TERM WORK UNDER GUIDANCE OF DR.

RAVI SHANKAR

Six Sigma and its Future

Term work submission for Six Sigma Course
Makarand A. Takale PGP02.056

Indian Institute of Management Rohtak

Six Sigma and its Future

Table of Contents
Introduction............................................................................................................................................. 2 DMAIC ..................................................................................................................................................... 2 Differing opinions on the definition of Six Sigma: ................................................................................... 3 Six Sigma uses following Quality Management Tools and methods ...................................................... 4 Applications:............................................................................................................................................ 5 In this criticism what will be the future of Six Sigma?............................................................................. 6 References: ............................................................................................................................................. 8

Makarand A. Takale (PGP02.056)

IIM Rohtak

Six Sigma and its Future Introduction Six sigma, a process improvement tool and strategy developed by Motorola (in 1986) and adopted by companies like GE. Many people right about it, explain what is Six Sigma, how to implement, some examples etc. But what is next? Does it have future? If yes then how it will be used in future? Just to brush up; Six Sigma is a factbased, datadriven philosophy of quality improvement that values defect prevention over defect detection. Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes. It drives customer satisfaction and bottom-line results by reducing variation and waste, thereby promoting a competitive advantage. It applies anywhere variation and waste exist, and every employee should be involved. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization ("Champions", "Black Belts", "Green Belts", "Orange Belts", etc.) who are experts in these very complex methods. In simple terms, Six Sigma means producing parts with defect rate of just 3.4 parts per million. Six Sigma has direct impact on bottom line of organisation. Here emphasis is on the DMAIC approach (define, measure, analyze, improve and control) to problem solving. DMAIC The DMAIC project methodology has five phases: Define the problem, the voice of the customer, and the project goals, specifically. Measure key aspects of the current process and collect relevant data. Analyze the data to investigate and verify cause-and-effect relationships. Determine what the relationships are, and attempt to ensure that all factors have been considered. Seek out root cause of the defect under investigation.

Makarand A. Takale (PGP02.056)

IIM Rohtak

Six Sigma and its Future Improve or optimize the current process based upon data analysis using techniques such as design of experiments, poka yoke or mistake proofing, and standard work to create a new, future state process. Set up pilot runs to establish process capability. Control the future state process to ensure that any deviations from target are corrected before they result in defects. Implement control systems such as statistical process control, production boards, visual workplaces, and continuously monitor the process. Differing opinions on the definition of Six Sigma: Six Sigma is a philosophy This perspective views all work as processes that can be defined, measured, analyzed, improved and controlled. Processes require inputs (x) and produce outputs (y). If you control the inputs, you will control the outputs: This is generally expressed as y = f(x). Six Sigma is a set of tools The Six Sigma expert uses qualitative and quantitative techniques to drive process improvement. A few such tools include statistical process control (SPC), control charts, failure mode and effects analysis and flowcharting. Six Sigma is a methodology This view of Six Sigma recognizes the underlying and rigorous approach known as DMAIC (define, measure, analyze, improve and control). DMAIC defines the steps a Six Sigma practitioner is expected to follow, starting with identifying the problem and ending with the implementation of long-lasting solutions. While DMAIC is not the only Six Sigma methodology in use, it is certainly the most widely adopted and recognized. Excerpted from Donald W. Benbow and T. M. Kubiak, The Certified Six Sigma Black Belt Handbook, ASQ Quality Press, 2005, pages 12.

Makarand A. Takale (PGP02.056)

IIM Rohtak

Six Sigma and its Future Six Sigma uses following Quality Management Tools and methods

5 Whys Analysis of variance ANOVA Gauge R&R Axiomatic design Business Process Mapping Cause & effects diagram (also known as fishbone or Ishikawa diagram) Check sheet Chi-squared Control chart Correlation Cost-benefit analysis CTQ tree Design of experiments Failure mode and effects test of

Pareto chart Pick chart Process capability Quality Function Deployment (QFD) Quantitative marketing research through use of Enterprise

Feedback Management (EFM) systems Regression analysis Rolled throughput yield Root cause analysis Run charts Scatter diagram SIPOC Inputs, analysis Process, (Suppliers, Outputs,

independence and fits

Customers) Stratification Taguchi methods Taguchi Loss Function TRIZ

analysis (FMEA) General linear model Histograms Pareto analysis

Makarand A. Takale (PGP02.056)

IIM Rohtak

Six Sigma and its Future Applications: Sigma application started with Manufacturing industry and now it can be applied to every industry including Health care to service. GE played main role in spreading a word for Six Sigma. GE declared $350 million in savings because of Six Sigma, that figure later grew to more than $1Billion. Now days Six Sigma approach is being used in manufacturing, health care, service, finance, education, IT industries and is applicable to many more domains. Even some companies have considered using Six Sigma to improve sales and marketing process. Companies like GE, DOW have used Six Sigma for new product development, customer supports to reduce costs, to improve performance and to increase profitability (Maddox, Marketers embrace Six Sigma strategies, B to B, 89 (10), 1 32, 2004). Few companies use Six Sigma as a road map to capture market data and competitive intelligence that will enable them to create products and services that meet customers needs (Pestorius, 2007; Rylander and Provost, 2006). Rylander and Provost (2006) suggest that companies should combine Six Sigma Methodology and online market research for better customer service, and Pestorius (2007) noted that Six Sigma could improve sales and marketing processes. Six Sigma methodology is also being used in accounting and finance also. It helped by reducing invoicing errors, reducing cycle time and by optimising cash flows. But still many people criticise Six Sigma because of following reasons. Lack of originality Role of consultants Potential negative effects Lack of systematic approach Based on arbitrary standards Criticism of the 1.5 sigma shift

Makarand A. Takale (PGP02.056)

IIM Rohtak

Six Sigma and its Future In this criticism what will be the future of Six Sigma? Six Sigma may appear similar to other quality management tools such as QM or Kaizen Events, but in reality, it is quite different. Other quality management programs often reach a stage after which no further quality improvements can be made. Six Sigma, on the other hand, is different as it focuses on taking quality improvement processes to the next level. This means that Six Sigma has the potential to outlast other quality management programs in the future. The scope of Six Sigma is also much broader than other quality management programs as it can be applied to every business process of an organization. The future is bright for Six Sigma programs with the growing awareness in small and medium enterprises about the potential benefits that can be derived from implementing such programs. Six sigma is likely to remain as one of the key initiatives to improve the management process than just being remembered as one of the fads (Johnson and Swisher, 2003). The primary focus should be on improving overall management performance, not just pinpointing and counting defects. Researchers and practitioners are trying to integrate six sigma with other existing innovative management practices that have been around to make six sigma method even more attractive to different organizations that might have not started or fully implemented the six sigma method. Integrating and comparing principles and characteristics of six sigma with Total Quality Management (Revere and Black, 2003), (Hammer and Goding, 2001), Human Resource Functions (Wyper and Harrison, 2000), Lean Production (Antony et al., 2003), ISO 9000 (Catherwood, 2002), ISO 9001 (Dalgleish, 2003), and the capability maturity model (Murugappan and Keeni, 2003) are all part of the quality communitys effort to maximize the positive effect of the six sigma method. To keep Six Sigma tool set up to date, Mr. Surgey Glukhov, president of Association of Six Sigma of Russia has addressed Six Sigma community with his Six Sigma 2.0 Manifesto. Actually motive behind it is to involve global community in discussions

Makarand A. Takale (PGP02.056)

IIM Rohtak

Six Sigma and its Future about how Six Sigma should evolve and develop how traditional approach should react to the changes that occurred since technology was first introduced. May be today it is being used in dozen industries but in future it may enter into new industries like sports also. Now days few softwares are available to gauge performance of sports persons, these can be further used for their improvements using six sigma approach. In Six Sigma, scope is unlimited but everything is dependent on how this technique is used. The future of Six Sigma is unknown. As long as it continues to be effective in improving processes and helping businesses to get a better ROI and customer satisfaction rating, it's likely that it will be around for a while. However, with our fastpaced and highly innovative society, it leaves many people wondering how long it will be before the next big thing will come along to replace Six Sigma. After all, if something can get a defect ratio better than 3.4 defects per million opportunities, then it deserves to take Six Sigma's place.

Makarand A. Takale (PGP02.056)

IIM Rohtak

Six Sigma and its Future References: Donald W. Benbow and T. M. Kubiak, The Certified Six Sigma Black Belt Handbook, ASQ Quality Press, 2005, pages 12 Maddox, Marketers embrace Six Sigma strategies, B to B, 89 (10), 1 32, 2004 eng.six-sigma.ru/?id=64 Future of Six Sigma Different viewpoints (article), www.sixsigmaonline.org Benefits, obstacles and future of Six Sigma approach, Young Hoon Kwak - Frank T. Anbari, Technovation 26 (2006) 708 715 Future of Six Sigma Where do we go from here? (article), www.sixsigmaonline.org

Makarand A. Takale (PGP02.056)

IIM Rohtak