M A

S IG
SIX
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Six Sigma Means 3.4
Defects in 1,000,000 -
MOTOROLA
 Six Sigma is a business concept that
answers customer’s demand for high
quality and Defect-free Business process.
 Six Sigma was born in Motorola and
developed by Mikel J. Harry.
 Motorola won Malcolm Baldridge Quality
Award.
 Six Sigma is carried out as projects and
mostly uses DMAIC method

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Eg: Godrej -G E Assembly
Plant
 Defective Components were coming at the
rate of 3,00,000 for one Million Parts.

 Applying Six Sigma saved Rs 4 Crores

 Mr. Vijay Krishna, C.E.O, Godrej-G E.

“We’re not talking about intangible savings
here. Six Sigma has given us the power to
measure and control costs. And that goes
straight to our bottom line”

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 PROCESS CAPABILITY
Process capability is simply a measure of how good a
metric is performing against established standard(s).

Upper
UpperandandLower
LowerStandards
Standards Single
SingleStandard
Standard
(Specifications)
(Specifications) (Specification)
(Specification)
Spec
Spec Spec
Spec Spe
Spe
(Low
(Low (Upp
(Upp cc
er)
er) er)
er)
Out of
Spec In Spec Out of In Out of
Spec Spec Spec

Probability
Probab Probabi
4 ility lity
 CONCEPT OF SIX SIGMA
Process Total Amount Typical
Variability Cp Outside Limits Action to be
taken
2σ 0.67 4.56 % Heavy Process
(45,500 ppm) Control, Sorting
rework, Etc.
3σ 1.0 2700 ppm Heavy process
Control,
Inspection
4σ 1.33 64 ppm Reduced
Inspection,
Selected use of
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USL LSL Control Charts
 CONCEPT OF SIX SIGMA

Process Total Amount Typical

Variability Cp Outside Limits Action to be
taken
5σ 1.67 1 ppm Spot Checking,
Selected use of
Control Charts
6σ 2.00 0.01ppm Reduced for
Control,
Uniformity in
process inputs
USL Process LSL Cp = Design Width / Process Width
6 Mean Cp
SIGMA SCALE OF DEFECTS(1.5 σ shift)
SIGMA DEFECT RATE COST OF Competitive
(PPM) POOR
QUALITY
Level
(% Sales)
6σ 3.4 < 10% World Class
5σ 233 10%-15% World Class
4σ 6,210 15%-20% High Quality
3σ 66,807 20%-30% Industry
Average
2σ 3,08,537 30%-40% Industry Average
1σ 6,90,000 > 40% Non-Competitive
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 Six Sigma
Implementation
 Five-phases
process
1.Establishing
2.Information
Management 3.Training
Gathering
Commitment

5.Business
4.Developing Process to 6.Conducting
Monitoring Be improved Six Sigma
Systems
are chosen Projects
8 Continuous Improvement
 Six Sigma - Three Dimensions

Customer Process A Process B Vendor

Customer Process A Process B Vendor

Define Measure Analyze Improve Control

Driven by
customer
needs
Process Map Analysis
LSL US
L
Methodology
Led by
Senior
Mgmt
••••••••••
Upper/Lower
specification
• •
••• •
•
•••••••
••••••
limits
Organization Tools
•
Regression

35 100%
30
80%
25
20 60%
15 40%
10
20%
5

Process variation 0 0%

Enabled by quality
L K A F B C G R D

team.
Frequency Cumulative Frequency

Pareto Chart

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 DMAIC PROCESS

Define Measure

DMAIC Analyze
Control

Improve

10
 DEFINE

Determine Bench mark

Set Baseline

Determine Customer requirements

Get Customer Commitment

Map Flow process

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 MEASURE
Develop Defect Measurement

Develop Data Collection process

Collect Data

Create Forms

Compile and Display Data

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 ANALYSE
Verify Data

Draw Conclusions From Data

Test Conclusions

Determine Improvement Opportunities

Determine Root Causes

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 IMPROVE
Create Improvement Ideas
Create Models

Experiment

Set Goals

Create Problem Statement

Create Solution Statement

Implement Improvement Methods
14
CONTROL

Monitor Improvement Progress

Measure Improvement Statistically

Assess Effectiveness

Make Needed Adjustments

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 ENIGMA OF SIX SIGMA

+3 +2 +1 Six Sigma -1 -2 -3
6σ

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 SIX SIGMA BENCHMARKS
Restaurant Bills
Prescription writing
100K Payroll processing

Order write-up

10K Journal Vouchers

Wire transfer
Average
company Air baggage handling

1K Material lot
Rejected

10 Air flight
Fatality Rate

Best in class

(0.25ppm)
1 17 2 3 4 5 6 7
Table 1: Companies And The Year They Implemented Six Sigma

Company Name Year Began Six Sigma

Motorola (NYSE:MOT) 1986

Allied Signal (Merged

With Honeywell in 1994
1999)

GE (NYSE:GE) 1995

Honeywell (NYSE:HON) 1998

Ford (NYSE:F) 2000

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Table 2: Six Sigma Cost And Savings By Company
% Revenue % Revenue
Year Revenue ($B) Invested ($B) Savings ($B)
Invested Savings
Motorola
1986-
356.9(e) ND - 16 1 4.5
2001
Allied Signal
1998 15.1 ND - 0.5 2 3.3
GE
1996 79.2 0.2 0.3 0.2 0.2
1997 90.8 0.4 0.4 1 1.1
1998 100.5 0.5 0.4 1.3 1.2
1999 111.6 0.6 0.5 2 1.8
1996-
382.1 1.6 0.4 4.4 3 1.2
1999
Honeywell
1998 23.6 ND - 0.5 2.2
1999 23.7 ND - 0.6 2.5
Key:
$B = $ Billions, United States
(e) = Estimated, Yearly Revenue 1986-1992 Could Not Be Found
ND = Not Disclosed 19
Note: Numbers Are Rounded To The Nearest Ten
The Quality Team
Master Black Belt --Thought
ThoughtLeadership
Leadership
--Expert
Experton
onSix
SixSigma
Sigma
--Mentor
MentorGreen
Greenand
andBlack
BlackBelts
Belts

--Backbone
Backboneof ofSix
SixSigma
SigmaOrg
Org
Black Belt Black Belt --Mentor
MentorGreen
GreenBelts
Belts
--Full
Fulltime
timeresource
resource
--Deployed
Deployedto tocomplex
complexor
or“high
“high
risk”
risk”projects
projects
Green Belt
Green Belt
--Part
Parttime
timeor
orfull
fulltime
timeresource
resource
Green Belt
--Deployed
Deployedtotoless
lesscomplex
complex
projects
projectsin
inareas
areasof
offunctional
functional
expertise
expertise
20
Scope of Six Sigma

Manufacturing
Service Industries
Hospitals
Insurance
Call Centre

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