Global Success

Through

Six Sigma initiatives

 The problem used to be:

“How do we get management interested enough in

quality to do something about it?”

Now the problem is:

“How do we get the people to believe that we are

really
going to do something and stick with it?”
What is Six Sigma?

Six Sigma - The Initiative

Process
Systematic Approach to improving processes and
thereby Reducing Defects which Affect What is
Important to the Customer & to the Business
Breakthrough Improvement Not Incremental!

Methodology
Qualitative, Statistical and Instructional Devices for
“Observing” Process Variables & Their Relationships as
well as “Managing” their Character. Use of DMAIC &
DMADV TOOLKIT.
Six Sigma . . the Practical sense

A Different Strategy for the Business

Quality Improvement Approaches
Pull / Kanban
TPM
5S System
Balanced scorecard
EFQM
Six Sigma
Lean
TOC
SPC
DOE
Survey Plan
MSA
ISO 9000
QS 9000
Jidoka
Poka-yoke
TRIZ
Value Engineering
BPR
Business Improvement Strategy
Business Process Re-engineering
Business Execellence Model
Lean (Agile) Methods
Six Sigma Implementation
Total Quality Management (TQM)
…….

……..
 Organization Dashboard
Y = f(y)=g(x)
Outcomes (Y) Sales Order Delivered Day Sales Mfg.
Inventory Compliance
Fill Rate On-Time Outstanding Cost

y,x y,x y,x y,x y,x y,x y,x

Process (X) y,x y,x y,x y,x y,x y,x y,x

y,x y,x y,x y,x y,x y,x y,x

y,x y,x yx y,x y,x y,x y,x

y,x y,x y,x y,x y,x y,x y,x

Outcome
Outcome Measures
Measures Are
Are Common
Common Across
Across the
the
organization
organization
Process Measures May Vary Across Plants and SBUs.
The framework and foundation for process improvement stem
from the work of W. Edwards Deming.
Deming’s system of ‘Profound Knowledge’ links four
elements:
Systems Thinking: The focus is on the whole system, the
interdependencies within it, and optimizing the system over
time. All processes are a series of interconnected steps. And
resultant Products stem out of it.
The Theory of Variation: Understanding and eliminating
sources of variation is the key improvement target.
The Theory of Knowledge: How people learn. Knowledge is
seen in terms of useful models and theories.
Psychology: How to involve people in processes and in
continuous improvement.
Knowledge is the Foundation

Business Survival & Growth

Customer Satisfaction

Quality, Price, Delivery CTQ’s

Process Capability/Performance

Level of Process Variation

Knowledge
The Ability to Learn Faster than our Competitors is the
Only Sustainable Advantage
Knowledge is the Foundation

“When you can measure what you are speaking about,

and express it in numbers, you know something about it;
but when you cannot express it in numbers, your
knowledge is of a meager and unsatisfactory kind. It may
be the beginning of knowledge, but you have scarcely,
in your thoughts, advanced to the state of science.”
Lord Kelvin

Risk
of
Loss
Extent of Knowledge
(Derived from Observation & Measurement)
Directions of Knowledge

Art Science
Chaos
Discipline
Knowledge
Fire Fighting
Good Decisions
Waste

Where Are Your Processes Today?

 Training Strategy
Belt Certification Program

6 The training process

Strategic
Guidelines follows the Breakthrough
Strategy Plan-Train-
Plan Apply-Review (PTAR)
model. As should be
apparent, such a model is
Review Train founded upon the merits
and benefits most
commonly associated with
Apply a closed-loop feedback
system.
Six Sigma is a culture and globally understood
language
Six Sigma applies to all facets of the
business and business processes:
A Language for All

SERVIC DESIGN
E

ADMIN. PURCH.

Six Sigma
Methods

QA MFG.

MAINT.
 Six Sigma In Marketing & Sales
• Applied across the enterprise,
• Manufacturing & Design, to
… reduce cycle times and inventory
… drive out cost
… reduce time to market
• Back Office, to
… reduce process errors
… eliminate process steps
… drive down cost
• External Clients, to
… create real differentiation via tools and skills to help clients
achieve their goals
… enable continuous improvement
… enhance strategic relationships by “improving the customer
experience”
… customers expect suppliers to contribute to their 6s initiatives
• Lean Six Sigma provides metrics illustrating the return on
marketing investment
• Adding Lean to Six Sigma reduces waste and increases process
speed
• Following Lean with Six Sigma improves customer-critical quality
and consistency
What Does Six Sigma Look Like?

• Project Definition

• Functional Team Involvement

• DMAIC

• Qualitative Tools

• Statistical Tools
 Project Portfolio
Y

y1 y2 y3 y4 y5

y11 y21 y31 y41 y51 • Critical business issues

y12 y22 y32 y42 y52 (VOB, VOC)
y13 y23 y33 y43 y53 • Resources

Project Identification,
Assessment, and
Selection

ny
ip pa r t
r sh m e Project Assignment
6 a de Co Exp s
Le n es
si r
Bu ade
Le

Project Charter
• Project
Execution
• Monthly 6sigma
Project Execution, Project Reviews
Validation, and Control
Define and Measure

Define: Clearly State the Problem

in terms of “Defects” or “Variation”
Manage which Upset the Customer/Management
“Correct”
(In-Spec.) Defect-
Free!

PIV
PIV Process POV CTQ
PIV
PIV

Measure: Describe the Performance of

the Process Quantitatively
Measured Units
Counted Units
then,
Identify Key Inputs
Analyze

Manage
“Correct” Defect-
(In-Spec.) Free!

PIV
PIV Process POV CTQ
PIV
PIV

Analytically Describe the Relationship Between

Inputs and the Output . . . to

Find the Inputs with the Biggest Impact on the Output

Improve

Manage
“Correct” Defect-
(In-Spec.) Free!

High PIV
Low PIV Process POV CTQ
Medium PIV
High PIV

????????

Systematically Find the Combination

Which Delivers the Optimal Output
Control

Control Control
Control
Manage “Correct” Defect-
(In-Spec.) Free!
High PIV
Low PIV Process POV CTQ
PIV
Medium PIV
High

Lock In the Inputs to Routinely Generate

the Optimal Output!
The Focus of Six Sigma

Y= f (X)

To get results, should we focus our behavior on the Y or X ?

 Y  X1 . . . XN
 Dependent  Independent
 Output  Input-Process
 Effect  Cause
 Symptom  Problem
 Monitor  Control
If we are so good at X, why do we constantly test and inspect Y ?

Focus on X rather than Y, as done historically

What Makes Six Sigma Different?

• Infrastructure

• Methodology & Tools

•Data Driven

•Statistically Validated Causes/Family of Causes

•Use Of Software tools

•Linkage with Business results

• Best People Dedicated to Defect Reduction

• Project Focused
 WHERE IS THE DIFFERENCE ?
Six-Sigma is a methodology

If you don’t wish, Don’t treat as an Initiative by itself

Some people always couple the word six-sigma with

use of statistical tools or cost reduction drive or only a
measurement gimmick
That’s a mistake.
Six-Sigma is a set of principles that accelerate the
speed of improvement process across the enterprise. It
also provides much needed confidence in the solutions
that emerge out of the project studies.
What Makes Six Sigma Different?

Manage “Correct” Defect-

(In-Spec.) Free!

PIV
PIV Process POV CTQ/KPI
PIV
PIV

1. With Data Prove Relationships 2. Systematic

Between Inputs and Outputs Control
Control
Control
Manage the INPUTS and good OUTPUTS will follow
DMAIC Problem Solving & Fixing Method

What It Is & What It Isn’t

It Won’t:
Run a Conference
It Will: Invent a New
Product
Reduce Defects Find a New Supplier
Hire a New Employee
Reduce Variation Buy a New Machine

.And improve the existing processes

Process Driven........ NOT Event Driven

Don’t use it for performing an obvious task
 For God’s Sake!

• Don’t Convert it to another Statistical

exercise - An intellectual perversion!
• Keep It focused to the Issue on hand.

• Don’t Get bogged down to prescriptive

Course content. Every day new and
simpler theories are taking birth, thus
have open mind!
Statistics is not everything
Support!different situations by specific
tools
Why are Companies are at
Low Interest Level?
• Past success has bred arrogance

B • Dependence on finding and fixing

A
R • Rewarding fire-fighting behavior
R
I • Little focus on measurements
companies
E
R • Functional silos inhibit collaboration

• Let’s see what it can do for us!

3 sigma 4 sigma 5 sigma 6 sigma

Leap toward Operational
Excellence
What’s needed to make the leap?

Conviction in the opportunity

B Belief in the methodology,

A
R Let’s make it a success
R
I Openness to challenge ‘status quo’
E
R New skills, tools, and information
Most
companies New behaviors for Process management

3 sigma 4 sigma 5 sigma 6 sigma

Six Sigma & bottom line results...
Six Sigma has significantly improved quality, image and
customer satisfaction,
while providing bottom line savings.
Savings

Motorola 2.2 Billion 2.6 years

ABB 900 Million 1 year
AlliedSignal 1.2 Billion 2 years
General Electric 1.1 Billion 9 months
Polaroid 100 Million 1 year
Crane 10 Million 1 year
Lockheed 10 Million 9 months
Sony 76 Million 7 Months
Large Indian Companies 100 MINR 1 year
In India, Service sectors/ITES are showing more savings
A Significant Competitive Advantage
Don’t emphasize on money only –No customer oriented project will
be taken up!
 2002 2003 2004 2005 2006

Roll out Initiation Integeration1 Integeration2 Institutionalization

# Champion 34 # Champion 70 # Champion 70 # Champion 70

# GBs 80 # GBs 394 # GBs 555 # GBs 706
#Projects 20 # BBs 34 # Champion 85
# BBs 61 # YBs 150
$ Not calculated #Projects 164 # GBs 766
Low handing Fruit # MBB 25 # BBs 86
$ 3.2 billion #Projects 329 #YBs 300
Manufacturing only # MBBs 25 # BBs 86
Hoshin Kanri $ 5.7 billion
Mfg.&After Sales #Projects 523 # MBBs 25
Hoshin Kanri $ Integrated
Mfg.,Sales &After Saleswith budgeting #Projects 594
EFQM,
& Engineering Balanced score Card Suppliers &
Mfg. &Enablers whole Group Co.
Customer Processes
 Over The Years
Agerage pre-dispatch audit score for a product
120 117.445
Avg. Pre-despatch audit score

109.150
110

100

90.555
90

83.065
81.765
80.345
80
2001 2002 2003 2004 2005 2006
Year
Pre-dispatch audit score is obtained from Regulatory Body/Customer Representative audit

Pre-Dispatch Audit Scores are means to capture Customer

satisfaction ratings.
 Finally, Business needs transformation .
Metabolism is the key word.
Can we improve its rate as well as the efficiency?
Energy Consumed Vs. Energy improved

Key Target is to improve AGILITY and make the

transformation more efficient

Six Sigma has an answer for it !

 Six Sigma and Business Marketing

•100 Lean Six Sigma projects

•140 customer-facing projects;
•520 active 6s Black Belts
•1,763 active Green Belts in residence.
•17,538 Yellow Belts trained online.
•More than 2,000 senior executives completing
leadership workshops
Lean Six Sigma and Marketing:
“It’s all about the customer experience”
• “Just improving customer satisfaction and loyalty
is a rear view mirror look.”
•Many customer touch points of all types
 Six Sigma and Business Marketing
Usual Processes:
Customer Contact Processes
Lead Generating Process
Lead Conversion Process
Customer Communication Process
Distributor appointment, Management & Monitoring
Process
Outstanding Collection Process
Ads/Promotion launching Process
Supply Chain Management Process
Customer Relations Management Process
Etc---
 Six Sigma and Business Marketing
Usual Metrics:
Cold Call to Warm Call Conversion
Hit Rate
DSO
ROPS
Customer Contact realization
Database correctness
Sales Cost
Distributor performance
Compliance to Process by RDSO
Sales Target Achievement
MAPE
Etc…..
 Six Sigma and Business Marketing
Program Investment Cost (UC) 150,000
Number of Targeted Contacts 150,000 to 150,000
FINANCIAL METRICS
Number of Leads Generated 1,340 to 3,093
Lead-to-Contact Rate (%) 0.9% to 2.1%
Cost-per-lead (UC) UC112 to UC47
Number of Sales Generated* 107 to 247
Close Rate 8.0% to 8.0%
Cost-per-sale (%) UC 1,399 to UC586
Net Profit Generated (UC)** UC307,235 to
UC709,163
Return on Investment (%) 205% to 489%
NOTES
*10% close rate, 80% incremental assumed.
**Assumes mixture of SKU sales.
.
 Six Sigma and Business Marketing

NON-FINANCIAL PROGRAM METRICS

Number of Total Responses 6,696 to 16,452
Response Rate 4.46% to 10.97%

WHAT DO WE DO NEXT??