An Introduction to

Six Sigma

Problem to opportunity
Continuous Improvement

PERFORMANCE

New Levels of Performance

Initial
Euphoria

A
Valley of
Despair
Change is
Implemented

TIME

8 depth of drop-off (A)

8 time of drop-off (B)
8 Valley of Despair

We Discuss.
1. What is Six Sigma Quality ?
2. Why would a company adopt Six Sigma ?
3. Is there a roadmap to Six Sigma ?
4. What are the challenges ?
5. What are the rewards ?

What is Six Sigma?

Originated at Motorola in the early 80s
Is a methodology for disciplined quality improvement
Term Sigma a Greek alphabet, designates the distribution or
spread about mean of any parameter of product, process or
procedure.
Process variation can be described by how many sigmas (i.e how
many multiples of standard deviation or SD ) fit within the
specification limits
Sigma is a statistical measure of the quality consistency for a
particular process / product.

What is Six Sigma Quality?

Six Sigmas goal is the near elimination of defects from any
process, product, or service.
The numerical goal is 3.467 defects per million opportunities.
Juran once concluded that in the US, close to 1/3 of the work
done consisted of redoing what had already been done.
Depending on the industry, this Cost of Poor Quality (COPQ)
could be 20 to 40% of total effort!

Sweet fruits
DFSS

Process
limitations

Bulk of fruits
Process characterization
and optimization
Low hanging fruits
Simple QC tools

Logic and intuition

Quick hits-Kaizen
Increase of sigma rating requires an exponential decrease in
defect reduction

Six Sigma Process Analysis

SIGMA

DPMO

COPQ

6 sigma

3.4

< 10% of sales

5 sigma

230

10 to 15% of sales

4 sigma

6200

15 to 20% of sales

3 sigma

67,000

20 to 30% of sales

2 sigma

310,000

30 to 40% of sales

1 sigma

700,000

CAPABILITY
World Class

Industry average

Noncompetitive

High

The implications of ignoring

non-technical aspects during
change.
5
4

The degree
to
which
3
positive
conditions
for 6 Sigma 2
success
exist in an 1
organisation

Low

Score 4-5; world-class; 6 Sigma is in the DNA; its

the way we work; order of magnitude payback

Score 3-4; cultural transformation beginning but may

take longer; payback significant
Score 2-3; significant tactical results, but 6 Sigma
remains just a programme but normal payback

Score 1-2; some tactical results ; 6 Sigma will

probably die; we only get our costs back.
Score 1 or less; change will fail; costs
of training & consultancy will be lost
The likely outcome
With acknowledgements to EAI

What is Six Sigma Quality?

Strategy includes
Define Measure

Analyze Improve Control

Improvement projects must be integrated with the goals of

organization
Implementation is top-down
CEO drives, and executive management provides the Champion
for each project
Uses concept of belts for levels of competency in
implementation
MBB = Master Black Belt

BB = Black Belt GB = Green Belt

Six Sigma Model

Existing
Business
Processes

Suppliers

Inputs

Manufacturing
and service
processes

Define

Six Sigma
Methodology
Control

Outputs

Measure

DMAIC
Analyze
Improve

Improved
Business
Performance

Quality

Productivity

Cost

Profitability

Customers

An Example
Six Sigma Project: Engineering Changes
Define: Large number of changes from client after
approving engineering design.
Measure: Number of changes, time involved in changes,
compliance to critical path schedule.
Analyze: No clear authority on client team to establish
scope, any of client team could make changes,
verbal communication of changes, conflicting
changes by client team members.

Improve: Regular engineering/client meetings conducted

topics include: scope for each section and
desired objective, known limitations,
unclear requirements were questioned and
options discussed. Written plan signed by
client representative and engineering lead.
Change requests in writing and signed by
client representative.
Changes decrease by a factor of 4.7 and
schedule met.
Control: Change requests all in writing. Shared approach
with other disciplines on project

Concept: Accident Story !!

Ques: 1

Ky a Hua ?

DEFINE

Ques: 2

Kitna la ga (OR
Kuch la ga to nahi)?

M EASURE

Ques: 3

Ka ise Hua ?

ANALYZE

Ques: 4

Aise Avoid ka r
Sa kta tha ?

IM PROVE

Ques: 5

Fir nahi
hoega !!

CONTROL

GE Proprieta ry

1/
GE C&I Asia

high
Monitory benefits

Six Sigma
Methodology

low
low

high
Complexity of projects

Some Results
Motorola 10 years; $11 Billion Savings
Allied Signal - $1.5 Billion estimated savings
General Electric started efforts in 1995
1998: $1.2 Billion less $450 Million in costs net
benefits = $750 Million
1999 Annual Report: more than $2 Billion net benefits
2001: 6,000 projects completed; $3 Billion in savings

Six Sigma according to GE

A highly disciplined process that helps us focus on
developing & delivering near-perfect products & 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

A Road Map for Six Sigma

Appoint a Champion
Select a Cross-functional team
Develop quantifiable goals
Develop an implementation plan

Establish a training program

Address data collection requirements and issues

Develop a change control and maintenance program

Coordinate your road map

Drivers of Business Performance

What goals do we have for our business efficiency?
How do we know how well we are doing?
CTB (critical to business)
inventory turns
(lagging indicator)

Order Fulfillment

Cycle time
WIP

Demand
Forecasting

Production
Planning

Sourcing &
Purchasing

Manufacturing
and Assembly

Warehousing

Order Entry

in-process timeliness
(predictive indicators)

Yield & Capacity

Receive
raw
material

material waste
and yields1

SubAssembly 1

SubAssembly 2

Final
Assembly

line uptime
material waste
and yields2

material waste
and yields3

Shipping

Test

Packaging

test set up time

What are the Challenges of Six Sigma?

Culture change
Understanding the DFSS (Design For Six Sigma)
It is not a quick fix nor a recipe
Consultants cant make it happen. Training especially
management level
Takes careful preparation and a commitment to the
foundational change efforts required
Statistical analysis is not generally part of the engineering
discipline in most IT shops
Implementation tends to be uneven and lapses occur
frequently

Rewards of Six Sigma

Improved reliability and predictability of software
products and services
Increased value to the customers and shareholders
Improvements in organizational morale
Increased marketplace viability
Organizational recognition
Significant reduction in defects
Institutionalization of a process mindset

THE DEFINE PHASE

Before Define Phase

Dashboard
A tool used by management to clarify and assign accountability
for the critical few key objective, indicators and projects needed
to steer the organization
Mission Statement

President

Direct reports

Key
objectives

Key
indicators

Key
objectives

Key
indicators

Potential six
sigma
projects

Objectives
that need to
be achieved
to attain the
mission
statement

Indicators
showing
progress
towards
attaining the
goal

Objectives
established to
move the
presidents
key
indicators in
proper
direction

One or more
indicator
shows
progress
towards each
key objective

Six sigma
projects used
to improve
or innovate
process to
move
indicators in
proper
direction.

Business Objectives
Four types
a. Financial objectives:
Include the management or stakeholders objective to make more profit,
market share, dominance of growth, and desire for high turnover,
less financial Loss
b. Process improvement objectives:
Management desire for consistency and uniformity in the output,
high productivity, products services and
process that exceed the needs & wants of current & future stake holder.
Produce products that incur less warranty costs, ease in distribution
c. Customer satisfaction:
Desired outcome ( joy security, personal time, belonging),
Undesired outcome (avoidance or elimination of death, taxes,
discomfort, wasted time, frustration.

c. Customer Satisfaction:
Desired product/ service outcome: ease of use,
accessibility, low cost of ownership, durability and
appeal.
Desired process characteristics: timely arrival of the
product , no waiting time, ease of acquisition.
d. Employee growth and development of key objectives:
Improving leadership skills
Providing training opportunities
Providing educational opportunities

Leading and lagging indicators:

Financial objectives are the result of customer satisfaction, Customer satisfaction is the
result of process improvement and process improvement is a function of employee
growth and development objectives.

Key indicators
Measurement that monitors the status of the key objective
a. Attribute indicators
Monitored by the attribute data such as count over time,
ex: customer complaints over week, percentage of defects etc
b. Measurement indicators
Need to actually measure the data, ex: cycle time to file a report,
waiting time in a bank, diameter of the ball bearing, etc..
c. Binary indicators
Action being accomplished on the said date. Etc.. Yes/ No type of
situations
d. List by time period indicators
List of employees not trained in safety standards etc..
e. Gantt chart indicators: deadlines

Tasks and projects:

Task is a process improvement activity in which necessary process
change is known by the process owner.
But he/she has not had enough opportunity to effect the process change.
The need is determined by existing gap between real and ideal value
of indicator
Project:
Project is a process improvement activity, where the necessary process
changes are unknown to the process owner, generally process owner
forms a team to identify the gap between real and ideal (required)
values between the key indicators.

There are three categories of tasks/ projects

a. zero project or task: the purpose of zero project or task is to get
the current value of the zero.
Examples: Zero defects, or to reduce the unit to unit variation
from the normal golden ornaments.
b. Increase project or task: aim is to increase:
example increase the revenue or profit
c. Decrease project or task:
Reduce the cost, reduce the cycle time

The overall business

Voice of Employee Voice of Customer Voice of Share holder
Key output matrices aligned
with strategic goals/objectives
of business. Big Ys provide a
direct measure of business
performance

Big Business (Y s)
Process Ys
Y
Y
Y
Y

Key out put metric that

summarize process
performance

Key out put metric that

defined from the
customers perspective

Project Y
X1

X2

X3

CTQ Drill down.. CTQ Tree

Average orders Received per hour

Timely processing of orders

Average time to process an order

Orders received by phone

Orders received by email
Orders received in person
Orders received by fax
Orders received by snail mail
Time to enter the order
Time to check the inventory
Time to process payment
Time to arrange shipment

President
Business
objectives
Increase the
number of
order
Increase the
number of
services

Minimize the
production cost
Eliminate
employee
complaints

Direct reports
Area objectives

Business
indicators
Number of
Increase the
order per month number of
orders for the
department
Average
Increase the
number of
number of
services utilized services utilized
by the customer by each
customer
Std deviation of
the services
utilized by the
customer
Production cost Minimize the
per month
production cost
in the division
Number of
Eliminate the
employee
employee
complaints
complaints in
the dept

Area indicators
Number of
orders per
month

Potential six
sigma projects
New customer
or promotion
project

a. average and
Std deviation of
the customer
services

Existing
customer
promotion
projects

Production cost
in the dept

Quality project

Employee
complaint per
month in dept

Employee
moral project.

Project Prioritization Matrix

The Define Phase

1. Determine the project CTQs (VoC analysis)
a. Identify customers
b. Gather VOC
c. Organize and Prioritize VOC
d. Translate VOC to CTQs
2. Define the Project

3. Project Charter
a. Business Case
b. Problem and Goal Statement
c. Project Scope
d. Miles stones and responsibilities

4. Map the process

a. Process operational Definition
b. benefits of process planning
c. SIPOC Model
d. Mapping guidelines

VoC analysis
a. Reactive data analysis
b. Proactive data analysis
Procative data analysis (KANO model)
Step 1: Collect the voice of customer data
a. Identify the heavy and lead users.
Heavy users: Actual users of the product
Lead users: are the customers/users of the product years
ahead of the regular users.
Example: washing machine/ hair dryer/ hairdryer
used as portable body warmer.

b. collect the data:

Step 2: Analyse the data:
a.classify the data obtained into product/ service specific and
Circumstantial data.
Circumstantial data gives idea of which products are used by customer
Product/ service data describes about expectations from customer.
Develop the features: Determine the key or group of circumstantial
parameters. This can be done using an affinity diagram.

Affinity Diagram.
Credit card example
Flexible product

Easy process

Availability

Personal Interface

Advice Consulting

Low interest rate

Easy application

Will come to my facilty

Knowledgeable
representatives

Knows the business

Variable terms

Easy Acess to capital

Availability after business hours

Professional

Graps my financial
status quickly

All charges clearly stated

Quick decision

Availability when I need to talk

Friendly

Makes finance

Pay back when needed

Can apply over phone

Responsive to phone calls

Make me feel comfortable

Cares about my

NO Prepayment Penalities

Know the status of loan

during application

Has an access to
expertise

Pre-approved Credit

Preference if having a
Savings/ current Account

Calls if problem
arises

Affinity Diagram
Tool that gathers large amount of data and organizes
them into groupings based on the natural relationships
Steps:
Step 1: Generate Ideas (brain storming)
Step 2: Display the Ideas
Step 3: Sort ideas into groups
Step 4: Create header cards
Step 5: Draw finished diagram

Step 3:
Development of cognitive image of the product:
a. Team members restate each focus point into one or more
operationally definable CTQs.
b. The engineers/ developers use the technical know how or
restate the focus point into one or more operationally definable CTQs
c. Experts restudy the use of product and restate focus point if required.
Carry out Kano Analysis for the desired point

Determine the Project CTQs (recap)

Identify customers
Gather VOC
The "voice of the customer" captures the
requirements/feedback from the customer
(internal or external) to provide the customers
with the best in class service/product quality.
Captured in a variety of ways: Direct
discussion or interviews, surveys, focus groups,
customer specifications, observation, warranty
data, field reports, complaint logs, etc.

CTQs (recap)
Measurable characteristics that must be met in order
to satisfy the customer.
Defined by the customer (Internal or External).
Interpreted from a qualitative customer statement to
an actionable, quantitative business specification.
CTQs are what the customer expects of a product...
the spoken needs of the customer.

The Kano Model*

Developed in the 80's by Professor Noriaki Kano,
Based on the concepts of customer quality
Provides a simple ranking scheme which differentiates
Basic and Attractive attributes.
Basic attributes (must be):
Attributes which must be present in order for the product to be successful

One dimensional attributes (Performance / Linear)

These characteristics are directly correlated to customer satisfaction.
Attractive attributes (Exciters / Delighters/ Attractive)
Customers get great satisfaction from a feature
and are willing to pay a price premium.
Satisfaction will not decrease (below neutral) if product lacks feature
Companies carry out QFD or Pareto analysis or Affinity diagram in lieu of Kano Model Analysis

Pictorial form of Kano model

High Satisfaction
(delighted)

m
Ti
e

Exciters or
delighters

Performance
( linear)

High quality performance

Quality of performance
not achieved

Basic

Low Satisfaction
(disgusted)

Methodology of carrying out Kano model

Determine main features, which need to be classified
Firstly, the features of interest need to be determined

Devise questionnaire
Aims to understand how potential customers would feel if a
feature was either present or not present.
Achieved by asking two questions for each feature
A functional question (ie - the feature is present) and
A dys-functional question (ie the feature is not present),
If you have a blue tooth facilty in a mobile phone, how would you feel?

1. Like it
2. Must be
3. Neutral
4. Live with
5. Dislike

If you do not have a blue tooth facilty in a mobile phone, how would you feel?

1. Like it
2. Must be
3. Neutral
4. Live with
5. Dislike

One way (O) user satisfaction is proportional to

performance of this feature. Lesser the user satisfaction,
more is the performance
Must Be (M) User satisfaction is not proportional to the performance
less performance, less user satisfaction, but high
performance creates feeling of indifference to the feature.
Attractive (A) User satisfaction is not proportional to performance
Low levels of the performance creates the feeling of
indifference to the feature, but high level of performance
create feeling of delight
Indifferent (I): User does not care about the feature
Questionable (Q) Users response does not make any sense
Reverse (R ) User offers response opposite to the responses
expected by individuals.

 Identify classification
Based upon the responses, the type of feature can be
determined from a simple look-up table,
Customers
Requirements

Dysfunctional (negative) Question

1. Like
2. Must be 3. Neutral 4. Live with
5. Dislike
1. Like
Questionable Attractive Attractive Attractive One dimentional
2. Must be
Reverse
Indifferent Indifferent Indifferent
Must be
Functional (positive) 3. Neutral
Reverse
Indifferent Indifferent Indifferent
Must be
question
4. Live with
Reverse
Indifferent Indifferent Indifferent
Must be
5. Dislike
Reverse
Reverse Reverse Reverse
Questionable

Indifferent responses:
These are attributes to which the customer pays
no attention "If they are present, it is nice.
If they are not present, it does not matter"
Questionable responses and reversals:
Responses which contradict each other

Sum responses*
As with any interview method, sufficient responses must be sought.
Product requirement
Battery Life >3 days
Camera
Bluetooth

A
7
10.4
63.8

O
32.3
45.1
21.6

M
49.3
30.5
2.9

I
9.5
11.5
8.5

R
0.4
1.2
0.7

Q
1.5
1.3
2.5

Total
100
100
100

*As per the survey carried in the year 2004

Plot features onto the Kano graph

Ideally, the features should be mapped onto the graph to provide a
visual guide to the relative importance from a user perspective of
different aspects of functionality;
We compute customer satisfaction coefficient.

Customer Satisfaction Coefficient

Extent of satisfaction =

A+O
A+O + M + I

Extent of dis-satisfaction =
Product requirement
Battery Life >3 days
Camera
Bluetooth

(O + M )
A+O + M + I

Dissatisfaction index Satisfaction Index

-0.831804281
7.329255861
-0.775384615
10.8625641
-0.253099174
64.0231405

Definition of the Project and Project Charter

An Agreement between
the organization providing the product or service, and
the customer organization requesting and receiving project
It defines
Partners and external stakeholders;
The project management framework to be used on project;
Roles, responsibilities, accountabilities, and activities of
team members;
Management commitments
(specifically in terms of communications and control);
and,
The empowerment framework.

Effective project planning tool

A communication vehicle that can be referenced
throughout the project.
It is a quick reference and overview of what the project
is about, why it is being conducted, who is involved and
in what capacity, and the general approach and timeline
that exists for the project.

The Scope

Does project Y link

with Business Ys

Business case/
Benifits

What is the improvement

team seeking to achieve

Problem/
opportunity
statement

Goal
statement

What is included /not included

What are boundaries? Scope/out of scope

Project
Scope

Start with a verb ( reduce, eliminate, increase)

Focus on the project ( cycle time, accuracy etc.)
Target (by 50%)
Deadline

Milestone/
Project
plan

Resources/
Team
Members
Roles

Who are the key resources?

Roles of GBs/ BBs

Following needs to be answered in details:

Project Purpose
A brief description of the project.
Describe in business terms the reason for project and overall
timing and expectations.
Some background information about how and why the project
was initiated should also be included.
Describe who will use final outcome of the project and identify any
other stakeholders who will be impacted by results of project.
The Business Case document may already contain
information to be included in section and should be
referenced as appropriate.

Project Scope
Defines the spectrum of features and functionality that will be
delivered and limits that have been imposed in order to control
the release or delivery of the product or service
(what project will accomplish)
The project scope defines the work that is required to deliver the
project product or service to meet the project objectives
(how the project will be accomplished).

Project Objectives
Identify the overall objectives for the project. Identify what the
project is intended to achieve, in business and technical
terms.

Outstanding Issues
Identify any outstanding issues that need to be resolved
within the scope of the Project. These are issues that have
been identified during the Business Case creation
and approval process and/or through project initiation
process.

References
R

Identify
any other documents, that relate to project at the time of
e
development
of project Charter.
f
e
Include
the current revision number, issue date, author, location
r
of
e the document and method of access for each document or
reference.
n
c
Rather,
enough information should be provided to explain how
e
document
relates to the project, what it contains that
s
is pertinent to the project, and how it can be located.
I
d
e
n

MAP the Process

The Business Process

Inputs

Supplier(s)

outputs

Customer(s)

The SIPOC Model

The SIPOC Model

Suppliers

Inputs

Process

Outputs

Customers

The Process Map

List a. CTQs
b. Boundry

The SIPOC Model. continued

Supplier:

The provider of inputs to the process

Inputs:

Materials, resources, or data required

to execute process

Process:

A collection of activities that takes one or

more inputs and creates and output that is of
value to the customer

Output:

The products or services that results from the

process

Customer:

The recipient of the process output

CTQ:

Critical to Quality characteristics

Boundry:

Limits of a particular process that defines

start and stop of the process

GRPI: Goals Roles Process Interpersonal

GRPI is a check list to see how well the personal in the team
have understood the project and
cope up with other persons in the team
Steps to be followed:
1. Distribute the copies of the check list to all
the team members prior to the team meeting
(after the first meeting).
2. Ask each team member to submit
the copies by the next meeting.
3. The team members discuss and resolve the
issues related to the check list.
4. Share difficulties if any with the leader.

GRPI Check List

Rating
Goals

Comfortable

Uneasy

How clear and in agreement are you on the mission

and the goals of our team/ projects?
Purpose and Outcome
Have you understood and agree on your project
mission and the desired oct come

Cutomer and needs

Do you know who the project stake holders are and
what they require and what this projct is relly needed.

Goals and Deliverabes

Have you identified specific, measurable and prioritized
project goals and deliverables linked to the business goals

Project Scope and definition

Do you understand and agree on what in/out of our
project scope and tasks.

GRPI Check List

Rating
Roles

Comfortable

Uneasy

How well do we understand, agree on and fulfill the

roles and responsibilities for our team
Roles and responsibilities
Have you defined and agreed on our roles, responsibilites,
requiredskills and resources for our project team

Authority and Autonomy

Are you clear on the degree of authority/empowerment
we have to meet our project mission

GRPI Check List

Rating
Process

Comfortable

Uneasy

Critical Success factors

Do you know and focus on the key factors needed
to meet the project goals and mission

Plans and Activities

Do you have a effective game plan to folloe that
includes the righttasks; clearly defined / assigned

Monitoring and measures

Do you have an effective monitoring process and
specific metrics linked to process and goals

Schedule/ Milestones
Have you defined the project schedule and know
what the key phases and milestones are

GRPI Check List

Rating
Interpersonal
Team Operating Agreement
Do you have shared expectations, agreed and
followed guidelinesfor how our team works together

Comfortable

Interpersonal / team
We have necessary relationships, trust, openness,
participationand behaviours for a healthyand productive team

Uneasy

If the total score by everybody is greater than 36

means that the team members are ready for the project
to be executed.