Introduction To Six Sigma

GE Lean Six Sigma
Participant Guide
Introduction to Six Sigma

Module Objectives
After completing this Introduction to Six Sigma module, you will:
Identify the different ways in which organizations respond to change.

Understand the Six Sigma and Lean process for continuous improvement.
List the twelve steps of the Six Sigma process.
Organizations Response to Change

Today, every organization wants to attain a competitive edge in the market and so does
GE. To get this edge, organizations should be able to respond quickly to change.
The ability to respond quickly doesnt happen with the wave of a magic wand. Like a
plant, the organizations ability to respond to change needs to be nurtured. The ability of
an organization to respond to change needs clear strategy, engaged leadership,
motivated workforce, and the use of effective management tools.
GE implements these conditions to get the
competitive edge and to keep itself ahead of its
competitors. Lets look at each of these
conditions more closely.
The first condition is clear strategy.
To get an edge in the market, it is imperative to
have a clear strategy for managing growth and
preparing business for any challenges in future.
Strategic quality objectives are the most
important objectives for a business. There are
many such objectives available, but it is the
leadership of the business who identifies the
strategic quality objectives amongst those.
Maybe you already know what GEs strategic
quality objectives are!
In the language of Lean Six Sigma, strategic quality objectives are referred to as Big Ys.
What is a Big Y? Heres a definition for you. A Big Y is always linked to the critical
requirements of the customer. Hold that thought for now. Well get back to it later.
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GEs Big Ys
So lets recollect GEs strategic quality objectives or Big Ys for 2008-09. Theyre:
New Product Introduction or NPI.

Quality Systems and Documentation
On-time Delivery
Issues Resolution. , and
Billing Quality.
New Product Introduction accelerates time to market,

product performance, and competitive positioning. Its goal
is to turn out better products at lower costs.
Quality Systems and Documentation helps to understand,
improve and institute procedural discipline in the most
critical areas of the business.
On-time Delivery helps to improve GEs ability to fulfill
customer commitments.
Issues Resolution ensures that the customer issues are
resolved on-time with consistent quality. It also helps to
prevent the recurrence of issues.
With Quality Billing, we ensure that processes and
controls are in place to get and keep price, and collect the cash to drive profitable
growth.
Engaged Leadership, Motivated Workforce, & Effective Management Tools

Lets move on to the next condition necessary to
nurture the ability to respond to change: Engaged
Leadership.
You may have heard of Green Belts and Black belts.
You know we are not referring to karate experts.
The ones who crack bricks with their bare hands.
The Green Belts and Black Belts we are referring
to are the people who belong to the Lean Six Sigma
organization. You could say theyre the people who
crack business problems. Or rather, solve business
problems using Lean Six Sigma.
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The Lean Six Sigma organization consists of:

Green Belts - By default, thats everyone in the business. They drive improvements for a
part of a process or a process as a whole.
Black Belts - These are people whose fulltime role is focused towards developing
expertise in Lean Six Sigma. They drive
improvement for a process or function.
Lets look at two more roles in the Lean Six
Sigma organization:
Master Black Belts - These are senior level
roles similar to black belts but with larger
responsibilities. They are responsible for
driving process improvement strategy for a
function and also act as mentors to black
belts.
And.Quality Leaders - These roles are
responsible for working with the leadership
team setting Big Y and executing the quality
strategy for the business.
Remember were talking about the conditions necessary for developing the
organizations ability to respond to change. So how does this model of leadership the
Lean Six Sigma organization relate to the ability to manage change effectively? In this
model, the change management process flows in two direction: top to bottom, and
bottom to top. The engagement and strategy is driven from the top to the bottom, while
the execution of the strategy happens from the bottom up to the top.
The objectives of all these roles are to understand the
customers need and drive productivity, efficiency, and NPI
excellence throughout the organization.
Now well look at the third condition necessary for growing
the organizations ability to respond to change: a motivated
workforce.
Lean Six Sigmas culture of continuous improvement
empowers employees to take ownership and fix problems
from the roots.
How can you tell if the workforce is motivated? Here are
three signs:
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Empowerment of employees Every employee is empowered to take the necessary

step required for quality products and services so as to ensure that no defects reach the
customer.
Ownership to employees Ownership is critical to a successful project. In short, giving
employees the ownership of project empowers them to make change.
Continuous improvement Lean six sigma is a process of continuous improvement. GE
gains edge over the competition through execution of these process improvements
projects that help in lowering the inventory levels, reducing the production and
processing cost, reducing product cycle time, and improving the customer delivery
performance etc.
The fourth condition for growing the organizations ability to respond to change is having
effective management tools.
For effective management of an
organization, it is important to have a
common approach and method. Lean
six sigma serves as an effective
management tool as it forces the
organization towards database decision
making. It also provides a common
approach
of
problem
solving,
continuous improvement, and decision
making. This approach is referred as
DMAIC or Define Measure Analyze Improve Control.
Finally its a tool box with numerous tools to deliver effective change. LSS as an
Effective management tool provides:
Data based decision making

Common approach to decision making
Tool box for effective change
In any organization, the leader must know how to grow the business, how to get
productivity out of its people, and how to drive change. Lean Six Sigma plays an
important role in developing these leadership qualities.
So now you can make out the big picture of how the four conditions; clear strategy,
engaged leadership, motivated workforce and use of effective management tools nurture
the change in organizations.
Lets move on to understand the implementation of GEs Management tools over the
years.
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Check Your Understanding

Lets answer this simple question before we move forward. Write your answers in the
space provided below.
Write the four conditions necessary for organizations response to change.
(Now go ahead and verify your answer with the answer key provided in the next page.)
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Answer Key
1.
2.
3.
4.
Clear strategy
Engaged Leadership
Motivated Workforce
Effective Management Tools
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GEs Management Tools Case Study

Lets take a look at the various Management tools that GE used over the years.
Starting from 1989, there had been many attempts to implement change at GE but they
did not work well. At that time, the general perception was that these attempts failed
because the tools were faulty.
It was only in 1992, when Jack Welch, Chairman and CEO of GE, decided to put in
place a framework that accelerates the pace of change as a competitive advantage than
just managing change.
To study the idea, GE hired a group of
consultants/experts and locked them in a
Crotonville conference room to build a
framework or process for change.
The experts looked at changes like personal
change, weight loss, business/organizational
change, and historic change.
The experts were concerned that what they
had designed wasnt new and improved enough. The upshot of the study concluded
that the problem was not in implementing the common practice but employing common
sense. Every employee does not follow the process steps every time. They tend to skip
the process steps and then keep wondering what happened.
It is this habit of skipping the required steps to meet the short term objectives creates
problems for the organization. Therefore, it is normally important to document steps but
also adhere to them without any deviations.
GEs Management Tools Implementation

GEs initiative to implement the
management tools did not happen
overnight. It took years. And, we at GE
believe that these are not just
another
management
tool
or
initiative. Instead, they help GE in
keeping a close eye on the market
and act accordingly.
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The implementation procedure started with the Work-OutsTM and Town Meetings in the
year 1989. The agenda was to:
Consider employees empowerment
Promote expert driven decision-making
Practice Action Work-Outs and Customized Work-OutsTM
From there, it moved onto Productivity or Best Practices by benchmarking external
organizations and sharing the best practices.
Next follows the Process Improvement stage with Process-mapping, Re-engineering,
and Bullet Train Approach.
To increase success and accelerate change, the Change Acceleration Process (CAP)
was initiated in the year 1992. CAP represented a key stone in a solid foundation of
ongoing cultural change. It is important to note here that CAP does not stand alone. To
be effective, it requires the mindset and behaviors inherent to Work-Out and the other
initiatives. Else, it is only a set of tools and exercises that will frustrate leaders and
followers alike.
Post CAP, the tools for key strategic initiatives were framed, including:
New Product Introduction (NPI),

Quick Market Intelligence (QMI),
Order to Remittance (OTR),
Supplier Partnership (SP),
Productivity, and
Globalization.
This was followed by GE Tool-kit. In this implementation process, the complexity of

change had considerably increased with the process tools. Six Sigma Quality tool was
implemented in 1996 to address productivity, span, and data-driven decision-making.
Digitization in Selling and
Buying using technological
tools was another remarkable
stage implemented in the
year 1998.
In the year 2000, the At the
Customer For the Customer
(ACFC) program was initiated
with the aim of getting faster,
better, and closer to the
customer.
Further, imagination at work
through Imagine, Solve, Build, and Lead was put into practice in the year 2003. In the
following year, GEs growth progression was aimed through Imagination, Customer
Centric, and Execution.
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As the utmost quality initiative, the Lean Six Sigma process was deployed in the year
2005 for improving speed and quality.
What is Lean Six Sigma Customer Centric Process

Lean Six Sigma is a customer centric process
improvement method used by GE to initiate and
manage change in a structured manner. Today,
GE applies the philosophy of Lean Six Sigma
universally, to all its processes. GE lives and
breathes Lean Six Sigma; the term is familiar to
every employee of GE.

What is Lean Six Sigma?
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Answer Key
It is a measure of quality
It is an enabler for culture change
It is a process for continuous improvement
Lean Six Sigma is a measure of quality, is an enabler for culture change, and is a
process for continuous improvement. Any organization that desires to be customer
centric and wants to have a competitive edge should implement effective management
tools. Lean Six Sigma is one such effective tool implemented by GE.
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What is Lean Six Sigma Measure of Sigma

Take the example of an airline. What do you think constitutes a high quality experience
for a passenger traveling by air?
Uh uh. forget the wine and caviar. We're talking strictly economy class here.
For most of us a high quality flying experience
would mean getting to our destination safely, and
finding our luggage there when we arrive.
So, that's quality for an airline: transporting
passengers safely from one destination to another
and, transporting luggage.
Let's say there's an airline, let's call it Lucky Airlines
that decides to implement the Six Sigma process to
improve the quality of its services. Before Lucky Airlines can improve the quality it needs
to know where it stands today in terms of quality.
So Lucky digs into its database, and discovers that today it manages to lose 45,000
pieces of luggage per million bags transported.
45,000 per million! That's a whole lot of people who had to make do without their
toothbrushes and PJs! Turns out they weren't very lucky or very smart for that matter to
fly Lucky!
Lucky does some more number crunching and discovers the average airline loses
45,000 number of bags per million while the best airline in the market loses only 3 bags
per million.
So lets plot that on a graph. Its really quite simple.
On the Y-axis we have the number of
bags lost and on the X-axis we have the
sigma level. Six Sigma values correlate
with the number of defects, which are
also the standard values for any given
process. Thats the rule. So we put 45,
000 bags lost per million here on the
graph and connect it to the sigma level.
Wheres Lucky Airlines on the curve?
Here it is. Lucky Airlines is in the 3
sigma band. To be more precise, it is at
a 3.5 sigma.
Now we put 3 bags lost per million,
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thats the performance of the best airline in the world way over here to the right and
connect the defects and sigma points. And way over here, all by itself, is the best airline
in the industry in the 6 sigma band.
Now Lucky knows if it wants to match the performance of the best airline in the industry,
just how much it has to improve its performance by.
The linear graph will help us in identifying the influence of sigma on the number of
defects produced, and the results. The general rule is as the sigma capability goes up,
defects go down. From the graph, you can infer that improving the process capability to
a six sigma level will result in just 3.4 defects per million opportunities.
So, that's how quality is measured on the Sigma scale of 1 to 6. Quality is measured as
1 sigma, 2 sigma, and so on. For now, just remember that as the sigma goes up, the
defects go down. So, 4 sigma is better than 3 sigma, which is better than 2 sigma.
What is Lean Six Sigma Statistical Objectives of Sigma

Now that you know what Sigma is and how it is measured, let's understand the statistical
component of Lean Six Sigma.
Consider a Customer Care process having a target of 20 seconds and an upper spec
limit of 25 seconds. That means any call that takes more than 25 seconds to connect is
considered a defect.
But, the process has a high variation ranging from 5 to 45 seconds for the customers to
get connected. For discussion purpose, let's say the call connecting time for these
customers; Joe and Kevin are at 8 and 34 seconds respectively. So, when Joe calls the
customer care, he gets a quick response but when Kevin calls he gets a delayed
response. Hey! Now Kevin has reason to get frustrated - Kevin feels the variation as
there is a delayed response.
If you only consider the mean,
you may conclude that all is
well with the Call Center. After
all the average connecting
time for the call is 21 seconds,
which is pretty close to the
process target of 20 seconds.
But that conclusion would be
false. Look at the large
variation, especially the large
number of calls that take more
than 25 seconds. That means,
in reality, there are a large
number of customers like
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Kevin who are getting frustrated at the delayed connection. You want to rememberthe
customer feels the variation more than the mean.
So, the statistical objective of using Six Sigma is primarily to reduce the variation. It is
also to shift the mean, and center the process, so the result is fewer defects in a
process.
When you're using Six Sigma, for example, as a first step, you need to identify the cause
of variation in the process. If the variation is due to the connecting device, install a better
device than the existing one.
Secondly, shift the mean by identifying factors that impact call connection time. Hey! The
idea looks great but is it possible?
Remember there were two customers. There was poor Kevin who was put on hold
listening to inane music for 34 seconds, and there was Joe who got through to the
service associate in 8 seconds.
The goal is to center the process around 20 seconds and reduce the variation. By
reducing the variation the call connecting time for Kevin drops from 34 seconds to less
than 25 seconds. Reducing variation also ensures that all customers have a consistent
experience in the performance of the call center.
The next step would be to shift the mean so that we can meet our target of 20 seconds.
This way we have centered the process and reduced the variation. To summarize: there
are two ways to improve the sigma for the process: reduce the variation and shift the
mean. This is easier said than done! How do we do it? This brings us to the next feature
of Six Sigma: the enabler of culture change.
State the statistical objectives of Lean Six Sigma.
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Answer Key
Statistical objectives of Six Sigma to:
Reduce the variation,

Shift the mean, and
Center the process
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What is Lean Six Sigma Enabler of Culture Change

Have you come across a process improvement that failed or did not stick?
If you did, then you might find that the process improvement failed because of wrong
approach.
Here is a case scenario of a fast food outlet where the process improvement attempt
was a complete failure.
A fast food outlet always had a long queue of customers waiting near the counter. In an
attempt to fix the problem, the manager used his common sense and opened two more
counters to reduce the length of time the customer had to wait to place the order. To his
surprise, it didn't help improve matters much. The length of the queues reduced, but the
time taken by customers to place their orders didn't come down as much as he had
hoped.
It was then the manager realized that the
length of the queue was only one factor
leading to long wait times for customers.
Other factors that were contributing to long
wait times were the absence of menus to
read while the customer was waiting in the
queue and the lack of simplified menu. This
resulted in customers taking more time to
decide and more time for the cashiers to
process the transactions.
If the manager would have taken time to
understand the reason for long queues he
would have had a big menu display for all
customers to see and standardized the menu items in groups that mostly people order.
Remember you visit to Mc DonaldsHappy Meal no. 1.
That's the difference between a systematic approach and a common sense approach!
Using Lean Six Sigma we adopt a systematic approach to process improvement.
By requiring us to adopt a systematic approach, Lean Six Sigma acts as an enabler for
change. Which brings us to the third feature of Lean Six Sigma: as an enabler of cultural
change.
We learned that Lean Six Sigma is a measure of quality, it is a process for continuous
improvement, and it is an enabler for cultural change.
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Before Lean Six Sigma:
Processes were internally focused

Symptoms were perceived as being the cause of out of specification material
Focus was on short-term improvements
With the implementation of Lean Six Sigma:
Processes are customer focused

Quantitative relationship exists between the
output and in-process variables
Root causes of the problems are identified
and eliminated
Control plans are required for long term
sustainability
Before we actually begin to learn how to use Lean Six Sigma, there's one more thing you
need to know about it: the importance of having a common Lean Six Sigma culture in an
organization.
Next is the Process of Continuous improvement.
What is Lean Six Sigma Process of Continuous Improvement: PDCA

It is through the process of continuous improvement that we can permanently solve
problems.
What do we usually do when we see a problem?
We try and fix the problem. That's a normal
reaction. Unfortunately, in the rush to fix the
problem, we often end up treating the symptom
rather than removing the root cause. This band
aid approach has a temporary effect.
Fixing a problem is not always a permanent
solution but eliminating the root cause always is.
To fix the root cause of a problem in a process
needs a process of continuous improvement
within it. The Plan, Do, Check, and Act process,
or PDCA as it is commonly called, is one such process of continuous improvement.
To understand what the PDCA looks like in a real life situation, let's go through an
example.
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Consider a customer complaining about the inconsistent cycle time and product quality.
To address the customer's concern, we'll subject the problem to the steps of PDCA
process.
As the first step, important questions to ask here for the plan phase are:
Do we have procedure and work instructions for the operators to follow?

Are there any training plans on Product Quality for the people to get trained?
Next is to implement or do these plans. Some important questions to ask here are:
Have the people received training as per the procedures?

Are trained people able to perform the repetitive tasks?
As a third step, we need to Check if the implemented plans are working.

Some important questions to ask here are:
Are there periodic audits?

Is there any non-compliance to the standard procedures?
Finally, based on the findings from the audits, we need to take action for the
improvement of the project. Some important questions to ask here are:
Did we eliminate the root cause and drive continuous improvement using Lean Six
Sigma?
Let's take a closer look at the Six Sigma process of continuous improvement.

State whether the following statements are true or false.
True
False
1. Lean six sigma processes are customer focused.

2. Fixing a problem is as same as eliminating the root cause for the problem.
3. Lean Six Sigma is a systematic approach for process improvement.
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Answer Key
1. False
2. False
3. True
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What is Lean Six Sigma Process of Continuous Improvement: Six Sigma

The PDCA process is the circle of quality. The Lean Six Sigma process for continuous
improvement uses a similar logic with the following steps; Process, Correlation,
Discipline, and Data.
Let's take them one at a time. First is
Process. Now a customer's decision to
install a turbine may look like a single step
process. In reality, this is a multi-step
process.
It starts with the customer submitting an
inquiry, receiving a quote, to shipping the
parts, installing a turbine, and finally
getting a maintenance service for the
turbine.
Everything that happens during installing the turbine; from submitting a quotation to
servicing the turbine for maintenance - is a process.
The second step is Correlation. For every process, there is an objective 'Y' and the
variables/dependencies 'X1', 'X2', 'X3'. The objective 'Y' of the project is correlated with
the variables (X).
Let's continue with the same customer who decided to install the turbine. GE would like
to receive money on time and hence a project is initiated focusing on 'Accounts
Receivables Process' for installing the turbine.
The objective of the project is to get paid on time for the turbine delivered, so time to get
paid is the objective 'Y'. And the various dependencies (Xs) would be:
Time taken for the invoice submission (X1)

Quality of billing, let say bills with the details
of all break ups like product cost, shipping
cost, and taxes (X2)
Time spent to follow up for the payment (X3)
After Correlation comes the third step: Discipline.

Lean Six Sigma follows the DMAIC discipline - Define, Measure, Analyze, Improve, and
Control, which this course is all about.
And the fourth and last step is Data. Why is data important?
The principle behind "discipline" is a data-oriented approach to solve a problem or
improve the process. If there is no data, there is no problem.
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Have you ever thought where this data reside?

This data resides in the brains of the customer and experienced people in the process
team, or in the databases.
What is Lean Six Sigma Process of Continuous Improvement: Lean
Let's take stock of what we learned.
We learned about the quality circle, plan do check act. We also saw that Lean Six Sigma
is a process for continuous improvement, a measure for quality and enabler of cultural
change. The characteristics of continuous improvement methods are process,
correlation, discipline, and data.
The Lean Six Sigma methodology consists of five steps, which are Define, Measure,
Analyze, Improve, and Control.
Now we'll take this a step further. Until now we've covered Lean Six Sigma in context to
the DMAIC methodology. Lets review further additional Lean Six Sigma tools available
as part of Lean. They are: Value, Value Stream, Flow, Pull, and Perfection.
Jim Womack, father of Lean manufacturing in US, played a significant role in translating
the Lean concepts from Japanese to English through his book "Lean Thinking".
You might wonder how Lean principles participate in improving a process.
Let's understand it with the help of a TV manufacturing example.
Value - Is always defined from the customer's point of view. Your choice to buy a
particular TV set will be determined by the good quality audio and video features, rather
than its packaging, or assembling. It is the same with every customer; everyone wants to
pay for the value of the product and nothing else!
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While in a TV manufacturing process, the amount of time spend on making the television
or in other words adding value to the products is usually 5%, the remaining 95% of the
time that the TV spends before reaching the customer is called waste or non-value
added time. These wastes can be in seven forms, which are: Transportation, Inventory,
Motion, Waiting, Over Processing, Over Production, and Defects.
All these wastes are part of the process that the
customer does not care about and constitutes on an
average to 95% of the cost. The objective is to use or
eliminate this non-value added time.
A Value Stream is a series of all actions required to fill
a customers request both value-added and non valueadded.
Value Stream Map creates a picture of the complete
material and information flow from the customer
request to order fulfillment for an operation. This map
helps the organization in identifying the wasteful
processes and plan for eliminating them.
A key point to reflect here is that many times organizations end up in fixing value added
time versus eliminating non-value added items.
Value Stream focuses only on the steps that are required to bring a product or service
from the customer request to customer satisfaction. This is a perfect process where
every step is valuable, capable, available, adequate, and repeatable.
Flow - Keeps the process moving from one
point to another. For example, in establishing
the assembly line for a TV manufacturing
process, all the operations are sequenced
such that the television while being
assembled does not have to wait for an
operator. The process just keeps flowing
without bottle-neck thus reducing non valueadded time in assembly.
Pull - You can relate the process for serving
fast foods like burrito or sandwich with the Pull principle. If you look at the way in which
the food is prepared, you notice that the server pulls the product from the prior step and
the preparations starts at the time requested by the customers. This helps to have fewer
inventories on the shelf and reduces wastages. Similarly, a process with the Pull
principle would use customer requirement as a trigger to start the production and will
have least amount of inventories between stations.
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Perfection - Is a result of continuous improvement of a process.

Lean Six Sigma can do wonders for an organization!
You can reduce the defect and lower the cost of production, increase quality and
capacity, rely on performance, and make on-time delivery and happy customers.
We know that these are the mantras that every organization wants to practice.
What is Lean Six Sigma 12-Step Six Sigma Process

You learned that the five disciplines of
Lean Six sigma process are: Define
Measure, Analyze, Improve and
Control.
Each discipline of Lean six sigma
process has three steps associated
with it and each step has a defined
deliverable.

List the five disciplines of the Six Sigma process.
1.
2.
3.
4.
5.
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Answer Key
1.
2.
3.
4.
5.
Define
Measure
Analyze
Improve
Control
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Module - Summary
You have reached the end of this module. Lets recollect some of the key points that we
covered here:
Clear strategy, engaged leadership, motivated workforce, and effective management

tools are the key management strategies to organizations response to change.
CAP, Workouts, Innovation and Growth, and Lean Six Sigma are the various quality
initiatives taken by GE.
Six Sigma is a measure of quality, a process for continuous improvement, and an

enabler for culture change.
Statistical objectives of Lean Six Sigma are to shift the mean, reduce the variation,
and center the process. Customer feels the variation in a process.
PDCA improves a process continuously through Plan Do Check & Act.
Characteristics of Six Sigma process are; Process, Correlation, Discipline, and Data,
and the principles of Lean are Value, Value Stream mapping, Flow, Pull, and
Perfection.
Lean Six Sigma is a systematic approach to process improvement.
Five steps of Lean Six Sigma methodology are Define, Measure, Analyze, Improve
and Control.
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