Six sigma

SIX SIGMAIN

MANUFACTURING INDUSTRIES

SIX SIGMA

Six sigma methodology provides the techniques and tools to improve the capability and reduces defects in any process.

It was started by Motorola in 1987, in its manufacturing division.

Six sigma strives for perfection. It allows only 3.4 defects per million opportunities.

Six sigma improves the process performance, decreases variation and maintains consistent quality of the process output. This leads to defect reduction and improvements in profits and customer satisfactions.

The objective of six sigma principle is to achieve zero defect products/process.

Many measurement standards (Cpk,Zero defects,etc) have been developed in the area of quality processing, but credit for coming up with the term “six sigma” was given to a Motorola engineer named Bill smith.“six sigma” is currently a federally registered trademark of Motorola. A six sigma quality program was established at Motorola in 1987. This program was developed by Mikel J.Harry, and gained publicity when Motorola won the Malcolm baldrige national quality award in 1988. Today many companies have adopted their own six sigma methodologies and programs.

HISTORY

SIX SIGMA - FIRST GENERATION (SSG 1)

The era ‘1986 to 1990’ is referred to as the first generation of Six Sigma, or SSG 1 for short.

Pioneered at Motorola Statistical approach Measured Defects Per Million Opportunities

(DPMO) Focused on:

Elimination of defects Improving product and service quality Reducing cost Continuous process improvement

SIX SIGMA-SECOND GENERATION(SSG 2)

In the 1990s, the focus of Six Sigma shifted from product quality to business quality. General Electric Corp. ushered in the second generation of Six Sigma, or SSG 2 as it is known.

Six Sigma became a business-centric system of management.

High potential candidates were selected as Black Belts.

SIX SIGMA - THIRD GENERATION (GEN III) Developed after the year 2000. Gen III can show companies how to deliver

products or services that, in the eyes of customers, have real value.

Combines Lean Manufacturing Techniques and Six Sigma. Termed as Lean Six Sigma.

Korean steel maker Posco and electronics maker Samsung has begun a Gen III programme.

SIX SIGMA CHALLENGE

7

• 20,000 lost articles of mail per hour

• Unsafe drinking water for almost 15 minutes each day

• 5,000 incorrect surgical operation per week

• Two short or long landing at most major airports each day

• 200,000 wrong drug prescriptions each year

• No electricity for almost seven hours each month

• 20,000 lost articles of mail per hour

• Unsafe drinking water for almost 15 minutes each day

• 5,000 incorrect surgical operation per week

• Two short or long landing at most major airports each day

• 200,000 wrong drug prescriptions each year

• No electricity for almost seven hours each month

99% Good (3.8 σ)

• Seven articles lost per hour

• One unsafe minute every seven month

• 1.7 incorrect surgical operation per week

• One short or long landing at most major airports every 5 year

• 68 wrong drug prescriptions each year

• One hour no electricity for almost every 34 years

99.99966% Good (6 σ)

How to calculate six sigma

Calculate defect per unit (DPU)

DPU = Total # defects

Total # of Units

Calculate defect per million opportunities for error (DPMO):

DPMO = DPU X 1,000,000

# of Opportunity per Units

Assume that the product in question is a television which contain800 opportunities for error. Total production 2,500 units, found

450 defects. What is six sigma level?

9

DPU calculation =Total # of Defect

Total # of Units

= 450

2,500

= 0.18

Thus,

DPU X 1,000,000

Opportunity for Error

= 0.18 X 1,000,000

800= 225

DPMO =

From the next table, found that sigma level : 5 < σ < 6

SIGMA (Σ) CONVERSION TABLE:

If your yield is: Your DPMO is: Your Sigma is:

30.9% 690,000 1.0

62.9% 308,000 2.0

93.3 66,800 3.0

99.4 6,210 4.0

99.98 320 5.0

99.9997 3.4 6.0

Champions: Business leaders who lead the implementation of Six Sigma within the business;

Master Black Belts: Fully trained quality leaders responsible for Six Sigma strategy, training, mentoring, deployment and results;

Black Belts: Fully trained Six Sigma experts who lead improvement teams, work on Six Sigma projects and mentor Green belts;

Green Belts: Fully trained individuals who apply Six Sigma skills to improvement projects;

Team Members: (Yellow Belts) Individuals who support projects in their areas.

Six Sigma Support Structure

SIX SIGMA METHODOLOGY

Six Sigma has two key methodologies: DMAIC and DMADV. DMAIC is used to improve an existing

business process. DMADV is used to create new product

designs or process designs in such a way that it results in a more predictable, mature and defect free performance.

DMAIC DMADV

Defines a business process.

Measuring current process

Identify root cause of the recurring PROBLEMS

Improvements made to reduce defects

Keep check on future performance

Define customer needs

Measure customer needs & specification

Analyze options to meet customer satisfaction.

Model is deigned to meet customer needs

Model put through simulation

tests for verification

DIFF. B/W DMAIC & DMADV

SIX SIGMA APPLICABILITY

Six Sigma is a “Industry Independent” methodology and has been successfully applied across:

Manufacturing Industry including Automotives, Aerospace, Health Equipment, FMCG, Electronic Goods, Continuous Process Industries, Textiles, etc.

Service Industry including Telecom, Banking and Financial Services, Health Care, Hotels, IT, ITES, KPOs, Airlines, Cargo movement, Support Services, HR services, Marketing Services, etc.

R&D organizations or in R&D functions of various organizations

SIX SIGMA :INDUSTRY WIDE APPLICATION

Industry Examples of Six Sigma ApplicabilityAutomotives i. Improving Safety & Reliability of Finished Vehicles

ii. Reducing Manufacturing defects at each stageiii. Using Design FMEA to understand and prevent any possible design

failuresiv. Improving the overall Incoming Material Quality or parts Qualityv. Optimizing Inventory levels for all major partsvi. Reducing time to manufacturevii. Reducing Design defectsviii. Reducing Supplier Lead time i.e the time take by each supplier to deliver

goods

Few Examples of Companies: Tata Motors, Ford, GM, Maruti, Telco.


Industry Examples of Six Sigma Applicability

Continuous Process Plants

i. Improving overall Yield of each shiftii. Reduce scrap or spilled materialsiii. Reduce the Process failures or breakdownsiv. Increase Plant capacity utilizationv. Improve Operator Productivityvi. Reduce time to restart the process after failurevii. Create mechanisms to prevent failures at each stageviii. Improve overall process stability & control

Few Examples of Companies: Reliance Industries Ltd, Asian Paints, GE plastics, Wipro consumer goods



Engineering Parts Manufacturing

i. Reduce Manufacturing cycle time (time of order to delivery)ii. Improve Customer Service performance scoresiii. Reduce or optimize inventory levelsiv. Reduce scrap or cost of poor qualityv. Reduce warranty costsvi. Reduce rejections due to design errorsvii. Improve parts design process to meet specifications 100% of

timesviii. Improve parts reliability by identifying & optimizing critical

factors that ensure reliability

Few Examples of Companies: Gates India Ltd., Medium to small scale suppliers of parts



Textiles/ Fashion houses/ Garments

i. Eliminating manufacturing errors/defectsii. Improving first sample approval percentages while working

with buyersiii. Improving buyer satisfaction levels iv. Increasing repeat businessv. Improving supplier evaluation processesvi. Improving processes at the source (including fabric purchase

and inspection, stitching, embroidery, packing and shipping) to reduce rejections at later stages.

vii. Reducing costs viii. Reducing delays

Few Examples of Companies: Reliance Industries, Raymonds, Grasim

Motorola saved $17 Billion from 1986 to 2004, reflecting hundreds of individual successes in all Motorola business areas including: Sales and Marketing Product design Manufacturing Customer service Transactional processes Supply chain management

Six sigma-motorola

SIX SIGMA-HONEYWELL Honeywell is one of the many success stories

involving Six Sigma. The company employs more than108,000 people who work in 95 countries.

The business is involved in products from aerospace to transportation products.

In 1994, Rick Schroeder who at the time was Vice President of Operations at Allied Signal (now Honeywell) brought his Six Sigma experience from Motorola to Allied Signal.

By 1999, Allied Signal was 5 years into Six Sigma program, which headed the company’s effort to capture growth.

They reduced defects and waste in all of their business processes—resulting in a $600 million annual savings.

Following its merger in 1999, Allied Signal became Honeywell.

Reduced time from design to certification of new projects like aircraft engines from 42 to 33 months.

SIX SIGMA: GE SUCCESS STORY

“the most important initiative GE has ever undertaken”.Jack Welch

Chief Executive OfficerGeneral Electric

• In 1995 GE mandated each employee to work towards achieving 6 sigma• The average process at GE was 3 sigma in 1995• In 1997 the average reached 3.5 sigma • GE’s goal was to reach 6 sigma by 2001in critical processes• From 1998 onwards GE realized benefits worth 2billion USD.• GE was the first company to Implement Six Sigma in services and also in offshoring.

SIX SIGMA-DABBAWALA

A Dabbawala is a person in the Indian city of Mumbai whose job is to carry and deliver freshly made food from home in lunch boxes to office workers.

Dabbawalas pick up 175,000 lunches from homes and deliver to their customers everyday.

Only one mistake is made in every 6 million deliveries.

Accuracy Rating is 99.999999. More than Six Sigma.

SIX SIGMA BENEFITS TO ORGANIZATIONS

Helps organizations produce products and services better, faster and cheaper.

Remove Wastage Maximize Customer Satisfaction Maximize Product/Service Quality. (Develop Close

to Zero Defect Products/Services) Increase Sales Increase overall Organizational Productivity Save Costs reduce scarp and rework Faster Cycle Time Empower Employees

Education

Six sigma