You are on page 1of 8

Six Sigma

what does it mean? Six Sigma at many organizations simply means a measure of quality that strives for near perfection. Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects (driving toward six standard deviations between the mean and the nearest specification limit) in any process -- from manufacturing to transactional and from product to service. The statistical representation of Six Sigma describes quantitatively how a process is performing. To achieve Six Sigma, a process must not produce more than 3.4 defects per million opportunities. A Six Sigma defect is defined as anything outside of customer specifications. A Six Sigma opportunity is then the total quantity of chances for a defect. Process sigma can easily be calculated using a Six Sigma calculator. The fundamental objective of the Six Sigma methodology is the implementation of a measurement-based strategy that focuses on process improvement and variation reduction through the application of Six Sigma improvement projects. This is accomplished through the use of two Six Sigma sub-methodologies: DMAIC and DMADV. The Six Sigma DMAIC process (define, measure, analyze, improve, control) is an improvement system for existing processes falling below specification and looking for incremental improvement. The Six Sigma DMADV process (define, measure, analyze, design, verify) is an improvement system used to develop new processes or products at Six Sigma quality levels. It can also be employed if a current process requires more than just incremental improvement. Both Six Sigma processes are executed by Six Sigma Green Belts and Six Sigma Black Belts, and are overseen by Six Sigma Master Black Belts. According to the Six Sigma Academy, Black Belts save companies approximately $230,000 per project and can complete four to 6 projects per year. General Electric, one of the most successful companies implementing Six Sigma, has estimated benefits on the order of $10 billion during the first five years of implementation. GE first began Six Sigma in 1995 after Motorola and Allied Signal blazed the Six Sigma trail. Since then, thousands of companies around the world have discovered the far reaching benefits of Six Sigma. Many frameworks exist for implementing the Six Sigma methodology. Six Sigma Consultants all over the world have developed proprietary methodologies for implementing Six Sigma quality, based on the similar change management philosophies and applications of tools.

Six Sigma is a business management strategy originally developed by Motorola, USA in 1986.[1][2] As of 2010, it is widely used in many sectors of industry, although its use is not without controversy. Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes.[3] It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization ("Black Belts", "Green Belts", etc.) who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified financial targets (cost reduction or profit increase). The term Six Sigma originated from terminology associated with manufacturing, specifically terms associated with statistical modeling of manufacturing processes. The maturity of a manufacturing process can be described by a sigma rating indicating its yield, or the percentage of defect-free products it creates. A six sigma process is one in which 99.99966% of the products manufactured are statistically expected to be free of defects (3.4 defects per million). Motorola set a goal of "six sigma" for all of its manufacturing operations, and this goal became a byword for the management and engineering practices used to achieve it.


As per the industry classification benchmark, this industry sector includes the following subsectors
y y y

Automobiles - Makers of motorcycles and passenger vehicles, including cars, sport utility vehicles (SUVs) and light trucks. Auto Parts - Manufacturers and distributors of new and replacement parts for motorcycles and automobiles, such as engines, carburettors and batteries. Tires - Manufacturers, distributors and retreaders of automobile, truck and motorcycle tires.


A Six Sigma project was initiated to improve first pass yield of Crank shaft by 60% (to reduce defectives from 1.71% defectives to 0.68% defectives). Detailed process study indicated issues with grinding and pin buffing steps. Further process analysis with statistical techniques showed that the size of the pin was observed as more than 0.00025before buffing. After pin buffing, the size reduces below 0.00025 which is undesirable. The buffing was done to remove extra MIP coating. Hypothesis tests were done with changed sequence of operations. It was hypothesized that if pin grinding is done after MIP coating, the pin buffing operation can be eliminated if no other problems get created. Statistical tests proved the finish did not get deteriorated after change in sequence. A control plan ensured that the improved process provided higher yield with no secondary effects. The No.1 tire manufacturing company in India & ranked No.11 in the world having a turnover of over Indian Rupees 22 Billion with 8 manufacturing units and 67 branches and 2000 dealers with a workforce of 12000. The radial size change over time was a concern for the production plan commitment & total original Equipment Efficiency. The constantly growing market needs to be met with increased production. And so as part of productivity Improvement project, it was decided to reduce the set up change time by 50%. Use of lean management techniques helped achieve this goal in less than 3 months.

NAUKRI.COM Overview-Human Resource Management is a field that relates to management of people.It

broadly contains 1. Workforce planning 2. Recruitment 3. Induction, Orientation and Onboarding 4. Skills management 5. Training and development 6. Personnel administration 7. Compensation in wage or salary 8. Time management 9. Travel management (sometimes assigned to accounting rather than HRM 10. Payroll (sometimes assigned to accounting rather than HRM) 11. Employee benefits administration 12. Personnel cost planning 13. Performance appraisal 14. Labor relations Human Resources Development (HRD) is a framework for the expansion of human capital within an organisation. Human Resources Development is a combination of Training and Education that ensures the continual improvement and growth of both the individual and the organisation. Human Resources Development is the medium that drives the process between training and learning. Human Resources Development is the structure that allows for individual development, potentially satisfying the organisations goals. The development of the individual will benefit both the individual and the organisation. CASE STUDY 1. A large software company found that the percentage of employees who passing the reverification tests was as low as 39%. The re-verification tests done by project managers were a second round of tests after an approval by the regular training team. An improvement project brought this up to 90%. This improved efficiency of new hires significantly. 2. Reducing the Learning curve is extremely important for meeting client set goals. In a company, associates were meeting client set goal for Cures/hr after 240 hours of on the job training. A Six Sigma project on reducing the learning curve for new hires helped boosting the overall process level performance. 3. A Six Sigma project was taken up for attrition reduction. Analysis showed that attrition is not related to education levels, previous industry, candidate being local or otherwise, past experience in years, gender, and marital status. Meanwhile attrition was found to have relation with incentive, source of recruitment, performance level, office tenure, and age. This led to policy changes and enhancement in retention levels. 4. Reducing revenue leakage in payroll processing - This project was able to bring down the errors in payroll processing at various stages.

As per the industry classification benchmark, this industry sector includes the following subsectors
y y y y y

Coal - Companies engaged in the exploration for or mining of coal. Diamonds & Gemstones - Companies engaged in the exploration for and production of diamonds and other gemstones. General Mining - Companies engaged in the exploration, extraction or refining of minerals not defined elsewhere within the Mining sector. Gold Mining - Prospectors for and extractors or refiners of gold-bearing ores. Platinum & Precious Metals - Companies engaged in the exploration for and production of platinum, silver and other precious metals not defined elsewhere

Applications in precious metals industry Gems is a vast industry and there is always an ever increasing demand worldwide for the best quality gems like diamonds, sapphires, topazes, ruby and emerald. All these are amongst the precious gemstones that are the cynosure in the eyes of potential buyers or customers. These gemstones are prized for their beauty and perfection and these are the attributes that are of primary value to their consumers. Lean Six Sigma finds applications in Gems industry by helping in improving these and other attributes that are of value to the customer. Some of the Six Sigma applications in this Industry are: 1. Optimizing the shape of the crystal (diamond) in order to make it reflect light with fire and sparkle. 2. Improving & optimizing the Gems Extraction processes 3. Improving & optimizing the diamond cutting & polishing processes in line with customer needs 4. Designing effective VOC capturing systems and underlying processes to effectively meet the VOC.

Case Study Petroleum coke calcination is a high temperature pyrolysis of Green Petroleum Coke. In this process, Green Petroleum Coke is thermally upgraded to remove associated moisture and Volatile Combustible Matter (VCM) to improve critical physical properties like, Electrical conductivity, Real density and oxidation properties. In a leading calciner plant, it was found that pressurization of kiln resulted in shut down, six times in one year. This was an annualized loss of 10,000 USD. Through brainstorming, it was found that several factors could be the cause including the following X1 - Electric hoist failure X2 - Hydraulic system failure X3 - Synchronization fault X4 - Sudden input of high air load X5 - Main ID fan in operation while bypass damper is open X6 - Failure of FGD dampers, Open and Close mismatch X7 - Failure of bag house bypass damper opening in emergencies X8 - Slow response time in existing emergency control system actuation.

Statistical analysis and FMEA resulted in the following critical factors. X1 - Synchronization fault X2 - Failure of FGD dampers, Open and Close mismatch (Draft imbalance) X3 - Failure of bag house bypass damper opening in emergencies (Restrictions in flue gas path) X4 - Slow response time in existing emergency control system actuation Process changes were made at several places and trials were conducted to find robust solutions. Control plans were made to sustain the solutions. The project led to significant business benefits and just one closure in the next year of operations.


As per the industry classification benchmark, this industry sector includes the following subsectors

Banks - Banks providing a broad range of financial services, including retail banking, loans and money transmissions.

Suntrust Bank, Citigroup and JPMorgan Chase & Co. are few examples of initial Six Sigma success in banks. JPMorgan Chase & Co is the second largest bank in the US. With Six Sigma, it has generated wonderful results through expense reduction, revenue increase and enhanced customer satisfaction. American Express began with Six Sigma in 1998. It has benefited with billions of dollars of benefits since then. Bank of America started with Six Sigma in 2001 and has announced huge savings through increased savings, increased revenue and enhanced customer satisfaction. Among Indian companies, Benchmark Six Sigma has had participation from good number of financial sector participants in recent training programs. Few of them are ABN AMRO, IDBI, HDFC Bank and ICICI Bank. Some example Six Sigma project titles are mentioned below. Loan Department 1. Reducing the cycle time to Process a Loan Application (both Mortgage & Personal loans). 2. Improving the Customer Information gathering processes. 3. Improving the Credit Evaluation Process 4. Improving Productivity of loan processing agents Account Opening 1. Reducing the time to open an account 2. Reducing errors in account opening process. 3. Reducing rework in processing customer applications Other Projects in Retail Banking 1. Reducing the Credit Card Delivery time. 2. Reducing Bank Statements Processing & Delivery time. 3. Reducing the errors in money transfer 4. Improving accuracy, timeliness and completeness of customer communication. 5. Developing new products (timeliness, business potential) 6. Improving Market Share of existing banking products. 7. Improving the Branch Banking Processes

Lean Six Sigma success being shared by a Hongkong and Shanghai Banking Corp professional.

Case Study
1. In a banking data capturing process, it was found that the process yield (first time right %) was only 65%. A Six Sigma project was initiated. A detailed process study led to identification of validated root causes. Alternative solutions were identified and the best one chosen after few hypothesis tests. Within two months the data capture process reached a yield of 85%. By putting in tighter controls, this process yield moved further to 94%. 2. A leading bank found that the reconciliation process had several issues. Data collection led to the following being recorded as the more frequent ones o The reconciliations were not completed on time. o Process improvements were not communicated to the client. o Processors lacked proper understanding of the process Several process changes were initiated. Value add/ Non Value Add (NVA) analysis showed that more than 60% of the processing time was avoidable NVA. Mistake proofing and decision tree techniques were introduced to reach the goal of 100% reconciliation on time.