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7. Introduction -Six Sigma

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6 Sigma Sr . No : Topic Page No: Remark : 1 Six Sigma - An Introduction , 2 2 Tools of Six Sigma 4 3 Statistical Six Sigma Definition 6 4 Six Sigma according to GE 9 5 Six Sigma Infrastructures 10 6 Levels and Expected Returns 14 7 What is Six Sigma Certification ? 16 8 How does Six Sigma work ? 17 9 10 Things a Six Sigma Black Belt Should Know By: Thomas Pyzdek 18 10 How much percent of defect is 19 Principal of management 1
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DECLARATION

6 Sigma

Sr. No:TopicPage No:Remark:

1Six Sigma - An Introduction,2

2Tools of Six Sigma4

3 Statistical Six Sigma Definition6

4Six Sigma according to GE9

5Six Sigma Infrastructures10

6Levels and Expected Returns14

7What is Six Sigma Certification?16

8How does Six Sigma work?17

910 Things a Six Sigma Black Belt Should Know By: Thomas Pyzdek18

10How much percent of defect is Acceptable?19

11Six Sigma Measures Reliability21

12Pitfalls of Six Sigma23

13Implementation of Six Sigma25

14The Companies adopted Six Sigma techniques are listed below.28

15Sigma Case study (About of Dabba Wala).30

16Conclusion33

17Bibliography34

Six Sigma - An Introduction: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 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. Process sigma can easily be calculated using a calculator. The fundamental objective of the Six Sigma methodology 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, and 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.Tools of Six Sigma:

The tools are applied within a simple performance improvement model known as DMAIC, or Define-Measure-Analyze-Improve-Control. DMAIC can be described as follows:

DDefine the goals of the improvement activity. At the top level the goals will be the strategic objectives of the organization, such as a higher ROI or market share. At the operations level, a goal might be to increase the throughput of a production department. At the project level goals might be to reduce the defect level and increase throughput. Apply data mining methods to identify potential improvement opportunities.MMeasure the existing system. Establish valid and reliable metrics to help monitor progress towards the goal(s) Defined at the previous step. Begin by determining the current baseline. Use exploratory and descriptive data analysis to help you understand the data.

AAnalyze the system to identify ways to eliminate the gap between the current performance of the system or process and the desired goal. Apply statisticaltools to guide the analysis.

IImprove the system. Be creative in finding new ways to do things better, cheaper, or faster. Use project management and other planning and management tools to implement the new approach. Use statistical methods to validate the improvement.CControl the new system. Institutionalize the improved system by modifying compensation and incentive systems, policies, procedures, MRP, budgets, operating instructions and other management systems. You may wish to utilize systems such as ISO 9000 to assure that documentation is correct.

Statistical Six Sigma Definition:

What does it mean to be "Six Sigma"? Six Sigma at many organizations simply means a measure of quality that strives for near perfection. But the statistical implications of a Six Sigma program go well beyond the qualitative eradication of customer-perceptible defects. It's a methodology that is well rooted in mathematics and statistics.The objective of Six Sigma Quality is to reduce process output variation so that on a long term basis, which is the customer's aggregate experience with our process over time, this will result in no more than 3.4 defect Parts Per Million (PPM) opportunities (or 3.4 Defects Per Million Opportunities DPMO). For a process with only one specification limit (Upper or Lower), this results in six process standard deviations between the mean of the process and the customer's specification limit (hence, 6 Sigma). For a process with two specification limits (Upper and Lower), this translates to slightly more than six process standard deviations between the mean and each specification limit such that the total defect rate corresponds to equivalent of six process standard deviations.Many processes are prone to being influenced by special and/or assignable causes that impact the overall performance of the process relative to the customer's specification. That is, the overall performance of our process as the customer views it might be 3.4 DPMO (corresponding to Long Term performance of 4.5 Sigma). However, our process could indeed be capable of producing a near perfect output (Short Term capability also known as process entitlement of 6 Sigma). The difference between the "best" a process can be, measured by Short Term process capability, and the customer's aggregate experience (Long Term capability) is known as Shift depicted as Zshift or shift. For a "typical" process, the value of shift is 1.5; therefore, when one hears about "6 Sigma," inherent in that statement is that the short term capability of the process is 6, the long term capability is 4.5 (3.4 DPMO what the customer sees) with an assumed shift of 1.5. Typically, when reference is given using DPMO, it denotes the Long Term capability of the process, which is the customer's experience. The role of the Six Sigma professional is to quantify the process performance (Short Term and Long Term capability) and based on the true process entitlement and process shift; establish the right strategy to reach the established performance objective

As the process sigma value increases from zero to six, the variation of the process around the mean value decreases. With a high enough value of process sigma, the process approaches zero variation and is known as 'zero defects.'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 content 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. Process sigma can easily be calculated using a Six Sigma calculator.

Six Sigma according to GE:

A highly disciplined process that helps us focuses on developing and delivering near-perfect products and services. The word Six Sigma is a statistical term that measures how far a given process deviates from perfection. The central idea behind Six Sigma is that if you can measure how many defects you have in a process, you can systematically figure out how to eliminate them and get as close to zero defects as possible. Six Sigma has changed the DNA at GE it is the way we work in everything we do and in every product we design.

Six Sigma Infrastructures:

A very powerful feature of Six Sigma is the creation of an infrastructure to ensure that performance improvement activities have the necessary resources. In this author's opinion, failure to provide this infrastructure is the #1 reason why 80% of all TQM implementations failed in the past. Six Sigma makes improvement and change the full-time job of a small but critical percentage of the organization's personnel. These full time change agents are the catalyst that institutionalizes change. Figure 2 illustrates the required human resource commitment required by Six Sigma.

Leadership:

Six Sigma involves changing major business value streams that cut across organizational barriers. It is the means by which the organization's strategic goals are to be achieved. This effort cannot be led by anyone other than the CEO, who is responsible for the performance of the organization as a whole. Six Sigma must be implemented from the top-down.

Champions and Sponsors:

Six Sigma champions are high-level individuals who understand Six Sigma and are committed to its success. In larger organizations Six Sigma will be led by a full time, high level champion, such as an Executive Vice-President. In all organizations, champions also include informal leaders who use Six Sigma in their day-to-day work and communicate the Six Sigma message at every opportunity. Sponsors are owners of processes and systems who help initiate and coordinate Six Sigma improvement activities in their areas of responsibilities.

Green Belt:

Green Belts are Six Sigma project leaders capable of forming and facilitating Six Sigma teams and managing Six Sigma projects from concept to completion. Green Belt training consists of five days of classroom training and is conducted in conjunction with Six Sigma projects. Training covers project management, quality management tools, quality control tools, problem solving, and descriptive data analysis. Six Sigma champions should attend Green Belt training. Usually, Six Sigma Black Belts help Green Belts define their projects prior to the training, attend training with their Green Belts, and assist them with their projects after the training.Black Belt:

Candidates for Black Belt status are technically oriented individuals held in high regard by their peers. They should be actively involved in the process of organizational change and development. Candidates may come from a wide range of disciplines and need not be formally trained statisticians or engineers. However, because they are expected to master a wide variety of technical tools in a relatively short period of time, Black Belt candidates will probably possess a background including college-level mathematics and the basic tool of quantitative analysis. Coursework in statistical methods may be considered a strong plus or even a prerequisite. As part of their training, Black Belts receive 160 hours of classroom instruction, plus one-on-one project coaching from Master Black Belts or consultants.Successful candidates will be comfortable with computers. At a minimum, they should understand one or more operating systems, spreadsheets, database managers, presentation programs, and word processors. As part of their training they will be required to become proficient in the use of one or more advanced statistical analysis software packages. Six Sigma Black Belts work to extract actionable knowledge from an organization's information warehouse. To ensure access to the needed information, Six Sigma activities should be closely integrated with the information systems (IS) of the organization. Obviously, the skills and training of Six Sigma Black Belts must be enabled by an investment in software and hardware. It makes no sense to hamstring these experts by saving a few dollars on computers or software.

Master Black Belt:

This is the highest level of technical and organizational proficiency. Master Black Belts provide technical leadership of the Six Sigma program. Thus, they must know everything the Black Belts know, as well as understand the mathematical theory on which the statistical methods are based. Master Black Belts must be able to assist Black Belts in applying the methods correctly in unusual situations. Whenever possible, statistical training should be conducted only by Master Black Belts. Otherwise the familiar "propagation of error" phenomenon will occur, i.e., Black Belts pass on errors to green belts, who pass on greater errors to team members. If it becomes necessary for Black Belts and Green Belts to provide training, they should do only so under the guidance of Master Black Belts.

For example, Black Belts may be asked to provide assistance to the Master during class discussions and exercises. Because of the nature of the Master's duties, communications and teaching skills are as important as technical competence. Staffing Levels and Expected Returns:As stated earlier in this article, the number of full time personnel devoted to Six Sigma is not large. Mature Six Sigma programs, such as those of Motorola, General Electric, Johnson & Johnson, AlliedSignal, and others average about one-percent of their workforce as Black Belts. There is usually about one Master Black Belts for every ten Black Belts, or about 1 Master Black Belt per 1,000 employees. A Black Belt will typically complete 5 to 7 projects per year. Project teams are led by Green Belts, who, unlike Black Belts and Master Black Belts, are not employed full time in the Six Sigma program. Black Belts are highly prized employees and are often recruited for key management positions elsewhere in the company. After Six Sigma has been in place for three or more years, the number of former Black Belts tends to be about the same as the number of active Black Belts.Estimated savings per project varies from organization to organization. Reported results average about US$150,000 to US$243,000. Note that these are not the huge mega-projects pursued by Re-engineering. Yet, by completing 5 to 7 projects per year per Black Belt, the company will add in excess of US$1 million per year per Black Belt to its bottom line. For a company with 1,000 employees the numbers would look something Like this:Master Black Belts: 1

Black Belts: 10

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)

Because Six Sigma savings impact only non-value added costs, they flow directly to your company's bottom line.

What is Six Sigma Certification?

Six Sigma certification is a confirmation of an individual's capabilities with respect to specific competencies. Just like any other quality certification, it does not indicate that an individual is capable of unlimited process improvement, just that s/he has completed the necessary requirements from the company granting the certification

How does Six Sigma work?

Metrics lie at the heart of Six Sigma. The basic approach is to measure performance on an existing process, compare it with a statistically valid ideal and figure out how to eliminate any variation. Project teams might speak in terms of reducing cycle time, improving customer satisfaction, cutting down on returns and improving the speed and accuracy of order fulfillment. No project is considered complete until the benefit has been shown and a team of financial auditors signs off.

10 Things a Six Sigma Black Belt Should KnowBy:

Thomas Pyzdek

1.In general, a Six Sigma Black Belt should be quantitatively oriented.

2. With minimal guidance, the Six Sigma Black Belt should be able to use data to convert broad generalizations into actionable goals.

3. The Six Sigma Black Belt should be able to make the business case forattempting to accomplish these goals.

4.The Six Sigma Black Belt should be able to develop detailed plans for

achieving these goals

5.The Six Sigma Black Belt should be able to measure progress towards the goals in terms meaningful to customers and leaders.

6. The Six Sigma Black Belt should know how to establish control systems for maintaining the gains achieved through Six Sigma.

7. The Six Sigma Black Belt should understand and be able to

communicate the rationale for continuous improvement, evenafter initial goals have been accomplished.

8. The Six Sigma Black Belt should be familiar with research that quantifies the benefits firms have obtained from Six Sigma.

9.The Six Sigma Black Belt should know or be able to find the PPM rates associated with different sigma levels (e.g., Six Sigma = 3.4 PPM)

10.The Six Sigma Black Belt should know the approximate relative cost of poor quality associated with various sigma levels (e.g., three sigma firms report 25% COPQ).

How much percent of defect is Acceptable?

Failure Rates in Various Industries

Many large airports have 200 flights landing each day. A one per cent error rate in landing means that every day two planes will miss the runway. This is clearly unacceptable. If, reluctantly, we accept that two misses in eight years is in some way unavoidable then we are accepting an error rate of 1 in 292,000 (3.4 errors per million). This is the six sigma level. With model-based development, a medium-sized model could easily have around 292,000 objects. So we might extrapolate and suggest that six sigma performance demands that there be no more than one error in every medium-sized project. As Motorola points out, a six sigma program is a major step towards defect-free operation.

Six SigmaSix sigma is based on statistical measures in which sigma is one standard deviation about the mean. Six sigma as defined by Motorola, however, is not a simple matter of managing within plus or minus six standard deviations. Taken literally, that level of control would allow for error rates of only 0.002 per million. Instead, the six sigma approach accepts that the mean is not fixed but can drift up and down. It therefore allows a plus or minus 1.5 sigma shift in the mean as the drift within its span of control.

Six Sigma is therefore concerned with managing both the upper and lower limits of specification and the drift in the mean.

The principle is illustrated in figure 2 where the normal distribution curve is shown along with two others to indicate the point to which a 1.5 sigma shift in the mean takes the curve. Six Sigma Measures Reliability: Six Sigma is a measure of the reliability or predictability of a process. It is particularly appropriate when a process is repeated millions of times within a manageable period.

Reliability can be roughly expressed as an absence of failure. We need to distinguish between the concepts of fault and failure. A failure is an event where a system departs from requirements or expectations (predictions). A fault is a defect that may cause failures. The failure is therefore a symptom that there is a fault somewhere. Note that the fault may be in the software, in the operating instructions, or somewhere else. Thus a design defect may be a fault. Failures are not always noticed by the users, and not always reported even when noticed. We therefore also need to distinguish failures from reported failures. The relationships between the three concepts are shown in the following diagram.

Fault / Failure Relationships

A fault may exist for a long time without causing a reported failure (either because the right combination of inputs never occurs, or because nobody notices or cares). Another fault may cause thousands of different failures, and it may take some time for the software engineers to demonstrate that all these failures are due to a single fault.

A failure may be detected by special monitoring software. Some systems may be designed to be self-monitoring. However, such automatic monitoring is only likely to pick up certain classes of failure.

Sometimes it may take several faults acting together to cause a failure. Performance failures may result from the accumulation of many small faults.

To sum up: You can count either faults or failures, but dont mix them up.

Failure metrics are preferred over fault metrics for one simple reason: they tend to be much easier to relate to customer satisfaction, whereas fault metrics tend to be internal engineering-focused.

Pitfalls of Six Sigma:Like any tool, Six Sigma can be used inappropriately. To the man with a hammer, everything appears to be a nail.

Defining metrics from producers perspectiveA common failing for engineers is to define quality metrics that cannot be related to customer satisfaction. This is particularly the case with fault metrics.

Concentrating on the product, not the processThe results of the inspection of a product (may sometimes be expressed in six sigma terms.

This means that the inspectors are counting not failures (of the process) but faults (in the product).

Implicitly, of course, they may be counting failures in the production process. But this approach may be of limited value in quality improvement, because the process errors are aggregated, and therefore difficult to trace.

Unreliable testing processThere are two ways to get a good score on a six sigma measurement of your manufacturing process. One is to have an excellent manufacturing process. The other is to have an inadequate testing process.

(ISO 9001 addresses this pitfall explicitly. Clause 4.11 demands that test processes be calibrated.)

Insufficient volumes for meaningful statisticsIf you only make a few hundred deliveries a year, it will take thousands of years to demonstrate conformity to six sigma standards (although it may take rather less time to demonstrate non-conformity). For such situations, six sigma measures may be meaningless.

Note that a single software model, with half a million objects and no known defects, is not large enough to demonstrate six sigma quality. You would need a series of such models before you could claim six sigma quality.

Measuring unimportant thingsOne way of getting enough things for a statistically significant sample is to decompose the work into very small items.

Consider an organization producing documentation. They may produce dozens of documents per year, containing thousands of pages and millions of words. To get statistically significant error rates, it may be necessary to count the number of incorrect words.

The trouble with measuring quality at this minute level of granularity is that they may miss the wood for the trees. All the words may be correct, but the document as a whole may not be fit for purpose.

Implementation of Six Sigma:

After over two decades of experience with quality improvement, there is now a solid body of scientific research regarding the experience of thousands of companies implementing major programs such as Six Sigma. Researchers have found that successful deployment of Six Sigma involves focusing on a small number of high-leverage items. The steps required to successfully implement Six Sigma are well-documented.1. Successful performance improvement must begin with senior leadership. Start by providing senior leadership with training in the principles and tools they need to prepare their organization for success. Using their newly acquired knowledge, senior leaders direct the development of a management infrastructure to support Six Sigma. Simultaneously, steps are taken to "soft-wire" the organization and to cultivate an environment for innovation and creativity. This involves reducing levels of organizational hierarchy, removing procedural barriers to experimentation and change, and a variety of other changes designed to make it easier to try new things without fear of reprisal.2.Systems are developed for establishing close communication with customers, employees, and suppliers. This includes developing rigorous methods of obtaining and evaluating customer, employee and supplier input. Base line studies are conducted to determine the starting point and to identify cultural, policy, and procedural obstacles to success.

3.Training needs are rigorously assessed. Remedial skills education is provided to assure that adequate levels of literacy and numeric are possessed by all employees. Top-to-bottom training is conducted in systems improvement tools, techniques, and philosophies.4.A framework for continuous process improvement is developed, along with a system of indicators for monitoring progress and success. Six Sigma metrics focus on the organization's strategic goals, drivers, and key business processes.

5.Business processes to be improved are chosen by management, and by people with intimate process knowledge at all levels of the organization. Six Sigma projects are conducted to improve business performance linked to measurable financial results. This requires knowledge of the organization's constraints.

6.Six Sigma projects are conducted by individual employees and teams led by Green Belts and assisted by Black Belts. Although the approach is simple, it is by no means easy. But the results justify the effort expended. Research has shown that firms that successfully implement Six Sigma perform better in virtually every business category, including return on sales, return on investment, employment growth, and share price increase.The Companies adopted Six sigma techniques are listed below:Sr. No.Name of the

CompaniesSr. No.Name of the

Companies

116

217

318

419

520

621

722

823

924

1025

1126

1227

1328

1429

1530

Source By: http://www.isixsigma.com/forum/showmessage.asp?messageID=37300CASE STUDY:

Mumbais Amazing Dabbawallas:A Six Sigma means the accuracy rate is 99.999 per cent, which otherwise means that for an office-goer engaging a dabbawala for a monthly fee of something between Rs 150 to Rs 300, the chances of missing a day's home-made lunch is just one in six thousand.More than 175,000 or 200,000 lunches get moved every day by an estimated 4,500 to 5,000 dabbawalas, all with an extremely small nominal fee and with utmost punctuality. According to a recent survey, there is only one mistake in every 6,000,000 deliveries. The American business magazine Forbes gave a Six Sigma performance rating for the precision of dabbawalas.The BBC has produced a documentary on dabbawalas, and Prince Charles, during his visit to India, visited them (he had to fit in with their schedule, since their timing was too precise to permit any flexibility). Owing to the tremendous publicity, some of the dabbawalas were invited to give guest lectures in top business schools of India, which is very unusual. Most remarkably, the success of the dabbawala trade has involved no modern high technology. The main reason for their popularity could be the Indian people's aversion to fast food outlets and their love of home-made food. Low-tech and lean.

Although the service remains essentially low-tech, with the barefoot delivery boys as the prime movers, the dabbawalas have started to embrace technology, and now allow booking for delivery through SMS. A web site, mydabbawala.com, has also been added to allow for on-line booking, in order to keep up with the times. An on-line poll on the web site ensures that customer feedback is given pride of place. The success of the system depends on teamwork and time management that would be the envy of a modern manager. Such is the dedication and commitment of the barely literate and barefoot delivery boys (there are only a few delivery women) who form links in the extensive delivery chain, that there is no system of documentation at all. A simple colors coding system doubles as an ID system for the destination and recipient. There are no elaborate layers of management either just three

layers. Each dabbawala is also required to contribute a minimum capital in kind, in the shape of two bicycles, a wooden crate for the tiffins, white cotton kurta-pyjamas, and the white trademark Gandhi topi (cap). The return on capital is ensured by monthly division of the earnings of each unit.

Six Sigma Rating :

A few years ago, US business magazine Forbes gave Mumbais dabbawallas a Six Sigma performance rating, or a 99.999999 percentage of correctness which means one error in six million transactions.

Conclusion:After complexion of this project which is on SIX SIGMA we are proud to say that we have learned something new from it. We have worked on: Six Sigma - An Introduction, Tools of Six Sigma, Statistical Six Sigma Definition, Six Sigma according to GE, Six Sigma Infrastructures, Staffing Levels and Expected Returns, What is Six Sigma Certification?, How does Six Sigma work?, 10 Things a Six Sigma Black Belt Should Know By: Thomas Pyzdek, How much percent of defect is Acceptable?, Six Sigma Measures Reliability, Pitfalls of Six Sigma, Implementation of Six Sigma, case study ( about of dabba wala).And after it some names of company that was not in my knowledge before

this project. And a very interesting case-study on the dabbawala's.

I was only known that our dabbawala's were known for time management but in my project of SIX SIGMA. We are glad to say that this project has given us a rough idea About the benefit's of SIX SIGMA and we would like to know more about it if we can, from you.

Thank you for giving us this exclusive opportunity. And we hope that this opportunity should be given to us in future also.

Bibliography

Books:Management Book C. B. GUPTA

Magazines:

Business Week 11th JUNE, 2007 subscription

HRO Today March 2006 subscription

Articles:

Hisdustan Times 15th December, 2006

Free Press - 3rd March, 2007Personnel:

Mr. Nazir Kazi, Director, S.R. Commerce Classes (Project Guide)

Websites:

www.google.com

www.sixsigmatutorial.com

www.minitab.com

www.isixsigma.com

www.sixsigmagobal.com

www.sigmaxl.com

www.expresscomputeronline.com

Principal of management 5


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