Nazmun Nahar

SIX SIGMA
World Class Performance
With 99 % Quality

With Six Sigma

Quality

For every 300000

letters delivered

3,000 misdeliveries

1 misdelivery

For every week of TV

broadcasting per
channel

1.68 hours of dead air

(no sound or video)

1.8 seconds of dead air

Out of every 500,000

computer restarts

4100 crashes

Less than 2 crashes

Source: The Six Sigma Way by Peter Pande and Others

SIX SIGMA

Business Definition
A break through strategy to significantly improve customer
satisfaction and shareholder value by reducing variability
in every aspect of business.

Technical Definition
A statistical term signifying 3.4 defects per million
opportunities.

What is Six Sigma?

Six Sigma is originally developed by Motorola in 1986. [Six Sigma

became well known after Jack Welch made it a central focus of his
business strategy at General Electrics in 1995, and today it is used
in different sectors of industry.
It uses a set of quality management methods, including statistical
methods, and creates a special infrastructure of people within the
organization who are experts in these very complex methods. Each
Six Sigma project carried out within an organization follows a
defined sequence of steps and has quantified financial targets (cost
reduction and/or profit increase)
Six sigma accuracy means that the process is 99.999998% accurate.
in quality practice six sigma means 3.4 defects per million

SIX SIGMA DEFINITION

(CONTD.)
Sigma
Level

Defects Per Million

Opportunities

Rate of
Improvemen
t

690,000

308,000

2 times

66,800

5 times

6,210

11 times

230

27 times

3.4

68 times

GOALS OF SIX SIGMA

To reduce variations

To reduce defects

To improve productivity

To enhance customer satisfaction

To improve market reputation

To increase shareholder value

What is Six Sigma

This is accomplished through the use of two Six

Sigma sub-methodologies: DMAIC and DMADV.

The Six Sigma DMAIC process (define, measure,

analyze, improve, control) is an improvement system

for existing processes falling below specification and
looking for incremental improvement.
The Six Sigma DMADV process (define, measure,
analyze, design, verify) is an improvement system
used to develop new processes or products at Six
Sigma quality levels.
Both Six Sigma processes are executed by Six Sigma
Green Belts and Six Sigma Black Belts, and are
overseen by Six Sigma Master Black Belts.

Six Sigma DMAIC

DMAIC
Define the project goals and customer (internal and

external) deliverables
Measure the process to determine current performance
Analyze and determine the root cause(s) of the defects
Improve the process by eliminating defects
Control future process performance

When To Use DMAIC

The DMAIC methodology, instead of the DMADV

methodology, should be used when a product or process

is in existence at your company but is not meeting
customer specification or is not performing adequately.

Six Sigma DMADV

DMADV
Define the project goals and customer (internal and external)
deliverables
Measure and determine customer needs and specifications
Analyze the process options to meet the customer needs
Design (detailed) the process to meet the customer needs
Verify the design performance and ability to meet customer
needs
When To Use DMADV
A product or process is not in existence at your company and
one needs to be developed
The existing product or process exists and has been
optimized (using either DMAIC or not) and still doesn't meet
the level of customer specification or six sigma level

SIX SIGMA CASE STUDY

Background
SERVICE
ORGANIZATION
M/s Alpha Inc. manages out bound cargo from a distribution

centre to different stores.

Deliveries made on trucks - owned and hired.
Customers dissatisfied at delivery schedules.
Leadership decision to deploy Six Sigma;
Team of 1 Black Belt and 3 Green Belts

formed

Sponsor of the project - Distribution Manager

Focus on customers generating annual revenue of USD

400,000/-.
Current process sigma level - 2.43 or 175889 DPMO
10

DEFINE CRITICAL TO QUALITY

Customer
needs

Improved delivery
performance

Level 1
CTQ

Timely delivery

Level 2
CTQ

On time delivery to
schedule

Level 3
CTQ

Delivery within +/- 1 hour

of scheduled delivery time

11

DEFINE GOAL STATEMENT

Reduce number of delayed deliveries by 50 % by

31st December Y 2002 to better meet customer

requirement of timely delivery defined as within
+/- 1 hour of scheduled delivery.

12

DEFINE PERFORMANCE
STANDARDS
Output unit

A scheduled delivery of freight

Output
characteristic

Timely delivery

Project Y measure

Process starts when an order is

received
Ends when goods are received & signed
for at customers desk.
Process measurement Deviation from
scheduled delivery time in minutes.

Specification limits

LSL = -60 minutes

USL= +60 minutes

Target

Scheduled time or zero minutes

deviation

Defect

Delivery earlier or later than 1 hour.

No. of defect
opportunities per

1 opportunity for a defect per

scheduled delivery of freight.

13

DEFINE SIPOC DIAGRAM

Supplier

Stores Manager

Input

Stores Order

Process Steps
(high level)

Receive order
Plan delivery
Dispatch Driver with goods
Deliver goods to stores
Receive delivery

Output

freight with Documents

Customer

Store Manager

Detailed process maps drawn

14

MEASURE AND ANALYZE

Delay earlier or later than 1 hour of schedule

Unit; time in hours
Current percentile 70%.
Survey and Cause and effect diagram
Driver and Distance identified as key factors
influencing delivery performance.
Driver selected for focus.
Potential root causes as to why Driver influenced the
time:

Size of the vehicle

Type of engine

Type of tyres

Fuel capacity
15

IMPROVE
Experiments designed and conducted

using truck type and tyre size.

Findings:
Larger tyres took longer time at certain routes

where area was cramped and time lost in

maneuvering.

High incidence of tyre failures since tight turns

led to stress on tyres thus increasing number

of flat tyres.

Team modified planning of dispatch

process by routing smaller trucks at more

restrictive areas.
16

CONTROL
Test implementation.
Process sigma level up from 2.43 or 175889 DPMO to

3.94 or 7353 DPMO.

Performance still fell short of best in class 4.32 or 2400

DPMO.
Improvement led to significant customer satisfaction.
Process continually monitored and data on new cycle

times, tyre failure collected as per defined methods

and frequency, analyzed and monitored.
Customer satisfaction measured and monitored.
17

LIMITATIONS
Define
Difficulty in identifying the right project and
defining the scope;
Difficulty in applying statistical parameters
to Voice of the Customers;
Trouble with setting the right goals;
Measure
Inefficient data gathering;
Lack of measures;
Lack of speed in execution;
18

LIMITATIONS
Analyze
Challenge of identifying best practices
Overuse of statistical tools/ under use of practical

knowledge
Challenge of developing hypotheses
Improve

Challenge of developing ideas to remove root

causes
Difficulty of implementing solutions

Control
Lack of follow up by Managers/ Process Owners
Lack of continuous Voice of the Customer feedback
Failure to institutionalize continuous improvement.
19

IMPORTANT POINTS
Define ranked most important step but gets the

lowest resource allocation

Measure is considered most difficult step and also

gets the highest resources

Source: Greenwich Associates Study Y 2002

20

PROCESS CAPABILITY (CP)

We have to quantify the extent to which a process

is capable of meeting its specifications

PROCESS CAPABILITY (CP)

(CONTD.)

Cp =
3
1. 3

PROCESS CAPABILITY INDEX

(CPK)

The Process Capability Index Cpk is the ratio of the

range of values permitted on one side of the mean
to three times the standard deviation

In some cases the output of a capable process can

be non-conforming if the process is not properly
centered. Cpk helps to measure it

PROCESS CAPABILITY INDEX

(CPK) (CONTD.)

=
Cpk
3
1. 3