Six Sigma

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Six Sigma method is a ‘measure of goodness’ involving the
application of statistical methods to business processes to improve
operating efficiency, reduce variation, avoid defects, and reduce
waste. More specifically, it is a method­ology and set of tools used to
reduce quality problems to less than 3.4 defects per million
opportunities (DPMO) or better.

Six Sigma is a management philosophy focused on business process

improvements. It seeks to elim­inate waste, rework, mistakes;
increase customer satisfac­tion; and, finally, increase profitability
and competitiveness. Six Sigma is a management philosophy aimed
at customer satisfaction.

Learn about:- 1. Introduction to Six Sigma 2. Meaning of Six Sigma 3.

Concept 4. Core Elements 5. Ten Principles 6. Pre Requisites 7. Levels
8. Six Sigma Belt 9. How Does Six-Sigma Work?

10. Phases of Six-Sigma Planning 11. How to Calculate Six Sigma? 12.
Tools 13. Steps for Implementing Six Sigma 14. Roles and
Responsibilities of People Responsible for Six-Sigma Implementation.
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15. Approaches of Six Sigma 16. Difference between TQM vs. Six
Sigma 17. Do’s and Don’t 18. Benefits 19. Criticisms.

Contents:

1. Introduction to Six Sigma

2. Meaning of Six Sigma
3. Concept of Six Sigma Quality
 4. Core Elements of Six-Sigma
5. Ten Principles of Six Sigma
6. Pre Requisites of Six Sigma
7. Levels of Six Sigma
8. Six Sigma Belt
9. How Does Six-Sigma Work?
10. Phases of Six-Sigma Planning
11.How to Calculate Six Sigma?
12. 9 Key Six Sigma Tools
13. Steps for Implementing Six Sigma
14. Roles and Responsibilities of People Responsible for
Six-Sigma Implementation
15. Approaches of Six Sigma
16. Difference between TQM vs. Six Sigma
17. Do’s and Don’t of Six-Sigma
18. Benefits of Six Sigma
19. Criticisms of Six Sigma

What is Six Sigma: Meaning, Concept, Six

Sigma Green and Black Belt, Process Tools,
Levels, Steps, Principles, Benefits and
Criticisms
Six Sigma – Meaning, Definition and Introduction
Sigma (σ) is a character of Greek alphabet, which is used in
mathematical statistics to define standard deviation. The standard
deviation indicates how tightly all the various specification (values)
are clustered around the mean in a set of data. Six Sigma is an
integrated, disciplined proven approach for improving business
performance.

Six Sigma is a methodology for pursuing continuous improvement, by

reducing process variability. The goal of six sigma is to increase profits
by eliminating variability, defects and waste that undermine customer
loyalty. Six sigma means recognizing the value of defect free business
processes. Fewer defects mean lower costs and better quality which is
need of customer and demand of competitive global market.
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Six sigma was implemented in Motorola in 1987. It took five years to

see the significant result of six sigma. Because of the implementation
of six sigma and consequently better quality and reduced waste,
Motorola attributes $15 billion in savings for Eleven years.

Many other companies which has adopted Six Sigma techniques are
Texas Instruments, Allied Signal, ICICI, General Electric (GE) etc.

The six sigma can be very effective in manufacturing as well as service

sector in order to reduce the number of defects or variations in a
process.

Six sigma is a structured management technique for breakthrough

improvement. The six sigma approach identifies the vital few elements
that impact the bottom-line of the organization and with the
structured, data driven, problem solving method improves the
processes. It is highly disciplined process that helps us to focus on
developing and delivering near perfect products and series.
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In a company the cost of poor performance is computed to be 20-25%

of total revenues. The six sigma approach implements proven
methodologies for curtailing these costs while reaching world class
quality levels by focusing on breakthrough performance.

Six sigma differs from traditional performance improvement program

in its focus on input variables. While traditional methods depend on
measuring outputs and establishing control plans to shield customers
from organizational defects a six sigma program demands that
programs be addressed at the root level, eliminating the need for
unnecessary inspection and rework processes.

The fundamental objective of six sigma methodology is the

implementation and a measurement based strategy that focuses on
process improvement and variation reduction through the application
of six sigma improvement projects.

Six Sigma – Meaning

Six Sigma method is a ‘measure of goodness’ involving the application
of statistical methods to business processes to improve operating
efficiency, reduce variation, avoid defects, and reduce waste. More
specifically, it is a method­ology and set of tools used to reduce quality
problems to less than 3.4 defects per million opportunities (DPMO) or
better.
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Six Sigma is a management philosophy focused on business process

improvements. It seeks to elim­inate waste, rework, mistakes; increase
customer satisfac­tion; and, finally, increase profitability and
competitiveness. Six Sigma is a management philosophy aimed at
customer satisfaction.
If a corporation is producing a product or ser­vice, which does not meet
the customer’s needs, then it will not be competitive or profitable.
Reworking a product or service as a result of inefficient processes not
only results in increased cost of mate­rial, labour, and time but also in
lost customers and poor reputation. It is the key to customer
involvement.

It is not only important to gain a customer but also to retain one. From
here, the corporation should go backwards and look at their processes
to improve the product based on customers’ requirements. Once these
processes are identified, then there must be a numerical, objective
approach to evaluate current practices and future goals.

The Greek symbol σ (sigma) refers to the amount of variation in a

process around its mean value. Statistics is a primary tool used in Six
Sigma. In fact, the name Six Sigma is derived from statistics. Sigma is
a Greek symbol, which denotes standard deviation, in other words,
variation around the mean value, typically on a bell curve. Processes
have acceptable upper and lower limits.
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Six Sigma is about defining the best measures of a process,

implementing them, tracking them, and making adjustments so that
more of the outcomes fall in the acceptable range by reducing the
number of defects.

Six sigma is a statistical and problem solving methodology that is

focused on variation and defect reductions. While TQM focuses on
detecting and correcting defects, six sigma re-creates the processes to
ensure defects never arise right from the beginning. Six sigma is a
broader concept of TQM, to achieve a new paradigm in customer
quality.
Six sigma goes beyond defect reduction to emphasize business process
improvement in general, which includes cost reduction, cycle-time
improvement, increased customer satisfaction and any other metric
important to the company.

An objective of Six sigma is to eliminate every molecule of waste that

can be found in an organization’s processes. Customers form the base
of today’s world market and sending a clear message – produce high
quality products at lower costs with greater responsiveness. Six sigma
helps an organization achieving these objectives when aligned with
other initiatives as part of business strategy.
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Six sigma is a breakthrough strategy that improves organizational

values, infusing changes in the process, which go into creating defect
free product or service at minimum cost.

For introducing Six sigma, it requires improvement in the

following areas:

(a) Improvement of process

(b) Improvement of products and services

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(c) Improvement in investor relationship

(d) Improvement in designing

(e) Improvement in supplier relationship

(f) Improvement in training and recruitment

Improvement in these areas usually represent dramatic cost savings to
businesses, as well as opportunities to retain customers, capture new
markets, and build a reputation for top performing products and
services. Although it involves measuring and analysing an
organization’s business process, Six sigma is not merely a quality
initiative, it is a business initiative.

Achieving the goal of Six sigma requires more than small, incremental
improvements. It requires breakthrough in every area of an operation.
In statistical terms, ‘reaching Six sigma means that your process or
product will perform with almost no defects. But the real message of
Six sigma goes beyond statics.
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Six sigma is a total management commitment and philosophy of

excellence, customer focus, process improvement. Six sigma is about
making every area of organization better able to meet the changing
needs of customers, markets and technologies – with benefits for
employees, customers and shareholders.

In brief Six sigma is:

(a) A statistical measure of the performance of a process or a product

(b) A goal that reaches near perfection for performance improvement

(c) A system of management to achieve lasting business leadership

and world-class performance.

Six Sigma – Concept

In recent years, a new interest in basic quality principles emerged in
many corporate board rooms under the concept of Six sigma; which is
a customer-focused and result oriented approach to business
improvement. Six sigma integrates many tested and validated quality
tools and techniques, with a bottom-line orientation.
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Six sigma can be described as a business improvement approach that

seeks to find and eliminate causes of defects and errors in
manufacturing and service processes by focusing on outputs that are
critical to customers and a clear financial return for the organisation.

Some key concepts on which the core philosophy of

Six-Sigma is based are:

1. Thinking in terms of key business processes and customer

requirements with a clear focus on overall strategic objectives of the
organisation.

2. Focusing on corporate sponsors, support team activities, helping to

overcome resistance to change and obtaining resources.

3. Emphasising quantifiable measures such as defects per million

opportunities (ppm) that can be applied to all parts of an organisation-
manufacturing, engineering, administration, software etc.

4. Ensuring that appropriate metrics are identified early in the process

and also ensuring that these metrics focus on business results, thereby
providing incentives and accountability.
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5. Providing extensive training and deploying a project team to

improve profitability, reduce non-value added activities and achieve
reduction of cycle time.
6. Creating highly qualified process improvement experts (such as
master black belts, black belts and green belts) who can lead teams
and apply improvement tools.

7. Setting stretch objectives for break-through improvement.

Exhibit 13.2 demonstrates this concept of Six-Sigma quality. If the

process distribution is stable, that is, it remains centred between the
specification limits, the proportion of the non­conforming product
should be only about 0.001 ppm on each tail.

In real world situations, the process distribution will not always be

centred between the specification limits, process shifts to the right or
left are not uncommon. It can be shown that even if the process mean
shifts by as much as 1.5 standard deviations from the centre, the
proportion of non-conforming will be about 3.4 ppm.

Comparing this to a three-sigma capability of 2700 ppm demonstrates

the improvement in the expected level of quality from the process. If
we consider a product containing 1000 parts and we design it for
Six-Sigma capability, then an average of 0.0034 defect per product
unit (3.4 ppm) is expected, instead of the 2.7 defects expected with
three-sigma capability.
Six Sigma – 11 Core Elements
Six-Sigma builds on a range of improvement methods that have
proven to be effective.

The core elements of Six-Sigma approach are:

(i) Focus on the Customer:

Since Six-Sigma, measures start with customer satisfaction, the

emphasis is on understanding customer expectations and
requirements.

(ii) Date-and-Fact Driven Management:

Specking with data, management decisions based on fact and

developing as in-depth understanding of internal processes are basic
to Six-Sigma approach.
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(iii) Specific Training:

Six-Sigma implementation requires trained people-both managers and

workers- a defined and formal infrastructure consisting of champions,
master Black Belts, black belts and green belts that head and influence
Six-Sigma projects. Master black belts are the technical experts who
provide training and support for other belts and also lead major
cross-functional Six- Sigma projects.

The Black Belts undertake full-time work on Six-Sigma projects and

lead the project team. The Green Belts are part-time process-owners
and usually undertake work on a small scale, in contrast to the Black
Belts.
(iv) Structured Approach:

Six-Sigma is based on a structured problem-solving approach. For

existing processes, an approach known as ‘DMAIC’ approach
consisting of steps “Define, Measure, Analyse, Improve and Control” is
used and for new processes the steps include-Define, Measure,
Analyse, Design and Verify-(called “DMADV” approach).

(v) Quality Engineering:

Six-Sigma was a full range of tools and techniques. Specific tools and
techniques are used in each stage of the ‘DMAIC’ and ‘DMADV’
problem solving approaches.

(vi) Process Focus, Control and Improvement:

The key aspect is understanding the process in order to control its

input and there by facilitate its improvement. It is important to
examine potential defects, root causes and potential corrective and
long-term actions. Also it is important to understand the relationship
between inputs and outputs, with respect to issues such as which
inputs have the biggest positive effect on which output.

(vii) Proactive Management:

An understanding of key principle of Six-Sigma is vital at all levels of

management. Managers must be proactive in challenging why’ things’
are done in a certain way, defining root causes of problems, setting
and maintaining aggressive improvement targets and devoting a large
amount of their time for improvement projects.

(viii) “Boundary Less” Collaboration:

Since many Six-Sigma projects involve cross-functional teams, team
work is essential and it is important to have a range of skills with in
the team.

(ix) Drive for Perfection:

In the drive to eliminate defects, often things will go wrong and some
projects will not achieve their goals. But it is important to understand
the reasons for failure, to learn from experiments and take counter
measures to prevent defects occurring in the future.

(x) Cost Savings of Each Project:

A sense of urgency is created with Six-Sigma, through the financial

targets linked to each project. Therefore, each project should lead to
verifiable bottom- line results.

(xi) Short-Term Improvement Projects:

It is necessary to fix a time-scale for each specific project’s completion.

The duration of each project is relatively short- say between three and
six months.

Six Sigma – Ten Principles of Six Sigma

1. Committed and strong leadership is absolutely necessary. This
means a major cultural change in the organisation.

2. Existing initiatives, strategies, measures and practices must be

integrated with Six-Sigma activities.

3. Data-based management having quantitative analysis and statistical

thinking as key concepts.
4. Application of consistent effort to learning everything possible
about customers and the market place.

5. Six-Sigma approach must produce a significant pay-off in a

reasonable time period.

6. Highly trained individuals (referred to as Master Black Belts, Black

Belts and Green Belts in that order of hierarchy) are necessary to lead
at all levels of the organisation.

7. Systems that track, measure and report performance are needed to

monitor progress, allow for needed course corrections and link the
Six-Sigma approach to the goals, objectives and strategic plans of the
organisation.

8. The organisation must have suitable reward and recognition

systems that support continuous reinforcement of the people at all
levels who significantly contribute to the viability and success of
Six-Sigma approach. Compensation systems need to be reengineered
in order to motivate employees.

9. Successes achieved due to Six-Sigma approach should be celebrated

internally and frequently in the organisation.

10. Successful organisation should give wide publicity to its Six-Sigma

achievements. This would further enhance the organisation’s image
and self-esteem of its employees.

Six Sigma – Pre Requisites

Six-Sigma, like any other major organisational change programme, is
not easy to implement successfully.
Success will depend on at least four major factors discussed
in the following paragraphs:

(i) High levels of commitment and involvement of

management:

Six-Sigma is based on an understanding of statistics which is not a

popular area for most managers. Also, it is necessary that
high-performing managers are released to be trained and after
training that they commit a significant amount of their time to the
implementation of Six-Sigma approach.

(ii) Six-sigma is not just another quality program or

stand-alone activity:

Six-Sigma is not just theory or a mere training program, It is an active,

involved effort that puts practical tools to work to root defects at all
levels of the organisation. It defines analyses, improves and controls
the vital few processes that matter most, to tie quality improvement
directly to bottom line results.

Like TQM, Six-Sigma requires adherence to a whole philosophy rather

than usage of a few tools and techniques. Six-Sigma is a business
strategy that fosters a cultural shift at all levels. It changes the outlook
and practices of everyone in the organisation.

(iii) Six-sigma is about reducing defects and improving

quality:

Improvement depends on how opportunities for defects or failures are

defined and measured. What matters in a Six-Sigma approach, as in
any other quality approach, is what the customer wants or needs. The
most critical effects or failures are those that cause maximum concern
to the customer.
Increasing complexity of systems and products used by consumers
created higher-than-desired system failures. Therefore, to increase
system reliability and reduce failure rates, the components utilised on
complex systems and products must have individual failure rates
approaching zero, for example Six-Sigma approach to be used in an
airline where the measure of failure needs to be defined.

(iv) Six-sigma involves a problem-solving approach:

Six-Sigma needs to be concentrated on those elements of a business

which will result in customers perceiving that they would rather deal
with them than with one of its competitors. Therefore, Six-Sigma, like
any other performance improvement drive, should start from a
strategy which is essentially a highly focused system of problem
solving.

Six-Sigma is essentially about results- enhancing profitability through

improved quality and efficiency resulting in high levels of customer
satisfaction, improvement projects are chosen based on their ability to
contribute to the bottom-line on a company’s income statement by
being connected to the strategic objectives and goals of the
corporation.

Six Sigma – Levels

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 toward six
standard deviations between the mean and the nearest specification
limit) in any process – from manufacturing to transactional and from
product to service.
Motorola Inc., who first developed the methodology in the
mid-late1980’s and who provide extensive Six Sigma training and
consultancy services, provide the following definitions-

Six Sigma has evolved over the last two decades and so has its
definition. Six Sigma has literal, conceptual, and practical definitions.

Six Sigma at three different levels:

a. As a metric

b. As a methodology

c. As a management system

Essentially, Six Sigma is all three at the same time.

a. “Six Sigma as a Metric- The term “Sigma” is often used as a scale for
levels of ‘goodness’ or quality. Using this scale, ‘Six Sigma’ equates to
3.4 defects per one million opportunities (DPMO). Therefore, Six
Sigma started as a defect reduction effort in manufacturing and was
then applied to other business processes for the same purpose.”

b. Six Sigma as a Methodology- As Six Sigma has evolved, there has

been less emphasis on the literal definition of 3.4 DPMO, or counting
defects in products and processes. Six Sigma is a business
improvement methodology that focuses an organization on-

i. Understanding and managing customer requirements

ii. Aligning key business processes to achieve those requirements

iii. Utilizing rigorous data analysis to minimize variation in those

processes

iv. Driving rapid and sustainable improvement to business processes.

At the heart of the methodology is the DMAIC model for process
improvement. DMAIC is commonly used by Six Sigma project teams
and is an acronym for-

i. Define opportunity

ii. Measure performance

iii. Analyse opportunity

iv. Improve performance

v. Control performance.

c. Six Sigma Management System – Through experience, Motorola has

learned that disciplined use of metrics and application of the
methodology is still not enough to drive desired breakthrough
improvements and results that are sustainable over time. For greatest
impact, Motorola ensures that process metrics and structured
methodology are applied to improvement opportunities that are
directly linked to the organizational strategy.

When practiced as a management system, Six Sigma is a high

performance system for executing business strategy.

Six Sigma – Six Sigma Belt Classified: Green Belts,

Black Belts, Master Black Belts and Six Sigma
Champion
In six sigma organization there are three basic level of training and six
sigma hierarchies. These levels derive their names from the Japanese
martial arts-green belt, black belt and master black belt.
The six sigma belts are classified into following categories:

1. Green Belts.

2. Black Belts.

3. Master Black Belts.

4. Six Sigma Champion.

1. Green Belts:

Six Sigma Green Belts are six sigma team leaders capable of forming
and facilitating six sigma teams and projects from concept to
completion. Green Belts are not full time positions. Green belts help
assists black belt projects. Generally Green belts are focusing on 1 to 2
projects to be accredited.

For becoming Green belts, they are required to complete five days
classroom training and it is conducted in conjunction with six sigma
team projects. Training modules cover facilitation techniques and
management of meetings, project management, quality management
tools, quality control tools, problem solving tools.

2. Black Belts:

Six Sigma Black Belts are leaders of teams responsible for measuring,
analyzing, improving and controlling key processes that influence
customer satisfaction and productivity growths. They are specialist
and experienced in using six sigma tools and techniques. They have
generally a good experience in statistical techniques, problem solving
techniques etc.

They have good leadership and team building skills. A black belt
employee is trained in the DMAIC methodology. Black belt is expected
to master a wide variety of technical tools in a relatively short period of
time. Black belts generally give training to green belts and receive it
from Master Black bets.

The desirable skills of Black belts are customer advocacy,

self-motivation, team leadership, project management expertise,
technical and numerical aptitude, good problem solving ability and
result oriented.

3. Master Black Belts:

Master Black belts are the persons with the highest level of technical
and organizational proficiency. In Motorola, the master black belt is a
person who has practised as a black belt for five years.

This employee is a full time practitioner in six sigma tools and has
been mentor to at least five black belt candidates. They should be
sound on mathematical theory and statistical techniques.

A master black belt is a leader in the implementation of six sigma

methodologies and is usually trained by the six sigma institute.
Because of nature of duties, the master black belt is required to have
good communication and teaching skills apart from mathematical
skills.

4. Six Sigma Champions:

In addition to different sigma belts, there is one more quality agent

who also contributes to six sigma effort, i.e. six sigma champions.

Business leaders who lead six sigma by sponsoring projects are called
champions. Champions are trained in essential of the six sigma
methodology focusing on selecting the projects that are aligned with
business goals. Champions must select and mentor six sigma project
leaders called belts.
Six Sigma – How Does Six Sigma Work?
The first step in the break- through strategy is to ask a new set of
questions, questions that take the managers out of their comfort zone
and ultimately provide them with a new direction. Six- Sigma forces
business to let go of bad habits. Bureaucracy becomes delayed. Those
employees who are closest to the actual work and to the customer
become motivated to meet or exceed consumer requirements.

By questioning the speed with which products are produced and

services are rendered, people begin to think about new systems that
can be put into place to produce a higher-quality product or service in
a shorter amount of time.

People who are close to the work discover more effective and
profitable ways of working, and are able to inform top management
about what changes need to be made and as a result, push those higher
in the organisation to reexamine the ways in which they do business.

Six-Sigma is about asking tougher and tougher questions until we

receive quantifiable answers that change behavior. Through Six Sigma,
companies relentlessly question every process, and every step along
the way to creating a final product. Managers, employees and
customers ask different kinds of questions of each other than they
have asked before.

As Six-Sigma takes hold across an organisation it creates an internal

infrastructure that includes executives, managers, engineers and
operations and service personnel. When 50 percent or more of an
organisation’s staff embrace Six-Sigma, those individuals are able to
mobilise massive changes in the way business is done, dramatically
increasing profitability.
The methodology behind Six-Sigma is designed to pave way to find the
right answers for the company. When an organisation starts to
question what it does and why it does it, it can begin to lay a road that
will lead to its own long-term goals.

The fact is, organisations need ways of measuring what they claim to
value. Measurements or “metrics” carry relevance to every member,
for every activity of an organisation. “You can’t change what you can’t
measure”. The foundation of Six-Sigma uses metrics to calculate the
success of everything an organisation does.

Exhortations won’t change things for the better, only measuring the
things a company values can produce quantum changes.

Without measuring a company’s process, – and its changes to these

processes, – it is impossible to know where you are or where you are
going – Six-Sigma tells us –

i. We don’t know what we don’t know

ii. We can’t do what we don’t know

iii. We don’t know until we measure

iv. We don’t measure what we don’t value

v. We don’t value, what we don’t measure.

So in a general way, Six-Sigma is a process of asking questions that

lead to tangible, quantifiable answers that ultimately produce
profitable results.

To date, every company that has followed Six-Sigma methodology has

achieved breakthrough profitability.
Six Sigma – Phases of Six Sigma Planning
After getting ready for Six-Sigma, the company needs to know how to
plan for it. There are certain phases in Six-Sigma planning which serve
as the foundation for any implementation and each phase consists of
certain steps that build separately to launch the Six-Sigma project.

1. Communication and Education:

One of the best ways to build awareness about Six-Sigma is through a

company-wide communication from the CEO or president of the
company. Once this has been done, Six-Sigma is further introduced in
key sessions to managers and executives to reinforce their
understanding and support.

All senior managers need to undergo “Champion training” and

managers at all levels need to undergo “Executive training”. “Executive
training” should include an overview of Six- Sigma review of ease
studies, related product and service demonstrations, strategies for
deployment of Six-Sigma and exploration of tools and methods,
statistical analysis, improvement, measurements and management
controls.

“Champion training” provides the managerial and technical

knowledge necessary to plan and implement Six-Sigma and mentor
black belts This training covers principles, tools and applications of
Six-Sigma including deployment tactics and strategies for establishing
metrics., selecting black belts and projects and implementing
Six-Sigma. The next steps in this planning phase are to order training
materials, select black belt candidates and schedule training
programmes.

2. Identification of Projects:
The planning phase also involves selection of Six-Sigma projects using
appropriate process to identify the chromic issues that the Six-Sigma
project teams should investigate and improve. If needed, support of
outside consultant may be sought to select the projects that have high
impact on quality and customer satisfaction and will deliver
bottom-line savings. Further to identifying the projects, the
departments and people needed for supporting these projects should
be identified.

3. Infrastructure:

“Job descriptions” for the new roles of the black belts must be
developed and these black belts must be posted to the selected
Six-Sigma project teams. Human measures department must also
benchmark compensation plans that reward black belts and their
teams upon successful completion of Six-Sigma projects.

Once the black belts are selected, their compensation plans are
decided, the training phase will begin based on what the project will
entail. The objective of training black belts is to create technical
leaders, advanced users and teachers for Six-Sigma.

The black belts should learn Six-Sigma philosophy, application tactics

(including statistics, benchmarking, process control techniques,
diagnostic methods and experimental design) and group dynamics.
After undergoing training, the black belts are assigned to the selected
projects.

The support of an experienced master black belt (usually provided by

an outside consultant) is crucial to the success of black belts. A
“master black belt” will guide and coach the “black belt” candidates
and work with ‘champions” to help overcoming barriers and obstacles.
Periodic review meetings involving top management, other
champions, senior leaders, and outside consultant are held to discuss
the progress of Six-Sigma initiative and to ensure that the teams are
meeting the objectives.

4. Implementation Partner:

Each Six-Sigma deployment follows the same success model for

implementation. The specifics of a particular situation, the projects
selected and the champions and black belts will determine how a plan
is created and all activities are scheduled. An outside consultant
directs, trains and executes the critical elements of the planning
process.

The consultant acts as implementation partner and helps to

orchestrate all responsibilities, roles and schedules to make a smooth
transition from planning phase to implementation phase. The outside
consultant or implementation partner should be focused on
knowledge transfer, on sharing how to solve problems through the
most effective methods and fix process defects with the right tools.

Six Sigma – How to Calculate Six Sigma? (With

Example and Formula)
Sigma (σ) stands for standard deviation. Standard deviation is a
statistical way to describe how much variation exists in a set of data, a
group of items or a process. Six sigma is a breakthrough strategy that
leads to defect free products and services, adding profit to the
organizations and satisfaction to the customers. However no
organization can achieve Six sigma level right at the beginning. It
requires relentless efforts to achieve each sigma level and then
ultimately the desired Six sigma level, at which products/services are
virtually defect free.

For calculating sigma level, we use the ‘Defects per Million

Opportunities (DPMO)’.

The following table shows the levels of sigma performance:

For example- if your company processed 2,50,000 credit card bills a

month and operated at 99.38 per cent accuracy (4 sigma), you would
have about 1,550 unhappy customers every month. Six sigma
recognizes that there is always some potential for defects, even in the
best run processes or best built product. But at 99.9997 per cent
performance, Six sigma sets a performance target where defects in
many processes and products are almost non-existent.

Once quantitative details about number of units and defects

are made available we can use the following formula to
calculate the sigma level:

For Error:
Therefore, 3,000 DPMO almost corresponds to 4.25 sigma level,
which indicates, the firm needs to identify further the process flows
and improve upon the quality of service. In this case, number of
opportunities for error has been taken as ‘2’ (i.e. non-availability of
assignment grade and improper computation of grades). Number of
defects is 15 (i.e. 10 + 5).

Six Sigma – 9 Key Six Sigma Tools

The overall Six-Sigma methodology is implemented by using a specific
set of statistical tools throughout each phase of the DMAIC model.

Taking the Six-Sigma journey requires a map which is made up of a set

of specific analytical tools that direct the course of all the efforts and
point to the path to be followed to improve the processes.

These are the first tools to be used in Six-Sigma approach at the

beginning of the project to conduct initial investigations into a specific
process. The key types of tools are basic statistics, graphical analysis
and simple correlation studies. These warming tools help us begin to
understand and represent the data obtained from measuring a
process.

Basic statistics involve the understanding and use of measures such as

‘mean’, ‘mode’ and ‘median’. Graphical analysis uses a key warm up
tool – the histogram to represent data graphically. Histogram shows
the distribution of elements in the process.

When we calculate the mean, the mode, and the median we are
measuring the central tendency of the data. To measure the dispersion
of data, we need to calculate “range” “variance” and “standard
deviation”.
The ‘standard deviation’ is the most commonly used measure of
spread or dispersion. Another means of discovering patterns in a
graphic form is the “run chart” – Run Charts are used to analyses
processes according to time or order and reveal patterns that occur
over time.

Simple correlation study is also classified under warm-up tools.

Correlation as a statistical concept is the degree to which variables are
related. For factors to correlate there must be a cause and effect
relationship, not just a coincidence. The input must affect the output.
Correlation also describes direction as well as linkage.

However it must be remembered that correlation does not necessarily

mean causation. A correlation study is used to quantify the
relationship if any between two sets of data points. An example of
graph used in correlation study is a ‘scatter plot’ or scatter diagram
which provides a good visual display between two sets of data points.

The warm up tools are used to find out fundamental information

about a process, including the average and spread of data and then
understanding cause and effect relationships. These steps serve as the
building blocks for all the rest of the Six-Sigma actions.

The key tools used to track down defects and quantify them
are discussed in the following paragraphs:

Key Tool No 1- Process Mapping:

This tool is used during the “Measure” phase of DMAIC. Process
mapping is an integrally important tool that helps us to understand
every aspect of every input and output. It helps to document the
process in order to maintain control and reduce variation due to
changes over time, process mapping is done through a flow chart
which shows operations, decision point, delays, movements, rework
loops and controls or inspections. By breaking down the process into
steps, the flowchart simplifies analysis of the process.

Key Tool No 2- The XY Matrix:

It is also called as the “House of Quality” which is another tool used in
the “Measure” phase. XY matrix is used to link the customer’s “critical
to-quality” (CTQ) requirements to the process inputs, to ensure that
we have the right set of priorities in the process improvement
activities.

Two techniques used in XY matrix are:

(i) Brain-storming and

(ii) Cause-and-effect diagram.

Brainstorming is a method for generating ideas. Participants in the

brainstorming session focus on a problem or an opportunity and come
up with as many ideas as possible and push the ideas as far as
possible. Participants can build on each other’s ideas. Then after
brainstorming, the team can analyse the results and explore the best
ideas. Brainstorming is a valuable tool for probing during the
“Analyse” phase and for generating ideas during “Improve” phase.

Cause-and – Effect Diagram is a graphical tool which can be used to

identify the relationship between a problem and possible causes of the
problem.

The purpose of using the XY matrix is to study and understand the

relationship between what we are putting into a process and what our
customer is getting out of it. The XY matrix allows the team to identify
gaps and areas for improvement.

Key Tool No 3- Measurement Systems Analysis (MSA):

This tool helps to ensure that the measurement system is statistically
confident – that it is both accurate and precise whenever it is used.
Undertaken during the “Measure” phase, this tool determines whether
or not we can make a certain measurement and repeat or reproduce it
among different people who take the same measurement.

Within the MSA tool there is another specific tool – the gauge
repeatability and reproducibility study, which compares our
measurement devices against others.

Key Tool No 4- Process Capability Tool:

Process capability is the measure of process being able to meet
required specification and fulfill CTQ needs on a long-term basis.
Process capability analysis uses a series of steps to establish short and
long term deviation patterns and baseline performance for each
process.

The tools determine whether or not the process is performing within

the specifications, show how to decrease variation and help to chart
the direction necessary to reach optimum capability.

Pareto Chart:

Gives graphical representation of the relative importance of process

causes or defects based on Pareto Principle 80-20 rule. Pareto Chart is
used to identify factors in a process that the greatest cumulative effect
so that we can focus on a few important factors (vital few) rather than
the trivial many (80 percent of problems result for 20 percent of
causes).

Key Tool No 5- Multivariate Study:

This is an analysis which offers a way to reduce possible causes of
variation in a process to a family of related causes, by graphing the
interrelationship of multiple variables. The multivariate studies look at
sources of variation within a piece or batch, variation from piece to
piece and variation related to time (temporal) to discuss which one
contributes the most to that variation.

Multivariate studies compare how the same functions, performed by

different people or in different shifts, perform over time. This tool is
used in the beginning of the “Analyse” phase.

Key Tool No 6- Hypothesis Testing:

This tool is used in the “Analyse” phase. This involves procedures for
making rational decisions about possible causes of a given effect.
Hypothesis testing involves a logical sequence of steps defining the
problem, statistically testing whither or not the probability of defect
caused by random chance or has a more tangible cause hidden in the
process. One of the ways to test hypotheses is through simulations.

Key Tool No 7- Failure Mode Effect Analysis (FMEA):

Failure mode effect analysis takes place during the “Analyse” phase. It
is the manner in which a part or process can fail to meet a
specification, creating a defect or non-conformance, and the impact on
the customer if that failure mode is not prevented or corrected.

It is a method for designing in reliability while minimising causes of

failure. Preventing failure modes prevents defects. FMEA charts the
type of effect, severity of defect, probability of occurrence and whether
or not systems are in place to properly detect it.

Key Tool No 8- Design of Experiments (DOE):

This tool is used in the “Improve” phase. It helps to identify and
quantity the effect of the X’s on the ‘Y’s. It helps to determine which
inputs are significant in affecting the output of a process. It also helps
to quantify the values of the input variables to meet the output
requirements.
DOE is a way of determining and measuring the importance of two or
more factors on the outcome of a process, by experimenting with
many factors and variables simultaneously.

Key Tool No 9- Control Plan:

This tool is used in the ‘control’ phase which is the concluding phase of
DMAIC. It improves quality by doing a thorough evaluation of process
characteristics and variation sources. It helps to increase customer
satisfaction by focusing resources on process and product
characteristics that are important to customers.

Control Chart are used to indicate the range of variability that is built
into a process known as common cause variation). It helps to
determine whether or not a process is operating consistently or if a
special cause has occurred to change the process mean or variance.
Control Chart is a fundamental tool of statistical process control.

Six Sigma – 5 Steps for Implementing Six Sigma

Bedi (2008) proposes the following five steps while
implementing six sigma in organizations:

Step 1 – Define the priorities of the customers with respect to quality.

In this step, attributes of the product that are considered the most
important by customers in evaluating the quality of the product are
identified. These attributes possess critical to quality (CTQ)
characteristics. The customers’ perception of quality attributes is
periodically updated by way of customer survey.

Step 2 – Measure the processes and defects arising in the product due
to process. The important processes influencing/affecting the CTQ
characteristics are identified through the performance measurement
techniques that are established for these processes.
Step 3 – Analyse the process to determine the most likely causes of
defects. The key variables most likely to responsible for variation in
the process are identified to find the reason for defect generation.

Step 4 – Improve the process performance and remove the causes of

the defects. Specification limits of the key variables are fixed and a
system for measuring the deviations of the variables is established and
validated. The process is improvised in order to keep the variables
within specification limits.

Step 5 – Ensure that the improvements are maintained over time. The
modified process is subject to vigil at regular intervals of time to
ensure that the key variables do not show any unacceptable variations
(beyond specification limits).

Six Sigma – Roles and Responsibilities of People

Responsible for Six Sigma Implementation
The success of Six-Sigma relies on the people who are responsible for
implementing it. Six- Sigma provides some powerful techniques and
tools, but success depends on the people who play the primary roles
and assume the central responsibilities for using those techniques and
tools to work for their organisation.

Six-Sigma invariably disturbs the status-quo. It creates a major

interruption as job descriptions are redefined and activities are
radically changed in order to bring real, permanent changes. Everyone
is a player in the implementation of Six-Sigma, regardless of
individual organisational positions.

However, not everyone is slated for full Six-Sigma responsibilities.

People should be chosen to run the projects, participate on teams and
to pursue the objective using Six-Sigma tools like metrics and other
statistical measurements. The right mix of right talents is needed to
refocus on Six-Sigma projects.

Key Players:

Basically there are five categories of key players.

They are:

1. Executive Leaders- who commit to Six-Sigma and promote it

throughout the organisation.

2. Champions- who fight for the cause of black-belts and remove the
barriers if any

3. Master Black Belts- who serve as trainers, mentors, and guides.

4. Black Belts- who work full time on Six-Sigma projects.

5. Green Belts- who assist black belts on part-time basis.

6. Process Owners- individual who have the ultimate authority to

change a process.

The roles and responsibilities of these Key Players are

briefly discussed in the following paragraphs:

1. Executive Leaders:

The key role of executive leaders is to decide to do Six-Sigma and to

endorse it publicly, throughout the organisation. They kick-off and
reinforce the comprehensive scope of Six-Sigma to ensure
participation and support of everyone in the organisation. Six-Sigma
being a company-wide initiative involving major permanent changes,
requires visible leadership to signal its importance to the organisation.
Executive leadership can be built on some essential aspects such as
determination, confidence, integrity and patience. Executive leaders
need to show determination in their actions. They need to be resolute
in believing that Six-Sigma will succeed.

They should be determined to get the training, understand the savings,

perpetuate the use of metrics and show-case achievements of black
belts, mark key milestones and keep the overall initiative on track.

For example, Jack Welch, The CEO of General Electric in the US could
be considered the ideal executive leaders for Six- Sigma. From the top
down and throughout all points in the organisation, executive leaders
can inspire and promote a’ Six-Sigma culture that continually produce
results.

Executive Leaders need to actively display confidence-not only in the

Six-Sigma method, but also in the people charged with making it work.
The leaders show confidence with rewards and incentives and inspire
sustained commitment and effort on the part of employees. This
confidence exhibited by executive leaders acts as a powerful motivator.
Executive leaders can validate their confidence in champions, black
belt or project team by pointing out specific outcomes that emerge
from project metrics.

Executive leaders must also need to show integrity in their actions.

“They need to do what they say they are going to do”. This inspires
ever-increasing confidence among project teams in the words of their
executive leaders. Executive leaders demonstrate a high standard of
ethical leadership of following through on commitments. Integrity
stimulates loyalty and respect which are essential catalysts for
employee motivation across the organisation.

Executive leaders must practice patience and be models to others even

though this is difficult to practice in a business environment that
demands quick results and solutions to problems. As Six- Sigma
projects are time consuming exercises, skipping steps or rushing the
process can prove disastrous.

By demonstrating their determination, confidence, integrity and

patience, company executive can develop good relationship with their
employees commanding respect and loyalty.

2. Champions:

The success or failure of a Six-Sigma project critically depends on the

champions. A champion is an advocate who fights for the cause of
black belts and to remove functional, financial or personal barriers so
as to enable black belts to do their work efficiently.

Champions know the process very well and can be considered as the
‘owners’ of the process in every respect. The champions are drawn
from the ranks of managers and executives depending on the size of
the organisation. They are responsible for the daily oversight and
management of each critical element.

They are responsible for reporting to top management about progress

of the project and also for supporting their teams. They must ensure
that the projects they select align with the executive strategy and can
be easily understood and embraced by project teams.

Champions also have the responsibility of selecting black belt

candidates, identifying project areas and establishing clear and
measurable goals for the selected projects. They are also responsible
for keeping the projects on schedule.

Champions must be fully involved in process. They identify and

remove obstacles to enable Black belts to focus on their projects and
achieve the bottom-line outcomes. The champion plays the role of an
advocate and defender, a mentor and a coach; He is ultimately
responsible for the success of the Six Sigma project.

While the black belts and project teams hunt for defects and waste, the
champion selects the project and monitors its performance. Therefore
the champions must have thorough knowledge of the strategy and
discipline of Six-Sigma and also be able to educate others about its
tools and implementation.

3. Master Black Belt:

Often, a member of the implementation partner’s (consultant’s) team

may fulfill the role of Master Black Belt in the initial stages. He / She
serves as the trainer, mentor and guide for the firm’s project team. The
master black belt is responsible for selecting the right people and
assisting in screening and selecting projects that will best achieve the
firm’s objectives.

Once the firm has firmly established Six-Sigma activities in place and
designated and trained people in their roles, started projects and
achieved some desired results, the members of the project teams can
be elevated to the rank of master black belts.

The master black belt has expertise in Six-Sigma tools and tactics and
is a valuable resource in terms of technical and historical expertise. He
plays the role of a teacher, mentor and lead agent of change and
ensures that the required infrastructure is in place and black belts are
trained. The focus of master black belt is entirely on process
improvement.

A key aspect of the role of master black belt is the capacity to skill-fully
facilitate problem solving without actually taking over a project. A
master black belt is an important asset at the initial stage of a
Six-Sigma initiative because of his/ her role in co-coordinating and
collaborating with the champion, top management, advising and
coaching black belts. He or she enables the champion to keep focused
on what is important in selecting projects and implementing
Six-Sigma.

4. Black Belts:

Black belts have multiple roles and responsibilities. They work

full-time on selected projects. Black belts are not masters of the
process under study but masters of the change process. They act as
full-time change agents. They supervise the green belts working on a
Six- Sigma project. Black belts are trained to dig into the chronic and
high impact issues and fix them with Six-Sigma techniques and
practices.

Other roles and responsibilities of a black belt are:

(i) Preparing a draft project charter for the Six-Sigma projects under
his\her supervision.

(ii) Working closely with a project team to keep it functioning and

progressing toward speedy and effective conclusion to the Six-Sigma
project.

(iii) Communication with the individual responsible for the financial

and political well-being of the team (called a champion)

(iv) Serving as the team leader for Six-Sigma projects because of his /
her expertise in Six- Sigma theory, tools and method.

(v) Helping team members analyse data and design experiments.

(vi) Providing training to the team members in Six-Sigma theory, tools

and methods.
(vii) Helping team members prepare for management reviews.

(viii) Recommending Six-Sigma teams for Six-Sigma projects.

(ix) Leading and coaching green belts dealing simpler Six-Sigma

projects.

Selection of Black Belts:

Black belts are central to Six-Sigma projects with important

responsibilities as technical experts, team leaders and project heads.
Being a black belt is a full time discipline that combines leadership
ability, technical skills and some statistical knowledge, the ability to
communicate clearly and motivated curiosity.

Black belts are the technical leaders and change agents, the key players
who implement the Six-Sigma principles, techniques and tools.

Successful black belts share the following traits:

(i) Ability to work well on their own and also in groups/teams.

(ii) Remaining calm under external pressure

(iii) Anticipating problems and acting on them immediately

(iv) Respecting their fellow workers and commanding respect by them.

(v) Inspiring others (team members)

(vi) Ability to delegate tasks to other team members and co-ordinate

their efforts

(vii) Understanding and recognising the abilities and limitations of

their fellow workers
(viii) Showing genuine concern for others, for what they need or want

(ix) Accepting criticisms well

(x) Having concern about the current processes and results and
improving the systems

(xi) Having the intelligence and interest to learn how to apply

Six-Sigma tools.

5. Green Belts:

Most green belts serve as team member on Six-Sigma projects. They

assist black belts in their functional areas. They apply Six-Sigma tools
to examine and solve chronic problems on projects within their
regular jobs. They also help black belts in collecting or analysing data,
running experiments or conducting other important tasks in a project.

However, if a green belt acts as a team leader for simpler

projects, then he or she has the following responsibilities:

(i) Preparing a draft charter for the Six-Sigma project

(ii) Selecting team members for Six-Sigma projects

(iii) Communicating with the champion, black belt and process owners
concerning the status of the project.

(iv) Facilitating the Six-Sigma project team members and

(v) Providing training to team members in basic Six-Sigma tools and

methods.

A green belt spends one-quarter of his / her work time as a team

member on one or more Six- Sigma projects.
Green belts are the “work horses” or “work bees’ driving bottom-line
results.

A green belt must pass a certification examination and participate in at

least one successful Six-Sigma project.

6. Process Owners:

A process owner is the individual who has the ultimate authority to

change a process. The process owner should be identified for every
project or task that is entered on to an organisation’s metric tracking
system.

The roles and responsibilities of a process owner are:

(i) Monitoring the performance of his / her process through key

indicators

(ii) Empowering the people who work in his / her process

(iii) Working with all Six-Sigma project teams in his / her area to
enable them to successfully complete their projects.

(iv) Managing the process after completion of the Six-Sigma project to

sustain the gains made by the Six-Sigma project team and

(v) Continuing to improve and / or innovate, his / her process through

the application PDCA Cycle. A process owner should pass the
champion certification examination because he / she should have
Six-Sigma knowledge to be effective. A process owner must
understand the PDSA cycle to accept a project from control phase of
the DMAIC model.

Difference between Black Belt and Green Belt Six-Sigma

Projects:
Green belt Six-Sigma projects tend to be less involved [e.g. they have
one “Critical to Quality (CTQ) characteristic and up – steam variable
(x)], do not deal with political issues, do not require many
organisational resources, do not require significant capital investment
to realise the gains identified during the project, and utilise only basic
statistical methods.

On the other hand, black belt projects tend to deal with more complex
situations that may involve two or more CTQs and many ‘x’s, may
involve substantial political issues or be cross- functional in nature,
require substantial organisational resources, may need substantial
capital investment to realise the gains made during the project and
utilise sophisticated statistical methods.

Six Sigma – Approaches

Six Sigma aims at improving processes and producing goods with zero
defects. There are two methods to achieve this goal. The first is define,
measure, analyse, improve, control (DMAIC) and the second is to
define, measure, analyse, design, and verify (DMADV).

(1) DMAIC:
It involves defining the problem, measuring where you stand,
analysing where the problem starts, improving the situation, and
controlling the new process to confirm that it is fixed. The black belts
attend four training sessions taught by the master black belts to clearly
understand these steps.

These sessions are broken up so that the black belts can take what they
learned and apply it to their initial projects. The theory behind this is
that they are not overwhelmed with too much information all at once.
Another good way to remember DMAIC is ‘dumb managers always
ignore customers’.

The various steps are explained in this section:

i. Define – A numerical parameter must be used to define the problem.

There must be an objective way to measure the problem. In addition,
the goal is not to manage the problem but to solve it. Therefore, there
must be a focus on the problem, not on the outcome.

ii. Measure – Again, a numerical measurement of the current process

is necessary in order to change the process. What are the results of the
current process? What are the competitor’s processes? The focus must
be on the critical quality issues that the customer finds important.

iii. Analyse – Once the measurements are available, it is necessary to

analyse this data. This will eliminate the gap between the current
practice and the desired goal—achieving 3.4 defects in one million
opportunities.

iv. Implement – After analysis, changes need to be implemented to

achieve this goal. Everyone should be involved in suggesting ways to
improve the processes, especially those that work directly with the
process. The green belts and black belts in an organization act on these
suggestions.

v. Control – Once changes have been made to the process to achieve

new operating limits, then the black belt must oversee measures to
keep these operating limits in place and then on to the next project in
order to achieve the Six Sigma goal. This project is only one in several
to incrementally achieve the Six Sigma.

Step of Six Sigma using DMAIC:

DMAIC means Define, Measure, Analyze, Improve and Control.

These are explained as:

1. Define:

It establishes a leadership team which will decide on project on which

it will work. It also decides the factors like customer expectations,
product quality, cost benefits etc.

The specific actions in this step are:

i. The problem statement, why the project needs to be done.

ii. Goal statement which include expected outcomes and results of

project.

2. Measure:

In this step the team examines all aspect of project, develops a

thorough understanding of it and identifies the critical requirement
and processes. After establishing of these, the team defines
performance measure for key characteristics and establishes an
effective means of measuring them.

The various steps are:

i. Define your needs in terms of essential input for products.

ii. Set up of quality measures.

iii. Define the method for computing error with various tools like
Pareto diagram, Histograms, charts, scatter diagram, etc.

iv. Measure current performance of process.

3. Analyze:
Team analyzers the data and lays the groundwork for improving the
process. This step includes identification of sources and location of
defects causing variables within the process.

4. Improve:

Team performs the following action in these steps:

i. Identification of process improvements.

ii. Designing a plan of action.

iii. Performing risk assessments on potential changes.

iv. Implementing the plan.

v. Monitoring the results after the recommended changes.

The improvements in the quality can be achieved in

following ways:

i. Simplification of process.

ii. Improving the education levels of workers and employees.

iii. Eliminating the non-value adding activities.

iv. Improving the maintenance of machines and equipment’s.

v. Highlighting the need of various Quality programs.

5. Control:

The team reviews the entire process to ensure that the appropriate
changes have been made and to identify the actions that will
permanently maintain these changes.
(2) DMADV:
The various aspects of DMADV are define, measure, analyse, design,
and verify.

i. Define – It involves the definition of internal and external goals of

the customers and the project.

ii. Measure – Quantification of the customer needs as well as the goals

of the management.

iii. Analyse – It involves the analysis of the options as well as the

existing process to determine the cause of error origination and
evaluate corrective measures.

iv. Design – It involves the design of a new process to the existing one
in order to eliminate the error origination that meets the target
specification.

v. Verify – This step involves verification, by simulation or otherwise,

of the performance of the developed design and its ability to meet the
target needs.

The difference between DMADV and DMAIC exists only in the way the
last two steps are handled. In DMADV, instead of the ‘improve’ and
‘control’ steps, which focus on readjusting and controlling by one way
or other, the ‘design’ and ‘verification’ steps deal with redesigning the
process to fit customer needs.

At the crux of the Six Sigma programme, advanced by GE’s Jack Welch
and instituted at many other major corporations such as Motorola, is a
renewed focus on eliminating errors, waste, and rework. Six Sigma is
based on designated teams (people power) that focus solely on solving
specific problems (process power), which may lead to efficiencies that
delight customers and, by saving the company money, enhance the
bottom line.

What distinguishes Six Sigma from other popular quality management

techniques, such as TQM and ISO 9000, is that each team has a clear
goal; moreover, employees benefit because companies usually link
financial incentives to a team’s goal.

Chowdhury (2001) has created a fictional story that exemplifies the

benefits of Six Sigma. In this book, Joe, a middle-aged manager is
unexpectedly laid off from his position at a fast-food franchise
company. He is worried and anxious about his next move. He calls
Larry, his old friend and former co-worker, whose career is thriving.

Over lunch, Larry explains how he has practised Six Sigma, both to
advance his career and to increase profits for his employer. He teaches
the programme’s basics to an initially sceptical, then wildly excited
and enthusiastic Joe.

Six Sigma – Difference between TQM vs. Six Sigma

TQM and Six Sigma no doubt have their common objective of
achieving high quality and continuous improvement. Both techniques
uses statistical techniques to solve problem. Still there are some
differences between TQM and Six sigma.

These are compared below:

TQM:

1. TQM is focused mainly on production design department etc.

2. It relies on self-directed work team.

3. Truly cross functional.

4. Quality oriented.

5. It does not focus on training in statistical techniques.

6. TQM frame work consists of co-ordinators, leaders, group member

etc.

Six Sigma:

1. Six Sigma not only focused on manufacturing but also on service

sector like banks, hospitals etc.

2. Six sigma relies upon executive ownership.

3. Largely within a single function.

4. Six sigma is mainly business result oriented.

5. Focuses mass training in statistical technique.

6. Six sigma has different organization structure like Green belt, Black
belt, Master Black belt.

Six Sigma – The Do’s and Don’ts

The Do’s:

1) Do keep the focus on results

2) Do embrace customers

3) Do plan for success

4) Do communicate the commitment companywide.

5) Do demonstrate the commitment of company leaders.

6) Do empower your key human resources

7) Do provide on – site monitoring for black belts

8) Do choose an implementation partner (an outside expert) who will

actively assist in serving and selecting Six-Sigma projects

9) Do be patient at the inception of your Six-Sigma initiative

10) Do claim and advertise early ‘wins’

11) Do bench – mark

12) Do establish project baselines and goals

13) Do get advance buy in from your controller.

Don’ts:

1) Don’t make Six-Sigma a massive ‘training’ exercise

2) Don’t take ‘Big-Bang’ approach to Six-Sigma

3) Don’t focus resources on reworking training material

4) Don’t let the controller waffle about your saving calculations.

5) Don’t skip steps.

6) Don’t be afraid to learn and use statistical tools.

The “do’s” and “don’ts” listed above are briefly discussed in

following paragraphs:
The ‘Do’s’:

1. Do keep the focus on results:

It is important to have a clear vision of where a firm is and where it

wants to be in terms of decreasing costs and increasing bottom – line
profits. Usually, a qualified implementation partner (a consultant)
may be helpful in using a project tracking system to monitor results.
The firm needs to focus on a vital few factors rather than the trivial
many.

2. Do embrace customers:

Achieving phenomenal business growth depends on how well the firm

understands and meets those “critical-to-quality” expectation of its
customers. The firm must constantly keep in touch with its customers
and know what they want in terms of price, quality and delivery.

3. Do plan for success:

Proper planning is necessary to ensure that the firm will meet its
goals. Planning provides the milestones and progress reports that
indicate how well and fast the firm is reaching its goals.

4. Do communicate the commitment company-wide:

It is important that the firm communicates with every employee and

lets them know what the firm is doing and intending to accomplish.
From the CEO to the worker in the production line-every employee
should have a sense of ownership of the Six-Sigma projects
undertaken and there should be time commitment and enthusiasm at
every level.

5. Do demonstrate the commitment of company leaders:

The leaders of the firm (top management) should actively show their
own commitment to the success of Six-Sigma implementation. The
leaders show their commitment by serving as mentors and champions,
allocating the needed company resources and breaking down barriers
to support Six-Sigma projects.

6. Do empower key human resources:

Right people must be selected to lead the Six-Sigma project teams.

These key persons must be empowered. The black belts and team
members should be provided with the essential quality tools for the
implementation of Six-Sigma projects through the phases-Define,
Measure, Analyse, Improve and Control (DMAIC)

7. Do provide on-site mentoring for black belts:

The top management must assure their black belts total support for
their projects. The black belts must have access to information or data
-both from within the firm and form outside, and their interpretation
of it must be unrestricted.

8. Do choose an implementation partner who will actively

assist in screening and selecting six-sigma projects:

A qualified outside expert (consultant) who is engaged in introducing,

training and supporting the firm’s Six-Sigma projects is of vital value
in helping the management select not only the right project, but also
the right people to run it.

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

The Six-Sigma projects require the front-end commitment of training,

time and resources to achieve the end results. The management and
employees have to learn how to select the projects, develop
appropriate metrics and assign key roles. These require proper
planning.

10. Do claim and advertise easy “wins”:

Even though patience is essential, it is also important to communicate

and celebrate each milestone of success in Six-Sigma projects. This is
necessary to keep the team’s enthusiasm high and to demonstrate how
Six-Sigma is working. The top management, employees, customers
and vendors – all need to know the value of the efforts put in by
Six-Sigma project teams.

11. Do bench mark:

A bench mark plan that looks at both internal and external

performance standards would be helpful to conduct the right gap
analysis to know where the firm is and where it should be.

12. Do establish project base lines and goals:

The firm should know its current defect levels, its defect – reduction
targets and the savings it wants to achieve. This enables the firm to
have the right baselines and goals to measure the progress of its
Six-Sigma projects.

13. Do get advance buy – in from your controller:

The leader of the Six Sigma project and the financial controller of the
firm must agree on how the real savings are calculated. If they work
together, the results can be verified by the controller which further
validates the work of Six-Sigma project.

“They Don’t”:

1. Don’t make six-sigma a massive training exercise:

As Six-Sigma focuses on real, tangible financial results (exact,
quantifiable cost savings, such as reduced hours, reduced inventory
levels etc.), It is important that the leader and the members of
Six-Sigma project teams learn how to implement the project and get
started. They don’t need extensive training to develop their Six- Sigma
skills. They need to know what they are doing, but once they are
trained as black belts, they will know exactly how and what they need
to do to achieve their goals.

2. Don’t take a “big-bang” approach to six-sigma:

It means, all employees need not be trained at once to be Six-Sigma

practitioners. Most organisations can’t manage a lot of changes
simultaneously or support hordes of black belts or projects. Therefore,
it is vital to have right people to work on right projects, and to train
selected people to keep the projects going and capture gains case by
case.

3. Don’t focus resources on reworking training material:

Even though training is an important part of Six-Sigma, it is not

advisable to spend excessive time in “tweaking” training materials to
fit the firm’s exact business model. The training materials should be
related to the business focus; recognising the overall and adaptable
nature of Six-Sigma.

4. Don’t let the controller waffle about your savings

calculations”:

Financial controllers play an important role in the implementation of

Six Sigma projects and therefore they must be included right from the
beginning of Six-Sigma initiative. They need to know that the
company’s executive leadership expects them to cooperate and
support the efforts of Six-Sigma project teams. The controller and the
Six-Sigma project leader must be in agreement on how the project
leader defines and assigns savings to the project.

5. Don’t skip steps:

Skipping necessary steps in Six-Sigma projects to speed up won’t yield

the needed information to correct and eliminate the problem in
question. Data is vital because Six- Sigma needs quantifiable facts and
does not deal with assumptions. Statistical measurements and metrics
are applied to analyse the issues so that the project team can prove
with data and not by opinion, why and how lasting changes can be
made.

6. Don’t be afraid to learn and use statistical tools:

Statistics and statistical tools are essential to Six-Sigma. However, it is

not necessary to spend exorbitant amounts of time reviewing
statistical data. With the systems and software available, technology
and training work together to yield results.

Six Sigma – Benefits

The benefits of six sigma are as below:

1. It enables enhanced product quality.

2. It helps to achieve productivity improvement.

3. It increases customer loyalty to the organization.

4. It helps to have rapid response to changing needs of customers.

5. It helps to eliminate the waste in the organization.

6. Cost is decreased because of wasteful activities.

7. It also increases employee involvement and thus satisfaction and

loyalty towards organization.

Six Sigma – Criticisms

Even though Six-Sigma has been known about for quite some time and
many firms have gained substantial benefits through implementation
of Six-Sigma approach to quality management, still some people have
negative views about Six-Sigma and are waiting for a new trend.

Some of the current criticisms for ‘Six-Sigma’ are:

(i) It hinders innovation processes.

(ii) It is best applied to strictly defined projects only.

(iii) It has no relevance for day-to-day operations.

(iv) It is often used as a stand-only methodology, which does not

involve the entire organisation.

(v) It only leads to short-term success because it offers quick gains but
limited long-term success.

However an international survey comprising respondents who are

knowledgeable and experienced with ‘Sig-Sigma’ and quality
management revealed that the respondents perceived Six-Sigma to be
useful in relation to innovation and long-term developments.

Considering the long-term success of Six-Sigma, top management

should take into account the fact that the actual process of any
improvement approach adopted by an organisation may be
predictable over the first year or so, but will then tend to lose its
predictability because of the following reasons-

(i) Organisations will soon begin to change in different ways, as

internal opposition to change, as external competitors react and the
actions of customers, supplies and corporate office will vary.

(ii) Organisations themselves differ in how they handle these

reactions.

A related issue is the extent to which Six-Sigma improvement projects

are capable of reaching their stated initial goals/ objectives. All
organisation – wide change programmes are expensive in terms of
time and money and therefore the consultants or internal activities
who initiate such projects need to sell their ideas aggressively to the
top management.

But the unpredictability of operating in a competitive environment

means that both internal and competitive reactions are difficult to
predict and counter. Therefor it is very difficult to demonstrate the
effectiveness of the Six-Sigma programmes to justify their adoption.

While some improvement projects are influenced by factors within the

control of operators and management, some change goals suffer from
lack of any clear relationship between improvement actions and
improvements results.

For example improving customer satisfaction or increasing

profitability by a certain; amount within a certain specified time may
be specific measurable goals, but they can be influenced by many
factors that are beyond the ability of employees to influence – from
competitive reactions to changes in global economy.
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