TERM PAPER ON SIX-SIGMAINTRODUCTION AND IMPLEMENTATION

SUBMITTED TO: PROF. ABHAY SRIVASTAVA

SUBMITTED BY: Nidhi kapri Nitika kataria Rohit Vaish Sunik Gupta Swati Goel

SIX SIGMA - INTRODUCTION

One can find many definitions for Six Sigma. The Financial Times defines Six Sigma initiative as a "program aimed at the near elimination of defects from every product, process and transaction . It is basically a proven set of methods that help people in running their business or organization more efficiently and profitably (Brue, 2005). Six Sigma is a management philosophy developed by Motorola which emphasizes on setting extremely high objectives, collecting data, and analyzing results to a fine degree as a way to reduce defects in products and services. Six Sigma is not a business fad that is tied to a single method or a strategy, but rather a flexible system for improved business leadership and performance (Pande, 2000). Six Sigma is a method that many companies these days use to strive for perfection. The Greek letter sigma () is a term that is used in statistics which measures standard deviation. Standard variation is a statistical way to describe how much variation exists in a set of data. The idea behind Six Sigma is that by measuring the defects that are there in a process, one can find out how to eliminate them systematically and get as close as possible to perfection. For a company to achieve Six Sigma, it cannot produce more than 3.4 defects per million opportunities. In other words, the company should operate at 99.997% precision (Stevenson & Mergen, 2006).
History of Six Sigma

Six Sigma was first started in Motorola. Motorola realized that they were losing a large portion of their business and productivity through the cost of non-quality. Motorola was having 2,600 parts per million losses in manufacturing and also were losing business due to defective parts and support of systems in the field that were not reliable. Bill Smith who was an engineer at Motorola found that the quality level associated with the measure of Six Sigma corresponds to a failure rate of two parts per billion and adopted that as a standard. The program that was designed to achieve this goal was developed at Motorola and the name given to that program is called Six Sigma (Raisinghani, Ette, Pierce, Cannon, & Daripaly, 2005).
Importance of Six Sigma:

According to Eckes (2003), Six Sigma is a technical measure of the number of customers who are unhappy per million opportunities. Consider an example to find the importance of Six Sigma. Imagine a company that sells computers. And on a particular day, the company has sold a million computers. If on that day the company had 233 customers who were unhappy because the computers they purchased were not working, then the company is working at a Five Sigma quality level. If the same company had 66,807 customers who are not happy as they got the computer with incorrect specification, then the company is working at a Three Sigma quality. Finally if there were 690,000 customers who are unhappy then the company is performing at One Sigma quality level. According to a research done, if the customers are unhappy with the service or the product provided they just keep quiet and do nothing about it. Mentioned here are a few facts about the effects of low sigma performance. A customer who is not happy with the product or the service provided will tell nine to ten people about the experience he had. He might tell even more people if the problem is not that serious. But if the problem was handled satisfactorily then the same customer instead of telling nine to ten

people would only tell five people about it. The evidence suggest that thirty-one percent of customers who have problems with the service would not register any complaints as it is too much trouble or they feel that nobody cares about their problem. And of that 31 percent only nine percent might do business again with the company (Pande, 2001). Basically, defects lead to the customer who would never do business again with the company. When these customers share their experiences with others, many more customers wouldn't even consider doing business with the company. Therefore, the company would not stay in business for a long time, if the company has a low sigma level (Pande, 2001). In United States, on average most companies operate at Four Sigma which is equal to 6,210 errors per million opportunities for error. (Mikel J Harry, 2004). In other words those companies are working at 99 percent quality level. Consider the following facts which show that performing at 99% quality level is not good enough. y y y If an airline industry performs at 99 percent quality, it means that at major airports there would be two planes that would be landed unsafely in a day. 16,000 pieces of mail would be lost every one hour, if the postal service department is working at 99 percent quality level. If the credit card companies in UK perform at 99 percent quality level, it will result in 80 million transactions that are incorrect (Raisinghani, Ette, Pierce, Cannon, & Daripaly, 2005).

The above examples show that it is very important for a company to run a business efficiently with very few defects so that it can stay in business for a long period and it does not lose its customers. Six Sigma Methodologies SIX SIGMA __________________________________________________________________________________________

Developing New Processes

Improving Existing Processes

Reengineering

DSSS+ DSSP DCAM

DMAIC TQSS

CFP

DSSS+ (Developing Six Sigma Software) - Software Development DSSP (Designing Six Sigma Process & Product) - Software Development DCAM (Design for Customer Satisfaction and Manufacturability) - Hardware design & Manufacture DMAIC (Define, Measure, Analyze, Improve, Control) - Helpdesk, Infra support, Callcentre TQSS (Transactional Quality Using Six sigma) - defect reduction CFPM (Cross Functional Process Mapping) - Cross functional streamlining of Processes.

The two different methods that are generally used in Six Sigma are explained further: DMAIC Methodology DMADV Methodology DMAIC Methodology: This method is used when a process or product already exists in a company but is not performing efficiently. This process has five stages that include Define, Measure, Analyze, Improve and Control. In the first stage, i.e. the define stage; a company leader with the input from others defines the problem or an opportunity within a particular process. The process owner or the sponsor is identified. The project goals are also set in this stage. Finally the teams are formed and the project timelines are developed. In the Measure stage, teams try to determine all the variables that impact a particular process. These variables are called inputs (X's). Once teams find all the variables that are affecting a process, they identify the variables that impact the process the most. Teams then try to evaluate the capability of the measurement systems that already exist to precisely account for these variables and if required they would design new measurement systems to track and monitor process performance. They also study the outputs of these processes. With the help from the findings, they determine the stability, process capability, reproducibility and repeatability. In the Analyze stage, Six Sigma practitioners with the help of various statistical tools try to find the relationship between the various variables that constitute the inputs and outputs of a process. They establish the hypothesis or the questions describing the problem. Also decide on the suitable techniques to prove the hypothesis. Finally they analyze the results and reach conclusions and then validate the process. In the Improve stage, teams brainstorm to come up with the solutions to remove the root causes of the service or the product. Teams might have many solutions, so they select the best solution by using various criteria such as the cost effectiveness, safety, capability, controllability etc. In the last stage that is the Control stage, teams focus on the developing the procedures to maintain

the gains that were realized in the previous stage. They also identify the opportunities to reproduce the gains (Sharma, 2003).

DMADV Methodology: This method is used when a company is trying to develop a new product or a process or this method can also be used when an existing product or process that is already existing has been optimized (using DMAIC or any other method) and still doesn't meet the level of customer specification or six sigma level. The first three steps are the same as those in the DMAIC methodology. The last two stages are Design and Verify. In the design stage, companies design details, optimize the final design and plan for design verification. And in the last stage, the companies verify the design, which may involve setting up pilot runs before turning over to production.

Roles and Responsibilities- Organizational Hierarchy

Six Sigma projects are run by "black belts" employees who have been trained in the philosophy and its application. Their entire work effort is focused on finding defects, wherever they might be, and eliminating them from the business processes. He or she helps the team getting started, helps the team in building their confidence and keeps the project moving to achieve great results. They move from department to department, heading Six Sigma projects. A black belt can do four projects a year. Black belts are backed up by "champions" .They are usually senior management-level employees who have been trained in Six Sigma concepts and usually who sponsors a Six Sigma project through the business. Champions help the project members overcome any obstacles. In most companies, Master Black Belt refers to the people who mentor or coach the black belts who work on a variety of projects. The major responsibility of a Master Black belt is to make sure that the Black Belt and his/her team complete their work, see to that the team stay on track. MBB indicates the highest level of skill and training, and sometimes designates an outside consultant who specializes in Six Sigma process improvements. Green Belt is a title for someone who is involved with a Six Sigma project "part-time". That is, they have a job with normal duties and serves as team member or a part time Six Sigma team leader (Pande & Holpp, 2001).

Pros and Cons of Six Sigma:

1) Six Sigma strategy places a clear focus on achieving measurable and quantifiable financial returns to the bottom-line of an organisation. No Six Sigma project is approved unless the bottom-line impact has been clearly identified and defined. 2) Six Sigma strategy places an unprecedented importance on strong and passionate leadership and the support required for its successful deployment.

3) Six Sigma methodology of problem solving integrates the human elements (culture change, customer focus, belt system infrastructure, etc.) and process elements (process management, statistical analysis of process data, measurement system analysis, etc.) of improvement. 4) Six Sigma methodology utilises the tools and techniques for fixing problems in business processes in a sequential and disciplined fashion. Each tool and technique within the Six Sigma methodology has a role to play and when, where, why and how these tools or techniques should be applied is the difference between success and failure of a Six Sigma project. 5) Six Sigma creates an infrastructure of Champions, Master Black Belts (MBBs), Black Belts (BBs) and Green Belts (GBs) that lead, deploy and implement the approach. 6) Six Sigma emphasises the importance of data and decision making based on facts and data rather than assumptions and hunches! Six Sigma forces people to put measurements in place. Measurement must be considered as a part of the culture change. 7) Six Sigma utilises the concept of statistical thinking and encourages the application of well-proven statistical tools and techniques for defect reduction through process variability reduction methods (e.g.: statistical process control and design of experiments).
The following are some of the limitations of Six Sigma which creates opportunities for future research.

1) The challenge of having quality data available, especially in processes where no data is available to begin with (sometimes this task could take the largest proportion of the project time). 2) The right selection and prioritisation of projects is one of the critical success factors of a Six Sigma program. The prioritisation of projects in many organisations is still based on pure subjective judgement. Very few powerful tools are available for prioritising projects and this should be the major thrust for research in the future. 3) The statistical definition of Six Sigma is 3.4 defects or failures per million opportunities. In service processes, a defect may be defined as anything which does not meet customer needs or expectations. It would be illogical to assume that all defects are equally bad when we calculate the Sigma Capability level of a process. For instance, a defect in a hospital could be a wrong admission procedure, misdiagnosis, lack of training required by a staff member, misbehaviour of staff members, unwillingness to help patients when they have specific queries, etc. 4) Assumption of 1.5 sigma shift for all business processes does not make much sense. This particular issue should be dealt with extra caution as a small shift in sigma could lead to erroneous defect calculations. 5) Non-standardisation procedures in the certification process of Black belts, Green belts, etc. Research has shown that the skills and expertise developed by Black belts/Green belts are inconsistent across companies and are dependent a great deal on the certification body. Black belts believe they know all the practical aspects of advanced quality improvement methods such as Design of Experiments, Robust Design, Response Surface Methodology, Statistical Process Control and Reliability, when in fact they have barely scratched the surface. 6) Six Sigma can easily digress into a bureaucratic exercise if the focus is on such things as the

number of trained Black Belts and Green Belts, number of projects completed, etc. instead of bottom-line savings. 7) There is an overselling of Six Sigma by too many consulting firms. Many of them claim expertise in Six Sigma when they barely understand the tools and techniques and the Six Sigma roadmap. 8) The relationship between Cost of Poor Quality (COPQ) and Process Sigma Quality Level requires more justification.
SIX SIGMA BASIC INFRASTRUCTURE:

A very powerful feature of Six Sigma is the creation of an infrastructure to ensure that performance improvement activities have the necessary resources. Failure to provide this infrastructure is the #1 reason why 80% of all TQM implementations failed in the past.

Six sigma magic:

Six Sigma's magic isn't in statistical or high-tech razzle-dazzle. Six Sigma relies on tried and true methods that have been around for decades. In fact, Six Sigma discards a great deal of the complexity that characterized Total Quality Management (TQM). Six Sigma takes a handful of proven methods and trains a small cadre of in-house technical leaders, known as Six Sigma Black Belts, to a high level of proficiency in the application of these techniques.

To be sure, some of the methods used by Black Belts are highly advanced, including the use of up-todate computer technology. But the tools are applied within a simple performance improvement model known as DMAIC, Define-Measure-Analyze-Improve-Control.
A PICK CHART

Findings:

Six Sigma initially was used only in the manufacturing companies with a focus on reducing costs and improving the productivity of a process. As Six Sigma gained popularity, it is used in various industries. These days Six Sigma is used in the service oriented business which includes telecommunication, health care, education, information technology, etc. Many companies have saved a lot of money by implementing Six Sigma. Few of the savings by various companies is mentioned below
y y y

General Electric has reported more than $12 billion in savings due to Six Sigma. Motorola reported a saving of $15 million in over 11 years (Foster, 2007).
Wipro maturity with six sigma resulted into:

 30-40% lower total cost of ownership  20-30% higher productivity  On-time deliveries (93% projects completed on time)  Lower field defect rates (67% lower than industry average). The performance enhancement enabled the client to have an improved product with the overriding benefit that the end customer perception of the quality of the client s product is improved.
Conclusion:

Six Sigma is a method that is used to reduce defects in a process. All companies big or small can benefit from Six Sigma if it is implemented properly. But one thing companies need to keep in mind is that they cannot expect the profits to flow immediately. It takes time for the companies to get the money. Some projects might go on for a year. As with any process, Six Sigma also has few disadvantages but the advantages outweigh the disadvantages.

IMPLEMENTATION OF SIX SIGMA WIPRO TECHNOLOGIES: THRUST ON QUALITY

Backdrop

Wipro Limited was established in 1945 and commenced its operations in 1946 as a vegetable oil company. In the early 1980s, Wipro diversified into the Information Technology sector with Liberalization hitting India in the 1980s. This has been a fascinating transformation from a vegetable oil company into a global IT services giant. Today, Wipro Technologies has become a global service provider delivering technology driven business solutions that meet the strategic objectives of clients. Wipro has 40+ Centres of Excellence that create solutions related to specific needs of Industries. Wipro can boast of delivering unmatched business value to customers through a combination of process excellence quality frameworks and service delivery innovation. A strong emphasis upon building a professional work environment, leaders from within, and having a global outlook for business and growth have led to innovation of people processes on a continued basis. Over the years, Wipro has significantly strengthened its competency based people processes and demonstrated innovative practices in talent acquisition, deployment, and development, based on strategic needs. A leading provider of communication networks in the US required improvement in the product performance of a telecom application using Six Sigma methodologies. Thus, with the growing importance on aligning business operations with customer needs and driving continuous improvement, Wipro began moving towards focusing on Quality, thereby, creating a learning environment that led to implementation of Six Sigma.

Integrating Six Sigma concepts was also intended to bring rigor in effective upstream processes of the software development life cycle. Implementation of Six Sigma methodologies brought in quantitative understanding, cost savings, and performance improvement towards product quality. Some of the key challenges involved were: y Reduce the data transfer time y Reduce the risk y Avoid interruption due to LAN/WAN downtime. y Parallel availability of the switch for the other administrative tasks during the same period.
Evolution of Six Sigma at Wipro:

Wipro is the first Indian company to adopt Six Sigma. Today, Wipro has one of the most mature Six Sigma programs in the industry ensuring that 91% of the projects are completed on schedule, mush above the industry average of 55%. As the pioneers of Six Sigma in India, Wipro has already put around ten years into process improvement through Six Sigma. Along the way, it has scaled Six Sigma ladder, while helping to roll out over 1000 projects. The Six Sigma program spreads right across verticals and impacts multiple areas such as project management, market development and resource utilization. Six Sigma at Wipro simply means a measure of quality that strives for near perfection. It is an umbrella initiative covering all business units and divisions so that it could transform itself in a world class organization. At Wipro, it means: y y y y Have products and services meet global benchmarks Ensure robust processes within the organization Consistently meet and exceed customer expectations Make Quality a culture within.

Difficulties encountered by Wipro and learning from them: Build the Culture:

Implementation of Six Sigma required support from the higher level managers. It meant restructuring of the organization to provide the infrastructure, training and the confidence in the process. Wipro had to build this culture and that took time in implementation. Project selection: The first year of deployment was extremely difficult for Six Sigma success. They decided to select the project on the basis of high probability of their success and targeted to complete them in a short period to assess the success. These projects were treated as pilot projects with a focus to learn. For the selection of the right project the field data was collected, process map was developed and the importance of the project was judged from the eyes of customers. Training: After the set up, the first step of implementation was to build a team of professionals and train them for various stages of Six sigma. The training was spread in five phases: Defining, measuring, analyzing, improving and controlling the process and lastly increasing customer satisfaction. These phases consisted of statistics, bench marking and design of experiments. To find the right kind of people and train them was a difficult job. This motivated Wipro to start their own consultancy to train the people.

Resources: It was difficult to identify resources that required for short-term basis and long-term basis as it varied from project to project. Wipro did it on the basis of seriousness and importance of the project. Project Reviews: As timely reviews play a very crucial role to judge the success of a project. Wipro had to develop a team of experts for this purpose. The task assigned was to see the timeliness, find out gap, week areas and to check the outcome as per the plan. Implementation of Six Sigma at Wipro: Wipro has adopted the project approach for Six Sigma, where projects are identified on the basis of the problem areas under each of the critical Business Processes that adversely impacts the business significantly. Wipro has evolved following Six Sigma methodologies: (I) For developing new processes: y DSSS+ Methodology Wipro employs DSSS methodology for software development. The methodology uses rigorous in-process metrics and cause analysis throughout the software development lifecycle for defect free deliveries and lower customer cost of application development. y DSSP Methodology used for designing new processes and products y DCAM Methodology used for designing for customer satisfaction and manufacturability (II) For Improving Existing Processes y TQSS Methodology used for defect reduction in Transactional processes. y DMAIC Methodology -used for process improvement in Non-transactional process (III) For Reengineering y CFPM Methodology - used for cross functional Process mapping. The list of players at Wipro is as below: y Executive Management y Six Sigma Champions and Deployment Leaders y Financial Executives y Black Belts y Green Belts y Yellow Belts Six Sigma projects at Wipro are: y Driven by business heads, also called Champions for the projects. y Led by Green Belts (GB) y Assisted by Black Belts (BB) The Management of the project at Wipro follows the following tools for implementation of Six Sigma: y Ideation y Definition y Selection y Tracking y Reporting

Currently 15000+ employees are trained in Six Sigma methodologies. Wipro has also built up a Six Sigma skill base of over 180 certified black belts while helping to roll out over a 1000 projects.

Reaping the Benefits:

The financial gain that Wipro has achieved by using Six Sigma has been one of the high points. As the Six Sigma initiative started maturing Wipro identified two major phenomenons: y The biggest projects had all been completed y The Yellow-belt culture had cured little problems before they became big ones.

At this point, the project-oriented Six Sigma culture began to give way to the sustaining culture. The Six Sigma process resulted in an achievement of close to 250%, 6 minutes for 1 MB transfer and 18 minutes for average data transfer. The set target was 200%. Because quality is customer driven, the objective of Six Sigma Implementation at Wipro has continuously been on integrating and implementing approaches through a simultaneous focus on defect reduction, timeliness, and

productivity. This has translated to lower maintenance costs, schedule-overrun costs, and development costs for customers. Measurements and progress indicators have been oriented towards what the customer finds important and what the customer pays for. Towards this, Six Sigma concepts have played an important role in: y y Improving performance through a precise quantitative understanding of the customer s requirements thereby bringing in customer focus Improving the effectiveness in upstream processes of the software development life cycle by defect reduction (software defects reduced by 50%) and cycle time reduction (rework in software down from 12% to 5%). Waste elimination and increased productivity up to 35%. Cost of failure avoidance (installation failures down from 4.5% to 1% in hardware business). Tangible cost savings due to lower application development cost for customer. Analysts remarked that Six Sigma was an indisputable success at Wipro whether in terms of customer satisfaction, improvement in internal performance, or in the improvement of shareowner value.

y y y y

The results of achieving Six Sigma are rapid and overwhelming at Wipro Its unique methodology provides Six Sigma knowledge and skills to the client, enabling the client to create ownership, generate results and sustain success. The maturity of Wipro s quality processes takes the benefits to another level, ensuring that the customers benefit from: y 30-40% lower total cost of ownership y 20-30% higher productivity y On-time deliveries (93% projects completed on time) y Lower field defect rates (67% lower than industry average). The performance enhancement enabled the client to have an improved product with the overriding benefit that the end customer perception of the quality of the client s product is improved. Future Focus and Challenges: Six Sigma certainly produces breakthrough improvement. But to achieve this Wipro will have to combine the power of the Six Sigma method and tools with stretch goals, goals that almost seem too aggressive, too optimistic. Also Wipro will have to benchmark itself against the competition on the level of performance achieved by rivals. This focus will lead to the adaptation of newer dimensions of the quality management framework towards embodying a totality of process, people, product, and technology for achieving high process capability. Six Sigma projects require continuous change. Black Belts and Green belts develop improvements to systems and processes for which they are not accountable. And when these participants are done with their project, they ask the real system or process owner to implement and sustain their solution and hence the challenge before Wipro lies in bringing the commitment towards continuing its process optimization theory. The Challenge will be to transform Six Sigma from a tool for improving product quality to an overall business improvement methodology. The company s aim will be at having 100% of its management trained in Six Sigma. To summarize, the quality system will continue to be based on incremental optimization, with rigorous implementation and sustenance of the same. The goal will be to make quality as the No.1 objective for all employees.

REFERENCES:
y y y y Essay Forum ICMR case studies Research paper on changing playfields- by Dr Manisha Sharma, Dr. Kapil Pandla and Prof. Prashant Gupta Isixsigma.com