An insite upon TQM & Six-sigma

8/14/2019 An insite upon TQM & Six-sigma

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AN INSIGHT UPON TQM AND SIX-SIGMA.

(This paper has been published by Central Board of Workers Education ,Ministryof Labour & Employment Govt. of India on its 5 th National Conference onQuality Management-March10-11/2007,New-Delhi.)

ABSTRACT : Globalization has intensified competition throughout the world, which

force the organizations to look for the ways and means for improving their process so

that quality of their products and services improve, wastes reduce and customer

satisfaction increases. To improve customer satisfaction is the goal of six sigma. Though

it has been accepted as a strategy by foreign firms way back from mid 1980s; Indian

industries are still lacking interest, work-environment and resources to adopt it as a

competitive strategy.

The Indian Statistical Institute( ISI ) ,with its vast hands-on experience in six sigma

methodology, assist organizations in integrating price meal quality efforts into an overall

effective organization wide initiative that becomes a powerful leverage to take

competition by horn. The present article tries to give an insight about TQM and ides

about how the companies should focus on some untapped areas to improve quality

consistently and make it as a strategic advantages which would be difficult for

competitors to imitate.

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INTRODUCTION:

After the second world war the back-bone of Japanese economy was totally ruined and

the picture of American and European economy was also direction less. There was a all

round frustration and confusion in the mind of industrialist. Within this environment of

darkness, there appeared a silver line of hope in the form of a new concept, Total Quality

Management, popularly known as TQM ,by Dr. W. Edward Deming , regarded as

management guru in the field of quality revolution. The TQM philosophy continued to

emerge under the guidance of Dr. Deming who believed, quality management should be

pervasive and should not be confined on merely sorting good products from the bad.

Dr. Deming believed that the responsibility for quality should be shared by every one in

the organization- the suppliers, the workers & the implementers i.e middle-level

management and obviously the CEO, the decision maker- its not like the old concept of

quality, that only the production department is responsible to maintain the quality of a

product.

So if we define TQM we can say in nut-shell it is a cost effective system for integrating

the continuous quality improvement efforts of people of all levels in the organization to

deliver products and services which ensure customer satisfaction.

TQM has emerged as a predominant management philosophy in USA, UK, Japan and

other European countries. It based on a number of concepts like customer focus,

continuous improvement, defect prevention and a recognition that quality responsibility

is shared by all of us( Fig-I ):

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Fig-I

The successful implementation of TQM requires a numbers of statistical tools and

concepts . Among those complicated statistical calculations and concepts which one gets

the momentum and became the synonym of world class quality is Six-Sigma .

What is six sigma ?

Six-Sigma is a statistical measure for quantifying quality of a product, process or a

service. Today it is synonymous with world class.

Six -Sigma provide a methodology for continuous improvement in everything we do.

Six- Sigma is an organizational philosophy in establishing the belief of doing things

right first time and every time . Generally Six Sigma stands for six standard deviations

(sigma is the Greek letter used to represent standard deviation in statistics) from mean.

Six Sigma methodology provides the techniques and tools to improve the capability and

reduce the defects in any process. To prevent defects it is important to know, what causes

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Employee-empowerment Q-measurementEmployee-involvement Training

Value-

ImprovementTeam work

Think statistically Bench-

Marking

Root-causeCorrective action

Supplier Teaming Sustained Mgt-Commitment

T M

Customer-focus

Continuous-

PreventionUniversal


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the defects; variation is the cause of defects. Six Sigma strategy aimed to reduce the

defects at breakthrough level through a disciplined and practical application of statistical

methods by reducing variations .

Source of Variation

Variation

Fig-II

The whole process of Six-Sigma can be explained with the help of the following triangle:

Reduced cost

Incr

eased profits Fig-III Increased quality & efficiency

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Methods*procedures*policies*accounting

Material*assemblies*components*suppliers*consumables

Environment*noise level*humidity*temperature*lighting

People*training*experience*skills*attitude

Machine*technology*variability*tooling*fixtures

Measurement* counting*instruments*grouping*tests


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After it won the Malcom Badrige award in 1988 the secret of their success became

publicly known and the Six Sigma revolution was on. Today it is hotter than ever.

The main mantra of Six Sigma is to help organization to produce products and services

better, faster and cheaper. In more traditional term Six-Sigma focuses on defect

prevention, cycle time reduction and cost saving. Six-Sigma identifies and eliminates

costs which provide no value to customers: Waste cost. Companies operating at 3Sigma

or 4 Sigma typically spend between 25%-40% of their revenue in fixing problems. This is

known as the cost of quality or more accurately the cost of poor quality.

COST OF POOR QUALITY Vs SIGMA LEVEL

Y Revenue

0 Level of Sigma

X3-sigma 4-sigma 5-sigma 6-sigma

Fig-IV

25%

1

5%

15%

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Whereas companies operating at six sigma typically spend less than 5% of their

revenues fixing problems.

Implementation of six sigma :

The first and foremost requirement for successful implementation of six sigma is

infrastructure .Failure to provide adequate infrastructure is the number one reason for

unsuccessful endeavour of implementing TQM in 80% of organizations. Implementation

of six sigma required a huge change in attitude and skill of human resources.

From CEO to shop-floor worker; everybody should be involved in the six sigma training

Process. The development involves training team members to become C hampions,

Black-Belts and Green-Belts . The C hampions are senior executives and managers who

are accountable fro the result of six sigma projects. The Master Black-Belts have proved

themselves to be effective problem solvers, the mentors who ensure the success of the

project. They have six sigma technical proficiency, mentoring/consulting skills and

ability to apply the six sigma methodology to a function and business process . Black-

Belts are senior and middle level managers who lead teams to successful project

completion.

Green-Belts are middle managers who support Black-Belts but not full time on the job.

The optimum ratio of Black-Belt to Green Belt is 1:5. Interestingly organizations

introducing six sigma mostly ran into resistance from middle level management as these

managers have the toughest job. Generally Black Belt training involves 23 days, spread

over four months roughly one week in class room and 3 weeks in application time-

most of the training involves working on real projects. The Black-Belts should have good

personal relation skill because the black belts are the key change agent for six sigma

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DMADV (Define, Measure, Analyse, Design, Verify) : This six-sigma methodology

applies to the creation of new processes for product development. This six-sigma

implementation differs from DMAIC methodology at the final two stages. Defining and

measuring the design and product goals and capabilities are the first two stages. The next

stage is analyzing alternatives and evaluating to choose the best products design. The

next stage consists of implementing the best design. The final stage entails verifying the

design, pilot runs and testing implementation before the final presentation.

The Dos and Donts in Implementing Six-Sigma :

Getting started : the Dos-Do keep the focus on results.

Do embrace the customers.

Do plan for success.

Do communicate the commitment company-wide.

Do demonstrate the commitment of companys leaders.

Do empower your key human resources

Do provide on-site mentoring for black-belts

Do choose an implementation partner who will actively assist in screening and

selecting six- sigma projects.

Do be patient at the inception of your six-sigma initiative.

Do claim and advertise early wins.

Do benchmark-to know where you are and where you should be.

Do establish project baselines and goals.

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Getting started : the Donts-

Dont make the six-sigma a massive training exercise.

Dont take a big bang approach to six-sigma(i.e. dont train all employees

at once.)

Dont focus resources on reworking training material(i.e. dont waste time in

discussing about training materials but get busy in applying it).

Dont let the controller waffle about your saving calculations (i.e make sure you

and the controller are in agreement on how you define and assign savings to your

projects.)

Dont skip steps.

Dont be afraid to learn and use statistical tools.

The Statistical Approach to Express Six-Sigma:

As it has already been mentioned that sigma( ) is a Greek-word which represent the

standard deviation in statistics. Standard deviation measures variation of values from

the mean, using the following formula:

(x -) 2 where = sum of .

= n x = observed values.

= arithmetic mean.

n = number of observations.

If we plot enough values on a control chart, we will likely find that the distribution of

values forms some variant of bell shaped curve. This curve can assume variant shapes.

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However in a normal distribution curve, statisticians have determined that about

68..2%

of values will be within 1 stander deviation of the mean, about 95.5% will be within 2

standard deviation and 99.7% will be within 3 standard deviation.

Now your goal is to reduce the variation in your assembly processes. So you need to

determine how much variation is acceptable to your customers. Then you use these

values to set your Lower Specification Limit(LSL) & Upper Specification Limit (USL).

These are the lower and upper boundaries within which the system must operate.

With the help of USL & LSL you will be able to calculate process capability index, which

will help you to take decision whether a process is up to the mark or required

some control and improvement.

Process Capability:

All process have an inherent ability to produce quality products. This ability can be

evaluated through proper data collection and specific analysis.

The process capability is define as the performance of a process over a certain period of

time while in the statistically controlled state. In other words, process capability can be

described as the ability of a process to repeat its results during multiple cycles of

operations.

Process Capability Index :

To find out whether a process can meet the specification or not, a process capability

study is under taken and capability is quantified in term of process capability index( Cp).

Which can be calculated by using the following formula:

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C p = S u - S C p= Process Capability Index, = standard deviation

6 and S u & S = upper & lower specification limit

Processes are evaluated by using the Cp values as below:

Cp Value Evaluation Action

Cp>1.67 Too much capability No concern of increase in product variation. Consider process simplification & costreduction.

1.67> Cp>1.33 Sufficient capability Ideal condition. Maintain it.

1.33> Cp>1.00 Moderate capability Process control has to be firm.When Cp is close to 1,rejection can occur.

1.00> Cp> 0.67 Insufficient capability Rejects are occurring. 100%inspection required. Processneed to be controlled &improved.

0.67> Cp Capability very muchinsufficient.

Quality not satisfactory.Standards & process needimmediate review &improvement.

Source: Creating Customer Driven Quality- Akhilesh N Singh, pg no:101

Table -I

So if we will be able to calculate the process capability index, Cp; with the help of the table

we would be in a position to take immediate decision about the status of an existing process.

Graphical Representation of Six-Sigma Through Normal Distribution Curve:

The normal curve can be described mathematically with the following equation:

y = e-(x-) 2 / 2 2

2

Where, y = the no. of times a value occurs in the distribution.

e = constant = 2.718, x = the value whose frequency we are interested in finding.

= the average value. = standard deviation. = 3.178 = constant.

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The above equation helps us in determining the shape of frequency distribution based

on two factors that vary. Note that in the above equation, all the terms except two are

constants. The only two factors in the above equation that are not constants are the

average x value i.e. and standard deviation i.e. .

The standard deviation is significant because it represents the bell curves spread or you

can say the spread in the data about the average ( ). Fig-VI shows two bell curves with

different standard deviation. A frequency distribution with a small standard deviation

represent a sharply defined bell curved ( 6), while a frequency distribution with a large

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standard deviation represent a more flattened bell curve(3).

Fig-VI

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In a 3 sigma process the value are widely spread along the center line, showing the

higher variation of the process. Whereas in a 6- sigma process, the values are closer to the

center line showing less variation in the process.

Now although six-sigma allows for no defects at all but in long run, every process shifts

by +- 1.5 , so 3.4 parts out of every million parts or 0.00034% of failure rate will exist.

In process other than manufacturing, this get translated into either 0.00034% 0f failure

rate or 99.999966% of success rate. Therefore this if know as virtual perfection.

INDIAN SCENARIO:

In todays global business environment, competition is significantly more intense due to

both the greater number of players and tremendous opportunities that exit. The producers

of good and services are require to deliver values to their customers. Value to the

customer means buying a product with most important attributes at the lowest price

possible. To improve value the manufacturers must either improve on their criteria that

are most important to the customer, reduce cost to the customer or do both. Also the

manufacturer are facing the challenge of introducing new products into the market

quickly. The giants among Japanese viz., Sony, Matsushita, Honda and Toyota are

pioneer in the field of innovation and are catering the market consistently for decades

with world class products.

Indian companies are not too far. They too have taken the challenge by horns.

WIPRO Takes The Lead:

WIPRO technologies have more than 200 black-belts to monitor different projects of six-

sigma. It initiated six-sigma process in 1997 with consultation services from Motorola.

The main objective of the projects is not to run around to solve a problem, but to develop

a solution with a tool of methodology that is based on six-sigma. . It helps to improve

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operational efficiency ,customer satisfaction and business parameters. Presently most

of its projects are running above the 4.5 level, which is much higher than Indian industry

average 3.

Satyams Initiative:

Satyam has also taken initiative to implement six-sigma more than its 500 projects of

different processes and services that impact business and customer deliverables, as it

needs to bring in significant cost savings through productivity improvements in all this

processes and services. It has set a target to take all its projects to a level of 4.8 sigma in

near future so that it will be in a position to save Rs 50 corer/annum. Currently more than

300 projects have already achieve 4.8 level of six-sigma and rest are functioning at 3-3.5

level of six-sigma. At present at has 182 qualified black-belts, 711 green-belts under a

core team of 4 master black-belts.

TCSS Endeavour:

TCS used TATASigmaX process excellence framework as a part of process solution.

This framework has been developed with the focus on optimal six-sigma deployment at

the fastest rate with maximum RoI from the organization.

TATASigmaX process excellence framework is componentized in a way that it ensure

organizations follow the optimal path function to achieve process excellence by

continuously responding to the voice of customer, the voice of business and the voice of

process. TCS has a pool of master black belt, black-belts and green belts, who have

collectively executed nearly 1000 projects.

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challenge. In this respect the Mumbais dabbawalas is the brilliant example of logistic

system , catering approximately 2,00,000 lunch- boxes within an hour with a man power

of roughly 5000 dabbawalas. They not only become an example in front of the elite

management institutes but also achieved the six sigma quality certification endorsed by

Forbes magazine, a fan club that includes Prince Charles and Richard Branson (owner of

virgin empire) .

CONCLUSION:

Six-sigma brings many changes in the work culture where it has been deployed, create an

open and transparent work culture where ideas are invited from employees, there is lack

of hierarchy and focus is on a learning environment. It leads to quality thinking at every

level and in every operations in manufacturing and service organizations. Most of our

Indian organization are working below the average standard of 3.5 level of 6 and the

preferred requirement level is 4.8.

To attain this level in overall Indian industries what is required most, is that the top

management commitment.. Top management commitment means there should be a

matching between saying and doing. First of all the top management must have to create

an environment of mutual trust and make the lower level employees understand about

the benefit of six-sigma for the organization and for over all society also. But it is not so

easy as writing about it. As per Indian corporate culture, though it is not next to

impossible, but very difficult to change the mind set of the top executives over night; to

break the shell of their hierarchical ego and whole heartedly welcome all shorts of

suggestion from their shop-floor employees.

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The next problem which we may come across about the implementation of six-sigma

in middle and small scale organizations is the cost. At the beginning the training cost per

employee is very high, which de-motivates the employers at the initial level of it.

The next problem which cant be overlooked is , that there is no global accreditation body

for six-sigma certification as there are global quality agencies for SW CMM or CMMI or

ISO. More over there is no audits or assessment for six-sigma. It is totally self-declared,

self-managed with no external validation. Till now it has been seen as a strategic

initiative not a quality initiative.

More over the people are certified as Master Black Belt, Black Belt, Green Belt like that,

not the organization. As they switch the job from one to another organization the skill

also flow along with them, which have a direct negative impact on the on going projects.

So lots of short coming are there but still we should work along with them, because

ummid par dunia kayam hai.

Case Study: Six Sigma Mumbai Dabawalas .

They make one Error on every 16 million transactions. The world renowned Forbes magazine

has selected them as a colossal example of six sigma's success..

Logistics at its best :

The Mumbai Tiffinwallas are international figures now thanks to Forbes Global. The Forbes story

details ,the efficiency which with they delivers the Tiffins of their customers. Around 5000

Tiffinwallas deliver 175,000 lunches everyday and take the empty Tiffin back. They make One

Mistake in 2 months. This means there is one Error on every 16 million transactions. This is thus

a 6 Sigma performance (a term used in quality assurance if the percentage of correctness is

99.999999) - the performance which has made companies like Motorola world famous for their

Quality.

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Following is the complete story :

Mumbai's "Tiffin wallahs" have achieved a level of service to which Western businesses can only

aspire. "Efficient organization" is not the first thought that comes to mind in India, but when the

profit motive is given free rein, anything is possible. To appreciate Indian efficiency at its best,

watch the Tiffin- wallahs at work.

These are the men who deliver 175,000 lunches (or "Tiffin") each day to offices and schools

throughout Mumbai, the business capital of India. Lunch is in a tin container consisting of a

number of bowls, each containing a separate dish, held together in a frame. The meals are

prepared in the homes of the people who commute into Mumbai each morning and delivered in

their own Tiffin carriers. After lunch, the process is reversed. And what a process - in it's

complexity, the 5,000 tiffinwallahs make a mistake only about once every two months, according

to Ragunath Medge, president of the Mumbai Tiffin men's Association. That's one error in every 8

million deliveries, or 16 million if you include the return trip. "If we made 10 mistakes a month, no

one would use our service," says the craggily handsome Medge.

How do they do it? The meals are picked up from commuters' homes in suburbs around central

Mumbai long after the commuters have left for work, delivered to them on time, then picked up

and delivered home before the commuters return.

Each Tiffin carrier has, painted on its top, a number of symbols which identify where the carrier

was picked up, the originating and destination stations and the address to which it is to be

delivered. After the Tiffin carriers are picked up, they are taken to the nearest railway station,

where they are sorted according to the destination station. Between 10:15 a.m. and 10:45 a.m.

they are loaded in crates onto the baggage cars of trains. At the destination station they are

unloaded by other Tiffin wallahs and re-sorted, this time according to street address and floor.

The 100-kilogram crates of carriers, carried on Tiffin wallahs' heads, hand-wagons and cycles

are delivered at 12:30 p.m., picked up at 1:30 p.m., and returned where they came from.

The charge for this extraordinary service is just 150 rupees ($3.33) per month, enough for the

Tiffin wallahs, who are mostly self-employed, to make a good living. After paying Rs. 60 per crate

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and Rs.120 per man per month to the Western Railway for transport, the average Tiffin wallas

clears about Rs.3, 250. Of that sum, Rs.10 goes to the Tiffin men's Association. After minimal

expenses, the rest of the Rs50,000 a month that the Association collects go to a charitable trust

that feeds the poor.

Superb service and charity too. Can anyone ask for more?

What is wonderful about this system is that it extends the design and uses the Tiffinwallas, the

end user and their cognitive and memory structure as well. Since one Tiffinwallas is not going to

pick more than 10-20 Tiffin, he can easily sort recognize at the originating station and deliver it to

the owner. Also within a building, the Tiffin wallah knows which floor to deliver. Within a floor a

owner can recognize his Tiffin amongst others. Thus these Tiffins carry only * A symbol (not

name) of the originating station * A symbol for the destination station * A symbol for the building

where the addressee is. And what is more amazing is that this is run by people, most of whom

are illiterate.

Salaam ( Salute) to the Spirit of Mumbai !!

* This article has already been published by Central Board of WorkersEducation , Ministry of Labour & Employment Govt. of India on its 5 th

National Conference on Quality Management-March10-11/2007,New-Delhi.

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References:

Creating Customer Driven Quality - Akhilesh N Singh, Excel Books, New-Delhi, 1 st

Edition, Jan 2000.

Express Computer- issue dated 11 th Oct 2004.

Six-Sigma for Managers Greg Brue, Tata McGrow Hill, 7 th Reprint-2004.

Total Quality Management - K. Shridhara Bhat, Himalya Publication House, 1 st

Edition-2002, Reprint-2004.

Total Quality Management- Joseph and Susan Berk, 1 st Indian Edition, Excell Books,

New-Delhi.

Convergence-Asia future edition , a management journal by IISE, Lucknow (U.P).

www.qualityamerica.com

www.thefabricator.com

www.bhartiteleventures.com

www.tatasteel.com

www.wipro.co.in

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Title : AN INSIGHT UPON TQM AND SIX-SIGMA.

Name of the Author : Prof . Moloy Ghoshal

Designation : Asst. Director .

Name of the Organisation : Institute of Productivity and Management.

1- Kalyanpur,G.T.Road,Kanpur-208017(U.P)

Email:[email protected]

Web: www.ipmkanpur.edu.in

Mob: 09839102543

Ph: (0512)2573783/84.

Fax: (0512)2570151

Correspondence address : DO

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