Six Sigma

- Key to Productivity Improvement

Manoj K Prasad,
Outline
Trends in Management
1. Definition of 6σ Management
2. Tools & Techniques of Six Sigma
3. Fundamental themes of six Sigma
4. The Road map to six Sigma
5. Look at Implementation (what it really is)
6. Cases
7. Lesson learned
8. References 12/13/09
 What is Six Sigma?
 Six Sigma is a popular quality improvement technique for cutting
costs, improving processes, and reducing business cycle times.
It was invented by Motorola in the 1980’s and popularized by
Allied Signal (now Honeywell) and GE in the mid to late 1990’s.
 Six Sigma is a number
 3.4 customer requirement failures per million
opportunities
 Six Sigma is a methodology
 DMAIC - Define, Measure, Analyze, Improve, &
Control
 DFSS – Design for Six Sigma
 Six Sigma is a culture

Six Sigma is Quality

Six Sigma as a Number
σσ PPM
PPM
2 308,537
3 66,807
4 6,210
5 233
Process Defects per
Process
Capability
Capability
6 3.4 Million Opp.
Variation-
Which Pilot Would You
Choose?

X
X
X XXX
X X
XXXX
X XXX
X
XX
X
X
Airplane landing’s example
 Examples of Sigma

Electric companies operated at

4 Sigma = no power 1 hour/week
 6 Sigma = no power for 2 seconds/week

Telephone Companies
 4 Sigma = No phone service 4
hours/month
 6 Sigma = No phone service 9
seconds/month
 Six Sigma -- Practical Meaning
99% (3.8 Sigma)
• 20,000 lost articles of mail per
hour
• Unsafe drinking water for
almost 15 minutes each day
• 5,000 incorrect surgical
operations per week
• Two short or long landings at
most major airports each day
• 200,000 wrong drug
prescriptions each year
• No electricity for almost seven
hours each month
99.99966% (6 Sigma)
• Seven articles lost per hour
• One unsafe minute every seven
months
• 1.7 incorrect operations per
week
• One short or long landing every
five years
• 68 wrong prescriptions per year
• One hour without electricity
every 34 years
Six Sigma Aspects /
Characteristics
 Really captures any analytical method that
uses data for decisions (statistical bias).
 ISO “Statistical business-improvement approach that
seeks to find and eliminate defects and their causes
from an organization's processes, focusing on outputs of
critical importance to customers.”

 Training / Certification
 Master Black Belt
 Black Belt
 Green Belt
 Yellow Belt
 Other training programs

12/13/09
Six Sigma Aspects /
Characteristics
 More than tools….
A process for
change (or
control ?).
 A Philosophy about
Variability

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SIX SIGMA - TOOLS AND
TECHNIQUES

PROJECT TEAM

CSI TVM-BIG2002 TUTORIAL 19-12-02

Fundamental themes of Six
Sigma
 Six Sigma is based around a number of central
themes
A genuine focus on the customer
 Data and fact driven Management
 Team based problem solving projects
 Process focus, management & improvement
 Proactive management
 Drive for perfection, tolerance for failure
Fundamental themes of Six
Sigma
 A genuine focus on the customer
 Six Sigma measures start with customer
satisfaction
 Emphasis on understanding customer
expectations and requirements

 Data and fact driven Management

 Speaking with data (not opinions!)
 Management decisions based on fact
 Develop understanding of internal processes
Fundamental themes of 6 Sigma
 Process focus, management & improvement
 Understanding the process is the key aspect
 Control the inputs, and improve process

 Proactive management
 Understanding of Six Sigma principles
 Defining the root cause of problems
 Setting and maintaining aggressive improvement targets
 Challenging ‘why’ things are done this way
Fundamental themes of Six
Sigma
 Team based collaboration
 Six Sigma is teamwork focused
 Project lead by process expert
 Facilitated by Six Sigma Black Belt
 Multi-skill experts within project team

 Drive for perfection, tolerance for failure

 Being prepared to fail during improvement
 Understanding why something failed
 Improving it next time
 Six Sigma
Elements
(Tools)

Basic Tools (Green Belts)

 Process Mapping - Putting ideas on paper.
 (QFD) Quality Function Deployment- Matrix of features & competitor offerings.
 (FEMA) Failure Mode and Effects Analysis - mapping of failures, likelihood &
severity

More Advanced (Black Belts)

 (DOE) Design of Experiment - Method for designing experience to determine
the influential factors in a process.

12/13/09
Six Sigma Elements (Tools)

Other Tools
 Statistical Techniques
 Weibul distribution
 Control Charts
 Graphical Techniques
 Affinity Diagram
 Fishbone Diagram
 Pareto
 Group Conceptual Tools
 Brain Storming
 Creativity / Thinking Out Of The Box

12/13/09
Six Sigma Elements (Tools)

 Effective Tools (processes)

???
 Work Out Process
 Balanced Score Card
 Benchmarking
 DMAIC
 DFSS
 Kaizen
 Lean Manufacturing
 Taguchi - Robust
 Really need a good tool for decision
making.
Feel Free to share your experience / opinion
in the question session 12/13/09
 3. The Roadmap to Six Sigma

North

East West

South

Usually has many twists and turns!

A Road Map for Six Sigma
 Appoint a Champion
 Select a Cross-functional team
 Develop quantifiable goals
 Develop an implementation plan
 Establish a training program
 Address data collection requirements and issues
 Develop a change control and maintenance
program
 Coordinate your road map
 Article by John M. Gross, ASQ, Quality Progress Magazine, November 2001
Implementation

 How you see it….depends on where

you are in the company.
12/13/09
Levels.  Large Diverse Corporations.
C o m p a n y H i e a r c h y

C E O
T o p M a n a g e m e Driven
 n t from the top.
S e n io r R a n k s

6σ is a Quality Program

M id d le M a n g e m e n t
& E n g in e e r in g
built around manufacturing
P r o d u c t io n M a n a gcontrol
e m e n t techniques….plus it

L in e W o r k e r s
promotes a culture change.

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CEOs & Six Sigma

 Basis for coordination and control

 Puts your people “on the ground”

 A Special Class of worker (commitment)

 Something for Wall Street

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Senior Management & Six
Sigma
C o m

C E
p

O
a n y H i e a r c h y

T o p M a n a g e m e n t

S e n i o r R a n k s

M i d d l e M a n g e m e n t
 Facilitates Cost
& E n g in e e r i n g
Savings =
P r o d u c t i o n M a n a g e m e n t
 down size
L in e W o r k e r s

 outsource
 reorganization

 WHY?

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Middle Managers & Engineers - Six
Sigma
Des
Confused
 ? Accoun ? I.
Have analytical methods already

ting ? H.T.
ign
Softw  Tools do not apply & they have limited “levers of control”
R.
are
Marke ? Procur
ting ement
Production Management - Six Sigma
 “Tune- In” to the idea
 Understand SPC
 Aspire to Management

Line Workers -Six Sigma

 Are accustomed to prescriptive processes

Feel Free to disagree with me in the question

12/13/09
session.
Implementation in
Different Companies
 GE (claims $12B over 5yrs)
 Honeywell (Allied Signal) (claim $800M one year)
 Johnson & Johnson
 Motorola ($15B in savings in last 11 yrs.)
 Sun Microsystems
 Car Companies (GM, Ford etc.)

 Fits with large diverse companies

(conglomerates) with high degrees of
outsourcing.

12/13/09
 Who is Using Six Sigma?
Dupont 1,139 Blackbelts,
>$1 billion/year savings
Dow trained thousands
since 1999

Motorola has been doing since the 80’s

>$1.5 billion savings in 2000,

$188 million in 1998

Honeywell saved $1.5 billion 1993-1997,

>$500 million in 1998
Implementation in
Different Companies
Companies And The Year They Implemented Six Sigma
Company Name Year Began Six Sigma
Motorola (NYSE:MOT) 1986
Allied Signal (Merged With Honeywell in 1999) 1994
GE (NYSE:GE) 1995
Honeywell (NYSE:HON) 1998
Ford (NYSE:F) 2000

12/13/09
 SIX SIGMA SUCCESS
STORIES
General Electric’s, Jack Welch describes Six Sigma as the most
important initiative GE has ever undertaken. GE had an operative
income of 10% for decades and they were not able to improve this
despite various efforts. After implementation of Six Sigma GE was able
to improve its operative income from 10% in 1995 to 16.7% in 1998.
In India Wipro Limited (Corporate) including Wipro GE Medical
Systems, Wipro Infotech and Wipro Fluid Power are applying Six
Sigma Techniques extensively. Infact in the recent annual report Wipro
have reported significant cost savings of over 120 Lacs through Six
Sigma Project.
ABB, after application of Six Sigma has reduced measurement
equipment error by 83%. The company also made drastic improvements
in material handling resulting in an annual estimated cost savings of US
$775000.

CSI TVM-BIG2002 TUTORIAL 19-12-02

 SIX SIGMA SUCCESS
STORIES
Motorola Corporation,USA, are the pioneers in the Application of
Six Sigma for the Enterprise. The had used six sigma techniques quite
early in the 80’s and have mastered the technology. The are providing
training to other organization in this break through technology. They
have also patterned some of the techniques / software in the application
of Six sigma for the enterprise. Motorola had reported several million
dollar saving and improvements through Six Sigma.
Allied Signal, USA, which was on the verge of bankruptcy was made
profitable by CEO Larry Bossidy through Six Sigma. The company
implemented Six Sigma program in 1994. The cumulative impact on
the savings in the direct costs during this period was more than US$ 2
billion.

CSI TVM-BIG2002 TUTORIAL 19-12-02

 Six Sigma “Lessons Learned”

• Commitment of top management is crucial

• Quality improvement should be driven by measurable,
“stretch” goals
• Quality improvements can (and should) happen everywhere:
engineering, R&D, sales, customer service, business
transactions, as well as manufacturing
• Don’t leave Quality to “professionals;” involve everyone
• Six Sigma should be regarded as a cultural change, not just a
technical methodology
• Reward the successful application of the process; don’t
punish for lack of specific tool use
 References
Books
The GE Way Fieldbook: Jack Welch's Battle Plan for Corporate Revolution by
Robert Slater (Paperback)

The Six Sigma Way: How GE, Motorola, and Other Top Companies are Honing
Their Performance by Peter S. Pande et al, et al (Hardcover)

Execution: The Discipline of Getting Things Done by Larry Bossidy, et al

(Hardcover)

What Is Six Sigma? -- by Peter S. Pande, et al; Paperback

Lean Six Sigma : Combining Six Sigma Quality with Lean Production Speed by
Michael L. George (Hardcover)

The Six Sigma Handbook by Thomas Pyzdek (Hardcover)

Lean Six Sigma for Service : How to Use Lean Speed and Six Sigma Quality to
Improve Services and Transactions -- by Michael L. George

Design for Six Sigma : A Roadmap for Product Development by Kai Yang, Basem
S. El-Haik (Hardcover)

Design for Six Sigma: Launching New Products and Services Without Failure

12/13/09
Thank You !!
Ask Questions
…
Some people change when they see the light,
others change only when they feel the heat
The time to act is NOW