Six Sigma & DMAIC Process

The purpose of this workshop:

Overview of Six Sigma Introduction to Basic Statistics Understand the DMAIC Process

The evolution of Quality systems

1987 and beyond
Six Sigma

2000 and beyond

Lean Six Sigma

1960-1980s
Total Quality Management

Zero defects

Lean manufacturing (TPM, JIT, SCM) + Six sigma Optimized flow from the customer point of view

1940-1960s
Statistical process control

1920-1940s
Quality as inspection

Using statistical techniques for reducing variability Quality control

Organizations tuned towards quality Quality assurance

Time

The evolution of six-sigma1

In the 1970s a Japanese company takes over a Motorola factory manufacturing televisions. Under Japanese management, the factory produces TVs with 1/20th of the defects as under Motorola. Bob Galvin became Motorolas CEO in 1981 and challenged the company to achieve a 10 fold improvement in performance over a five year period. In 1985, Bill Smith a veteran quality control engineer wrote an internal article where he established a correlation between how well a product did in its field life and how much rework was required in the manufacturing process. In 1986, Mikel Harry develops the MAIC approach for problem-solving in a research paper published at Arizona State University. January 15, 1987, Galvin launched a long term quality program called The Six Sigma Quality Program . The Corporate Policy Committee of Motorola then updated their quality goal as follows: Improve product and service quality ten times by 1989, and at least one hundred fold by 1991. Achieve Six Sigma capability by 1992. There is only one ultimate goal: zero defects in everything we do.

The evolution of six-sigma.2

1988 Motorola bags the prestigious Malcolm Balridge Quality award. 1988, Harry discusses how to leverage six-sigma throughout the company and recognize people equipped with six-sigma tools with Mr. Ames, a colleague at Unisys Corp. They decide on using martial arts belts as the way of recognitionhence the usage of Black Belts. 1989 Motorola develops the Motorolas six-sigma research institute with Harry heading it. Harry develops an implementation strategy to spread six-sigma tools among all employees rather than only among quality engineers. 1993 ABB launches six-sigma along with the Motorola institute and Harry decides to involve all business leaders with qualityhence the terms Champion, Master Black Belt, Black Belt, Green Belt. 1993 Allied Signals CEO Larry Bossidy launches Six-sigma along with Harry. 1995 Jack Welch, CEO, GE invites Larry Bossidy to lecture about the benefits Allied Signal got from the sixsigma initiative. 1997, Jack Welch decides to launch Six-Sigma throughout GE ..and the rest is history

GE: Making the elephant dance

1995: Started efforts towards Six Sigma using Work Out session groups and boundaryless company processes

The quality progress is tied directly to rewards at GE,

Black Belts not only have to go through rigorous training, but they also also have to complete two years and 20 quality projects for further career improvement.

No management promotions will come without at least Six Sigma Greenbelt certification at GE

Historically, 40 percent of each GE executives bonus is tied to Six Sigma implementation, which applies to the top 7,000 executives

GE: Making the elephant dance

Some achievements of GE

The companys operating profit margins raised from 13.6% in 1995 to 19.1% in 2002 World's Most Respected Company - Financial Times (1999, 2000, 2001, 2002, 2003) The Scientific American 50 Award -- Scientific American (2002) Global Most Admired Company - Fortune (1999, 2000, 2001, 2002) America's Most Admired Company - Fortune (1999, 2000, 2001, 2002) 10 Best Board of Directors -- Business Week (2002) Sixth - Fortune 500. If ranked independently, 13 GE businesses would appear on the Fortune 500

Dupont's strategy of sustainable growth Productivity Improvement

Productivity is not just a operational cost-savings issue, but of strategic importance and is central to the sustainability effort Adopted Six Sigma methodology integrating mathematics and statistics with the existing science and technology base to directly contribute to sustainable growth Six Sigma at Dupont is a stringent approach to reduce productivity variability and waste by reducing defects and non-conformances to ppm levels 1100 black belts and 1700 greenbelts weeks of training in the methodology imparted working of 4200 projects, resulted in savings of more than USD 1 billion / year over a revenue of USD 30 billion / year

Dupont's strategy of sustainable growth Productivity Improvement examples

Increase production rate of a Buffalo, NY plant by 10% without capital investment Corian (solid surfacing for kitchen and bath countertop) increase rate of production by increasing the concentration of catalyst, resulting in USD 26 milion additional revenue / year

Sontara high strength durable cloth used for medical gowns defect rate reduced saving an equivalent of 760000 gowns per year

Reduced waste by more than 100 tonnes and improved packaging design to save USD 340000 per year in a plant in Brazil

Dupont's strategy of sustainable growth Productivity Improvement examples

28% reduction in energy per unit of production over 10 years resulting in USD 12000000 / year in a plant in Canada

Pealable lid developed by Dupont Europe decreasing the material required for packing and reduced use of methyl acetate solvent by 1000 tonnes / year

Reducing toxic emissions by 50% and producing 900 million gallons of drinking water for local community at Victoria, Texas, US

Bechtels six sigma effort

Launched in November 2000, Bechtel has integrated its six-sigma movement with Performance based leadership, thus merging HR policies with six sigma measures The company has 150 black belts and more than 2500 green belts Total benefits from the initiative are claimed to be $15 million in 2001 and $200 million in 2002. Total revenue of about $15 Billion in 2001. The company claims to have achieved break-even on its six-sigma effort in three years Six Sigma is the most important initiative for change we have ever undertaken. Were happy to report that its becoming a way of life at Bechtel Bechtels annual report

Six Sigma a way of life for people who may not have even heard of management tools
7-8 am 10:15 10:45 am 12:00 to 12:30 pm

Dabbas are collected from customers' homes

At the nearest railway station, they are sorted according to the destination station and are loaded in crates onto trains.

At the destination station they are unloaded by other dabbawalas and re-sorted. The 100kg crates of carriers are delivered, picked up at 1:30 p.m., and returned whence they came

No of defects : 1 in 8 million transactions, Sigma level : 7 sigma

They do it with codes and colors

Collection Point Andheri Lokhandwala Complex

Dabbawala identification at destination Destination Details Nariman Point Nirmal Bldg 11th Floor

What is Sigma

The term Sigma taken from the Greek alphabet, is used to designate the distribution or spread about the mean (average) of any parameter of product, process or procedure. In the context of business or manufacturing process, Sigma capability is a metric which indicates how the process is behaving. Higher the Sigma value, better the capability of the process to produce defect free work and vice versa.