History of Six Sigma

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Project Report on Six Sigma

Submitted to

Prof.P.K.Bala

Six Sigma in Nokia Siemens Networks Pvt.Ltd

Submitted By:

Auronil Dutta
Roll No. 8,
PGDM (3 Year) (2007-2010)

XAVIER INSTITUTE OF MANAGEMENT,


BHUBANESWAR
History of Six Sigma

Originally developed by Bill Smith at Motorola in 1986, the Six Sigma Training program
was created using some of the most innovative quality improvement methods from the
preceding six decades. The term "Six Sigma" is derived from a field of statistics known
as process capability. The term 6 Sigma refers to the ability of manufacturing 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. Six Sigma’s goal is to improve overall
processes to that level of quality or better.

What is Six Sigma?

The term "Six Sigma" is widely used to refer to all of the following:
• A structured method for improving business processes. This method, called DMAIC
(define, measure, analyze, improve, and control), is supported by an assortment of
statisticaltools.
• A statistical measurement of how well a business process is performing. A process that
performs at "Six Sigma" produces only 3.4 defects out of every million opportunities to
produce a defect. Processes that perform at lower sigma levels (such as one sigma or four
sigma) produce more defects per million opportunities. It is possible for a process to
perform at an even higher level (and thus have even fewer defects), but Six Sigma has
become popular as the standard for excellent process performance.
• An organizational mindset in which people make decisions based on data, look for root
causes of problems, define defects based on customer rather than internal requirements,
seek to control variation, track leading indicators of problems to prevent them from
happening,etc.

Six Sigma has a martial arts convention for naming many of its professional roles. The
chart below describes how these roles are typically defined Leaders and Champions
usually receive high-level training on the technical aspects of Six Sigma and specific
training on how to lead an initiative. At the "Belt" level, each candidate is assigned an
initial "training project" that he/she will work on during the formal training period.
Candidates attend classroom training for a week, work on their projects for three weeks,
return to class for another week, and so on until they have acquired all the skills
appropriate to their role.

A collaboration of years of proven management strategies developed into one clear and
concise management program with one goal in mind, to improve the outcome of any
company, whether that be a company whose goal is to provide the best customer service
or the best products, the process is the same and is very simple. The goal is to eliminate
defects, anything that leads to customer dissatisfaction, and improve the manufacturing
and/or business processes, leading to only a successful outcome.

The Six Sigma Training Program believes in three primary principles for creating
success: Business success is highly reliant upon reducing the amount of variation that you
have in your business process. Manufacturing and business processes have characteristics
that can be clearly measured, analyzed, controlled and improved upon. Achieving
sustained quality improvement is the result of the entire organization working together
for a common goal, especially onboard need to be the members of top level management.

How Does Six Sigma Work?

Six Sigma has both management components and technical components. Using this dual
approach allows for everyone to have a role in making the Six Sigma plan a success. The
management side focuses on using the management system to line up the right projects
and match them with the right individuals. Management also focuses on getting the right
goals and process metrics to insure that projects are successfully completed and that these
gains can be sustained over time. The technical side focuses on enhancing process
performance using process data, statistical thinking, and methods. This focused process
improvement methodology has five key stages: Define, Measure, Analyze, Improve and
Control.

– Define is to define process improvement goals that are consistent with customer
demands and company strategy.
– Next measure the key aspects of the current processes that your company is using
and collect relevant data about these processes and current results.
– Then analyze the data to verify cause and affect relationships, be sure to consider all
possible factors involved.
– Then improve or optimize the process based upon data analysis using techniques like
Design of Experiments or observational study.
– The last step is to control to ensure that any deviations are corrected before they result
in defects. During this step you will also set up pilot runs to establish process capability
and will continuously monitor the process.
– All tools statistical or not are linked and sequenced in a unique way that makes 6 Sigma
both easy and effective to use. The basic approach focuses on the identification of the key
process drivers (variables that have the largest effect on output) and relies on software
such as Minitab for statistical calculations.

Significance and relevance of Six Sigma

The great thing about six sigma certification is that it is perfect for all businesses, whether
you are a large corporation producing a product or a small business that specializes in
customer service. Six Sigma Training will help your business improve productivity and
increase the bottom line. 6 Sigma is a very flexible program that gets everyone working
together towards one common goal and that is improving the quality of whatever you
produce, thus improving your company’s profitability. The different levels of Six Sigma
Certification give each and every employee the chance to contribute, which in essence
allows everyone to be part of the solution to the businesses problems. This not only
creates a feeling of team work and unity, but also allows each and every employee to
realize they are valued by the company.
Six Sigma in Nokia Siemens Networks

Six Sigma methodologies improve any existing business process by constantly reviewing
and re-tuning the process. To achieve this, Six Sigma uses a methodology known as
DMAIC (Define opportunities, Measure performance, Analyze opportunity, Improve
performance, Control performance).

This project report entails an understanding and work on Six Sigma practices in Nokia
Siemens Networks Pvt.Ltd (NSN)

The report focuses on the application of Six Sigma principles in improving the
effectiveness of its’ HR practices that have enormous implications on the talent pool of
NSN and long term growth.

Nokia Siemens Networks NSN started as an undisputed industry leader with the scale
and ambition to become the number one enabler of communication services.

Already holding a top three position in the telecommunications infrastructure industry,


NSN is are ideally positioned to utilize NSN’S strong end-to-end convergence
capabilities for further growth.

NSN is continuing the legacy of two companies that shaped the communications
industry. Siemens has been a pioneer in the communications industry since the mid 19th
century, while Nokia pioneered the development of mobile communications and became
the world leader in this field.

NSN’S approach is all about helping operators and service providers address the
challenges of a dynamic and fast-changing world.

NSN’S planned portfolio covers the whole spectrum of products, services and solutions
relating to communication networks infrastructure and services, driving IP convergence
and providing end-to-end solutions. For NSN’S customers this means: simplicity in the
face of complexity, e.g. triple and quadruple play turnkey solutions.

NSN’S five product Business Units provide the full range of products and applications
for fixed, mobile and converged networks. Additionally, NSN addresses the growing
demand for services through NSN’S Services Business Unit and close to 20,000 service
professionals worldwide.

As an organization NSN is pioneering and passionate, yet pragmatic. NSN provides


NSN’S customers with the flexible foundation they need to succeed:

New ways of working – from product vendor to solutions partner.

New ways of thinking, based on the insights into the market, technology and consumers.
New efficiencies, through solutions that make the best use of customers’ existing assets.

In a world of continuously changing consumer behavior, service competition and


technology, NSN brings the insight, ingenuity and partnership that helps NSN’S
customers adapt and thrive.

HR professionals in NSN with the right skills contribute to a Six Sigma initiative at both
strategic and tactical levels. This report describes the areas in which HR plays a role in
Six Sigma and discusses how HR professionals increases their chances of being included
in Six Sigma decision-making and implementation.

Six Sigma Roles in NSN HR

Six Sigma has a martial arts convention for naming many of its professional roles. The
chart below describes how these roles are typically defined.

 Six Sigma Roles And Responsibilities

 Sponsor
Senior executive who sponsors the overall Six Sigma Initiative.

Senior-level executive who is responsible for implementing Six Sigma


 Leader
within the business.
Middle- or senior-level executive who sponsors a specific Six Sigma
 Champion project, ensuring that resources are available and cross-functional issues
are resolved.
Full-time professional who acts as a team leader on Six Sigma projects.
 Black Belt Typically has four to five weeks of classroom training in methods,
statistical tools, and (sometimes) team skills.
Highly experienced and successful Black Belt who has managed several
projects and is an expert in Six Sigma methods/tools. Responsible for
 Master Black Belt
coaching/mentoring/training Black Belts and for helping the Six Sigma
leader and Champions keep the initiative on track.
Part-time professional who participates on a Black Belt project team or
 Green Belt leads smaller projects. Typically has two weeks of classroom training in
methods and basic statistical tools.
Professional who has general awareness of Six Sigma (through no formal
 Team Member training) and who brings relevant experience or expertise to a particular
project.
Professional responsible for the business process that is the target of a Six
 Process Owner
Sigma project.

Leaders and Champions usually receive high-level training on the technical aspects of Six
Sigma and specific training on how to lead an initiative. At the "Belt" level, each
candidate is assigned an initial "training project" that he/she will work on during the
formal training period. Candidates attend classroom training for a week, work on their
projects for three weeks, return to class for another week, and so on until they have
acquired all the skills appropriate to their role.

NSN HR's Role in Six Sigma

When NSN first successfully implemented Six Sigma from 2005 to 2008, its
management program of setting goals, sharing savings, risk-taking and linking personal
goals to corporate goals all played important roles. As a result, the company grew, made
lots of money and rewarded its
employees with bonuses. The Figure 1. Six Sigma and Human Resources
challenge in implementing Six
Sigma in HR included
questions such as, “What
should I do?,” “What should I
measure?,” “How would I
improve the HR process?” and
“How can HR be at 3.4 parts
per million as it doesn’t deal
with a million people?”

Typical HR functions include


benefits management,
compensation, recruitment and
skills development. Innovation
and change management must
also become key functions in
the HR department. In addition
to managing these functions
well, managing idea to
innovation, improving HR
functions, and accountability
of employees and executives
must also be implemented.

As with any major organizational initiative, many factors contribute to success. Some of
these factors will fall within HR's area of responsibility, such as those discussed below.

Roles played by the Six Sigma Team of NSN

 Establishment of project selection criteria

 Establishment and use of proper communication process

 Timely Approval of projects – ensuring linkage to strategy and key needs

 Reviewing of the entire process every 3-6 months


 Selection of Project Champions

 Establishment of reward and recognition format

 Provision for needed resources and training

 Linking rewards to performance

 Reviewing Black Belt and Green Belt projects monthly

 To be accountable for the success of the effort

For the critical steps in the HR functions, following questions identifies opportunities for
improvement that can be exploited by applying the Six Sigma methodology:

What is the purpose the HR function or sub-function?

What are the expected deliverables (people, skills, services, value, reports, etc.)?

What are the measures of goodness of key-deliverables?

What are the error opportunities for key-deliverables?

What improvement activities are carried out in the HR function?

NSN HR has identified output (unit), measures of reliability, and items and elements that
can go wrong (opportunities for error). Having identified ‘what’ to measure, HR will
establish a baseline for key performance indicators, which may include one or more of
the following:

HR Responsiveness

Employee involvement

Idea and innovation for improvement

HR effectiveness in fulfilling its intended functions

Implementing Six Sigma in NSN HR was no different than applying it in other functions.
The key is recognizing gaps or opportunities for improvement by breaking down
processes in manageable chunks. The HR function has considered the following steps to
implement Six Sigma in HR or to facilitate implementation of Six Sigma in the
organization:

Establish a clear and significant role of HR for institutionalizing Six Sigma


Establish Six Sigma objectives and role in HR

Seek customer feedback and identify opportunities for improvement

Establish Six Sigma goals for HR function

Formulate, prioritize projects and form teams

Provide Six Sigma Green Belt training

Implement DMAIC for breakthrough solution.

NSN’s Black Belt Selection and Retention

Having the right people in the Black Belt role is critical to the success of a Six Sigma
initiative in NSN. The training investment is substantial for this pivotal role. Further,
Black Belts are the visible "face" of Six Sigma. They help shape the organization's
impression of Six Sigma, and, consequently, the willingness of many to embrace the
initiative. Therefore, Black Belts are picked up very carefully. (In NSN, the organization
selects Black Belts from among those who have already been identified as "high
potentials.").

HR professionals helps the Six Sigma Leader find the right people for Black Belt roles
and ensure they remain in those positions for the typical two-year rotation. Potential HR
contributions in this area include:

 Building a competency model that will help identify candidates with the right mix
of technical, team, and leadership skills and abilities.

 Creating job descriptions that help candidates fully understand the position and
expectations prior to signing on.
 Developing a retention strategy that will help ensure Black Belts complete their
rotation and the organization recoups its investment in training and development.

NSN’s Rewards and Recognition

Rewarding and recognizing Black Belts and Six Sigma teams is more complex than it
may appear. Black Belts join the Six Sigma initiative from various places in the
organization where they are likely to have been at different job levels with differing
compensation arrangements. Determining whether and how to make appropriate
adjustments in level and compensation now that all these individuals are in the same role
is both tricky and critical.

Similar complexities are involved at the project team level. Six Sigma projects led by
Black Belts typically result in savings in the hundreds of thousands of dollars. Deciding
how the team should be rewarded and recognized and who should get credit for what is
not easy. Yet ignoring these issues can result in resentment, reluctance to work on Six
Sigma projects, and the potential failure of the overall initiative.

HR professionals helps the Six Sigma Leader tackle the challenge of establishing the
right rewards/recognition. Potential HR contributions in this area include:

 Analyzing existing compensation arrangements to identify the extent to which


those arrangements will support the Six Sigma initiative.

 Creating a strategic compensation plan that will better support Six Sigma.
 Developing a non-monetary reward program for Six Sigma teams.

NSN’s Project Team Effectiveness

The work of Six Sigma is done mostly at the project team level by a Black Belt leading a
small team through the steps of the DMAIC method. If the team itself does not function
well or does not interact effectively with others in the organization that ultimately have to
support and carry out the process changes, the project probably will not be successful.
Given the typical project's potential payback, failure can be expensive.

HR professionals can help the project teams work together more effectively. Potential HR
contributions in this area include:

 Ensuring team leaders and members get training and/or coaching in teamwork,
conflict management, communications, dealing with difficult team members, and
other team effectiveness skills.

 Providing teams with tools that allow them to diagnose their own performance
and identify when and where they need help.
 Acting as a resource for Black Belts who encounter team-related challenges they
cannot surmount.

Creating a Six Sigma Culture

In NSN Many Sponsors, Champions, and Leaders look to Six Sigma as a way to change
an organization's culture to one that is more data-driven, proactive, decisive, and
customer-oriented. But they often have little idea about how to achieve successful culture
change.

HR professionals helps executives approach culture change in a way that addresses the
underlying business goals without creating organizational resistance. Potential HR
contributions in this area include:

 Working with Six Sigma Sponsors, Leaders, and Champions to identify elements
of the culture that might hinder the achievement of Six Sigma goals.
 Advising on change plans that will target those specific cultural elements.
 Identifying how Six Sigma can be rolled out in a way that works with, rather than
against, the current culture.

NSN Change Management and Communications

Introducing Six Sigma into NSN was a major change that had a profound effect on a
broad group of stakeholders. Managers and employees at many levels of the organization
were asked to engage in new behaviors. In many cases, those leading other initiatives
started seeing Six Sigma as a source of competition for resources, executive attention,
and organizational power. Others found it as an indictment of their past performance.
Many will be confused about how Six Sigma fits with the large number of other ongoing
organizational initiatives.

HR professionals help reduce the uncertainty and anxiety surrounding Six Sigma and
increase the levels of acceptance and cooperation in the organization. Potential HR
contributions in this area include:

 Drafting a change management/ communications plan that addresses the people


side of the Six Sigma rollout.

 Helping create a "case for change" that describes:


o The reasons for and benefits of Six Sigma.
o How the organization will help employees succeed in new ways of
working.
o How Six Sigma fits with other ongoing initiatives.

 Counseling Six Sigma Leaders and Champions on how their behavior can help or
hinder Six Sigma's acceptance throughout the organization.

Being Included in Six Sigma

Just because HR professionals can play a role in the success of Six Sigma, it doesn't
automatically follow that they will be asked to participate. Unless it’s an organization that
views HR as a partner in all business initiatives, there may be a necessity to push to be
included in Six Sigma.

HR can greatly increase its chances of being included in the Six Sigma initiative by:

 Ensuring HR professionals have the right skills and knowledge.

 Marketing its potential contribution early in the initiative.


Gaining the Right Skills and Knowledge

In addition to HR/organizational development-related areas, NSN HR professionals need


to have a familiarity with Six Sigma itself. Without a basic knowledge of the DMAIC
method, supporting tools, roles, jargon, and even simple statistical methods, HR will not
have the credibility it needs to be considered a potential contributor to the initiative.

The time to get this knowledge is now. There are two reasons why it's worth a HR
professional's time to become familiar with the concepts now. If the organization does
decide to implement Six Sigma, there won't be enough time to catch up. HR has to be
involved at the very beginning of the initiative. In addition, there are many applications
of Six Sigma to HR's processes themselves, e.g., the payroll process, benefits
administration, selection, and recruiting. HR might even consider setting an example for
the rest of the organization by adopting Six Sigma techniques to enhance its own
processes.

Marketing NSN HR's Potential Contribution

The marketing challenge is twofold. First, senior executives may not believe that the
people issues are just as critical to Six Sigma's success as are its many technical
components. In that case, HR needs to sell the importance of the people side. Second,
executives must perceive HR as being able to make a significant contribution on the
people side of Six Sigma. Besides ensuring that it has both the required skills and
knowledge described above, HR helps to meet these challenges by:

 Gathering data that supports the need for attention to the people side of Six
Sigma. Potential sources include Six Sigma publications, case studies, conference
sessions, and executives in companies that have already implemented Six Sigma.

 Deriving lessons from previous organizational initiatives in which people issues


and/or HR actions played an acknowledged role in success or failure.
 Meeting with senior executives to discuss their business/Six Sigma goals and then
identifying areas where HR could provide very specific and measurable help.
 Speaking to Six Sigma Leaders and Champions in the language of Six Sigma, not
the language of HR. These executives are typically interested in improving
efficiency (i.e., internal cost) and effectiveness (i.e., what the customer sees as
"defects"). HR needs to understand what the executives care about and pitch HR's
services in relevant terms.
 Taking the lead and applying Six Sigma successfully within the HR function...

Conclusion
HR has a substantial role to play in the success of a Six Sigma initiative. But it will have
the opportunity to contribute only if its professionals have the right skills and knowledge
and are able to show Six Sigma executives the value they can add. HR has to gain those
skills now and make sure senior leadership remains accessible to the knowledge how HR
can help support the success of the initiative. Only then will they realize they just can't do
it without you.

It must be understood that HR isn’t a huge part of any business, but it has a huge effect
on every business. Human resources in NSN are considered as human capital. HR must
ensure that there’s good return on investment in human capital.

Six Sigma has implied dramatic improvement through reengineering or innovation of the
NSN HR functionalities. HR involvement in achieving corporate growth and profitability
has been well defined. The HR role ahs supported leadership and departmental activities,
provide feedback, and intellectually engaged employees in achieving their personal and
corporate objectives. Customers expectations have bettered, become faster with cost-
effective solutions. Unless every department performs better, faster and cheaper, the
company will be unable to meet customer expectations. NSN HR was no exception to
this expectation. It has set its standards to perform better, faster and more cost-effectively
by creating value rather than just rote support of management or training. Creating value
could be accomplished through innovative solutions and employee innovation. This is a
low-hanging fruit for NSN HR for the years to come.

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