SIX SIGMA FUNDAMENTALS SYNOPSIS: Six Sigma at many organizations simply means a measure of quality that strives for

near perfection. Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects (driving towards six standard deviations between the mean and the nearest specification limit) in any process -- from manufacturing to transactional and from product to service. The statistical representation of Six Sigma describes quantitatively how a process is performing. To achieve Six Sigma, a process must not produce more than 3.4 defects per million opportunities. A Six Sigma defect is defined as anything outside of customer specifications. A Six Sigma opportunity is then the total quantity of chances for a defect. The fundamental objective of the Six Sigma methodologies is the implementation of a measurement-based strategy that focuses on process improvement and variation reduction through the application of Six Sigma improvement projects. This is accomplished through the use of two Six Sigma sub-methodologies: DMAIC and DMADV. The Six Sigma DMAIC process (Define, Measure, Analyze, Improve, Control) is an improvement system for existing processes falling below specification and looking for incremental improvement. The Six Sigma DMADV process (Define, Measure, Analyze, Design, Verify) is an improvement system used to develop new processes or products at Six Sigma quality levels. It can also be employed if a current process requires more than just incremental improvement. Both Six Sigma processes are executed by Six Sigma Green Belts and Six Sigma Black Belts, and are overseen by Six Sigma Master Black Belts. According to the Six Sigma Academy, Black Belts save companies approximately $230,000 per project and can complete four to 6 projects per year. General Electric, one of the most successful companies implementing Six Sigma, has estimated benefits on the order of $10 billion during the first five years of implementation. GE first began Six Sigma in 1995 after Motorola and Allied Signal blazed the Six Sigma trail. Since then, thousands of companies around the world have discovered the far reaching benefits of Six Sigma This paper discus in details about deployment of six sigma methodology.

INTRODUCTION
Today, the world in which we compete is far different from what we have previously experienced. Competition is stronger than ever, customers have more choices and are demanding higher quality and faster delivery and profit margins are shrinking across our industry. commitments to shareholders, customers, and ourselves. To thrive and We need to effectively compete in this kind of environment and deliver on our explore new ways to improve our performance. There has never been a better time to develop a strategy that will widen the gap between a company and its competitors to meet customers expectations. That strategy is Six sigma. Sigma is a term used in statistics to represent standard deviation, an indicator of degree of variation in a set of measurements or a process. Six sigma is a statistical concept that measures a process in terms of defects at the six sigma level, there are only 3.4 defects per million opportunities. Six sigma is also a philosophy of managing that focus on eliminating defects through practices that emphasize understanding, measuring, and improving processes. TQM is a management approach that focuses on the organization as a system, with an emphasis on teams, processes, statistics, continuous improvement, and delivering products and services that meet and exceed customer expectations. Six sigma is disciplined extension of TQM. Six sigma Quality programs are valuable in that they can create quality perspective and culture. But six sigma fixes identifiable, chronic problems that directly impact your bottom-line. Six sigma projects are selected to reduce or eliminate waste, which translates into real money.

SIX SIGMA TOOLS

The overall Six sigma methodology is implemented by using a specific set of statistical tools throughout each phase. These tools are the keys to unlocking the information that will yield the answers you need to improve performance. 1. BASIC STATISTICS : Mean, Mode, Median 2. GRAPHICAL ANALYSIS: Paroto charts, Control charts, Histograms 3. BRAIN STROMING 4. CAUSE AND EFFECT DIAGRAM

THE REQUIREMENTS OF SIX SIGMA Management Team Buy-In and Support Education and Training Resource Committment Link to Compensation Management Team Buy-In and Support If executive team is not fully supportive and proactive in establishing your Six Sigma Quality initiative, you will be wasting everyone's time. As with any successful initiative implementation, everyone's actions need to be tied to the initiative. A useful exercise in determining buy-in is to list out all the individuals of the management team on a piece of paper. Then assign a positive, neutral or negative to each person signifying what you believe to be their support for the initiative. Your job, before beginning the implementation, is to move every single person to at least a neutral position, if not positive. Education can help with this goal. Education and Training Many educational programs currently exist; most provided by consulting companies. A list of the most reputable consultants can be found in the Six Sigma Consultants category of the iSixSigma library. What training is necessary? Well, it depends on who is getting trained. Here's a snapshot table identifying the major groups of individuals, the suggested trtion $12,000-$50,000 4 weeks delivered over a period of 2-6 months All Employees

Six Sigma * * What To Expect * Simple Case Study and Exercise

Going

Overview Benefits Forward

Variable, depending on if taught in-house or if consultant (approximately $2,0s. A Six Sigma defect is defined as anything outside of customer specifications. A Six Sigma opportunity is then the total quantity of chances for a defect. The fundamental objective of the Six Sigma methodologies is the implementation of a measurement-ba be assigned to your Six Sigma efforts almost 100%; 50% application yields less than a 50% result. In addition to BBs and MBBs, you should be ready to assign 5-15% of key employees' time to specific projects.

Link

to

Compensation

We all work and perform responsibilities for a paycheck, right? Just as you expect your factory to produce Y widgets per hour and your bank to process Z deposits per day, you should expect projects to be contributed to and successfully completed in a prescribed time period. And employees executing well should be compensated well. The quickest way to initiative success is to results to the business bottom line create performance goals, and employees appropriately. "http://www.isixsigma.com/ce/incentives/" compensate

SIX SIGMA METHODOLOGIES:

The fundamental objective of the Six Sigma methodologies is the implementation of a measurement-based strategy that focuses on process improvement and variation reduction through the application of Six Sigma improvement projects. This is accomplished through the use of two Six Sigma sub-methodologies: DMAIC and DMADV. TheSix Sigma DMAIC process (Define, Measure, Analyze, Improve, Control) is an improvement system for existing processes falling below specification and looking for incremental improvement. The Six Sigma DMADV process (Define, Measure, Analyze, Design, Verify) is an improvement system used to develop new processes or products at Six Sigma quality levels. It can also be employed if a current process requires more than just incremental improvement. The Similarities of DMAIC and DMADV

Let's first look at the DMAIC and DMADV methodologies and talk about how they're alike. DMAIC and DMADV are both:

Six Sigma methodologies used to drive defects to less than 3.4 per million opportunities.

Data intensive solution approaches. Intuition has no place in Six Sigma -only cold, hard facts.

The

Implemented by Green Belts, Black Belts and Master Black Belts. Ways to help meet the business/financial bottom-line numbers. Implemented with the support of a champion and process owner.
Differences of DMAIC and DMADV

DMAIC and DMADV sound very similar, don't they? The acronyms even share the first three letters. But that's about where the similarities stop.

DMAIC

Define Measure Analyze Improve Control

Define the project goals and customer (internal and external) deliverables

Measure

the

process

to

determine

current

performance

Analyze and determine the root cause(s) of the defects

Improve the process by eliminating defects Control future process performance Use DMAIC

When

To

The DMAIC methodology, instead of the DMADV methodology, should be used when a product or process is in existence at your company but is not meeting customer specification or is not performing adequately. DMADV Define Measure Analyze Design Verify

Define the project goals and customer (internal and external) deliverables Measure and determine customer needs and specifications Analyze the process options to meet the customer needs

Design (detailed) the process to meet the customer needs

Verify the design performance and ability to meet customer needs

When

To

Use

DMADV

The DMADV methodology, instead of the DMAIC methodology, should be used when:

A product or process is not in existence at your company and one needs to be developed

The existing product or process exists and has been optimized (using either DMAIC or not) and still doesn't meet the level of customer specification or six sigma level

SIX SIGMA ORGANISATION

Roles and Responsibilities Quality Leader/Manager (QL/QM) - The quality leader's responsibility is to represent the needs of the customer and to improve the operational effectiveness of the organization. The Quality function is typically separated from the manufacturing or transactional processing functions in order to maintain impartiality. The quality manager sits on the CEO/President's staff, and has equal authority to all other direct reports. Master Black Belt (MBB) - Master Black Belts are typically assigned to a specific area or function of a business or organization. It may be a functional area such as human resources or legal, or process specific area such as billing or tube rolling. MBBs work with the owners of the process to ensure that quality objectives and targets are set, plans are determined, progress is

tracked, and education is provided. In the best Six Sigma organizations, process owners and MBBs work very closely and share information daily. Process Owner (PO) - Process owners are exactly as the name sounds they are the responsible individuals for a specific process. For instance, in the legal department there is usually one person in charge -- maybe the VP of Legal -- that's the process owner. There may be a chief marketing officer for your business -- that's the process owner for marketing. Depending on the size of your business and core activities, you may have process owners at lower levels of your organizational structure. If you are a credit card company with processes around billing, accounts receivable, audit, billing fraud, etc., you wouldn't just have the process owner be the chief financial officer, you would want to go much deeper into the organization where the work is being accomplished and you can make a big difference. Black Belt (BB) - Black Belts are the heart and soul of the Six Sigma quality initiative. Their main purpose is to lead quality projects and work full time until they are complete. Black Belts can typically complete four to six projects per year with savings of approximately $230,000 per project (see earlier reference). Black Belts also coach Green Belts on their projects, and while coaching may seem innocuous, it can require a significant amount of time and energy. Green Belt (GB) - Green Belts are employees trained in Six Sigma who spend a portion of their time completing projects, but maintain their regular work role and responsibilities. Depending on their workload, they can spend anywhere from 10% to 50% of their time on their project(s). As your Six Sigma quality program evolves, employees will begin to include the Six

Sigma methodology in their daily activities and it will no longer become a percentage of their time -- it will be the way their work is accomplished 100% of the time.

SIX SIGMA DEPLOYMENTS All Six Sigma proponents agree to the fact that the key to Six Sigma improvement success is the building up of an effective infrastructure. An effective infrastructure lays the foundation for the success of the organization in its implementation of Six Sigma. It is a known fact today that the success of Six Sigma lays on the projects selected and their link to the strategy of their organization. There have been enough publications on the selection of projects and the filters to be used for the prioritization of projects, however there are not enough details available on the building the key infrastructure for the deployment of Six Sigma.

When we discuss the building up of an implementation structure what we are embarking on is a project in itself, which follows the DMAIC (Define, Measure, Analyze, Improve and Control) methodology: D: Define the Strategic Direction of the organization M: Set Measures for the strategic objectives of the organization A: On a continual basis collect data on the measures set and analyze using Six Sigma tools and techniques I: Identify the opportunities for improvement and convert them to Six Sigma projects for improvement C: Set up a management control action of continuous reviews on the improvements made on the Six Sigma Projects

The objectives of the Define and Measure phase of this project are defined as below: Building up a set of metrics for the organization that give definition to the organizations Vision Metrics that are integrated with the Strategic direction and objectives of the organization Metrics that align people and work with their strategic objectives Metrics that serve as effective means of communication for the organization both horizontally and vertically. Metrics that provide insight needed for making decisions, setting direction and correcting course. Metrics which will serve as a continuous source for identifying gaps in the organization and plugging them with Six Sigma Projects The problem most organizations face in the phases of Define and Measure is how to build such an organizational dashboard, which will help achieve the objectives cited above.

First Step The first step an organization needs to embark on is conducting a selfassessment based on proven assessment models like the Malcolm Baldrige which will help the organization in understanding its "as is" state more clearly and help identify the various opportunities for improvement. The organizations could use the checklist type of approach in conjunction with

interviews for identifying the gaps in Approach-Deployment-Results. Once the assessment of the organization is completed the findings need to be shared with the top management and the employees. This step is extremely crucial as this is what binds the organization together and helps create the cultural change needed aspect within the organization combined with the need for Six Sigma. Second Step Once the first step is conducted the organization is now clear about its current strategies for growth and customer statisfaction. Based on the assessment conducted the organization can re-evaluate all its strategies and strategic objectives. New strategic objectives can now be identified. Third Step Most organizations after having articulated and identified their various objectives are unable to communicate the strategies of the organization. One of the most effective methods for communicating the strategy of the organization is building a strategy map encompassing the now widely adopted Kaplan and Norton's Balanced score card spanning the four perspectives. Answering the questions related to the perspectives helps understand the strategy better and also build a good strategy map. The strategy map helps provide the vital cause and effect linkages in an organization and helps link the Business processes to the strategic destination of the organization. Before attempting to build the map it is essential for the organization to identify all its core processes and support processes as they help in completing the strategy map.

The Four Perspectives

The Balanced score card perspectives help an organization to integrate and operationalise the organizations strategy.

As an example for the application for the application of the method consider a hypothetical case mentioned below. This case utilizes the frequently used Catapult in the Six Sigma black belt training and explains the concept.

XYZ is a company that is newly set up. It is in the business of delivering thrown balls to customer specifications. It has a vision of being a leading international player in the business of thrown balls by the Year 2005. It hopes to achieve this through high volumes and low cost by being the lowest cost producer. The company values its customers very strongly and believes in customer retention as its strength. In order to meet this vision the company CEO has ordered the latest state of the art machinery -- the Catapult -- for a cost of 10 Million Dollars.

The business of thrown balls is a relatively new business. In prior years, potential customers of this business had their own machinery and set-ups to meet their internal requirements. Today, where organizations are focusing on their core activities, various users of thrown balls are contemplating outsourcing this activity, making this business a very viable potentially high earning business.

XYZ has to market their product from scratch where they have to identify the markets and generate the marketing demands. International threats from Chinese products is very high. The Chinese products are known to be

supplied at a very low cost making them potentially high threat to the industry. Apart from the Chinese threat there are four other Indian competitors.

The key requirements of customers are the consistency in the distance the ball is thrown from the base of the catapult. Variation from the center of the base is also critical, however, the customer might accept products offered with variation beyond specifications subject to customers approval. Delivery on time is one of the key requirements of the customer.

To service the customers properly the CEO has decided to operate through three sales and marketing outlets and two manufacturing units strategically located.

The spares of the machinery imported are not available freely in India. The organization cannot afford downtime of machines and has taken necessary steps to ensure that the machines are in the best of shape.

The management has decided that it needs to keep a control on the costs while developing business. The main raw material for the product is the balls and they are available freely in India. The marketing department has just received a hot inquiry from a potential client. This customer is one of the largest potential customers in the market.

The customer needs are that he wants balls to be delivered at 75+- 3 inch from the base of the catapult. The ball delivered to be +-2 inch from the center of the base (axial requirement). The customer needs 50 balls delivered within 10 miniutes. For balls that do not meet the requirement of +2 axially but are in the +- 3-inch specification, the customer will buy the material at a 10% discount. Selling price of each correct ball delivered is $1000. Despite stiff competition from the Chinese on the price front, your marketing manager has been able to get this pilot order.