Productivity Improvement

-Using Six Sigma & Kaizen

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PRESENTED BY:
MARUTI NANDAN DUBEY
NILESH DEOKHILE
KETAN SOLANKI
HARSHAD MALU
(FINANCE -A)
 Introduction to Six sigma
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It’s considered the most challenging and most effective tool for
customer satisfaction.

Unlike ERP, TQM and all other management solutions that

have at one time or the other risen in popularity, Six Sigma is
harder to implement. “Six Sigma is a much more rigorous
methodology. Closely linked to business metrics, it produces
breakthrough results by the use of statistics”

TQM and ISO 9000 place the business process at the forefront,
six sigma approaches problems from the customer’s side.
 Definition of Six Sigma
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“A comprehensive and flexible system for achieving,

sustaining and maximizing business success. Six sigma is
uniquely driven by a close understanding of customer
needs, disciplined use of facts, data and statistical analysis,
and diligent attention to managing, improving and
reinventing business processes”

- Peter S. Pande
 Six Sigma Definitions
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 Business Definition
 A break through strategy to significantly improve customer
satisfaction and shareholder value by reducing variability in
every aspect of business.

 Technical Definition
 A statistical term signifying 3.4 defects per million
opportunities.
 What is Six Sigma ?
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Jack Welch led GD splurged $450 million in two years on

training its employees for Six Sigma initiative. GE used Six
Sigma to achieve zero defect (3.4 defects per million
products) quality in their manufacturing unit after
successful Six Sigma implementation by Motorola to
produce defect free pagers.
Six sigma approach to quality ensures that the defects are
eliminated progressively by identifying the root causes and
eliminating the source of variation.
In India, Wipro achieved 5.1 Sigma level in its manufacturing
business and defects per million opportunities has reduced
from 66,807 to 33 DPMO.
 What is Sigma ? (Statistical Meaning)
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Sigma (Standard deviation) is the statistical measurement for

variation in any output, (refer Normal Distribution Curve)
and when companies talk of +/- 6 times the Sigma within a
specification, it means that 99.9996 per cent of the
products manufactured are within specification. Higher the
Sigma level better the quality.

For example, a 3 Sigma level of quality means 93.32 per cent

of the products or processes are within specification.
Among Indian companies average Sigma level is estimated by
consultants to be in at 2.5 Sigma level.
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Sigma Defects Per Million Rate of

Level Opportunities Improvement
1 690,000
2 308,000 2 times
3 66,800 5 times
4 6,210 11 times
5 230 27 times
6 3.4 68 times
What is Sigma ? (Statistical Meaning)
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 Six Sigma Project Methodology
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 Project Phases

 Define
 Define  Measure
 Measure  Analyze
 Analyze  Improve
 Improve  Control
 Control

 Identify, evaluate  Collect data on  Analyze data,  Improvement  Establish

and select projects size of the selected establish and strategy standards to
for improvement problem, confirm the “ vital  Develop ideas to maintain process;
 Set goals  identify key few “ remove root  Design the
 Form teams. customer determinants of causes controls,
requirements, the performance.  Design and carry implement and
 Determine key  Validate out experiments, monitor.
product and hypothesis  Optimize the  Evaluate financial
process process. impact of the
characteristic.  Final solutions project
 Six Sigma Roles
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 Six Sigma defines five specific roles for successful

implementation. These are:
- Executive Leader
- Champions
- Master Black Belts
- Black Belts
- Green Belts.

 Specific training courses are widely available to support

these roles.
 Six Sigma Roles (Contd…)
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 Executive leader is top management person who initiates

Six Sigma in order to achieve high level goal.

 Champions or Core team defines and reviews Six Sigma

project’s progress, and acts as the political leader, removing
the barriers for the project teams.

 Master Black Belts acts as a technical coach and provides

the knowledge of the quality tools for the project team. There
is one Master Black Belt for every 1000 employees.
 Six Sigma Roles (Contd…)
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 The Black Belt controls the project. There are typically 10 to 20 black
belts for 1000 employees.

 The Green Belt supports Black Belt. There are typically 3 to 5 Green
Belts with each Black Belt.

 Yellow Belts are the balance of your population. They provide

information and support to the six sigma project teams, and are a
source for future Green Belts.
 Advantages of Six sigma
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Design Better products

Improve Quality
Reduce wastes
Continuous Improvement process.
Provides a consistent metrics
Rapid and almost Radical Improvements
Customer is always a focus
 Who is Implementing Six Sigma
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 At least 25% of the fortune 500 claim to have a serious

six sigma program - Michael Hammer.
 Financial - Bank of America, GE Capital, Electronics -
Allied Signal, Samsung, Sony

 Chemicals - Dupont, Dow Chemicals

 Manufacturing - GE Plastics, Johnson and Johnson,

Motorola, Nokia, Microsoft, Ford.

 Airline - Singapore, Lufthansa, Bombardier

 And hundreds of others in Americas, Europe, Asia.

 Six Sigma Results
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Company Annual Savings

General Electric $2.0+ billion
JP Morgan Chase $1.5 billion (*since inception in 1998)
Motorola $ 16 billion (*since inception in 1980s)
Johnson & Johnson $500 million
Honeywell $600 million

Six Sigma Savings as % of revenue vary from 1.2 to 4.5 %

For $ 30 million/yr sales – Savings potential $ 360,000 to $ 1.35 million.
 KAIZEN
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Masaaki Imai - 1986

Words tell the story?
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 Elements
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 There are two elements that construct KAIZEN………

1. Improvement/changing for the better

2. On going / continuity
Types of Waste
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 Plus Productivity
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Doing more; Using less

This is what I am doing today that I couldn’t do
yesterday (Doing more)
Alternatively, You should be able to identify a resource
that you don’t use today but that you thought you
needed yesterday (Using less)
Involving everyone
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Implementation of KAIZEN strategy
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 Benefits from KAIZEN
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Kaizen reduces waste.

Kaizen improves: Space utilization.
Product quality.
Use of capita.
Communications.
Production capacity.
Employee retention.
Kaizen provides immediate results.
 Pit Falls in Kaizen
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Lack of proper procedure to

implement.

Too much suggestion may lead

to confusion and time waste.

Resistance to change.
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Sakichi Toyoda -1937

 TOYOTA uses KAIZEN Technique
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Toyota is well known as one of leaders in using

kaizen. In 1999 at one US plant 7000 Toyota
employees submitted over 75000 suggestions of this
99% was implemented.
 Why????????
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To remain competitive.

To improve customer service and make him happy.
To work smarter and not harder.
To improve productivity and quality.
To become world class.
THANK YOU
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