SIX SIGMA

By:-
Amulya Kalia
400907002
INE-1
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 Historical overview
 Origin and meaning of six sigma process
 Methods
 Companies implementing
 Results
 Case study
 What's different
 Benefits

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• Based on teachings of Dr. Walter Shewhart,
Dr. W. E. Deming & Dr. J. Juran. like
• Process Control;
• Plan Do Check Act;
• Common and Special Causes;
• Improvement can be done project by project
• Statistical tools
• Developed by Bill Smith at Motorola in 1980s

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  Degree of variation
• ;

• Level of performance in terms of

defects;
• Statistical measurement of process
Sigma is a letter capability;
in the Greek • Benchmark for comparison;
Alphabet • Process improvement methodology;
• It is a Goal;
• Strategy for change;
• A commitment to customers to achieve
an acceptable level of performance

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• Technical Definition
A statistical term signifying 3.4 defects per million
opportunities.
• Business Definition
A break through strategy to significantly improve
customer satisfaction and shareholder value by
reducing variability in every aspect of business.

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 The term "six sigma process" comes from
the notion that if one has six standard
deviations between the process MEAN and
the nearest specification limit, as shown in
the graph, practically no items will fail to
meet specifications.

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Project Phases

Define Measure Analyze Improve Control

 Identify, evaluate  Collect data on  Analyze data,  Improvement  Establish

and select projects size of the selected establish and strategy standards to
for improvement problem, confirm the “ vital  Develop ideas to maintain process;
 Set goals  identify key few “ remove root  Design the
 Form teams. customer determinants of causes controls,
requirements, the performance.  Design and carry implement and
 Determine key  Validate out experiments, monitor.
product and hypothesis  Optimize the  Evaluate financial
process process. impact of the
characteristic.  Final solutions project

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 Roles and responsibilities of the project
team: There are several roles critical to the
success of the Six Sigma team.
 1) Champion. The Champion is usually the
process owner who guides the project team
strategically but will usually not be a full-
time team member.
 2) Black Belt. The Black Belt is responsible
for the day-to-day activities associated with
the team, from setting the team agendas, to
keeping the team on track with meeting the
specific responsibilities of DMAIC.

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 If the team leader has organizational
responsibilities other than being a team
leader they are called a Green Belt.
 3) The Master Black Belt  is equivalent to an
internal consultant. They are not full-time
members of the team but assist the team
withthe more technical aspects of their work
on an as needed basis. The rest of the team
are called team members and should be the
subject matter experts who will conduct the
actual work of the project.

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 With 99 % With Six Sigma
Quality Quality
For every 300000 3,000 misdeliveries 1 misdelivery
letters delivered
For every week of TV 1.68 hours of dead air 1.8 seconds of dead
broadcasting per air
channel
Out of every 500,000 4100 crashes Less than 2 crashes
computer restarts

Source: The Six Sigma Way by Peter Pande and Others

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Sigma Defects Per Million Rate of
Level Opportunities Improvement
1 690,000
2 308,000 2 times
3 66,800 5 times
4 6,210 11 times
5 230 27 times
6 3.4 68 times

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 At least 25% of the fortune 500 claim to
have a serious six sigma program - Michael
Hammer.
 Financial - Bank of America, GE
Capital, Electronics - Allied Signal,
Samsung, Sony
 Chemicals - Dupont, Dow Chemicals
 Manufacturing - GE Plastics, Johnson
and Johnson, Motorola, Nokia,
Microsoft, Ford.
 And hundreds of others in America,
Europe, Sub Continent.

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 Company Annual Savings
General Electric $2.0+ billion
JP Morgan Chase *$1.5 billion (*since inception in
1998)

Motorola $ 16 billion (*since inception in 1980s)

Johnson & Johnson $500 million
Honeywell $600 million
Six Sigma Savings as % of revenue vary from 1.2 to 4.5 %
For $ 30 million/yr sales – Savings potential $ 360,000 to $
1.35 million.
Investment: salary of in house experts, training, process
redesign. 13
Background

 M/s Alpha Inc. manages out bound cargo from

a distribution centre to different stores.
 Deliveries made on trucks - owned and hired.
 Customers dissatisfied at delivery schedules.
 Leadership decision to deploy Six Sigma;
 Team of 1 Black Belt and 3 Green Belts
formed
 Sponsor of the project – Distribution Manager

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 Reduce number of delayed deliveries
by 50 % by 31st December Y 2002 to
better meet customer requirement of
timely delivery defined as within +/- 1
hour of scheduled delivery.

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Output unit A scheduled delivery of freight
Output Timely delivery
characteristic
Project Y measure Process starts when an order is received
Ends when goods are received & signed
for at customers desk.
Process measurement – Deviation from
scheduled delivery time in minutes.
Specification limits LSL = -60 minutes
USL= +60 minutes
Target Scheduled time or zero minutes
deviation
Defect Delivery earlier or later than 1 hour.
No. of defect 1 opportunity for a defect per scheduled
opportunities per delivery of freight.
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 Driver and Distance identified as key
factors influencing delivery
performance.
 Driver selected for focus.
 Potential root causes as to why Driver
influenced the time:
 Size of the vehicle
 Type of engine
 Type of tyres
 Fuel capacity

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 Experiments designed and conducted
using truck type and tyre size.
 Findings:
 Larger tyres took longer time at certain
routes where area was cramped and time
lost in maneuvering.
 High incidence of tyre failures since tight
turns led to stress on tyres thus increasing
number of flat tyres.
 Team modified planning of dispatch
process by routing smaller trucks at
more restrictive areas.

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 Test implementation.
 Process sigma level up from 2.43 or
175889 DPMO to 3.94 or 7353 DPMO.
 Performance still fell short of best in class
4.32 or 2400 DPMO.
 Improvement led to significant customer
satisfaction.
 Process continually monitored and data on
new cycle times, tyre failure collected as
per defined methods and frequency,
analysed and monitored.
 Customer satisfaction measured and
monitored.

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 “ Define “ ranked most important step but gets
the lowest resource allocation
 Project scoping and its definition is critical to its
success/ failure;
 “Measure” is considered most difficult step and
also gets the highest resources

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 Versatile
 Breakthrough improvements
 Financial results focus
 Process focus
 Structured & disciplined problem solving
methodology using scientific tools and
techniques
 Customer centered
 Involvement of leadership is mandatory.
 Training is mandatory;
 Action learning (25% class room, 75 %
application)

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 Generates sustained success
 Sets performance goal for everyone
 Enhances value for customers;
 Accelerates rate of improvement;
 Promotes learning across boundaries;
 Executes strategic change

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Thank you

Questions?

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