SIX SIGMA

By: Nitesh n Vikas

INTRODUCTION
Six Sigma is an integrated, disciplined proven approach for improving business performance. Six Sigma is management methodology driven by data. Six Sigma focuses on projects that will produce measurable business results. For example GE Capital saved $2 Billion in 1999 using Six Sigma.

What is Six Sigma ?

Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects and minimizing variability in manufacturing and business processes. Six Sigma management uses statistical process control to reduce variance and standard deviation in all critical processes to achieve continuous and breakthrough improvements that impact the bottom-line and/or top-line of the organization and increase customer satisfaction

 It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization ("Black Belts", "Green Belts", etc.) who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified financial targets.

 The objective of Six Sigma Quality is to reduce process output variation on a long term basis. This will result in no more than 3.4 defect Parts Per Million (PPM) opportunities (or 3.4 Defects Per Million Opportunities DPMO).

Key Concepts
Critical to Quality: Defect: Attributes most important to the customer Failing to deliver what the customer wants

Process Capability:
Variation:

What your process can deliver

What the customer sees and feels

Stable Operations:
Design for Six Sigma:

Ensuring consistent, predictable processes to improve what the customer sees and feels
Designing to meet customer needs and process capability

METHODOLOGY
Six sigma implies two methodologies DMAIC DMADV

DMAIC
D
Who are the customers and what are their priorities

C
How can we maintain the improvements

M
How is the process measured and how is it performing

I
How do we remove the causes of the defects

A
What are the most important causes of defects

DMADV
D
Defining goals

V
Verifying

M
Measuring critical to quality characterstics

D
Designing

A
Analyzing

The key roles are:

Executive leadership these are the very top of the managers, CEO. They set the vision and give resources to the levels below. Champions are the ones who actually integrate the Six Sigma across the organization. Then there come the Master Black Belts who coach on Six Sigma. Black Belts apply the methodologies and are in direct supervision of Master Black Belts. At the very bottom are Green Belts the individual employees who implement the concepts to the manufacturing itself. In some cases organizations may assign other colors down the road such as Yellow Belts.

Six Sigma Champions

Business Leaders who lead Six Sigma by sponsoring projects are called "Champions". Champions are trained in the essentials of the Six Sigma Methodology focusing on selecting the projects that are aligned with business goals. Champions must select and mentor Six Sigma project leaders called "Belts" Champions must support, align and integrate the Six Sigma Launch into their organization.

Six Sigma Master Black Belt

Often the key support person to the Champions to assist in Project Definition The mentor and teacher of Six Sigma Green Belts and Six Sigma Black Belts Requires extensive project management experience Requires proven mastery of Six Sigma Methodology Requires proven mastery of Six Sigma Statistical Tools Often chosen to be future leaders of an organization

SIGMA LEVEL
Sigma level 1 2 3 4 5 6 7 691,462 308,538 66,807 6,210 233 3.4 0.019 DPMO Percent defective 69% 31% 6.7% 0.62% 0.023% 0.00034% 0.0000019% 31% 69% 93.3% 99.38% 99.977% 99.99966% 99.9999981% Percentage yield

SIX SIGMA COST AND SAVINGS

Year Revenue ($B) Invested ($B) % Revenue Invested Savings ($B) % Revenue Savings Motorola 1986-2001 Allied Signal 1998 GE 1996 1997 1998 1999 1996-1999 Honeywell 1998 1999 2000 1998-2000 Ford 2000-2002 43.9 ND 16 2.3 23.6 23.7 25.0 72.3 ND ND ND ND 0.5 0.6 0.7 1.84 2.2 2.5 2.6 2.4 79.2 90.8 100.5 111.6 382.1 0.2 0.4 0.5 0.6 1.6 0.3 0.4 0.4 0.5 0.4 0.2 1 1.3 2 4.43 0.2 1.1 1.2 1.8 1.2 15.1 ND 0.52 3.3 356.9(e) ND 161 4.5

Source:http://www.isixsigma.com/index.php?option=com_k2&view=item&id=1228:&Itemid=111

GENERAL ELECTRIC

GEs Evolution Towards Quality

GE began moving towards a focus on quality in the late 80s. Six Sigma, in turn, is embedding quality thinking across every level and in every operation of Company around the globe. Today, GE is defining and has set the stage for making customers feel Six Sigma.

Key Elements of Quality...

Customer Process Employee

...the Customer
Delighting Customers o Customers are the center of GEs universe: they define quality. o They expect performance, reliability, competitive prices, on-time delivery, service, clear and correct transaction processing and more. o In every attribute that influences customer perception, just being good is not enough.

...the Process
Outside-In Thinking o Quality requires to look at business from the customers perspective. o By understanding the transaction lifecycle from the customers needs and processes, discover what they are seeing and feeling. o Identify areas where we can add significant value or improvement from their perspective.

...the Employee
Leadership Commitment o People create results. o Involving all employees is essential to GEs quality approach. GE is committed to providing opportunities and incentives for employees to focus their talents and energies on satisfying customers. o All GE employees are trained in the strategy, statistical tools and techniques of Six Sigma Quality.

 Training courses are offered at various levels: Quality Overview Seminars: basic Six Sigma awareness. Team Training: basic tool introduction to equip employees to participate on Six Sigma teams. Master Black Belt, Black Belt and Green Belt Training: indepth quality training that includes high-level statistical tools, basic quality control tools, Change Acceleration

 Process and Flow technology tools. Design for Six Sigma (DFSS) Training: prepares teams for the use of statistical tools to design it right the first time.

GEs Commitment to Quality

Across the Company, GE associates embrace Six Sigmas customer-focused, data-driven philosophy and apply it to everything. Building on these successes by sharing best practices across all of businesses, putting the full power of GE behind quest for better, faster customer solutions.