Six Sigma in Indian industries

Case Study

Author
Author Position
Date

Version: 1.0

Atanu Maity
Program Manager
August 05, 2009

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TABLE OF CONTENTS
INTRODUCTION TO SIX SIGMA..................................................................................................................5
HISTORY OF SIX SIGMA..............................................................................................................................6
WHAT IS SIX SIGMA....................................................................................................................................8

WHY SIX SIGMA DEVELOPMENT ?..........................................................................................................10

BENEFITS AND ADVANTAGES OF SIX SIGMA.........................................................................................10

1. Improved Customer Loyalty..............................................................................................................11

2. Customer Satisfaction........................................................................................................................11
4. Business Results................................................................................................................................13

5. Data Analysis Before Decision Making...........................................................................................14

6. Team Building..................................................................................................................................17

7. Measure Value According to the Customer........................................................................................18

8. Effective Supply Chain Management................................................................................................20
9. Design and Redesign Products/Services...........................................................................................23
10. Develop Leadership Skills..............................................................................................................26

11. Integration of Products, Services and Distribution.........................................................................29

12. Alignment with Strategy Vision, and Values..................................................................................33
14. Supervisor Training.........................................................................................................................35
15. Generates Sustained Success..........................................................................................................35
16. Set a Performance Goal for Everyone.............................................................................................37
17. Enhance Value to Customers.........................................................................................................37
18. Accelerates the Rate Of Improvement............................................................................................39
19. Promotes Learning And "Cross-Pollination".................................................................................39
20. Executes Strategic Changes............................................................................................................39
DOS AND DONTS OF SIX SIGMA...............................................................................................................40
KEY CONCEPTS OF SIX SIGMA..................................................................................................................41
THEMES OF SIX SIGMA.............................................................................................................................44
THE SIX SIGMA ROADMAP........................................................................................................................49

SIX SIGMA QUALITY TOOLS AND TEMPLATES.......................................................................................50

IS SIX SIGMA RIGHT FOR US NOW ?..........................................................................................................51

WHEN SIX SIGMA IS NOT RIGHT FOR AN ORGANIZATION......................................................................53

SIX SIGMA TRAINING................................................................................................................................55

TRAINING THE ORGANIZATION FOR SIX SIGMA.....................................................................................57

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LARGE ORGANIZATIONS THAT HAVE ADOPTED SIX SIGMA..................................................................59
USE SIX SIGMA TOOLS TO MEET ISO 9000 REQUIREMENTS..................................................................60
USE THE ISO 9000 FRAMEWORK TO ASSESS A SIX SIGMA SYSTEM.....................................................61
SIX SIGMA AND QUALITY MANAGEMENT GLOSSARY............................................................................62
CASE STUDY : SIX SIGMA IMPLEMENTATION IN BHARTI BROADBAND.................................................69

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Introduction to Six Sigma

Six Sigma is a statistical concept that measures a process in terms of
defects. Achieving "Six Sigma" means your processes are delivering only
3.4 defects per million opportunities (DPMO) - in other words, they are
working nearly perfectly. Sigma (the Greek letter ) is a term in statistics
that measures standard deviation. In its business use, it indicates defects in
the outputs of a process, and helps us to understand how far
the process deviates from perfection.
A sigma represents 691462.5 defects per million opportunities, which
translates to only 30.854% of non-defective outputs. That is obviously a poor
performing process. If you have a process functioning at a three
sigma level that means you're allowing 66807.2 errors per million
opportunities, or delivering 93.319% non-defective outputs. That's much
better, but we are still wasting money and disappointing our customers.
The central idea of Six Sigma management is that if you can measure
the defects in a process, you can systematically figure out ways to eliminate
them to approach a quality level of zero defects.
In short, Six Sigma is several things:
A statistical basis of measurement: 3.4 defects per million
opportunities
A philosophy and a goal: as perfect as practically possible
A methodology
A symbol of quality

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History of Six Sigma

Since the 1920's the word 'sigma' has been used by mathematicians and engineers
as a symbol for a unit of measurement in product quality
variation. (Note it's sigma with a small 's' because in this context sigma is a generic
unit of measurement.)
In the mid-1980's engineers in Motorola Inc in the USA used 'Six Sigma' an informal
name for an in-house initiative for reducing defects in
production processes, because it represented a suitably high level of quality. (Note
here it's Sigma with a big 'S' because in this context Six
Sigma is a 'branded' name for Motorola's initiative.)
(Certain engineers - there are varying opinions as to whether the very
first was Bill Smith or Mikal Harry - felt that measuring defects in terms of thousands
was an insufficiently rigorous standard. Hence they
increased the measurement scale to parts per million, described as 'defects per
million', which prompted the use the 'six sigma' terminology
and adoption of the capitalized 'Six Sigma' branded name, given that six sigma was
deemed to equate to 3.4 parts - or defects - per million.)
In the late-1980's following the success of the above initiative, Motorola extended the
Six Sigma methods to its critical business processes, and
significantly Six Sigma became a formalized in-house 'branded' name for a
performance improvement methodology, i.e. beyond purely 'defect
reduction', in Motorola Inc.
In 1991 Motorola certified its first 'Black Belt' Six Sigma experts, which
indicates the beginnings of the formalization of the accredited training of Six Sigma
methods.
In 1991 also, Allied Signal, (a large avionics company which merged with Honeywell
in 1999), adopted the Six Sigma methods, and claimed
significant improvements and cost savings within six months. It seems that Allied
Signal's new CEO Lawrence Bossidy learned of Motorola's
work with Six Sigma and so approached Motorola's CEO Bob Galvin to learn how it
could be used in Allied Signal.
In 1995, General Electric's CEO Jack Welch (Welch knew Bossidy since Bossidy
once worked for Welch at GE, and Welch was impressed by
Bossidy's achievements using Six Sigma) decided to implement Six
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