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Six Sigma Means 3.4

Defects in 1,000,000 -
MOTOROLA
Six Sigma is a business concept that
answers customers demand for high
quality and Defect-free Business process.
Six Sigma was born in Motorola and
developed by Mikel J. Harry.
Motorola won Malcolm Baldridge Quality
Award.
Six Sigma is carried out as projects and
mostly uses DMAIC method

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Eg: Godrej -G E Assembly
Plant
Defective Components were coming at the
rate of 3,00,000 for one Million Parts.

Applying Six Sigma saved Rs 4 Crores

Mr. Vijay Krishna, C.E.O, Godrej-G E.

Were not talking about intangible savings
here. Six Sigma has given us the power to
measure and control costs. And that goes
straight to our bottom line

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 PROCESS CAPABILITY
Process capability is simply a measure of how good a
metric is performing against established standard(s).

Upper and Lower Standards Single Standard

(Specifications) (Specification)
Spec Spec Spe
(Low (Upp c
er) er)

Out of In Spec Out of In Out of

Spec Spec Spec Spec

Probab Probab Probabil

ility 4 ility ity
 CONCEPT OF SIX SIGMA
Process Total Amount Typical
Variability Cp Outside Limits Action to be
taken
2 0.67 4.56 % Heavy Process
(45,500 ppm) Control, Sorting
rework, Etc.
3 1.0 2700 ppm Heavy process
Control,
Inspection
1.33 64 ppm Reduced
4 Inspection,
Selected use of
5
USL LSL Control Charts
 CONCEPT OF SIX SIGMA

Process Total Amount Typical

Variability Cp Outside Limits Action to be
taken
1.67 1 ppm Spot Checking,
5 Selected use of
Control Charts
2.00 0.01ppm Reduced for
6 Control,
Uniformity in
process inputs
USL Process LSL Cp = Design Width / Process Width
Mean
6 Cp = USL LSL / UCL - LCL
SIGMA SCALE OF DEFECTS(1.5 shift)
SIGMA DEFECT RATE COST OF Competitive
(PPM) POOR
QUALITY
Level
(% Sales)
6 3.4 < 10% World Class
5 233 10%-15% World Class
4 6,210 15%-20% High Quality
3 66,807 20%-30% Industry Average
2 3,08,537 30%-40% Industry Average
1 6,90,000 > 40% Non-Competitive
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 Six Sigma
Implementation
Five-phases
process
1.Establishing
2.Information
Management 3.Training
Gathering
Commitment

5.Business
4.Developing Process to 6.Conducting
Monitoring Be improved Six Sigma
Systems
are chosen Projects
8 Continuous Improvement
 Six Sigma - Three Dimensions

Customer Process A Process B Vendor

Define Measure Analyze Improve Control

Driven
by
customer
needs
Process Map Analysis
LSL US
L
Methodology
Led by
Senior
Mgmt

Upper/Lower
specification



Organization Tools
limits

Regression

35 100%
30
80%
25
20 60%
15 40%
10
20%
5
Process variation 0 0%

Enabled by quality
L K A F B C G R D

team.
Frequency Cumulative Frequency

Pareto Chart

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 DMAIC PROCESS

Define Measure

DMAIC Analyze
Control

Improve

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 DEFINE

Determine Bench mark

Set Baseline

Determine Customer requirements

Get Customer Commitment

Map Flow process

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 MEASURE
Develop Defect Measurement

Develop Data Collection process

Collect Data

Create Forms

Compile and Display Data

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 ANALYSE
Verify Data

Draw Conclusions From Data

Test Conclusions

Determine Improvement Opportunities

Determine Root Causes

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 IMPROVE
Create Improvement Ideas

Create Models

Experiment

Set Goals

Create Problem Statement

Create Solution Statement

Implement Improvement Methods
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CONTROL
Monitor Improvement Progress

Measure Improvement Statistically

Assess Effectiveness

Make Needed Adjustments

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 ENIGMA OF SIX SIGMA

+3 +2 +1 Six Sigma -1 -2 -3
6

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 SIX SIGMA BENCHMARKS
Restaurant Bills
Prescription writing
100K Payroll processing

Order write-up

10K Journal Vouchers

Wire transfer
Average
company Air baggage handling
1K Material lot
Rejected

10 Air flight
Fatality Rate

Best in class

(0.25ppm)
117 2 3 4 5 6 7
Table 1: Companies And The Year They Implemented Six Sigma

Company Name Year Began Six Sigma

Motorola (NYSE:MOT) 1986

Allied Signal (Merged

With Honeywell in 1994
1999)

GE (NYSE:GE) 1995

Honeywell (NYSE:HON) 1998

Ford (NYSE:F) 2000

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Table 2: Six Sigma Cost And Savings By Company
% Revenue % Revenue
Year Revenue ($B) Invested ($B) Savings ($B)
Invested Savings
Motorola
1986-
356.9(e) ND - 16 1 4.5
2001
Allied Signal
1998 15.1 ND - 0.5 2 3.3
GE
1996 79.2 0.2 0.3 0.2 0.2
1997 90.8 0.4 0.4 1 1.1
1998 100.5 0.5 0.4 1.3 1.2
1999 111.6 0.6 0.5 2 1.8
1996-
382.1 1.6 0.4 4.4 3 1.2
1999
Honeywell
1998 23.6 ND - 0.5 2.2
1999 23.7 ND - 0.6 2.5
Key:
$B = $ Billions, United States
(e) = Estimated, Yearly Revenue 1986-1992 Could Not Be Found
ND = Not Disclosed 19
Note: Numbers Are Rounded To The Nearest Ten
The Quality Team
Master Black Belt - Thought Leadership
- Expert on Six Sigma
- Mentor Green and Black Belts

- Backbone of Six Sigma Org

Black Belt Black Belt - Mentor Green Belts
- Full time resource
- Deployed to complex or high
risk projects
Green Belt
Green Belt
- Part time or full time resource
Green Belt
- Deployed to less complex
projects in areas of functional
expertise
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Scope of Six Sigma

Manufacturing
Service Industries
Hospitals
Insurance
Call Centre

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