Six sigma

1. Introduction to Six Sigma2. Characteristics of Six Sigma3. Levels of Six Sigma Implementation4. Approaches to Six Sigma5. Similarities and differences between TQM’s and

Six Sigma6. Pros and Cons of implementing Six Sigma in organizations 7. Case Study

Companies who have successfully adopted ‘Six Sigma’strategies include:

Financial : bank of America, GE capital, HDFC, HSBC, Americanexpress

Hospitality : ITC hotels, GRT hotels, Apollo hospitals

Manufacturing : Motorola, GE plastic, Johnson and Johnson,Nokia, Microsoft, Ford, Wipro , Nestle, Samsung

Telecom : Bharti Cellular, Vodafone, Tata

IT : Wipro, Satyam, Accenture, Infosys, TCS, Birla

Six Sigma is a smarter way to manage a business or a department.Six Sigma puts the customer first and uses facts and data to drivebetter solution.

Six sigma efforts target three main areas :Improving customer satisfactionReducing cycle timeReducing defects

Six sigma is about making every area of the organization betterable to meet the changing needs customers, markets, andtechnologies- with benefits for employees, customers, andshareholders.

However Six Sigma originated from terminology associatedwith manufacturing, where six sigma process is one in which99.99966% of the products manufactured are statisticallyexpected to be free of defects (3.4 defects per million).

Areas of

application

Service

Purchase

IT

Administration

Production

Design

Quality

HRM

Six Sigma has evolved over time. It’s more than just a quality system like TQM or ISO.

The term “Six Sigma ” was coined by Bill Smith,an engineer with Motorola

Late 1970’s Motorola started experimenting withproblem solving through statistical analysis

1987 – Motorola officially launched itsSix Sigma program.

Motorola saved more than $15 billion in thefirst 10 years of its six sigma effort.

Bill Smith of Motorola

Six Sigma is Customer focused : Its almost an obsession to keepthe external customer needs in plain sight, driving theimprovement effort.

Six Sigma projects produce major returns on investment : Forexample in General Electricals, the Six sigma program resulted inthe following cost versus returns :In 1996, cost of $200 million and returns of $150million.In 1998, costs of $400 million returns of more than $1 billion.

Six Sigma changes how management operates : new approachesto thinking, planning and executing to achieve results. In a lot ofways, Six Sigma is about putting into practice the notions ofworking smarter, not harder.

1. Six Sigma Champion/Yellow Belt: Champions undergo five daysof training and are taught how to manage projects and act asadvisors to various project teams.

2. Green Belts: They undergo two weeks of training that includesproject-oriented tasks. They act as team members to the SixSigma project team. Their cooperation and involvement isnecessary for projects success.

3. Black belts: They receive four weeks of trainings and aredirectly involved in the implementation of Six Sigma Projects.They are the project leaders and go through in-depth trainingon Six Sigma approach and tools and work full time on theproject.

4. Master Black Belts: These are the people who conduct SixSigma Training and also have on the job training andexperience

DMAIC APPROACHTHIS IS ORGANIZATIONAL BASED

DMADV APPROACHTHIS IS BASED ON CUSTOMER NEEDS AND SATIFACTIONS

DMAIC APPROACH

This approach is undertaken to improve existing business process

CONTROL

DEFINE

MEASUREANALYSE

IMPROVE

1.Define high-level project goals and the current process.

2.Measure key aspects of the current process and collectrelevant data.

3.Analyze the data to verify cause-and-effect relationships.Determine what the relationships are, and attempt to ensure thatall factors have been considered.

4.Improve or optimize the process based upon data analysis usingvarious tools

5.Control to ensure that any deviations from target are correctedbefore they result in defects.

DEFINE

MEASURE

ANALYZE

DESIGN

VERIFY

This approach is undertaken when there is a need to create newdesign for product

Define design goals that are consistent with customer demands and theenterprise strategy.

Measure and identify CTQs (characteristics that are Critical To Quality),product capabilities, production process capability, and risks.

Analyze to develop and design alternatives, create a high-level design andevaluate design capability to select the best design.

Design details, optimize the design, and plan for design verification. Thisphase may require simulations.

Verify the design, set up pilot runs, implement the production process andhand it over to the process owners.

DMADV is also known as DFSS, an abbreviation of "Design For Six Sigma

Defines a business process.

Measuring current process

Identify root cause of therecurring PROBLEMS

Improvements made toreduce defects

Keep check on futureperformance

Define customer needs

Measure customer needs &specification

Analyze options to meetcustomer satisfaction.

Model is deigned to meetcustomer needs

Model put through simulationtests for verification

DMAIC DMADV

SIGMA LEVEL DEFECT RATE YIELD

1 691,500 dpmo 30.85%

2 308,770 dpmo 69.10000%

3 66,811 dpmo 99.33000%

4 6,210 dpmo 99.38000%

5 233 dpmo 99.97700%

6 3.44 dpmo 99.99966%

Six Sigma and TQM are both quality-improvement systemsand attempt to reduce defective products or poor service in anorganization, while improving customer satisfaction

Both approaches first and foremost attempt to identify thefundamental sources of defects and provide lasting cures thatwill permanently enhance quality.

TQM SIX SIGMATQM’s focus is generalimprovement by approachingthe problem collaboratively andculturally.

While TQM strives forincreased levels of performance

In TQM, the definition ofquality is the level at which aproduct/process meets the setcompany standards.

While TQM doesn’t require full-time dedication in supporting thequality management process

Six Sigma utilizes the efforts ofmany departments, it is more of astatistical approach, and isvery much data driven.

Six Sigma focuses on settingminimum standards and acceptancerequirements.

In Six Sigma, the definition is arelational one, stressing that qualityis reflected in the least number ofdefects, which must, as much aspossible, be eliminated.

Six Sigma approach requirescertified professionals in Six Sigmatechniques.

Differences between TQM and Six Sigma

Pros

Increase in customer loyalty

Increased bottom line

Shareholder Value

Customer Satisfaction

Increased employee satisfaction

Benefits to the supply chain

Cons

Applicability of Six Sigma is being argued among the 6 Sigmacritics.

Six Sigma gives emphasis on the rigidity of the process whichbasically contradicts the innovation and kills the creativity.

People argue that Six Sigma is a bit gimmickly and simply arebranding of the continuous improvement technique and toll.

Six Sigma implementation constantly requires skilled manforce.

Case Study

MUMBAI DABBAWALA

NMTBSA(Nutan Mumbai Tiffin Box Suppliers Association)

History : Started in 1890

Charitable trust : Registered in 1956

Avg. Literacy Rate : 8th Grade Schooling

Total area coverage : 60 kms

Employee Strength : 5000

Number of Tiffin’s : 2,00,000 Tiffin Boxes

i.e., 4,00,000 transactions every day

Error rate : 1 in 16 million transactions

Earnings : 8000 – 9000/month

ORGANIZATIONAL STRUCTURE

PRESIDENT

VICE PRESIDENT

GENERAL

SECRETARY

TREASURER

DIRECTORS

MUKADAM

MEMBERS(5000)

13 MEMBERS

How Do They Do It?

Executive committee

(5 members)

Teams of 20-25 headed

by a Group Leader

Individual Dabbawala

Workload = 30 tiffin’s

Operations

10:30 – 11:20 am

This time period is actually the journey time. The dabbawalas load the wooden crates filled with tiffin’s onto the luggage or goods compartment in the train. Generally they choose to occupy the last compartment of the train.

11:20 am – 12:30 pm

At this stage, the unloading takes place at the destination station.

Re-arrangement of tiffins takes place as per the destination area and destination building.

1:15 – 2:00 pm

Here on begins the collection process where the dabbawalas have to pick up the tiffin boxes from the offices where they had delivered almost an hour back.

RETURN JOURNEY :

2:OO – 2:30 pm

The group members meet for the segregation as per the destination suburb.

2:45 – 3:30 pm

The return journey by train where the group finally meets up after the day’s routine of dispatching and collecting from various destination offices.

Usually, since it is more of a pleasant journey compared to the earlier part of the day, the dabbawalas lighten up the moment with merry making, joking around and singing.

3:30 – 4:00 pm

This is the stage where the final sorting and dispatch takes place. The group meets up at the origin station and they finally sort out the tiffins as per the origin area.

CODING

VLP :Vile Parle(suburb in Mumbai)

9E12 :Code for Dabbawalas at destination

E : Express Towers(Bldg. Name)

12 :Floor No.

E :Code for Dabbawalas

at Residential station. 3 :Code for Destination

station(Eg : Nariman point)

Some Achievements

Six Sigma Performance (99.999999)

World Record in “Best TIME Management”

Name in “GUINESS BOOK Of World Records”

The ROYAL Visit :

Recently, the dabbawalas had royal company at Church gate station, Mumbai. The Prince of Wales (Prince Charles) himself had visited them when he came down to Mumbai.

Sir Richard Branson, Chairman, Virgin Atlantic Airways, meeting the Mumbai’s famed ‘Dabbawalas’ at their nodal point, the Churchgate Railway Station in South Mumbai, on April 1st, 2005.

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