ch-11 (six sigma)

11-1 Excel Books Total Quality Management Text and Cases G Nagalingappa, Manjunath V S

Copyright © 2010, G Nagalingappa, Manjunath V S

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CChapterhapter

11 Six Sigma



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Introduction

Six Sigma is a management framework that, in the past 15 to 20 years,

has evolved from a focus on process improvement using statistical tools

to a comprehensive framework for managing a business.

Six Sigma has become a synonym for improving quality, reducing cost,

improving customer loyalty, and achieving bottom-line results.



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Six Sigma Definition

According to James Harrington, "Six Sigma was simply a TQM process that

uses process capability as a way of measuring progress.

Six Sigma = TQM (or CQI) .+ Additional Data Analysis Tools + Stronger Customer Focus + Project Management + Financial Results.



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Historical Perspective on Six Sigma

In the mid-1980s, Motorola, under the leadership of Robert W. Galvin,

was the initial developer of Six Sigma.

Most credit goes to the late Bill Smith for inventing Six Sigma.

Meeting the challenge Galvin had set in 1981 to improve quality by tenfold

and developing Six Sigma helped Motorola to win the first Malcolm

Baldrige National Quality Award in 1989.



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Cont….

Statistical Framework for Six Sigma

Sigma is the Greek symbol used for standard deviation of a population.

Sigma means standard deviation which indicates dispersion.

According to Six-Sigma philosophy, processes rarely stay centred and

tend to shift above or below the target.



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Cont….Slide 35

A 6 Sigma ProcessCustomer target

Lower Specification Limit Upper Specification Limit

66

0.00034% of points will be outside of the specification limits ie. defects(= 3.4 parts per million out of spec.)

= 99.7966% of data inside the limits (C= 2)p

0.00017%1.7 ppm

0.00017%1.7 ppm

Six Sigma Process



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Cont….

Statistical Framework for Six Sigma

Six Sigma, which operates 3.4 Defects per million of

opportunities (DPMO).

The basic condition to implement Six Sigma, includes

combining Six Sigma improvement project with DMAIC

(Defining, Measure, Analyze, Improve and Control)

Define, Measure, Analyse, Design, Verify (DMADV)



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Quality Level for Six Sigma

Quality LevelOff-

Centering3-

sigma3.5-

sigma4-

sigma4.5-

sigma5-

sigma5.5-

sigma6-

sigma0 2,700 465 63 6.8 0.57 0.034 0.002

0.25-sigma 3,577 666 99 12.8 1.02 0.1056 0.0063

0.5-sigma 6,440 1,382 236 32 3.4 0.71 0.019

0.75-sigma 12,288 3,011 665 88.5 11 1.02 0.1

1-sigma 22,832 6,433 1,350 233 32 3.4 0.39

1.25-sigma 40,111 12,201 3,000 577 88.5 10.7 1

1.5-sigma 66,803 22,800 6,200 1,350 233 32 3.4

1.75-sigma 105,601 40,100 12,200 3,000 577 88.4 11

2-sigma 158,700 66,800 22,800 6,200 1,300 233 32



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Key Concepts of Six Sigma

Organizational/TransformationalProcesses

XInputs

Products/Services/ Outputs

Y

Y = f(X)

Six Sigma and Business Processes



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Key Elements of Six Sigma1. Process Orientation

2. Customer Focus

3. Y = f(X)

4. Data and Measurement Driven

5. Focus on Variation Reduction

6. Statistical Rigour

7. Project Orientation

8. The DMAIC Process Improvement/Problem Solving Process

9. Dedicated Personnel

10. Bottom Line Results Focussed

11. Data-driven culture (In God we trust, all others bring data).



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Six Themes of Six Sigma

Principle 1 – Genuine Focus on the customer

Principle 2 – Data and fact driven management

Principle 3 – Process focus, management and improvement

Principle 4 – Proactive Management

Principle 5 – Boundaryless Collaboration

Principle 6 – Drive for perfection, tolerance for failure



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The DMAIC Methodology

Define

Measure

Analyse

Improve

Control

6

Analyse to identify root causes

Measurethe current

performanceand capability

Control bystandardising solution

and monitoringperformance

Define the problem oropportunity

Improve by implementing potential solutions



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Cont….

Six Sigma Support Structure

1. Champions

2. Sponsors / Process Owners

3. Master Black Belts

4. Black Belts

5. Green Belt

6. Team Members



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RolesPosition

Responsibilities

Champions Members of senior management team/Driver and advocate.

Master Black Belt

Full-time breakthrough experts/Train and coach.

Black Belt Full-time improvement experts/project manager and specialist.

Green Belt Middle management, supervisors/Projects manager and team leader.

White Belt Operator, front –line staff, Team member



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• Champions’ receive one week of training.• MBBs receive two training sessions (each of

one week) and have usually completed a BB training program. MBBs are mainly involved in the training and coaching of BBs and GBs. MBBs undergo extensive training in statistics and problem-solving techniques and dedicate 100% of their time to Six Sigma.



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• BBs, who usually work under the supervision of an MBB, receive four training sessions (each of one week, with three weeks between the sessions to apply strategy to assigned projects). BBs also undergo extensive training in statistics and problem-solving techniques and dedicate 100% of their time to Six Sigma.



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• GBs are employees of the organization who execute Six Sigma as part of their usual jobs. They receive two training sessions (each of three days with three weeks between the sessions for project work).

• White Belts are Project team members who work on Six Sigma projects on a part time basis are called “White Belts” or “Yellow Belts”. They receive about two to three full days of training in the fundamentals of Six Sigma methodology.



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• Black Belt is a full time Six Sigma practitioner who has had rigorous training in statistical methods used to gather and analyse data in a Six Sigma projects.

• Green Belt is a Six Sigma practitioner, usually part-time, who trained in the Six Sigma DMAIC problem solving methodology and basic statistical tools.

• The champions are head of business or process owners who run the process.



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The Leadership Group or Council

The “Sponsor” or “Champion

The Implementation Lead

The Six Sigma Coach

The team leader or project leader

Team member

The Process owner



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Cont….

Benefits of Six Sigma

1. It generates sustained success

2. It sets a performance goal for everyone in the organization

3. It enhances value to the customer

4. It accelerates the rate of improvement

5. It promotes learning and cross-pollination through cross functional

teams

6. It executes strategic change.



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Cont….Slide 158

Relationship between Quality, Market Share and ROI – The Business Case for Six Sigma

Relative Market Share

RelativeQuality

Low 25% 60% High

Superior

33 %Inferior

67%

Return on Investment (ROI) %

21

38

2029

27

20

13

7

14

Six Sigma's Contribution to Success



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Slide 159

Improve Quality

External Quality

Customer Satisfaction

MarketShare

Revenue

Internal Quality

OperatingCosts

Capital Costs

Economies ofScale

Higher Profit

Higher ROI

Products &Services

Processes & People

Six Sigma Competitive Advantage



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Cont….

Twelve Keys to Success in Six Sigma Implementation

1. Tie Six Sigma to business strategy and priorities

2. Position Six Sigma as an improved way to manage for today

3. Keep the message simple and clear

4. Develop your own path to Six Sigma

5. Focus on short-term results

6. Focus on long-term growth and development

7. Publicize results admit setbacks, and learn from both



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8. Make an investment to make it happen

9. Use Six Sigma tools wisely

10. Link customers, process, data, and innovation to build the Six Sigma

system

11. Make top leaders responsible and accountable

12. Make learning an ongoing activity.

ch-11 (six sigma)

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