Introduction to Six Sigma

Pioneered at Motorola in the mid-1980s, Six Sigma was initially targeted to quantify the defects
occurred during manufacturing processes, and to reduce those defects to a very small level.
Motorola claimed to have saved several million dollars. Another very popular success was at GE.
Six Sigma contributed over US $ 300 million to GEs 1997 operating income.

Originally, Six Sigma was defined as a metric for measuring defects and improving quality; and
a methodology to reduce defect levels below 3.4 Defects Per (one) Million Opportunities
(DPMO). Six Sigma is a registered service mark and trademark of Motorola, Inc who has
reported over US$17 billion savings from Six Sigma to date.

Six Sigma has now grown beyond defect control. It can be defined as a methodology to manage
process variations that cause defects, defined as unacceptable deviation from the mean or target;
and to systematically work towards managing variation to eliminate those defects. The objective
of Six Sigma is to deliver world-class performance, reliability, and value to the end customer.

It is important to recall that every customer always values consistent and predicable services
and/or products with near zero defects. Therefore they experience the variation and not the mean.
Mean is their expectation or our target.

If we can measure process variations that cause defects i.e. unacceptable deviation from the
mean or target, we can work towards systematically managing the variation to eliminate defects.
It is implemented via two potential scenarios - (a) there is already an existing process(s) that is
working reasonably well and (b) there is no process at all or the process is considered to be
poor.

Scenario (a) focuses on significant process improvements and requires use of DMAIC:

* Define process goals in terms of key critical parameters (i.e. critical to quality or critical to
production) on the basis of customer requirements or Voice Of Customer (VOC)
* Measure the current process performance in context of goals
* Analyze the current scenario in terms of causes of variations and defects
* Improve the process by systematically reducing variation and eliminating defects
* Control future performance of the process

7 Principles of Toyota Production System

1. Reduced Setup Times:

All setup practices are wasteful because they add no value and they tie up labor and equipment.
By organizing procedures, using carts, and training workers to do their own setups, Toyota
managed to slash setup times from months to hours and sometimes even minutes.

2. Small-Lot Production:
Producing things in large batches results in huge setup costs, high capital cost of high-speed
dedicated machinery, larger inventories, extended lead times, and larger defect costs. Because
Toyota has found the way to make setups short and inexpensive, it became possible for them to
economically produce a variety of things in small quantities.

2. Employee Involvement and Empowerment:

Toyota organized their workers by forming teams and gave them the responsibility and training
to do many specialized tasks. Teams are also given responsibility for housekeeping and minor
equipment repair. Each team has a leader who also works as one of them on the line.

4. Quality at the Source:

To eliminate product defects, they must be discovered and corrected as soon as possible. Since
workers are at the best position to discover a defect and to immediately fix it, they are assigned
this responsibility. If a defect cannot be readily fixed, any worker can halt the entire line by
pulling a cord (called Jidoka).

5. Equipment Maintenance:
Toyota operators are assigned primary responsibility for basic maintenance since they are in the
best position to defect signs of malfunctions. Maintenance specialists diagnose and fix only
complex problems, improve the performance of equipment, and train workers in maintenance.

6. Pull Production:
To reduce inventory holding costs and lead times, Toyota developed the pull production method
wherein the quantity of work performed at each stage of the process is dictated solely by demand
for materials from the immediate next stage. The Kamban scheme coordinates the flow of small
containers of materials between stages. This is where the term Just-in-Time (JIT) originated.

7. Supplier Involvement:
Toyota treats its suppliers as partners, as integral elements of Toyota Production System (TPS).
Suppliers are trained in ways to reduce setup times, inventories, defects, machine breakdowns
etc., and take responsibility to deliver their best possible parts.