UNIT I LEAN & SIX SIGMA BACKGROUND AND FUNDAMENTALS 9

Historical Ovrvi! " D#i$itio$ o# %&alit' " ()at is si* si+,a -T.M a$/ Si* si+,a " la$
,a$&#act&ri$+ a$/ si* si+,a- si* si+,a a$/ 0rocss tolra$c " Si* si+,a a$/ c&lt&ral c)a$+s "si*
si+,a ca0a1ilit' " si* si+,a $/ assss,$ts - i,0licatio$s o# %&alit' lvls2 Cost o# 3oor .&alit'
4CO3.52 Cost o# Doi$+ Not)i$+ " assss,$t %&stio$s
The Motorola Six Sigma model was developed in 1986 when employee Bill Smith
proposed a concept aimed at minimizing variability in manuacturing through the standardization
o product deect measurement! "n #$$8% the concept integrated the lean manuacturing
methodology o optimizing customer value and reducing waste! &ltimately% this accumulated
into what we currently call 'ean Six Sigma!
B()(*"TS
+esigned to help organizations optimize speed and agility% reduce costs% and improve
,uality- 'ean Six Sigma has given pro.ect leaders rom companies including /eneral (lectric%
"BM% and Mayo 0linic the analytic and statistical tools needed to achieve operational excellence
and enable growth! The ollowing industries are getting beneits
1 2ealthcare 1 (nergy 3 &tilities 1 Manuacturing 1 4etail 1 Transportation 3 'ogistics
05M67)8 74( 7B'( T5
1 Better meet customer expectations
1 7chieve bottom9line ob.ectives and top9line growth
1 (nhance their organization:s problem9solving capabilities
1 "ncrease customer satisaction and loyalty
1 +rive toward operational excellence
1 "ncrease brand image
Today;s manuacturing and business environments are reaching a point that competition
or survival and mar<et share is an obligation! Trac<ing the global economy will show that being
good is not enough% thereore each organization really strive or excellence i want to stay in the
mar<et!
3ROFIT is not a single concept but comes with many important implications=
1 69 6rocess excellence
1 49 4esources Management
1 59 5riented to a /oal
1 *9 *inancially Strong
1 "9 "nnovative > to stay ahead o competition
1 T9 Timely deployment o strategies
"n order to be a leader% most companies are realizing that traditional management%
manuacturing processes% and other historic approaches% are not enough! More eective methods
are needed=
1 Six Sigma 1 'ean Manuacturing
?ith origins in the Toyota 6roduction System% is a way o living in the business
environment! *rom the 'ean manuacturing%
+eects reduced by #$@ per year
+elivery 'ead Times reduced by more than AB@
5n Time +elivery improved to 99C@
6roductivity Dsales per employeeE increases o 1B9#B@ per year
"nventory Dwor<ing capitalE reductions o more than AB@
4eturn on 7ssets improvement o 1$$@C
LEAN SIX SIGMA STRATEG6
"mprove ,uality (liminate ?aste 4educe 'ead Time 4educe Total 0osts
Cor 3ri$ci0ls o# La$=
1E Speciy value in the eyes o the customer
#E "dentiy value stream and eliminate waste
FE Ma<e value low at pull o the customer
GE "nvolve 3 empower employees
BE 0ontinuously improve in pursuit o perection
B&il/i$+ Bloc7s o# t) La$ E$tr0ris
LEAN SIX SIGMA DEFINITION
Halue 7dded
7ny activity or operation perormed that helps transorm a product or service rom its
raw state into its inished orm! 1 0ompleted right the irst time! 1 7ny activity customer is
prepared to pay or! 7ctivity re,uired to ensure that a product or service is delivered in
conormance to speciication!
)on9Halue 7dded
7ny activity that doesn;t help to transorm a product or service into its inal orm or
7ctivity not perormed right or 7ctivity customer not willing to pay or! This includes=
II &nnecessary process steps
II Movement o inventory% paperwor<% etc!
II 4e9wor<% corrections% etc!
II Storage between operations% batching inventory
II?ait times% delay times% idle times
'ean Six Sigma 9 A most common wastes
M&+7 J non9value added activity
"dentiy and reduce=
1 +eects Drepair% rewor<% scrapE 1 5verproduction DinventoryE
1 Transportation DconveyanceE 1 ?aiting D,ueue timeE
1 "nspection Dreliance on mass inspectionK veriicationE
1 Motion Dparts% paper% peopleE
1 6rocess% itsel Dover9processing% long cyclesE
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http=KKen!wi<ipedia!orgKwi<iKSixLSigma
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http=KKwww!peoplecert!orgKenK'eanLSixLSigmaKwhatLisLleanLsixLsigmaK6agesKleanLsixLsigma!a
spx
http=KK,uanterion!comKTrainingKMu"0N(4KSixSigmaKMS"'eanSixSig!pd
http=KKas,!orgKlearn9about9,ualityKsix9sigmaKoverviewKoverview!html
http=KKadultlearner!n.it!eduKprogramsKnoncreditKlean9sixsigma!php
http=KKwww!motorolasolutions!comK&S9()KTrainingC2omeK'eanCSixCSigma
http=KKwww!isixsigma!comKnew9lean9six9sigmaK
()at is si* si+,a a$/ la$ ,a$&#act&ri$+8
Six sigma and lean manuacturing are tool<its to reduce waste in business processes!
Both% six sigma and lean manuacturing are proven concepts and have saved clients millions o
dollars without capital investment! Six Sigma Systems helps your associates to generate business
results! The return on investment provided by our approach exceeds A$$@
()at is si* si+,a8 Six sigma is a philosophy o doing business with a ocus on eliminating
deects through undamental process <nowledge! Six sigma methods integrate principles o
business% statistics and engineering to achieve tangible results!
Six sigma tools are used to improve the processes and products o a company! They are
applicable across every discipline including= 6roduction% Sales% Mar<eting% +esign%
7dministration and Service!
Six sigma oers a wealth o tangible beneits! ?hen s<illully applied by your people=
Six sigma reduces costs by B$@ or more through a sel9unded approach to improvement!
Six sigma reduces the waste chain!
Six sigma aords a better understanding o customer re,uirements!
Six sigma improves delivery and ,uality perormance!
Six sigma provides critical process inputs needed to respond to! changing customer
re,uirements!
Six sigma develops robust products and processes!
Six sigma drives improvements rapidly with internal resources!
()at is la$ ,a$&#act&ri$+8 'ean manuacturing is a proven approach to reduce waste and
streamline operations! 'ean manuacturing embraces a philosophy o continually increasing the
proportion o value added activity o their business through ongoing waste elimination! 7 lean
manuacturing approach provides companies with tools to survive in a global mar<et that
demands higher ,uality% aster delivery and lower prices! Speciically%
'ean manuacturing dramatically reduces the waste chain!
'ean manuacturing reduces inventory and loor space re,uirements!
'ean manuacturing creates more robust production systems!
'ean manuacturing develops appropriate material delivery systems!
'ean manuacturing improves layouts or increased lexibility!
La$ vs Si* Si+,a9 ()at:s t) Di##r$c8
Lean Six Sigma is a methodology that combines process speed with ,uality! To become a
truly more eicient and eective organization in terms o operations and business processes% you
must have both 'ean and Six Sigma methodologies- having one without the other ultimately
results in process destruction!
Lean, itsel% ocuses on speed! "t emphasizes reducing the amount o time between activities%
events% and cycles! The shorter the cycle time% the more cycles you can complete in a given
amount o time! 'ean also identiies areas where process waste and bottlenec<s can be
eliminated! There are 8 types o waste that can be removed rom business processes to reduce
costs and time=
?aiting9 whether it is or the next activity% process step% or inormation% process wait
time can be 90% or more of the processing cycle.
5verproduction9 over producing products or services ahead o the need can result in
product expiration or excess inventory
4ewor<9 correcting deects% mista<es and errors
Motion9 excessive movementKtranser o people% supplies% materials% and documents
5ver 6rocessing9 o inormation% data% and testing
"nventory9 maintaining excessive amount o supplies that could potentially expire
"ntellect9 ailing to use the talents and <nowledge o the organization
&nnecessary Transporting9 e,uipment% people% etc!
?hile lean promotes rapid business processes the problem that arises rom it is a lac< o
,uality! "t doesn:t matter how many orms are completed or calls are ta<en i the data and
inormation captured is not up to par! Simply completing activities rapidly% without chec< mar<s
osters an environment prone to errors and oten re,uires rewor<! This is where Six Sigma
becomes essential to business process management.
The Six Sigma methodology is a ,uality tool that emphasizes reducing the number o
errors in a process! "t ocuses on identiying variation in the types o data inputs% and loo<s at
4oot 0ause 7nalysis to determine the source o errors! 7ter all% what good is it to complete a
process ,uic<ly i the inormation is incorrectly enteredO
To ensure process and organizational success a combination o both lean and six sigma
are needed! Together lean and six sigma wor< through process mapping to model and automate
the most eicient% ,uality workflows possible% allowing your company to maximize productivity%
while eliminating waste and reducing costs! 2aving a Lean Six Sigma approach to your business
processes is essential or any company to achieve operational excellence!
T) Di##r$cs 1t!$ T.M & Si* Si+,a
Both TMM% total ,uality management% and Six Sigma are time tested tools to enhance
,uality o products as well as services! ?hile there are numerous similarities% the subtleties
within these systems are dierent! Traditionally% these systems have been utilized by large
corporations! 2owever% small businesses can successully apply most o the <ey lessons!
Six Sigma and TQ !asics
Six Sigma and TMM are both ,uality9improvement systems and attempt to reduce
deective products or poor service in an organization% while improving customer satisaction!
Both approaches irst and oremost attempt to identiy the undamental sources o deects and
provide lasting cures that will permanently enhance ,uality! " delivery truc<s oten arrive late at
customers: stores% or example% both systems loo< ar beyond the truc<s% warehouses and loading
doc<s! Six Sigma and TMM analyze large portions o the business% identiying problems that
might not appear connected at irst sight and review the culture that might be leading to ,uality
issues! The scope as well applications o these systems% however% dier upon closer inspection!
"ocus and Scope
5ne dierence between the two systems lies in their areas o ocus! ?hile TMM
concentrates on individual departments and more speciic ,uantitative goals% TMM:s ultimate
ocus is customer satisaction! The path that ta<es the business toward that inal goal is
secondary! TMM must be redeined when the predetermined goals are accomplished! Six Sigma%
however% aims at continuous improvements and is sel9propelled! Six sigma% when correctly
applied% will continue to yield beneits ater the original goals have been realized as it instills a
culture that orever aims to improve perormance!
#pplication
Six Sigma pro.ects are managed by Pblac< beltsP who have gone through ormal training
and have a proven trac< record in ,uality gains! These individuals wor< ull time on Six Sigma in
their departments but return to their previous .obs ater a ew years! TMM is run by the ,uality
control department and proessionals who specialize on ,uality improvements% usually% or their
entire career! Six Sigma aims to spread the ownership o ,uality improvement to the entire
organization while those who run TMM are more experienced in the ,uality ield! Six Sigma is
oten driven by a ocus on cutting costs and tends to wor< best i it has speciic inancial goals!
TMM% however% pursues ob.ectives that are harder to boil down to a single igure% such as
customer satisaction and long9term strategic excellence!
Six Sigma $s. Total Quality anagement
Six Sigma is a relatively new concept as compared to Total Muality Management DTMME!
2owever% when it was conceptualized% it was not intended to be a replacement or TMM! Both
Six Sigma and TMM have many similarities and are compatible in varied business environments%
including manuacturing and service industries! ?hile TMM has helped many companies in
improving the ,uality o manuactured goods or services rendered% Six Sigma has the potential
o delivering even sharper results!
Total .&alit' Ma$a+,$t
Total Muality Management is oten associated with the development% deployment% and
maintenance o organizational systems that are re,uired or various business processes! "t is
based on a strategic approach that ocuses on maintaining existing ,uality standards as well as
ma<ing incremental ,uality improvements! "t can also be described as a cultural initiative as the
ocus is on establishing a culture o collaboration among various unctional departments within
an organization or improving overall ,uality!
Co,0ariso$ To Si* Si+,a
"n comparison% Six Sigma is more than .ust a process improvement program as it is
based on concepts that ocus on continuous ,uality improvements or achieving near perection
by restricting the number o possible deects to less than F!G deects per million! "t is
complementary to Statistical 6rocess 0ontrol DS60E% which uses statistical methods or
monitoring and controlling business processes! 7lthough both S60 and TMM help in improving
,uality% they oten reach a stage ater which no urther ,uality improvements can be made! Six
Sigma% on the other hand% is dierent as it ocuses on ta<ing ,uality improvement processes to
the next level!
The basic dierence between Six Sigma and TMM is the approach! ?hile TMM views
,uality as conormance to internal re,uirements% Six Sigma ocuses on improving ,uality by
reducing the number o deects! The end result may be the same in both the concepts Di!e!
producing better ,uality productsE! Six Sigma helps organizations in reducing operational costs
by ocusing on deect reduction% cycle time reduction% and cost savings! "t is dierent rom
conventional cost cutting measures that may reduce value and ,uality! "t ocuses on identiying
and eliminating costs that provide no value to customers such as costs incurred due to waste!
TMM initiatives ocus on improving individual operations within unrelated business
processes whereas Six Sigma program ocus on improving all the operations within a single
business process! Six Sigma pro.ects re,uire the s<ills o proessionals that are certiied as Qblac<
belts; whereas TMM initiatives are usually a part9time activity that can be managed by non9
dedicated managers!
A00licatio$s ()r Si* Si+,a Is Bttr
Six Sigma initiatives are based on a preplanned pro.ect charter that outlines the scale o a
pro.ect% inancial targets% anticipated beneits and milestones! "n comparison% organizations that
have implemented TMM% wor< without ully <nowing what the inancial gains might be! Six
Sigma is based on +M7"0 D+eine9Measure97nalyze9"mprove90ontrolE that helps in ma<ing
precise measurements% identiying exact problems% and providing solutions that can be measured!
Co$cl&sio$
Six sigma is also dierent rom TMM in that it is act based and data driven% result oriented%
providing ,uantiiable and measurable bottom9line results% lin<ed to strategy and related to
customer re,uirements! "t is applicable to all common business processes such as administration%
sales% mar<eting and 4 3 +! 7lthough many tools and techni,ues used in Six Sigma may appear
similar to TMM% they are oten distinct as in Six Sigma% the ocus is on the strategic and
systematic application o the tools on targeted pro.ects at the appropriate time! "t is predicted that
Six Sigma will outlast TMM as it has the potential o achieving more than TMM!
THE SIX SIGMA C6CLE OF CHANGE
RNot)i$+ $/&rs 1&t c)a$+;S > 2eraclitus Dl! B$$ B0E! " only it were that easy!
7chieving a speciic change% li<e becoming a Six Sigma company% will not .ust miraculously
happen% it will re,uire a purposeul process ocused on results! 0hange% li<e other processes%
consists o a series o steps- each o which ta<e time and must be ollowed in order! "n recent
months% several people have as<ed me what the real goal o implementing Six Sigma is and what
the change process actually loo<s li<e! This remar< rom a Six Sigma 0hampion sums it up best%
I hear that Six Sigma is about culture change, but all we really seem to be doing is talking
about Black Belts, Green Belts and their projects. What does that hae to do with !ulture
!hange"#
/reat ,uestion% but one not oten addressed in popular literature! " began my answer
instinctively by drawing a picture! The picture was a circle with three labeled points=
<5 c)a$+ 1)avior2 =5 *0ri$c rs&lts a$/ >5 c&lt&r c)a$+;
Throughout my career and personal lie% " have ound that the most eective way to
sustain change is by successully repeating experiences! "t is the reinorcement through repetition
that will lead to lasting change% either behavioral or cultural! 'i<ewise% or Six Sigma% it is the
repeated positive impact o successul Blac< Belt and /reen Belt pro.ects that will help drive and
institutionalize change in your company;s culture!
?hile you cannot change your culture overnight% you can start to drive results through
Six Sigma pro.ects! By repeatedly delivering results% everyone involved in the pro.ects%
supporting the pro.ects% beneiting rom the results% or those merely observing the results will all
come to appreciate Six Sigma as a more disciplined problem solving methodology and data
driven decision9ma<ing process! Through the experience o repeated success% the culture o your
organization will begin to change!
The model " developed to describe the Six Sigma change cycle is illustrated below! 7t
irst glance% it appears as an overly simple model% so " thought ";d better explain! ?ith most
companies% Six Sigma gradually becomes a sel9ulilling prophecy because once you begin
experiencing the results- you will not give up! "t is .ust too powerul! /etting through the early
stages o a Six Sigma implementation% however% can be tough!
8ou will notice rom the model that the Six Sigma change process is a closed cycle! ?ith a
closed cycle% the ,uestion always is% Rhow do " enter the cycleOS
0onsider the three possible points o entry=
1! E*0ri$c rs&lts= 4esults ta<e time% eort% and
investment! ?e obviously cannot start here!
#! C&lt&r c)a$+= 0ulture change ta<es time and the
experience o repeated results! ?e cannot start here either!
That only leavesT
F! C)a$+ 1)avior= 0an we simply agree one day to do
things dierentlyO 8es% we can% but it will not be easy! "t
ta<es a very deliberate% concerted eort to decide to do
things dierently! ?e cannot sustain a hard% conscious eort
orever either! (ventually we will revert to our old habits% unlessT our new behavior
produces reasonably ast results% which in turn drives a culture change! This culture
change will cause us to do things dierently on a permanent basis!
?e all <now that change isn;t easy% so how can we create the series o repeated
experiences that produce the culture change that drives the behavior and results that we wantO
?e must irst start with what we can control > our own behavior!
There is one more dimension o the model that " want to elaborate uponT the wheel!
?hy not .ust a circleO The wheel represents the orces at wor<! 7 large wheel at rest is diicult to
get rolling! 8ou have to put in a lot o energy to overcome the inertia and resistance that is
<eeping the wheel at rest! 2owever% once in motion% <eeping the wheel rolling is easy% we .ust
periodically have to add a little bit o energy! That is the Six Sigma cycle o change- it;s very
hard in the beginning to get things rolling% but once the wheel o change is in motion% it;s easy to
sustain! "n other words% Six Sigma becomes a sel9ulilling prophecy!
Six Sigma is the most efective methodology available for improving the performance of any organization by
minimizing the defects in its products or services. Every error committed, has a cost associated to it in form of losing
customers, redoing a task, replacing a part, waste time/material or losing efciency.
The Six Sigma methodology was frst endorsed at Motorola in the mid-1980s. The company was trying to devise a
methodology that could measure defects at a granular level than previous methods and thus help in reducing these defects.
This resulted in an astounding increase in the quality levels of several Motorola products, and the company received the
inaugural Malcolm Baldrige National Quality Award in 1988. Motorola shared the Six Sigma secret openly, and soon
various companies started reaping rewards. And by year 2003, total combined savings accumulated to over $100 billion.
Understanding the Sigma Scale: The Sigma scale is a universal measure of the performance of any business or
organization. Sigma () is a statistical term to represent standard deviation which is a measure of variation in a dataset.
Higher sigma score indicates better performance or more precise results. In other words, if the output is defective sixty-nine
percent of the time, it implies that the performance is One Sigma compliant. On the other hand if it is defective thirty-one
percent of the time, it means that the performance is demonstrating Two Sigma compliance.
Table: The Sigma Scale
Sigma
Percent
Defective
Defects per
Million
1 69% 691,462
2 31% 308,538
3 6.70% 66,807
4 0.62% 6,210
5 0.02% 233
6 0.00% 3.4
7 0.00% 0.019
As mentioned in the table above, Six Sigma implies almost perfect output resulting in only 3.4 defects per million
opportunities (DPMO).
DPMO: The term defect can be explained as the non conformities present in the output that falls beyond the satisfactory
customer limits. The number of defects present per million opportunities (DPMO) is used to determine as to which Sigma
scale a particularprocess corresponds to. Most of the organizations around the world deliver results in the Three to Four
Sigma band which implies that they are losing around a quarter of total revenue due to the presence of defects in their
organizations.
Application of Six Sigma: DMAIC and DFSS are the elementary methodologies that exist for two potential scenarios
DMAIC: To modify an existing process or the application of DMAIC: This methodology (DMAIC) is required to modify an
existing process and make it Six Sigma compliant, hence more efcient.
DMAIC refers to:
o Defne the goals for process improvement in coherence with the customers !eman! an! the
organi"ations strategies.
o Measure the current performance an! amass rele#ant !ata for future
o Analyze the current setting an! o$ser#e the relationship $etween %e& parameters an!
performance.
o Improve the process $ase! on the analysis to further optimi"e the process.
o Control the parameters $efore the& a'ect the outcome.
DFSS: To start a new process from scratch or the application of DFSS: When a new process is started, straight from
scratch, such that it is Six Sigma compliant, the DFSS or Design For Six Sigma methodology is incorporated. It is sometimes
considered as an ofshoot of Six Sigma while other times, it is considered as an entirely diferent methodology. DFSS
requires IDOV approach that refers to:
o Identify an! !e(ne the process goals in consistence with the customers !eman!s an! in!ustr&
stan!ar!s.
o Design inclu!es rec%oning all the possi$le solutions an! selecting the optimal solution.
o ptimize the performance $& the application of a!#ance! simulations an! statistical mo!eling.
o !alidate or #erif& the selecte! solution.
At times, DMAIC ends up in DFSS when the process under study requires a complete redesign to achieve the desired
standards.
Implementation of Six Sigma: Six Sigma professionalized the quality management roles. Six Sigma has adopted
martial arts ranking nomenclature to defne the hierarchy that covers all kinds of business functions. Six Sigma has
identifed certain roles for itsimplementation. These designations defne a promotion path.
o "#ecutive $eadership refers to top management inclu!ing the )*+. ,he& are the #isionaries
who authori"e other team mem$ers an! pro#i!e them with resources for process improvement.
o Champions or %uality $eaders implement an! integrate -i. -igma metho!olog& throughout
the organi"ation. ,he& are chosen from the upper management $& the *.ecuti#e /ea!ership. ,he& also
act as mentors to 0lac% 0elts.
o Master &lac' &elts, i!enti(e! $& )hampions, are e.pert coaches on -i. -igma. ,he& act as
gui!e 0lac% 0elts an! 1reen 0elts an! assist )hampions to implement -i. -igma an! integrate the
metho!olog& throughout the organi"ation inclu!ing all !epartments an! their respecti#e functions an!
processes.
o &lac' &elts operate un!er the gui!ance of 2aster 0lac% 0elts an! their tas% is to appl& -i.
-igma metho!olog& to #arious pro3ects speci(e!. ,heir primar& focus is the e.ecution of -i.
-igma pro(ect, as against to )hampions an! 2aster 0lac% 0elts who primaril& focus on i!entif&ing
functions an! goals for the -i. -igma pro(ect.
o )reen &elts wor% on -i. -igma implementation along with other (ob responsi$ilities unli%e
0lac% 0elts, 2aster 0lac% 0elts an! )hampions who !e#ote 100% of their time on -i. -igma e.ecution.
,he& are gui!e! $& 0lac% 0elts an! pro#i!e them support in achie#ing the !esire! results.
o *ello+ &elts are emplo&ees who are traine! in -i. -igma techni4ues, $ut ha#e not practicall&
applie! their %nowle!ge to a -i. -igma pro3ect.
1.5 Sigma Shift: It has been observed that the accuracy or efciency of any process erodes with time. In other words,
processes do not work as efciently in long term as they do in short term i.e. the quality or the Sigma level is likely drop over
a stretched period of time. Taking this drop in account, an empirical 1.5 Sigma shift is introduced in statistical calculations. If
a process is Six Sigma compliant in a short run is likely to deliver 4.5 Sigma level outcomes. Therefore, the popular 3.4
DPMO in reality corresponds to 4.5 Sigma level viz. 6 Sigma minus 1.5 Sigma.
Why is Six Sigma Used?
o ,he 4ualit& of the pro!uct an! the pro!ucti#it& of the compan& impro#e immensel&.
o ,he num$er of possi$le !efects per million opportunities re!uces immensel&. ,hus, the 4ualit& of
the pro!uct impro#es further.
o ,he result of an& process is !e(ne!, $ase! on collecti#e !ata an! facts rather than assumptions.
o ,he pro(t5le#el of the compan& increases immensel& an! there$& pro#i!es a growth in the
corporate sector.
o 6t calls for a more integrate! an! correlate! approach to sol#e the e.isting pro$lem.
o 7ather than a!opting the con#entional cost cutting metho!, it prefers remo#ing costs that gi#e no
#alue to the customers.
o ,he net pro!uction cost incurre! while manufacturing a pro!uct re!uces.
o 0& re!ucing the num$er of !efect, it pro#i!es the compan& a ra& of hope for higher e.pectations.
o ,he nee! an! e.pectations of the customers are met $& pro#i!ing them the same pro!uct with a
$etter 4ualit&.
o ,he internal un!erstan!ing $etween the !epartments increase, there$& the emplo&ees ten! to $e
more aware of the techni4ues an! strategies use! for sol#ing a particular pro$lem.
o ,here is a $etter prospect of (ob satisfaction for emplo&ees, $ecause of which, the internal
communication within the organi"ation increases.
o ,he pro!uction time spent while manufacturing a pro!uct !ecreases8 there$& the !eli#er& of the
ser#ice is fast.
o ,he mar%et #alue of the compan& impro#es.
The Other Side of Six Sigma: Even though the Six Sigma standard of 3.4 defects per million opportunities sounds
fantastic, this quality standard may not be optimal for some processes. A process concerning a human beings health may
require a higher quality standard. On the other hand, certain other operation might work well with lower Sigma levels. There
is no clear justifcation for choosing the number Six.
Because of this capriciousness, several Quality Managers do not rate Six Sigma methodology very highly.
Six Sigma steps are quite simple to be implemented but needs a lot of analysis. It is desirous to employ well qualifed Six
Sigma professionals having good deal of experience in the feld. There are numerous organizations that have followed the
stepwise process of Six Sigma and received genuine benefts in terms of quality and profts.
Six Sigma is not just another management strategy that is implemented to reap temporary profts from a business.
This is a complete set ofmanagement tools supported by applications that can bring about the best from a system and
also increase the efciency of the employees. If an organization is about to implement Six Sigma in their set up for the frst
time, they should seek suggestions from a good consultant who is already experienced and completely aware of the Six
Sigma steps. Six Sigma can prove to be extremely benefcial in terms of revenue and quality of services, only if it is
implemented in a systematic manner.
Application of Six Sigma in a company is a process, consisting of several steps that are explained below:
o Discovering the Scopes9 ,he (rst step towar!s implementing -i. -igma is !isco#ering all the
scopes of the process. ,he e.perience! -i. -igma consultants can easil& i!entif& if there is an& scope
a#aila$le in a particular !epartment of an organi"ation for implementing -i. -igma. ,he e#aluation
process shoul! $e e.ecute! thoroughl& in or!er to assess the possi$le outcome of -i. -igma in that
!epartment. 6f the scopes are wi!e an! the pro$a$le impact is goo! enough, &ou shoul! go ahea!
to plan a pro(ect for it.
o Decide9 ,he -i. -igma professionals can plan the pro3ects an! e.plain the possi$le $ene(ts of
the -i. -igma process $ut the& cannot ta%e the !ecisions as the po+er is alwa&s with the
management. :ence, this is #er& important that the management !eci!es an! appro#es
the pro(ect $efore going an& further with it. 6f the management is !etermine! to implement the
principles, thedeployment $ecomes much easier. -o, the secon! step is getting the appro#al an!
!ecision from the higher managements en!.
o rganize the ,argets9 +rgani"ing is one of the most important steps of -i. -igma. ,he -i.
-igma professionals shoul! $e aware of the (nancial targets which the& wish to achie#e. 6f the goal is
to impro#e the 4ualit& of ser#ice or correct the infrastructural !efects, the o$3ecti#es shoul! $e !e(ne!
clearl& an! %ept in front of the team mem$ers. ,he time frame that is e.pecte! to co#er the entire
pro3ect shoul! $e (.e! s%illfull& an! e.ecute! accor!ingl&. *!ucating the team mem$ers on the process
is also a part of organi"ing the resources.
o Initializing the -rocess9 ,he initiali"ation process for -i. -igma inclu!es se#eral tas%s. ;irst of
all, the resources shoul! $e collecte! loo%ing at the re4uirement of the pro3ect. <!e4uate num$er of
green an!blac' belt professionals shoul! $e hire! an! the training material shoul! $e a#aila$le for
!etaile! %nowle!ge. ,he cost sa#ing factor shoul! $e highlighte! an! the a#aila$le resources shoul! $e
e.ploite! full&. -elf5e.planator& presentations nee! to $e prepare! in or!er to communicate with the
emplo&ees of all le#els.
o Implementation of Si# Sigma9 ,his is the (nal step of -i. -igma. ,he pro3ects an! strategies
are (nall& incorporate! in the s&stem to achie#eimprovement from all aspects. ,he process
of implementation shoul! $e completel& un!er control of the lea!ing master blac' belt so that it can
$e stoppe! imme!iatel& when there is slightest chance of loss.
These are few steps of Six Sigma which can make the Six Sigma project a major success. The steps can be further altered
according to the requirements of the companies but the fundamental principles remain the same.
The Six Sigma strategy behind the execution of any process is based on understanding the consumer process and
thereby creating excellence in the workplace. It emphasizes mostly on minimizing the errors and thereby maximizing the
proft level of the company by improving the quality and productivity of the organization. The working strategy of the Six
Sigma process is to rely mainly on the statistical data, related to any problem and, as a matter of fact, fnd its solution.
Nowadays, the increase in the corporate waste and decrease in the market value of the companies have become a
common topic. Many suchcompanies are facing this problem because they do not know their customer well. Knowing the
needs and the demands of the customers is the frst and the foremost thing behind any organizations success. According to
Six Sigma, anything, which provides no value to the consumers, is a waste or defect. Six Sigma aims at reducing such
number of defects to less than 3.4 defects per million opportunities (DPMO). This ensures the success of any process in any
frm and thereby creates a path of good market value and a greater consumer satisfaction for the organization.
The Six Sigma strategy is a statistical measure of the efectiveness and theperformance of any process in any frm. Six
Sigma not only provides a company an increase in the proft level but also helps them in achieving customer satisfaction in
terms of quality of the product, on-time delivery of the product, the price value of the product etc. Six Sigma aims at
eradicating the cost that provide no good to the customers rather than adopting the conventional cost method, which may
lower the quality level of the fnal product. As a result of which a better quality product can be provided to the consumers
at a comparatively lower price. This, indeed, increases the market value and reputation of the organization and helps them to
gather more business.
Aim of the Six Sigma Strategy: In todays scenario, a methodology with a better strategy is very necessary for the
success of any process. The following are the few main points behind the formulation of a Six Sigma strategy for any
process:
o ,he -i. -igma strateg& aims at pro#i!ing a !efect5free pro!uct to the consumers, with a $etter
4ualit&. ,his is accomplishe! $& limiting the num$er of !efects to 3.4 !efects per million opportunities.
o -i. -igma process wor% un!er statistical control, measuring the input processes, which a'ect the
output of the process, an! aims at minimi"ing the pro!uction time to pro#i!e a on5time !eli#er&.
o ,he -i. -igma strateg& aims for ma.imi"ing the spee! an! accurac& !uring the pro!uction an!
thus aims to minimi"e the o#erhea! costs.
o ,he -i. -igma strateg& !eman!s for a complete co5operation from the professionals in#ol#e! in
an& -i. -igma process. ,his, in turn, increases the internal communication within an& organi"ation.
Six Sigma strategy for the execution of any process mainly involves all those factors which may afect its performance.
The Six Sigma strategy is based on an organized approach and the following business issues play the vital role behind
its formulation:
o -rocess Designing9 < pro!uction process, $ase! on the statistical calculation, is !esigne! in
such a manner that the process &iel!s a !efect5free pro!uct an! pro#i!es a consistent outcome from
the $eginning.
o Identifying the !ariables9 ,his in#ol#es the analysis an! measurement of all the input
#aria$les, which ma& a'ect the output of an& process.
o .easoning and Analysis9 ,he pro$lems, which ma& create !e#iation in the !esire! output, are
anal&"e!, $ase! on collecti#e !ata an! facts rather than assumptions.
o -rocess Improvement9 ,he strateg& focuses on impro#ing the process an! there$& ma.imi"ing
the 4ualit& of the pro!uct.
o Disciplined Ambience9 < more structure! an! !iscipline! approach shoul! $e pro#i!e! in or!er
to tac%le an& pro$lem.
o Internal Communication9 ,he strateg& !eman!s a goo! internal communication within the
organi"ation to preclu!e an& such pro$lem from occurring, which ma& hin!er the progress of an&
process. ,his also helps in getting more people in#ol#e! in (n!ing the solution for an& gi#en pro$lem
an! there$& sol#ing it with mutual co5operation.
o /no+ledge Communion9 ,his in#ol#es the learning an! sharing of new pro$lem sol#ing
techni4ues, which ma& spee! up the progress of an& process an! there$& &iel! 4uic% result.
o )oal Setting9 ,he organi"ation shoul! set short5term an! long5term goals for the process, with
respect to the 4ualit& le#el of the pro!uct, the !esire! pro(t margin an! the mar%et #alue of the
compan&. ,hese goals shoul! $e logicall& an! anal&ticall& achie#a$le as well as challenging. ,he (rm
shoul! alwa&s stri#e for the improvement. ,his ensures a consistent improvement in the 4ualit& of
the pro!uct as well as the mar%et #alue of the compan&.
o .eduction in the Cycle0,ime9 ,he process shoul! aim at re!ucing the time ta%en in
the manufacturing of an& pro!uct. ,his, in turn, will re!uce the o#erhea! cost incurre! !uring the
pro!uction an! woul!, there$&, increase the chances of its on5time !eli#er&.
o Application of DMAIC9 ,he constant application of the DMAIC methodology shoul! $e applie!
to the process, to achie#e the !esire! result as well as to increase the 4ualit& le#el of the pro!uct.
o Data0&ased Decision0Ma'ing9 ,his !eman!s the ma%ing of a !ecision, $ase! on !ata an! facts
rather than assumptions, to pro#i!e a consistent growth to the process in terms of progress. ,he
process shoul! alwa&s $e statisticall& anal&"e! an! new metho!s shoul! $e implemente! in or!er to
achie#e the !esire! goals of the process.
The various Six Sigma principles should be kept in mind while designing or formulating the Six Sigma strategy for any
process. The needs and the demands of the consumers should be kept in mind. Moreover, there should be no compromise
with the quality of the product; rather an organization should aim at constantly improving the quality level of the products.
This, in turn, would improve the market value of the company and would achieve consumer satisfaction as well as
the (ob satisfaction amongst the employees.
Si# Sigma DMAIC
DMAIC is an abbreviation, which stands for Design-Measure-Analyze-Implement-Verify. The Six
Sigma DMAIC methodology is aprocess improvement methodology, which aims at
reducing the number of possible defects in an organization, by letting theprocess operate at a 99.9997%
efciency level. The DMAIC methodology brings about melioration in the process of any frm and
thereby defnes its outcome.
DMAIC is a systematic, statistical execution of any process under a controlled plan. It signifes the
following fve, unifed stages:
o 6t in#ol#es the !e(ning of the process an! its re4uirements in terms ofquality,
consumer satisfaction, compan&s pro(t le#el, its mar%et #alue etc.
o 2easuring its success $ase! on its output.
o <nal&"ing the !i'erence in the current performance an! the re4uirement an!
there$& i!entif&ing the components responsi$le for it.
o +ne of the main stages of the =2<6) metho!olog& is the 6mpro#ement of the
process to era!icate the pro$lems, which are pro#i!ing resistance to the achie#ement
of the !esire! re4uirements.
o ,he last stage in#ol#es the controlling of the performance an! achie#ing the
!esire! re4uirements $& implementing a new e'ecti#e process un!er a controlle! plan.
In todays scenario, the business-sale going down has become a common topic. As a matter of fact,
the companies demand their employees for better performance. However, the eforts are fzzling out
and are reaching to no avail. History is replete with instances of the perspicacious tycoons who did not
falter when confronted with a problematic ambience. They rather preferred being prudent, enough to dwell
deep into the problem and thereby came out with a solution. The solution lies in the involvement of a
better methodology, promising more reliability and efciency. The Six Sigma DMAIC methodology
emerges as a lively solution which functions at a 99.9997% quality level, by confning the number of
possible defects to less than 3.4 defects per million, thus promising great success. The following
illustrates well the systematic execution of the DMAIC process:
1. Defne: This is the frst and the most important step of the Six Sigma DMAIC methodology which
calls for defning the process and its objectives. These objectives or the requirements could be in terms of
consumer satisfaction, market value of the company, proft level of the process, quality control of the
product etc. The main objective of this stage is to identify the problem, the requirements of the process
and the factors, which may provide resistance to its execution. The following are the main key factors of
this stage:
o =e(ne the nee!s an! the !eman!s of the consumers.
o 6!entif& the critical5to54ualit& >),?@ characteristics of the process.
o =e(ne !efect on the $utton.
o =e(ne a team to e.ecute the process. ,he team shoul! also ha#e a A)hampion.
o -tu!& the le#el of performance of the process.
o =e(ne the current cost of the !efect.
o +$tain the appro#al of the senior management oBcers for the e.ecution of the
process.
The most applicable tools of this stage are the Project Charter, Trend Chart, Pareto Chart and the
Process Flowchart.
2. Measure: This step involves the use of various statistical and technical measurements with accurate
metrics, to analyze the efectiveness of the existing process. This step helps the Six Sigma team
members to analyze the performance level of the existing process and its deviation from the actual
requirements. The following are the main key factors of this stage:
o 2easure the performance of the e.isting process.
o 6!entif& the performance re4uirements of the process with respect to its critical5to5
4ualit& >),?@ characteristics.
o )ollect the !ata an! i!entif& the inputs, which a'ect the outputs.
o 6!entif& the factors, which ma& cause errors in the measurement stage.
o Cerif& the e.istence of the pro$lem $ase! on measurements.
The most applicable tools of this stage are the Fishbone Diagram, Process Mapping. Cost and Efect
Matrix, preliminary Failure Mode and Efect Analysis (FMEA), and the Gauge Repeatability and
reproducibility (GR&R).
3. Analyze: This stage involves the comparison between the current performance of the existing
process and its requirements. This comparison shows the actual deviation of the existing process from its
expectation and the requirements. Once the deviation is measured the problem causing this deviation is
identifed. This is a stage where practical problems are converted into statistical problems and are dealt
with utmost care. The following are the key factors of this stage:
o 6!entif& the pro$lem causing the !e#iation in the outputs.
o < statistical approach towar!s the pro$lem shows the inputs that are creating the
#ariation in the outputs.
o -tu!& the changes in the inputs, which ma& a'ect the output.
o =raw a conclusion $ase! on the measurements.
The most applicable tools of this stage are the Five Whys, Tests for normality (Descriptive Statistics,
Histograms), Correlation/Regression Analysis, Analysis of Variances (A1!A), Failure Mode and
Efect Analysis (FMEA), and the Hypothesis Testing Methods.
4. Improve: This stage puts forward a solution to the problem being analyzed in the last stage, After
the analysis of the problem, the team fnds the solution for the existing problems and refnes the existing
process. The following are the key factors of this stage:
o 6!entif& the wa&s to era!icate the e.isting pro$lem.
o Cerif& the inputs that are creating the pro$lem an! are causing the #ariation in the
outputs.
o )ontrol the inputs that are creating the pro$lem.
o 2easure the amount of =D2+ !ecrease!.
o =esign the changes in the e.isting process to era!icate the e.isting pro$lem an!
get the appro#al of the management section for its implementation.
The most applicable tools of this stage are the Process Mapping, Process Capability Analysis (CPK),
and Design of Experiment (DOE).
5. Control: This is the last method of the Six Sigma DMAIC methodology and apparently, is the most
important also. It helps to ensure that the problems that are creating variations in the desired output are
rectifed. The new process is implemented under a controlled plan to achieve the desired results, The
following are the main key factors of this stage:
o Cerif& the long5term capa$ilit& of the implemente! process.
o 6mplement the new process un!er a controlle! plan to ensure that the pro$lems !o
not occur again.
o )ontinuall& monitor the process to control the 4ualit& le#el of the pro!uct.
o 2easure the performance of the new process un!er a controlle! plan an! !e(ne its
e'ecti#eness.
o <t the close of this stage the information is passe! to the process owner an! the
team responsi$le for the -i. -igma process. ,he team then !eci!es the ne.t stage.
The most applicable tools of this stage are the Control Plans, Operating Flowcharts with Control Points,
Statistical Process Control (SPC) Charts and the Check Sheets.
Lean and Lean Six Sigma are methodologies that companies apply to ALL aspects of business
(NOT just manufacturing and supply chain processes). Tangible improvements and benefits are
being realized in transactional service and other totally divergent business environments. The
fundamental basis for the success of Lean and Lean !i" !igma methods in all facets of an
organization is the ability to identify #aste reduce it and aggressively go for the elimination of non$
value added activities and improve response to that business% customer base #hether internal or
e"ternal.
&ublic !chedule $ Online 'ourse Lising $ !ee (rochure
Lean methods have been proven since the beginning of the industrial revolution. (usiness leaders
have been focused on driving performance and response to meet customer e"pectations #hile
reducing costs. )"amples include *enry +ord%s genesis of the automobile industry and the military%s
need to ta,e advantage of -.etroit%s/ abilities in 0orld 0ar 11 #here a (23 Liberator #as rolling of the
assembly line every 45 minutes. Lean methods #ere 6uantified and fined tuned during the 7849%s
and 59%s by Toyota and other for#ard thin,ing out of the bo" companies to the current available
Lean methods available to businesses. These include:
4! &rograms
Theory of 'onstraints
The ; 0astes
Toyota &roduction !ystems (T&!)
.emand +lo#
<ust in Time
=alue !tream >apping
Transactional >apping
T?'
@e$engineering
1n all cases the results e"pected remain the same:
+ocus on 'ustomer their e"pectations and #hat they perceive as value
A passion for 'ontinuous 1mprovement in the elimination of #aste
1dentification of #here an organization adds value and the identification of non$value activities to
enable the successful implementation of the future state vision
'reating the ability for products or activities (transactions) to flo# through a process map in
shortest amount of time possible
)stablishing disciplines to lin, 'ustomer .emand directly to processes transactions resource or
material.
0hat has changed recently is understanding #hich of these methods or combination of methods #ill
have the greatest impact in your business. !i"!igma.us Lean education and service programs have
been developed on a solid !i" !igma .>A1' foundation.
'ompanies #or,ing to implement Lean #ill normally grab onto one or t#o of the available Lean
methodologies and #ill see some short term benefits as in an e"ample of implementing a 4!
program or getting a team together to put together a =alue !tream >ap of the particular process
relationships or transaction flo#. (y just raising the visibility and focusing on an area companies #ill
immediately realize the lo# hanging and on the ground fruit #aiting to be harvested.
!i"!igma.us Lean methods are designed to yield benefits 6uic,ly by supporting the optimum
methodology matched to a company%s business objectives and needs #hile establishing a
sustainable process for ongoing improvement. Our methods are 6uantitative and bring to light
further areas of opportunity #here !i" !igma projects can be ta,en advantage of.
*o# do #e define the best Lean methods to applyA 0hat are steps in driving a Lean
transformationA *o# long #ill it ta,eA 0hat is the level of involvement of team membersA Are #e
getting the results defined in our objectivesA *o# do #e continue our progress and integrate !i"
!igma into our effortsA
!i"!igma.us has a proven education and services methodology that brings the tools and processes
of !i" !igma to Lean education and Lean implementation programs to drive results and
sustainability more 6uic,ly and #ith long term sustainability using 6uantifiable methods.
!i"!igma.us has developed a seamless process for supporting both Lean and Lean !igma
implementations across divergent business and governmental processes. 0e invite you attend one
of our informative Lean or Lean !igma #or,shops participate in our Lean >asters program or gain
an in depth understanding of the potential for improvement from our Lean assessment program or
participating in our Lean !i" !igma continuing education series.
Bnderstanding and comprehension are important first steps to#ards guaranteeing success in
implementing Lean and Lean !i" !igma programs. !i"!igma.us% Lean curriculum and continuing
Lean !i" !igma )ducation programs offer instruction geared to meeting the specific needs of the
participants to build the foundation for driving successful process improvement initiatives. )ducation
programs are available online on site and public.
+or more in depth information on Lean !i" !igma Training see the Lean +undamentals 'ourse
Objectives and 'ourse Agenda for details.
Assss,$t #or Si* Si+,a
?hen nominating 0hampions% conducting pro.ect selection wor<shops and selecting Blac< Belts% the organization must be aware
o any cultural and operational barriers that would prevent it rom reaching its goals! Thus% the need or a readiness assessment to
understand the positives and negatives in deploying Six Sigma! Two aspects o readiness need examination cultural and
operational!
C&lt&ral Assss,$t9 This type o assessment varies rom simple observation to a ormal survey o all employees! The goal o
the assessment is to identiy whether change will be accepted across the organization! 7nd i so% at what speed can the change be
implementedO 7lthough cultural assessment may be perceived as an easy process% it is more diicult than organizational
assessment!
"n a cultural assessment% one must answer the ollowing ,uestions=
2ow do senior leaders cascade important inormation throughout the organizationO
2ow are important decisions madeO
?ho ma<es the decisionsO
2ow ast are the decisions implementedO
2ow does the organization recognize successes and ailuresO
2ow does the organization handle ailuresO
+oes everyone in the irm understand the mission% vision and strategy o the irm as a wholeO
"s everyone in the irm aware o the critical customer% revenue and operating expense issues across the irmO
2ow does the irm set up corporate goalsO
2ow clear are these corporate goalsO
7re the corporate goals measurableO
O0ratio$al Assss,$t9 7n operational assessment measures the maturity o the processes% measurement systems and data
systems in an organization! The ,uestions that must be answered are=
2ow does the organization measure successO
+oes the organization measure the right thingsO
2ow oten does the organization measure these thingsO
+oes the organization have a ew metrics that all employees understand and useO
7re decisions based on data or assumptionsO
?ho owns each critical processO
?ho owns the dataO
?here is the dataO
"s data stored on spreadsheets on employee laptops or in a data warehouseO
2as the data been validatedO
7re the company;s reports written in simple% scientiic or inancial terms% or ree orm using uzzy languageO
7re there updated process maps o the most critical processesO
+o the executives <now what a process map isO
The answers to these and other cultural and operational ,uestions together with the success e,uation provide a good
understanding o whether an organization is ready to launch Six Sigma! But even more importantly% the success e,uation and the
readiness assessment will provide an organization with the <nowledge needed to build a tailored deployment plan that includes
the right elements and mitigates the ris< o ailure!
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