six sigma

A SEMINAR REPORT ON :

PREPARED BY :

GUIDED BY:

MECHANICAL ENGINEERING DEPARTMENT.

1

ABSTRACT

Six Sigma (6 ) is a business-driven, multi-faceted approach to process

improvement, reduced costs, and increased profits. With a fundamental principle to improve

customer satisfaction by reducing defects, its ultimate performance target is virtually defect-

free processes and products (3.4 or fewer defective parts per million (ppm)). The Six Sigma

methodology, consisting of the steps "Define - Measure - Analyze - Improve - Control," is

the roadmap to achieving this goal. Within this improvement framework, it is the

responsibility of the improvement team to identify the process, the definition of defect, and

the corresponding measurements. This degree of flexibility enables the Six Sigma method,

along with its toolkit, to easily integrate with existing models of software process

implementation.

Six Sigma originated at Motorola in the early 1980s in response to a CEO-

driven challenge to achieve tenfold reduction in product-failure levels in five years. Meeting

this challenge required swift and accurate root-cause analysis and correction. In the mid-

1990s, Motorola divulged the details of their quality improvement framework, which has

since been adopted by several large manufacturing companies.

2

List of Figures.

Figure .1 – Six Sigma Defined ….8

Figure .2 - Six Sigma Organizational Architecture. ….10

List of Graph.

Graph .1 - Introducing Six Sigma. ….6

Table 1: Sigma Capabilities. ….8Table

2. DMAIC Steps.

….9INDEX Introducing Six Sigma.

….6

Six Sigma Defined ….8

Six Sigma Organizational Architecture. ….10

Six Sigma Training Levels.

Benefits of Six Sigma.   ….12

The Six Steps To Six Sigma Using. ….14

Motorola's Six Sigma Program. ….16

Six Sigma and City Government. ….17

3

Costs and Limitations. ….18

Alternatives. ….19

And the Quality Winner Is…? ….20

References and Information Sources. ….21

Introducing Six Sigma.

Six Sigma is a

business improvement

concept that focuses

on meeting the needs

of customers and

bottom line benefit to

your organisation. The

goal is to provide

defect-free business

processes with

customer satisfaction

and improvement

being the driving

forces.

4

Graph .1

Six Sigma was established in 1987 through the Motorola Six Sigma quality program. The

program gained publicity when Motorola won the Malcolm Baldrige quality prize in the USA

and further development of the concept took place in the early 1990’s with companies like

General Electric, ABB, Honeywell and Allied Signal. Each of these organisations has boasted

significant reductions in costs.

Sigma is a character of the Greek alphabet that is used in mathematical statistics to define

standard deviation. The concept of standard deviation relates to how tightly all the various

outputs of a process are clustered around the mean in a set of data.

In statistical terms, Six Sigma means that if there were 1 million opportunities for a defect to

occur, there would only be 3.4 defects. Therefore, defects or problems in the processes have

been removed to the point where the quality of the output is near perfect. Six Sigma is seen as

the ultimate goal in achieving near perfect processes through continual improvement.

Six Sigma is undertaken through the development and management of projects, led by

improvement specialists (Green Belts and Black Belts). Each person is given key

responsibilities for analysing information that will have an impact on improving processes

and customer satisfaction.

The most common tool used for Six Sigma improvement is the Define-Measure-Analyse-

Improve-Control (D-M-A-I-C) cycle. This approach focuses on ensuring that the

improvement is clearly defined and measured, through a data-driven and disciplined

approach. Data is analysed to identify problems and the improvement is consolidated through

process controls.

5

Six Sigma Defined .

Six Sigma is a data-driven, methodical program

of continuous and breakthrough improvement

focused on customers and their critical

requirements. Sigma refers to the Greek symbol

(s) that represents the amount of variation in a

process. The lower the variation in a process, the

fewer defective parts or service transactions are

produced, and the higher the Sigma number. The

ultimate goal is to eliminate defects and errors

and the costs associated with poor quality. After

defining which performance measures represent Critical to Customer (CTC) requirements,

data are collected on the number of defects and then translated into a sigma number. A sigma

of 6 translates to 3.4 defects per million opportunities. (See Table 1.) It is common to find 3

to 4 sigma levels in many manufacturing processes, and 2 or 3 sigma in transactional

businesses. Moving from 3 to 4 sigma could be classified as continuous improvement. The

breakthroughs occur when a process is improved to the 6 sigma level, almost perfect quality.

For example, U.S. daily mail delivery at the 4 sigma level would result in the loss of 20,000

6

Figure .1

pieces of mail each hour. If mail delivery were at the 6 sigma level, the result would be the

loss of seven pieces of mail each hour.

Table 1: Sigma Capabilities.

Б CapabilityDefects per Million

Opportunities (DPMO)Yield (no defects)

2 308,537 69.1%

3 66,807 93.3%

4 6,210 99.4%

5 233 99.97%

6 3.4 99.9996%

To ensure that the process works, a series of steps is undertaken in every Six Sigma

project: Define, Measure, Analyze, Improve and Control, commonly referred to as DMAIC.

(See Table 2.) Six Sigma requires training of key personnel involved in the projects and

oversight management of the program. Training activities have evolved to a set of generally

accepted levels known as Yellow Belts, Green Belts, Black Belts, Master Black Belts and

Champions, defined later, who all contribute increasingly complex levels of capability in Six

Sigma process and management

Table 2. DMAIC Steps.

DEFINE Determines the scope and purpose of the project and

includes a project charter, a process map of the problem

to be investigated and analysis to determine the voice of

the customer (VOC), resulting I critical to quality

7

variables,or CTQ’s (sometimes CTC, critical to

customers)

MEASURE The collection of information on the current situation.

Base line data on defects and possible causes are

collected and plotted, and sigma capability levels are

calculated

ANALYZE Determines the root causes of defects and explore and

organize potential causes.

IMPROVE The development of solution that are implemented to

remove the root causes and then measured and evaluated

for desired result.

CONTROL Standardizes the improvement process to maintain the

gains. The new standard practices are documented, and

performance is monitored

Six Sigma Organizational Architecture.Six Sigma is a quality methodology

that can produce significant benefit to businesses and

organizations. Not much text, however, has been

written about the structure needed to successfully

implement Six Sigma quality within your business or

organization. This article will focus on roles and

responsibilities, as well as required rewards and

recognition for a successful Six Sigma quality

program.Six Sigma Training Levels.

Once committed to Six Sigma methodology, learning

can be organized by degree of employee involvement:

8

Figure .2

Yellow Belt

Green Belt

Black Belt

Master Black Belt

Champion

Yellow Belt is a relatively new level, not yet widely accepted. A three- to five-day quick

overview gives participants a basic understanding of the Six Sigma methodology, including

DMAIC and simple statistical methods. It is often done on-site, given the large number of

employees who can participate. Many organizations have gone directly to Green Belt training

for all those working on projects. Other approaches may include one-day overviews delivered

on-site for upward of $585 per person, followed by Green Belt training.

Green Belt is the role of project participant. Training is typically two weeks, separated by

about a month so that the learner can participate in a Six Sigma project. Training consists of

the application of DMAIC, project planning, process analysis and statistical analysis.

Certification as a Green Belt requires work on a project with a reasonable bottom-line

improvement, e.g., $75,000 as quoted by one training supplier. A typical program could cost

$5,000 if accessed though open enrollment, not including travel and accommodations. This

training is more often done on-site to accrue substantial savings per participant. Some

organizations have used successful Green Belts as project leaders.

Black Belt plays the role of project leader and sometimes as coach for a number of projects.

Considered the key change agent, the Black Belt must be technically oriented, a master of the

advanced tools and a project leader. Training is delivered over four weeks separated so that

the learner can lead a Six Sigma project. Training consists of advanced statistical methods,

project leadership and advanced Six Sigma methods. Certification as a Black Belt requires

leading a project with a higher bottom-line improvement, possibly $150,000. A typical

program could cost upward of $20,000 if done as an open enrollment, often the preferred

training since an organization would need only about one Black Belt per 50 employees.

Master Black Belt has the role of senior leader, manager of Black Belts, internal consultant

and in-house trainer. Training lasts four weeks at minimum, often more depending on

additional content. The weeks are separated so that the learner can lead a Six Sigma project.

9

Training consists of advanced statistical methods, project leadership, Six Sigma methods,

training capabilities and leadership and communication skills. Certification as a Master Black

Belt requires work on three successful projects as a Black Belt. A typical program could cost

more than $40,000. Open enrollment is the preferred delivery since an organization would

only need one per major business site or unit.

The Champion role is the senior management leader of the Six Sigma implementation.

Training of three to four days includes the basics of Six Sigma and is designed to prepare the

Champion to give leadership to the Six Sigma team. A typical program could cost upward of

$3,000. Open enrollment is the preferred method since an organization would only need one

per major business site or unit.

The Executive Overview is offered to leaders and managers who should gain an

understanding of “why” and “how” before embarking on a Six Sigma implementation.

Training is completed in one day, typically at a cost of $350 per person. Open enrollment,

often in major cities, and on-site delivery are available.

Master Black Belt Tom Riley, DuPont’s Global Services Business, shared some learning

from the enterprise-wide Six Sigma training effort, which boasts great success: “Don’t start if

you are not committed! Pick your best people to be Black Belts, Master Black Belts and

Champions. Don’t let statistical purists run the process, and be sure to reward and recognize

Black Belts who drive culture change.”

Benefits of Six Sigma.  

There are numerous benefits of six sigma as a way to address  issues and problems. Among

the benefits of six sigma is the decrease in defects that are allowed to reach the customer. 

You can get some sense of the benefits of six sigma by reviewing some six sigma projects.

Other benefits of six sigma include:

Focus on customers.

Improved customer loyalty.

Reduced cycle time.

Less waste.

10

Data based decisions.

Time management.

Sustained gains and improvements.

Systematic problem solving.

Employee motivation.

Data analysis before decision making.

Faster to market.

Team building.

Improved customer relations.

Assure strategic planning..

Reductions of incidents.

Measure value according to the customer.

Better safety performance.

Understanding of processes.

Effective supply chain management.

Design and redesign products/services.

Knowledge of competition, competitors .

Develop leadership skills.

Breakdown barriers between departments and functions.

Management training.

Improve presentation skills.

Integration of products, services and distribution.

Use of standard operating procedures.

Better decision making.

Improving project management skills.

Sustained improvements.

Alignment with strategy vision, and values.

Increased margins.

Greater market share.

Supervisor training.

Lower costs to provide goods and services.

Fewer customer complaint

11

The Six Steps To Six Sigma Using.

Step #1 - Identify the product you create or the service you provide

In other words ... WHAT DO YOU DO?

Step #2 - Identify the Customer(s) for your product or service, and determine what

they consider important i.e. Customer Requirements

In other words ... WHO USES YOUR PRODUCT AND SERVICES?

Step #3 - Identify your needs (to provide product/service so that it satisfies the

Customer)

In other words ... WHAT DO YOU NEED TO DO YOUR WORK?

Step #4 - Define the process for doing your work

In other words ... HOW DO YOU DO YOUR WORK?

12

Step #5 - Mistake-proof the process and eliminate wasted efforts using...

In other words ... HOW CAN YOU DO YOUR WORK BETTER?

Step #6 - Ensure continuous improvement by measuring, analyzing and controlling

the improved process using DAMIC – (Define, Measure,Analyze,Improve,Control)

In other words ... HOW PERFECTLY ARE YOU DOING YOUR CUSTOMER-FOCUSED

WORK?

Step 6:

Ensure continuous improvement by measuring, analyzing and controlling the improved

process from Step #5

I was on board at Motorola when they conceived the 6 sigma concepts, (1985), and actually

wrote the very first six sigma software. I believe the most useful part is the concept of Six

Sigma is design margins. I worked directly with the late Bill Smith and others to develop

software to meet Motorola's Six Sigma Concepts.

13

Motorola's Six Sigma Program.

In 1988, Motorola Corp. became one of the first companies to receive the Malcolm Baldrige

National Quality Award. The award strives to identify those  excellent firms that are worthy

role models for other businesses. One of Motorola's innovations that attracted a great deal of

attention was its Six Sigma program. Six Sigma is, basically, a process quality goal. As such,

it falls into the category of a process capability (Cp) technique.

The traditional quality paradigm defined a process as capable if the process's natural spread,

plus and minus three sigma, was less than the engineering tolerance. Under the assumption of

normality, this translates to a process yield of 99.73 percent. A later refinement considered

the process location as well as its spread (Cpk) and tightened the minimum acceptable so that

the process was at least four sigma from the nearest engineering requirement. Motorola's Six

Sigma asks that processes operate such that the nearest engineering requirement is at least

plus or minus six sigma from the process mean.

Motorola's Six Sigma program also applies to attribute data. This is accomplished by

converting the Six Sigma requirement to equivalent conformance levels (see Figure 1).

One of Motorola's most significant contributions was to change the discussion of quality from

one where quality levels were measured in percentages (parts per hundred) to a discussion of

parts per million or even parts per billion. Motorola correctly pointed out that modern

technology was so complex that old ideas about acceptable quality levels were no longer

acceptable.

14

One puzzling aspect of the "official" Six Sigma literature is that it states that a process

operating at Six Sigma levels will produce 3.4 parts-per-million nonconformances. However,

if a normal distribution table is consulted (very few go out to six sigma), one finds that the

expected nonconformances are 0.002 parts per million (two parts per billion). The difference

occurs because Motorola presumes that the process mean can drift 1.5 sigma in either

direction. The area of a normal distribution beyond 4.5 sigma from the mean is indeed 3.4

parts per million. Because control charts will easily detect any process shift of this magnitude

in a single sample, the 3.4 parts per million represents a very conservative upper bound on the

nonconformance rate.

Six Sigma and City Government.

Fort Wayne has implemented Six Sigma to improve customer service and increase the

effectiveness of city government. Data based decision-making and empowerment of

employees are key components to the success of the program.

Top companies have produced outstanding results with Six Sigma. Motorola, General

Electric and Allied Signal dramatically cut costs, increased profits and improved

customer service by using this system.

Six Sigma is new to City government. Fort Wayne may be the first City in the country

to implement Six Sigma. Mayor Richard wanted to capitalize on the many benefits it

could bring to Fort Wayne government.

The use of Six Sigma demonstrates the city’s commitment to innovation and

continuous improvement. Reduction of variation and defects within a process is the

goal.

Six Sigma is a disciplined approach to problem solving using data, statistical analysis

and a diverse team of employees knowledgeable about the process or service to be

improved. Teamwork is crucial to the success of each Six Sigma project.

Mayor Richard’s vision to bring a high powered private sector program to

government has not only enhanced services for Fort Wayne citizens, but has also

created a culture of renewed enthusiasm among employees to do their jobs better.

15

Costs and Limitations.

Institutionalizing Six Sigma into the fabric of a corporate culture can require significant

investment in training and infrastructure. There are typically three different levels of

expertise cited by companies: Green Belt, Black Belt Practitioner, Master Black Belt. Each

level has increasingly greater mastery of the skill set. Roles and responsibilities also grow

from each level to the next, with Black Belt Practitioners often in team/project leadership

roles and Master Black Belts often in mentoring/teaching roles. The infrastructure needed to

support the Six Sigma environment varies. Some companies organize their trained

Green/Black Belts into a central support organization. Others deploy Green/Black Belts into

organizations based on project needs and rely on communities of practice to maintain

cohesion.

Alternatives.

In past years, there have been many instances and evolutions of quality improvement

programs. Scrutiny of the programs will show much similarity and also clear distinctions

between such programs and Six Sigma. Similarities include common tools and methods,

concepts of continuous improvement, and even analogous steps in the improvement

framework. Differences have been articulated as follows:

16

Six Sigma speaks the language of business. It specifically addresses the concept of

making the business as profitable as possible.

In Six Sigma, quality is not pursued independently from business goals. Time and

resources are not spent improving something that is not a lever for improving

customer satisfaction.

Six Sigma focuses on achieving tangible results.

Six Sigma does not include specific integration of ISO900 or Malcolm Baldridge

National Quality Award criteria.

Six Sigma uses an infrastructure of highly trained employees from many sectors of

the company (not just the Quality Department). These employees are typically viewed

as internal change agents.

Six Sigma raises the expectation from 3-sigma performance to 6-sigma. Yet, it does

not promote "Zero Defects" which many people dismiss as "impossible."

17

And the Quality Winner Is…?

The implementation of Six Sigma is no trivial matter, involving the commitment of

training expenditures and participation of all employees. Enterprise-wide success with Six

Sigma will take a concerted effort by the CLO to ensure that the proper foundation is in

place and that training and learning funds are wisely invested. Organizations that have

remained committed to this journey provide strong testimony that Six Sigma is worth the

effort!

18

References and Information Sources.

What Is Six Sigma? (Paperback)

by Pete Pande, Larry Holpp

www.bmgi.com .

SixSigmaTutorial.com

ovitztaylorgates.com

The Six Sigma Way: How GE, Motorola, and Other Top Companies are Honing Their

Performance by Peter S. Pande et al

Six Sigma for Dummies by Stephen R. Covey

Six Sigma for Everyone by George Eckes

The Six Sigma Handbook: The Complete Guide for Greenbelts, Blackbelts, and

Managers at All Levels, Revised and Expanded Edition by Thomas Pyzdek

What is Lean Six Sigma by Michael L. George

Leaning Into Six Sigma ByBarbara Wheat

19