Information United System Consulting Group

(Member of Tariq Alghanim Holding)

Six Sigma – An Introduction

Program : 6th September 2007

By: Ravi Kalimuthu

Specially Designed for Tamilnadu Engineers Forum

Venue: Caesars Restaurant. Fahaheel

copyrights- IC Group 2007

 About the Tutor.
„ Business Development Manager &
Management Consultant
„ 20 Years experience in Industrial &
Management Sector
„ C tifi d Six
Certified Si Sigma
Si Green
G belt
b lt & ISO
9001:2000 Lead Auditor
„ Conducted More than 40 Training R i Kalimuthu
Ravi K li th
Programs in Several titles in
Management & Technical
About Information United System Consulting
Group. (IUSC Group)
(A Member of Tariq Al Ghanim Holdings)

„ Provides Management Consultancy

Services

„ One stop solution for any business

needs

„ Consultancy provided >40 clients

Services offered…

„ Certification related services

„ Value added services

„ Trainings / seminars
 Certification related services
„ ISO 9001:2000 – Quality Management System
„ ISO 14001:2004 – Environmental Management
System
„ OHSAS 18001:2002 – Safety Management
System
„ ISO 22000:2005 – Food Safety Management
System
„ ISO 27001:2005 – Information Security
Management System
and
d more……
Value added services

„ Training & Implementation of Six Sigma

„ Establishing KPIs
KPIs, Performance
measurement system & Balanced
Scorecard
„ Development of vision & values
„ Business Plan
l
„ Business Process Re-engineering
Value added services
„ Support services for effective
p
implementation of ISO systems
y
„ Implementing total quality management
„ Implementing cost management
concepts like activity based costing and
quality costing etc.,
„ Implementing 5 ‘S’
„ Consultancy on CE marking
Training services
„ Support for sustaining International
standards certification
„ Tailor made in-house programs
„ Knowledge
g reach to 175 topics
p specially
p y
designed for improving business
 Before we start !!!
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Six Sigma - A Breakthrough Strategy
Contents

What is Six Sigma?

Why Six Sigma?

Comparison of various management initiatives

Overview of six sigma and lean principles

Role of Green Belt

Project Management Idea

Process Mapping & Process Management

Team Dynamics
y and Techniques
q

Appreciating the use of QFD

 What is Sigma (σ)
The term ‘Sigma’
Th ‘Si ’ taken
k f
from the
h Greek
G k alphabet,
l h b i
is
used to designate the distribution or spread about the
mean ((average)
g ) of anyy p
parameter of pproduct,, pprocess or
procedure. Six Sigma is a system of practices originally
developed by Motorola to systematically improve
processes by eliminating defects.
defects The process was
pioneered by Bill Smith at Motorola in 1986 and was
originally defined as a metric for measuring defects and
i
improving
i quality,
lit andd a methodology
th d l t reduce
to d d f t
defect
levels below 3.4 defects per one million opportunities
(
(DPMO).)
 What is Six Sigma (6σ)

„ Level of process performance equivalent to

producing only 3.4 parts per million defects or
has a yield of 99.9997%.
 What is Six Sigma (6σ)

„ Six Sigma is a long-term, forward-thinking initiative

designed to fundamentally change the way corporations
do business.
„ It is first and foremost "a business process that enables
companies to increase profits dramatically by streamlining
operations, improving quality, and eliminating defects or
mistakes in everything a company does.
„ While traditional quality programs have focused on
detecting and correcting defects, Six Sigma encompasses
something broader: It provides specific methods to re re-
create the process itself so that defects are never
produced in the first place."
 What is Six Sigma (6σ)

„ Six Sigma has evolved over the last two

decades and so has its definition.
definition Six
Sigma has literal, conceptual, and practical
definitions Six Sigma can be taken at three
definitions.
different levels:
„ As a metric
„ As a methodology
„ As a management system
„ Essentially, Six Sigma is all three at the
same time.
 Six Sigma as a Metric

„ The term "Sigma" is often used as a scale

for levels of "goodness" or quality. Using
this scale,
scale "Six Sigma" equates to 3 3.4
4
defects per one million opportunities
(DPMO) Therefore,
(DPMO). Therefore Six Sigma started as a
defect reduction effort in manufacturing
and was then applied to other business
processes for the same purpose.
 Six Sigma as a Methodology

„ As Six Sigma has evolved, there has been less

emphasis on the literal definition of 3.4 DPMO, or
counting defects in products and processes. Six
Sigma is a business improvement methodology
that focuses an organization on:
„ Understanding and managing customer
requirements
„ Aligning key business processes to achieve those
requirements
„ Utilizing rigorous data analysis to minimize
variation in those processes
„ Driving rapid and sustainable improvement to
business processes
Six Sigma as a Methodology 2

At the heart of the methodology is the DMAIC

model
d l ffor process iimprovement. DMAIC iis
commonly used by Six Sigma project teams
and is an acronym
y for:

-Define opportunity

-Measure performance

-Analyze
A l opportunity
t it

p
-Improve p
performance

-Control performance
Six Sigma Management
When practiced as a management system, Six
Sigma is a high performance system for executing
business strategy
strategy. Six Sigma is a top
top-down
down solution
to help organizations:
•Align their business strategy to critical improvement efforts
•Mobilize teams to attack high impact projects
•Accelerate improved business results
•Govern efforts to ensure improvements are sustained
The Six Sigma Management System drives clarity
around the business strategy and the metrics that
most reflect success with that strategy. It provides
the
h framework
f k to prioritize resources for
f projects
that will improve the metrics, and it leverages
leaders who will manage g the efforts for rapid,
p ,
sustainable, and improved business results.
Determining
g Sigma
g Level

Determining sigma levels of processes (1 sigma, 6 Sigma etc)

allows process performance to compared throughout the
organization.
i ti Sigma
Si is
i a statistical
t ti ti l term
t that
th t measures how
h
much a process varies from perfection, based on the
number of defects pper million units.
1 Sigma = 690,000 DPMO = 30.9% Final yield
2 Sigma = 308,000 DPMO = 69.2%
3 Sigma = 66,800 DPMO = 93.3%
4 Sigma = 6,210 DPMO = 99.4%
5 Sigma
Si = 320 DPMO = 99.8%
99 8%
6 Sigma = 3.4 DPMO = 99.9997
 The Cost of Quality
Sigma level DPMO Cost of Quality
2 308,507(non
, ( NA
competitive
companies)
3 66,807 25 – 40% of
Sales
4 6,210 (Industry 15 -25% of
Average) Sales
5 233 5 – 15 % of
sales
6 3 4 (world
3.4 ( ld class)
l ) <1%
1% off sales
l
Each sigma shift provides a 10% net income improvement.
Impact of six sigma implementation at GE
(
(results
lt achieved
hi d over first
fi t 2 years 1996-1998)
1996 1998)

- Revenues
R have
h risen
i to
t $100 billion,
billi up 11%
- Earnings have increased to $9.3 billion, up
13%
- Earnings per share have grown to $2.80, up
14%
- Operating margin has risen to a record 16.7%
- Working capital turns have risen sharply to
9.2%, up from 1997's record of 7.4
 Why Six Sigma? Is it necessary to go for zero defects?

Why isn’t 99.9% defect-free good enough? Here are some examples of
what life would be like if 99.9% were "good enough:"

-1 HOUR OF UNSAFE DRINKING WATER EVERY MONTH

- 2 LONG OR SHORT LANDINGS AT EVERY AMERICAN
AIRPORTS EACH DAY
- 400 LETTERS PER HOUR WHICH NEVER ARRIVE AT
THEIR DESTINATION
- 500 INCORRECT SURGICAL OPERATIONS EACH WEEK
- 3,000 NEWBORNS ACCIDENTALLY FALLING FROM
THE HANDS OF NURSES OR DOCTORS EACH YEAR
- 4,000 INCORRECT DRUG PRESCRIPTIONS PER YEAR
- 22,000 CHECKS DEDUCTED FROM THE WRONG BANK
ACCOUNT EACH HOUR
- 32,000 MISSED HEARTBEATS PER PERSON PER YEAR
 Why Six Sigma? Is it necessary to go for zero defects?
Here are some examples of what life would be like at
Six Sigma

-13
13 WRONG DRUG PRESCRIPTIONS PER YEAR

-10 NEWBORNS ACCIDENTALLY FALLING FROM THE

HANDS OF NURSES OR DOCTORS EACH YEAR

- 1 LOST ARTICLE OF MAIL PER HOUR

Various Management
Initiatives

TOTAL PRODUCTIVE MAINTENANCE

SIX SIGMA

ISO 9001:2000

TOTAL QUALITY MANAGEMENT

Various Management
Initiatives

THE FOCUS IN TOTAL PRODUCTIVE

MAINTENANCE (TPM) IS MINIMISATION OF
LOSSES
Various Management
Initiatives

THE FOCUS IN SIX SIGMA IS MEASUREMENT

Various Management
Initiatives

THE FOCUS IN ISO 9001 IS SYSTEMS

Various Management
Initiatives

THE FOCUS IN TOTAL QUALITY MANAGEMENT

(TQM) IS PEOPLE
Various Management
Initiatives

CAN ONE INITIATIVE WORK WITHOUT THE OTHER

1 F
1. For L
Losses (TPM),
(TPM) Measurements
M t
(Six Sigma) are essential

2. For Measurement (Six Sigma),

Systems (QMS) are essential

3. For Systems (QMS), People

(TQM) are essential
Summary
y

All the initiatives are complementary to each other. .The

continued focus is the key factor. It is prudent to integrate

each initiative with the fundamental QMS like ISO

9001 2000 Th
9001:2000 The effort
ff should
h ld bbe to take
k the
h people
l along
l

the process
Five Pillars of TQM
Q
PRODUCT

EFFECTIVENESS WASTE ELIMINATION

PROCESS

SYSTEM RE-ENGINEERING

PEOPLE

SUITABILITY CULTURE & MATURITY

LEADERSHIP
Six Sigma

„ Process standard Vs Performance Standard

„ Six Sigma Vs ISO 9001
„ I process and
Is d performance
f related
l t d
„ What is important in business
„ Performance should consider both internal and
external needs
„ Measurement is the key.
„ M
Measure what
h t is
i important
i t t or whath t is
i needed
d d
„ Measurement without a target is meaning less
„ Deviation from target is defect
„ Defect is more important to customer than reject
DPMO Vs PPM

Six Sigma demands 3.4 Defects per

Million Opportunity
Why the name “Green Belts”?

The name Green belts comes from the sport of

Karate. Both Karate and Six Sigma depend on
mental discipline and systematic, intensive training.
Just as black belts in Karate depend on power, speed
and decisiveness, Six Sigma green belts should also
depend on the same qualities. Six Sigma Green belts
also must be able to reposition themselves as they
move from one project to another.
Characteristics of Six Sigma Green Belt

„ Proper understanding of Deliverable & CTQ.

„ Proper Understanding of DMAIC steps
„ Speaks the language of money,
money time,
time organizational
objectives.
„ Understands Project Charter and base line performance
„ An expert in SPC and continuous improvement tools.
„ C
Capable
bl off implementing
i l ti standardization
t d di ti methods
th d
„ Drives change by challenging conventional wisdom.
„ Anticipates and confronts problems proactively and solves
them.
What is DMAIC ?
Define phase

Thi phase
This h d fi
defines th project.
the j t It identifies
id tifi critical
iti l
customer requirements and links them to business
needs. It also defines a project charter and the
business processes to be undertaken for Six Sigma.

Note: This phase is extensively covered in a

separate chapter “Define phase”.
Measurement phase

This phase involves selecting product characteristic,

characteristic
mapping respective process, making necessary
measurements and recording the results of the
process. This is essentially a data collection phase.

Note: This phase is extensively covered in a

separate chapter “Measurement phase”.
Analysis phase

In this p
phase an action p plan is created to close the
“gap” between how things currently work and how the
organization would like them to work in order to meet
the goals for a particular product or service.
service This phase
also requires organizations to estimate their short term
and long term process capabilities.

Note: This phase is extensively covered in a

separate chapter “Analysis
Analysis phase
phase”.
 Improvement phase

This p phase involves improving

p g p processes/product
/p
performance characteristics for achieving desired results
and goals. This phase involves application of scientific tools
and techniques for making tangible improvements in
profitability and customer satisfaction.

Note: This phase is extensively covered in a

separate chapter “Improvement phase”.
Control phase

This phase requires the process conditions to be properly

documented and monitored through statistical
process control methods. After a “settling in” period, the
process capability should be reassessed. Depending
upon the results of such a follow-up analysis, it may be
sometimes necessary to revisit one or more of the
preceding phases.
phases

Note: This phase is extensively covered in a

separate chapter “Control phase”.
Key steps of the define phase

A. Identify project which are critical to

A
customers.
B Develop team charter / action plan.
B. plan
C. Define process map.
Each
E h step
t is
i discussed
di d iin detail
d t il in
i the
th following
f ll i
slide.
 Deliverable & CTQ
Department/ Function : Accounts 1
S.no Deliverables CTQ Measurement method Acceptable criteria Remarks
Agreement with
1 Customer reconcilations Correct statement of accounts customer book
Timely updation Every month
Respective date for
various submission as
2 Filing
Fili off various
i s returns
t s Ti l submission
Timely s b issi per matrixi

Accuracyy No ppenaltyy Late fees

Interest to the company
Branch and profit-centre wise
3 profitability
fit bilit Timely submission of statements By 25th of every month
Accuracy of report
 Deliverable & CTQ
S.no Deliverables CTQ Measurement method Acceptable criteria Remarks

Delivery challan
1 Receipt of material Correct inwarding of quantity Zero Variance
30% reduction from
Visual
Reduction in unloading time present condition
Documentation flow to
SAP
2 excise department Timely issue of documents 1 Day

SAP
Accuracy
y of information Zero Variance

warranty claim
3 Cost Optimization 1.Re use warranty material To be decided
2. Reduction of cost through material 30% reduction in
Visual
handling equipments present situation
Improve 50% floor
Store Layout
3. Use of floor space space

VSM
4. Recycling of cotton waste 10% cost savings

SAP
5 Reduction of non
5. non-moving
moving material T be
To b decided
d id d
 Operations related :- Marketing

1. Accuracy of forecast assumptions.

2. Number of incorrect order entries.

3 Overstocked
3. O t k d field
fi ld supplies.
li

4. Contract errors.

5. Late deliveries.

6 Customer complaints.
6. complaints

7. Warranty cost as a percentage of sales.

 Operations related :- Purchase

1. Premium freight cost/ demurrage charges.

2. Down - time because of parts shortages.

3. Number of Off specification parts used to keep line

going.

4. Cycle time from start of purchase request until

items in house.

5. Excess inventory.

6. Percentage of purchased material rejected on

receipt.
Operations related :-
Manufacturing

1. Yield per ton of raw materials.

2. Percentage of parts scrapped.

3. Percentage of parts reworked.

4. Percentage of parts accepted on concession.

5. Percentage
g of final p
product g
graded as
seconds.

6. Production p
per man / machine.
Operations related :- Product engineering

1. Number of engineering changes per document.

2. Number of errors found during design review.

3 Number
3. N b off errors found
f d in
i design
d i evaluation
l ti test.
t t

4. Percentage of time over- run compared to

planned
l d ti
time for
f development.
d l t

5. Percentage of cost over - run over estimated cost

off d
development.
l t

6. Number of tooling redesign after trial production.

Operations related :- Quality Assurance

1. Percentage of lots rejected due to errors.

2. Percentage of products having defects detected

by customers.

3. Number of engineering changes that should have

been detected in design review.

4. Errors in inspection / test reports.

5 Cycle
5. C l time
ti t gett corrective
to ti actions.
ti

6. Percentage of appraisal cost compared to

production
d ti cost.
t
Operations related :- Product reliability

„ Mean time to failure.

„ Failure rate
rate.

„ Probability of failure occurrence during given

time interval.
interval

„ Probability of failure non-occurrence during

given
i e time
ti e interval.
i te l

„ Mean life time.

„ Mean time to first generate overhaul.

„ Mean time to repair.

repair
 Operations
Ope at o s related
e ated :- Accounting
ccou t g

1. Percentage of late payments.

2. Time to respond to customer request for
information.

3. Billing errors.

4. Incorrect accounting entries.

5. Payroll errors.

6 Errors
6. E in
i costt estimates.
ti t
Customer related
„ Market share

„ Market penetration

„ New markets identified

„ Overall customer satisfaction

„ Customer complaints

„ Customer retention

„ R&D expenditure as a percentage of sales

„ New p
products and services introduced

„ Sales per employee

 Six Sigma – Tools and Techniques

„ Quality
Q li Function
i „ Analysis
A l i off variance
i
Deployment „ Correlation and Regression
„ Design of experiments „ Chi-Square
q
„ 7 QC tools „ Control charts
„ New 7 tools „ Control plans
„ Measurement system „ Robust design
analysis „ Cost of quality
„ Process mapping „ Reliability Engineering
„ Project Management „ Q lit systems
Quality t
„ FMEA „ Fault tree analysis
„ SPC
„ T – Test
T t
 Certification of Six Sigma
Option I – Certification as Six Sigma Green Belt
Becoming certified as a Six Sigma Green Belt confirms your commitment to quality and the positive impact it
will have on your organization. The Six Sigma Green Belt operates in support of or under the supervision of a
Six Sigma Black Belt, analyzes and solves quality problems and is involved in quality improvement projects.

Option II – Certification as Six Sigma Black Belt

Becoming certified Six Sigma Black Belt leads the quality or core process team involve in the data analysis. The
Six Sigma Black belt guides the green belt in taking the decisions with respect to quality problems and direct
quality improvement projects

Certification procedure:
ASQ (American Society for Quality) offers the certification programmes in various field of discipline. In today’s
world, where competition is a fact of life and the need for a work force proficient in the principles and practices
of qqualityy is a central concern of many
y companies,
p , certification is a mark of excellence. It demonstrates that the
certified individual has the knowledge to ensure the quality of products and services. Certification is an
investment in your career and in the future of your employer.

Training procedure:
The Information United System Consulting Group offers extensive training for management staffs in order to
achieve the certification for Six Sigma black belt and Six Sigma green belt. The training avenues could be as
follows:
•In-house training can be conducted within the premises of any Company

•External training
 Sigma Conversion Table
SIGMA VALUE DPMO SIGMA VALUE DPMO SIGMA VALUE DPMO

0.00 933193 2.50 158655 3.25 40059

0.20 903199 2.55 146859 3.30 35930

0.50 841345 2.60 135666 3.35 32157

1.00 697700 2.65 125072 3.40 28717

1.50 500000 2.70 115070 3.45 25588

2.00 308537 2.75 105650 3.50 22750

2.05 291160 2.80 96800 3.55 20182

2.10 274253 2.85 88505 3.60 17865

2.15 257846 2.90 80757 3.65 15778

2.20 241964 2.95 73529 3.70 13904

2.25 226627 3.00 66807 3.75 12225

2.30 211856 3.05 60571 3.80 10724

2 35
2.35 197663 3 10
3.10 54799 3 85
3.85 9387

2.40 184060 3.15 49471 3.90 8198

2.45 171056 3.20 44565 3.95 7143

 Sigma Conversion Table
SIGMA VALUE DPMO SIGMA VALUE DPMO SIGMA VALUE DPMO

4.00 6210 4.65 816 5.30 72

4 05
4.05 5386 4 70
4.70 687 5 35
5.35 59

4.10 4661 4.75 577 5.40 48

4.15 4024 4.80 483 5.45 39

4.20 3467 4.85 404 5.50 32

4.25 2980 4.90 337 5.55 26

4.30 2555 4.95 280 5.60 21

4.35 2186 5.00 233 5.65 17

4 40
4.40 1866 5 05
5.05 193 5 70
5.70 13

4.45 1589 5.10 159 5.75 11

4.50 1350 5.15 131 5.80 9

4.55 1144 5.20 108 5.90 5

4.60 968 5.25 89 6.00 3

 Sigma Conversion Table
SIGMA VALUE DPMO SIGMA VALUE DPMO SIGMA VALUE DPMO

4.00 6210 4.65 816 5.30 72

4 05
4.05 5386 4 70
4.70 687 5 35
5.35 59

4.10 4661 4.75 577 5.40 48

4.15 4024 4.80 483 5.45 39

4.20 3467 4.85 404 5.50 32

4.25 2980 4.90 337 5.55 26

4.30 2555 4.95 280 5.60 21

4.35 2186 5.00 233 5.65 17

4 40
4.40 1866 5 05
5.05 193 5 70
5.70 13

4.45 1589 5.10 159 5.75 11

4.50 1350 5.15 131 5.80 9

4.55 1144 5.20 108 5.90 5

4.60 968 5.25 89 6.00 3

Project Charter
 Our Training Programs

*October 3rd Week 2007 – Six Sigma Green Belt Certification

Program
( A 3 Day Program)

*November 3rd Week 2007 – ISO 9001:2000 Lead Auditor

Certification Course
(A 5 Day program)

Please enroll in our training programs to attain career

development and call us for any of your training &
Management consultancy needs…
needs

* Tentative Schedule
Thank you for your Time & Involvement

If need any clarifications or for assistance, please

f l free
feel f to
t conduct
d t me on M Mobile:
bil +965 9529846
or write to me in email: Ravi.km@usa.net