Quality Revolution

An Introduction to Six Sigma Quality

SK Purushotham Module Resource Manager, ITC,Bangalore

WHY SIX SIGMA?

Why Six Sigma?

Concept has been around for 16 years; isnt just a fad. Six Sigma is the latest name for a comprehensive set of philosophies, tools, methods, and fundamental concepts.
Continues to evolve at all organizational levels; from CEO to the Black Belts and Green Belts. Has shown the most endurance and return on investment of any such program until now.

WHAT IS SIX SIGMA?

SIX SIGMA IS
A metric based on the Standard Deviation Sigma is a statistical concept that represents the amount of variation present in a process relative to customer requirements or of specifications. When a process operates at Six Sigma, the variation is so small that the resulting products and services are 99.9997% defect free!

What is Six Sigma?

Six Sigma is an aggressive method for breakthrough improvement in speed, quality, and profitability. Unlike TQM its focus is on results, not training.

Measures errors in parts per million (ppm) not %s.

Normal Distribution - Gaussian Curve

2 ( xi x ) n 1

Sigma = = Deviation
( Square root of variance )

Axis graduated in Sigma

-4

-3

-2

-1

-7

-6

-5

between + / 1 between + / 2 between + / 3 between + / 4 between + / - 5 between + / 6

68.27 % 95.45 % 99.73 % 99.9937 % 99.999943 % 99.9999998 %

result: 317300 ppm outside (deviation)

7
45500 ppm 2700 ppm 63 ppm 0.57 ppm 0.002 ppm

Six Sigma And the Statistics

-1.5 Sigma +1.5 Sigma Lower spec. limit Upper spec. limit

3.4 ppm or Zero

-5.0

-6.0

-1.0

-7.0

-3.0

0.0

1.0

-2.0

2.0

3.0

5.0

-4.0

Reduce the variation when < = design specification width / 12 ; cp > = 2 Stabilize the process, without affecting the variance, to limit the maximum process shift to +/- 1.5 Cp > = 2 and Cpk > = Under these conditions, and in the worst case, there will be no more than a 3.4 ppm defect (reject) level, with specification limits at 4.5 on one side and 7.5 on the other

7.0

4.0

6.0

1.5

Six Sigma...And Capability

Design specification width

Cp =

6 Mean - Spec Limit 3

1 0.33 -0.16 2 0.66 0.16 3 1 0.5 4 1.33 0.83 5 1.66 1.16

Cpk = Min.

Cp Cpk

6 2 1.5

7 2.33 1.83

8 2.66 2.16

With a maximum process shift of +/- 1.5

The Opportunities
Customers and Suppliers:One opportunity per
product delivered or per component purchased.

Manufacturing process:
process step).

( pportunities at each

Administartive areas:Number of opportunities for

error for each each activity performed.

What is Six Sigma?

Originated at Motorola in the early 80s Is a methodology for disciplined quality improvement Juran principles apply Doesnt use Quality in the name.

With the inclusion of Six Sigma into a sound business system the major ingredients of a Total Quality Management System are usually in place. Uses a modified Deming Wheel (PDCA)

What is Six Sigma?

Six Sigmas goal is the near elimination of defects from any process, product or service. The numerical goal is 3.467 defects per million opportunities.
Juran once concluded that in the US close to 1/3 of the work done consisted of redoing what had already been done. Depending on the industry this Cost of Poor Quality (COPQ) could be 20 to 40% of total effort!

What is Six Sigma?

Strategy includes:
Define

Measure Analyze Improve Control Similar to PDCA Improvement projects must be integrated with the goals of the organization. Six Sigma uses a divide and conquer approach.

Implementation is top-down. Top management drives, and executive management provides the Champion for each project. GEs implementation is often the de facto model for implementation. Uses concept of belts for levels of competency in Six Sigma implementation.

What is Six Sigma?

All six sigma projects are evaluated rigorously for financial impact. Most important is the financial cumulative impact of all projects upon the companys bottom line.

Six Sigma-Practical Meaning

99% (3.8 Sigma)
20,000 lost articles of mail per hour Unsafe drinking water for almost 15 minutes each day 5,000 incorrect surgical operations per week Two short or long landings at most major airports each day 200,000 wrong drug prescriptions each year No electricity for almost seven hours each month

99.99966% (6 Sigma)
Seven articles lost per hour One unsafe minute of drinking water every seven months 1.7 incorrect operations per week One short or long landing every five years 68 wrong prescriptions per year One hour without electricity every 34 years

Six Sigma and TQM

Every activity is a process. Every process has inputs and outputs. Every individual process is part of a larger system of interconnected processes. Every process has customers and suppliers. The purpose of every process is to satisfy the customer. To satisfy the customer requires continuous improvement. To beat the competition requires breakthrough improvements.

Six Sigma Process Capability

SIGMA 6 Sigma 5 Sigma 4 Sigma 3 Sigma 2 Sigma 1 Sigma

DPM 3.4 230 6200 67000 310000 700000

COPQ <10% of sales 10% to 15% of sales 15% to 20% of sales 20% to 30% of sales 30% to 40% of sales Above 40%

CAPABILITY World Class

Industry Average

Non competitive

Six Sigma Process Capability

A 4 Sigma company will spend >10% of revenue on internal and external repair.

A 6 Sigma company will spend <1% of revenue on internal and external repair!
*From study at Motorola

Studies show that most companies stop improving at about 3-Sigma..

Why? Because they hit the wall. Most companies grow from a startup into a viable, profitable organization using trialand-error, gut-feel, and common sense; at some point common sense just isnt too common anymore and stops working. Just 1%, 2%, or 3% error levels in marketing, sales, ordering, billing, can add up to 6%,12% and 18% error levels across the enterprise! Each error costs far more to fix than it did to create!

Every organization is actually two organizations in one.

The mainline organization that produces products and services, and, the Fix-IT organization that cleans up the defects caused by the mainline organization.
In a 3-Sigma company, the Fix-IT Factory is most likely costing Rs.25 Rs.40 of every Rs.100 spent! (If its a Rs.10crore company thats Rs.2.5crore - Rs4 crore that doesnt make it to bottom line.)

Most businesses employ a lot of ad hoc processes..

That includes error rates of 20% 30% (300,000 PPM or 2-sigma). When the economy turns downward or sales go dramatically up, the costs of fixing the defects can substantially hurt a start-up company ( dot-coms effect.)

Most businesses employ a lot of ad hoc processes..

Eventually, these businesses (if they survive), grow their error rates to around 3% (or 3.5-sigma) using trial and error and common sense. More companies die here because they can not be profitable. Failure to raise the bar at this level leaves the organization vulnerable to competition

Worth Remembering.
Maximize results and minimize costs by using the 4-50 rule:
4% of business causes over 50% of the rework, lost profits, and waste. Initially one should involve only 4% of staff in the first round of improvements, then add another 4% and then another 4% until a critical mass (or about 20%) of staff is actively engaged.

Worth Remembering.
The traditional PDCA (Plan, Do,Check, Act) gave way to DMAIC. Heres another way to remember the same concept:
FISH
Focus (laser-like precision; max results, min investment) Improve ( reduce delay, defects, and costs by 50% or more in mission-critical systems) Sustain (stabilize and sustain improvement) Honour (recognize, review, refocus efforts on the next 4% of the mission-critical problems)

But, also worth remembering.

The bad news is that 50% of effort only produces 4% of the benefit.Laser-focus to avoid wasting money on attempts to involve the entire organization at the same time. One should start small, focus on mission critical issues and begin to drive results.

Results of a Benchmark Study

Six Sigma according to GE

A highly disciplined process that helps us focus on developing and delivering near-perfect products and services. The word Six Sigma is a statistical term that measures how far a given process deviates from perfection. The central idea behind Six Sigma is that if you can measure how many defects you have in a process, you can systematically figure out how to eliminate them and get as close to zero defects as possible. Six Sigma has changed the DNA at GE it is the way we work in everything we do and in every product we design.

WHAT ARE THE CHALLENGES AND REWARDS?

What are the Challenges of Six Sigma?

The perception of Sick Sigma Culture change Understanding the DFSS (Design for Six Sigma) It is not a quick fix nor a recipe. Consultants cant make it happen.
Quality Concept and not a tool for career advancement. Training especially management level Takes careful preparation and a commitment to the foundational change efforts required.

What are the Challenges of Six Sigma?

Implementation tends to be uneven and lapses occur frequently. Not everything has to be Six Sigma; Lack of discipline and accountability.

Reliability of data from the field. People must not fear giving bad news. Design for six sigma is very critical.Design without review/s is useless.

What are the Rewards of Six Sigma?

Improved reliability and predictability of products and services. Increased value to the customers and shareholders. Improvements in organizational morale,
Increased marketplace viability. Organizational recognition. Significant reduction in defects. Institutionalization of a process mindset.

CRITICAL DEFINITIONS

Critical Definitions
Quality Quality Assurance vs. Quality Control Requirements Process Defect COPQ(cost of poor quality) Policy / Standard / Procedure Metrics DMAIC (Define, measure, analyze, improve, control) DMADV (Define, measure, analyze, design, verify)

WHERE SHOULD WE USE SIX SIGMA?

Where should we use Six Sigma?

Areas of the business that directly impact customer expectations and customer requirements. Areas of products and services that typically are prone to defects.

Areas of the actual business processes (customer side). Supply chain processes.

WHAT TOOLS ARE AVAILABLE?

Some of the tools to use:

Control charts Histograms Tree Diagrams Voice of the Customer Benchmarking Line graphs Pareto Chart Fishbone diagram Flow Charts QFD Design of Experiments(anov a) COPQ

Six Sigma relies heavily on histograms and control charts

To provide capability and stability analysis. Communication is clear and easy. MS -Excel is an excellent vehicle to use. Takes full advantage of the power of SPC

Six Sigma relies on Lean Thinking

Lean Thinking is a systematic method of identifying simple solutions to eliminate waste and produce products and services at the appropriate speed and correct quality to meet customer demands.
Lean production = waste is down, production is up Lean call centers = length of calls down, customer satisfaction up Lean service = less repeat failures, less travel time Lean distribution = more JIT, better accuracy

Different ways of thinking about waste / defects

A supervisor on a shop floor thinks in terms of equipment, people and production. Accounting and purchasing departments think in terms of costs, expenses and ROI. Top management thinks about market share, return to shareholders and growth.

The power of Six Sigma

Provides common measurement and common goals. Encourages a common vision. Promotes teamwork and esprit de corps
Combines aggressive goals with methods and tools. Requires the application of tools throughout the entire lifecycle of a product or service. Correlates improved cycle time, reduced defects and lower cost.

HOW DO WE IMPLEMENT SIX SIGMA?

How do we implement? The Roadmap to Six Sigma

North East West

South

Usually has many twists and turns!

Six Sigma Roles

Champion
Master Black Belt Black Belts Green Belts Team Members (Suppliers)
Is responsible for coordinating a business roadmap to achieve Six Sigma. Selects projects, executes control, and alleviates roadblocks for the Six Sigma projects in his or her area of responsibility. Is mentor, trainer, and coach of Black Belts and others in the organization. Brings the broad organization up to the required Six Sigma competency level. Is a leader of teams implementing the Six Sigma methodology on projects. Uses more sophisticated statistical tools to help team members and the broader organization. Delivers successful focused projects using the Six Sigma methodology and tools.
Participates on the project teams. Supports the goals of the project, typically in the context of his or her existing responsibilities. Is expected to continue to utilize learned methodology and tools as part of his or her normal job.

The Motorola Story

..Motorola Story

Management Leadership
DATED JAN 15, 1987 IMPROVE PRODUCT AND SERVICES QUALITY Ten times by 1989 and at least 100 fold by 1991 Achieve SIX SIGMA CAPABILITY by 1992 With a deep sense of urgency, spread dedication to every facet of the corporation and achieve a culture of continual improvement to ASSURE TOTAL CUSTOMER SATISFACTION. There is only one ultimate goal: zero defects - in everything we do.
Signed: MOTOROLA EXECUTIVE COMMITTEE

..Motorola Story

Why We Have Been Successful... The Management Process!

Quality improvement goals and plans integrated into business plans. No formal organization changes to implement. Part of everyone's job. Employee empowerment and involvement. Extensive education and training support. Recognition and awards.

..Motorola Story

Management of the Improvement Process

Corporate review of Sectors quarterly Sector review of Group monthly Group review of products monthly Plant review of manufacturing lines weekly Manufacturing line review of processes daily Same measurement - same improvement goal

..Motorola Story

Employee Involvement Requires

Awareness
How are we doing? How are the best in class doing?

Training
Tools, Methodology, Metrics

High expectations
Team goal setting

Communication
Progress and recognition

..Motorola Story

Empowered Teams
Its a business-driven process, not a human relations program It starts with senior management - cant be delegated Employees want to take ownership and become world class producers You dont need a crisis to get started Empowerment affects all functions, not just factories Done right, its an irreversible process

The Road Map for Six Sigma

Appoint a Champion Select a Cross-functional team Develop quantifiable goals Develop an implementation plan
Establish a training program Address data collection requirements and issues Develop a change control and maintenance program

Coordinate your road map

The Champion(s)
Management (Mentors)
Believe in the need for change, create the vision, provide resources Authorize, legitimize, own the change Trained in SS philosophies and methods Demonstrate visible, top-down commitment to SS Establish a SS Leadership Team

 Management (Mentors)

The Champion(s)

Become mentors for SS experts

Identify key business processes where breakthrough technologies can best be used Identify SS Expert candidates Provide financial and organizational resources to train and equip the experts to identify and accomplish stretch goals Agree on metrics to manage and track progress Recognize and reward success Propagate successes to general corporate cultural change

Six Sigma Leadership Team

Trained in Six Sigma Develops the SS Master Plan to accelerate performance Work with management mentors to identify SS Expert candidates Develops a focused curriculum Prepares training schedules Serve as mentors for SS Expert candidates Determine certification requirements

Six Sigma Leadership Team

Certify SS Experts Work with Champions to develop reward system Determine annual re-certification requirements Develop a communications plan Review and improve the SS process Monitor project selection and progress

Six Sigma Experts

Experts should equal 10 20 per 1000 employees Duties include:
Assist management in identifying key business issues Lead SS projects Take charge in areas of needed improvement Provide leadership within the area of their expertise Stimulate management thinking Challenge old ways of doing business / be a change agent Motivate others to set and accomplish stretch goals Teach, consult and mentor the Green Belts and Black Belts

How does one become Belted

Phase 1: Candidate Identification and Mentor Structure Identify candidate Management sponsorship Master Black Belt Mentor Define Black Belt responsibilities Phase 2: Skill Development Black Belt Orientation Class Personal Skill Development High Impact Improvement Project Phase 3: Recognition Application for recognition Black Belt Recognition Continuous Improvement

A Black Belt Is . . .

An Individual from Any Discipline with Advanced Statistical, Quality, and Interpersonal Skills An Experienced and Proven Leader in the use Six Sigma Strategies and Tools

Black Belts
Are responsible for leading, executing and completing DMAIC projects. Teach team members the SS methodology and tools. Assist in identifying project opportunities and refining project details and scope. Report progress to the project champions and the process owners. Transfer knowledge to other Black Belts and the organization. Mentor Green Belts.

Training
Green Belt
Utilize Statistical & Quality Techniques 2%-5% of Time (1-2 hrs/week) Training Min. 2 Projects* per Year Lead use of Statistical & Quality Techniques Mentor Green Belts; Communicate New

Black Belt

Techniques 5%-10% of Time (2-4 hrs/week) Consulting/Training Min. 4 Projects* per Year

Master Black Belt

Mentors Green & Black Belts 80%-100% of Time Consulting/Mentoring/Training

*Projects = training classes or project consultations

Green Belts
Usually equal 5% of the organization
Support large Black Belt projects Lead smaller scope projects Are part-time practitioners Tend to be functionally specific Potential future Black Belts Assist with culture change

Green Belts
Need to understand basics of SS Use statistical tools for continuous improvement
COPQ Process mapping Cause and Effect Diagrams Standard Operating Procedures (SOP) X-bar /R, x-bar/s. IMR, c and p charts

Must understand Lean practices

Implementation Strategy
Identify the needs Clarify vision Develop the plan Implement the plan Evaluate the result Sustain the gain Remember: As with any other endeavor,If you fail to plan, plan to fail!

SUSTAINING SIX SIGMA

Sustaining Six Sigma

Continue to set aggressive stretch goals
Examples:
10-Fold reduction in defect levels every 3 years Reduce time to market by a factor or 10 every 5 years

Sustaining Six Sigma

Dont allow Six Sigma to become the flavor of the month improvement program. Understanding change before the change thats required; not understanding this killed TQM. One size doesnt fit allwork is required.

Sustaining Six Sigma

Dont rely on outsiders. If you dont have the commitment, resources, funding, stomach to do this, dont do it. Dont think you can delegate Six Sigma. If you dont like statistics dont go there; Six Sigma requires statistical analysis.

MEASURING SIX SIGMA

Why do we need metrics?

Perception and intuition are not always reality. Paradigms can limit the thought process. To understand processes. To evaluate customer satisfaction.

To communicate about processes. To baseline a process. To determine if processes are improving. To determine if a process is stable and predictable.

Measurement is about

RISK!

Prior to collecting any data

Establish an environment suitable for action.
Management responsiveness Employee training and motivation Documentation plan

Identify the critical processes. Determine the quality criteria to be measured.

Customer requirements Current and potential problem areas
Usually related to cost, time, schedule and / performance

Build critical process criteria matrix Define each critical process

Inputs, outputs, etc.

Measurements affect behavior.

As a result, many leading organizations are paying the price for fostering an environment in which measurements didnt accurately reflect what was occurring in the organization. The environment is one in which games are played with numbers (short-term numbers look good at the expense of long-term performance for stockholders and employeesENRON effect). Did not create a solid strategic plan, did not align process improvements with the plan nor reengineer projects to the plan.

Measurements affect behavior.

Some measurements from Six Sigma can be deceiving as well. One must be careful with the metrics and their interpretations or practitioners will feel pressured to play games with the numbers . The measurements used in a Six Sigma infrastructure need to drive the right behavior for all processes.

CRICKET AND SIX SIGMA

Measurements affect behavior.

Take cricket, for instance. Pretend you played two days and ended up with the scores shown on the score book. Think of these scores as a sequence of products produced or transactions executed over two days. How should these metrics be reported?

Measurements affect behavior. In a Six Sigma infrastructure we use process capability and performance indices (like Cp, Cpk, Pp, and Ppk) and defects per million opportunities (DPMO) and sigma quality level metrics which all help to quantify how well a process or product is doing relative to a criterion.

Measurements affect behavior.

One could define an opportunity per defect at the stroke level. (The stroke has a defect when the ball is not hit properly). Using this approach forces one to play games with the numbers because this definition for a defect includes various levels of goodness and does not necessarily relate to overall score.

Measurements affect behavior.

A different approach would be to define a defective event as when you missed hitting a ball. Using this definition for your two days of cricket one could count, say, 25 defective hits out of 36 balls. This translates to a defect rate of 0.694444 (25/36) or a parts per million (PPM) defective rate of 694,444. This ppm rate approximately equates to a sigma quality level of 1.0

So, how are you doing?

How well does the sigma quality level metric describe your cricket game? If you report a 1-sigma quality metric to a friend, would he understand how well you are batting? Do you understand how well you are doing over time? Do you have a strategy that leads you to quantify the source of variability in your cricket game? Do we know what questions we must ask ourselves to improve?

So, how are you doing? The obvious answer is NO. This same confusion will occur when using the Cp, Cpk, Pp, and Ppk metrics. Other concerns are the implication of sample size and of how samples are taken.

Is there an alternative way to measure?

YES! Start with a high-level strategic view of your cricketing process. Do not define a defect at stroke level It can be defined at an innings level(so many scores below 30 runs in so many innings) Analyze the batting(for all inning scores less than 30)to improve overall inning scores.

What have we learnt?

This idea of cricket game allows to create a sampling plan that considers operator-to-operator, machine-to-machine, shift-to-shift, etc. as the overall output. Gives us a strategic view of what constitutes a sample size. Example can be number of cigarette trays rejected for every 100 trays- sample size(strategic view of a defect, not at defect level of individual sticks)

Quality
is not an Assignable Task it must be Rooted and Institutionalized Within every Step of the Business Process IT IS EVERYONE'S RESPONSIBILITY

Thank You