Quality Revolution

An Introduction to Six Sigma Quality
SK Purushotham Module Resource Manager, ITC,Bangalore

WHY SIX SIGMA?

Why Six Sigma?
• Concept has been around for 16 years; isn’t just a fad. • Six Sigma is the latest name for a comprehensive set of philosophies, tools, methods, and fundamental concepts.
• Continues to evolve at all organizational levels; from CEO to the Black Belts and Green Belts. • Has shown the most endurance and return on investment of any such “program” until now.

WHAT IS SIX SIGMA?

SIX SIGMA IS… • A metric based on the Standard Deviation • Sigma is a statistical concept that represents the amount of variation present in a process relative to customer requirements or of specifications. the variation is so small that the resulting products and services are 99.9997% defect free! . • When a process operates at Six Sigma.

What is Six Sigma? • Six Sigma is an aggressive method for breakthrough improvement in speed. not training. and profitability. . • Unlike TQM it’s focus is on results. quality. • Measures errors in parts per million (ppm) not %’s.

27 % 95.Normal Distribution .73 % 99.002 ppm .45 % 99.5σ between + / 6σ 68.57 ppm 0.9937 % 99.999943 % 99.Gaussian Curve 2 ∑ ( xi − x ) n −1 Sigma = σ = Deviation ( Square root of variance ) σ σ = Axis graduated in Sigma -4 -3 -2 -1 -7 -6 -5 1 2 3 5 6 0 between + / 1σ between + / 2σ between + / 3σ between + / 4σ between + / .9999998 % 4 result: 317300 ppm outside (deviation) 7 45500 ppm 2700 ppm 63 ppm 0.

Six Sigma …And the Statistics -1.0 -6.0 2.0 4.0 5.0 -7.0 -4.4 ppm defect (reject) level. with specification limits at 4.0 1.5 Sigma Lower spec.4 ppm or Zero -5.0 -1. limit 3.0 6. there will be no more than a 3.0 3. cp > = 2 • Stabilize the process.5 σ on one side and 7.5 Sigma +1.5 .1. to limit the maximum process shift to +/.0 1. and in the worst case.0 0.0 -2.0 -3.5σ Cp > = 2 and Cpk > = • Under these conditions. limit Upper spec.5 σ on the other 7. without affecting the variance.0 • Reduce the variation when σ < = design specification width / 12 .

.66 0.16 With a maximum process shift of +/.5  .5 4 1.33 -0.16 2 0.33 1. σ Cp Cpk 6 2 1..5 7 2.33 0.16 Cpk = Min.66 2.Spec Limit 3σ 1 0.83 5 1.66 1.And Capability Design specification width Cp = 6σ Mean .1.Six Sigma.83 8 2.16 3 1 0.

The Opportunities • Customers and Suppliers:One opportunity per product delivered or per component purchased. • Manufacturing process:Σ process step). (Ο pportunities at each • Administartive areas:Number of opportunities for error for each each activity performed. .

• With the inclusion of Six Sigma into a sound business system the major ingredients of a Total Quality Management System are usually in place.What is Six Sigma? • Originated at Motorola in the early 80’s • Is a methodology for disciplined quality improvement • Juran principles apply • Doesn’t use “Quality” in the name. • Uses a modified Deming Wheel (PDCA) .

• Depending on the industry this “Cost of Poor Quality” (COPQ) could be 20 to 40% of total effort! . product or service.467 defects per million opportunities. • Juran once concluded that in the US close to 1/3 of the work done consisted of redoing what had already been done. • The numerical goal is 3.What is Six Sigma? • Six Sigma’s goal is the near elimination of defects from any process.

and executive management provides the Champion for each project. Top management drives. • Uses concept of “belts” for levels of competency in Six Sigma implementation. • Implementation is top-down. • Six Sigma uses a “divide and conquer” approach. . • GE’s implementation is often the de facto model for implementation.What is Six Sigma? • Strategy includes: – Define – Measure – Analyze – Improve – Control • Similar to PDCA • Improvement projects must be integrated with the goals of the organization.

What is Six Sigma? • All six sigma projects are evaluated rigorously for financial impact. . • Most important is the financial cumulative impact of all projects upon the company’s bottom line.

000 lost articles of mail per hour • Unsafe drinking water for almost 15 minutes each day • 5.000 incorrect surgical operations per week • Two short or long landings at most major airports each day • 200.8 Sigma) • 20.Six Sigma-Practical Meaning 99% (3.99966% (6 Sigma) • Seven articles lost per hour • One unsafe minute of drinking water every seven months • 1.7 incorrect operations per week • One short or long landing every five years • 68 wrong prescriptions per year • One hour without electricity every 34 years .000 wrong drug prescriptions each year • No electricity for almost seven hours each month 99.

• To satisfy the customer requires continuous improvement. . • Every process has inputs and outputs. • Every process has customers and suppliers. • To beat the competition requires breakthrough improvements. • Every individual process is part of a larger system of interconnected processes. • The purpose of every process is to satisfy the customer.Six Sigma and TQM • Every activity is a process.

4 230 6200 67000 310000 700000 COPQ <10% of sales 10% to 15% of sales 15% to 20% of sales 20% to 30% of sales 30% to 40% of sales Above 40% CAPABILITY World Class Industry Average Non competitive .Six Sigma Process Capability SIGMA 6 Sigma 5 Sigma 4 Sigma 3 Sigma 2 Sigma 1 Sigma DPM 3.

A 6 Sigma company will spend <1% of revenue on internal and external repair! *From study at Motorola .Six Sigma Process Capability A 4 Sigma company will spend >10% of revenue on internal and external repair.

• Why? Because they “hit the wall”.Studies show that most companies stop improving at about 3-Sigma…. ordering. billing. can add up to 6%. – Just 1%. or 3% error levels in marketing. – Most companies grow from a startup into a viable. sales. profitable organization using trialand-error.12% and 18% error levels across the enterprise! – Each error costs far more to fix than it did to create! . at some point common sense just isn’t too “common” anymore and stops working.. 2%. and common sense. gut-feel.

and.) .25 – Rs.5crore .2.10crore company that’s Rs. the • “Fix-IT” organization that cleans up the defects caused by the mainline organization.Rs4 crore that doesn’t make it to bottom line.Every organization is actually two organizations in one….100 spent! (If its a Rs.40 of every Rs. – In a 3-Sigma company. • The mainline organization that produces products and services. the Fix-IT Factory is most likely costing Rs.

000 PPM or 2-sigma). • That includes error rates of 20%– 30% (300.Most businesses employ a lot of ad hoc processes. the costs of fixing the defects can substantially hurt a start-up company ( “dot-coms” effect.) . • When the economy turns downward or sales go dramatically up..

. More companies die here because they can not be profitable.5-sigma) using trial and error and common sense. Failure to “raise the bar” at this level leaves the organization vulnerable to competition .Most businesses employ a lot of ad hoc processes. these businesses (if they survive). • Eventually. grow their error rates to around 3% (or 3.

and waste. .Worth Remembering…. – Initially one should involve only 4% of staff in the first round of improvements. • Maximize results and minimize costs by using the 4-50 rule: – 4% of business causes over 50% of the rework. lost profits. then add another 4% and then another 4% until a critical mass (or about 20%) of staff is actively engaged.

review.Check. • Here’s another way to remember the same concept: – FISH • Focus (laser-like precision. min investment) • Improve ( reduce delay. • The traditional PDCA (Plan. max results. refocus efforts on the next 4% of the mission-critical problems) . defects. Do.Worth Remembering…. Act) gave way to DMAIC. and costs by 50% or more in mission-critical systems) • Sustain (stabilize and sustain improvement) • Honour (recognize.

focus on mission critical issues and begin to drive results. • The bad news is that 50% of effort only produces 4% of the benefit.But.“Laser-focus” to avoid wasting money on attempts to involve the entire organization at the same time. • One should start small. also worth remembering…. .

Results of a Benchmark Study .

The central idea behind Six Sigma is that if you can measure how many “defects” you have in a process. The word Six Sigma is a statistical term that measures how far a given process deviates from perfection. you can systematically figure out how to eliminate them and get as close to “zero defects” as possible. Six Sigma has changed the DNA at GE – it is the way we work – in everything we do and in every product we design.Six Sigma according to GE “A highly disciplined process that helps us focus on developing and delivering near-perfect products and services.” .

WHAT ARE THE CHALLENGES AND REWARDS? .

• “Quality Concept” and not a tool for career advancement. . • Consultants can’t make it happen. • Training – especially management level • Takes careful preparation and a commitment to the foundational change efforts required.What are the Challenges of Six Sigma? • The perception of “Sick Sigma” • Culture change • Understanding the DFSS (Design for Six Sigma) • It is not a quick fix nor a recipe.

• Reliability of data from the field.What are the Challenges of Six Sigma? • Implementation tends to be uneven and lapses occur frequently. • Design for six sigma is very critical. • People must not fear giving “bad news”. • Lack of discipline and accountability. • Not everything has to be Six Sigma.Design without review/s is useless. .

What are the Rewards of Six Sigma? • Improved reliability and predictability of products and services. . • Organizational recognition. • Institutionalization of a “process” mindset. • Significant reduction in defects. • Increased marketplace viability. • Increased value to the customers and shareholders. • Improvements in organizational morale.

CRITICAL DEFINITIONS .

analyze. measure. design. analyze. improve. control) • DMADV (Define.Critical Definitions Quality Quality Assurance vs. measure. Quality Control Requirements Process Defect COPQ(cost of poor quality) Policy / Standard / Procedure Metrics DMAIC (Define. verify) • • • • • • • • • .

WHERE SHOULD WE USE SIX SIGMA? .

• Areas of products and services that typically are prone to defects. • Areas of the actual business processes (customer side). .Where should we use Six Sigma? • Areas of the business that directly impact customer expectations and customer requirements. • Supply chain processes.

WHAT TOOLS ARE AVAILABLE? .

Some of the tools to use: • • • • Control charts Histograms Tree Diagrams Voice of the Customer • Benchmarking • Line graphs • • • • • Pareto Chart Fishbone diagram Flow Charts QFD Design of Experiments(anov a) • COPQ .

• Takes full advantage of the power of SPC .Six Sigma relies heavily on histograms and control charts… • To provide capability and stability analysis. • Communication is clear and easy. • MS -Excel is an excellent vehicle to use.

less travel time – Lean distribution = more JIT. customer satisfaction up – Lean service = less repeat failures. – Lean production = waste is down.Six Sigma relies on Lean Thinking • Lean Thinking is a systematic method of identifying simple solutions to eliminate waste and produce products and services at the appropriate speed and correct quality to meet customer demands. production is up – Lean call centers = length of calls down. better accuracy .

• Accounting and purchasing departments think in terms of costs. return to shareholders and growth.Different ways of thinking about waste / defects… • A supervisor on a shop floor thinks in terms of equipment. . expenses and ROI. • Top management thinks about market share. people and production.

• Encourages a common vision. . reduced defects and lower cost.The power of Six Sigma • Provides common measurement and common goals. • Promotes teamwork and “esprit de corps” • Combines aggressive goals with methods and tools. • Correlates improved cycle time. • Requires the application of tools throughout the entire lifecycle of a product or service.

HOW DO WE IMPLEMENT SIX SIGMA? .

How do we implement? The Roadmap to Six Sigma North East West South Usually has many twists and turns! .

Supports the goals of the project. executes control.Six Sigma Roles Champion Master Black Belt Black Belts Green Belts Team Members (Suppliers) Is responsible for coordinating a business roadmap to achieve Six Sigma. and coach of Black Belts and others in the organization. Participates on the project teams. . Delivers successful focused projects using the Six Sigma methodology and tools. Is mentor. typically in the context of his or her existing responsibilities. Brings the broad organization up to the required Six Sigma competency level. Selects projects. Uses more sophisticated statistical tools to help team members and the broader organization. and alleviates roadblocks for the Six Sigma projects in his or her area of responsibility. Is a leader of teams implementing the Six Sigma methodology on projects. trainer. Is expected to continue to utilize learned methodology and tools as part of his or her normal job.

The Motorola Story .

There is only one ultimate goal: zero defects .in everything we do. Signed: MOTOROLA EXECUTIVE COMMITTEE . 1987 IMPROVE PRODUCT AND SERVICES QUALITY • • • • Ten times by 1989 and at least 100 fold by 1991 Achieve SIX SIGMA CAPABILITY by 1992 With a deep sense of urgency.Motorola Story Management Leadership DATED JAN 15.. spread dedication to every facet of the corporation and achieve a culture of continual improvement to ASSURE TOTAL CUSTOMER SATISFACTION.….

…..Motorola Story

Why We Have Been Successful... The Management Process!

• Quality improvement goals and plans integrated into business plans. • No formal organization changes to implement. • Part of everyone's job. • Employee empowerment and involvement. • Extensive education and training support. • Recognition and awards.

…..Motorola Story

Management of the Improvement Process
• Corporate review of Sectors quarterly • Sector review of Group monthly • Group review of products monthly • Plant review of manufacturing lines weekly • Manufacturing line review of processes daily • Same measurement - same improvement goal

…..Motorola Story

Employee Involvement Requires
• Awareness
– How are we doing? – How are the best in class doing?

• Training
– Tools, Methodology, Metrics

• High expectations
– Team goal setting

• Communication
– Progress and recognition

…..Motorola Story

Empowered Teams
• It’s a business-driven process, not a human relations program • It starts with senior management - can’t be delegated • Employees want to take ownership and become world class producers • You don’t need a crisis to get started • Empowerment affects all functions, not just factories • Done right, it’s an irreversible process

The Road Map for Six Sigma  Appoint a Champion  Select a Cross-functional team  Develop quantifiable goals  Develop an implementation plan  Establish a training program  Address data collection requirements and issues  Develop a change control and maintenance program  Coordinate your road map .

own the change – Trained in SS philosophies and methods – Demonstrate visible. create the vision. top-down commitment to SS – Establish a SS Leadership Team . legitimize.The Champion(s) • Management (Mentors) – Believe in the need for change. provide resources – Authorize.

• Management (Mentors) The Champion(s) – Become mentors for SS experts • Identify key business processes where breakthrough technologies can best be used • Identify SS Expert candidates • Provide financial and organizational resources to train and equip the experts to identify and accomplish stretch goals • Agree on metrics to manage and track progress • Recognize and reward success • Propagate successes to general corporate cultural change .

Six Sigma Leadership Team • Trained in Six Sigma • Develops the SS Master Plan to accelerate performance • Work with management mentors to identify SS Expert candidates • Develops a focused curriculum • Prepares training schedules • Serve as mentors for SS Expert candidates • Determine certification requirements .

Six Sigma Leadership Team • Certify SS Experts • Work with Champions to develop reward system • Determine annual re-certification requirements • Develop a communications plan • Review and improve the SS process • Monitor project selection and progress .

Six Sigma Experts • Experts should equal 10 – 20 per 1000 employees • Duties include: Assist management in identifying key business issues Lead SS projects Take charge in areas of needed improvement Provide leadership within the area of their expertise Stimulate management thinking Challenge old ways of doing business / be a change agent – Motivate others to set and accomplish stretch goals – Teach. consult and mentor the Green Belts and Black Belts – – – – – – .

How does one become ‘Belted’ Phase 1: Candidate Identification and Mentor Structure Identify candidate Management sponsorship Master Black Belt Mentor Define Black Belt responsibilities Phase 2: Skill Development Black Belt Orientation Class Personal Skill Development High Impact Improvement Project Phase 3: Recognition Application for recognition Black Belt Recognition Continuous Improvement .

An Individual from Any Discipline with Advanced Statistical. . and Interpersonal Skills An Experienced and Proven Leader in the use Six Sigma Strategies and Tools . Quality. .A Black Belt Is .

executing and completing DMAIC projects. • Assist in identifying project opportunities and refining project details and scope. . • Mentor Green Belts. • Transfer knowledge to other Black Belts and the organization.Black Belts • Are responsible for leading. • Teach team members the SS methodology and tools. • Report progress to the project champions and the process owners.

2 Projects* per Year – Lead use of Statistical & Quality Techniques – Mentor Green Belts.Training • Green Belt – Utilize Statistical & Quality Techniques – 2%-5% of Time (1-2 hrs/week) Training – Min. Communicate New • Black Belt Techniques – 5%-10% of Time (2-4 hrs/week) Consulting/Training – Min. 4 Projects* per Year • Master Black Belt – Mentors Green & Black Belts – 80%-100% of Time Consulting/Mentoring/Training *Projects = training classes or project consultations .

Green Belts • Usually equal 5% of the organization – – – – – – Support large Black Belt projects Lead smaller scope projects Are part-time practitioners Tend to be functionally specific Potential future Black Belts Assist with culture change .

Green Belts • Need to understand basics of SS • Use statistical tools for continuous improvement – – – – – COPQ Process mapping Cause and Effect Diagrams Standard Operating Procedures (SOP) X-bar /R. x-bar/s. c and p charts • Must understand “Lean” practices . IMR.

“If you fail to plan.Implementation Strategy • • • • Identify the needs • Clarify vision Develop the plan Implement the plan • Evaluate the result • Sustain the gain Remember: As with any other endeavor. plan to fail!” .

SUSTAINING SIX SIGMA .

Sustaining Six Sigma • Continue to set aggressive stretch goals – Examples: • 10-Fold reduction in defect levels every 3 years • Reduce time to market by a factor or 10 every 5 years .

• Understanding “change before the change” that’s required.Sustaining Six Sigma • Don’t allow Six Sigma to become the “flavor of the month” improvement program. not understanding this killed TQM. . • One size doesn’t fit all……work is required.

stomach to do this.Sustaining Six Sigma • Don’t rely on outsiders. • Don’t think you can “delegate” Six Sigma. resources. funding. Six Sigma requires statistical analysis. don’t do it. • If you don’t like statistics “don’t go there”. . If you don’t have the commitment.

MEASURING SIX SIGMA .

• Paradigms can limit the thought process. . • To determine if a process is stable and predictable. • To communicate about processes. • To evaluate customer satisfaction. • To baseline a process. • To determine if processes are improving.Why do we need metrics? • Perception and intuition are not always reality. • To understand processes.

Measurement is about RISK! .

. – Customer requirements – Current and potential problem areas • Usually related to cost. outputs. time. schedule and / performance • Build critical process criteria matrix • Define each critical process – Inputs.Prior to collecting any data… • Establish an environment suitable for action. etc. – Management responsiveness – Employee training and motivation – Documentation plan • Identify the critical processes. • Determine the quality criteria to be measured.

many leading organizations are paying the price for fostering an environment in which measurements didn’t accurately reflect what was occurring in the organization. • Did not create a solid strategic plan. . • The environment is one in which “games” are played with numbers (short-term numbers look good at the expense of long-term performance for stockholders and employees…ENRON effect).Measurements affect behavior. • As a result. did not align process improvements with the plan nor reengineer projects to the plan.

• One must be careful with the metrics and their interpretations or practitioners will feel pressured to play games with the numbers . • Some measurements from Six Sigma can be deceiving as well. • The measurements used in a Six Sigma infrastructure need to drive the right behavior for all processes.Measurements affect behavior. .

CRICKET AND SIX SIGMA .

• Take cricket. Think of these scores as a sequence of products produced or transactions executed over two days.Measurements affect behavior. • How should these metrics be reported? . Pretend you played two days and ended up with the scores shown on the score book. for instance.

.Measurements affect behavior. Cpk. and Ppk) and defects per million opportunities (DPMO) and sigma quality level metrics which all help to quantify how well a process or product is doing relative to a criterion. • In a Six Sigma infrastructure we use process capability and performance indices (like Cp. Pp.

Measurements affect behavior. (The stroke has a defect when the ball is not hit properly). • Using this approach forces one to “play games” with the numbers because this definition for a defect includes various levels of “goodness” and does not necessarily relate to overall score. • One could define an “opportunity” per defect at the stroke level. .

Measurements affect behavior. 25 defective hits out of 36 balls. This ppm rate approximately equates to a sigma quality level of 1.444. Using this definition for your two days of cricket one could count. • This translates to a defect rate of 0. say. • A different approach would be to define a defective event as when you missed hitting a ball.0 .694444 (25/36) or a “parts per million (PPM) defective rate of 694.

would he understand how well you are batting? Do you understand how well you are doing over time? Do you have a strategy that leads you to quantify the source of variability in your cricket game? Do we know what questions we must ask ourselves to improve? .So. how are you doing? • How well does the sigma quality level metric describe your cricket game? • If you report a 1-sigma quality metric to a friend.

So. • Other concerns are the implication of sample size and of how samples are taken. • This same confusion will occur when using the Cp. Pp. and Ppk metrics. . Cpk. how are you doing? • The obvious answer is “NO”.

.Is there an alternative way to measure? • YES! Start with a high-level strategic view of your cricketing process. • Do not define a defect at stroke level • It can be defined at an innings level(so many scores below 30 runs in so many innings) • Analyze the batting(for all inning scores less than 30)to improve overall inning scores.

What have we learnt? • This idea of cricket game allows to create a sampling plan that considers operator-to-operator. shift-to-shift.sample size(strategic view of a defect. etc. • Example can be number of cigarette trays rejected for every 100 trays. • Gives us a strategic view of what constitutes a sample size. not at defect level of individual sticks) . as the overall output. machine-to-machine.

Quality is not an Assignable Task it must be Rooted and Institutionalized Within every Step of the “Business Process” IT IS EVERYONE'S RESPONSIBILITY .

Thank You .

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