manager of Manufacturing with
 average salary of $88,000. A Black Belt assignment normally last two years with 8
to 12 projects from different areas of company and it takes two successful projects
before a black belt is certified.
 Six Sigma Master Black Belt Certification- they are the top of the food chain for
Six Sigma. They are primarily teachers based on their quantitative skill and on their
mentoring capabilities because they are assistant and advisor to champions. They
also hold full time position and become certified after taking 20 successful projects
(10 as black belt and other 10 as master black belt). Typical jobs: Senior Project
Manager, Senior Project Engineer, and Lean Transformation Expert with salary
ranging from $132,000 to $200,000.
 Champion- it is not a belt but have critical function in six sigma project or
organization. They are the leader of the organization, sponsor of the projects; they
also support projects and take decisions on bottlenecks.

General perception states the companies that have successfully implemented Six Sigma
have one Black Belt for every 100 employees and one Master Black Belt for every 100
Black Belts but this vary according to company size and number of projects undertaken.

How Six Sigma Certification can level up your career:

 Move up within the organization- person with six sigma certification has veritable
“leg up” on opportunities for promotion.
 Become more visible and knowledgeable- employees working in six sigma
projects are assigned to look the entire organization and as a result, their
commitment to improving quality lands on senior executives – a way for them to
grow within the company.
 Build self-esteem- in the process of learning Six Sigma you also develop and boost
your self-esteem.
 Gain a reputation as an expert- employee with six sigma experience often receive
high credits in organizations and industry because after all quality improvement is
still trend in industry no matter what type of business.
Getting Six Sigma Certification will help individuals/ employees to accelerate their career
for eliminating deficiencies and become fundamental value add to the corporation. This
will also put them ahead of the competition for employment consideration.

In order to get Six Sigma Certification individual must undergo trainings, classes and
workshops to organizations that provide or give this specific certification.

WHAT IS LEAN?

It is the elimination of all forms of non-value added work from the customer’s
perspective in business transactions and processes.

UNDERSTANDING “VALUE”

 Non-Value Add – unnecessary wastes

 Value Add – these are essential activities in which the customer is willing to pay
for.
 Business Non-Value Add – these are the necessary wastes that must completed
even if no value is added

THE SEVEN TYPES OF WASTE

 Overproduction – It is producing unnecessary products that are independent of

the demands and to the production of goods before they are required which can
cause all other types of wastes. Stocking too much of a product that goes unused
has obvious costs: storage, wasted materials, and excessive capital tied up in
useless inventory. It enhance the possibility of producing inaccurate goods,
product obsolescence, as well as the need to offer products at a discount.
 Inventory – It refers to the waste produced by unprocessed inventory. This
includes the waste of storage, the waste of capital tied up in unprocessed
inventory, the waste of transporting the inventory, the containers used to hold
inventory, the lighting of the storage space, etc. The environmental impacts of
inventory waste are packaging, deterioration or damage to work-in-process,
additional materials to replace damaged or obsolete inventory, and the energy to
 light whether it is heat or cool (inventory space), increases lead times, delays the
identification of problems, and inhibits communication.
 Motion – It refers to the actual movement of a person or a machine. This might be
unnecessary motion within a workstation or motion in the job task that takes too
much time to complete. The environmental costs from excess motion is the
needless waste of materials used to replace worn machines and health resources
for overburdened employees.
 Over-processing - refers to any component of the process of manufacture that is
unnecessary. Essentially, it refers to adding more value than the customer
requires. It will cost you money with regards to the time of your staff, the materials
used and the wear on your equipment. As one of the seven wastes, it is caused
by having unclear standards and specifications, many operators will try to do the
best job possible and will not always be aware of what truly adds value to the
product or even the end use. The environmental impact involves the excess of
parts, labor, and raw materials consumed in production.
 Waiting - refers to wasted time because of slowed or halted production in one step
of the production chain while a previous step is completed. The environmental
impact comes from the wasted labor and energy from lighting, heating, or cooling
during the waiting period. Additionally, material can be spoiled, and components
could be damaged because of an inefficient workflow. Lack of information can also
cause waiting, either through unclear or missing information to conduct an
operation or even through waiting to know which product is required to be run next.
 Transportation – It is moving materials from one position to another. The transport
itself adds no value to the product, so minimizing these costs is essential.
Environmental costs to waiting include gas emissions, transportation packaging
used, possible damage to the product en route, as well as a whole host of other
wastes involving transporting hazardous materials. Excessive transport also gives
many opportunities for handling damage and losses. The Company have to pay
for material handling equipment, staff to operate it, training, safety precautions,
extra space for the movement of material and so forth.
  Defects – It refers to a product deviating from the standards of its design or from
the customer’s expectation. Defective products must be replaced which require
paperwork and human labor to process it. Companies might potentially lose
customers and the resources put into the defective product are wasted because
the product is not used. Environmental costs of defects are the raw materials
consumed, the defective parts of the product requiring disposal or recycling, and
the extra space required and increased energy use involved in dealing with the
defects. There are costs associated with problem solving, materials, rework,
rescheduling materials, setups, transport, paperwork, increased lead times,
delivery failures and potentially lost customers who will take their custom
elsewhere.

VALUE STREAM MAPPING

It is the most essential and powerful lean management principle and tool. It is used
to map and visualize a business process which contains all actions and process steps
which are required to create a product or service. It should include process data to
quantify and demonstrate the process performance in a graphical way.

Purpose of value stream mapping:

 to provide common understanding of current state

 helps to identify waste and opportunities for improvement
  LEAN SIX SIGMA

Primary Interest and Remove Waste Reduce Variation

Effects

Format Kaizen Event Format: Project format:

Concentrated resources in Resources spread over
short timeframe months

Process Improvement Seven Deadly Waste DMAIC Approach

Origin of Waste Believes that waste comes Waste results from

from unnecessary steps in variation within the
the production process that process.
do not add value to the
finished product

Goal Shorten Cycle Time Improve Process

Capability
Scope and Scale Quick and initial gains Complex problems that
requires in-depth
Ongoing Improvements analysis

Suitable for everyone and Requires specialist

every part of the business skills.
Results Less waste = Less Variation =
Consistent Output
Increased Efficiency
Lean Vs. Six Sigma
References:
Six Sigma Pro SMART. (2017). Introduction to Six Sigma. Retrieved July 5, 2019 from
https://youtube.com/watch?v=GiCMGL7RqRw
Quality Gurus. (2013). Introduction to Six Sigma. Retrieved July 5, 2019 from
https://youtube.com/watch?v=wEBPVQ7W2wg
Six Sigma Institute. (n.d.). What is Sigma and Why is it Six Sigma. Retrieved July 7,
2019 from https://www.sixsigma-
institute.org/What_Is_Sigma_And_Why_Is_It_Six_Sigma.php
Six Sigma Camp. (n.d.). Six sigma belts and level certification. Retrieved June 29, 2019
from https://www.sixsigmacamp.com/six-sigma-belt-levels/
Quality Hub India. (2017). six sigma structures and roles. Retrieved June 29, 2019 from
https://www.youtube.com/channel/uCdDEcmELwWVr_77GpqldKmg/videos
Russel, R. & Taylor, B. Operations management: quality and competitiveness in a
global environment. John Wiley & Sons, Inc.