Six Sigma 337 v1 PDF

SIX SIGMA
Sub Code- 337
Developed by
Prof. Ramchandra Nadkarni
On behalf of
Prin. L.N. Welingkar Institute of Management Development & Research
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Advisory Board
Chairman
Prof. Dr. V.S. Prasad
Former Director (NAAC)
Former Vice-Chancellor
(Dr. B.R. Ambedkar Open University)
Board Members
1. Prof. Dr. Uday Salunkhe  2. Dr. B.P. Sabale  3. Prof. Dr. Vijay Khole  4. Prof. Anuradha Deshmukh 
Group Director  Chancellor, D.Y. Patil University, Former Vice-Chancellor  Former Director 
Welingkar Institute of Navi Mumbai  (Mumbai University) (YCMOU)
Management Ex Vice-Chancellor (YCMOU)
Program Design and Advisory Team
Prof. B.N. Chatterjee Mr. Manish Pitke

Dean – Marketing Faculty – Travel and Tourism
Welingkar Institute of Management, Mumbai Management Consultant
Prof. Kanu Doshi Prof. B.N. Chatterjee

Dean – Finance Dean – Marketing
Welingkar Institute of Management, Mumbai Welingkar Institute of Management, Mumbai
Prof. Dr. V.H. Iyer Mr. Smitesh Bhosale

Dean – Management Development Programs Faculty – Media and Advertising
Welingkar Institute of Management, Mumbai Founder of EVALUENZ
Prof. B.N. Chatterjee Prof. Vineel Bhurke

Dean – Marketing Faculty – Rural Management
Prof. Venkat lyer Dr. Pravin Kumar Agrawal

Director – Intraspect Development Faculty – Healthcare Management
Manager Medical – Air India Ltd.
Prof. Dr. Pradeep Pendse Mrs. Margaret Vas

Dean – IT/Business Design Faculty – Hospitality
Welingkar Institute of Management, Mumbai Former Manager-Catering Services – Air India Ltd.
Prof. Sandeep Kelkar Mr. Anuj Pandey

Faculty – IT Publisher
Welingkar Institute of Management, Mumbai Management Books Publishing, Mumbai
Prof. Dr. Swapna Pradhan Course Editor

Faculty – Retail Prof. Dr. P.S. Rao
Welingkar Institute of Management, Mumbai Dean – Quality Systems
Welingkar Institute of Management, Mumbai
Prof. Bijoy B. Bhattacharyya Prof. B.N. Chatterjee

Dean – Banking Dean – Marketing
Mr. P.M. Bendre Course Coordinators

Faculty – Operations Prof. Dr. Rajesh Aparnath
Former Quality Chief – Bosch Ltd. Head – PGDM (HB)
Welingkar Institute of Management, Mumbai
Mr. Ajay Prabhu Ms. Kirti Sampat

Faculty – International Business Assistant Manager – PGDM (HB)
Corporate Consultant Welingkar Institute of Management, Mumbai
Mr. A.S. Pillai Mr. Kishor Tamhankar

Faculty – Services Excellence Manager (Diploma Division)
Ex Senior V.P. (Sify) Welingkar Institute of Management, Mumbai
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1st Edition (Jan-2011). 2nd Edition ( Jan-2012). 3rd Edition (Jan-2014)
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CONTENTS
Contents
Chapter No. Chapter Name Page No.
1 Six Sigma – Strategy for Sustained Growth 3-10
2 What is New about Six Sigma? 11-16
3 Key Concepts of the Six Sigma System 17-29
4 Key Ingredients of Six Sigma Management 30-55
5 Objectives and Benefits of Six Sigma 56-62
6 Six Sigma for Manufacturing and Service Industries 63-68
7 Roles and Responsibilities in Six Sigma Management 69-80
8 The Roadmap for Six Sigma 81-92
9 Getting Started with Six Sigma 93-102
10 Tools Used 103-120
11 DO's & DON'Ts of Successful Six Sigma 121-128

Implementation
Annexure 129-131
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SIX SIGMA – STRATEGY FOR SUSTAINED GROWTH
Chapter 1
SIX SIGMA – STRATEGY FOR SUSTAINED
GROWTH
Objectives
After completing this chapter, you will be able to understand:
• Six Sigma – Approach and benefits
• What are the critical elements that make Six Sigma a leadership system.
Structure
1.1 Organisations Achieving Break-through Improvements through Six

Sigma
1.2 The Six Sigma Approach
1.3 The Critical Elements of Six Sigma
1.4 Summary
1.5 Self Assessment Questions
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1.1 Organisations Achieving Break-through Improvements  

through Six Sigma
Six Sigma methodology was formalised in the mid-1980s at Motorola. New

theories and ideas were combined with basic principles and statistical
methods that had existed in quality engineering circles for decades. The
building blocks were enhanced with business and leadership principles to
form the basis of a complete management system. The result was a
staggering increase in the levels of quality for several Motorola products
and the inaugural Malcolm Baldrige National Quality Award was bestowed
on the company in 1988.
Everyone wanted to know how Motorola had done it. Then-president Robert
Galvin chose to share Motorola’s Six Sigma secret openly, and by
mid-1990s, corporations like Texas Instruments, Asea Brown Boveri, Allied
Signal and General Electric had begun to reap similar rewards. By 2000,
many of the world’s top corporations had a Six Sigma initiative underway,
and by 2003, over $ 100 billion in combined savings had been tallied.
Six Sigma performing companies realised staggering business success:
• General Electric profited between $7 and $10 billion from Six Sigma in
about 5 years.
• Dupont added $1 billion to its bottom line within two years of initiating its
Six Sigma program, and that number increased to about $2.4 billion
within 4 years.
• Bank of America saved hundreds of millions of dollars within three years

of launching Six Sigma, cut cycle times by more than half and reduced
the number of processing errors by an order of magnitude.
• Honeywell achieved record operating margins and savings of more than

$2 billion in direct costs.
• Motorola, the place where Six Sigma began, saved $2.2 billion in a four
year time frame.
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The above illustrations indicate that Six Sigma helps organisations achieve
breakthrough improvement. In short, Six Sigma is a path to dramatic
improvement in value for the customers and the company.
1.2 The Six Sigma Approach
Six Sigma can seem like another management initiative. But looking closer,
we will find it is not a business fad tied to a single method or strategy, but
rather a flexible system for improved business leadership and performance.
It builds on many of the most important management ideas and best
practices, creating a new formula for 21st century business success. It is
not about theory, it is about action. The goal of the Six Sigma Way is to
understand what Six Sigma is? Why it is probably the best answer to
improved business performance in years? And how to put it to work in the
unique environment of one’s organisation? Six Sigma is as much about a
passion for serving customers and a drive for great new ideas as it is about
statistics and number crunching. Six Sigma applies just as much to
Marketing, Services, Human Resources, Finance and Sales as it does to
Manufacturing and Engineering.
Six Sigma is a methodology for minimising mistakes and maximising value.

Every mistake, an organisation or person makes ultimately has cost – a
lost customer, the need to do a certain task over again, a part that has to
be replaced, time or material wasted, efficiency lost or productivity
squandered. In fact, waste and mistakes cost many organisations as much
as 20 to 30 per cent of their revenue.
The emphasis on customers is probably the most remarkable element of

Six Sigma. As Jack Welch of GE explains it “The best Six Sigma projects
begin not inside the business but outside it. It focused on answering the
question – how can we make the customer more competitive? What is
critical to the customer’s success? One thing we have discovered with
certainty is that anything we do that makes the customer more successful,
inevitably results in a financial return for us.”
The Six Sigma approach is not for an unprepared organisation. It is intense

and rigorous, and it entails a thorough inspection of the way everything is
done. Six Sigma sets ambitious business objectives and measures
performance in a way that forces accountability. It doesn’t allow a
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management team to become complacent, but, rather, it exposes waste

that otherwise would remain largely invisible.
Six Sigma takes a business out of its comfort zone – but for a relatively
short time. After the first project gains are made and the money starts
flowing to the profit margin, a cultural change takes hold. The early
discomfort of changing business processes gives way to success, problem
become opportunities for improvement and the organisation begins to
enthusiastically leverage the methods and tools of Six Sigma – more
pervasively and with a keen eye on value.
All businesses, organisations and individuals have room to improve. No

operation is run so tightly that another ounce of inefficiency and waste
can’t be squeezed out. By their nature, organisations tend to become
messy as they grow. Processes, technology, systems and procedures – the
ways of doing business – become cluttered with bottlenecks, resulting into
work piling up in one part of the organisation while other parts sit idle with
nothing to do.
Work is often performed incorrectly, or the outcome is flawed in some way.

When this happens, one scraps products and services and have to do the
work over again. One has to consume additional resources to correct a
problem before it is delivered to the customer, or the customer asks later
for a “redo” – a new product or a more satisfactory service.
Sometimes, flaws and defects are not the problem, but a product or
service simply takes too long to produce and deliver. Imagine a problem for
a mortgage company, if it processed home loans perfectly, but did so 5
times slower than the competition. That would be a disaster.
Six Sigma was once a quality-improvement methodology, but now it is a

general-purpose approach to minimising mistakes and maximising value :
How many products can be produced, how many services can be delivered,
how many transactions can be completed to an expected level of quality in
the least possible amount of time at the lowest possible cost ?
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1.3 The Critical Elements of Six Sigma
The critical elements that make Six Sigma a leadership system are:
1. Genuine focus on the customer

There is a very close correlation between customer loyalty and profitability.
A 5% reduction in customer defection can result in profit increasing from
30-85%. It is also seen that if customers increase their customer retention
by 2%, it is equivalent of cutting operating costs by 10%. Loyal customers
provide higher profits, more repeat business, higher market share and
more referrals than do just satisfied customers.
In Six Sigma, customer focus becomes the top priority. In fact, the
measures of Six Sigma performance begin with the customer. Six Sigma
improvements are defined by their impact on customer satisfaction, loyalty
and value.
In the 1970s, customer satisfaction began to replace profit as purpose of

business.
In the 1980s, customer delight – or customer “wow” – became business

mantra.
In the 1990s, customer loyalty – or customer long-term retention –

became the rallying cry for progressive companies.
In the first decade of the 21st century, customer loyalty is metamorphosing

into the loyalty of all stakeholders, i.e., customers, employees, suppliers,
distributors, dealers and investors.
By the end of first half of the 21st century, businesses will go beyond their
self-imposed boundaries to address many dimensions of a society yearning
for the betterment of humankind. That is the future direction of Six Sigma.
2. Data and Fact-driven Management

Six Sigma takes the concept of “management by fact” to a new, powerful
level. Six Sigma discipline begins by clarifying what measures are key to
gauging business performance; then it applies data and analysis so as to
build an understanding of key variables and optimise results.
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3. Process Focus, Management and Improvement

In Six Sigma, processes are where, the action is. Whether designing the
products and services, measuring performance, improving efficiency and
customer satisfaction – or even running the business – Six Sigma positions
the process as the key vehicle of the success.
One of the most remarkable breakthroughs in Six Sigma efforts to date has
been convincing leaders and managers, that mastering processes is not
just a necessary evil, but actually a way to build competitive advantage in
delivering value to the customers.
4. Proactive Management
Proactive management is defining ambitious goals and reviewing them
frequently; setting clear priorities, focussing on problem preventions and
questioning “why we do things” instead of blindly defining them as “how
we do things”.
Six Sigma encompasses tools and practices that replace reactive habits
with a dynamic, responsive, proactive style of management. Considering
today’s slim margin for error, competitive environment, being proactive is
the “only way to fly”.
5. Boundaryless Collaboration
Six Sigma expands opportunities for collaboration as people learn how their
roles fit into the “big picture” and can recognise and measure the
interdependence of activities in all parts of a process. Boundary-less
collaboration in Six Sigma does not mean selfless sacrifice, but it does
require an understanding of both the real needs of end-users and of the
flow of work through a process or a supply chain. Moreover it demands an
attitude that is committed to using customer and process knowledge to
benefit all parties. Thus, the Six Sigma system can create an environment
and management structures that support true teamwork.
6. Drive for Perfection, Tolerance for Failure

Any company that makes Six Sigma its goal will have to constantly push to
be ever more perfect while being willing to accept and manage occasional
setbacks.
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1.4 Summary
The chapter talks about how Six Sigma can provide breakthrough
improvements to organisations and how so many organisations have been
benefitted with the implementation of Six Sigma projects. The chapter has
also listed down the critical elements that make Six Sigma a leadership
system.
1.5 Self assessment Questions
1. “Six Sigma is yet another management initiative” – evaluate this

statement
2. What are the critical elements that make Six Sigma a leadership
system?
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
Video Lecture 
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WHAT IS NEW ABOUT SIX SIGMA?
Chapter 2
Objectives
• Evolution of quality over time
• What Six Sigma is and what it is not.
Structure
2.1 Evolution of Quality Improvement Plans
2.2 Is Six Sigma an “Old Wine in New Bottle?”
2.3 Why Six Sigma is Succeeding Where TQM Failed?
2.4 Summary
2.5 Self Assessment Questions 
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2.1 Evolution of Quality Improvement Plans
The disillusionment with quality is by no means new. The history of the

quality movement in the past fifty years has had a program-of-the-decade
flavor as organisations seek quality salvation with each new initiative
replacing the earlier one. For example:
• 1950s Sampling Plans – A whole host of sampling plans were

developed, each claiming to be the ultimate for the quality control.
• 1960s Zero Defects – Launched by the U.S. Department of Defense,

this stated that if workers could only dedicate themselves to zero
defects, the quality would rise.
• 1970s Quality Circles – Based on teams tackling daily line problems,

quality circles achieved some success in Japan.
• 1980s Statistical Process Control (SPC) – In the mistaken notion

that Japan’s quality success was because of statistical process control
and control charts, American companies started papering their factory
walls with control charts. Automotive companies such as Ford Motors
spent billions of dollars on control charts.
From 1980s to 1990s, a whole plethora of quality standards spawned all

over the world. They included:
• ISO 9000: This quality standard was launched in 1987, as a worldwide

standard by a consortium of forty-five countries within the International
Standards Organisation (ISO).
• QS 9000: This quality standard was developed in 1990s, by the big

three Automotive companies – General Motors, Ford Motor Company and
Chrysler Corp. – for their first tier suppliers. It is an improvement over
ISO 9000, with a minimum C of 1.33 required of these suppliers.
• ISO 14000: This international standard patterned after ISO 9000 to

improve industry’s contribution to the environment.
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2.2 Is Six Sigma an “old wine in new bottle?”
Many people think that Six Sigma management is an “old wine in new
bottle “This notion is both false and true. It is false for several reasons.
First, it is false because Six Sigma projects are far more structured and
formatted than projects in most previous Quality Management processes.
Second, it is false because Six Sigma management provides metrics for

discussing the quality of processes that can transcend ownership of
processes (i.e., finance, human resources, engineering and service
processes can be compared). It creates “apples to apples” metrics for
understanding process improvements. Other Quality Management
approaches do not have such metrics.
Third, it is false because Six Sigma is very focused on impacting the

bottom line and top line of an organisation and it has a specific method for
accomplishing this objective. Most other Quality Management approaches
do not have such a clear financial focus. The cost of poor quality and other
similar concepts have been investigated by the quality profession, but they
had not been well utilised outside the quality profession until Six Sigma
management.
Fourth, it is false because Six Sigma is focused on ongoing rapid

improvement of the enterprise. Most other Quality Management processes
are focused on incremental continuous improvement, whereas Six Sigma
demands breakthrough improvement.
Fifth, it is false because past Quality Management efforts were initially

spurred on by quality professionals, consultants or academics, while Six
Sigma is being promoted by executive managers such as George Fisher
(Motorola) and Jack Welch and Jeffrey Immelt (General Electric).
Finally, it is false because Six Sigma is facilitated by an infrastructure of Six

Sigma experts overlaying the current organisational structure. Other
Quality Management approaches use supervisors, managers or workers to
facilitate teams. Expert facilitation of teams is a big leap forward in rapid
process improvement that impacts the bottom line of an organisation.
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On the other hand, it is true because most of the tools, methods and
theories were borrowed from the Quality Management predecessors of Six
Sigma. Six Sigma is more an example of evolutionary management than
revolutionary management. The founders of Six Sigma management stood
on the shoulders of the giants who preceded them in the quality
movement, such as W. Edwards Deming, Joseph Juran and Kaoru Ishikawa.
2.3 Why Six Sigma is succeeding where TQM failed?
Six Sigma is a relatively new concept as compared to TQM. However, when

it was conceptualised, it was not intended to be a replacement for TQM.
Both Six Sigma and TQM have many similarities and are compatible in
varied business environment including manufacturing and service
industries. While TQM has helped many companies in improving the quality
of manufactured goods and services rendered, Six Sigma could deliver
even sharper results.
Six Sigma succeeded over TQM for following reasons:
• Six Sigma organisations are putting process management, improvements

and measurements into action as part of the daily responsibilities,
reinforcing the message that Six Sigma is “part of the job”.
• Passion for and belief in Six Sigma at the very top of the business is
unquestioned in successful Six Sigma companies. Leaders of such
companies believe that Six Sigma is synonymous with constant
reinvention of the business.
• A clear goal is the centerpiece of Six Sigma. It is an extremely

challenging goal, but still believable, unlike past campaigns for “zero
defects”. People involved in Six Sigma initiatives can see their results
grow and they can equate them to company earnings as well. Just as
importantly, by focusing on ways to track changes in customer needs and
requirements, Six Sigma companies are building a dynamic system for
measuring performance based on the latest and most stringent demands
of the customer. While the goal may change over time, the closed loop
Six Sigma system will help the organisation to adjust.
• Successful Six Sigma companies see Six Sigma as a tool to bust silos and
eliminate rework created by disconnects and miscommunication.
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• One of the great opportunities of Six Sigma is to begin afresh, with the
recognition that both small improvements and major changes are an
essential part of the survival and success of 21st century businesses.
• Six Sigma companies are setting very demanding standards for learning
and are backing them up with the necessary investments in time and
money to help people meets those standards.
• Six Sigma not only works in service and in transactional processes, but
probably offers more opportunities there than in manufacturing. Thus,
Six Sigma has the potential to be more “total” than Total Quality.
2.4 Summary
The chapter provides a history trail of quality movement and tries to

explain why Six Sigma is not just another quality improvement initiative.
Six Sigma is a disciplined approach to problem solving and sustaining
improvements and its in-built actions make it a much superior mean for
organisation-wide success compared to other quality management
initiatives like TQM.
1. “Six Sigma is an old wine in new bottle” – evaluate this statement
2. What are the success factors of Six Sigma over TQM? 
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REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture 
! !17
KEY CONCEPTS OF THE SIX SIGMA SYSTEM
Chapter 3
Objectives
• Why Processes are at the heart of Six Sigma?
• Different terminologies used in Six Sigma implementation
Structure
3.1 It is a “process” that Six Sigma Works on
3.2 Different terms used in Six Sigma
3.3 Six Sigma Management
3.4 Summary
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3.1 It is a “process” that Six Sigma works on
A Process
An organisation is a multiplicity of micro sub-processes, all synergistically
building to the macro process of that organisation. A process is a collection
of interacting components that transform inputs into outputs toward a
common aim. The job of management is to optimise the entire process.
All processes have customers and suppliers; these customers and suppliers
can be internal or external to the organisation. A customer can be an end-
user or the next operation downstream. A supplier could be another
organisation or the prior operation upstream.
Processes exist in all facets of an organisation. Administration, Sales,

Services, Human Resources, Training, Maintenance, Document flows,
Interdepartmental communication and Vendor relations are all processes.
Most processes can be studied, documented, defined, improved and
innovated.
Process is at the Heart of Six Sigma
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3.2 Different terms used in Six Sigma
Variation
The lower case letter “sigma” in the Greek alphabet is a symbol to
represent the standard deviation of a population. It is an indicator of the
amount of variation or inconsistency in any group of items or process.
Variation is a part of life.
Common and Special Causes of Variation

The design and execution of a process creates common causes of variation.
Process capability is determined by inherent common causes of variation,
such as hiring, training or supervisory practices, stress, management style
or policies and procedures. Employees working within the process cannot
control a common cause of variation and unless a change is made in the
process, the capability of the process will remain the same. Special causes
of variation are due to events external to the usual functioning of the
process. New raw materials, a drunken employee or a new operator can be
examples of special causes of variation.
With Six Sigma, one spends particular effort to identify the difference
between common and special cause variations, because they are so
different. In general, it is best to work on reducing special cause variation
before trying to reduce common cause variation. The reason is because
when one has special cause variation, the process is not stable or
predictable and one can not be sure of what is happening. But after the
special cause variation is taken care of, one can then improve its common
cause variability.
Because unit-to-unit variation decreases the customer’s faith in the

uniformity of the outputs of a process, managers must understand how to
reduce and control variation. Employees use statistical methods so that
common and special causes of variation can be differentiated; special
variation can be resolved and common variation can be reduced by
management action, resulting in improvement and innovation of the
outputs of a process.
The objective in driving for Six Sigma performance is to reduce or narrow

variation to such a degree that six Sigma – or standard deviation of
variation - can be squeezed within the limits defined by the customer’s
! !20
specifications. For many products, services and processes that means a

huge and tremendously valuable degree of improvement.
Quality
Quality is a concept whose definition has changed over time. In the past,
quality meant “conformance to valid customer requirements” That is, as
long as an output fell within acceptable limits, called specification limits,
around a target value, also called nominal value, it was deemed
conforming. A more modern definition of quality states that quality is a
predictable degree of uniformity and dependability at low cost and suited to
the market.
CTQ
The first step, fundamental to Six Sigma, is to clearly define what the
customer wants as an explicit requirement. In Six Sigma language, these
requirements are often called “CTQs”.
CTQ is an acronym for Critical-to-Quality characteristic for a product,

service or process. A CTQ is a measure or proxy of what is important to a
customer. Examples of CTQ can be the percentage of errors in ATM
transactions for a bank per month or the number of car accidents per
month on a particular stretch of highway. Six Sigma projects are designed
to improve CTQs.
Unit
A unit is the item (e.g., product or component, service or service step or
time period) to be studied with a Six Sigma project. A non-conforming unit
is a defective unit.
Defect
A defect is a non-conformance on one of many quality characteristics of a
unit that causes customer dissatisfaction. Each defect for a unit needs to
be operationally defined. E.g., if a word in a document is misspelled, the
word may be considered a defect. A defect does not necessarily make a
unit defective. For example, a water bottle can have a scratch on the
outside and still can be used to hold water. However, if a customer wants a
scratch-free water bottle, then it could be considered defective. Examples
of defect are: 
! !21
• Typos in a document
• Long hold times in a call centre
• Late deliveries
• Incomplete shipments
• Medication errors
• Power outages
• Systems crashes
• Parts shortages
• Post-sales repairs
• Expense check discrepancies
Defect Opportunity
A defect opportunity is each circumstance in which a CTQ can fail to be
met. There may be many opportunities for defects within a defined unit.
For example, if a service has four components and each component has
three opportunities for a defect, then the service has 12 defect
opportunities. The number of defect opportunities is generally related to
the complexity of the unit.
Defects per Unit (DPU)

It refers to the average of all defects for a given number of units. If we are
producing a 50-page document and if there are 150 errors, the DPU is 3.0.
Defects per Opportunity (DPO)

DPO refers to the number of defects divided by the number of defect
opportunities. In the previous service example, there are 12 opportunities
per service. If there are 20 errors in 100 such services, the DPU is 0.20
(12/100) and the DPO is 0.0167 (20/1200).
Defects per Million Opportunities (DPMO)

DPMO equals DPO multiplied by one million. In the previous example,
DPMO would be 16,700 (0.0167x1,000,000). DPMO simply indicates how
many errors would show up if an activity were to be repeated a million
times.
Yield
Yield is the proportion of units within specification divided by the total
number of units. If 25 units are served to customers and 20 are good, then
the yield is 0.80 or 80%.
! !22
Normal Distribution
The term Six Sigma is derived from the normal distribution used in
statistics. Many observable phenomena can be graphically represented as a
bell-shaped curve or a normal distribution.
When measuring any process, its outputs vary in size, shape, look, feel or
any other measurable characteristic. The typical value of the output is
measured by a statistic called the mean or average. The variability of the
output is measured by a statistic called the standard deviation. In a normal
distribution, the interval created by the mean +/- 3 standard deviations
contains 99.73 % of the data, leaving 2700 defects per million
opportunities outside of the area. In a normal distribution, the interval
created by the mean +/- 6 standard deviations contains 99.9999998% of
the data, 2 data values per billion data values outside the area.
Six Sigma promotes the idea that the distribution of output for a stable,
normally distributed process (Voice of the Process – VoP) should be
designed to take up no more than half of the tolerance allowed by the
specification limits (Voice of the Customer – VoC).
‘C’ measures the ratio of a specification width (highest allowable – lowest

allowable value) to the process width (highest observed – lowest observed
value). If the process limits and the specification limits are both X +/- 3
sigma, then (i.e., C of 1.0), the defect level would be 0.27 per cent or 2700
ppm. This was considered a reach out target level of quality up to the mid-
eighties.
The ultimate objective is for process limits at X +/- 3 sigma to be no more

than half the specification limits at X +/- 6 sigma – a defect level of 2 ppb
(parts per billion) or C of 2.0. For all practical purposes, this is zero
defects, which is the statistical meaning of Six Sigma.
Although, processes may be designed to be at their best, variation may

increase over time due to process inputs, the way process is monitored,
changing conditions, etc. The increase in process variation is often
assumed to be similar to the temporary shifts in the process mean. In
practice, the increase in process variation has been shown to be equivalent
to an average shift of 1.5 standard deviation in the originally designed and
monitored process. If a process is originally designed to be twice as good
as a customer demands (i.e., the specifications representing the customer
! !23
requirements are 6 standard deviations from the process target), then

even with shift in VoP, the customer demands are likely to be met. Even if
the process mean shifted off target by 1.5 standard deviations, there are
4.5 standard deviations between the shifted mean and closest specification
limit, resulting in no more than 3.4 defects per million opportunities  
(3.4 DPMO).
Yield and DPMO at Different Sigma levels
If the Yield is DPMO would be Sigma would be

30.9% 6,90,000 1.0
69.2% 3,08,000 2.0
93.3% 66,800 3.0
99.4% 6,210 4.0
99.98% 320 5.0
99.9997% 3.4 6.0
The difference between a 3-sigma process (66,807 DPMO at the nearest

specification limit) and a 6-sigma process (3.4 DPMO at the nearest
specification limit) can be glaring in a service with 20 component steps. If
each of the 20 component steps has a quality level of 66,807 DPMO, then
the likelihood of a defect at each step is 6.68% or the likelihood of defect-
free step is 93.3%. Consequently, likelihood of delivering a defect-free final
service is 25.08% (at the end of 20 component steps). However, if each of
the 20 component parts has a quality level of 3.4 DPMO, then the
likelihood of delivering a defect-free final service is 99.99932%. The
difference is dramatic enough to certainly believe that 6-sigma level
performance matters, especially with more complex processes with a
greater number of steps or components. 
! !24
Dramatic Success of Six Sigma Process
99% Good (3.8 Sigma) 99.9997% Good (Six Sigma)

20,000 lost articles of mail per
1 7 articles of lost mail per hour
hour
Unsafe drinking water for almost One unsafe minute of drinking water
2
15 minutes per day. every seven months
5000 incorrect surgical operations 1.7 incorrect surgical operations per
3
per week week
2 short or long landings at major 1 short or long landing at major
4
airports everyday airports every five years
200,000 incorrect drug 68 incorrect drug prescriptions each
5
prescriptions each year year
No electricity for almost 7 hours One hour without electricity every 34
6
each month years
11.8 million shares incorrectly 4021 shares incorrectly traded on the
7
traded on the NYSE everyday NYSE everyday
3 warranty claims for every new 1 warranty claim for every 980 new
8
automobile automobiles
48,000 to 96,000 deaths
17 to 34 deaths attributed to hospital
9 attributed to hospital errors each
errors each year
year
! !25
Normal Distribution of Process Capability at 3-Sigma and 6-Sigma

Levels
! !26
Six Sigma Process with no shift in the Mean
Six Sigma Process with 1.5 Sigma shift in the Mean
! !27
3.3 Six Sigma management
Six Sigma
Six Sigma is a comprehensive and flexible system for achieving, sustaining
and maximising business success. Six Sigma is uniquely driven by close
understanding of customer needs, disciplined use of facts, data and
statistical analysis and diligent attention to managing, improving and
reinventing business processes.
It is a measure of the process performance determined by using DPMO and

a stable normal distribution. It allows process performance comparisons
across processes, departments, divisions and companies.
Six Sigma management is the relentless and rigorous pursuit of the

reduction of variation in all critical processes to achieve continuous and
breakthrough improvements that impact the bottom line and/or top line of
the organisation and increase customer satisfaction.
Another common definition is that Six Sigma management is an

organisation initiative designed to create manufacturing, service and
administrative processes that produce a high rate of sustained
improvement in both defect reduction and cycle time.
Six Sigma organisation is an organisation that is actively working to build

the themes and practices of Six Sigma into its daily management activities
and is showing significant improvements in process performance and
customer satisfaction.
! !28
3.4 Summary
Process and data are at the heart of Six Sigma initiative and it deploys lot
of statistical tools to analyse it for meaningful information and lead to a
targeted improvement. It is, therefore, necessary to understand various
concepts and terminologies used in Six Sigma before proceeding further.
1. Why processes are said to be at the heart at Six Sigma?
2. What are the common & special causes of variation?
3. Explain Normal Distribution. 
! !29
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture 
! !30
KEY INGREDIENTS OF SIX SIGMA MANAGEMENT
Chapter 4
KEY INGREDIENTS OF SIX SIGMA
MANAGEMENT
Objectives
• DMAIC Methodology for six sigma implementation
• DMADV Methodology for new products & new business practices
Structure
4.1 DMAIC Methodology
4.2 Define Phase
4.3 Measure Phase
4.4 Analyse Phase
4.5 Improve Phase
4.6 Control Phase
4.7 The DMADV Methodology
4.8 Summary
! !31
4.1 DMAIC Methodology
Every Six Sigma project follows a standardised and systematic method

known as DMAIC, a formalised problem solving process. DMAIC is an
acronym for Define, Measure, Analyse, Improve and Control. The DMAIC
process can improve any type of process in any organisation to improve its
efficiency and effectiveness.
Define phase of DMAIC process involves identifying the quality

characteristics that are critical to customers (called CTQs), using SIPOC
(acronym for Supplier, Input, Process, Output and Customer) analysis and
a voice of the customer analysis for preparing a business case for the
project with a project objective. The steps involved in Define phase are:
• Identify the problem

• Define requirements
• Set goal
Measure phase involves operationally defining the CTQs, conducting

studies of the validity of the measurement system of the CTQs, collecting
baseline data for the CTQs and establishing baseline capabilities for the
CTQs. The steps involved in Measure phase are:
• Validate problem/process
• Refine problem/goal
• Measure key steps/inputs
Analyse phase involves identifying input and process variables (called Xs)
that affect each CTQ using process maps or flowcharts, creating a cause-
and-effect matrix to understand the relationships between the Xs and the
CTQs, conducting an FMEA (Failure Mode and Effects Analysis) to identify
the critical Xs for each CTQ, operationally defining the Xs, collecting the
baseline data for the Xs, establishing the baseline capabilities for the Xs,
conducting studies of the validity of the measurement system of the Xs and
generating hypotheses about which Xs affect which CTQs. The steps
involved in Analyse phase are:
• Develop causal hypothesis

• Identify “vital few” root causes
• Validate hypothesis
! !32
Improve phase involves designing appropriate experiments to understand

the relationships between the Xs that impact CTQs, generating the actions
needed to implement optimum levels of critical Xs that minimise spread in
CTQs and conducting pilot tests of processes with Xs set at their optimum
levels. The steps involved in Improve phase are:
• Develop ideas to remove root causes

• Test solutions
• Standardise solution/measure results
Control phase involves avoiding potential problems in Xs with risk

management and mistake proofing, standardising successful process
changes, controlling the critical Xs, developing process control plans for the
critical Xs, documenting the control plans and turning over the control plan
to the process owner. The steps involved in Control phase are:
• Establish standard measures to maintain performance

• Correct problems as needed
4.2 Define Phase
The Define phase of a Six Sigma DMAIC project assumes that one has
identified a certain number of problems to be solved, and these problems
are then converted into Six Sigma projects. A key challenge for all Six
Sigma practitioners and management alike is to find these problems in a
strategic way that assures maximum benefit from the application of the Six
Sigma methodology.
Defining projects is about recognising problematic areas of the business

and subsequently creating a clear direction for resolving these problematic
areas. Problematic areas of the business (like warranty returns, accounts
receivable, product yield and customer satisfaction issues) are elephant
sized issues of the business. More likely than not, each of these
problematic areas requires more than one Six Sigma project to resolve and
improve.
The best Six Sigma projects begin not inside the business but outside it. It
focused on answering the question – how can we make the customer more
competitive? What is critical to the customer success? Anything we do that
! !33
makes the customer more successful inevitably results in a financial return

for the company.
• Poor product quality: Poor design, poor manufacturing, poor material
• Poor product reliability: Designs not robust with time and field
stresses
• Product liability potential: Poor design for human and product safety
• Poor field service: Unmotivated staff, non-availability of parts, poor

training and tools
• Customer non-comprehension: Non user-friendly features
• Late delivery: Poor forecasts, equipment breakdowns, supplier

delinquency
• Disconnected distributors/dealers: Limited loyalty to company
• Order processing, billing, accounts receivable errors: Order

inaccuracies, poor order tracking, routing errors
• Customer contact employees not empowered: Untrained,

unmotivated and underpaid employees
• Dictatorial management: Management by fear, micromanagement
The first step – to define – is to clearly describe the problem and the
impact on customer satisfaction, stakeholders, employees and profitability.
During this phase, the following are defined:
• Customer critical requirements

• Project goals and objectives
• Team roles and responsibilities
• Project scope and resources
• Process map and SIPOC (Supplier, Input, Process, Output and Customer)
• Process performance baseline
! !34
Noritaki Kano’s approach sorts the customer requirements into three

categories; assumed, specified and expected requirements.
An assumed requirement is one that is taken as a given. Someone who is

buying a car, for example, never checks to be sure that the car will include
four wheels or a steering wheel. When an implicit requirement is not met,
customers are extremely dissatisfied.
The specified requirements are a customer’s explicitly communicated

requirements. To meet the requirements is to satisfy the customer. But if
an organisation has not done anything beyond what customers have
specifically asked for, customers will be very open to try competitive
products or services.
The expected requirements include requirements beyond what the

customer explicitly communicates. These are the customers’ real unstated
expectations of what they would love to receive from the suppliers. For a
supplier to fulfill these expectations, the supplier must be able to anticipate
the customers’ future needs for products or services, thus demonstrating a
desire for ongoing relationships with customers.
Once the requirements are understood, they flow down to the operation
level, where project goals and objectives are set.
Some of the techniques used in the define phase include the following:
• Project charter
• Stakeholders’ commitment analysis
• Affinity diagrams
• Voice of the customer
• Kano’s quality analysis
• Force field analysis
• Pareto analysis
• Process mapping
• SIPOC (Suppliers, Input, Process, Output, Customers)
Projects state performance problems in quantifiable terms that define

expectations related to desired levels of performance and timing.
! !35
A Project
• Has a financial impact to EBIT or a significant strategic value

• Produces results that significantly exceed the amount of effort required
to obtain the improvement
• Solves a problem that is not easily or quickly solvable using traditional
methods and
• Improves performance by greater than 70 per cent over existing
performance levels
The responsibilities, accountabilities and deliverables of a project are

divided between management and various Belts who perform problem
solving activities. Management, including the process owner, is responsible
for determining priorities and focus, while non-management personnel are
responsible for implementing the solution and realising the benefits. These
project life cycle relationships prevent Six Sigma deliverables from falling
into the cracks.
Six Sigma is a team effort. Even in the Define stage, where management is
responsible for project identification and launch, the Belts assist. Generally
speaking, Belts have 20 per cent responsibility for defining and managing
improvement, while management has 80 per cent. When it comes to
implementation – the MAIC portion of the breakthrough strategy – these
percentages are reversed.
When defining a project, one gets into the nuts and bolts of Six Sigma. It is
well worth one’s time to do this step right, because 50 per cent of project’s
success depends on how well it is defined.
The most common mistakes in defining a potential project are as follows:
• The scope is too broad. Symptoms include considering too many Ys

(outputs) for improvement, multiple goals, numerous process owners
and multiple departments.
• The problem is too easy
• The problem solution is known
• It is a “just do it” solution; no problem analysis is required
• The problem is a management issue, not a good Belt project
! !36
It’s best to go through a specified sequence of events or a process to

ensure that a project is well defined. Generally, one can expect to perform
eight specific steps in this process:
1. Determine the Y: What specifically needs to be improved

The Ys in need of improvement must be easily identifiable and quantifiable.
If there are more than two Ys, there is a good chance that the project is
too large in scope and may have to be broken into two or more projects to
be successful.
2. Identify the associated processes and their physical locations

One needs to get a better sense of the process steps that are involved in
the performance of identified Y. At this point, one needs a macro process
map, which is concerned with the high-level flow that generates the output
of interest. Such a map shows the full scope of the process and includes all
major areas being affected.
3. Determine the baseline performance for each Y chosen

One normally has a sense of the magnitude of the problem one wants to
solve. Under Six Sigma methodology, one must have more than just a
sense of the magnitude; one should be able to express the magnitude of
the problem (defect level) in some unit of measure (e.g., hours, inches, per
cent, late, etc.).
At this phase of improvement effort, one may not have abundant and
accurate data. The amount and integrity of data will significantly improve
in the Measure phase. The data should be long-term, not short-term, when
estimating the baseline performance. Short-term data is a snapshot of
what is happening and could mislead. It also doesn’t represent all the
potential sources of variation that are contributing to the problem over the
long-term, such as seasonal effects.
4. Identify the cost and impact of the problem

The Six Sigma effort is primarily aimed at cost reductions by eliminating
waste (scrap, inefficiencies, excess materials, rework, etc.) that increases
cost but adds no value. As a general rule, Six Sigma projects should
produce a financial benefit, either directly or indirectly, through cost
reductions, revenue growth, balance sheet improvements or accomplishing
strategic goals.
! !37
Cost avoidance is not an appropriate metric for determining Six Sigma

savings. If a process has been improved, one can not make a projection
into the future about what may have happened if the project had not been
done. A good way to estimate the potential value of a project is to imagine
how much one could save if the problem was completely eliminated.
5. Write the problem statement

The problem statement serves several purposes. First, it significantly
clarifies the current situation by specifically identifying what needs to
improve, the level of the problem, where it is occurring, and the financial
impact of the problem. It also serves as a great communication tool,
helping to get buy-in and support from others. When problem statements
are well written, people readily grasp and understand what it is that one is
trying to accomplish.
A problem statement needs to be concise and include the following:
• A description of the problem and the metric used to describe the problem
• Where the problem is occurring by process name and location
• The time frame over which the problem has been occurring
• The size or magnitude of the problem
6. Write the objective statement

The objective statement directly addresses the information in the problem
statement. Just like the problem statement, the objective statement must
contain certain information in order for it to be effective. A good objective
statement contains all of the following elements: improve some metric
from some baseline to some goal in some amount of time with some
impact against some corporate goal or objective. This timeline must be
aggressive, yet realistic.
Simply stated, one needs to indicate what level of improvement is

expected from this project. This is a specific, quantifiable amount of
improvement planned above the baseline performance that was indicated
in the problem statement. One also needs to determine how long it will
take to complete this project and to achieve the goal.
• Identify and recruit candidates for the project team

Very few people have all the skills necessary to take on process
improvement projects by themselves. Usually, three to six team members,
! !38
all of whom have expertise from the areas associated with the project, are
sufficient. If one has enlisted the process owners into the project,
identifying these individuals becomes easy.
• Obtain approvals and launch

The last step involved is to identify who has to approve the project. The
key individual to identify is the process owner. This is the person who has
the primary responsibility for the results of the process associated with the
problem one is going to solve. If additional approvals are required, it will
become obvious when the process owners are known. It is also important
to seek approval from the person who will be leading the project.
4.3 Measure Phase
The purpose of the next phase – to measure – is to describe the

opportunity for improvement and quantify the baseline performance. When
changes are made for improvement, then the business can verify the
effectiveness of the changes. To analyse data, basic statistical techniques
such as averages, standard deviation and probability distributions (i.e., the
Normal distribution and the Poisson distribution) are critical for
understanding the nature of excessive variation in the process.
W. Edwards Deming said that “variation is evil.” This premise underlies the
method for achieving dramatic improvement in any process. Walter
Stewart classified variation as random or assignable. Deming called it
common or special variation. The nature of variation depends upon its
causes, which could be random or assignable.
Random causes of variation such as ambient temperature, supplier-to-

supplier variation in parts or operator-to-operation variation, are inherent
in process. Assignable causes are those that change for specific reason,
such as machine breakdown, untrained operator, use of the wrong
material, an incorrect set-up or some design related issue. The random
causes are difficult to diagnose and many of those act concurrently, while
the assignable causes are known, specific and introduced in the process. In
statistical terms, random causes are the ones that are more likely to
happen as a routine (about 95% of time), while assignable causes occur
less often (about 5% of time) and are exceptions.
! !39
Another measure of performance is the cost of quality. The traditional cost

of quality consists of four categories: internal failures, external failures,
appraisal and prevention. The goal is to increase the preventive cost of
quality and to reduce the internal failures, external failures and appraisal
components. Typically, not all the costs of poor quality are measured in a
company’s accounting system; therefore, it takes both effort to understand
and courage to measure accurately the cost of poor quality.
Measure is generally the most difficult and time consuming phase in the
DMAIC methodology. But if it is done well and right at the first time, it
saves a lot of trouble later and maximises one’s chance of improvement.
Accuracy and precision are two distinct properties of a measurement

system. Accuracy describes how centred the measurement system is
compared to the actual variation. Precision describes how widely spread
the variation of the measurement system is compared to the actual
variation of the process or characteristic being measured.
In measurement system, precision is made up of two components:

repeatability and reproducibility.
Repeatability is the part of measurement variation that occurs when one

repeats measurements with the same item, the same measurement set-up
and the same equipment, under the identical conditions.
Reproducibility is the part of measurement variation that occurs when one

repeats measurements with different items and different measurement set-
ups, under different environmental conditions.
Several important principles constitute the foundation of a robust Six

Sigma measurement system:
• Any department or team can and must be measured for effectiveness

• The measurements must be simple, meaningful, fair and easy to apply
with little calibration error
• Employees must be involved in the formulation of the measurements
• When employees have operational “ownership”, they set higher goals
than measurement
• Team measurements must be transparent and prominently visible to all –
employees, managers and customers
! !40
• Each team should be measured against itself, using time for comparison
• The benefit-to-cost ratio of any measurement must be at least 5:1 and
preferably 10:1
• Leading indicators should be given much greater attention than lagging
indicators
Measures need to be continuously improved. Following are the important

steps in any measurement process
1. Select what to measure

Selecting the optimal performance measures suggests balancing two major
elements 1) what is feasible and 2) what is most useful or valuable. If the
customer requirements could be prioritized, it is a good starting point for
determining value. Areas, in which one suspects, there are performance
gaps, can also be good places to begin measures.
2. Develop operational definitions

One of the biggest pitfalls associated with the quest for effective business
process measurement is the failure to create good “Operational Definitions”
and the data collection procedures to go with them. Operational definition
is a clear, understandable and unambiguous description of what is to be
measured or observed, so that everyone can operate or measure
consistently on the basis of definition.
3. Identify data source

There are many possible sources of data in an organisation. The important
consideration in this step is to choose the source which has accurate data
and represents the process, product or service one wants to measure.
4. Prepare a collection and sampling plan

Well designed spreadsheets and check sheets are the workhorses of data
gathering and although, there are some standard types of forms, one
should rather tailor each form to fit the actual data collection one is going
to do.
Some common types of check sheets include the following:

• Defect or Cause Check sheet
• Data sheet
• Frequency Plot Check sheet
• Concentration Diagram Check sheet
! !41
• Traveller Check sheet
5. Implement and refine measurement

It is always prudent to run a test on data collection so as to ensure that
forms, sampling plans and definitions work as planned. If a trial is not
possible, one should pay careful attention to how it works when one begins
to gather the data. If many people are involved in gathering and compiling
data, some kind of training is essential.
4.4 Analyse Phase
During the analyse phase, the focus is on searching for the root cause.
Based on the data analysis, opportunities are prioritised according to their
contribution to customer satisfaction and impact on profitability.
Analyse is the most “unpredictable” of the DMAIC phases. The tools used
and the order in which these are applied depend a lot on the problem and
how the problem is approached. One of the most valuable lessons of the
Six Sigma approach is that the “usual suspects” often turn out to be “not
guilty” or just the accomplices to the real culprit.
The Root Cause analysis can be represented as a cycle driven by

generating and evaluating hypothesis as to the cause of the problem.
The root cause hypothesis/analysis cycle
! !42
!
One can enter the cycle either at point (a) – by looking at the process and
the data to identify possible causes – or point (b) – where one can start
with a suspected cause and seek to validate or refute it through analysis.
Even “incorrect” causes are actually opportunities to refine and narrow the
explanation of the problem.
As the analysis cycle indicates, there are two key sources of input to
determine the true cause of the targeted problem
• Data Analysis: It is the use of measures and data to discern patterns,

tendencies or other factors about the problem that either suggest or
prove/disprove possible causes
• Process Analysis: It is a deeper investigation into and understanding of

how work is being done to identify inconsistencies, disconnects or
problem areas that might cause or contribute to the problem.
There is no such thing as absolute certainty of a root cause. Various tools

that help in identifying the opportunities for improvement are indicated
below.
Pareto Analysis: The Pareto chart is a graphic representation of the

opportunities for improvement. It is used in identifying the critical
opportunities that will have the greatest impact on customer satisfaction
! !43
and profitability. People tend to work first on opportunities that are easier
to attack rather than those most important to attack. The purpose of using
the Pareto chart is to promote work on important opportunities rather than
on the easy ones.
Pareto Chart of Opportunities for Improvement
Cause-and-Effect Analysis: Once the most significant opportunities have

been identified, a root cause analysis is performed. The cause-and-effect
diagram is one tool used to diagnose the causes of a selected problem.
Most failures are caused by problems with the machine, material, method
or mind (skills). In addition, the environment and measurement devices
may cause failures. Once causes are listed, a cross-functional team can
prioritise various causes and select a few on which to work. The cause-and-
effect diagram, as shown below, is also called the Fishbone or Ishikawa
diagram.
! !44
Cause-and-Effect (Fishbone) Diagram
Multivary Analysis: Multivary analysis is an excellent tool to apportion

variance in the area where opportunities for improvement exist. It dissects
the variance into positional, cyclical and temporal categories. The positional
variation is caused by the variables that affect the process performance at
certain locations within the process or the product. The temporal variation
is attributed to the changes between cycles of a process and represents
trends over time, i.e., shift to shift, day to day or week to week.
Apportioning the variation in a process puts focus on the variables related

to a particular type of variation. For example, the positional variation is
normally attributed to product or process design, as the defects recur at
certain locations. The cyclical variation is attributed to the variables related
to the process setup that cause variation in performance from one process
cycle to the next. The temporal variation can be related to the maintenance
activities, as well as degradation in consumable items in the process.
! !45
FMEA: Failure Mode and Effects Analysis (FMEA) is an excellent tool that
has been used mainly in automotive and aerospace industries or where
personal safety is a concern. As implied by the name, FMEA is used to
anticipate potential failure modes during the product or process design to
determine the effects of failure modes on performance and to identify
action items that will prevent anticipated failure modes. Each failure mode
is ranked for severity of the effect on performance, frequency of
occurrence of its cause and detection of the failure mode based on the
effectiveness of the control methods. A risk priority number (RPN) is
calculated by multiplying the ranking for severity, occurrence and
detection.
Following are few final steps that may help in confirming the causal
hypothesis and move into the Improve phase
1. Verifying the cause through logical analysis: it is testing the cause

against the data gathered and checking whether the explanation fits the
facts, including both what is seen and what is not seen happening
2. Checking the cause through observation: It is visiting the process

or the place where the cause is suspected to be happening, to see if one
can watch it in action
3. Confirming the suspicions with people who know: It is talking to

people involved in the work – customers, suppliers or subject matter
experts to get their validation – or refinement or rejection – of the
hypothesis
4. Apply the “confidence test”: It is a process of reaching consensus as

a team on the following questions:
✦ Is the team comfortable that it understands enough about the process,

problem and its root cause to develop effective solutions?
✦ Is the value of further confirmation of team’s conclusions worth the

additional time, resources and momentum?
If the answers to these questions are “Yes” and “No” respectively, then the
team is ready to move onto Improve phase.
! !46
4.5 Improve Phase
All the efforts of defining, measuring and analysing process problems pay-
off in the Improve phase. At this stage, most teams find new energy when
they begin to ask questions that drive improvement:
• What possible actions or ideas will help in addressing the root cause of
the problem and achieving our goal?
• Which of these ideas form workable potential solutions?
• Which solution will most likely achieve the goal with the least cost and
disruption?
• How can the chosen solution be tested to ensure its effectiveness and
then be implemented permanently?
It is important in the Improve phase to look for ways to maximise the

benefits of efforts put in. Too often, teams apply narrow solutions when
they might have achieved more with just somewhat greater creativity and
a broader perspective.
A Six Sigma organisation can be a great place for creative thinking.

Following are some of the basics of effective idea generation used during
the Improve phase:
• Clarifying the objective of brainstorming

• Listening to and building on the ideas of others
• Not to judge, criticise or comment on ideas
• Avoiding self-censorship
• Abandoning assumptions and being wild in thinking
Once the team is loaded with ideas, great or not-so-great, the next
challenge to the team is to turn them into real solutions. Ideas generated
in the Improve phase are like raw material, they need to be refined to have
real value to the organisation. Usually Six Sigma solutions will be
combination of ideas that together make up a plan for results, whether it’s
reduced defects, faster cycle times, enhanced value for customers etc. it is
important to recognise that solution selection may not be an either/or
choice. Combining several actions into one plan, suits. On the other hand,
! !47
a “shotgun” solution that sprays many different mini-fixes at the problem

can be a big waste of resources.
Two key aspects of the Improve phase include the use of Design of
Experiments (DOE) and change management.
The traditional approach to finding a solution to a problem focuses on one

variable at a time, holding the other factors constant. Shortcomings of this
approach include the following:
• It is usually not possible to hold all other variables constant

• Too many experiments are required to study the impact of all the input
variables
• The interaction between variables cannot be determined
• The optimum combination between variables may never be revealed
• Resources might be wasted in studying the wrong variables
Statistically designed experiments involve varying two or more variables

simultaneously and obtaining multiple measurements under the same
experimental conditions. The objective of DOE is to assess the effects of
the critical variables and the interaction among them and then to
determine the significance of those effects compared to the experimental
error. If the effects of the process changes happen to be significantly
better, a new process can be implemented. The advantages of this
approach are the following:
• Many variables can be measured simultaneously, making the DOE

approach more economical
• Interactions between variables can be detected and measured
• Experimental error is quantified and used to determine the confidence
level in the experiment results
• The results will indicate if any important variables were missed in the
experiments
To improve a process, one must gain knowledge of the process, its

environment, its components and its responses. The following steps outline
the various steps for process improvement:
• Describe the process and break it into sub-processes

• Determine measurement instrument variability
! !48
• Collect and analyse data

• Identify major components of variation, using statistical tools
• List input variables associated with the major component of the
variation. Screen out trivial variables by using brainstorming, screening
experiments or similar techniques
• Conduct statistically designed experiments to identify critical input
variables
• Optimise the process with attention to critical variables and determine
realistic tolerances of input variables.
The “Solution Statement” is a clear description of a proposed improvement.

The value of the Solution Statement is that it ensures a thorough definition
and understanding of the idea under consideration. The Solution Statement
becomes the project objective once a solution is chosen for
implementation. It also becomes the last of the four key statements, a
DMAIC team creates in the course of a process improvement project –
Problem Statement, Goal Statement, Hypothesis Statement and Solution
Statement.
Following solutions can be aimed at in the Improve stage
• Reduce the number of product options, using an ABC cost analysis

• Postpone product differentiation until the latest possible stage in supply
chain. The best such change is product differentiation by the customer,
the second is at the distributor/dealer level, the third is in the final
assembly and the worst is at the start of production
• Limit the number of customers based on customer differentiation
• Modularise the design for easy, rapid and reliable assembly
• Maximise standardisation up to the point of differentiation
• Produce modules in parallel instead of in a series
• Carry JIT/lean production to suppliers to reduce inventories and
prevent stock-outs at the same time
• Automate order entry and programs for instant changes in options
• Reduce cycle time to customers
• Increase inventory turns with pull systems and kanban
! !49
Implementing Process Improvements

This midpoint in the improve phase is a major threshold for the team.
Depending on the nature of the solution, a team may need other
knowledge and resources. To launch solutions successfully, the team should
focus on the “three Ps”: Planning, Piloting and Problem Prevention.
Planning: Changing or fixing a process demands strong project

management skills. Having a solid implementation plan that covers actions,
resources and communication is key and more critical as the complexity of
the solution increases.
Piloting: Trying solutions on a limited scale is a must. The chances of

unforeseen problems are high and the learning curve can be steep when
changing to a new way of doing things.
Problem Prevention: Asking tough questions like “How could this thing
crash?” can seem like negative thinking, but it is key to ensuring that the
team has thought through as many possible difficulties as it can and is
prepared to deal with them proactively.
It can take a while to test solutions, measure results and ensure the
success of a DMAIC project. A final, critical element of the implementation
is to capture data to track the impact of the changes as they take effect –
both to tally the results and to look for, and respond to, any possible
glitches.
4.6 Control Phase
Six Sigma emphasizes the control phase. This is because previous attempts
at improving quality and business performance have repeatedly
demonstrated that process behaviour is complex and fragile and that hard-
earned gains slip away if the process is left to itself.
What gets measured gets managed. Deciding what to measure and

manage in Six Sigma is determined by define, measure, analyse and
improve project activity, before one gets to the control phase. Simply
stated, they are the critical input Xs and the output CTQs (the Ys)
discovered in the project. In the Control phase, one monitors the outputs –
the CTQs – and one controls the inputs, the critical Xs. When done
! !50
properly, this monitoring allows to consistently reap the fruits of efforts put
in.
Once the improvement is realised, the goal is to control the improved

processes and sustain the Six Sigma initiative. Tools such as control charts,
pre-control charts and run charts are used to maintain the processes. The
challenge, however, lies in keeping the Six Sigma initiative alive on a
continual basis.
There are two aspects to a control plan. Y=f(X) shows the inputs that must
be controlled. The outputs can be monitored only to see whether control
has or has not been achieved. Accordingly, there are two aspects of a Six
Sigma control plan:
Process monitoring of outputs uses a tool called process management

summary. The objective of the process management summary is to enable
the visibility, review and action for all critical process outputs in an
organisation.
Process control of inputs uses a tool called a process control plan. The
objective of a process control plan is to create systematic feedback loops
and actions to assure the process has inherent, automatic control. With a
good process control plan, one can change people, equipment, materials
and production rates without significantly altering the performance quality
of the process.
Statistical Process Control (SPC) involves the use of statistical techniques

to monitor and control the variation in process. SPC is used first to stabilise
out-of-control processes. But it is also used as a follow-on, to monitor the
consistency of product and service processes.
The primary SPC tool is the control chart – a graphical tracking of a

process input or an output over time. In the control chart, these tracked
measurements are visually compared to decision limits calculated from
probabilities of the actual process performance.
The visual comparison between the decision limits and the performance
data allows detection of any extraordinary variation in the process –
variation that may indicate a problem or fundamental change in the
! !51
process. There are several different types of control charts, depending on

what type of process measurement one is tracking.
These different types of control charts are separated into two major
categories: Continuous data control charts and attribute data control
charts.
Continuous data control charts:

✴ Averages and ranges
✴ Averages and statistical deviations
✴ Individual values and moving ranges
Attribute data control charts:

✴ p chart
✴ u chart
Control charts provide information about the process measure in two ways:
the distribution of the process and the trending or change of the process
over time. Control charts are used to
• Provide a simple, common language for discussing the behavior and

performance of a process input or output measure
• Control the performance of a process by knowing when and when not
to take action
• Reduce the need for inspection
• Understand and predict process capability based on trends and other
performance insights
• Determine whether changes made to the process are having the
desired result
• Provide an ongoing, continual view of the performance of the process
• Create a repository of data for follow-on improvement activities
When process improvement or design projects achieve their goal of

reducing defects, discipline is essential to sustain the results. Without a
sustained, focused effort, the beginning drive for improvement will lose
energy and the company will become a former Six Sigma organisation.
Being smart about getting others to understand and buy into team’s
solutions is a recurring theme in Six Sigma, and the need to “sell” the
! !52
solution doesn’t stop. Some of the most important considerations include

the following:
• Working with those who manage the process

• Using a “storyboard” with facts and data
• Treat the people managing and using the new process as customers
• Creating a sense of purpose and enthusiasm
One way to keep the Six Sigma initiative alive is to have the organisation
divide itself into functional territories, with managers in each territory
working on improving their own functions. This solution, however, is
sometimes detrimental to the organisation as a whole. Such an
organisational hierarchy can give managers a monopoly for controlling any
changes to their departments or functions. This authority can lead to
resistance to any “outside” interference and change, such as quality
improvement projects. On the other hand, some organisations have too
many rules (or written procedures) and any change in those rules must go
through a bureaucratic process, which may take weeks or months. To lower
such barriers, incentives to drive dramatic improvement or consequences
for resistance must be clearly defined and communicated.
Leadership must transform the organisation’s culture into one that

embraces change rather than fights it. A mentor can help project managers
find the right resources or address critical roadblocks. The mentor may
direct the project manager to an informal leader whose support is critical
for the project’s success as well as find legitimate ways around constraints
and roadblocks. For example, a minor change in the project plan might
help bypass a daunting approval requirement.
Documenting the Changes and New Methods

Documentation is a necessary evil, and can even be a creative undertaking
in itself. A successful Six Sigma organisation will have to look for new and
better ways to make documentation usable and accessible and get away
from all those huge procedure manuals and process descriptions. Following
are some general guidelines that will help people to actually follow the
team’s directions and/or documentation:
• Keeping the documentation simple

• Keeping the documentation clear and inviting
• Including options and instructions for “emergencies”
! !53
• Keeping the documentation brief

• Keeping the documentation handy and
• Having a process for updates and revisions
4.7 The DMADV Methodology
The DMADV (Define – Measure – Analyse – Design – Verify) methodology is

geared towards creating new products and business practices. It consists of
following steps:
Define: Define the project goals and customer (internal and external)
deliverables
Measure: Measure and determine customer needs and specifications
Analyse: Analyse the process options to meet the customer needs
Design: Design the product / process to meet the customer needs
Verify: Verify the design performance and ability to meet customer needs
The entire process of DMADV will rely on the company’s ability to

understand the customers’ needs and to determine which needs are not
met. Management will begin the process by drawing up a business strategy
that will include the improvement of products and systems which will
ultimately result in overall customer satisfaction.
The DMADV methodology is used instead of DMAIC in following cases:
• When a product or process is not in existence in the organisation and

one needs to be developed
• The existing product or process has been optimised (using DMAIC or

otherwise) but still does not meet the level of customer specification or
Six Sigma level
DMAIC and DMADV are two different methodologies of the Six Sigma
approach. Both methods are used to drive defects to less than 3.4 DPMO.
Both methodologies are data intensive and are implemented by the
organisation structure consisting of Master Black Belts, Black Belts and
! !54
Green Belts. Similar to DMAIC process, the process owner or champion is

in charge of implementing the DMADV process.
While, first three phases of DMADV process will follow similar steps and
techniques of DMAIC methodology, it will take different route in last two,
since it deals with design and development of new products and new
processes. During the Design phase, there will be lot of demand on
creativity from the team members and support from the design team. The
phase will include several executives from Development, Testing, Prototype
building and Budgeting functions. Lot of efforts will have to be put in
reviewing simulations, process modelling, risk analysis and developing
process charts.
The last phase of Verify will ascertain the design performance and
transition the product, process or service to the customer.
4.8 Summary
Six Sigma project involves 5 basic steps – Define, Measure, Analyse,

Improve and Control. Each step is an involved activity and has clear
deliverables. Time duration of each step and management structure
required to handle it depends upon magnitude and complexity of the
project. The chapter studies these steps in detail.
4.9 Self assessment questions
1. What are the different stages of DMAIC methodology?
2. What are the different steps in defining a project?
3. What are the important steps in a measurement process?
4. Explain Cause-and-Effect analysis.
5. What is DMADV methodology? How it is different to DMAIC process?
! !55
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture - Part 1
Video Lecture - Part 2 
! !56
OBJECTIVES AND BENEFITS OF SIX SIGMA
Chapter 5
Objectives
• Why Six Sigma is important to an Organisation?
• Benefits of Six Sigma
Structure
5.1 Objectives of Six Sigma
5.2 Benefits of Six Sigma
5.3 Summary
! !57
5.1 Objectives of six sigma
Perception and performance of an enterprise determines its value. Six

Sigma management focuses on driving effective and efficient performance
across the total enterprise to increase the perception of the marketplace of
its ability to deliver value added processes, products and services.
Six Sigma process has several reach out objectives in industry
• Develop a comprehensive infrastructure that goes well beyond the

narrow confines of quality to encompass all areas of business
excellence.
• Maximise all stakeholder loyalty – customer, employee, supplier,

distributor/dealer and investor.
• Maximise business results – profits, return on investment, asset turns,

inventory turns, sales/value added per employee, etc.
• Minimise employee turnover and bring joy to workplace, especially to

the line worker.
• Go beyond modest and mediocre quality standards / systems to devise

an ideal yet practical quality system.
• Introduce powerful problem solving tools.
• Implement solutions that are low in implementation costs and high in

business results.
• Conduct periodic audits and self-assessments to achieve continuous,

never-ending improvement.
The perception of the marketplace of the value of an enterprise is indirectly

measured by market share, shareholder value and the willingness of
customers to recommend these processes, products and services to other
potential customers.
! !58
Following are the critical success factors of Six Sigma
• Customer loyalty and long-term retention
• Quality of leadership to provide vision and inspiration for employees to

reach their full potential
• Quality of organisation to revolutionize the ways people are hired,

trained, evaluated, compensated and promoted
• Quality of employees to provide empowerment on the road to industrial

democracy
• Quality of metrics to assess business excellence
• Quality of tools to achieve quality, cost and cycle time break-throughs
• Quality of design to maximise customer value and “ wow”
• Quality of supplier partnerships to improve customer quality, cost and

cycle time while enhancing supplier profits
• Quality of manufacturing to improve overall effectiveness
• Quality of field reliability towards zero field failures
• Quality of support service and
• Quality of results
5.2 Benefits of Six Sigma
There are two types of benefits from Six Sigma management, benefits to
the organisation and benefits to stakeholders. Benefits to an organisation
are gained through the continuous reduction of variation and where
applicable, by centring of processes on their desired (nominal) levels.
1. Six Sigma generates sustained success: Six Sigma is the only way
to continue double-digit growth and retain a hold on shifting markets by
! !59
constantly innovating and remaking the organisation. Six Sigma creates

the skills and culture for constant revival through a closed loop system.
2. Six Sigma sets a performance goal for everyone: In a company of

any size, getting everyone working in the same direction and focussing on
a common goal is pretty tough. Each function, business unit and individual
has different objectives and targets. What everyone has in common,
though, is the delivery of the products, services or information to
customers. Six Sigma uses that common business framework – the process
and the customer – to create a consistent goal. Anyone who understands
their customers’ requirements can assess their performance against the Six
Sigma goal of 99.9997 per cent perfect – a standard so high that it makes
most businesses’ previous views of “excellent” performance look pretty
weak.
3. Six Sigma enhances value to customers: With tighter competition in

every industry, delivering just “good” or “defect-free”products and service
won’t guarantee success. The focus on customers at the heart of Six Sigma
means learning what value meansto customers and planning how to deliver
it to them profitably. When GE began its Six Sigma efforts, Jack Welch
stated that “we want to make our quality so special, so valuable to our
customers, so important to their success that our products become their
only realvalue choice.”
4. Six Sigma accelerates the rate of improvement: Motorola’s goal of

“100X improvement in four years” set an example for ambition driven
organisations. By borrowing tools and ideas from many disciplines, Six
Sigma helps a company not only improve performance, but improve
improvement.
5. Six Sigma promotes learning and “cross-pollination”: Six Sigma is

an approach that can increase and accelerate the development and sharing
of new ideas throughout an organisation. Even in a company as diverse as
GE, the value of Six Sigma as a learning tool is seen as critical.
6. Six Sigma executes strategic change: Introducing new products,

launching new ventures, entering new markets, acquiring new
organisations have become daily events in many companies. Better
understanding of company’s processes and procedures through Six Sigma
! !60
gives a greater ability to carry out both the minor adjustments and the
major shifts that 21st century business success will demand.
Other Six Sigma benefits include :
• Improved process flows.
• Reduced total defects. Outgoing defect rates have drastically come down
from 1-10% to 10 ppm (parts per million)
• Improved communication
• Reduced cycle times. It has exhibited a reduction in set-up times from

1.5 days to 1.5 hours.
• Enhanced knowledge and enhanced ability to manage that knowledge
• Higher levels of customer satisfaction.
• Increased productivity and employee satisfaction. Value added per

employee has shown to increase by 30%.
• Decreased inventory. Inventory turns in organisations have increased

from a single digit number to more than 100.
• Increased capacity and output. Asset turns have shown to go up from

four to over fifteen.
• Increased quality and reliability. Field failures have come down from
2-20% range per year to 100 ppm per year. The cost of poor quality (as
a % of sales) has come down from 8-20% range to less than one per
cent.
• Decreased unit costs
• Increased price flexibility
• Better designs by releasing the natural but currently bottled-up creativity

of the engineer. Decreased time to market
! !61
• Faster delivery time
• Increased ability to convert improvements and innovations into hard

currency. It can take the organisation to number one or two in market
share in each business line
Benefits to the Stakeholders

• Shareholders receive more profit due to decreased costs and increased
revenues. Business’s long-term profits have shown to grow by factors of
2:1 to 5:1. The return on investments has gone up by 3:1 to 8:1.
• Customers are delighted with products and services. Customer loyalty

and retention levels have shown to increase from below 75% to 99%.
• Employees experience higher morale and more satisfaction from joy in

work. Employee turnover has shown to decrease from 20% to 10% and
eventually down to less than 0.5% per year.
• Suppliers enjoy a secure source of business
5.3 Summary
Chapter provides an insight to the objectives of Six Sigma initiative and the
benefits it brings to an organisation. It also enumerates the factors of a
successful Six Sigma project.
5.4 Self assessment Questions
1. What are the objectives of the Six Sigma process?
2. ________ Critical success factors of Six Sigma?
3. List down various benefits Six Sigma process bring to an organization.
! !62
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture 
! !63
SIX SIGMA FOR MANUFACTURING AND SERVICE INDUSTRIES
Chapter 6
SIX SIGMA FOR MANUFACTURING AND
SERVICE INDUSTRIES
Objectives
• Six Sigma Opportunities in Service Industry
• ____________ Manufacturing set-ups.
Structure
6.1 Service process opportunities
6.2 Manufacturing process opportunities
6.3 Summary
The purpose of this chapter is to look at the compelling reasons why both
service and manufacturing operations can benefit from a Six Sigma
discipline and how Six Sigma can be approached to meet unique challenges
in either of them.
“Service” processes are those processes which are not directly involved in
designing or producing tangible products. These can include sales, finance,
marketing, procurement, customer support, logistic or human resources –
and more – in any organisation.
“Manufacturing” processes relate to the development and production of

tangible products.
Although, these categories are quite broad, all of the issues pertaining to
making Six Sigma effective tend to be most similar.
! !64
6.1 Service process opportunities
As the role played by services in boosting business competitiveness grows,

so does the evidence of there being plenty of untapped potential in these
activities
• Research has shown that the costs of poor quality in service-based

businesses and processes typically run as high as 50% of total budget
(10-20% in manufacturing processes)
• Administrative and service processes, prior to improvement, perform in a

range of 1.5 to 3 sigma
• Analysis of service processes reveal that less than 10% of total process
cycle time is devoted to real work on tasks that are important to
customers
There are some important, understandable reasons why service-based

processes often have more opportunities for improvement than
manufacturing operations
1. Invisible work processes: Most service processes are hard to spot

with the naked eye: information, requests, orders, proposals,
presentations, meetings, signatures, invoices, designs, ideas. As more
and more service processes revolve around information handled in
computers and networks, the work product becomes virtual. It makes
an understanding of how the work gets done harder to come by.
2. Evolving workflows and procedures: In service arena, a process can

be changed quickly, unlike that in manufacturing. Responsibilities can be
shifted, forms revised, new steps added, guidelines altered without any
capital investment or serious deliberation. Many changes arise out of
individual, even spur-of-the-moment decisions, with ramifications that
may be small. Add up all the individual choices and changes and the
overall impact can be huge.
3. Lack of facts and data: The nature of service processes make them
inherently more difficult to measure. The data that exists, is narrowly
focused and subjective. Accurately measuring the time and cost of the
rework and redundancy is difficult.
! !65
4. Lack of a “head start”: A vast majority of service activities have not

been touched by the powerful methods of process measurement and
improvement. It means there is a lot of catching up to do and for that,
one should be ready to adapt the Six Sigma approaches to the special
conditions of a service environment.
Following are broad guidelines for making Six Sigma more effective in
services:
1. Start with the process: In most service organisations, one would need
to investigate processes to start with. Although, it might be a rude
awakening, it also can be an enlightening event that gets the Six Sigma
effort off to a fast start.
2. Fine-tune the problem: Once the processes are identified, the next
step would be to work detailing the processes, customer requirements
and the issues affecting them.
3. Using facts and data to reduce ambiguity: One of the biggest

obstacles in clarifying issues, measuring performances and generating
improvements in the service arena is the fact that things often are not
well described. That means that as one starts to shed light on processes
and customers in a service environment, high priority will have to be
given to translate ambiguity into clear performance factors and
measures. Lower volumes in some service processes pose an extra
challenge. For that, one will need to gather and analyse the data little
differently.
6.2 Manufacturing process opportunities
Designing, producing and selling manufactured products is the core

business of many companies and the need to provide defect-free products
is more important than ever. A successful manufacturing business needs to
master many competencies including:
• Keeping track of new technologies and being able to develop them

rapidly into viable products
• Understanding existing and emerging customer needs that can be met by

improved processes and improved products
! !66
• Establishing and managing supplier networks so as to ensure a timely

supply of parts and raw materials
• Taking, processing and filling customer orders accurately – including

building to unique specifications as needed – and profitably
• Adapting to shifting market conditions
An increasing number of businesses have handed over responsibility for

manufacturing to a vendor so that they can focus on product design,
development and marketing. However, the specialist firms who supply
manufactured products to these design-and-marketing-only clients must
also have processes capable of planning and setting up for production,
managing order flow and building effective interfaces with customers.
The efforts to apply Six Sigma to manufacturing bring with it some unique
challenges too. Following are some of the most prevalent difficulties
organisations must be mindful of:
1. Adopting a broader perspective: People on the shop floor have

always tended to be somewhat isolated from the rest of the business.
The Six Sigma system would demand communication and coordination
all along the company’s critical processes, as well as the demolition of
the barriers between manufacturing and the rest of the world.
2. Moving past “certification” to improvement: The growing emphasis

on various certifications and audits have hampered many companies’
improvement efforts. Once a process is “certified”, it tends to be
perceived as law. Certification activities have also drawn resources away
from process improvement efforts. Tying Six Sigma to certification
efforts offers some impressive potential improvement synergies.
3. Adapting tools to manufacturing environment: Manufacturing

processes differ from each other vastly in different industries. It is,
therefore, difficult and not advisable to adapt same Six Sigma methods
and tools for these varied processes.
4. Six Sigma is a very robust system: Even with the challenges likely to
arise in manufacturing or service set-up, one can be successful if he/she
! !67
remembers that this is not really a program or a technique, but a

flexible and essential way to make business more responsive, efficient,
competitive and profitable.
6.3 Summary
Application of Six Sigma is not restricted to any particular type of industry
and since the steps involved in Six Sigma are so basic, the same can be
made applicable to different walks of business. Although, the approach to
Six Sigma is pretty standardised, the format is flexible enough to suit one’s
organisational needs, product portfolio and funds available.
6.4 Self assessment questions
1. Service industry has more improvement opportunities for Six Sigma is

compared to manufacturing industry – Explain
2. What are the improvement opportunities for manufacturing industry?
! !68
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture 
! !69
ROLES AND RESPONSIBILITIES IN SIX SIGMA MANAGEMENT
Chapter 7
ROLES AND RESPONSIBILITIES IN SIX
SIGMA MANAGEMENT
Objectives
• Six Sigma Organisation
• Roles & Responsibilities in Six Sigma Management
Structure
7.1 Six Sigma Organisation
7.2 Roles & Responsibilities
7.3 Project Responsibilities
7.4 Summary
! !70
7.1 Six Sigma organisation
The full deployment and implementation of a Six Sigma initiative in an

organisation requires the collective participation of numerous people, each
of whom is responsible for fulfilling specific roles and obligations at both
the managerial and technical levels. The rigorous nature of a Six Sigma
deployment compels an organisation to call on its very best people to
participate. Most often these people are drawn from within the ranks of the
company and are specially trained to the requisite skills.
Six Sigma requires energised thinking, an open mind and an unquenchable

thirst for truth and betterment. The Six Sigma mindset is one that initiates
change, sees problems as opportunities and formally questions
fundamental assumptions until the root causes are characterised,
optimised and controlled. These are principles and practices of leadership
and they are a fundamental part of the character of everyone who carries
the Six Sigma flag.
For every participant, Six Sigma is a breakthrough leadership initiative.

Just like the breakthrough performance returns realised by the
organisation, everyone involved in Six Sigma realises a nearly unbounded
sense of potential. Barriers and limitations melt away. Anything is possible.
After one drinks the Six Sigma elixir, there is no turning back – one is
transformed. Energised thinking and thirst for truth become part of one’s
being. One feels naturally compelled to question assumptions, search for
root causes and to characterise and optimise things. One becomes a leader.
Six Sigma is a top-down initiative. It begins with a team of executives and

business-unit leaders, who approve the Six Sigma deployment program,
endorse projects and are accountable for achieving the results. They inject
the initial dose of vision and ambition into the organisation and apply the
business savvy and people skills to stimulate the drive for change. While
the methods and tools of Six Sigma are applicable at all levels,
breakthrough organisational performance requires a full coordinated
commitment – and that can only come from the top
There are several positions in an organisation that are critical to the Six
Sigma management process. These positions are: Senior Executive (CEO
or President), Executive committee, Champion, Process owner, Master
Black belt, Black belt and Green belt.
! !71
The Hierarchy of Six Sigma Roles
[The leadership and technical roles of Six Sigma flow down through an
organization in hierarchical fashion, with a very small number of leaders
and champions at the top, small number of Master Black Belts, Black Belt
and Green Belts in the middle and a large number of Yellow Belts and team
members at the bottom]
7.2 Senior Executive

The most successful Six Sigma efforts have had one thing in common:
unwavering, clear and committed leadership from top management. There
is no doubt in anyone’s mind that Six Sigma is “the way we do business”.
Although it may be possible to initiate Six Sigma concepts and processes at
lower levels, dramatic success will not be possible until the senior
executive becomes engaged and takes a leadership role.
The senior executive provides the impetus, direction and alignment

necessary for Six Sigma’s ultimate success. The senior executive should:
! !72
• Lead the executive committee in linking strategies to Six Sigma projects

• Participate in appropriate Six Sigma project teams
• Maintain an overview of the system to avoid sub-optimisation
• Maintain a long-term view
• Act as a liaison to stakeholders explaining the long-term advantages of
Six Sigma management
• Constantly and consistently, publicly and privately champion Six Sigma
management
• Conduct project reviews
Executive Committee
The members of the executive committee are the top management of an
organisation. They should operate at the same level of commitment for Six
Sigma management as the senior executive. The members of the executive
committee should
• Deploy Six Sigma throughout the organisation

• Priorities and manage the Six Sigma project portfolio
• Assign champions, black belts and green belts to Six Sigma projects
• Conduct reviews of Six Sigma projects with the senior executive and
within their own areas of control
• Improve the Six Sigma process
• Identify strategic improvement initiatives
• Remove barriers to Six Sigma management and projects
• Provide resources for the Six Sigma management process and projects
Champions
Champions take a very active sponsorship and leadership role in
conducting and implementing Six Sigma projects. They work closely with
the executive committee, the black belt assigned to the project and the
master black belt overseeing their project. A champion should be a
member of the executive committee, or at least a trusted direct report to a
member of the executive committee. He or she should have enough
influence to remove obstacles or provide resources without having to go
higher in the organisation. Champions have the following responsibilities:
• Identify their project’s impact to the organisation

• Develop and negotiate project objectives and charters with the executive
committee
! !73
• Select a black belt (or a green belt for a simple project) to lead the
project team
• Remove any political barriers or resource constraints
• Provide a link between their project team and the executive committee
• Help team members manage their resources and stay within the budget
• Review the progress of their project with respect to the project’s
timetable
• Keep the team focused on the project by providing direction and
guidance
• Ensure that Six Sigma methods and tools are being used in the project
Process Owner
A process owner is the manager of a process. He or she has the
responsibility for the process and has the authority to change the process
on her or his signature. The process owner should be identified and
involved immediately in all Six Sigma projects relating to his or her own
area.
In some organisations, it is difficult to determine an appropriate process

owner. For example, in many banks, the “obtaining new customers
process” is the responsibility of both the marketing department and branch
management. It is possible that the CEO of the bank is the only common
process owner, under whom there is ownership for both marketing and
branch operations. In this case, it may be more convenient to have a
virtual process owner who will take ownership and have decision making
authority for projects dedicated to obtaining new customers. In some
cases, the process owner will be a team of leaders who jointly have
responsibility for the process. If the team effort is used, it requires that the
joint process owners establish a good working relationship with frequent
communication and cooperation regarding projects. A process owner has
the following responsibilities:
• Be accountable for the monitoring, managing and output of his or her

project
• Empower the employees who work in the process to follow and improve
the best practice method for the process
• Focus the project team on the project objective
• Assist the project team in remaining on schedule
• Allocate the resources necessary for the project
! !74
• Accept, manage and sustain the improved process after completion of

the Six Sigma project
• Ensure that the project objectives and indicators are linked to the
organisation’s mission
• Understand how the process works, the capability of the process and the
relationship of the process to other processes in the organisation
Master Black Belt

A master black belt takes on a leadership role as keeper of the Six Sigma
process and advisor to senior executives or business unit managers. He or
she must leverage his or her skills with projects that are led by black belts
and green belts. Frequently, master black belts report directly to senior
executives or business unit managers. He or she is a proven change agent,
leader, facilitator and technical expert in Six Sigma management. Ideally,
master black belts are selected from the black belts within an organisation.
However, circumstances sometimes require hiring master black belt
external to the organisation. Master black belts have following
responsibilities:
• Help identify, priorities and coordinate key project areas in keeping with
strategic initiatives
• Teach black belts and green belts Six Sigma theory, tools and methods
• Mentor back belts and green belts
• Continually improve and innovate the organisation’s Six Sigma process
• Be able to apply Six Sigma across both operations and transaction-based
processes such as sales, human resources, information technology,
facility management, call centres, finance, etc.
Black Belt
A Black belt is a full time change agent and improvement leader who may
not be an expert in the process under study. The ideal candidate for a black
belt is an individual who possesses the following characteristics:
• Has technical and managerial process improvement/ innovation skills,

including mastery of the DMAIC and DMADV models
• Has a passion for statistics and systems theory
• Understands the psychology of individuals and teams
• Has excellent communication and writing skills
• Works well in team format
• Can manage meetings
! !75
• Has a pleasant personality and is fun to work with

• Communicates in the language of client and does not use technical
jargon
• Is not intimidated by upper management, process owner or champion
• Has a customer focus
The responsibilities of a black belt include:
• Help to prepare/refine a project charter

• Communicate with the champion about progress of the project
• Lead the project team
• Schedule meetings and coordinate logistics
• Help team members design experiments and analyse the data required
for the project
• Provide training in tools and team functions
• Help team members prepare for reviews by the champion and executive
committee
• Recommend additional Six Sigma projects
• Lead and coach green belts leading projects with limited scope
A black belt is a full time quality professional who is mentored by a master

black belt, but who may report to a manager for his or her scope of duty as
a black belt.
Green Belt
A Green belt is an individual who works on projects part time, either as a
team member for complex projects or a project leader for simpler projects.
Green belts are the “work horses” of Six Sigma projects. Most managers in
a mature Six Sigma organisation are green belts. Green belt certification is
a critical prerequisite for advancement into upper management in a Six
Sigma organisation. Green belts leading simpler projects have the following
responsibilities:
• Refine a project charter for the project

• Review the project charter with the project’s champion
• Select the team members for the project
• Communicate with the champion, master black belt/black belt and
process owner throughout all stages of the project
• Facilitate the team through all phases of the project
• Schedule meetings and coordinate logistics
! !76
• Analyse data through all phases of the project

• Train team members in the basic tools and methods through all phases of
the project
Black belt and Green belt Six Sigma projects differ on the basis of five
criteria.
1. Green belt projects tend to be less involved (e.g., they have one CTQ
and few Xs), whereas black belt projects tend to deal with more
complex situations that may involve two or more CTQs and many Xs.
2. Green belt projects do not deal with political issues compared to black
belt projects which involve substantial political issues
3. Green belt projects do not require many organisational resources as

compared to black belt projects
4. Green belt projects do not require significant capital investment to

realise the gains identified during the project as compared to the black
belt projects
5. Green belt projects utilise only basic statistical methods, whereas black
belt projects utilise sophisticated statistical methods.
Yellow Belt
Everyone in the organisation can apply elements of the Six Sigma
methodology and improve their work environments. Everyone can assist
Green Belts and Black Belts in completing projects. But not everyone needs
to be immersed in the details or challenges to the extent that requires the
level of training or skill of the Green Belt or Black Belt.
The Six Sigma Yellow Belt is “everyone else”. Yellow belts are staff
members, administrators, operations personnel, project team members or
anyone else – technical or non-technical. Nearly anyone can identify
measurement scales, define critical process factors, collect some data,
characterise a process, make easy improvements and cultivate
opportunities.
Responsibilities in a Six Sigma project are shared as indicated below in its

life cycle
! !77
7.3 Project Responsibilities
An individual can satisfy more than one role in Six Sigma management. For
example, senior executives, members of the executive committee and
champions can also be green belts. In fact, because senior leaders typically
control large budgets, they can typically lead or participate in projects as
green belts having great financial impact on the organisation.
Six Sigma roles are not necessarily driven by position within an

organisation. For example, senior executives who are green belts might
have master black belts and black belts reporting to them. Roles are more
related to the level of training and expertise than to position within the
organisation.
! !78
Role Relationship Map
[The project is the center point of Six Sigma activity]
! !79
7.4 Summary
Organisation Structure for Successful implementation of Six Sigma project

would depend upon type of industry, size and spread of an organisation,
project skills it possesses and the magnitude and complexity of the project.
Various personnel in the organisation will have to shoulder different
responsibilities depending upon their functional role, seniority and skills
they have. These responsibilities have been labelled under different roles in
Six Sigma. The chapter explains all such roles in detail and also tries to
project their inter-relationship.
1. Write a brief note on Six Sigma organisetion
2. List down various roles in the hierarchy of the Six Sigma set-up &
explain responsibilities of any two roles.
! !80
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture 
! !81
THE ROADMAP FOR SIX SIGMA
Chapter 8
Objectives
• The primary constituencies on which Business must concentrate for

results
• The Life cycle of a Six Sigma initiative
Structure
8.1 Primary Constituencies for Results
8.2 Life Cycle of a Six Sigma Initiative
8.3 Training for Six Sigma
8.4 Summary
! !82
8.1 Primary Constituencies for Results
In the final analysis, there are four primary constituencies on which a

business must concentrate in terms of results – customers, leadership,
employees and financials.
Customers
In terms of results, the customer takes the top priority. Without customers,
there can be no company, no results. Companies that worship only the god
of profit wind up with neither profit nor customer loyalty. Four primary
factors are key to customer results
1. Core customer loyalty: Their retention rate as a percentage of the

total customer base is crucial for the success of a company.
2. Value added to the customer: A company’s primary objective is to

add value to the customer, as perceived by the customer. If that value
added is insufficient, customer could change suppliers or take on the
product/service to himself.
3. Customer base reduction: Not all customers are worth keeping. In

fact, the mark of smart companies would be to give their poor
customers to the competition.
4. Public perceptions of the company: When all is said and done, a

company grows in stature or fades away based on the perceptions of
the public-at-large about the company as a good employer and as a
responsible citizen.
Leadership
Next only to customers, leadership is the most important criterion for
results. A company without true leadership is rudderless. Four primary
factors are vital to leadership results.
1. Releasing the full potential of all employees: The true measure of a

successful leader is to release the creative genie of each employee
currently trapped in a bottle of bureaucracy and giving it full scope to
flower and bloom for the betterment of the employee and of the
company.
! !83
2. Transforming managers into leaders: Most employees estimate that

the ratio of leaders to managers in companies is 1:99. The measure of a
successful, results-oriented company is the extent to which this dismal
ratio has been reversed to favour enlightened leaders over autocratic
managers.
3. Conveying ethics, trust and help: These are the hallmark of

leadership. Without ethics, the company is not likely to survive in the
long run. Without trust, employees will always feel alienation. Without
active, concrete help, they will not rise to their maximum of their god-
given potential. Leadership involves uncompromising integrity in all
business dealings, even at the expense of the bottom line. It involves
trust in people so that the latter can earn that trust. It involves helping
people technically, managerially, administratively or emotionally, as
coach and guide, rather than as an overbearing boss.
4. Gain sharing: One of the distinctive differences between a truly

successful company and a mediocre one is the differentials in gain
sharing between senior managers and those employees who have
earned it by their tangible contributions to profitability.
Employees
Behind customers and leadership, employees are next in the rank order of
constituencies. It is becoming axiomatic that a company cannot have
customer loyalty without a corresponding employee loyalty. Four primary
factors are essential in generating employee loyalty
1. “Create joy in workplace” – Deming: Company’s productivity and

employee morale can be gauged in a brief walkthrough in its plant. If
workmen appear busy, happy and hustling, a good productivity can be
presumed. On the other hand, if they appear furtive, cowed, bored or
sullen, one can sense a poor work climate and poor productivity.
2. Empowerment: Empowerment ranges from total passivity to industrial

democracy. With the introduction of open book management, self-
directed work teams and mini companies, an organisation can make a
leap of faith to the full potential.
3. Ratio of CEO salaries to line worker salaries: No rational worker

would ever begrudge the higher salaries of top managers who have the
! !84
onerous responsibility of guiding companies in these turbulent times.

But if the ratio is excessively high, the gap is the harbinger of a
potential revolt. It contributes to worker dejection, frustration and
alienation. If free enterprise is to survive, this ratio by design, be
reduced, voluntarily by a company’s board of directors.
4. The reduction of organisation layers between top management

and the worker: One sure mark of a company’s employee health is the
number of organisational layers between the CEO and the lowly worker.
Modern organisational development recommends no more than five
layers, even for the largest of companies. When managers have to
shepherd fifty to a hundred employees each, instead of six to ten, they
can no longer micromanage them. They must have faith in their
employees, give them the freedom to attain corporate goals and get out
of their way. This transforms autocratic managers into coaches and
teachers.
Financials
Financials are important to gauge health of an organisation; however, they
are lagging indicators, not leading ones. Following primary factors give a
well rounded perspective on financials:
• Profit on Sales: The most common yardstick of financial performance is

profit on sales. But since profit on sales is not tied to money invested, it
is less effective as compared to other parameters of financial
performance, notably:
• Return on Investment (ROI): Income after interest and taxes, divided

by assets minus current liabilities
• Return on Assets (ROA): Income divided by assets (i.e., inventory and

receivables plus fixed assets)
• Return on Net Assets (RONA): Income before interest and taxes,

divided by assets minus current liabilities
• Return on Equity (ROE): Income after interest and taxes, divided by

stockholders’ equity.
! !85
Of these, ROI and RONA are the most meaningful of yardsticks because of
the multiplier effect of asset turns on profits, which is expressed as ROI =
Profit on Sales x Asset turns even a mediocre profit on sales of one per
cent can be turned into an outstanding ROI of 20 % with asset turns of
twenty.
1. Market position: Several companies consider market share to be

particularly attractive and strive mightily to increase it. It, however,
could give a company a false sense of well-being as its market share
increases while customer defections may also be on rise slowly. By
contrast, market position vis-a-vis other companies in the same
business gives a clearer signal of performance. General Electric’s Jack
Welch would jettison any of his businesses if it does not achieve the
number-one or number-two position and maintain it in the marketplace.
2. Value added per employee: Frequently, companies use the metric of

sales per employee per year as a measure of their financial/productivity
performance. A truer productivity measure is value added per employee
– that is, revenue minus material cost. With this, comparisons across
companies become meaningful.
8.2 The Life cycle of a Six Sigma initiative
A Six Sigma initiative occurs in five major stages
• In first stage, goals are established and infrastructure is installed
• In second stage, the initiative is deployed by assigning, training and

equipping the staff
• In third stage, the projects are implemented to improve performance and

yield financial results
• In fourth stage, the scope of the initiative is expanded to include

additional organisational units and
• In the fifth stage, the initiative is sustained through re-alignment, re-

training and evolution.
! !86
Initialise
Six Sigma initiatives are programs. They require programmatic-type
preparations and planning, beginning with a prospective set of readiness
tasks. The initialisation stage includes selecting the core team, preparing
the supporting infrastructure and enabling the processes, which must be in
place to facilitate the deployment activities of the next stage.
As part of initialisation, executive training prepares the executive staff and

senior leaders by providing a comprehensive overview of the Six Sigma
deployment process and what to expect. The executives also agree on
macro items including scope, time frames, goals and objectives and they
issue a formal commitment statement to all employees and constituents.
The scope of the first deployments should be kept in check. The most
successful Six Sigma initiatives begin with the deployment scope limited to
a selected line of business or division of activity.
Deploy
With a supporting infrastructure, corporate goals and metrics established,
the deploy stage begins with the selection of the champions and the first
candidate Black Belts, Green Belts and Yellow Belts.
Champions are trained in the Six Sigma methodology, principles of

implementing Six Sigma, project selection, practices and tools and then
they begin the critical work of selecting the first Six Sigma projects. Also,
the infrastructure is deployed by the core team. This includes finance
practices, guidelines for auditing project financials; software tools for
statistical analysis, project management and process optimisation; training
materials, curricula and schedules for all Belt Training and motivational
communications from management. A project tracking and performance
dashboard system is deployed.
According to the deployment plan, the first waves of Black Belts, Green
Belts and Yellow Belts are trained and assigned to projects. Six Sigma
deployments include the practice of conducting projects as part of the Belt
training. All types of Belt training include the definition, characterisation
and improvement of a work process as part of training regimen. Although
this extends the training period, trainees deliver results to the bottom line
as they complete their initial training. The training has immediate-term
ROI.
! !87
Implement
Upon completion of the first waves of Belt training, the early successes
create momentum and the Six Sigma initiative begins to gather traction. As
successes continue, the initiative can become infectious and turn around
even the skeptics.
In this stage, the practitioners define and map the processes, identify
critical-to-quality indicators, collect performance data and characterise the
process performance. They conduct statistical analysis, discover the root
causes of problems and improve performance levels. At this stage,
company begins to root out waste, increase productivity, lower costs and
decrease cycle time.
It’s important to watch the process closely. Black Belts must be assigned
full time to their projects and given leverage to perform. Green Belts and
even Yellow Belts must be supported in their projects. Technical issues
must be addressed head-on with appropriate skill to ensure success.
Not all first projects go well – for a variety of reasons. If early high-profile
projects sputter, it can threaten the success of the initiative. For this
reason, one must choose early projects that have a manageable scope,
moderate risk and the promise of reasonable returns. Big risk-High reward
projects can be withheld for a little later.
Expand
Following the first successful waves of implementation, the organisation
expands Six Sigma into new geographies, functional areas and lines of
business.
The introduction of Six Sigma into each new line of business is an initiative
unto itself and includes the stages of initialisation, deployment and
implementation. The lessons learned from the first deployment are
included in revisions to the implementation plans going forward.
Some form of tailoring or customisation of Six Sigma is required to deploy

into each new business or functional area. Examples include :
• Six Sigma in engineering and design areas would employ methods and
tools of DFSS and tools like Axiomatic design
! !88
• Six Sigma in manufacturing includes lean practices
• highly computerised environments may incorporate automated process

execution management tools
• deployment into foreign countries requires internationalisation and

localisation of materials and tools
Also, as the portfolio of projects grows and diversifies, it is important to

apply enterprise-class tracking and management tools.
The first few waves of projects in any given function or business area
harvest what is known as the low-hanging fruit – the obvious opportunities
with big returns. As the Six Sigma initiative matures, two phenomena
occur
• The biggest projects have all been completed
• The Yellow Belt culture is curing little problems before they become big
problems
At this point, the project-oriented Six Sigma culture begins to give way to
the sustaining culture.
Sustain
Six Sigma is a problem solving methodology. A Six Sigma deployment
applies the Six Sigma suite of problem solving tools to business challenges
in a series of projects, each of which addresses technical, performance,
quality and other problems in core and enabling processes of the
organisation.
Through expansion, typically over a period of several years, the initiative

reaches the four corners of the enterprise. At this point, the Six Sigma
initiative changes character. The deployment leader and champion shift the
sustaining direction away from a project orientation into a process-
management approach, where the tools of Six Sigma move to a supporting
role – as part of how business and work processes execute most efficiently
and effectively. The Six Sigma tools take their place in the organisation’s
methodological toolbox, along with other selected tools of business
performance operations.
! !89
In the sustain phase, the culture is self-healing. The Six Sigma project is
used as a hot-shot tool for addressing flare-up issues that emerge from
new initiatives and outside forces. Six Sigma training supports these
project needs and is also integrated with other methods to support process
needs. Training is used as a refresher for existing staff and to enable new
hires, contractors and acquisitions.
8.3 Training for Six Sigma
Training is a key ingredient to achieving success by following the Six Sigma

way. The emphasis in Six Sigma training should be to improve employee
skills and the methods they need to fulfill their roles. A model Six Sigma
training curriculum could work out as below
! !90
Six Sigma Training Curriculum

Training Topic Key Content Audiences
Basic Six Sigma
principles; Review of
business need for Six
Orientation to the
1 Sigma; Brief practice All
Six Sigma concepts
and simulation;
Overview of roles and
expectations.
Role requirement and
skills for leadership
Leading and
council and sponsors; Business Leaders;
2 sponsoring Six
Project selection; Implementation Leaders
Sigma efforts
Reviewing team
projects.
Condensed and adapted
Six Sigma processes instructions in Six Sigma Business Leaders;
3
and tools for leaders measurement and Implementation Leaders
analysis process/tools.
Business Leaders;
Concept and practices
Implementation
for setting direction,
4 Leading change Leaders; Coach/Master
promoting and guiding
Bleak Belts; Team
organisational change
Leaders/ Black Belts.
Process improvement, Team Leaders, Black
Six Sigma
Design/ Redesign and Belts; Manager/Green
5 Improvement Basic
cost measurement and Belts; Team members,
skills training
improvement tools Project Sponsors.
Skills and methods for
Business Leaders,
developing consensus
Collaboration and Coaches/Master Black
6 leading discussions
Team leading skills Belt, Team Leaders/
conducting meeting,
Black Belts, Managers
managing disagreement
! !91
Technical skills for more

complex project
challenges; Sampling
Intermediate Six and dote collection;
Coaches/Master Black
Sigma Statistics process
7 Belt; Team Leading/
measurement and control; Tests of
Black Belts.
analytical tools. statistical significance;
Correlation and
regression; Basic design
of experiments, etc.
Modules in specialised
skills and tools; Quality
function deployment; Coaches/Master Black
Advanced Six Sigma
8 Advanced satisfied Belts; Internal
tools.
analysis; Advanced Consultants
DOE; Taguchi methods,
etc.
Defining a cost or
support process;
Process identifying critical Process owners,
9 Management outputs, Requirement Business Leaders;
principles and skills and measure; Functional Managers
Monitoring and response
plans
8.4 Summary
Having decided on the need for a Six Sigma project, making funds
available and setting up the organisation structure, management will have
to lay out a roadmap for going ahead with it. Training the personnel for the
appropriate skills, methods and use of tools becomes imperative for the
successful completion of the project.
1. Which are the four primary constituencies, a business should

concentrate for results? Explain one of those in detail.
2. Write a brief on Six Sigma Life-cycle.
3. Write a brief on Six Sigma training curriculum.
! !92
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture 
! !93
GETTING STARTED WITH SIX SIGMA
Chapter 9
Objectives
• The steps involved in Six Sigma implementation
• What is a project life cycle?
Structure
9.1 Steps Involved in the Six Sigma Implementation
9.2 Project Life Cycle
9.3 Summary
! !94
9.1 Steps Involved in the Six Sigma Implementation
Getting started with Six Sigma involves following five steps:
• Identify core processes and key customers
• Define customer requirements
• Measure current performance
• Priorities, analyse and implement improvements
• Expand and integrate the Six Sigma system
1. Identify Core Processes and Key Customers

As businesses become ever more dispersed and global, it gets tougher and
tougher to see the “big picture” of how the work actually gets done. The
purpose of this step is to get clearer focus by defining critical activities and
understanding the broad structure of the business system. The objectives
of this step are applicable to an entire organisation or any segment of it.
Even functions that serve internal customers like HR, Information
Technology or Administration have their own core processes.
2. Define Customer Requirements

Getting good customer input on the company’s requirements is the most
challenging aspect of the Six Sigma approach. One can’t develop
meaningful measures until he/she has clear, specific customer
requirements. These requirements fall into two key categories:
• Output requirements that are tied to the end product or service that
make it work for the customer
• Service requirements describing how the organisation should interact

with the customer
Define Checklist
Following is a good checklist to confirm whether sufficient work spread has
been done in Define stage of the Six Sigma project in one’s organisation
! !95
1. Confirmed that the project is a worthwhile improvement priority for the

organisation and is supported by business leaders.................YES / NO
2. Written a brief project rationale explaining the project impact of the

project on customers, profits and its relationship on the company’s
business strategies………………………………………………….…………………YES / NO
3. Composed and agreed to a two to three sentence description of the

problem as one sees it – the problem statement – focusing on
symptoms only………………………………………………………………………..…YES / NO
4. Prepared a goal statement defining the results one is seeking from the
project, with a measurable target. No solutions are proposed in the goal
statement……………………………………………………………………………………YES / NO
5. Prepared other key elements of a DMAIC team charter, including a list of

constraints and assumptions, a review of players and roles, a
preliminary plan and schedule and a process scope…………………YES / NO
6. Reviewed one’s charter with his/her sponsor for the project and
confirmed his/her support ………………………………………………….…….…YES/NO
7. Identified the primary customer and key requirements of the process

being improved and created the SIPOC diagram of the areas of
concern……………………………………………………………………………….………YES / NO
8. Prepared a detailed process map of areas of the process where one

expects to focus initial measurement……………………………………….…YES/NO
3. Measure Current Performance
This step looks into how well the organisation is delivering the customer
requirements and how the performance can be sustained in future. There
are several other benefits of this step
• Creating a measurement infrastructure: It sensitises the changes in

performance – good and bad – and responds promptly to warning signs
and opportunities. Over time, this data becomes valuable input to the
responsive Six Sigma organisation.
! !96
• Setting priorities and focusing resources: Knowledge derived from

these measures drives decisions as to where to make the most urgent
and high potential improvements.
• Selecting the best improvement strategies: Having accurate process

capability measures allows gauging the real nature of performance issues
and strategizing improvement plan
Measure Checklist
If one can respond “yes” to each statement below, he/she is doing well
with the measurement and is ready to move into the “Analysis” phase of
DMAIC
1. Determined what one wants to learn about the problem and process and
where in the process one can go to get the answer ……….………YES / NO
2. Identified the types of measures one wants to collect and have a

balance between effectiveness/efficiency and input/process output
…………………………………………………………………………………………………….YES / NO
3. Developed clear, unambiguous operational definitions of the things or

attributes one wants to measure …………………………………….YES / NO
4. Tested one’s operational definitions with others to ensure their clarity

and consistent interpretation…………………………………………………….YES / NO
5. Made a clear, reasonable choice between gathering new data or taking

advantage of exiting data collected in the organisation ….………YES / NO
6. Clarified the satisfaction factors we need to identify to facilitate analysis

of one’s data……………………………………………………………………….………YES / NO
7. Developed and tested data collection forms or check sheets which are
easy to use and provide consistent, complete data …………………YES / NO
8. Identified an appropriate sample size, subgroup quantity and sampling

frequency to ensure valid representation of the process one is
measuring……………………………………………………………..……………………YES / NO
! !97
9. Prepared and tested one’s measurement system, including training of

collectors and assessment of data collection stability …………….YES / NO
10.Used data to prepare baseline process performance measures, including

proportion defective and yield………..…………………………………………YES / NO
4. Priorities, Analyse and Implement Improvements

The objective of this step is to identify high-potential improvement
opportunities and develop process-oriented solutions supported by factual
analysis and creative thinking. The objective is, also, to effectively
implement new solutions and processes and provide measurable,
sustainable gains. Six Sigma techniques and tools can be applied to large,
complex business problems or to fairly simple process improvement
opportunities.
Analyse Checklist
If one can respond “yes” to statements below and have done many of the
tasks described in the other statements, then one is ready to begin
developing solutions in the “Improve” phase of DMAIC
1. Examined one’s process and identified potential bottlenecks, disconnects

and redundancies that could contribute to the problem on which one is
focusing...........................................................................YES / NO
2. Conducted a value and cycle time analysis, locating areas where time
and resources are devoted to tasks not critical to the customer
…………………………………………….………………….……….…………………………YES / NO
3. Analysed data about the process and its performance to help stratify the
problem, understand reasons for variation in the process and identify
potential root causes …………………………………………………………….….YES / NO
4. Evaluated whether one’s project should focus on process design or

redesign, as opposed to process improvement and confirmed one’s
decision with the project sponsor………………………………………………YES / NO
5. Ensured that one understands the key workings of the process so one
can begin creating a new process to meet the needs of the customer
efficiently/effectively……………………………….…………………………………YES / NO
! !98
6. Developed root cause hypotheses to explain the problem one is

solving…………………………………………………………………………………………YES / NO
7. Investigated and verified one’s root cause hypotheses, so that one is

confident that one or more “vital few” root causes for the problem have
been uncovered……………………………………………………………………….…YES / NO
Improve Checklist
If one can respond “yes” to each of the statements below, he/she has
achieved success with one’s improvement and is ready to plan to “control”
his/her process/solution
1. Created a list of innovative ideas for potential solutions…..…….YES / NO
2. Used the narrowing and screening techniques to further develop and

quantify potential solutions…………………….…………………………………YES / NO
3. Created a “solution statement” for at least two possible proposed

improvements……………………..…………………………………………………….YES / NO
4. Made a final choice of one’s solution based on success

criteria………………………………………………………………….…………………….YES / NO
5. Verified one’s solution with his/her sponsor and received buy-in and the
go-ahead………………………………………………………………………….…………YES / NO
6. Developed a plan for piloting and testing the solution, including a pilot
strategy, action plan, results assessment, schedule, etc.........YES / NO
7. Evaluated pilot results and confirmed that one can achieve the results
defined in the goal statement…………………………………………………..YES / NO
8. Identified and implemented refinements to the solution based on

lessons from the pilot………………………….…………………………………… YES / NO
9. Created and put in place a plan to expand the solution to a complete

implementation…………………………………………………………………….…….YES / NO
! !99
10.Considered potential problems and unintended consequences of the

solution and developed preventive and contingent actions to address
them…………………………………………………………………………….……………YES / NO
5. Expand and integrate the Six Sigma system

Objective of this step is to initiate ongoing business practices that drive
improved performance and ensure constant measurement, re-examination
and renewal of products, services, processes and procedures. In this step,
organisation works hard to achieve its vision of a Six Sigma organisation
A Six Sigma project passes through following stages, time duration of

which will depend upon complexity and magnitude of the project.
Control Checklist
If one can respond “yes” to each statement below, he/she has completed
all key steps in the DMAIC project and celebrations are now due for the
successful completion of the Six Sigma project
1. Compiled results data confirming that the improvement has achieved

the goal defined in the DMAIC team charter..........................YES / NO
2. Selected ongoing measures to monitor performance of the process and

continued effectiveness of one’s solution………………………………… YES / NO
3. Determined key charts / graphs for a “process scorecard” on this

Process……………………………………………………………………….………………YES / NO
4. Prepared all essential documentation of the revised process, including

key procedures and process maps...................................... YES / NO
5. Identified an “owner” of the process who will take over responsibility for
the solution and for managing continuing operations……………..YES / NO
6. Developed Process Management charts detailing requirements,

measures and responses to problems in the process………….…. YES / NO
7. Prepared a storyboard documenting the team’s work and data collected

during the project………………………………………………….…………………. YES / NO
! !100
8. Forwarded other issues/opportunities which the team was not able to

address to senior management…………………………………………………YES / NO
9.2 Project Life Cycle
Practical Problem Generally a systemic or chronic problem that is impacting

the success of a process or a function
Six Sigma Project A well defined effort that states the problem in quantifiable
terms with known expectations.
Statistical Problem Data-oriented problem that is addressed with facts and

data analysis method.
Statistical Solution Data-driven solution with known confidence/risk levels

versus an “I think” solution.
Control Plan A method of assuring the long-term sustainability of the fix

it the problem.
Practical Solution The solution is not complex, expensive or irrational and is

readily implementable.
Results Tangible results measurable in metrics with quantifiable

financial or strategic value.
! !101
9.3 Summary
Six Sigma is an organisation-wide initiative and when the whole

organisation is driven by an urge to improve, then one can say that the Six
Sigma initiative is successful in that organisation. Six Sigma, however, will
start small as a problem solving or quality improvement initiative and then
grow in magnitude and spread across the organisation as success breeds
success. It is, for this reason, important to know, what necessitates Six
Sigma and how to get started with it.
1. What are the steps involved in setting started with Six Sigma?
2. What will you check in ‘Define’ stage to ascertain that sufficient spread
work has been done?
3. What will you check in ‘Measure’ stage to make sure that the needful
has been done? 
! !102
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture 
! !103
TOOLS USED
Chapter 10
TOOLS USED
Objectives
• Which are the process optimisation tools used in Six Sigma

implementation?
• Which are the statistical analysis tools used in Six Sigma

implementation?
Structure
10.1 Importance of using Appropriate Tools in Six Sigma Implementation
10.2 Process Optimisation Tools
10.3 Statistical Analysis Tools
10.4 Summary
! !104
TOOLS USED
10.1 Importance of Using Appropriate Tools in Six Sigma

Implementation
To be a successful Six Sigma practitioner, one must be accomplished in the

application of the Six Sigma analytical and statistical concepts and
formulas. Most Six Sigma tools are implemented in software programs
which run directly on PC. These programs perform many processes and
analytical functions. Unleashing the Six Sigma genius is just a few clicks
away.
Motorola discovered when it initiated Six Sigma that one of the keys to the
success of the Six Sigma system has been the application – by teams and
by specially trained Black Belts – of sophisticated tools that bring more
power to the learning and improvement efforts.
Practitioner tools fall into two primary types: Process optimisation tools and
statistical analysis tools. Each plays a critical role in the successful
application of Six Sigma.
Process optimisation tools enable designing, simulating and optimising

work processes. These include tools for creating process and work flow
diagrams, building cause-and-effect matrices, constructing fishbone
diagrams, developing SIPOC (Supplier-Inputs-Process-Outputs-Customers)
diagrams, assessing process capabilities and more. The goal of these tools
is to help seeing how work is performed and identifying where the source
of problem is.
Statistical analysis tools enable analysing data collected either from the
real world performance of a product or process, or as the output of a
simulation or experiment. These include basic statistics tools and tools for
analysing variance, conducting regressions, performing design of
experiments (DOE), and building control charts, plots, tables and graphs.
The goal of these tools is to help turning data into knowledge such that one
can make informed decisions.
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10.2 Process Optimisation Tools
Six Sigma is practiced for one reason and one reason only, to improve the
business processes. Therefore, these tools are the primary weapons in the
battle against ineffectiveness, inefficiency, variance and waste. Following
tools are available as process optimisation tools:
• The SIPOC
• CT (critical to) tree
• Modeling
• Simulation
• C and E (cause-and-effect) matrix
• Fishbone diagram
• FMEA (failure mode effects analysis)
• Capability and complexity analysis
• Plans
The SIPOC
The SIPOC is one of the most fundamental building blocks in the Six Sigma
process. With this tool, one can build controlled and organised view of work
process and set the foundation for applying the breakthrough DMAIC
strategy. SIPOC consists of
• Suppliers: Suppliers are systems, people, organisations or other sources

of the materials, information or other resources that are consumed or
transformed in the process
• Inputs: Inputs are materials, information and other resources provided

by the suppliers that are consumed or transformed in the process
• Process: The process is the set of actions and activities that transform
the inputs into the outputs
• Outputs: Outputs are the products or services produced by the process

and used by the customer
• Customer: Customers are persons, groups of people, companies,

systems and downstream processes that receive the output of the
process
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With SIPOC, one has the basis for defining and characterising the process
itself, the context for measurement and the basis for analysis, identifying
areas of improvement and homing in on targets of control.
The CT Tree
CT stands for critical to whatever matters. Depending on what one is
analysing and optimising, this could mean anything from the satisfaction of
the customer, to the quality and reliability of the product, to the cycle time
of manufacture or the cost of the delivered product or service.
Most CT trees begin with the output of the SIPOC, customer satisfaction at
the top and the others being subordinate. Following CTXs are the most
commonly used:
• Satisfaction (CTS): What contributes to customer success?
• Quality (CTQ): What contributes to process or product quality?
• Cost (CTC): What contributes to the cost or final price?
• Delivery (CTD): What contributes to the cycle time to deliver?
In creating a CT tree, specific area, such as customer satisfaction (CTS), of

application is defined. Next defined are the key contributors to customer
satisfaction, which may include availability, price, selection, accuracy,
presentation, performance and so on. These are subordinate CTXs. Lastly,
causes or influences on those categories of customer satisfaction are
defined.
Modeling a Process
A Six Sigma process is defined very precisely down to the last detail of
activity, resource, decision, dependency and value. The process model is
the representation of this precise process definition and the practice of
process modeling, is therefore, at the very heart of Six Sigma.
In the world of Six Sigma, the process model is characterised in

mathematical terms, permitting us to perform a plethora of statistical
analysis on its various parts and pieces. Each mode, each function and
each activity is backed by numerical descriptions and quantifiable
attributes, enabling us to see the process in the mathematical light.
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The Six Sigma process modeling begins with the building of process maps.
The paths, encounters, decisions and destinations on these maps are then
annotated and defined in quantitative terms, including such measures as
value, time, resources, yields and the statistical distributions around each.
The outcome of this process is the statistical basis for simulating the
process and analysing the results.
A process map looks like a flow chart which exhibits the activities and
events in a process.
Once the process map is drawn, the next step is to define explicitly each of
the map’s objects. The categories of process element definitions include:
• Operation cycle time of the process element, including its average time
to complete, the variation in time called the standard deviation and
perhaps a distribution curve to represent all the possible completion
times as well.
• Resources used in the process element, including human, capital and

natural resources and then later track their utilisation during simulation.
• Value added by the process step, in the units of measure that mean the
most to one’s organisation. At a minimum, one must be able to define
whether the process step is value added (VA) or non-value added (NVA).
• Costs of the resources consumed. These include the costs of personnel,

facilities, direct material and can even include indirect costs.
The closer, one comes to defining costs in the same terms as his/her
accounting system, the better. Ultimately, one will be reconciling cost and
claiming value that will be verified by the accounting department.
Simulating a Process
Simulation tools are advanced computer-based programs that ingest all the
parameters of the model and runs dozens, hundreds and even thousands
of trials in the computer. By doing this, one generates simulated real-life
outcomes without having made a single physical change to the process and
obtains vast amounts of detailed results for statistical analysis.
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The more advanced simulation tools animate the process map as the
simulations run, tracing for where the process will run smoothly and where
the bottlenecks are – as they occur. From the act of watching the model in
action and then analysing the results of the simulation, one can pursue the
goal of process optimisation. It is an iterative process.
More often, simulation results reveal unexpected connections and

dependencies that cause one to re-think, redesign and re-plan the process.
Most simulators produce only rudimentary reports. For sufficient analysis of
data, one will be required to transport the simulator data to an analytical
tool.
Cause-and-effect (C and E) Matrix

In Six Sigma, y=f(x). All “Ys” are the result of some inputs “Xs” and the
transformations that acted upon them: Cause and effect. An effective tool
for the process analyst is the cause-and-effect (C and E) matrix. With the C
and E matrix, one can identify, explore and graphically display all of the
possible causes related to a problem or condition and search for the root
cause.
The system-level software tools that implement C and E automatically

database this information and carry it forward into further activities,
including failure mode effects analysis (FMEA), control plans and data
collection plans.
Fishbone Diagram
Fishbone diagram is a brainstorming tool used to explore and display
sources of variation or influence on a process. With the fishbone diagram,
one can quickly create the inputs to a C and E matrix, identifying the key
sources that contribute most significantly to the problem or process being
addressed. The fishbone diagram also serves as an affinity mechanism for
relating and categorising inputs.
A fishbone diagram is so simple that it can be done on a whiteboard or a

notepad. A representative fishbone diagram has been illustrated in chapter
4.
FMEA: Failure Mode Effects Analysis

The failure mode effects analysis is key to reducing or eliminating the risk
of failures. The concept was first developed in the aerospace industry.
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FMEA provides with a structured approach to identifying the potential ways

a product or process can fail, how readily one can detect the failure and
the effects of those failures, so the risk of its occurrence or impact of it can
be reduced. Using the FMEA, one can further prioritise the actions to be
taken to reduce failure risk and can evaluate the design and control plans
for their robustness to failure.
Applications of FMEA include Design FMEA, Process FMEA, Product FMEA

and Software FMEA.
One can build FMEA from Process Map, the C and E matrix or even the
fishbone diagram. In any case, one has to add three new categories of
information to the identified failure outcomes or effects:
• Severity of impact
• Probability of occurrence
• Likelihood of detection
The analysis phase of the FMEA is the process of determining probabilities

and ranking the results. One of the primary indicators is the risk priority
number (RPN). The RPN is simply the product of the three elements:
RPN = severity rating x probability rating x detection rating
For each failure outcome, RPN can be plotted in a Pareto chart as shown
and by which one can instantly see where to focus attention.
The FMEA is invaluable in applications where processes or products have

safety or security implications, but it is equally applicable to any process or
product where failures have a material impact on customer satisfaction or
measurable business success.
Poka-Yoke (Mistake-Proofing)
Mistake proofing or Poka-Yoke as it is known in Japan is an action taken to
remove or significantly lower the opportunity for an error or to make the
error so obvious that allowing it to reach the customer is almost
impossible.
Poka-yoke is very consistent with the fundamental aims and philosophy of

Six Sigma and it has wide applicability in manufacturing, engineering and
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transactional processes. It is one of the simplest tools to master. It involves

the creation of actions that are designed to eliminate errors, mistakes or
defects in everyday activities and processes.
Poka-yoke starts with an understanding of the cause-and-effect

relationship of a defect. This is followed by the implementation of a remedy
that eliminates the occurrence of the mistakes that lead to that defect.
Poka-yoke solutions can include the addition of a simple physical feature,
the creation of a checklist, a change in the sequence of operation, a
highlighted field on a form, a software message that reminds the operator
to complete a task or any other way of helping to ensure that mistakes will
be either totally eliminated or substantially reduced.
Poka-Yoke
Prevention
Poka-yoke that focuses
here, works on prevention
or on making mistakes impossible
!
Poka-yoke that focuses here,
works on mistake
detection or on making sure
mistakes do not turn
into defects
Capability-Complexity Analysis
In Six Sigma it is necessary to define, measure and control both the
complexity of our products and services as well as the capability of our
processes. Following fundamental questions need to be asked for reaching
point of optimisation:
• How capable must our processes be to handle the complexity in our

products and services?
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• How complex can our products and services be in order to handle them
with the capability of our processes?
• If we’re going to introduce new complexity into our products, how much
must we ratchet up the capability of our processes to handle it?
• If we introduce new complexity into our products and services and don’t
ratchet up the capability of our processes what’s the increase in our
defect rate?
The more advanced CCA tools permit what-if analysis where one can set
outcome matrix and determine what changes in process capability or
product complexity are required to achieve them.
Funnel Reports
Six Sigma is all about finding those critical few influencers out of the trivial
many candidates that affect the outcome. Inherent in the Six Sigma
methodology is a process called variable reduction. It reduces the number
of contributors or funneling the Xs to find the so called “critical Xs” or “vital
causes”.
The sources of information for the Funnel report come primarily from the
CT trees, C and E matrices and FMEAs. In the Funnel process, each
candidate is subjected to a set of analytical and statistical considerations,
which serve as tests to qualify if the cause is vital.
Plans
The Six Sigma practitioner produces and manages a set of plans that affect
the DMAIC elements of the breakthrough strategy. The data collection plan
ensures the measurements. The control plan ensures management of the
critical Xs and the audit plan addresses the ongoing monitoring of the vital
causes.
Data Collection Plan

The data collection plan provides a concise and focussed set of directives
and actions required to collect all necessary data associated with a process
or within a Six Sigma project. The data collection plan addresses not only
the content, but the reliability, availability and presentation or formatting of
the data. 
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Following data characteristics need to be attended to while collecting it:
• Data sources: It is best if the same is received from the point of origin.
• Data timing: Transactional data from operations changes regularly. The

timing, when it is pulled is as critical as the data itself. Getting the right
data at the wrong time leads to bad data.
• Data stability: It is necessary that the definition of the data, one is

depending on, does not change.
• Data format: One needs to identify how he/she wants the data to be
formatted in collection plan.
• Data transfer: By far the best way of data transfer is for an automatic
extract and transfer to occur on a scheduled basis.
Control Plan
The control plan directs focus on the vital cause critical Xs and ensures all
participants understand the activities, items and specification limits
required for the process to be under control. The control plan is a proactive
effort to assure long-term performance and also a call to action if a
triggering event occurs, indicating the process performance is
deteriorating.
The control plan is a key Six Sigma management tool. It is a one-stop

reference view of all the vital contributors to the success of the process
and it contains sufficient detail to exercise sharply focused management
controls.
Audit Plan
The audit plan acts as the measurement tool for the control plan. When the
control plan is in place, the audit plan is the means for regular measuring
and monitoring of the outcomes.
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10.3 Statistical Analysis Tools
At the heart of Six Sigma are the statistical tools. These enable the Six
Sigma practitioner to first analyse practical problems statistically and then
to craft statistical answers that enable breakthrough practical solutions.
Following is the general view of the tools which indicates their applicability:
Plots and Charts

Plots and charts are a fast and powerful way to help interpret and
communicate the data. Plots and charts can turn masses of unintelligible
data into coherent information that provides the message. Following are
the most commonly used plots and charts:
• Histogram: A bar chart that plots the spread of data according to

frequency of occurrence, suggesting the distribution function
• Dot plot: A type of histogram where data are displayed in a single point
format; used to assess a distribution or compare distributions
• Pareto chart: A bar chart in which the bars are ordered from highest to
lowest, showing the critical contributors
• Scatter plot: Shows the relationship between two variables, conveying

the nature of correlation
• Matrix plot: Shows the relationships between many pairs of variables at

the same time
• 3D scatter plot: A three-dimensional scatter plot, useful for evaluating

the relationships between three different variables at the same time
• Interval plot: A plot of data values with added confidence intervals or

error bars; useful for showing both the central tendency and the
variability
• Box plot: A side-by-side comparison of sample distributions. By

convention, the central line is the mean, the boxes are +/- 25% and the
lines are the limits
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• CDF (Cumulative Distribution Function) plot: A stepped cumulative

histogram, overlaid with a best-fit normal CDF
• Probability plot: A scatter plot, overlaid with a CDF cumulative

probability line used to determine how closely a particular distribution fits
data
• Time series plot: A plot of data spread over time used to evaluate
patterns in activity across time.
• Marginal plot: A scatter plot with an added histogram used to assess

the relationship between two variables and their distributions
Time Series
Time-Series Analysis is closely correlated to the management and
measures of performance improvement. These include the following:
• Trending: Fits a general model to past data and observe the trends
• Forecasting: Simple forecasting and smoothing methods to decompose

data into its component parts and then extend the estimates into the
future to predict ongoing performance
• Decomposition: Separates seasonal or cyclical trends into groups and

profile repetitive performance
• Moving average: Averages the consecutive observations and observes

the trend over time
• Exponential smoothing: Smoothes the time-series data and calculates

the average level and optionally, in a double exponential smoothing, both
the average level and trend.
• Autocorrelation: Discovers repeating patterns in time-series data
• Cross-correlation: Computes, plots and discovers the relationship

between two separate time series.
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ANOVA (Analysis of Variance)

Analysis of variance is a major field of Six Sigma application. ANOVA tools
include one-way and two-way analysis (variance testing with classification
by one or two variables); Analysis of Means (test the equality of population
means) and balance ANOVA (accounting for data collected by different
designs or procedures). All these tools are defined and executed in
software application programs available in the market.
Tolerance Analysis
Tolerance analysis is the statistical analysis tool that helps in determining
the right specifications and limits on individual parts and components to
ensure that they fit together properly as a system once manufactured.
Tolerance analysis is applied in cases where parts or components must
come together precisely for the system to function properly in satisfaction
of the customer’s expectations.
Design of Experiments (DOE)

Experiments are vitally important tools. They permit us to prototype,
evaluate and test our hypothesis in controlled settings before unleashing
them in the real world. Experiments are critical risk-reducers and
confidence-builders.
DOEs statistically investigate the variables that influence a process and the
resulting quality of products and services in experimental settings. DOE
also allows the practitioner to simultaneously understand the effects of
changing the settings of multiple variables.
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Spider Diagram
!
Spider chart representing the contribution, a particular technique  
(e.g. Design of Experiments – DOE) can make to Business excellence
Because of this keystone role, experiments must be done right. Well

designed experiments yield much more useful results than tests that are
casually thrown together. Experiments consume resources, including
personnel, equipment and materials. They cost money and time. And
because so much is riding on the results, they deserve the care and
attention that any project would receive.
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Process Capability Analysis

Process capability analysis is how one determines if the process, once in
control, is also meeting specifications. Six Sigma practitioners calculate a
variety of indices and measures and draw numerous plots and charts to
assess and optimise process capability.
Capability analysis takes the voice of the process (VOP) and compares it to
the voice of the customer (VOC) to see if it is capable of meeting the
requirements. Following are the most commonly applied tools in capability
analysis
• Normal analysis: Analyses process capability when the data is from a

normal distribution
• Non-normal analysis: Analyses process capability when the data is

from a non-normal distribution
• Between/within analysis: Analyses process capability for between

subgroup and within subgroup variation
• Multi-variable analysis: Analyses the capability of an in-control

process when each of multiple continuous variables follow a normal
distribution
• Binomial analysis: Analyses the process when the data are from a
binomial distribution
• Poisson analysis: Analyses the number of defects observed, where the

item occupies a specified time or space
• Capability six-pack: A set of six charts, which collectively contains key

process capability metrices
Regression
Regression analysis is used to discover and characterise the relationship
between a response and one or more predictors. In regression analysis,
models or distribution functions are fit to observed data and depending on
the data, it can lead to a variety of functions.
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The goal of regression analysis is to fit a line and create an equation to

explain or predict the way the process output is behaving. For example,
one can create a correlation between fuel consumption of a car to different
speeds using regression analysis.
Multivariate Analysis
Quite often, one will have multiple measurements on a given item or
subject. Multivariate analysis helps to understand the structure in this mix
of data. It helps assigning different observations to statistically-significant
groups and visually explore the relationships among the grouped variables.
Multivariate analysis begins with applying tools to understand the

covariance structure in the data. Principal component analysis and factor
analysis are two methods for determining structure, alignment and
dimensions of the variables within the data. Grouping tools then help to
aggregate data. When the variables are statistically segmented,
multivariate analysis explores the relationship among them.
Exploratory Analysis
Sometimes, it is not clear where to begin or which statistical tools should
be used for a given situation. In such situations, a variety of exploratory
analysis tools help in examining the data in non-traditional ways and see
data in a different light.
Measurement Systems Analysis

Measurement systems analysis is the practice of determining the extent to
which observed process variation is due to variation in the measurement
systems.
Measurement system errors are classified into two broad categories:

Accuracy and precision. With most measurement systems, both errors are
present.
Accuracy is the difference between the observed measurement and the

true value. Linearity, Bias and Stability are the three sources that
contribute to the accuracy error. Gauge Linearity, Gauge Bias and Gauge
Stability studies help in analysing measurement systems accuracy issues.
Precision error is the condition of observing variation from measurement to

measurement, or from part to part. Repeatability and Reproducibility are
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two components of precision error. Gauge R and R (repeatability and

reproducibility) studies help in determining the extent to which device and
process variation contribute to overall measurement system variation.
Reliability and Survivability

Reliability and survivability analysis helps in using all the measurements
and data from the past to predict what is the most likely to occur in the
future.
10.4 Summary
The chapter details various tools useful in implementing Six Sigma. These
tools fall in categories of either ‘Process optimisation tools’ or ‘Statistical
analytical tools’. As said before, process and data are at the heart of Six
Sigma and these tools help in gathering, compiling, analysing and
measuring massive data to meet the target set by the Six Sigma initiative.
1. Write a note on importance of using tools in Six Sigma implementation..
2. List down various process optimisation tools and explain in detail, one of
them.
3. List down various statistical analysis tools and explain in detail one of
them.
4. Write a note on ‘Poka-Yoke’. 
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REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture 
! !121
DO’S AND DON’TS OF SUCCESSFUL SIX SIGMA IMPLEMENTATION
Chapter 11
DO’S AND DON’TS OF SUCCESSFUL SIX
SIGMA IMPLEMENTATION
Objectives
• The good practices used in Six Sigma implementation
• The mistakes one should avoid while implementing Six Sigma
Structure
11.1 DO’s of Six Sigma implementation
11.2 DON’Ts of Six Sigma Implementation
11.3 Summary
! !122
11.1 Do’s of Six Sigma Implementation
Successful Six Sigma efforts have several practices and characteristics in

common. Following are some of the best practices followed by the
successful Six Sigma enterprises:
DO’s
Aligning projects with key goals

One of the most important Six Sigma success factors is selecting projects
that are aligned with the key goals and strategic objectives of the
organisation. Six Sigma efforts that are successful and lasting are always
made up of projects that are each specifically focussed on moving an
organisation towards its stated objectives.
Setting stretched goals

Six Sigma has repeatedly proven that it produces breakthrough
improvement. But to achieve this, one has to combine the power of the Six
Sigma method and tools with stretched goals, goals that almost seem too
aggressive, too optimistic.
Specifically, a stretched goal represents a 70 per cent improvement over

current performance. For example, if the company’s profit margin is seven
percent, one would want to aim for 11.9 per cent, or if a certain process or
product is producing ten defects per 100 units, one would want to reduce
that number to three defects per 100 units.
Linking customers, processes, data and innovation

These are the core elements of the Six Sigma approach. When one
understands markets, operations and can use measures and creativity to
maximise value and performance, then that is the potent combination to
make life difficult for the competitors.
Targeting tangible results

Six Sigma project must be tied to a tangible financial measures of return –
money saved, new revenue gained, specific costs avoided, etc. These
financial returns must be formally measured, tracked and rolled up if one
wants to achieve the startling financial returns – that is a hallmark of Six
Sigma. Without tying projects to tangible financial measures and tracking
! !123
their financial impact, Six Sigma efforts naturally drift away from their
financial potential.
In few cases, a Six Sigma project is targeted on a strategic objective, such

as increasing the brand awareness. So long it enables the company’s key
business strategies, the project is still worth the effort.
Determining outcomes
Every output or result is determined by a set of inputs. The natural
outgrowth of this principle is that one actively goes out and adjusts and
controls the inputs in a way that enables reaching one’s desired outcomes
with certainty and consistency.
Thinking before acting

Too often, one is tempted to jump into action and do something to solve a
problem. Such an approach usually ends in a continuation of the problem
or, at the best, a sub-optimal solution.
Six Sigma’s DMAIC methodology forces one to shift the bulk of the activity
of solving a problem into defining, measuring and planning a solution. In
the long run, the front loaded DMAIC approach solves the problem more
quickly and with better, more consistent results than other approaches.
Having faith in Data

Data allows one to objectively identify and select the truly best ideas and
solutions from among the many alternatives. Without data, decisions are
based on supposition, estimation, option and sometimes wishful thinking.
Data requires one to suspend judgement and personal bias, to confront

sometimes brutal and undesirable facts. One has to believe that, in the
long run, trusting data will consistently lead towards better and more rapid
solutions.
Minimising variation
Variation will always be present in the plans one designs, the products one
makes, the transactions one conducts or services one delivers. Even in the
environment outside one’s control, events and circumstances change and
vary in ways beyond one’s control.
! !124
Six Sigma does two important things. One, it narrows the range of
variation in any process, product, service or transaction. Two, it enables
configuration of the work, so that performance targets are met, in spite of
the variation one cannot control.
Making top leaders responsible and accountable

Until senior managers of the corporation, business unit or even department
accept Six Sigma as part of their jobs, the true importance of the initiative
will be in doubt and the energy behind it will be weakened.
Successful Six Sigma practitioners communicate with and involve the

owner of the process or system they are working in. They solicit their input
and provide feedback through all stages of DMAIC. Then, when the time for
change arrives, the owner jumps at the chance to implement the awaited
improvements.
Unleashing everyone’s potential

The best Six Sigma efforts extend beyond full-time Black Belts. When an
organisation broadens its Six Sigma knowledge and participation to Green
Belts and Yellow Belts, it unleashes the vast potential of a greater number
of its employees. Instead of relying on a handful of isolated, specialized
experts to drive organisation-wide improvement, an entire army is enlisted
to contribute to the effort.
Celebrating success
Success is contagious. When the first, small victories are showcased and
lauded – with recognition, rewards, praise and publicity – people develop
real interest. They build confidence and trust. They begin to believe in the
power and potential of the method. Each successive victory becomes that
much easier.
Navigating through Six Sigma can be treacherous. One should be aware of

common mistakes and perceptions that can hinder project’s success.
11.2 DON’Ts of Six Sigma Implementation
Not allowing enough time

An organisation breaking through to a new level of performance requires
an engine of project activity. That’s why the Black Belts are asked to
dedicate all their time and efforts towards completing Six Sigma projects. A
! !125
common mistake is to assume that an organisation can get the same

magnitude and speed of change by having Black Belts work on projects on
the side, as a part-time assignment, between the tasks and duties of their
regular work. This approach simply doesn’t generate the force necessary to
sustain organisational change. Project completion drags out and resulting
savings languish. Ultimately, momentum and interest wane.
Not having a project leader

Some organisations have tried to deploy Six Sigma without a designated,
empowered deployment leader. They believe breakthrough change will
occur by the sum of the individual, independent efforts. But a Six Sigma
deployment without a leader is like a ship without a captain – individual
crew members may know what to do in their own areas, but there is no
direction or overall progress.
Taking too big a bite

Almost invariably, the failure of any Six Sigma project can be traced to a
scope that was too broad. Trying to minimise variation in an entire product,
for example, is so defocused that little improvement can happen on any
part of the product. Concentrating on minimising the variation in a single
critical characteristic of a product, however, allows to dig deep enough to
discover the real source of improvement.
Focussing on isolated areas

A mistake companies can make with Six Sigma is to implement it in
isolated pockets, rather than as a uniform and pervasive campaign.
Sometimes an organisation will allow a couple of Black Belts or Green Belts
to be trained and work a few projects. The problem with this approach is
that the Belts don’t get the needed support from management, and they
run into political and organisational roadblocks that impede their success.
“But we are different”

It’s natural to consider one’s organisation to be unique – so unique that
what has worked for others, couldn’t possibly work for his/her
organisation. This is one of the most common myths people have about Six
Sigma.
Six Sigma is general methodology. It has proven itself in every arena

where it is been applied – manufacturing, operations, logistics, design,
supply chains, services, transactions, processing, legal, human resources,
! !126
software, sales, marketing, management, health care, the public sector,

defence contracting – the list literally goes on and on! One need not think
to be lone exception to the rule.
Overtraining
It is not necessary that everyone doing Six Sigma needs to know the
details of every advanced statistical tool and method. Expediency in
learning and application is the key. The best system gets the right
knowledge to the right person at the right time.
Blindly believing in measurement system

Data and measurements are the foundation of Six Sigma. All too often,
however, practitioners neglect to check the validity of their measurements.
It would be prudent to perform a measurements’ system analysis at the
beginning of the project. This step saves from many potential headaches at
a later part.
Six Sigma measures are not static. As customer requirements change, Six
Sigma performance will change. In some Six Sigma organisations,
calculations continue to be made simultaneously on “old rules” and “new
rules” for a while, to make the transition smoother.
“Is it CLs or SLs?”

Control limits (CLs) are a critical part of every control chart. They capture
and represent the true voice of the process. The problem is that they are
often confused with Specification limits (SLs) – which represent the voice
of the customer. It is critically important to know when to use which limit in
which situation – control limits for the voice of the process and
specification limits for the voice of the customer.
Exaggerated opportunity counts

The definition of Six Sigma performance is no more than 3.4 defects per
million opportunities for defects – counting every single opportunity for
defects in a given system. Some practitioners erroneously inflate the
number of opportunities in a system to make their performance look better
than it really is. This should be avoided.
! !127
Not leveraging technology

Technology and software are inseparable from Six Sigma. Yet many
practitioners try to segment technology into its own, isolated corner. Some
dismiss its contribution outright, because they do not understand how to
leverage its potential. The right technology can help any person in Six
Sigma do his or her work better and faster.
11.3 Summary
There are many organisations, worldwide, which have been immensely

benefitted implementing Six Sigma. There are also many organisations,
which could not harness as much success as these organisations would
have desired. If Six Sigma is a well laid approach, why then, some
organisations are not so successful? A reader of the subject should know
that every organisation has its own peculiarities and it may be necessary to
make finer changes in the Six Sigma implementation suiting its product
offerings, skills, management culture, etc. The chapter provides DO’s and
DONT’s in implementing Six Sigma, which can be taken as a guideline
1. Which are the best practices followed by the successful Six Sigma
enterprises?
2. Which are the pitfalls one should guard against while implementing Six
Sigma?
! !128
REFERENCE MATERIAL
chapter
Summary
PPT
MCQ
Video Lecture 
! !129
ANNEXURE
ANNEXURE
Six Sigma Conversion Table
% Success DPMO Sigma Level

6.68 933200 0
8.455 915450 0.125
10.56 894400 0.25
13.03 869700 0.375
15.87 841300 0.5
19.08 809200 0.625
22.66 773400 0.75
26.595 734050 0.875
30.85 691500 1
35.435 645650 1.125
40.13 598700 1.25
45.025 549750 1.375
50 500000 1.5
54.975 450250 1.625
59.87 401300 1.75
64.565 354350 1.875
69.15 308500 2
73.405 265950 2.125
77.34 226600 2.25
80.92 190800 2.375
84.13 158700 2.5
86.97 130300 2.625
89.44 105600 2.75
91.545 84550 2.875
93.32 66800 3
94.79 52100 3.125
95.99 40100 3.25
96.96 30400 3.375
! !130
ANNEXURE
% Success DPMO Sigma Level

97.73 22700 3.5
98.32 16800 3.625
98.78 12200 3.75
99.12 8800 3.875
99.38 6200 4
99.565 4350 4.125
99.7 3000 4.25
99.795 2050 4.375
99.87 1300 4.5
99.91 900 4.625
99.94 600 4.75
99.96 400 4.875
99.977 230 5
99.982 180 5.125
99.987 130 5.25
99.992 80 5.375
99.997 30 5.5
99.99767 23.35 5.625
99.99833 16.7 5.75
99.999 10.05 5.875
99.99966 3.4 6
References to the Book

The subject book is a gist of a vast literature written on the subject arising
out of the actual experiments carried out by many practicing managers.
Students are requested to read these books to dive deep into the subject
and initiate the process of Six Sigma as actually doing it will bring out finer
intricacies and a true success.
1. The Six Sigma Way by Peter S. Pande, Robert P. Neuman & Roland R.
Cavanagh.
2. The Ultimate Six Sigma: Beyond Quality Excellence to Total Business

Excellence by Bhote, Ketki R.
! !131
ANNEXURE
3. Six Sigma Business Scorecard-2nd by Gupta, Praveen.
4. Six Sigma Continual Improvement For Business: A Practical Guide by

Truscott, William T.
5. World Class Master Scheduling: Best Practices & Lean Six Sigma
Continuous Improvement by Sheldon, Donald H.
6. The Power of Six Sigma – An inspiring tale of how Six Sigma is

transforming the way we work by Subir Chowdhury.
7. Six Sigma for Dummies by Gygi, Craig, Decarlo Neil/Williams, Bruce.
8. Design for Six Sigma in Technology and Product Development by C. M.

Creve ling, J. L. Slutsky & D. Antis, Jr
! !132

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SIX SIGMA

Sub Code- 337

Program Design and Advisory Team

Prof. B.N. Chatterjee Mr. Manish Pitke

Prof. Kanu Doshi Prof. B.N. Chatterjee

Prof. Dr. V.H. Iyer Mr. Smitesh Bhosale

Prof. B.N. Chatterjee Prof. Vineel Bhurke

Prof. Venkat lyer Dr. Pravin Kumar Agrawal

Prof. Dr. Pradeep Pendse Mrs. Margaret Vas

Prof. Sandeep Kelkar Mr. Anuj Pandey

Prof. Dr. Swapna Pradhan Course Editor

Prof. Bijoy B. Bhattacharyya Prof. B.N. Chatterjee

Mr. P.M. Bendre Course Coordinators

Mr. Ajay Prabhu Ms. Kirti Sampat

Mr. A.S. Pillai Mr. Kishor Tamhankar

COPYRIGHT © by Prin. L.N. Welingkar Institute of Management Development & Research.

NOT FOR SALE. FOR PRIVATE CIRCULATION ONLY.

1st Edition (Jan-2011). 2nd Edition ( Jan-2012). 3rd Edition (Jan-2014)

Chapter No. Chapter Name Page No.

1 Six Sigma – Strategy for Sustained Growth 3-10

2 What is New about Six Sigma? 11-16

3 Key Concepts of the Six Sigma System 17-29

4 Key Ingredients of Six Sigma Management 30-55

5 Objectives and Benefits of Six Sigma 56-62

6 Six Sigma for Manufacturing and Service Industries 63-68

7 Roles and Responsibilities in Six Sigma Management 69-80

8 The Roadmap for Six Sigma 81-92

9 Getting Started with Six Sigma 93-102

10 Tools Used 103-120

11 DO's & DON'Ts of Successful Six Sigma 121-128

After completing this chapter, you will be able to understand:

• Six Sigma – Approach and benefits

1.1 Organisations Achieving Break-through Improvements through Six

1.2 The Six Sigma Approach

1.3 The Critical Elements of Six Sigma

1.5 Self Assessment Questions

1.1 Organisations Achieving Break-through Improvements

Six Sigma methodology was formalised in the mid-1980s at Motorola. New

Six Sigma performing companies realised staggering business success:

• Bank of America saved hundreds of millions of dollars within three years

• Honeywell achieved record operating margins and savings of more than

1.2 The Six Sigma Approach

Six Sigma is a methodology for minimising mistakes and maximising value.

The emphasis on customers is probably the most remarkable element of

The Six Sigma approach is not for an unprepared organisation. It is intense

management team to become complacent, but, rather, it exposes waste

All businesses, organisations and individuals have room to improve. No

Work is often performed incorrectly, or the outcome is flawed in some way.

Six Sigma was once a quality-improvement methodology, but now it is a

1.3 The Critical Elements of Six Sigma

1. Genuine focus on the customer

In the 1970s, customer satisfaction began to replace profit as purpose of

In the 1980s, customer delight – or customer “wow” – became business

In the 1990s, customer loyalty – or customer long-term retention –

In the first decade of the 21st century, customer loyalty is metamorphosing

2. Data and Fact-driven Management

3. Process Focus, Management and Improvement

6. Drive for Perfection, Tolerance for Failure

1.5 Self assessment Questions

1. “Six Sigma is yet another management initiative” – evaluate this

After completing this chapter, you will be able to understand:

• Evolution of quality over time

• What Six Sigma is and what it is not.

1.1 Organisations Achieving Break-through Improvements  

2.5 Self Assessment Questions 

2. What are the success factors of Six Sigma over TQM? 

3. Explain Normal Distribution. 