Six Sigma RAMESH SARDAR U.D.M.S,AURANGABAD

FLOW OF PRESENTATION INTRODUCTION METHODOLOGY STATISTICAL CONCEPT LEAN SIX SIGMA ROLES CASE STUDY I HUMAN SIGMA CASE STUDY II CONCLUSION

What is Sigma? Greek letter used to represent Standard Deviation (σ) Used in statistics to measure variance Sigma is a measure of perfection.

Origin Failure of Total Quality Management Introduced by Bill Smith in 1980’s in Motorola It was later introduced in many sectors such as service sector.

What exactly is Six Sigma? Six sigma is a smarter way to manage a business or department. It puts the customer first and uses facts and data to drive better solutions. It targets 3 main areas 1.Improving Customer Satisfaction 2.Reducing cycle time 3.Reducing defects

Six Sigma, But why Six? Levels of sigma performance Sigma level Defects/10 lakh opportunity % of sales defectsAccuracy 16,90,00069%31% 23, %(appx)69% %93.32% %99.38% %99.977% 63.4Practically perfect, no defect %

Themes of Six Sigma 1.Main Focus on Customer 2.Data and Fact Drive 3.Processes are where the Action is 4.Proactive Management 5.Boundary less collaboration 6.Drive for perfection

Methodology Six Sigma has mainly 2 key methodologies:-  DMAIC  DMADV Both were inspired by W. Edwards Deming’s Plan–Do-Check-Act cycle.

Define the processDefine the process Measure the performanceMeasure the performance Analyze the causes of problemAnalyze the causes of problem Improve the processImprove the process Control the processControl the process DMAIC

Measur e Analyze Design Verify Define DMADV Methodology

DMADV Define goalsDefine goals Measure and Identify product qualitiesMeasure and Identify product qualities Analyze to develop and design alternativesAnalyze to develop and design alternatives Design detailsDesign details Verify the designVerify the design

Some Examples MethodologyProponent DCCDI (Define, Customer Concept, Design and Implement) Geoff Tennant CDOC (Conceptualize, Design, Optimize, Control) SBTI DCDOV (Define, Concept, Design, Optimize, Verify) Uniworld DMADOV (Define, Measure, Analyze, Design, Optimize and Verify) General Electric General Electric

Y = f(X) Outputs are a function of inputs … The key is unlocking which inputs are the critical few among the trivial many -Know and Control the X’s -Reduce the Variability in Y -Decrease the number of defects -Improves Cycle Time and Capacity -Eliminate or reduce inspection, test and rework Y = f (X1, X2, X3, …, Xk )

NORMAL DISTRIBUTION CURVE Defects LSLUSL Tolerance =+/

Each sigma shift - 10% net income improvement. Cost of Poorly Performing Processes (CP 3 ) Sigma Capabilit y Defect free per million Defects per million CP3 :Cost of poorly performing processes Not applicable %-40% of sales %-25% of sales %-15% of sales < 1% of sales

Converting Defect Levels to... Sigma! 175 defects are identified while producing 5000 controllers The manufacture of one controller allows for 1367 defect opportunities. D.P.Op = / 1367 = An Example : D.P.U = 175 / 5000 = D.P.M.Op = 25.6 "Sigma" level : 5.50

SIX SIGMA BREAKTHROUGH PERFORMANCE MODEL SIX SIGMA PERFORMANCES Customer Driven Process Mgt Statistical Analysis Higher profits Increased Value Reduced Variation Mission: Quality, Wipro Ltd Saved Cost 110 Cr approx Hardware : Installation failures : 4.5% to 1% Software : Reducing Reworking : 12% to 5% Productivity Printer : by 50% and Toilet Soap : by 100%

What is lean Six Sigma? It’s a data driven approach & methodology It improves employee’s knowledge It is a management strategy It’s a combination of engineering & techniques with low risk Lean Techniques and Principles

 5S’s Sort Shine Straighten Standardize Sustain  Value-stream mapping  Continuous improvement  Mistake-proofing  Cycle time reduction  Inventory reduction  Setup time reduction  Waste identification & elimination Lean Technique and Principles

1.Eliminates all the waste time 2.Maintains customers satisfaction 3.Project gets completed on time and in budget 4.Continuously improves the profitability Lean Contribution to Six Sigma

What is Kaizen? Kaizen is the Japanese word which means ‘Continuous Improvement’. Any action towards the process of improvement is called Kaizen. Kaizen

1.Keep a Positive attitude 2.Be open minded 3.Get involved in team work & challenges 4.Look for solutions always 5.Ask the 5 Why rules 6.Apply ideas immediately with available resources 7.Treat all team members equally 8.Apply just in time concept Kaizen Strategies

Implementation Roles LeadershipLeadership ChampionsChampions Master Black BeltMaster Black Belt Black BeltBlack Belt Green BeltGreen Belt

1)LEADERSHIP -CEO & Other key top management team members. -Sets a vision 2)CHAMPIONS & SPONSORS -Responsible for 6 sigma implementation -Mentors -High-level individuals. -Informal leaders.

3)MASTER BLACK BELTS -Highest level of technical proficiency. -Everything what black belt knows. -Assist champions. -100% time. 4)BLACK BELTS -Involve in organisation change & development. -Master technical tools. -Training. -100% time.

5)GREEN BELTS -Project leaders. -Form six sigma teams & manage six sigma projects. -Training. -Black belts help Green belts.

Staffing Levels & Expected Returns One Master Black Belts for every ten Black Belts, or about 1 Master Black Belt per 1,000 employees.One Master Black Belts for every ten Black Belts, or about 1 Master Black Belt per 1,000 employees. A Black Belt complete 5 to 7 projects per year.A Black Belt complete 5 to 7 projects per year. Project teams are led by Green Belts.Project teams are led by Green Belts. Expected US$1 million per yearExpected US$1 million per year

Example A company with 1000 Employees will have Master Black Belts: 1Master Black Belts: 1 Black Belts: 10Black Belts: 10 Projects: = 50 to 70 (5 to 7 per Black Belt)Projects: = 50 to 70 (5 to 7 per Black Belt) Estimated saving: US$9 million to US$14.6 million (US$14,580 per employee)Estimated saving: US$9 million to US$14.6 million (US$14,580 per employee)

Tata Steel's First Certified Six Sigma Black Belt Niloy MitterNiloy Mitter Focus on the bottom line.Focus on the bottom line. Reduce mistakes in every aspectsReduce mistakes in every aspects

Boeing And Six Sigma Boeing is the world's leading aerospace company and the largest manufacturer of commercial jetliners and military aircraft combined. Headquartered in Chicago, Boeing employs more than 150,000 people across the United States and in 70 countries.

Evolution Of Six Sigma At Boeing 1999 – decision to implement six sigma 1999 – To better deploy six sigma, Boeing established a working relationship with GE – To learn from a recent acquisition, Boeing established Boeing Satellite Systems 2000 – To cultivate soft skills for successful six sigma deployment, Boeing established linkage with Aircraft and Missiles Navigator – At this time Boeing merged six sigma and Navigator 2003 – Boeing shifted responsibility for six sigma deployment to individual organizations with Lean Enterprise offices help.

Why Boeing Decided To Deploy Six Sigma Six Sigma is a complete system Six Sigma focused improvement methodology. Six Sigma provides hands-on training. Six Sigma incorporates a mentoring of less-experienced experts (black belts assisting green belts). Two six sigma projects at Boeing –The delivery of 777 aircraft sections was reduced from 12 to 10 days, with the standard deviation being cut from 3.0 to 1.7. –IT process improvement

General Electric Saved $750 million by the end of 1998 Cut invoice defects and disputes by 98 percent speeding payment Created better productivity faster completion of deals and annual savings of $1 million.

Dabbawalas Total area coverage60 km Number of Tiffin's2,00,000 Time taken3 hrs Error Rate1 in 16 million Six Sigma performance % Technological Backup Nil Operations Supply chain management

HUMAN SIGMA Origin of the Model Purpose :- Looks at the Quality of the Employee – Customer encounter, weaving together a consistent method for assessing it & a disciplined process for Managing & Improving it. Focus – Reducing Variability & Improving Performance Principles for Measuring & Managing Interactions

Emotions Frame The Encounter Customer Engagement - Confidence - Integrity - Pride - Passion Employee Engagement Encounter Must be Measured Locally

Ways To Achieve Responsibility for Human Sigma must be Centralized Local Manager is nonetheless the Single Most Important Factor in Local Group Performance Companies need to Overhaul their HR practises

Firstsource Solutions January 2007: Received Six Sigma IQ award under “Best Six Sigma Project in Healthcare”. April 2007 : Won the Award for “Best Defect elimination in Service & Transaction” category in the IQ Six Sigma excellence Awards at London. June 2007 : Firstsource Solutions Limited won “Best Design for Six Sigma” in the IQ Six Sigma Excellence Awards in Singapore.

Name of company:Firstsource Listed on: NSE: FSL.NS, BSE: FSL.BO Revenues: INR 8,399 million, Services: providing business transformation services, headquartered :India. It is among India’s top 3 pure-play BPO service providers. Its clients include six “Fortune Global 500” banks, two “Fortune Global 500” telecommunications companies and three “Fortune 100” healthcare companies.

Application and benefits in BPO industry Application and benefits Application: AHT Benefit: hard benefit Application: Call quality Benefit: soft benefit

Advantages of Six Sigma Clear focus on the target. Six Sigma includes both human & process elements. Disciplined use of Tools & techniques. Emphasis on facts. Use of statistical methods.

Limitations of Six Sigma Challenges of having quality data available. Right selection and prioritisation of projects. Assumption of 1.5 Sigma Shift. Non-Standardised process in certification of Black Belt. Over selling of Six Sigma.

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