Six Sigma

Introduction:

Six Sigma is a management framework that, in the past 15 years has evolved from a focus on
process improvement using statistical tool to a comprehensive framework for managing a
business. In other words Six Sigma is a methodology that firms can use to improve the output
quality of a process. The result that world-class companies such as General electric, Johnson &
Johnson, Honeywell, Motorola, and many others have accomplished this. Six Sigma has become
a synonym for improving quality, reducing cost, improving customer loyalty, and achieving
bottom-line results.

Historical perspective of Six Sigma:

In the early and mid-1980’s with Chairman Bob Galvin at the helm, Motorola engineers decided
that the traditional quality levels measuring defects in thousands of opportunities didn't provide
enough quality output. Instead, they wanted to measure the defects per million opportunities.
Motorola developed this new standard and created the methodology and needed cultural change
associated with it. Six Sigma helped Motorola realize powerful bottom-line results in their
organization - in fact, they documented more than $16 Billion in savings as a result of our Six
Sigma efforts.
Six Sigma:

Sigma is the Greek letter used to represent standard deviation in statistics which stands for six
standard deviation from mean. The foundation of the Six Sigma program is statistics. In other
words Sigma is a measure of variation. When a process reaches the six sigma level that process
will be running close to perfection, producing a mere 3.4 defects per million opportunities. By
using statistical tools firm can reduce the amount of variations in a process by removing the
cause of variations therefore increasing the output quality of the process. Six Sigma is similar to
Zero Defect(ZD). Six Sigma strives for perfection.
Definition:

A definition given by Motorola “The six sigma is a framework that a company can use to help
reduce the number of defective products the company produces for its customers.”

Steps in Six Sigma :

Motorola prescribes the following six steps to achieve the Six Sigma state.

Step 1 : Identify the process you create or service you provide.

Step 2 : Identify the customers for your product or service and determine what they consider
important.

Step 3 : Identify your needs to provide the product or service that satisfies the customer.

Step 4 : Define the process for doing the work.

Step 5 : Mistake-proof the process for doing the work.

Step 6: Ensure continuous improvement by measuring, analyzing and controlling the improved
process

Quality Approaches and Models

The DMAIC Methodology (DMAIC – Define, Measure, Analyze, Improve and

Control)
1. Define: After a Six Sigma project is selected, the first step is to clearly define the
problem. This activity is significantly different from project selection. Project
selection generally responds to symptoms of a problem and usually results in a rather
vague problem statement. One must describe the problem in operational terms that
facilitate further analysis. For example, a firm might have a history of poor
reliability of electric motors it manufactures, resulting in a Six Sigma project to
improve motor reliability. A preliminary investigation of warranty and field service
repair data might suggest that the source of most problems was brush wear, and more
specifically suggest a problem with brush hardness. Thus, the problem might be
defined as “reduce the variability of brush hardness.” The Define phase should also
address such project management issues as what will need to be done, by whom and
when.

2. Measure: This phase of the DMAIC process focuses on how to measure the internal
processes that impact “critical to quality”(CTQ) Data from existing production
processes and practices often provide important information, as does feedback from
supervisor, workers, customers and field service employees. One must first ask some
basic questions before data collection:
 What questions are we trying to answer?
 What type of data will we need to answer the question?
  Where can we find the data?
 Who can provide the data?
 How can we collect the data with minimum effort and with minimum chance
of error?

Some of the important considerations for data collection are:

a) Formulate good questions that relate to the specific information needs of

the project;
b) Use appropriate data analysis tools and be certain the necessary data are
being collected.
c) Define comprehensive data collection points so that job flows suffer
minimum interruption.
d) Select an unbiased collector who has the easiest and most immediate
access to the relevant facts.
e) Understand the environment and make sure that data collectors have the
proper experience.
f) Design simple data collection forms.
g) Prepare instructions for collecting the data.
h) Test the data collection forms and the instructions and make sure they are
filled out properly.
i) Train the data collectors as to the purpose of the study, what the data will
be used for, how to fill out the forms and the importance of remaining
unbiased.
j) Audit the data collection process and validate the results.

3. Analyze: The Analyze phase of DMAIC focuses on why defects, errors or excessive
variation occur, which often result from one or more of the following:
 A lack of knowledge about how a process works which is particularly
critical if different people perform the process. Such lack of knowledge
results in inconsistency and increased variation in outputs.
  A lack of knowledge about how a process should work including
understanding customer expectations and the goal of the process.
 A lack of control of materials and equipment used in a process.
 Inadvertent errors in performing work.
 Waste and complexity, which manifest themselves in many ways, such as
unnecessary steps in a process and excess inventories.
 Hasty design and production of parts and assemblies; poor design
specifications; inadequate testing of incoming materials and prototypes.
 Failure to understand the capability of a process to meet specifications.
 Lack of training.
 Poor instrument calibration and testing.
 Inadequate environmental characteristics such as light, temperature and
noise.

4. Improve: One of the root cause of a problem is understood, the analyst or team needs
to generate ideas for removing or resolving the problem and improve the performance
measures and CTQs. The idea-gathering phase is a highly creative activity, because
many solutions are not obvious. One of the difficulties in this task is the natural
instinct to prejudge ideas before thoroughly evaluating them. Most people have a
natural fear of proposing a “silly” idea or looking foolish. However, such ideas may
actually form the basis for a creative and useful solution. Effective problem solvers
must learn to defer judgment and develop the ability to generate a large number of
ideas at this stage of the process, whether practical or not.

A number of processes and tools to facilitate idea generation can be used. One of the
most popular is brainstorming. Brainstorming is a useful group problem-solving
procedure for generating ideas. With brainstorming, no criticism is permitted and
people are encouraged to generate a large number of ideas through combination and
enhancement of existing ideas. Wild ideas are encouraged and frequently trigger other
good ideas from somewhere else.
 After a set of ideas have been proposed, it is necessary to evaluate them and select the
most promising. This process includes confirming that the proposed solution will
positively impact the key process variables and CTQs and identifying the maximum
acceptable ranges of these variables.

Problem solutions often entail technical or organizational changes. Often some sort of
decision or scoring model is used to assess possible solutions against important
criteria such as cost, time, quality improvement potential, resources required, effects
on supervisors and workers, and barriers to implementation such as resistance to
change or organizational culture. To implement a solution effectively, responsibility
must be assigned to a person or a group who will follow through on what must be
done, where it will be done, when it will be done and how it will be done. Project
management techniques are helpful in implementation planning.

5. Control: The control phase focuses on how to maintain the improvements, which
includes putting tools in place to ensure that the key variables remain within the
maximum acceptable ranges under the modified process. These improvements might
include establishing the new standards and procedures, training the workforce, and
instituting controls to make sure that improvements do not die over time. Controls
might be as simple as using checklists or periodic status reviews to ensure that proper
procedures are followed, or employing statistical process control charts to monitor the
performance of key measures.

The DFSS – (Design for Six Sigma)

DFSS is a systematic methodology utilizing tools, training and measurements to
enable us to design products and processes that meet customer expectations and can be produced
at Six Sigma quality levels. DFSS is used where the process is totally new, rather than improving
an existing process. The DMAIC sequence is replaced by a DMADV(Define, Measure, Analyze,
Design and Validate).
1. Define :
 Decide on goals of the activity.
 Make sure the goals meet the customer expectations and are in line with the
strategy of the organization.
 This is similar to the ‘D’ in DMAIC.

2. Measure :
 Use the feedback from the customers, and other stakeholders, to decide on the
metrics that the project must achieve.
 The voice of the customer can be translated into specific features of the product
or service using quality function deployment(QFD), often known as the House Of
Quality.
 3. Analyze :
 Develop several option for the design, and choose between them.
 Developing the options may involve using strategic-level analytical tools, such as
porter’s five force analysis or benchmarking.
 Deciding between the option may involve using a method such as Pugh analysis.

4. Design :
 Carry out Design
 The design should make use of the appropriate ‘Design for X’(DFX) methods.
 Available methods include Design for Quality, Design for Manufacture and
Design for Assembly.

5. Validate :
 Put the design into practice and make sure it works.
 This will involve prototype trials. It will also involves collecting detailed
feedback from customers and stakeholders.

Quality Tools used in Six Sigma:

 Control Chart – Monitors variance in a process over time and alerts the business to
unexpected variance which may cause defects.
 Defect Measurement – Accounting for the number or frequency of defects that cause
lapses in product or service quality.
 Pareto Diagram – Focuses on efforts or the problems that have the greatest potential for
improvement by showing relative frequency and/or size in a descending bar graph. Based
on the proven Pareto principle: 20% of the sources cause 80% of any problems.
 Process Mapping – Illustrated description of how things get done, which enables
participants to visualize an entire process and identify areas of strength and Weaknesses.
 It helps reduce cycle time and defects while recognizing the value of individual
contributions.
 Root Cause Analysis – Study of original reason for nonconformance with a process.
When the root cause is removed or corrected, the nonconformance will be eliminated.
 Statistical Process Control – The application of statistical methods to analyze data, study
and monitor process capability and performance.
 Tree Diagram – Graphically shows any broad goal broken into different levels of
detailed actions. It encourages team members to expand their thinking when creating
solutions.

How to organize a Six Sigma program:

Implementing Six Sigma requires having the “right people in the right seats” to be
successful. Six Sigma is no different. Studying some of the companies listed above will
prove that having the right people with the right skills and a shared vision is the
foundation for success. The key players of the Six Sigma team are the:
Champion: (Usually upper management/ executive officers)
The Champion is the person responsible for instilling the vision of Six Sigma and
communicating it across the firm. The Champion should receive Six Sigma training in order to
be an effective leader. While most likely not as knowledgeable in the use of specific tools in Six
Sigma, a Champion must have an understanding of what the Black and Green Belts are doing in
order to relay updates and accomplishments to upper management and throughout the
company. The champion also assists the Black Belts by dedicating resources, assists in
choosing projects, and is the advocate for the Black and Green Belts. Some programs distinguish
between Champion and Executive leadership, it’s up to you.

Master Black Belt:

A master Black Belt is a Black Belt that has had extensive experience with the Six Sigma
methodology. When a firm first tries to implement a Six Sigma program it may be necessary to
hire the services of a master Black Belt to help facilitate correct implementation and initial
success. The Master Black Belt can act as a coach to the Black and Green Belts by drawing on
extensive experience relating past problems and how they were solved. The Master Black Belt
can also evaluate project results and give feedback to Black and Green Belts on performance and
implementation.

Black Belts:
The rank of Black Belt is achieved through a proper accreditation program that teaches the Six
Sigma process and tests understanding of the tools to be used. Black Belts have a strong
understanding of statistical methods of data collection and analysis and must have experience in
past Six Sigma projects. Their full time responsibility is to Six Sigma projects. Black Belts work
as project managers and are responsible for all the traditional roles of that assignment,
communicating often with the Champion throughout a process. If there are no Black Belts in an
organization it might be necessary to train some and secure the services of a Master Black Belt to
mentor and develop new Black Belts. Adams, Gupta, and Wilson suggest that a company
develop one black per every million in revenue, or in some cases .5-4.0% of employees should
be Black Belts.

Green Belts:
Green Belts are essentially assistants to the Black Belts in their job. Effective Green Belts have
an understanding of statistics but don’t have the expertise and experience with the Six Sigma
tools and projects like Black Belts. Green Belts typically do the leg work under Black Belt
direction such as data collection and so on. However, it is important for Green Belts to be
involved with the whole process of choosing projects, analyzing processes, using Six Sigma
tools, and improving processes so that they can achieve the level of Black Belt and advance into
a leadership role. Generally Green Belts work on Six Sigma projects part time while still taking
care of their normal responsibilities. (AGW) There should be approximately 10 Green Belts for
every Black Belt in a company as a general rule.

Achievements of Six Sigma:

The most important Achievements of Six Sigma is

 Financial Benefits
 Benefits for Customer
 Benefits for Employees

Financial Benefits :

 GE boasts gains of $2 billion to the bottom line in 1999 and $2.4 billion in 2001
because of Six Sigma.

 Motorola saved $15 billion in the first 10 years of Six Sigma implementation

 DuPont realized more than $1.6 billion in cost savings the first four years of Six
 Sigma.

 Many other companies and even municipalities have had similar success by
implementing Six Sigma.

Benefits for Customer :

 Six Sigma focuses on the expectations of the Customer.
 Business goals to be aligned according to Customer requirements and expectations of
customer.

Benefits of Employees :
 Six Sigma inspires employees.
 Six Sigma promotes better morale and a higher sense of self-esteem.
 It gives employees the opportunity to make a difference.
 It emphasizes the importance of viewing processes, products and services from the
perspective of the customers.

Advantages of Six Sigma:

 Reduction in cost.

 Less Defects.

 Reduced Cycle time.

 Increased Capacity.

 Higher Flexibility.

 Better Products.

 Better management decisions in less time and at lower cost.

Limitations:

 It is not justified for short duration project.

 It is suitable for high value projects only.
 Cost implementation of six sigma is very high.

A Case Study

The Dow Chemical Company is a leading science and technology company that provides
innovative chemical, plastic, and agricultural products and services to many essential consumer
markets. With annual sales of $27 billion, Dow serves customers in more than 170 countries and
a wide range of markets that are vital to human progress, including food, transportation, health
and medicine, personal and home care, and building and construction, among others. Committed
to the principles of Sustainable Development, Dow and its approximately 50,000 employees seek
to balance economic, environmental, and social responsibilities. In 1998 Dow chose to
implement Six Sigma methodology to accelerate the company’s rate of improvement in quality
and productivity. A trial of Six Sigma in two of Dow’s global businesses convinced management
that the value proposition was well worth the effort, and in September 1999 the company
launched a corporate-wide program to incorporate the Six Sigma methodology into all of its
businesses and functions. The company’s 1999 annual report stated that by the end of 2003, Dow
expected its Six Sigma implementation to deliver revenue growth, cost reductions, and asset
utilization totaling $1.5 billion in earnings before interest and taxes (EBIT). At the close of
2002, Dow achieved its $1.5 billion cumulative financial goal—a full year ahead of schedule.
Conclusion:

Six sigma should become a company wide mantra and be implemented as a core part of the
companies culture and strategy with training from top to bottom in order to see the fullness of its
benefits.