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TERM PAPER
Of
OPERATION MANAGEMENT

TOPIC: -SIX SIGMA

Submitted TO: - SUBMITTED

BY:-
MR.MANDEEP SINGH ISHAN
BHANOT
RQ1809A
24
SIX SIGMA

Six Sigma simply means a measure of quality that strives for near perfection. Six Sigma is a
disciplined, data-driven approach and methodology for eliminating defects (driving towards six
standard deviations between the mean and the nearest specification limit) in any process -- from
manufacturing to transactional and from product to service.

Six Sigma has evolved over time. The concepts behind Six Sigma can be traced through the
centuries as the method took shape into what it is today.

The roots of Six Sigma as a measurement standard can be traced back to Carl Frederick Gauss
(1777-1855) who introduced the concept of the normal curve. Six Sigma as a measurement
standard in product variation can be traced back to the 1920's when Walter Stewart showed that
three sigma from the mean is the point where a process requires correction. Many measurement
standards (Capek, Zero Defects, etc.) later came on the scene but credit for coining the term "Six
Sigma" goes to a Motorola engineer named Bill Smith. (Incidentally, "Six Sigma" is a federally
registered trademark of Motorola)

In the early and mid-1980s 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 granularity. 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.
The Six Sigma DMAIC process

D define,

M measure,

A analyze,

I improve,

C control
is an improvement system for existing processes falling below specification and looking for
incremental improvement.

The Six Sigma DMADV process

D define,

M measure,

A analyze,

D design,

V verify

is an improvement system used to develop new processes or products at Six Sigma quality levels.

Define: In the first step, you must define the design goals that are both consistent with your
customer's demands and your own company's goals.

Measure: In this step, four things should be measured. They include, CTQ's which stand for
critical to qualities, production process capability, risk assessments and product capabilities.

Analyze: It is important to use the process of analysis to develop and design better alternatives
that can reduce defects. These designs must be evaluated for their inherent capabilities to
determine whether the design is the best available or if an alternative can be created which may
be better.

Design Details: In this step a design must be optimized to function at its peak. In addition, in
order to optimize a design, a design must usually be verified. While verification is the last
process, during the design details step, a design plan should be readied for the next step.

Verification: Once a design has been analyzed and tested, it should be verified. Verification
usually occurs through pilot runs. As a design is verified through the pilot run, it can be readied
for full production.

Benefits of Six Sigma.

There are numerous benefits of six sigma as a way to address issues and problems. Among the
benefits of six sigma is the decrease in defects that are allowed to reach the customer. You can
get some sense of the benefits of six sigma by reviewing some six sigma projects .Other benefits
of six sigma include:
 • Focus on customers.

• Improved customer loyalty.

• Reduced cycle time.

• Less waste.

THE SIX SIGMA STEPS

Step 1: Understand the Issues

Champions or Master Black Belts should start by meeting individually with senior managers to
discover the problems underlying the overall business. Big Y type issues can be found by asking
senior division managers (e.g., human resources manager, maintenance manager, plant manager,
etc):

• What are their major concerns within their division?

• What is their division's actual performance versus target?
• What are their performance results from past years and identify:
o Gaps in performance
o Less dollars (revenue, profit, etc.) than expected
 o Areas they think the division could do better in but did not

Step 2: Consolidate the Issues and Confirm

Structure the ideas and areas of concern from Step 1 and categorize them into areas of similar
subject (i.e., production, maintenance, human resources, etc.) making use of affinity diagrams.
Be prepared to pull out just-do-it projects during this step.

After consolidating the issues, confirm the categories with senior management. Champions or
Master Black Belts should briefly meet with each senior manager again and review the affinity
diagram results. This is senior management's chance to verify these are indeed the main issues
facing the organization.

Step 3: Review Meeting with Senior Management

Conduct a meeting with all the senior managers interviewed in Step 1 and present the
consolidated concerns. As a team, drill down into the issues behind the concerns. Ask root cause,
5-why and cause-and-effect type questions. The objective is to determine the specific, key issues
senior management wants fixed.

This meeting has a useful side effect - getting all senior management on the same page, building
the burning platform for change. The senior management team sees the need for the continuous
improvement effort, strengthening their commitment to the Six Sigma initiative.

Step 4: Develop a Picture of Projects

Using the issues stemming from Step 3, meet individually with staff who report directly to senior
management to drill down into more specific issues. These people may include plant and
maintenance managers, financial accountants or safety supervisors.

Try to validate each issue by asking for numbers, trends, performance charts, etc. Also try to
determine which level of Six Sigma expertise may be most appropriate for each project (i.e.,
Black Belt, Green Belt or just-do-it). At the end of this step, a clear picture of specific projects
should emerge.

Step 5: Prioritize Project List

Champions and Master Black Belts next need to prioritize the list of projects from Step 4 using
tools such at the pay-off matrix, criteria rating (the table below), or Failure Mode and Effects
Analysis FMEA. When prioritizing, take into consideration:

• Feedback from the meetings with senior management and their direct reports.
• Divisional key performance indicators or measures.
• One- to five-year corporate and site goals.
 • The voice of the customer.
• The voice of the business.
• Time and ease to complete each project.
• Black Belt, Green Belt and divisional resources.

Step 6: Assign People to Projects

Assign the right people to the right projects. Six Sigma project leaders and team members must
have the appropriate training, skills, energy, experience and authority to make improvements on
their assigned projects. They also must be allowed time to investigate, analyze and improve the
issues properly.

Champions and Master Black Belts need to know the strengths, weaknesses and availability their
Black Belts and Green Belts well before assigning projects to them. Anything less is just playing
lip-service to Six Sigma initiatives.

Six Sigma Champions and Master Black Belts should constantly work on identifying Six Sigma
projects. Over the long term, it is their responsibility to create an easy access and user friendly
repository, where any member of the organization can drop ideas or opportunities for projects
that can later be more clearly defined and be fed into the pipeline.

large organizations that have adopted six sigma

These are some the large US corporations referenced by Motorola Inc that have used Six Sigma.
There are thousands more all over the world. Send me your own thoughts and comments about
Six Sigma.

Kraft General Foods

AB Dick Campbell Soup Seagate
Lear Astronics
Adolph Coors Chevron Sony
Lockheed martin
Advanced Micro Citicorp Star Quality
McDonnell Douglas
Devices Clorox Texaco
Microsoft
Allied Signal Danon Texas Instruments
Motorola
Alcoa Dow TRW
NASA
Aeropspace Corp Fidelity US Army
Northrop Corp
Abbotts Labs Intel US Air Force
Pentagon
Apple Computer Ford United Technologies
Parkview Hospital
Bank of USA General Dynmics UPS
Implementation of Roles in Six Sigma Methodology

There are many roles that that are used in the Six Sigma Methodology. While most of the roles
below are used in many organizations Six Sigma implementation, it should be noted that they are
not universal. The roles include:

Executive Leadership - Top level executives are responsible for vision and ultimately
implementation of the Six Sigma Methodology. They also empower others to take initiative and
ownership of the Six Sigma principles.

Champions - Champions are usually upper management that is responsible for the
implementation of Six Sigma throughout their organization.

Master Black Belts - are usually hand picked by Champions to coach others within the
organization on the Six Sigma methodologies. They allocate either all or most of their time to the
Six Sigma methodologies. It should also be noted, that they usually have mentoring
responsibilities to coach and train lower roles including Black Belts and Green Belts (see below)

Experts - while this role is not in every organization, it can play a huge role in major engineering
or manufacturing sectors. They improve overall services, products, and processes for their end
customers.

Black Belts - Black Belts focus on six sigma execution. They are usually middle managers.

Green Belts - These roles are usually taken on by employees who help Black belts execute
specific projects, as well as other job responsibilities.

HOW IS SIX SIGMA DIFFERENT

Features that differentiate Six Sigma apart from previous quality

improvement initiatives include –

• A clear focus on achieving measurable and quantifiable financial

returns from any Six Sigma project.
• An increased emphasis on strong and passionate management leadership and support
• A special organization infrastructure of "Champions," "Master Black Belts," "Black
Belts”, “Green Belts” etc. to lead and implement the Six Sigma approach
• A clear commitment to making decisions on the basis of verifiable data, rather than
assumptions and guesswork.
• The term "Six Sigma" is derived from a field of statistics known as process capability
study. It refers to the ability of processes to produce a very high proportion of output
within specification. Processes that operate with "Six sigma quality" over the short
term are assumed to produce (long-term) defect levels below 3.4 defects per million
opportunities (DPMO).Six

IMPACT ANALYSIS
One of the most important factors a business must look at is disaster recovery. This is an
important part of organizational planning because it deals with what would happen should a
monumental disaster occur. How would important data and other information be retained? This
question must be answered in the form of a plan that addresses such issues and put into place a
resolution before the possibility ever comes to pass. Creating a business impact analysis, or a
BIA, for the purpose of disaster recovery is important. This can be accomplished in a few easy
steps and is an aspect of a business plan that should never be ignored.

A BIA is the cornerstone of any disaster recovery strategy and plan. It will be used to identify the
processes, systems, and functions that are critical to the survival of a company. When that
company is yours, you want to protect it any way you can. Gaining an understanding of these
elements will allow you to allocate your resources wisely to ensure operations even with the
occurrence of unexpected events that disrupt normal business operations.

A business impact analysis is a Six Sigma process which aims to reveal the factors that would
impact a business, and would result when a process that is critical to normal operation exceeds
its maximum allowable outage. Before you can create a BIA, you will first need to have a solid
understanding of the operations of your business. There are many details you will be required to
know and that must receive proper attention. This attention will be crucial to forming a
resolution that will enable you to keep your business operating normally when faced with various
types of disasters. If proper planning is not accomplished, such disasters could mean a major set
back for your business or, in serious situations, may even result in the end of your company
altogether.