Project Report

On

Six Sigma Applications

Name of the Learner: Registrat ion No.: Program Name: Post Graduate

Diploma in Business Administrat ion

Special izat ion: Operat ions ManagementAddress:

Submitted toSymbiosis Centre for Distance Learning (SCDL)

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DECLARATION

This i s to dec lare tha t I have carr ied out th is projec t work mysel f in par t fu l f i lment of the Post Graduate Diploma in Business Adminis t ra t ion Specia l iza t ion in Opera t ion Management Program of SCDL.

The work i s or ig ina l , has not been copied f rom anywhere e lse and has not been submit ted to any other Univers i ty / Ins t i tu te for an award of any degree /d ip loma.

Date : S ignature :

Place : Name:

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CERTIFICATE OF SUPERVISOR

Cert i f ied tha t the work incorpora ted in th is Projec t Repor t on Six Sigma Appl ica t ion submit ted by Vishal Mal ik i s h is /her or ig ina l work and comple ted under my supervis ion .

Mater ia l obta ined f rom other sources has been duly acknowledged in the Projec t Repor t

Date : Sanjay Kumar (Guide Name)

Place :

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INDEX

SR.NO TOPIC PAGE NO

1. In t roduc t i on 5

2. Ob jec t i ve and Scope 18

3. L imi t a t i ons 19

4. Theo re t i c a l Pe r spec t i ve 21

5. Ana lys i s o f Da t a 23

6. Me thodo logy and P rocedu re o f Work 25

7. F ind ings , I n f e r ences and Recommenda t i ons

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8. Conc lu s ion 83

9. Summary 84

ANNEXURES

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INTRODUCTION

In r e cen t decades , t he compan i e s and o rgan i za t i ons a round t he wor ld a r e showing g r ea t i n t e r e s t s i n qua l i t y . Espec i a l l y i n 1970s and 1980s , t he succe s s o f J apanese i ndus t ry s t imu la t e s t he who le wor ld t o focus on qua l i t y i s sue s . The expe r i ence f rom them p roved t ha t t he r equ i r emen t s and expec t a t i ons o f cus tomer s a r e t he key f ac to r s wh ich dec ide t he qua l i t y .

The roo t s o f S ix S igma a s a measu remen t s t anda rd can be t r a ced back t o Ca r l F r ede r i ck Gauss (1777 -1855) who i n t roduced t he concep t o f t he no rma l cu rve . S ix S igma a s a measu remen t s t anda rd i n p roduc t va r i a t i on can be t r a ced back t o t he 1920 ' s when Wa l t e r Shewha r t showed t ha t t h r ee s i gma f rom the mean i s t he po in t whe re a p roce s s r equ i r e s co r r ec t i on . Many measu remen t s t anda rds (Cpk , Ze ro De fec t s , e t c . ) l a t e r c ame on t he s cene bu t c r ed i t f o r co in ing t he t e rm "S ix S igma" goes t o a Moto ro l a eng inee r named B i l l Smi th . ( I nc iden t a l l y , "S ix S igma" i s a f ede ra l l y r eg i s t e r ed t r ademark o f Moto ro l a ) .

I n t he e a r l y and mid -1980s w i th Cha i rman Bob Ga lv in a t t he he lm , Moto ro l a eng inee r s dec ided t ha t t he t r ad i t i ona l qua l i t y l eve l s - - measu r ing de fec t s i n t housands o f oppo r tun i t i e s - - d idn ' t p rov ide enough g ranu l a r i t y . I n s t e ad , t hey wan t ed t o measu re t he de f ec t s pe r m i l l i on oppo r tun i t i e s . Mo to ro l a deve loped t h i s new s t anda rd and c r ea t ed t he me thodo logy and needed cu l t u r a l change a s soc i a t ed w i th i t . S ix S igma he lped Moto ro l a r e a l i z e power fu l bo t t om- l i ne r e su l t s i n t he i r o rgan i za t i on - i n f a c t , t hey documen ted more t han $16 B i l l i on i n s av ings a s a r e su l t o f ou r S ix S igma e f fo r t s .

S ince t hen , hund reds o f compan i e s a round t he wor ld have adop t ed S ix S igma a s a way o f do ing bus ine s s . Th i s i s a

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d i r ec t r e su l t o f many o f Amer i ca ' s l e ade r s open ly p r a i s i ng t he bene f i t s o f S ix S igma . Leade r s such a s La r ry Boss idy o f A l l i ed S igna l ( now Honeywe l l ) , and J ack We lch o f Gene ra l E l ec t r i c Company . Rumor ha s i t t ha t La r ry and J ack we re p l ay ing go l f one day and J ack be t La r ry t ha t he cou ld imp lemen t S ix S igma f a s t e r and w i th g r ea t e r r e su l t s a t GE than La r ry d id a t A l l i ed S igna l . The r e su l t s speak fo r t hemse lve s .

S ix S igma ha s evo lved ove r t ime . I t ' s more t han j u s t a qua l i t y sy s t em l i ke TQM or ISO. I t ' s a way o f do ing bus ine s s . As GE o f f Tennan t de sc r i be s i n h i s book S ix S igma : SPC and TQM in Manufac tu r i ng and Se rv i ce s : "S ix S igma i s many t h ings , and i t wou ld pe rhaps be ea s i e r t o l i s t a l l t he t h ings t ha t S ix S igma qua l i t y i s no t . S ix S igma can be s een a s : a v i s i on ; a ph i l o sophy ; a symbo l ; a me t r i c ; a goa l ; a me thodo logy . " We cou ldn ' t ag r ee more .

The roo t s o f s i x s i gma a s a measu remen t s t anda rd can be t r a ced back t o Ca r l F r ede r i ck Gauss (1777 -1855) who i n t roduced t he concep t o f t he no rma l cu rve . S ix s i gma a s a measu remen t s t anda rd i n p roduc t va r i a t i on can be t r a ced back t o t he 1920 ' s when Wa l t e r Shewha r t showed t ha t t h r ee s i gma f rom the mean i s t he po in t whe re a p roce s s r equ i r e s co r r ec t i on . Many measu remen t s t anda rds (Cpk , Ze ro De fec t s , and so on ) l a t e r c ame on t he s cene bu t c r ed i t f o r co in ing t he t e rm " s ix s i gma" goes t o a Moto ro l a eng inee r named B i l l Smi th ( s i x s i gma i s a f ede ra l l y r eg i s t e r ed t r ademark o f Moto ro l a ) .

I n t he l a t e 1970 ' s , Dr . Mike l Ha r ry , a s en io r s t a f f eng inee r a t Mo to ro l a ' s Gove rnmen t E l ec t ron i c s Group (GEG) , began t o expe r imen t w i th p rob l em so lv ing t h rough s t a t i s t i c a l ana ly s i s . Us ing h i s me thodo logy , GE began t o show d rama t i c r e su l t s – GEG ' s p roduc t s we re be ing de s igned and p roduced f a s t e r and more cheap ly . Subsequen t l y , Dr . Ha r ry began t o fo rmu la t e a me thod fo r app ly ing s i x s i gma t h roughou t Moto ro l a . H i s work cu lmina t ed i n a pape r t i t l ed "The S t r a t eg i c V i s ion fo r Acce l e r a t i ng S ix S igma Wi th in Moto ro l a . " He was l a t e r appo in t ed head o f t he Moto ro l a S ix S igma Resea rch In s t i t u t e and became t he d r i v ing fo r ce beh ind s i x s i gma .

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Dr . Mike l Ha r ry and R icha rd Sch roede r , an ex -Moto ro l a execu t i ve , we re r e spons ib l e fo r c r ea t i ng t he un ique combina t i on o f change managemen t and da t a -d r i ven me thodo log i e s t ha t t r ans fo rmed s i x s i gma f rom a s imp le qua l i t y measu remen t t oo l t o t he b r eak th rough bus ine s s exce l l ence ph i l o sophy i t i s t oday . They had t he cha r i sma and t he ab i l i t y t o educa t e and engage bus ine s s l e ade r s such a s Bob Ga lv in o f Moto ro l a , La r ry Boss idy o f A l l i edS igna l ( now Honeywe l l ) , and J ack We lch o f GE . Toge the r , Ha r ry and Sch roede r e l eva t ed s i x s i gma f rom the shop f l oo r t o t he boa rd room wi th t he i r d r i ve and i nnova t i ve i dea s r ega rd ing en t i t l emen t , b r eak th rough s t r a t egy , s i gma l eve l s , and t he ro l e s fo r dep loymen t o f B l ack Be l t s , Mas t e r B l ack Be l t s , and Champions . I n e f f ec t , t hey c r ea t ed a bus ine s s r evo lu t i on t ha t con t i nues t o cha l l enge t he t h ink ing o f execu t i ve s , manage r s and emp loyees a l i ke . The i r s t r a t eg i e s and t oo l s have been pe r f ec t ed t h rough t he yea r s by S ix S igma Academy . In b r i e f , we be l i eve ou r con t r i bu t i on was t he un ique combina t i on o f bus ine s s l e ade r sh ip p lu s qua l i t y and p roce s s improvemen t t oo l s and t e chn iques wh ich made i t pos s ib l e fo r l e ade r s t o r e cogn i ze t he va lue o f s i x s i gma , no t j u s t a s a t oo l f o r ope ra t i ona l e f f i c i ency , bu t a s an en t e rp r i s e w ide bus ine s s s t r a t egy w i th d i r ec t bo t t om l i ne impac t .

Hav ing s a id a l l t ha t , I be l i eve eve ry s i x - s i gma p rac t i t i one r , consu l t i ng f i rm , and b l ack be l t ha s con t r i bu t ed t o t he evo lu t i on o f s i x s i gma . We shou ld t he r e fo re focus ou r t ime and r e sou rce s , no t on d i a t r i be s abou t who can c l a im c r ed i t f o r s i x s i gma , bu t r a t he r on con t i nuous ly improv ing upon t he s t r a t eg i e s and t a c t i c s t o a ch i eve b r eak th rough r e su l t s i n bus ine s s exce l l ence . Fo r example , s i x s i gma ha s been i nd i spu t ab ly succe s s fu l i n e l im ina t i ng was t e , r educ ing va r i ance and i nc r ea s ing p roduc t i v i t y and p ro f i t s . Bu t i t s po t en t i a l t o c r ea t e new bus ine s s mode l s f o r g rowth and i nnova t i on i s ba r e ly t apped . I u rge a l l o f u s t o t ake s i x s i gma t o t he nex t l eve l by be ing t hough t l e ade r s i n sp i r i ng c r ea t i v i t y and o r i g ina l i t y i n ou r succe s so r s , i n s t e ad o f s imp ly r egu rg i t a t i ng wha t o the r s have s a id be fo re u s . Do ing so w i l l en su re s i x s i gma wi l l become the g loba l s t anda rd fo r conduc t i ng bus ine s s , no t j u s t ano the r managemen t t r end doomed t o f a l l by t he ways ide .

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Six S igma i s a b r eak th rough managemen t t oo l , wh i ch enab l e s compan i e s t o i nc r ea se p ro f i t s d r ama t i c a l l y by s t r e aml in ing ope ra t i ons , improv ing qua l i t y , and e l im ina t i ng de fec t s and mi s t akes i n eve ry th ing a company does . The da r l i ng o f Wa l l S t r ee t , i t h a s become the man t r a o f Fo r tune 500 boa rd rooms a round t he wor ld because o f i t s p roven and measu rab l e c apab i l i t i e s .

S ix S igma r educes t he va r i ab l e s i nvo lved i n a p roce s s i n o rde r t o improve and ach i eve t he goa l o f 3 .4 de f ec t s pe r m i l l i on . The me thodo logy i s ba sed on 5 s t eps

Def ine : I den t i f i e s a p ro j ec t su i t ab l e fo r S ix S igma e f fo r t s ba sed on bus ine s s ob j ec t i ve s a s we l l a s cus tomer needs .

Measure : I t measu re s t he va r i ab l e s o f t he p roce s s and coun t s t he de f ec t s .

Analyze : De fec t s a r e i den t i f i ed and t he key va r i ab l e s r educed .

Improve : I t con f i rms t he key va r i ab l e s and quan t i f i e s t he i r e f f ec t s on t he p roce s s .

Contro l : Too l s a r e pu t i n p l ace t o ensu re t ha t unde r t he mod i f i ed p roce s s t he key va r i ab l e s r ema in w i th in t he max imum accep t ab l e r anges ove r t ime .

S ix S igma Qua l i t y i s an advanced t e chn ique o f improv ing p roce s se s and p ro f i t ab i l i t y t ha t ha s r evo lu t i on i zed i ndus t r i e s a c ro s s Amer i ca and a round t he wor ld . The f ac t s a r e p l a in : by improv ing qua l i t y w i th S ix S igma t e chn iques , bus ine s se s have been ab l e t o s ave b i l l i ons wh i l e ga in ing a compe t i t i ve edge .

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Six S igma means some th ing d i f f e r en t t o eve ry company . Fo r some , S ix S igma i s a t o t a l managemen t ph i l o sophy , f o r o the r s i t i s s imp ly a p roce s s improvemen t e f fo r t de s igned t o i nc r ea se p roduc t i v i t y and r educe cos t s . Rega rd l e s s o f t he way i t i s u sed w i th in you r o rgan i za t i on , S ix S igma means da t a d r i ven dec i s i on mak ing !

In i t s mos t s imp le s ense , S ix S igma i s a h igh ly d i s c ip l i ned app roach t o dec i s i on mak ing t ha t he lp s peop l e focus on improv ing p roce s se s t o make t hem a s nea r pe r f ec t a s pos s ib l e .

Done p rope r ly , S ix S igma ensu re s t ha t i n t e rna l p roce s se s a r e runn ing a t op t imum e f f i c i ency . Compe t i t i on , co s t s , and cus tomer demands a r e d r i v ing supp l i e r s t o improve p roduc t qua l i t y and t r ansac t i ona l p roce s se s . S ix S igma i s a me thodo logy t ha t a l l ows compan i e s t o fo rma l i z e t h i s improvemen t p roce s s , speak a common l anguage , s t r e aml ine p roce s se s , expose pe r fo rmance bo t t l enecks and d r i ve con t i nuous and con t ro l l ed improvemen t .

S ix S igma a t many o rgan i za t i ons s imp ly means a measu re o f qua l i t y t ha t s t r i ve s fo r nea r pe r f ec t i on . S ix S igma i s a d i s c ip l i ned , da t a -d r i ven app roach and me thodo logy fo r e l im ina t i ng de fec t s ( d r i v ing t owards s i x s t anda rd dev i a t i ons be tween t he mean and t he nea re s t spec i f i c a t i on l im i t ) i n any p roce s s - - f r om manufac tu r i ng t o t r ansac t i ona l and f rom p roduc t t o s e rv i ce .

The s t a t i s t i c a l r ep re sen t a t i on o f S ix S igma de sc r i be s quan t i t a t i ve ly how a p roce s s i s pe r fo rming . To ach i eve S ix S igma , a p roce s s mus t no t p roduce more t han 3 .4 de f ec t s pe r m i l l i on oppo r tun i t i e s . A S ix S igma de fec t i s de f i ned a s any th ing ou t s i de o f cus tomer spec i f i c a t i ons . A S ix S igma oppo r tun i t y i s t hen t he t o t a l quan t i t y o f chances fo r a de f ec t . P roce s s s i gma can ea s i l y be ca l cu l a t ed u s ing a S ix S igma ca l cu l a to r .

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The fundamen ta l ob j ec t i ve o f t he S ix S igma me thodo logy i s t he imp lemen ta t i on o f a measu remen t -ba sed s t r a t egy t ha t f ocuse s on p roce s s improvemen t and va r i a t i on r educ t i on t h rough t he app l i c a t i on o f S ix S igma improvemen t p ro j ec t s . Th i s i s a ccompl i shed t h rough t he u se o f two S ix S igma sub -me thodo log i e s : DMAIC and DMADV. The S ix S igma DMAIC p roces s (de f i ne , measu re , ana lyze , improve , con t ro l ) i s an improvemen t sy s t em fo r ex i s t i ng p roce s se s f a l l i ng be low spec i f i c a t i on and l ook ing fo r i nc r emen ta l improvemen t . The S ix S igma DMADV p roces s (de f i ne , measu re , ana lyze , de s ign , ve r i fy ) i s an improvemen t sy s t em used t o deve lop new p roce s se s o r p roduc t s a t S ix S igma qua l i t y l eve l s . I t c an a l so be emp loyed i f a cu r r en t p roce s s r equ i r e s more t han j u s t i nc r emen ta l improvemen t . Bo th S ix S igma p roce s se s a r e execu t ed by S ix S igma Green Be l t s and S ix S igma B lack Be l t s , and a r e ove r seen by S ix S igma Mas t e r B l ack Be l t s .

Acco rd ing t o t he S ix S igma Academy , B l ack Be l t s s ave compan i e s app rox ima te ly $230 ,000 pe r p ro j ec t and can comple t e fou r t o 6 p ro j ec t s pe r yea r . Gene ra l E l ec t r i c , one o f t he mos t succe s s fu l compan i e s imp lemen t ing S ix S igma , ha s e s t ima t ed bene f i t s on t he o rde r o f $10 b i l l i on du r ing t he f i r s t f i ve yea r s o f imp lemen ta t i on . GE f i r s t began S ix S igma i n 1995 a f t e r Mo to ro l a and A l l i ed S igna l b l azed t he S ix S igma t r a i l . S ince t hem, t housands o f compan i e s a round t he wor ld have d i s cove red t he f a r r e ach ing bene f i t s o f S ix S igma .

Many f r ameworks ex i s t f o r imp lemen t ing t he S ix S igma me thodo logy . S ix S igma Consu l t an t s a l l ove r t he wor ld have deve loped p rop r i e t a ry me thodo log i e s fo r imp lemen t ing S ix S igma qua l i t y , ba sed on t he s im i l a r change managemen t ph i l o soph i e s and app l i c a t i ons o f t oo l s .

Definition

Six S igma i s a r i go rous and d i s c ip l i ned me thodo logy t ha t u se s da t a and s t a t i s t i c a l ana ly s i s t o measu re and improve a company ' s ope ra t i ona l pe r fo rmance by i den t i fy ing and

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e l im ina t i ng "de fec t s " i n manufac tu r i ng and s e rv i ce - r e l a t ed p roce s se s . Commonly de f i ned a s 3 .4 de f ec t s pe r m i l l i on oppo r tun i t i e s , S ix S igma can be de f i ned and unde r s tood a t t h r ee d i s t i nc t l eve l s : me t r i c , me thodo logy and ph i l o sophy"

S ix S igma i s a t e rm used t o de sc r i be a measu re o f qua l i t y con t ro l t ha t i s h ighe r t han "no rma l " . S ix S igma i s a me thodo logy t ha t i s i n t ended t o r educe p roce s s va r i a t i on t o w i th in a l im i t t ha t w i l l r e su l t i n 3 .4 de f ec t s pe r m i l l i on s amp le s o r l e s s .

The word “qua l i t y” comes f rom the La t i n “qua l i t a s ” , and C ice ro ( a roman o ra to r and po l i t i c i an , 106 -43 B .C . ) i s be l i eved t o be t he f i r s t pe r son who used t he word . Un t i l t he a f ew decades be fo re , t he concep t o f qua l i t y ha s been s i gn i f i c an t l y ex t ended a s we know i t t oday .

F i r s t l y , a lmos t a l l f a c to r s a r e conduc t ed a round cus tomer s . I n ano the r word , i t c an be s a id a s cus tomer s dec ide t he qua l i t y ( e . g . Ju r an i n 1951 , Deming i n 1985 , and T r ibus i n 1990 ) . Second ly , a cco rd ing t o cus tomer , two t h ings a r e common ly cons ide red a s wh ich sha l l be fu l f i l l ed – cus tomer r equ i r emen t s and cus tomer expec t a t i ons . The r equ i r emen t s a r e wha t cus tomer s r eques t and demand . These a r e t he ba s i c s o f t he qua l i t y . The expec t a t i ons a r e wha t t he cus tomer s expec t and l ook fo rwa rd t o . Some t imes , t he cus tomer s do no t know wha t t hey r ea l l y need . So t ha t demands deve lope r s t o have a good unde r s t and ing abou t t he cus tomer ’ s m inds .

“Qua l i t y i s f r e e . I t i s no t a g i f t , bu t i t i s f r e e . Wha t cos t s money a r e i n -qua l i t y t h ings - a l l t he a c t i ons t ha t i nvo lve no t do ing j obs r i gh t t he f i r s t t ime . ” – Ph i l i p C rosby Many compan i e s pay p roce s s improvemen t a ims t o have a be t t e r con t ro l i n so f twa re deve lopmen t . Manage r s o r o rgan i za t i ons gene ra l l y d iv ide t he who le p ro j ec t i n to sma l l e r phase s , such a s r equ i r emen t ana ly s i s , p l ann ing , cod ing , t e s t i ng , r e l e a s ing , e t c .

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Many compan i e s pay a l o t i n co r r ec t i on , i . e . 80% o f t he cos t i n a So f twa re Eng inee r i ng (SE) p ro j ec t i s common ly r e l a t ed t o a f t e r -de l i ve ry co r r ec t i ons . And we a l so found :

Unsa t i s f i ed cus tomer s t e l l i n ave rage 10 pe r sons abou t t he i r bad expe r i ence s . 12% t e l l s up t o 20 o the r pe r sons .

Sa t i s f i ed cus tomer s t e l l i n ave rage 5 pe r sons abou t t he i r pos i t i ve expe r i ence s .

I t co s t s 5 t imes a s much t o ga in new cus tomer s t han keep ing ex i s t i ng ones .

Up t o 90% o f t he unsa t i s f i ed cus tomer s w i l l no t make bus ine s s w i th you aga in , and t hey w i l l no t t e l l you .

95% o f t he unsa t i s f i ed cus tomer s w i l l r ema in l oya l i f t he i r compla in t s a r e hand l ed f a s t and we l l .

A l l above mo t iva t e u s t o improve qua l i t y . Improved qua l i t y c an a f f ec t t he succe s s i n many d i f f e r en t ways :

More s a t i s f i ed and l oya l cu s tomer s

Lower emp loyee t u rnove r and s i ck l e ave r a t e s

A s t ronge r ma rke t pos i t i on

Sho r t e r l e ad t imes

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Oppor tun i t i e s f o r c ap i t a l r e l e a se

Reduced cos t s due t o was t e r and r ework

H ighe r p roduc t i v i t y

Process Improvement

Proces s improvemen t a ims t o have a be t t e r con t ro l i n so f twa re deve lopmen t . Manage r s o r o rgan i za t i ons gene ra l l y d iv ide t he who le p ro j ec t i n to sma l l e r phase s , such a s r equ i r emen t ana ly s i s , p l ann ing , cod ing , t e s t i ng , r e l e a s ing , e t c .

P roce s s i s “ a s equence o f s t eps pe r fo rmed fo r a g iven pu rpose . ” I t p rov ide s p ro j ec t member s a r egu l a r me thod o f u s ing t he s ame way t o do t he s ame work . P roce s s improvemen t focuse s on de f i n ing and con t i nua l l y improv ing p roce s s . De fec t s f ound i n p r ev ious e f fo r t s a r e f i xed i n t he nex t e f fo r t s . The re a r e many mode l s and t e chn iques fo r p roce s s improvemen t , such a s CMMI , ISO9000 s e r i e s , SP ICE , S ix S igma , e t c .

Six Sigma

Six S igma app roach i s a s t r uc tu r ed quan t i t a t i ve me thod wh ich i s i nven t ed by Moto ro l a i n 1986 fo r improv ing t he p roduc t qua l i t y . I t s a im i s t o enhance o rgan i za t i on ’ s pe r fo rmance by u s ing s t a t i s t i c a l ana ly t i c t e chn iques . Af t e r two decades o f succe s s fu l imp lemen ta t i on i n manufac tu r i ng , S ix S igma i s app roved a s an e f f ec t i ve me thodo logy fo r improv ing qua l i t y . Nowadays , some r e sea r che r s be l i eve t ha t S ix S igma can b r i ng l a rge bene f i t s f o r so f twa re compan i e s

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“S ix S igma” equa t e s t o 3 .4 De fec t s Pe r Mi l l i on Oppor tun i t i e s (DPMO) . The re fo re , a s a me t r i c s , S ix S igma focuse s on r educ ing de fec t s .

I f we ach i eve 99 .9997% o f a ims , t hen we a r e a t t he 6σ l eve l wh ich equa t e s t o 3 .4 DPMO. F rom th i s po in t o f v i ew , S igma l eve l i s t o show how we l l t he p roduc t i s pe r fo rming . I t s e ems t h i s l eve l c an neve r be ach i eved . Howeve r , t he S igma l eve l i s no t ou r pu rpose , t he r e a l pu rpose i s t o improve qua l i t y con t i nua l l y . The h ighe r S igma l eve l we have r each , t he h ighe r qua l i t y we ge t .

The ca l cu l a t i on o f S igma l eve l i s ba sed on t he number o f de f ec t s pe r m i l l i on oppo r tun i t i e s (DPMO) . The fo rmu la i s

DPMO = 106* D / (N*O)

Where D means t he number o f de f ec t s , N means number o f un i t s p roduced , and O i s t he number o f oppo r tun i t i e s pe r un i t .

Wha t does i t mean t o be "S ix S igma"? S ix S igma a t many o rgan i za t i ons s imp ly means a measu re o f qua l i t y t ha t s t r i ve s fo r nea r pe r f ec t i on . Bu t t he s t a t i s t i c a l imp l i c a t i ons o f a S ix S igma p rog ram go we l l beyond t he qua l i t a t i ve e r ad i ca t i on o f cus tomer -pe rcep t i b l e de f ec t s . I t ' s a me thodo logy t ha t i s we l l r oo t ed i n ma thema t i c s and s t a t i s t i c s .

The ob j ec t i ve o f S ix S igma Qua l i t y i s t o r educe p roce s s ou tpu t va r i a t i on so t ha t on a l ong t e rm bas i s , wh i ch i s t he cus tomer ' s agg rega t e expe r i ence w i th ou r p roce s s ove r t ime , t h i s w i l l r e su l t i n no more t han 3 .4 de f ec t Pa r t s Pe r Mi l l i on (PPM) oppo r tun i t i e s ( o r 3 .4 De fec t s Pe r Mi l l i on Oppor tun i t i e s – DPMO) . Fo r a p roce s s w i th on ly one spec i f i c a t i on l im i t (Uppe r o r Lower ) , t h i s r e su l t s i n s i x p roce s s s t anda rd dev i a t i ons be tween t he mean o f t he

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proces s and t he cus tomer ' s spec i f i c a t i on l im i t ( hence , 6 S igma) . Fo r a p roce s s w i th two spec i f i c a t i on l im i t s (Uppe r and Lower ) , t h i s t r ans l a t e s t o s l i gh t l y more t han s i x p roce s s s t anda rd dev i a t i ons be tween t he mean and each spec i f i c a t i on l im i t such t ha t t he t o t a l de f ec t r a t e co r r e sponds t o equ iva l en t o f s i x p roce s s s t anda rd dev i a t i ons .

Many p roce s se s a r e p rone t o be ing i n f l uenced by spec i a l and /o r a s s i gnab l e c ause s t ha t impac t t he ove ra l l pe r fo rmance o f t he p roce s s r e l a t i ve t o t he cus tomer ' s spec i f i c a t i on . Tha t i s , t he ove ra l l pe r fo rmance o f ou r p roce s s a s t he cus tomer v i ews i t m igh t be 3 .4 DPMO (co r r e spond ing t o Long Te rm pe r fo rmance o f 4 .5 S igma) . Howeve r , ou r p roce s s cou ld i ndeed be capab l e o f p roduc ing a nea r pe r f ec t ou tpu t (Sho r t Te rm capab i l i t y – a l so known a s p roce s s en t i t l emen t – o f 6 S igma) . The d i f f e r ence be tween t he "be s t " a p roce s s c an be , measu red by Sho r t Te rm p roce s s c apab i l i t y , and t he cus tomer ' s agg rega t e expe r i ence (Long Te rm capab i l i t y ) i s known a s Sh i f t dep i c t ed a s Zsh i f t o r sh i f t . Fo r a " t yp i ca l " p roce s s , t he va lue o f sh i f t i s 1 . 5 ; t he r e fo re , when one hea r s abou t "6 S igma , " i nhe ren t i n t ha t s t a t emen t i s t ha t t he sho r t t e rm capab i l i t y o f t he p roce s s i s 6 , t he l ong t e rm capab i l i t y i s 4 . 5 (3 .4 DPMO – wha t t he cus tomer s ee s ) w i th an a s sumed sh i f t o f 1 . 5 . Typ i ca l l y , when r e f e r ence i s g iven u s ing DPMO, i t deno t e s t he Long Te rm capab i l i t y o f t he p roce s s , wh i ch i s t he cus tomer ' s expe r i ence . The ro l e o f t he S ix S igma p ro fe s s iona l i s t o quan t i fy t he p roce s s pe r fo rmance (Sho r t Te rm and Long Te rm capab i l i t y ) and ba sed on t he t r ue p roce s s en t i t l emen t and p roce s s sh i f t , e s t ab l i sh t he r i gh t s t r a t egy t o r e ach t he e s t ab l i shed pe r fo rmance ob j ec t i ve

As t he p roce s s s i gma va lue i nc r ea se s f rom ze ro t o s i x , t he va r i a t i on o f t he p roce s s a round t he mean va lue dec rea se s . Wi th a h igh enough va lue o f p roce s s s i gma , t he p roce s s app roaches z e ro va r i a t i on and i s known a s ' z e ro de f ec t s . '

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Stat is t ical Take Away

Decrea se you r p roce s s va r i a t i on ( r emember va r i ance i s t he squa re o f you r p roce s s s t anda rd dev i a t i on ) i n o rde r t o i nc r ea se you r p roce s s s i gma . The end r e su l t i s g r ea t e r cu s tomer s a t i s f ac t i on and l ower cos t s .

PROCESS SIGMA CALCULATION

Defec t s Pe r Mi l l i on Oppor tun i t i e s (DPMO) =

(To t a l De fec t s / To t a l Oppor tun i t i e s ) * 1 ,000 ,000

De fec t s (%) = (To t a l De fec t s / To t a l Oppor tun i t i e s )* 100%

Yie ld (%) = 100 - %Defec t s

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Proces s S igma ( t ype t h i s f o rmu la i n to Exce l ) :

=NORMSINV(1- ( t o t a l de f ec t s / t o t a l oppo r tun i t i e s ) )+1 .5

Be su re t o i nc lude t he Equa l s (= ) s i gn . Th i s w i l l g i ve you you r p roce s s s i gma (o r s i gma capab i l i t y ) a s suming t he 1 .5 s i gma sh i f t .

Fo r example i f you t ype t h i s i n to Exce l ,

=NORMSINV(1-100 /1000000)+1 .5

you w i l l ge t 5 . 22 fo r you r P roce s s S igma .

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OBJECTIVE AND SCOPE

The ma in a im o f t h i s pape r i s t o p rov ide S t eps fo r so f twa re compan i e s who wan t t o imp lemen t S ix S igma fo r p roce s s improvemen t . To ach i eve t ha t , f o l l owing ob j ec t i ve s sha l l be r e ached :

I den t i fy t he d i f f e r ences o f S ix S igma i n manufac tu r i ng and so f twa re compan i e s .

D i scus s t he a ccep t ance o f S ix S igma i n so f twa re compan i e s .

Compare t he a cademic r e sea r ch r e su l t s w i th t he r e a l i t y o f so f twa re compan i e s .

I den t i fy t he s t a t e -o f - a r t o f S ix S igma i n so f twa re .

Sc r een ou t t he su i t ab l e S ix S igma t oo l s and t e chn iques fo r so f twa re compan i e s .

D i scus s t he fu tu r e work fo r S ix S igma i n so f twa re compan i e s .

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LIMITATIONS

Threats To Val id i ty

Val ida t i on fo r t h r ea t s i s ve ry nece s sa ry t o va l i da t e r e sea r ch r e su l t s . Acco rd ing t o , f ou r ma in t ypes o f va l i d i t y we re conduc t ed a s be low .

1 In terna l Va l id i ty

The i n t e rna l va l i d i t y t h r ea t s i n t he r e sea r ch a r e r e l a t ed t o t he p rocedu re s and expe r i ence s o f pa r t i c i pan t s . I n t h i s pape r , peop l e i nvo lved i n s t ud i e s c ame f rom d i f f e r en t l eve l s . Tha t w i l l i n f l uence t he r e sea r ch r e su l t . Ano the r t h r ea t r e l a t e s t o c a se s t ud i e s , t he chosen ca se s c ame f rom d i f f e r en t f i e l d s . A l though t h i s c an he lp t o gene ra t e t he gene r i c me thod fo r common ca se s , i t a l so can be a t h r ea t t o puzz l e r e sea r che r s .

2 Cons truc t Va l id i ty

To min imize t h i s t h r ea t , t he sou rce s o f au tho r ’ s r e sea r ch ma te r i a l s gene ra l c ame f rom t ru s t ab l e o r c e r t i f i c a t ed o r i g ina t i ons , such a s IEEE , ACM d ig i t a l l i b r a ry , e t c . Howeve r , some sou rce s s t i l l h ave a l ow l eve l r i sk . Th i s may mi s l ead au tho r s ‟ r e sea r ch d i r ec t i on .

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3 Conc lus ion Va l id i ty

The r e sea r ch conc lu s ion conc luded l i t e r a tu r e r ev i ew , compa r i sons , i n t e rv i ew and ca se s t ud i e s . The re i s a t h r ea t t ha t au tho r s have no t exac t l y conc luded t he r e a l r e sea r ch f i nd ings . And t o m in imize t h i s t h r ea t , au tho r s have i nv i t ed s eve ra l f r i ends t o he lp va l i da t e r e sea r ch pape r .

4 Externa l Va l id i ty

Exte rna l va l i d i t y i s r e l a t ed t o gene ra l i z e r e sea r ch r e su l t s w i th who le popu l a t i on . To deg rade t h i s t h r ea t , l i t e r a tu r e s , c a se s we re s e l ec t ed f rom d i f f e r en t f i e l d s i n au tho r s ‟ r e sea r ch . A t t he s ame t ime , t he r e sea r ch goa l i s t o gene ra t e a gene r i c me thod fo r so f twa re compan i e s . So t h i s pa r t ’ s t h r ea t i s m in imized .

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THEORETICAL PERSPECTIVE

A mixed me thodo logy w i l l be u sed wh ich i nc lude bo th qua l i t a t i ve and quan t i t a t i ve r e sea r ch . And t h i s m ixed me thodo logy ha s been u sed fo r au tho r s ‟ r e sea r ch . Bo th qua l i t a t i ve and quan t i t a t i ve r e sea r ch me thodo log i e s we re u sed . I n t he qua l i t a t i ve r e sea r ch me thodo logy pa r t , a de t a i l ed and comprehens ive l i t e r a tu r e s t udy have been ca r r i ed ou t . The l i t e r a tu r e s t udy cons i s t s o f a r t i c l e s , books , web ma te r i a l s , d i s cus s ion fo rms and o the r s . The l i t e r a tu r e s t udy i s u sed t o f i nd ou t t he cha rac t e r i s t i c s o f S ix S igma , t he t oo l s and t e chn iques u sed i n S ix S igma , and t o ana lyze t he su i t ab i l i t y o f t he se t oo l s and t e chn iques fo r p roce s s improvemen t i n so f twa re compan i e s . A l i s t o f t oo l s and t e chn iques have been p rov ided , wh ich a r e he lp fu l f o r S ix S igma imp lemen ta t i on . Wi th t he he lp o f t he l i t e r a tu r e s t udy , t he cond i t i on o f S ix S igma i n manufac tu r i ng ha s been i den t i f i ed . Af t e r comple t e ly unde r s t and ing t he u sage o f S ix S igma i n manufac tu r i ng , t he r e sea r ch moved t o fo l l ow r e sea r ch ques t i ons – app l i c ab i l i t y o f S ix S igma i n so f twa re and why so f twa re compan i e s choose S ix S igma fo r p roce s s improvemen t . I n o rde r t o answer t he se r e sea r ch ques t i ons , d i f f e r en t v i ews wh ich p rov ided by so f twa re spec i a l i s t s have been d i s cus sed . Then au tho r s ana lyzed t he d i f f e r ence be tween manufac tu r i ng p roce s s and so f twa re p roce s s . Once t he d i f f e r ences a r e c l e a r , we can ea s i l y f i nd ou t t he app l i c ab i l i t y o f S ix S igma fo r so f twa re .

I n t he quan t i t a t i ve r e sea r ch me thodo logy pa r t , two i n t e rv i ews have been conduc t ed , one ca se s t udy , and t h r ee c a se s t ud i e s a r e r ev i ewed . The f i r s t i n t e rv i ewee was one emp loyee i n a wor ld - c l a s s manufac tu r i ng company . The company ha s ove r 5 yea r s expe r i ence i n imp lemen t ing S ix S igma . And t he i n t e rv i ewee cu r r en t l y i s a Green Be l t who have pa r t i c i pa t ed more t han t h r ee S ix S igma p ro j ec t s . And t he i n t e rv i ew was conduc t ed t h rough phone . Be fo re i n t e rv i ew , au tho r s have made enough p repa ra t i ons wh ich i nc lude company backg round i nves t i ga t i on , ques t i on l i s t p r epa ra t i on , and some i n t e rv i ew sk i l l l e a rn ing . To have a be s t commun ica t i on , a qu i t e env i ronmen t and one backup

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phone have been p r epa red . Rega rd ing ques t i on l i s t , i t was gene ra t ed a f t e r S ix S igma app roach s t udy ing and company backg round l e a rn ing . The mo t iva t i on beh ind t he i n t e rv i ew was f i r s t l y t o unde r s t and how S ix S igma i s imp lemen ted i n a manufac tu r i ng company . Second ly how S ix S igma improves a pa r t i cu l a r manufac tu r i ng p roce s s . And t he emp loyee ha s add i t i ona l p rov ided documen t s r ega rd ing t o a r e a l S ix S igma ca se s t udy . The ca se s t udy shows how a pa r t i cu l a r manufac tu r i ng p roce s s i s improved u s ing S ix S igma . The Second i n t e rv i ew was i n a company , whe re t hey have imp lemen ted S ix S igma fo r So f twa re ’ s . The mo t iva t i on beh ind t he i n t e rv i ew was f i r s t l y t o unde r s t and how S ix S igma i s imp lemen ted i n So f twa re Company . Second ly how i t improves pa r t i cu l a r so f twa re p roce s se s . The i n t e rv i ewee was one emp loyee i n t he company . He was work ing a s a qua l i t y head . He had t r a i n ings i n S ix S igma Green Be l t and B lack Be l t . To have a f a r t he r r e sea r ch on S ix S igma app roach , t h r ee c a se s t ud i e s have been found f rom p rev ious r e sea r che r s ’ work . The mo t iva t i on beh ind t he ca se s t ud i e s r ev i ew i s t o f i nd ou t t he s t a t e -o f - a r t f o r S ix S igma ’ s imp lemen ta t i on . The compan i e s wh ich p rov ided t hose ca se s c ame f rom th r ee d i f f e r en t f i e l d s – so f twa re , human r e sou rce and consu l t ancy . Tha t i s good fo r ou r r e sea r ch . By compa r ing t he i r d i f f e r ences and s im i l a r i t i e s , au tho r have ga in ve ry i n t e r e s t i ng and u se fu l f i nd ings . Those f i nd ings we re i n t eg ra t ed w i th S ix S igma imp lemen ta t i on mode l , and p r e sen t ed a s t he r e sea r ch f i na l r e su l t s f o r so f twa re compan i e s and r e sea r che r s . To va l i da t e t he t h r ea t s i n au tho r s ’ r e sea r ch , a va l i da t i on was conduc t ed a t l a s t . Lea rn ing f rom, t he va l i da t i on was made up by fou r pa r t s – i n t e rna l va l i d i t y , cons t ruc t va l i d i t y , conc lu s ion va l i d i t y and ex t e rna l va l i d i t y . Wi th he lp o f m ixed r e sea r ch me thodo logy and r ea sonab l e va l i da t i on , au tho r s ’ r e sea r ch i s be l i eved t o fu l f i l l bo th co r r ec tne s s and au then t i c i t y ’ s r equ i r emen t s .

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ANALYSIS OF DATA

Benchmarking: How do your processes compare?

The fo l l owing S igma me t r i c s a r e d r awn f rom Neva l a inen D , Be r t e L , Kra f t C , Le igh E , Morgan T . Eva lua t i ng l abo ra to ry pe r fo rmance on qua l i t y i nd i ca to r s w i th t he s i x s i gma sca l e . Arch Pa tho l Lab Med 2000 ;124 :516 -519 .

Q-Probe QUALITY INDICATOR % ERROR DPM SIGMA*

Order accuracy 1.8 % 18,000 3.60

Duplicate test orders 1.52 15,200 3.65

Wristband errors (not banded) 0.65 6,500 4.00

TDM timing errors 24.4 244,000 2.20

Hematology specimen acceptability 0.38 3,800 4.15

Chemistry specimen acceptability 0.30 3,000 4.25

Surgical pathology specimen accessioning 3.4 34,000 3.30

Cytology specimen adequacy 7.32 73,700 2.95

Laboratory proficiency testing 0.9 9,000 3.85

Surg path froz sect diagnostic discordance 1.7 17,000 3.60

PAP smear rescreening false negatives 2.4 24,000 3.45

Reporting errors 0.0477 477 4.80

*Conve r s ion u s ing t ab l e w i th a l l owance fo r 1 .5 s sh i f t

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As shown by t he va r i e t y o f p r eana ly t i c , ana ly t i c , and pos t ana ly t i c p roce s se s i n t h i s t ab l e , t he app roach o f u s ing ou t come measu re s c an be app l i ed t o v i r t ua l l y any p roce s s . The obse rved e r ro r r a t e s f o r s eve ra l o f t he se p roce s se s a r e i n t he 3 .0% to 0 .3% range , wh ich t r ans l a t e s t o t yp i ca l s i gma l eve l s o f 3 t o 4 . Even ana ly t i c a l pe r fo rmance , a s e s t ima t ed f rom p ro f i c i ency t e s t i ng da t a , i s on ly a t t he 3 .85 s i gma l eve l . The be s t p roce s s i s " r epo r t i ng e r ro r s " wh ich ha s a s i gma me t r i c o f 4 .80 . No p roce s s a ch i eves t he s i x s i gma goa l .

Some rules of thumb:

3-S igma pe r fo rmance i s cons ide red t he min imum fo r any i ndus t r i a l p roce s s .

Typ ica l pe r fo rmance o f bus ine s s and i ndus t ry p roce s se s i s cons ide red t o be a round 4 -S igma .

The f i r s t goa l o f a S ix S igma p ro j ec t i n bus ine s s and i ndus t ry i s u sua l l y t o improve f rom 4 -S igma t o 5 -S igma . Th i s i s i n f a c t a ve ry s i gn i f i c an t improvemen t : a 100 - fo ld r educ t i on i n de f ec t s i n t he sho r t t e rm!

Some p roce s se s neve r r e ach 6 -S igma . Bu t r e ach ing 5 -S igma may be good enough . I n some ca se s , t he p roce s s c an be r eeng inee red t o a ch i eve 6 -S igma pe r fo rmance .

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METHODOLOGY AND PROCEDURE OF WORK

Six S igma i s a s t r uc tu r ed quan t i t a t i ve me thod wh ich i s o r i g ina l l y i nven t ed fo r r educ ing de fec t s i n manufac tu r i ng by Moto ro l a i n 1986 . I t s a im i s u s ing s t a t i s t i c a l ana ly t i c t e chn iques t o enhanc ing o rgan i za t i on ’ s pe r fo rmances , and t o improv ing qua l i t y . S ince S ix S igma ha s evo lved ove r t he l a s t two decades , i t s de f i n i t i on i s ex t ended t o t h r ee l eve l s :

Me t r i c

Me thodo logy

Managemen t Sys t em

S ix S igma app roach s a t i s f i e s a l l t he t h r ee l eve l s a t t he s ame t ime . Those l eve l s a r e d i s cus sed i n t he fo l l owing s ec t i ons .

As a Metr ic

“S igma” i s t he La t i n symbo l “σ” . He re we u se i t t o symbo l i ze how much dev i a t i on ex i s t s i n a s e t o f da t a , and t ha t i s wha t we ca l l ed s t anda rd no rma l d i s t r i bu t i on , o r t he be l l cu rve . The no rma l d i s t r i bu t i on , a l so ca l l ed t he Gauss i an d i s t r i bu t i on , i s u sed fo r con t i nuous p robab i l i t y d i s t r i bu t i ons . The p robab i l i t y dens i t y func t i on i s shown a s be low – “μ” i s t he mean and “σ2” i s t he va r i ance . The s t anda rd no rma l d i s t r i bu t i on i s “ t he no rma l d i s t r i bu t i on w i th a mean o f z e ro and a va r i ance o f one” . We can s ee t ha t i n a s t anda rd no rma l d i s t r i bu t i on , 50% o f t he va lue s a r e unde r t he mean and 50% o f t he va lue s a r e above t he mean .

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In S ix S igma app roach , “S igma” i s u sed a s a s ca l e fo r l eve l s o f p roce s s c apab i l i t y o r qua l i t y . Acco rd ing t o t ha t , “S ix S igma” equa t e s t o 3 .4 De fec t s Pe r Mi l l i on Oppor tun i t i e s (DPMO) . The re fo re , a s a me t r i c s , S ix S igma focuse s on r educ ing de fec t s . I f we ach i eve 68% o f a ims , t hen we a r e a t t he 1 S igma l eve l . I f we ach i eve 99 .9997% o f a ims , t hen we a r e a t t he 6σ l eve l wh ich equa t e s t o 3 .4 DPMO. F rom th i s po in t o f v i ew , S igma l eve l i s t o show how we l l t he p roduc t i s pe r fo rming . I t s e ems t h i s l eve l c an neve r be ach i eved . Howeve r , t he S igma l eve l i s no t ou r pu rpose , t he r e a l pu rpose i s t o improve qua l i t y con t i nua l l y . The h ighe r S igma l eve l we have r each , t he h ighe r qua l i t y we ge t . How S ix S igma measu re s qua l i t y?

Sigma Leve l Calcu la t ion

The ca l cu l a t i on o f S igma l eve l i s ba sed on t he number o f de f ec t s pe r m i l l i on oppo r tun i t i e s (DPMO) . The fo rmu la i s

DPMO = 106* D / (N*O)

Where D means t he number o f de f ec t s , N means number o f un i t s p roduced , and O i s t he number o f oppo r tun i t i e s pe r un i t . Fo r example , a so f twa re company wan t s t o measu re t he i r so f twa re p roduc t ’ s S igma l eve l . I n t he i r p roduc t , t he r e a r e 200 ,000 l i ne s o f code (LOC) . Fo r e ach LOC, t he company pe r fo rms one check t o t e s t t he qua l i t y . Dur ing t he t e s t i ng , 191 de fec t s a r e de t ec t ed . Then we have DPMO = 106*191 / ( 200 ,000*1) = 955 . F rom Tab l e 1 , a pa r t o f DPMP to s i gma conve r s ion t ab l e , we can f i nd t he s i gma l eve l i s 4 . 60 . You can a l so f i nd t he f r e e c a l cu l a to r s on t he webs i t e .

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DPMO VALUE TO SIGMA LEVEL CONVERSION TABLE

DPMO Sigma Level DPMO Sigma Level

933,193 0.00 60,571 3.05

926,471 0.05 54,799 3.10

919,243 0.10 49,471 3.15

911,492 0.15 44,565 3.20

903,199 0.20 40,059 3.25

894,350 0.25 35,930 3.30

884,930 0.30 32,157 3.35

874,928 0.35 28,717 3.40

864,334 0.40 25,588 3.45

853,141 0.45 22,750 3.50

841,345 0.50 20,182 3.55

828,944 0.55 17,865 3.60

815,940 0.60 15,778 3.65

802,338 0.65 13,904 3.70

778,145 0.70 12,225 3.75

773,372 0.75 10,724 3.80

758,036 0.80 9,387 3.85

742,154 0.85 8,198 3.90

725,747 0.90 7,143 3.95

708,840 0.95 6,210 4.00

691,462 1.00 5,386 4.05

673,645 1.05 4,661 4.10

655,422 1.10 4,024 4.15

636,831 1.15 3,467 4.20

617,911 1.20 2,980 4.25

598,706 1.25 2,555 4.30

579,260 1.30 2,186 4.35

59,618 1.35 1,866 4.40

539,828 1.40 1,589 4.45

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519,939 1.45 1,350 4.50

500,000 1.50 1,144 4.55

480,061 1.55 986 4.60

460,172 1.60 816 4.65

440,382 1.65 687 4.70

420,740 1.70 577 4.75

401,294 1.75 483 4.80

382,088 1.80 404 4.85

63,169 1.85 337 4.90

344,578 1.90 280 4.95

326,355 1.95 233 5.00

308,537 2.00 193 5.05

291,160 2.05 159 5.10

274,253 2.10 131 5.15

257,846 2.15 108 5.20

241,964 2.20 89 5.25

226,627 2.25 72 5.30

211,856 2.30 59 5.35

197,663 2.35 48 5.40

184,060 2.40 39 5.45

171,056 2.45 32 5.50

158,655 2.50 26 5.55

146,859 2.55 21 5.60

135,666 2.60 17 5.65

125,072 2.65 13 5.70

115,070 2.70 11 5.75

105,650 2.75 9 5.80

96,800 2.80 7 5.85

88,508 2.85 5 5.90

80,757 2.90 4 5.95

73,529 2.95 3 6.00

66,807 3.00

Tab le 1 DPMO to s i gma conve r s ion t ab l e .

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As a Methodology

Six S igma app roach i s no t j u s t coun t i ng de fec t s i n a p roce s s o r p roduc t , bu t i t i s a me thodo logy t o improve p roce s se s . The S ix S igma me thodo logy focuse s on :

Manag ing t he cus tomer r equ i r emen t s .

A l i gn ing t he p roce s se s t o a ch i eve t hose r equ i r emen t s .

Ana lyz ing t he da t a t o m in imize t he va r i a t i ons i n t hose p roce s se s .

Rap id and sus t a inab l e improvemen t t o t hose p roce s se s .

When we l ook a t S ix S igma a s a me thodo logy , t he r e a r e many mode l s ava i l ab l e fo r p roce s s improvemen t l i ke DMADV, DMAIC, Break th rough s t r a t egy , Roadmap , New S ix S igma , Eckes me thod , S ix S igma Roadmap , IDOV, and DMEDI . The mos t w ide ly u sed mode l s a r e DMAIC and DMADV. The DMAIC mode l i s u sed when a p roce s s o r p roduc t i s i n ex i s t ence bu t i s no t mee t i ng t he cus tomer r equ i r emen t s . And t he DMADV mode l i s u sed when a p roce s s o r p roduc t i s no t i n ex i s t ence o r i s needed t o be deve loped

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DMAIC Model

Moto ro l a imp lemen ted t he f i r s t S ix S igma mode l c a l l ed a s MAIC (Measu re , Ana lyze , Improve and Con t ro l ) . I t was deve loped by Dr . Miake l Ha r ry . Th i s mode l was u sed t o so lve t he a l r e ady known qua l i t y p rob l ems . GE , un l i ke Moto ro l a was unaware o f t he i r qua l i t y p rob l em. They needed a mode l t ha t c an f i r s t l y map t he r e a l qua l i t y p rob l ems and t hen t o so lve t hem. Dr . Miake l Ha r ry t ook advan t age o f h i s expe r i ence a t Mo to ro l a and deve loped a new mode l DMAIC (De f ine , Measu re , Ana lyze , Improve and Con t ro l ) . Nowadays t h i s mode l i s mos t l y i n S ix S igma imp lemen ta t i on . The phase s o f DMAIC mode l a r e exp l a ined a s fo l l ows :

De f ine phase i s t o de f i ne t he cus tomer ’ s r equ i r emen t s and t he i r expec t a t i ons fo r p roduc t o r s e rv i ce s . To a l i gn t he p ro j ec t goa l s w i th bus ine s s goa l s . To de f i ne t he p ro j ec t s cope , t he s t a r t and s t op o f t he p roce s s .

Measu re phase i s t o deve lop a da t a co l l e c t i on p l an fo r t he cu r r en t p roce s s . To co l l e c t da t a fo r t he cu r r en t p roce s s and t o deve lop a measu remen t sy s t em. The measu remen t sy s t em i s u sed t o c a l cu l a t e t he cu r r en t pe r fo rmance o f t he p roce s s .

Ana lyze phase i s t o f i nd ou t t he gap be tween t he cu r r en t pe r fo rmance and t he goa l pe r fo rmance . To ana lyze t he co l l e c t ed da t a o f cu r r en t p roce s s and t o de t e rmine t he ma in f ac to r s o f t he poo r pe r fo rmance . To f i nd ou t t he sou rce o f va r i a t i on i n t he cu r r en t p roce s s .

Improve phase i s t o i den t i fy and s e l ec t t he r i gh t de s ign so lu t i ons t o f i x t he p rob l ems . The s e t o f so lu t i ons t o improve t he s i gma pe r fo rmance a r e s e l ec t ed on t he ba s i s o f r oo t c ause s i den t i f i ed i n Ana lyze phase .

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Con t ro l phase i s t o f i na l l y imp lemen t t he so lu t i ons . To p rov ide t he ma in t enance o f t he improved p roce s s so t ha t t he improved S ix S igma p roce s s c an run fo r a l ong t ime .

DMADV Model

DMADV (Def ine , Measu re , Ana lyze , Des ign and Ve r i fy ) mode l was deve loped by Thomas Pyzdek i s . Th i s mode l i s app l i ed t o t he deve lopmen t o f new p roce s se s o r p roduc t s . The phase s o f DMADV a re de sc r i bed be low:

De f ine phase i s t o f i nd ou t t he cus tomer needs and expec t a t i ons and t o de f i ne t he p ro j ec t s cope .

Measu re phase i s t o i den t i fy t he CTQs ( c r i t i c a l t o qua l i t i e s ) , p roce s s c apab i l i t y and r i sk a s se s smen t .

Ana lyze phase i s t o deve lop t he h igh l eve l de s ign concep t s and de s ign a l t e rna t i ve s . To s e l ec t t he be s t de s ign .

Des ign phase i s t o deve lop p l ans fo r t e s t ve r i f i c a t i on , t h i s may r equ i r e s imu la t i ons .

Ve r i fy phase i s t o imp lemen t t he p roce s s i n ope ra t i ona l s ca l e .

As a Management Sys tem

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Through expe r i ence , Mo to ro l a ha s found t ha t u s ing S ix S igma a s a me t r i c and a s a me thodo logy a r e no t enough t o d r i ve t he b r eak th rough improvemen t s i n an o rgan i za t i on . Mo to ro l a ensu re s t ha t S ix S igma me t r i c s and me thodo logy a r e adop t ed t o improve oppo r tun i t i e s wh ich a r e d i r ec t l y l i nked t o t he bus ine s s s t r a t egy . Now S ix S igma i s a l so app l i ed a s a managemen t sy s t em fo r execu t i ng t he bus ine s s s t r a t egy . S ix S igma app roach p rov ide s a t op -down so lu t i on t o he lp t he o rgan i za t i on . I t pu t t he improvemen t e f fo r t s a cco rd ing t o t he s t r a t egy . I t p r epa re s t he t e ams t o work on t he h igh ly impor t an t p ro j ec t s . I t d r i ve s c l a r i t y a round t he bus ine s s s t r a t egy .

Tools And Techniques In Six Sigma

The mos t popu l a r 7 Qua l i t y Con t ro l (QC) t oo l s . They a r e Cause -e f f ec t D iag ram, Pa re to Cha r t , F low Cha r t , H i s t og ram, Check Shee t , Con t ro l Cha r t , and Sca t t e r P lo t .

Bra ins to rming i s " a con fe r ence t e chn ique by wh ich a g roup a t t emp t s t o f i nd a so lu t i on fo r a spec i f i c p rob l em by amass ing a l l t he i dea s spon t aneous ly by i t s member s "

The a f f i n i t y d iagram i s deve loped by Kawak i t a J i r o , so i t i s a l so ca l l ed KJ me thod . I t i s u sed t o o rgan i ze l a rge number o f da t a i n to l og i ca l c a t ego r i e s . Gene ra l l y , we u se a f f i n i t y d i ag ram to r e f i ne t he i dea s gene ra t ed i n b r a in s to rming wh ich i s unce r t a i n o r need t o be c l a r i f i ed .

SIPOC d iagram i s a S ix S igma t oo l wh ich i s u sed t o i den t i fy a l l p roce s s r e l a t ed e l emen t s be fo re we s t a r t t o work . P r ede f ine t hose f a c to r s c an avo id we fo rge t some th ing wh ich may i n f l uence t he p roce s s improvemen t , e spec i a l l y i n complex p ro j ec t s . S IPOC i s t he l ogog rams fo r “Supp l i e r s , I npu t s , P roce s se s , Ou tpu t s , and Cus tomer s”

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Measuremen t Sy s t em Ana l y s i s (MSA) , o r ca l l ed Measuremen t Capab i l i t y Ana l y s i s (MCA) , i s u sed t o a s se s s t he c apab i l i t y o f p roce s s measu remen t sy s t ems by u s ing expe r imen t a l and ma thema t i ca l me thods . The pu rpose i s t o improve you r measu remen t sy s t em, t o ensu re t he sy s t em p rov ide s t he unb i a sed r e su l t s w i th l i t t l e va r i a t i ons .

Voice o f t he cus tomer me thod i s a p roce s s t o i den t i fy cus tomer ’ s r equ i r emen t s fo r h igh qua l i t y p roduc t . The cus tomer s come f rom d i f f e r en t f i e l d s . Ex t e rna l cu s tomer s u sua l l y a r e common cus tomer s , supp l i e r s , p roduc t u se r s , pa r t ne r s , e t c . And i n t e rna l cu s tomer s i nc lude emp loyees f rom marke t depa r tmen t , p roduc t deve lopmen t depa r tmen t , and so on .

Kano ana l y s i s i s deve loped by Dr . Nor i t ak i Kano , i t i s a qua l i t y t oo l wh ich he lp s t o p r i o r i t i z e cus tomer r equ i r emen t s ba sed on t he i r s a t i s f ac t i on . Tha t i s because a l l i den t i f i ed r equ i r emen t s a r e no t equa l l y impor t ance . The r e su l t c an he lp u s t o r ank t he r equ i r emen t s and i den t i fy t he f ew c r i t i c a l ones wh ich have t he h ighes t impac t . Fu r the rmore , i t c an he lp u s t o make t he dec i s i on .

The o the r me thods a r e s e ldom used , bu t s t i l l v e ry he lp fu l . They a r e

Pro j ec t Managemen t Me thods – The p ro j ec t managemen t sk i l l s c an s i gn i f i c an t l y he lp t he S ix S igma improvemen t p ro j ec t s , such a s p ro j ec t p l ann ing , p ro j ec t cha r t e r , s chedu l i ng , commun ica t i on , HR managemen t , and p ro j ec t managemen t t oo l s .

Fai lure , E f f ec t and Mode Ana ly s i s (FEMA ) – The ma in work o f FEMA i s t o a s se s s r i sk s and pu t e f fo r t s on con t ro l l i ng and min imiz ing r i sk s . Be fo re you work w i th t hose r i sk s and i den t i fy t he i r c ause s and e f f ec t s , u s i ng f l ow cha r t t o p r i o r i t i z e t hem in t he t ime ly s equence i s a n i ce cho i ce .

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Stakeho lde r s Ana ly s i s – I den t i fy ing t he peop l e who have a s t ake on t he S ix S igma p roce s s improvemen t p ro j ec t . Those peop l e w i l l d i r e c t l y o r i nd i r ec t l y i n f l uence t he p ro j ec t s o r r e su l t s . The ones who a r e no t s a t i s f i ed w i l l i n s i s t t o changes .

Proces s Documenta t i on – E f f ec t i ve , c l e a r , comprehens ive p roce s s documen ta t i on i s ve ry he lp fu l f o r t he S ix S igma p ro j ec t s , such a s p roce s s maps , t a sk i n s t ruc t i ons , measu re s , e t c .

Analy s i s o f Var iance (ANOVA) – I t i s a co l l e c t i on o f s t a t i s t i c a l mode l s wh ich ana lyze s t he va r i a t i ons p r e sen t ed i n t he p ro j ec t . I t i s u sed t o a s se s s t he d i f f e r ences be tween g roups o f da t a .

Corre la t i on and Regre s s ion – These t oo l s a s se s s t he r e l a t i onsh ip s (p r e sence , s t r eng th and na tu r e ) among va r i ab l e s i n p roce s s .

Des ign o f Exper imen t s (DOE) – I t i s u sed t o a s se s s t he pe r fo rmance o f a p roce s s . Gene ra l l y , i t t e s t s two o r more cha rac t e r i s t i c s unde r t he d i f f e r en t cond i t i ons . By compa r ing , t he c ause s o f a p rob l em wi l l be i den t i f i ed . I t a l so can be u sed t o op t im ize r e su l t s .

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STEPS IN THE SIX SIGMA METHODOLOGY

The s i x s i gma me thodo logy i nc ludes t he fo l l owing f i ve s t eps .

1 . De f ine t h e bus ine s s . Th i s s t ep i nc ludes de f i n ing cus tomer r equ i r emen t s , bus ine s s goa l s and ob j ec t i ve s , t e am ro l e s and r e spons ib i l i t i e s , s cope and r e sou rce s , p roce s se s , and pe r fo rmance ba se l i ne s . Fo r example , Nor i t ak i Kano ' s qua l i t y ana ly s i s i s u se fu l i n de f i n ing t he cus tomer ' s r equ i r emen t s . Kano ' s app roach s epa ra t e s cus tomer r equ i r emen t s i n to t h r ee c a t ego r i e s :

Assumed r equ i r emen t s - a g iven f ea tu r e o r f unc t i on such a s whee l s on a au tomob i l e .

Spec i f i ed r equ i r emen t s - t he cus tomer ' s exp l i c i t l y s t a t ed r equ i r emen t s .

Expec t ed r equ i r emen t s - t he cus tomer ' s uns t a t ed , bu t r e a l expec t a t i ons .

These r equ i r emen t s e s t ab l i sh how good work and de fec t i ve work a r e de f i ned . O the r t e chn iques u sed i n t h i s s t ep i nc lude : p ro j ec t cha r t e r , s t akeho lde r commi tmen t ana ly s i s , a f f i n i t y d i ag rams , vo i ce o f t he cus tomer , f o r ce f i e l d ana ly s i s , Pa r e to ana ly s i s , p roce s s mapp ing , and S IPOC ( supp l i e r s , i npu t s , p roce s s , ou tpu t s , cu s tomer s ) .

2 . Measure t h e p roce s se s . Measu re de f ec t s pe r un i t , de f ec t s pe r m i l l i on oppo r tun i t i e s and t he y i e ld pe r cen t age . Fo r example ,

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Defec t s pe r un i t = To t a l numbe r o f de f ec t s ÷ To t a l numbe r o f un i t s i n spec t ed

A un i t i s t he ou tpu t o f a p roce s s , e . g . , an i nvo i ce i n a ccoun t s payab l e , a subas sembly i n an a s semb ly a r ea , a package i n a pack ing depa r tmen t . A l l de f ec t s a r e coun t ed , no t j u s t t he number o f de f ec t i ve un i t s s i nce a un i t may i nc lude s eve ra l de f ec t s .

3 . Ana lyze t h e p roce s s t o de t e rmine t he roo t c ause . Pa re to cha r t s o r d i ag rams a r e u sed i n t h i s s t ep t o i den t i fy c r i t i c a l f a c to r s t ha t have t he g r ea t e s t i n f l uence on pe r fo rmance , r e cogn i z ing t ha t mos t p rob l ems a r e c r ea t ed by a f ew cause s (Re fe r r ed t o a s t he 80 /20 ru l e ) . The ana lyze s t ep con t i nues w i th c ause and e f f ec t , o r f i shbone d i ag rams t o i den t i fy po t en t i a l c ause s o f p rob l ems . O the r t e chn iques u sed i n t h i s s t ep i nc lude mu l t i va ry ana ly s i s and f a i l u r e mode and e f f ec t s ana ly s i s .

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4 . Improve t h e p roce s s . Th i s s t ep i nc ludes u se o f two t e chn iques , Des ign o f Expe r imen t s and change managemen t . Des ign o f expe r imen t s i nvo lve s s t a t i s t i c a l l y de s igned expe r imen t s whe re mu l t i p l e measu remen t s a r e made o f two o r more va r i ab l e s a r e t ha t va ry s imu l t aneous ly . Th i s a l l ows t he i n t e r ac t i ons be tween many va r i ab l e s t o be i nc luded i n t he expe r imen t . Af t e r t he expe r imen t i s de s igned , da t a a r e co l l e c t ed and ana lyzed w i th s t a t i s t i c a l so f twa re .

5 . Contro l . Con t ro l t oo l s i nc lude con t ro l cha r t s , p r econ t ro l cha r t s , and run cha r t s . Th i s s t ep i nc ludes t r ans fo rming and ma in t a in ing an o rgan i za t i ona l cu l t u r e t ha t embrace s change and improvemen t .

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RELATED PROCESS MODELS – THE SIX SIGMA METHODOLOGY

A c l a s s i c de f i n i t i on : "S ix S igma i s a p roce s s - focused me thodo logy de s igned t o improve bus ine s s pe r fo rmance t h rough improv ing spec i f i c a r ea s o f a s t r a t eg i c bus ine s s p roce s se s . " . F rom th i s a l one i t i s c l e a r why t he r e a r e a number o f pa r a l l e l s w i th IT IL , a l t hough s i x s i gma o f cou r se i sn ' t r e s t r i c t ed t o i n fo rma t ion t e chno logy .

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Sigma i s a symbo l mean ing how much dev i a t i on ex i s t s i n a s e t o f da t a - some t imes ca l l ed a be l l cu rve , o r a s t anda rd no rma l d i s t r i bu t i on . I n a s t anda rd no rma l d i s t r i bu t i on , 50% o f t he va lue s l i e above t he mean ( ave rage ) and 50% o f t he va lue s l i e be low . In S t a t i s t i c s we t ake i t a s t ep fu r t he r and de l i nea t e c e r t a i n da t a po in t s w i th in t ha t t ime l i ne .

The d i ag ram may l ook t r i cky t o r e ad , bu t i n s imp le l anguage : Cons ide r t ha t you run a p i zza de l i ve ry bus ine s s and you s e t a t a rge t o f de l i ve r i ng p i zza ’ s w i th in 25 minu t e s o f r e ce iv ing t he o rde r . I f you ach i eve t ha t 68% o f t he t ime , you a r e runn ing a t 1 S igma . I f you ach i eve i t 99 .9997% o f t he t ime t hen you a r e a t 6 S igma (o r you a r e l a t e on ave rage on ly 3 .4 t imes ou t o f eve ry one mi l l i on o rde r s ) .

Tha t i s f undamen ta l l y how s ix s i gma measu re s qua l i t y . I t measu re s t he Va r i ance and does no t r e l y on t he Mean .

I t i s a rgued t ha t a l l t oo o f t en bus ine s se s ba se t he i r pe r fo rmance on a mean , o r ave rage -based measu re , o f t he r e cen t pa s t . Howeve r , r e a l i t y i s t ha t cu s tomer s DON'T j udge bus ine s se s on ave rages . They ac tua l l y expe r i ence t he va r i ance i n e ach and eve ry t r ansac t i on o r pu rchase .

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Cus tomer s a l so va lue cons i s t en t and p r ed i c t ab l e bus ine s s p roce s se s and p roduc t s t ha t de l i ve r h igh l eve l s o f qua l i t y . S ix S igma focuse s f i r s t on r educ ing va r i a t i on , and t hen on improv ing p roce s s c apab i l i t y .

INTERESTING? I t i s c e r t a i n ly an i n t e r e s t i ng app roach , and i s we l l t r i ed and t e s t ed . S ince i t was deve loped by Moto ro l a i n t he e i gh t i e s i t ha s been adop t ed by more and more co rpo ra t i ons and ma jo r o rgan i za t i ons . I t i s now ex t r eme ly w ide ly u sed and ha s r e su l t ed i n subs t an t i a l and demons t r ab l e improvemen t s i n o rgan i za t i ons o f a l l shapes and s i z e s .

SIX SIGMA COSTS AND SAVINGS

The f i nanc i a l bene f i t s o f imp lemen t ing S ix S igma a t you r company can be s i gn i f i c an t .

Many peop l e s ay t ha t i t t ake s money t o make money . I n t he wor ld o f S ix S igma qua l i t y , t he s ay ing a l so ho ld s t r ue : i t t ake s money t o s ave money u s ing t he S ix S igma qua l i t y me thodo logy . You can ' t expec t t o s i gn i f i c an t l y r educe cos t s and i nc r ea se s a l e s u s ing S ix S igma wi thou t i nves t i ng i n t r a i n ing , o rgan i za t i ona l i n f r a s t ruc tu r e and cu l t u r e evo lu t i on .

Su re you can r educe cos t s and i nc r ea se s a l e s i n a l oca l i z ed a r ea o f a bus ine s s u s ing t he S ix S igma qua l i t y me thodo logy - - and you can p robab ly do i t i nexpens ive ly by h i r i ng an ex -Moto ro l a o r GE B lack Be l t . I l i ke t o t h ink o f t ha t s cena r io a s a "ge t r i ch qu i ck" app l i c a t i on o f S ix S igma . Bu t i s i t go ing t o l a s t when a manage r i s p romoted t o a d i f f e r en t a r ea o r l e aves t he company? P robab ly no t . I f you wan t t o p roduce a cu l t u r e sh i f t w i t h in you r o rgan i za t i on , a sh i f t t ha t c ause s emp loyees t o t h ink abou t how the i r a c t i ons impac t t he cus tomer and t o commun ica t e w i th in t he bus ine s s u s ing a cons i s t en t l anguage , i t ' s go ing t o r equ i r e a r e sou rce commi tmen t . I t t ake s money t o s ave money .

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How much f i nanc i a l commi tmen t does S ix S igma r equ i r e and wha t magn i t ude o f f i nanc i a l bene f i t c an you expec t t o r e ce ive? We a l l have peop l e t ha t we mus t answer t o - - and rhe to r i c doesn ' t pay t he b i l l s o r keep t he s t ockho lde r s happy ( anymore ) . I was t i r ed o f r e ad ing web pages o r hea r i ng peop l e s ay :

"Compan ie s o f a l l t ype s and s i z e s a re i n t he m ids t o f a qua l i t y r evo lu t i on . GE saved $12 b i l l i on ove r f i v e y ear s and added $1 t o i t s ea rn ings pe r share . Honeywe l l (A l l i edS igna l ) r ecorded more t han $800 m i l l i on i n sav ings . "

"GE produces annua l bene f i t s o f ove r $2 .5 b i l l i on ac ros s t he o rgan i za t i on f rom S i x S igma . "

"Motoro la r educed manu fac tu r ing cos t s by $1 .4 b i l l i on f rom 1987-1994 . "

"S i x S igma repor t ed l y saved Mo toro la $15 b i l l i on ove r t he l a s t 11 year s . "

The above quo t a t i ons may i n f a c t be t r ue , bu t pu l l i ng t he number s ou t o f t he con t ex t o f t he o rgan i za t i on ' s r evenues does no th ing t o he lp a company f i gu re ou t i f S ix S igma i s r i gh t f o r t hem. Fo r example , how much can a $10 mi l l i on o r $100 mi l l i on company expec t t o s ave?

Whi l e r e cen t co rpo ra t e even t s l i ke t he En ron and Wor ldCom scanda l s m igh t l e ad u s t o be l i eve t ha t no t eve ry th ing we r ead i n a company ' s annua l r epo r t i s va l i d , I am go ing t o p rov ide t he fo l l owing i n fo rma t ion ba sed on t he a s sumpt ion t ha t t he se S ix S igma compan i e s ope ra t e w i th i n t eg r i t y un t i l p roven o the rwi se .

I i nves t i ga t ed Moto ro l a , A l l i ed S igna l , GE and Honeywe l l . I choose t he se fou r compan i e s because t hey a r e t he

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compan i e s t ha t i nven t ed and r e f i ned S ix S igma - - t hey a r e t he mos t ma tu re i n t he i r dep loymen t s and cu l t u r e changes . As t he Moto ro l a webs i t e s ays , t hey i nven t ed i t i n 1986 . A l l i ed S igna l dep loyed S ix S igma i n 1994 , GE in 1995 . Honeywe l l was i nc luded because A l l i ed S igna l me rged w i th Honeywe l l i n 1999 ( t hey l aunched t he i r own in i t i a t i ve i n 1998 ) . Many compan i e s have dep loyed S ix S igma be tween t he yea r s o f GE and Honeywe l l - - we ' l l l e ave t hose compan i e s fo r ano the r a r t i c l e .

Company Name Year Began Six Sigma

Motorola (NYSE:MOT) 2001

Allied Signal (Merged With Honeywell in 1999) 2002

GE (NYSE:GE) 2003

Honeywell (NYSE:HON) 2004

Ford (NYSE:F) 2005

Tab le 2 i den t i f i e s by company , t he yea r l y r evenues , t he S ix S igma cos t s ( i nves tmen t ) pe r yea r , whe re ava i l ab l e , and t he f i nanc i a l bene f i t s ( s av ings ) . The re a r e many b l anks , e spec i a l l y whe re t he i nves tmen t i s conce rned . I ' v e p r e sen t ed a s much i n fo rma t ion a s t he compan i e s have pub l i c l y d i s c lo sed .

Table 2: Six Sigma Cost And Savings By Company

Year Revenue ($B) Invested ($B)% Revenue

InvestedSavings ($B) % Revenue Savings

Motorola

1986-2001 356.9(e) ND - 16 1 4.5

Allied Signal

1998 15.1 ND - 0.5 2 9.9

GE

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1996 79.2 0.2 0.3 0.2 0.2

1997 90.8 0.4 0.4 1 1.1

1998 100.5 0.5 0.4 1.3 1.2

1999 111.6 0.6 0.5 2 1.8

1996-1999 382.1 1.6 0.4 4.4 3 1.2

Honeywell

1998 23.6 ND - 0.5 2.2

1999 23.7 ND - 0.6 2.5

2000 25.0 ND - 0.7 2.6

1998-2000 72.3 ND - 1.8 4 2.4

Ford

2000-2002 43.9 ND - 1 6 2.3

Key:$B = $ Billions, United States

(e) = Estimated, Yearly Revenue 1986-1992 Could Not Be FoundND = Not Disclosed

Note: Numbers Are Rounded To The Nearest Tenth

Al though t he comple t e p i c tu r e o f i nves tmen t and s av ings by yea r i s no t p r e sen t , S ix S igma sav ings can c l ea r l y be s i gn i f i c an t t o a company . The s av ings a s a pe r cen t age o f r evenue va ry f rom 1 .2% to 4 .5%. And wha t we can s ee f rom the GE dep loymen t i s t ha t a company shou ldn ' t expec t more t han a b r eakeven t he f i r s t yea r o f imp lemen ta t i on . S ix S igma i s no t a "ge t r i ch qu i ck" me thodo logy . I l i ke t o t h ink o f i t l i ke my r e t i r emen t s av ings p l an - - S ix S igma i s a ge t r i ch s l ow me thodo logy - - t he t ake -away po in t be ing t ha t you w i l l ge t r i ch i f you p l an p rope r ly and execu t e cons i s t en t l y .

As GE’s 1996 annua l r epo r t s t a t e s , " I t ha s been e s t ima t ed t ha t l e s s t han S ix S igma qua l i t y , i . e . , t he t h r ee - t o - fou r S igma l eve l s t ha t a r e ave rage fo r mos t U .S . compan i e s , c an cos t a company a s much a s 10 -15% o f i t s r evenues . Fo r GE , t ha t wou ld mean $8 -12 b i l l i on . " Wi th GE’s 2001 r evenue o f

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$111 .6 b i l l i on , t h i s wou ld t r ans l a t e i n to $11 .2 -16 .7 b i l l i on o f s av ings . A l though $2 b i l l i on wor th o f s av ings i n 1999 i s impre s s ive , i t appea r s t ha t even GE hasn ' t been ab l e t o ye t c ap tu r e t he l o s se s due t o poo r qua l i t y - - o r maybe t hey ' r e above t he t h r ee - t o - fou r S igma l eve l s t ha t a r e t he ave rage fo r mos t U .S . compan i e s?

In e i t he r c a se , 1 . 2 -4 .5% o f r evenue i s s i gn i f i c an t and shou ld ca t ch t he eye o f any CEO o r CFO. Fo r a $30 mi l l i on a yea r company , t ha t c an t r ans l a t e i n to be tween $360 ,000 and $1 ,350 ,000 i n bo t t om- l i ne - impac t i ng s av ings pe r yea r . I t t ake s money t o make money . I s i nves t i ng i n S ix S igma qua l i t y , you r emp loyees and you r o rgan i za t i on ' s cu l t u r e wor th t he money? On ly you and you r execu t i ve l e ade r sh ip t e am can dec ide t he answer t o t ha t ques t i on .

THE SIX SIGMA CALCULATORS

The Calculators:

DPM (Defects Per Mil l ion) Calcula tor

Proces s Des ign Ca l cu l a to r

QC Des ign Ca l cu l a to r

L imi t a t i ons

DPM (Defec t s Pe r Mi l l i on ) Ca l cu l a to r

He re you can ca l cu l a t e t he S igma-me t r i c by coun t i ng t he number o f De fec t s i n a s amp le .

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Note that this calculator "rounds up" - to the nearest Sigma-Metric on the table on this website.

Enter the number of Defects Observed:

Enter the size of the sample:(how many total results were examined)

Calculate Sigm

Here are your Defects Per Million:

Here is your Sigma-Metric:

No t e a l so t ha t i f you know you r De fec t /E r ro r r a t e a s a pe r cen t age , you can en t e r i t he r e w i th t he s amp le s i z e o f 100 ( i . e . a de f ec t r a t e o f 2% wou ld be en t e r ed "2" i n t he de f ec t s obse rved , and "100" i n t he s i z e o f t he s amp le ) .

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Process Design Calculator

Here you can calculate your Sigma-metric by analysis of variance measurements.

Enter the Quality Requirementor Tolerance Limit (in %):

(If you don't know, look it up below)

Observed Bias (as a %):(If you don't know, start with 0)

Observed CV (as a %):(If you don't know, find out)

Calculate Sigm

QC Design Calculator (Crit ical Systematic Error)

Here you can ca l cu l a t e t he s i z e o f t he e r ro r you r QC mus t de t ec t .

Enter the Quality Requirementor Tolerance Limit (in %):

(If you don't know, look it up below)

Observed Bias (as a %):(If you don't know, start with 0)

Observed CV (as a %):(If you don't know, find out)

Calculate Critic

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Limitat ions

These J avasc r i p t c a l cu l a to r s a r e fo r demons t r a t i on pu rpose s on ly . I n pa r t i cu l a r , i f you en t e r nonsens i ca l numbe r s , t hey w i l l r e t u rn nonsense . En t e r i ng 0 fo r De fec t s Obse rved , Sample S i ze , Qua l i t y Requ i r ed , Obse rved CV wi l l g ive you u se l e s s answer s . More robus t S ix S igma ca l cu l a to r s a r e ava i l ab l e upon r eques t .

CERTIFICATIONS AND AWARDS

ASQ Cer t i f i c a t i ons

Deming

ISO 9000

Ind iv idua l S t a t e Awards (US)

Malco lm Ba ld r i ge

Mas te r B l ack Be l t s and B lack Be l t s

Six S igma

TL 9000

Othe r Awards

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• Amer i can Soc i e ty fo r Qua l i t y Meda l s and Awards

• Aus t r a l i an Qua l i t y Award

• Eu ropean Qua l i t y Award

• Na t i ona l Qua l i t y In s t i t u t e

SIX SIGMA & QUALITY METHODOLOGIES

Ba lanced Sco reca rd

Ba ld r ige (@)

Benchmark ing

Bus ine s s P roce s s Reeng inee r i ng (BPR)

Deming (@)

Documen t Con t ro l

DMADV / New P roduc t & Se rv i ce In t roduc t i on

DMAIC / Ex i s t i ng P roduc t o r Se rv i ce

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Financ i a l Ana lys i s / Cos t o f Qua l i t y

ISO 9000 (@)

Lean Manufac tu r i ng

Managemen t

Met r i c s

Plan , Do , Check , Ac t - PDCA

Proces s Managemen t

Pro j ec t Se l ec t i on

Simu la t i on

Six S igma

Taguch i Me thods

TL 9000 (@)

Tota l Qua l i t y Managemen t (TQM)

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Work-Ou t

QUALITY TOOLS & TEMPLATES

Aff in i t y D iag ram

Bra in s to rming

Ca lcu l a to r s

Cause & Ef f ec t / I sh ikawa / F i shbone

Char t e r s

Con t ro l Cha r t s (@)

Crea t i v i t y / Ou t o f t he Box Th ink ing

Des ign Of Expe r imen t

Documen t Con t ro l (@)

Flow Cha r t / F low Cha r t i ng

FMEA / R i sk Asse s smen t

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Glossa r i e s

His tog ram

Kano Ana lys i s

Organ i z ing Da t a

Onl ine S t a t i s t i c s Tex tbooks (@)

Pa re to

Poka Yoke (Mis t ake P roo f ing )

Proces s Map / P roce s s Mapp ing

Pro j ec t Cha r t e r s

Qua l i t y Func t i on Dep loymen t / House o f Qua l i t y

Sca t t e r D iag ram / P lo t

SIPOC Diag ram

Sof twa re

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Suppor t and Res t r a in t

Surveys (@)

Think ing Ou t Of The Box

SAMPLE: SIX SIGMA BELT PRACTICE TEST

Thi s i s a t imed p rac t i c e S ix S igma be l t t e s t , no t i n t ended t o p rov ide you w i th a c tua l ques t i ons f rom ce r t i f y ing compan i e s o r o rgan i za t i ons .

Number Of Ques t i ons : 2410

Cur r i cu lum Leve l : B l ack Be l t

T ime Pe r Ques t i on : 30 s ec s1 Minu t e2 Minu t e s3 Minu t e s4 Minu t e s5 Minu t e s

Ques t i on No : 1

Wha t i s t he p r e sen t va lue o f $2 ,000 .00 t o be pa id i n 10 yea r s a s suming an i n t e r e s t r a t e o f 7%?

$1 ,808 .00

$1 ,017 .00

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$1 ,529 .00

$2 ,209 .00

$1 ,117 .00

Ques t i on No : 2

Cos t o f c a l i b r a t i on and f i r s t t r i a l t e s t ha rdware wou ld be i nc luded i n :

Appra i s a l co s t

Preven t i ve cos t

Tr i a l co s t

Fa i l u r e cos t

Ca l ib r a t i on cos t

Ques t i on No : 3

Us ing ±2 s t anda rd dev i a t i on con t ro l l im i t s , wha t i s t he number o f f a l s e a l a rms ( t he chance o f be ing ou t s i de t he con t ro l l im i t s ) when t he p roce s s ha s no t sh i f t ed?

None o f t he answer s i s co r r ec t

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460

270

22

Ques t i on No : 4

Which o f t he fo l l owing s t a t emen t s i s no t t r ue w i th r e spec t t o "Fo rce F i e ld Ana lys i s " t oo l ?

Gene ra l l y u sed i n t he i n i t i a l s t age s o f p l ann ing .

I t i s he lp fu l i n i den t i fy ing t he "d r i ve r s " and " r e s t r a i n t s " pe r t a i n ing t o any new in i t i a t i ve dep loyed i n an o rgan i za t i on .

BEST PRACTICES

Six s i gma can be imp lemen ted bo th i n manufac tu r i ng and s e rv i ce i ndus t r i e s . I t r equ i r e s l o t o f d i s c ip l i ne and commi tmen t .

Ca l l Cen t e r s

Cus tomer Re l a t i onsh ip Managemen t

Food

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Fu l f i l lmen t

I n fo rma t ion Techno logy - IT

Manufac tu r i ng

Med i ca l

Sa l e s

T r ansac t i ona l

COMPANIES IN INDIA HAVING SIX SIGMA

GE p rac t i c e s s i x s i gma i n Ind i a a s i t doe s wor ld ove r

E-Funds Ind i a In t e rna t i ona l , a t Gurgaon and Mumba i , hav ing i n i t i a t ed t he r e S ix S igma e f fo r t s .

I spa t I ndus t r i e s L td . , I nd i a ha s t aken up t he S ix S igma i n i t i a t i ve i n a b ig way . They have s t a r t ed t he p roce s s i n a l l a spec t o f i t s ope ra t i ons .

Ti sco i s a l so t he r e .

Esco t e l

Mumba i T i f f i nwa l a

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HOW WELL CAN SIX SIGMA BE IMPLEMENTED IN INDIAN INDUSTRIES?

The re a r e qu i t e a f ew Ind i an compan i e s , wh i ch have a l r e ady adop t ed s i x s i gma . A l though , i t i s t oo ea r l y fo r t he i n t e rven t i on t o t ake e f f ec t , t he r e s eems t o be no r ea son why t he s ame so r t s o f r e su l t s w i l l no t come fo r t he Ind i an cos . a s we l l .

I gue s s t he ba s i c i s sue i s go ing t o be o f a t t i t ude : t he managemen t s ' & t he worke r s ' .

MANUFACTURING BEST PRACTICES

The cos t o f poo r qua l i t y c an r ep re sen t 20% to 30% o f a company’ s t o t a l r evenues . The fo l l owing ca se s t ud i e s demons t r a t e how S ix S igma dep loymen t c r ea t e s b r eak th rough pe r fo rmance , c ap tu r e s cos t s av ings and i nc r ea se s cus tomer s a t i s f ac t i on . Of t en , t he s av ings a s soc i a t ed w i th a f i r s t p ro j ec t j u s t i f y t he en t i r e cos t o f S ix S igma t r a i n ing .

PAPER AND PULP INDUSTRY

St r a igh t - l i ne G lue r E f f i c i ency

At a c a r t on -p roduc ing f ac i l i t y , t he s t r a i gh t - l i ne g lue r i n u se was p roduc ing a t a r a t e o f 33% be low i t s c apac i t y . The improvemen t t a rge t ed was a 50% inc rea se i n Ne t E f f i c i ency Ou tpu t (NEO) , wh ich wou ld s ave an e s t ima t ed $250 ,000 annua l l y . Based on ex t ens ive s t a t i s t i c a l and Pa re to ana ly s i s , i t was dec ided t o t a rge t down t ime and spo i l age spec i f i c a l l y . The re was a s t r ong focus on mechan i ca l f i xe s and deve lop ing and conduc t i ng ex t ens ive ope ra to r t r a i n ing . The comple t ed p ro j ec t exceeded t he o r i g ina l goa l s by 11%, w i th

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f i na l r e su l t s o f a 50% reduc t i on i n down t ime and a 40% dec rea se i n spo i l age . Th i s i nc r ea sed Ne t E f f i c i ency Ou tpu t by 61%, w i th s av ings o f $316 ,434 f rom th i s p ro j ec t . To ma in t a in t h i s new ou tpu t , con t ro l p l ans we re pu t i n p l ace w i th p r even t a t i ve ma in t enance s chedu l e s and new h i r e and r e f r e she r t r a i n ing p rog rams .

Recove ry Bo i l e r Th roughpu t Repo r t

Wi th in t he r e cove ry depa r tmen t o f a ma jo r pu lp p roduce r , ope ra t i on i ne f f i c i enc i e s we re found w i th in t he two bo i l e r s u sed t o conve r t b l a ck l i quo r i n to g r een and t hen wh i t e l i quo r . The p roce s s was mapped and S ix S igma me thodo logy was app l i ed , p rov id ing t he company w i th s t anda rd ope ra t i ng p rocedu re s t o measu re l i quo r so l i d s cons i s t en t l y wh i l e g iv ing ope ra to r s a c l e a r v i ew in to how the sy s t em i s pe r fo rming . Th i s new s t r e aml ined ope ra t i on r emoved a ch ron i c bo t t l eneck i n t he p roduc t i on o f g r een l i quo r , r e su l t i ng i n annua l i z ed s av ings o f $226 ,000 . Based on t he new measu remen t sy s t em in s t a l l ed fo r p r ima ry me t r i c s , ope ra to r s a r e a l so ab l e t o make r e f i n ing changes on t he con t ro l l im i t s , t hus dec rea s ing s t anda rd dev i a t i on be tween t he concen t r a to r s .

Tu rn -up Loss

Wi th in a l e ad ing pape rboa rd company , a p ro j ec t goa l was s e t t o r educe t u rn -up l o s s . Tu rn -up l o s s da t a was co l l e c t ed t o quan t i fy t he oppo r tun i t i e s f o r improvemen t , i nc lud ing spoo l l o s s , l ap l o s s , w inde r p roce s s l o s s , and qua l i t y s amp le l o s s a s we l l a s t o m in imize cus tomer compla in t s f rom tu rn -up t ape marks , wr ink l e s , and co re ma rks . The ob j ec t i ve was t o r educe t he cu r r en t ave rage o f 1 .01 pe rcen t t o . 90 pe r cen t . S ix S igma t oo l s we re app l i ed t o t a rge t p rob l em a r ea s . By improv ing r epo r t i ng p rocedu re s , t he t e am was ab l e t o ob t a in a . 922 pe rcen t t u rn -up l o s s w i th an annua l i z ed s av ings o f $89 ,000 .

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Pape rboa rd Was t e Reduc t i on Shee t -Fed P roce s s

Wi th in t he shee t / p r i n t / cu t p roce s s o f a l e ad ing pape rboa rd company , a p ro j ec t goa l was s e t t o dec rea se was t e t o 6 .5% f rom the cu r r en t 7 .6% h i s t o r i c a l ba se l i ne ave rage , r e su l t i ng i n an annua l cos t s av ings o f $120 ,000 ba sed on t he s ame l eve l o f p roduc t i on . By r eus ing was t e shee t s , improv ing r epo r t i ng p rocedu re s and deve lop ing a s e t o f “be s t p r ac t i c e s /p rocedu re s , ” t he t e am was ab l e t o ob t a in a mon th ly ave rage was t e o f 4%, r e su l t i ng i n an annua l i z ed s av ings o f $696 ,000 ( a s suming t he was t e wou ld o the rwi se have r ema ined a t t he 7 .6% ave rage ) . Add i t i ona l l y , i t was r e commended t o con t i nue t he improvemen t s i n was t e r educ t i on and expand beyond t he shee t / p r i n t / cu t p roce s s .

UTILITIES INDUSTRY

Condense r A i r I n -Leak Reduc t i on

At a gene ra t i ng s t a t i on o f an e l e c t r i c u t i l i t y i n t he Sou thea s t , t he a i r i n - l e akage f l ow fo r one o f t he un i t ’ s condense r s was ou t o f spec i f i c a t i on compl i ance by 25 s c fm a t f u l l l oad . The annua l cos t o f t h i s dev i a t i on was app rox ima te ly $200 ,000 . Th rough t he u se o f t he PFMEA, i t was de t e rmined t ha t t he ex i s t i ng p roce s s con t ro l measu remen t ( t u rb ine backp re s su re ) was i nadequa t e . Tho rough ana ly s i s conc luded t ha t i f He l i um l eak de t ec t i on equ ipmen t we re u sed a s t he con t ro l measu remen t , i t wou ld r e so lve t he a i r i n - l e ak ing p rob l ems . The change o f t he measu remen t t oo l p roduced f i na l r e su l t s o f a 67 .5% reduc t i on i n a i r i n - l e ak f l ow and a 13 .4% reduc t i on o f t u rb ine backp re s su re . Th i s improvemen t p roduced annua l s av ings o f $206 ,466 , i n add i t i on t o t he i n t ang ib l e s av ings due t o improved bo i l e r r e l i ab i l i t y . To ma in t a in t h i s r educ t i on , con t ro l p l ans we re pu t i n p l ace .

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Ca l l Cen t e r E f f ec t i venes s

Wi th in a c a l l c en t e r o f an e l e c t r i c u t i l i t y company , poo r commun ica t i on w i th c a l l - i n s r e su l t ed i n a h igh abandoned ca l l r a t e , mu l t i p l e t r ans f e r s , and an i ne f f i c i en t u t i l i z a t i on o f c a l l hand l i ng r e sou rce s . Us ing t he S ix S igma me thodo logy , improvemen t s we re made t ha t enhanced s t a f f u t i l i z a t i on , messag ing sy s t ems , and a r educ t i on o f abandoned ca l l r a t e s and t r ans f e r s . The improvemen t s t r ans l a t ed i n to s av ings o f $515 ,000 annua l l y . Cus tomer su rveys we re gene ra t ed t o measu re cus tomer s a t i s f ac t i on and con t i nuous improvemen t s a r e made r egu l a r l y .

P rocu remen t Redundancy and Was t e

Wi th in t he pu rchas ing depa r tmen t o f a ma jo r u t i l i t y i n t he Nor thea s t , t oo many vendo r s and t oo f ew l eve raged ag reemen t s r e su l t ed i n r edundancy and was t e w i th in t he p rocu remen t p roce s s . The p roce s s was mapped and S ix S igma me thodo logy was app l i ed , i den t i fy ing t ha t poo r p l ann ing and commun ica t i on con t r i bu t ed t o l ow con t r ac t u t i l i z a t i on r a t e s t h roughou t t he 14 l oca t i ons . By t r a ck ing do l l a r s spen t by each l oca t i on and ana lyz ing vendo r de l i ve r i e s , t hey l e a rned t ha t t he cos t o f d i r e c t l abo r supe r seded any p r i c e advan t age ga ined . The t e am began work ing w i th l oca l pu rchas ing pe r sonne l t o i nc r ea se t he u se o f app roved vendo r s . They a l so me t w i th vendo r s and d i s cus sed a “ sha red” i ncen t i ve p rog ram. Dur ing t he f i r s t s i x -mon th pe r i od o f imp lemen ta t i on , l eve raged pu rchase s i nc r ea sed by 46% o r $664 ,000 . The company a l so r e ce ived two r eba t e checks i n exce s s o f $52 ,000 .

Con t r ac t Compla in t Reduc t i on

Wi th in t he con t r ac t depa r tmen t o f a ma jo r u t i l i t y company , excava t i on , c ab l e - l ay ing and r e - i n s t a t emen t con t r ac t compla in t s r e su l t ed i n cus tomer d i s s a t i s f ac t i on and h igh cos t s . Us ing t he S ix S igma me thodo logy , a Qua l i t y Con t ro l

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Sys t em was deve loped r educ ing con t r ac t compla in t s f rom 109 t o 55 du r ing 2000 -2001 .

BENEFITS OF SIX SIGMA

The re a r e numerous bene f i t s o f s i x s i gma a s a way t o add re s s i s sue s and p rob l ems . Among t he bene f i t s o f s i x s i gma i s t he dec rea se i n de f ec t s t ha t a r e a l l owed t o r e ach t he cus tomer . You can ge t some sense o f t he bene f i t s o f s i x s i gma by r ev i ewing some s i x s i gma p ro j ec t s . O the r bene f i t s o f s i x s i gma i nc lude :

Focus on cus tomer s .

Improved cus tomer l oya l t y .

Reduced cyc l e t ime .

Less was t e .

Data ba sed dec i s i ons .

Time managemen t .

Sus t a ined ga in s and improvemen t s .

Sys t ema t i c p rob l em so lv ing .

Employee mo t iva t i on .

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Data ana ly s i s be fo re dec i s i on mak ing .

Fas t e r t o ma rke t .

Team bu i l d ing .

Improved cus tomer r e l a t i ons .

Assu re s t r a t eg i c p l ann ing . .

Reduc t i ons o f i nc iden t s .

Measu re va lue acco rd ing t o t he cus tomer .

Be t t e r s a f e ty pe r fo rmance .

Unde r s t and ing o f p roce s se s .

Ef fec t i ve supp ly cha in managemen t .

Des ign and r edes ign p roduc t s / s e rv i ce s .

Knowledge o f compe t i t i on , compe t i t o r s .

Deve lop l e ade r sh ip sk i l l s .

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Breakdown ba r r i e r s be tween depa r tmen t s and func t i ons .

Managemen t t r a i n ing .

Improve p r e sen t a t i on sk i l l s .

In t eg ra t i on o f p roduc t s , s e rv i ce s and d i s t r i bu t i on .

Use o f s t anda rd ope ra t i ng p rocedu re s .

Be t t e r dec i s i on mak ing .

Improv ing p ro j ec t managemen t sk i l l s .

Sus t a ined improvemen t s .

Al ignmen t w i th s t r a t egy v i s i on , and va lue s .

Inc r ea sed marg in s .

Grea t e r ma rke t sha r e .

Supe rv i so r t r a i n ing .

Lower cos t s t o p rov ide goods and s e rv i ce s .

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Fewer cus tomer compla in t s .

TOTAL QUALITY MANAGEMENT

Tota l Qua l i t y Managemen t , o r TQM, was ve ry popu l a r i n t he 1980s and 1990s a s a way o f b r i ng ing abou t ma jo r change w i th in o rgan i s a t i ons .

Tota l - eve ryone i s i nvo lved f rom sen io r managemen t t o t he l owes t company j un io r

Qua l i t y - t he a im i s t o improve p roduc t s and s e rv i ce s t o t he cus tomer

Managemen t - a s suming t ha t t h ings ge t be t t e r i f you manage t hem

TQM i s we l l cons t ruc t ed a s a me thodo logy , and ha s a r ange o f power fu l t oo l s f o r a i d ing and b r i ng ing abou t change . I t i s one o f t he be s t me thods fo r b r i ng ing abou t cu l t u r a l and p roce s s change i n an o rgan i s a t i on .

The f a i l u r e o f TQM to be adop t ed l ong t e rm i s t ha t

I t i s a t oo l and no t a goa l i n i t s e l f

I t ha s no v i s i b l e measu re o f succe s s

Improvemen t s ga ined a r e o f t en l o s t ove r t ime

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Six S igma Qua l i t y Me thodo logy u se s TQM too l s and t e chn iques t o a i d p roce s s improvemen t and change , bu t f u l l y add re s se s t he f a i l i ngs o f TQM by p rov id ing a t a rge t goa l and a measu re by wh ich improvemen t c an be j udged and sus t a ined . S ix S igma a l so f i rm ly p l ace s t he emphas i s on t o t a l and comple t e cus tomer s a t i s f ac t i on , whe re TQM may have been u sed by o rgan i s a t i ons t o cu t co s t s r a t he r t han de l i ve r pe r f ec t i on t o t he cus tomer .

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FINDINGS, INFERENCES AND RECOMMENDATIONS

What Can GE Do fo r You?

From j e t eng ine s t o power GE ne ra t i on , f i nanc i a l s e rv i ce s t o p l a s t i c s , and med i ca l imag ing t o news and i n fo rma t ion , GE peop l e wor ldwide a r e ded i ca t ed t o t u rn ing imag ina t i ve i dea s i n to l e ad ing p roduc t s and s e rv i ce s t ha t he lp so lve some o f t he wor ld ' s t oughes t p rob l ems .

Mak ing Cus tomer s Fee l S ix S igma Qua l i t y

Globa l i z a t i on and i n s t an t a cce s s t o i n fo rma t ion , p roduc t s and s e rv i ce s have chan GE the way ou r cus tomer s conduc t bus ine s s — o ld bus ine s s mode l s no l on GE work . Today ' s compe t i t i ve env i ronmen t l e aves no room fo r e r ro r . We mus t de l i gh t ou r cus tomer s and r e l en t l e s s l y l ook fo r new ways t o exceed t he i r expec t a t i ons . Th i s i s why S ix S igma Qua l i t y ha s become a pa r t o f ou r cu l t u r e .

Wha t i s S ix S igma?

F i r s t , wha t i t i s no t . I t i s no t a s ec r e t soc i e ty , a s l ogan o r a c l i ché . S ix S igma i s a h igh ly d i s c ip l i ned p roce s s t ha t he lp s u s focus on deve lop ing and de l i ve r i ng nea r -pe r f ec t p roduc t s and s e rv i ce s . Why "S igma"? The word i s a s t a t i s t i c a l t e rm tha t measu re s how f a r a g iven p roce s s dev i a t e s f rom pe r f ec t i on . The cen t r a l i dea beh ind S ix S igma i s t ha t i f you can measu re how many "de fec t s " you have i n a p roce s s , you can sy s t ema t i c a l l y f i gu re ou t how to e l im ina t e t hem and GE a s c l o se t o " ze ro de f ec t s " a s pos s ib l e . S ix S igma ha s chan GE the DNA o f GE — i t i s now the way we work — in eve ry th ing we do and i n eve ry p roduc t we de s ign .

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GE’s Evo lu t i on Towards Qua l i t y

GE began mov ing t owards a f ocus on qua l i t y i n t he l a t e ' 80 s . Work -Ou t® , t he s t a r t o f ou r j ou rney , opened ou r cu l t u r e t o i dea s f rom eve ryone , eve rywhe re , dec ima ted t he bu reauc racy and made bounda ry l e s s behav io r a r e f l ex ive , na tu r a l pa r t o f ou r cu l t u r e , t he r eby c r ea t i ng t he l e a rn ing env i ronmen t t ha t l ed t o S ix S igma . Now, S ix S igma , i n t u rn , i s embedd ing qua l i t y t h ink ing — p roces s t h ink ing — ac ros s eve ry l eve l and i n eve ry ope ra t i on o f ou r Company a round t he g lobe .

Work -Ou t i n t he 1980s de f i ned how we behave . Today , S ix S igma i s de f i n ing how we work and ha s s e t t he s t a GE fo r mak ing ou r cus tomer s f e e l S ix S igma .

Key E l emen t s o f Qua l i t y

– t he Cus tomer

– t he P roce s s

– t he Employee

The re a r e t h r ee key e l emen t s o f qua l i t y : cu s tomer , p roce s s and emp loyee . Eve ry th ing we do t o r ema in a wor ld - c l a s s qua l i t y company focuse s on t he se t h r ee e s sen t i a l e l emen t s .

. . . the Cus tomer Del igh t i ng Cus tomers

Cus tomer s a r e t he c en t e r o f GE’s un ive r se : t hey de f i ne qua l i t y . They expec t pe r fo rmance , r e l i ab i l i t y , compe t i t i ve p r i c e s , on - t ime de l i ve ry , s e rv i ce , c l e a r and co r r ec t

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t r an sac t i on p roce s s ing and more . I n eve ry a t t r i bu t e t ha t i n f l uences cus tomer pe r cep t i on , we know tha t j u s t be ing good i s no t enough . De l i gh t i ng ou r cus tomer s i s a nece s s i t y . Because i f we don ' t do i t , s omeone e l s e w i l l !

. . . the Proces s Out s ide - In Th ink ing

Qua l i t y r equ i r e s u s t o l ook a t ou r bus ine s s f rom the cus tomer ' s pe r spec t i ve , no t ou r s . I n o the r words , we mus t l ook a t ou r p roce s se s f rom the ou t s i de - i n . By unde r s t and ing t he t r ansac t i on l i f e cyc l e f rom the cus tomer ' s needs and p roce s se s , we can d i s cove r wha t t hey a r e s ee ing and f ee l i ng . Wi th t h i s knowled GE , we can i den t i fy a r ea s whe re we can add s i gn i f i c an t va lue o r improvemen t f rom the i r pe r spec t i ve .

. . . the Employee Leader sh ip Commi tmen t

Peop l e c r ea t e r e su l t s . I nvo lv ing a l l emp loyees i s e s sen t i a l t o GE’s qua l i t y app roach . GE i s commi t t ed t o p rov id ing oppo r tun i t i e s and i ncen t i ve s fo r emp loyees t o focus t he i r t a l en t s and ene rg i e s on s a t i s fy ing cus tomer s .

A l l GE employees a r e t r a i ned i n t he s t r a t egy , s t a t i s t i c a l t oo l s and t e chn iques o f S ix S igma qua l i t y . T ra in ing cou r se s a r e o f f e r ed a t va r i ous l eve l s :

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• Qua l i t y Ove rv i ew Semina r s : ba s i c S ix S igma awarenes s .

• Team Tra in ing : ba s i c t oo l i n t roduc t i on t o equ ip emp loyees t o pa r t i c i pa t e on S ix S igma t e ams .

• Mas t e r B l ack Be l t , B l ack Be l t and Green Be l t T ra in ing : i n -dep th qua l i t y t r a i n ing t ha t i nc ludes h igh - l eve l s t a t i s t i c a l t oo l s , ba s i c qua l i t y con t ro l t oo l s , Chan GE Acce l e r a t i on P roce s s and F low t echno logy t oo l s .

• Des ign fo r S ix S igma (DFSS) T ra in ing : p r epa re s t e ams fo r t he u se o f s t a t i s t i c a l t oo l s t o de s ign i t r i gh t t he f i r s t t ime .

Qua l i t y i s t he r e spons ib i l i t y o f eve ry emp loyee . Eve ry emp loyee mus t be i nvo lved , mo t iva t ed and knowledgeab l e i f we a r e t o succeed .

The S ix s i gma S t r a t egy– Key Concep t s

To ach i eve S ix S igma qua l i t y , a p roce s s mus t p roduce no more t han 3 .4 de f ec t s pe r m i l l i on oppo r tun i t i e s . An "oppo r tun i t y " i s de f i ned a s a chance fo r noncon fo rmance , o r no t mee t i ng t he r equ i r ed spec i f i c a t i ons . Th i s means we need t o be nea r l y f l aw le s s i n execu t i ng ou r key p roce s se s . S ix S igma i s a v i s i on we s t r i ve t oward and a ph i l o sophy t ha t i s pa r t o f ou r bus ine s s cu l t u r e .

Key Concep t s o f S ix S igma

At i t s co re , S ix S igma r evo lve s a round a f ew key concep t s .

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Cr i t i c a l t o Qua l i t y : A t t r i bu t e s mos t impor t an t t o t he cus tomer

Defec t : Fa i l i ng t o de l i ve r wha t t he cus tomer wan t s

P roces s Capab i l i t y : Wha t you r p roce s s c an de l i ve r

Va r i a t i on : Wha t t he cus tomer s ee s and f ee l s

S t ab l e Ope ra t i ons : Ensu r ing cons i s t en t , p r ed i c t ab l e p roce s se s t o

improve wha t t he cus tomer s ee s and f ee l s

Des ign fo r S ix

S igma :

Des ign ing t o mee t cus tomer needs and

p roce s s c apab i l i t y

Our Cus tomer s Fee l t he Va r i ance , No t t he Mean

Of t en , ou r i n s ide -ou t v i ew o f t he bus ine s s i s ba sed on ave ra GE o r mean -based measu re s o f ou r r e cen t pa s t . Cus tomer s don ' t j ud GE us on ave ra GE; t hey f ee l t he va r i ance i n e ach t r ansac t i on , and each p roduc t we sh ip . S ix S igma focuse s f i r s t on r educ ing p roce s s va r i a t i on and t hen on improv ing t he p roce s s c apab i l i t y .

Cus tomer s va lue cons i s t en t , p r ed i c t ab l e bus ine s s p roce s se s t ha t de l i ve r wor ld - c l a s s l eve l s o f qua l i t y . Th i s i s wha t

GE’s Commi tmen t t o Qua l i t y

GE’s succe s s w i th S ix S igma ha s exceeded ou r mos t op t im i s t i c p r ed i c t i ons . Ac ros s t he Company , GE a s soc i a t e s embrace S ix S igma ' s cus tomer - focused , da t a -d r i ven ph i l o sophy and app ly i t t o eve ry th ing we do . We a r e bu i l d ing on t he se succe s se s by sha r i ng be s t p r ac t i c e s a c ro s s a l l o f ou r bus ine s se s , pu t t i ng t he fu l l power o f GE beh ind ou r ques t f o r be t t e r , f a s t e r cu s tomer so lu t i ons .

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What ha s S ix S igma accompl i shed?

Gene ra l E l ec t r i c i s mos t o f t en u sed a s t he example fo r S ix S igma r e su l t s , i n pa r t because t hey have been so zea lous abou t u s ing t h i s t e chn ique . GE e s t ima t e s t ha t i n 1998 , t hey made $750 mi l l i on do l l a r s due t o S ix S igma improvemen t s , w i th ano the r e s t ima t ed $1 .5 b i l l i on i n 1999 . The i r ope ra t i ng marg in s con t i nue t o make r eco rds , and t he l e ade r s o f GE a t t r i bu t e t h i s ex t r ao rd ina ry pe r fo rmance d i r ec t l y t o S ix S igma .

Moto ro l a , t he company t ha t l a i d t he founda t i ons o f t he S ix S igma concep t , ha s spen t ove r a decade u s ing S ix S igma improvemen t t e chn iques - and ha s en joyed t r emendous l ong t e rm succe s s : 500% g rowth i n s a l e s , e s t ima t ed s av ings o f $14 b i l l i on , nea r l y 20% p ro f i t g rowth fo r a decade . Af t e r two yea r s o f S ix S igma , Moto ro l a a l so won t he p r e s t i g ious Ma lco lm Ba ld r i d GE Na t iona l Qua l i t y awa rd .

SIX SIGMA FOR SALES

Tru th Abou t t he Cus tomer s ' Needs

I s be s t comple t ed by t he p ro j ec t l e ade r r a t he r t han by t he en t i r e p ro j ec t t e am.

"The more I l e a rn abou t cus tomer s a t i s f ac t i on , t he l e s s I know," t he CEO o f a Fo r tune 500 company r ecen t l y l amen ted . Many CEOs can empa th i ze – fo r even t he mos t cus tomer - cen t e r ed compan i e s f a l l sho r t on t r u ly unde r s t and ing t he i r cu s tomer s ' wan t s and needs and o f t en don ' t r e a l i z e i t un t i l i t ' s t oo l a t e . How does t h i s happen? Many CEOs a r e i nunda t ed w i th cus tomer s a t i s f ac t i on da t a t ha t have been ga the red a s an end i n i t s e l f r a t he r t han a means t o an end .

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Forward - th ink ing compan i e s know tha t GEt ing t he focus r i gh t i s key . The i r unde r ly ing s a l e s s t r a t egy i s t o de t e rmine wha t f ew th ings w i l l have t he g r ea t e s t l eve ra GE , and t o focus s ca r ce r e sou rce s on t he se c r i t i c a l a r ea s . One way t o a ccompl i sh t h i s i s t o c l o se t he gap be tween wha t cus tomer s va lue and wha t you p rov ide u s ing t he S ix S igma me thodo logy . S ix S igma i s a d i s c ip l i ned me thodo logy t ha t beg in s and ends w i th t he Vo ice o f t he Cus tomer (VOC) . I t ha s i t s r oo t s i n manufac tu r i ng bu t i s p rov ing equa l l y e f f ec t i ve i n s a l e s and marke t i ng . Many compan i e s wh ich have r eaped t he bene f i t s o f app ly ing S ix S igma t o i nc r ea se p roduc t i v i t y and t he bo t t om l i ne a r e now us ing i t t o c r ea t e t op l i ne g rowth by app ly ing i t i n t he a r ea s o f :

• C l i en t r e l a t i onsh ip managemen t

• Sa l e s e f f ec t i venes s

• New marke t deve lopmen t

• P r i c i ng p roce s s improvemen t

• Adve r t i s i ng / commun ica t i on improvemen t

• Brand ing e f f ec t i venes s

• Channe l e f f ec t i venes s

• Lead managemen t

• Se rv i ce improvemen t

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• P roduc t deve lopmen t

Gene ra l E l ec t r i c , en t e r i ng t he n in th yea r o f i t s S ix S igma j ou rney , began u s ing S ix S igma t o improve s a l e s e f f ec t i venes s i n yea r f i ve . J ack We lch s a id , "We found t ha t S ix S igma i sn ' t on ly fo r eng inee r s . . . . Reg iona l s a l e s mana GEs can u se i t t o improve fo r eca s t r e l i ab i l i t y , p r i c i ng s t r a t eg i e s , o r p r i c i ng va r i a t i on . "

DuPon t , now in i t s f ou r th yea r o f i n t eg ra t i ng S ix S igma , began u s ing S ix S igma fo r t op l i ne g rowth i n yea r two . "S ix S igma b rough t a new focus on t he vo i ce o f t he cus tomer . Cus tomer i npu t i s va luab l e i n d r i v ing r e sea r ch deve lopmen t , p roduc t deve lopmen t , and app l i c a t i ons , " s a id Don L insenmann , DuPon t v i ce p r e s iden t and co rpo ra t e champion -S ix S igma .

Bombard i e r , now in i t s s even th yea r o f imp lemen t ing S ix S igma , i n i t i a l l y focused i t s bus ine s s improvemen t e f fo r t s on ca sh f l ow , cos t r educ t i on , co s t improvemen t , co s t avo idance and e f f i c i ency improvemen t . Today , many o f t he i r S ix S igma p ro j ec t s a r e focused on g rowth p ro j ec t s t o i nc r ea se s a l e s vo lume and s a l e s ma rg in s .

I f I t Can Make P roduc t s Be t t e r , Can I t Improve Sa l e s?

To unde r s t and how S ix S igma impac t s t op l i ne g rowth , l e t ' s t ake a l ook a t how i t i s app l i ed spec i f i c a l l y i n s a l e s and marke t i ng t o i nc r ea se s e l l i ng e f f ec t i venes s . We mus t f i r s t beg in w i th an unde r s t and ing o f t he t heo r i e s o f Dr . Abraham Mas low and Dr . Nor i t ak i Kano . Many o f Kano ' s concep t s a r e u t i l i z ed i n S ix S igma t o enab l e s a l e s execu t i ve s t o unde r s t and t he p syche o f t he i r cu s tomer s .

Kano , l i ke Mas low be fo re h im , pos tu l a t ed t ha t o rgan i za t i ons , l i ke peop l e , have needs and wan t s . These needs and wan t s c an and shou ld be s egmen ted i n to a

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h i e r a r chy . Th i s h i e r a r chy p rov ide s u s w i th a l og i ca l pa thway t o mee t i ng and exceed ing cus tomer needs on t he impor t an t e l emen t s o f ou r r e l a t i onsh ip .

Many o f u s f i r s t encoun t e r ed Mas low ' s t heo r i e s i n Psycho logy 101 bu t f ew wou ld su spec t t ha t t he key t o unde r s t and ing ou r cus tomer s a l so may be found i n Mas low ' s H ie r a r chy o f Needs . Mas low be l i eved t ha t an i nd iv idua l ' s needs mus t f i r s t be s a t i s f i ed a t t he l ower , more ba s i c l eve l s ( food , wa t e r , and oxy GE n ) be fo re one cou ld s eek t o g r a t i f y needs a t t he nex t h ighe r l eve l ( s a f e ty , l ove , e s t e em) . On ly when l ower - l eve l needs a r e s a t i s f i ed can s e l f -a c tua l i z a t i on needs beg in t o be add re s sed . Se l f -ac tua l i z a t i on i s t he fu l f i lmen t o f one ' s human po t en t i a l and i s o f t en t he po in t a t wh i ch an i nd iv idua l becomes t r u ly c r ea t i ve

The re a r e s i gn i f i c an t pa r a l l e l s be tween Mas low and Kano ' s t heo r i e s i n exp l a in ing t he needs o f o rgan i za t i ons and how to mee t t hem. The Kano Mode l i s a power fu l t oo l t ha t enab l e s a s a l e s t e am to p rope r ly i den t i fy t he f ew c r i t i c a l i t ems cus tomer s a r e s ay ing have t he h ighes t impac t . The mode l s egmen t s t he se needs acco rd ing t o :

1 ) Mus t be ' s

2 ) One -d imens iona l

3 ) de l i gh t e r s

Mus t -Be Needs

Mus t -be ' s a r e t hose needs and wan t s t ha t have t o be me t f o r a cus tomer t o even beg in t o have a pos i t i ve r e l a t i onsh ip w i th you r company . Many cus tomer s be l i eve t he i r mus t -be needs a r e so ba s i c t hey don ' t even t h ink o f d i s cus s ing t he se

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un l e s s t hey have been d i s appo in t ed . Mus t -be needs fo r a t yp i ca l ho t e l cu s tomer , f o r example , wou ld i nc lude an accu ra t e r e se rva t i on i n t he sy s t em, a c l e an ba th room and a non - smok ing room p re f e r ence . Cus tomer s o f ma jo r ho t e l cha in s fu l l y expec t l ower l eve l needs t o be me t , and s imp ly a s sume t he ho t e l knows wha t t he se needs a r e .

One -Dimens iona l Needs

One -d imens iona l needs a r e t he needs a cus tomer w i l l d i s cus s and a r e t yp i f i ed by a "w in - lo se " nego t i a t i on . An example migh t be t he p r i c e o f a ho t e l r oom. I f a sked how the ho t e l m igh t make a gues t more s a t i s f i ed , a ma jo r i t y m igh t r eques t a l ower room r a t e . Bu t wh i l e e ach do l l a r o f d i s coun t p rov ided t o t he gues t makes t hem tha t much happ i e r , t he s ame do l l a r o f d i s coun t makes ho t e l managemen t t ha t much unhapp i e r .

De l i gh t e r s

De l i gh t e r s a r e when wan t s o r needs a r e me t when a cus tomer i s no t expec t i ng i t . Dur ing a r e cen t vaca t i on , I r e ce ived a beau t i fu l f r u i t and cheese t r ay when I checked i n to a we l l known ho t e l . Unfo r tuna t e ly t hey had a s s igned me t o a smok ing room. The de l i gh t e r d id no t have t he de s i r ed e f f ec t . I n f a c t , i t b ack f i r ed because my mus t -be need fo r a non - smok ing room was no t me t . When a be l lman a r r i ved t o move me t o a non - smok ing room, I r eques t ed he r emove t he chee se t r ay because i t sme l l ed o f smoke .

The Les son I s C l ea r

• We mus t be nea r l y f l aw le s s ( app roach ing S ix S igma l eve l s ) on mee t i ng cus tomer s ' mus t -be needs and we shou ld focus ou r t ime , e f fo r t and S ix S igma t e ams on t he se needs .

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• We shou ld acknowled GE the one -d imens iona l needs o f ou r cus tomer s bu t qu i ck ly move t he d i s cus s ion t o t he nex t l eve l t o focus on de l i gh t e r s .

• We mus t f ocus concen t r a t ed e f fo r t on t he de l i gh t e r s - - t hose d i f f e r en t i a t o r s t ha t p rov ide ex t r ao rd ina ry bene f i t t o t he cus tomer w i thou t i nc r ea s ing a supp l i e r ' s co s t .

Us ing S ix S igma t o unde r s t and a cus tomer ' s needs and wan t s ensu re s you a r e deve lop ing and de l i ve r i ng p roduc t s and s e rv i ce s t o c r ea t e more va lue fo r cus tomer s and make t hem more l i ke ly t o s t ay w i th you t han go t o you r compe t i t o r . More impor t an t l y , s i nce money and t ime t o i nves t i n improvemen t s a r e s ca r ce , t h i s app roach he lp s you f i gu re ou t wha t you ' r e no t go ing t o do . Th i s he lp s you s t ay ahead o f t he game i n c l o s ing a s a l e and open ing a p ro f i t ab l e cus tomer - cen t e r ed r e l a t i onsh ip .

A Case S tudy

Does w in ing and d in ing p rospec t i ve cus tomer s l e ad t o s a l e s? The conven t i ona l w i sdom o f a p roduc t s a l e s t e am was t ha t such en t e r t a i n ing was nece s sa ry t o c l o se t he dea l . Bu t a S ix S igma p ro j ec t t ha t examined s a l e s da t a found t ha t wh i l e f a ce t ime w i th cus tomer s was impor t an t , w in ing and d in ing was no t . The da t a showed t ha t r egu l a r f a ce t ime he lped c lo se s a l e s , bu t t ha t t ime cou ld be spen t ove r a cup o f co f f ee , no t go l f i ng a t a r e so r t . I n add i t i on , t oo much f ace t ime w i th cus tomer s was coun t e rp roduc t i ve . A r egu l a r l y s chedu l ed cus tomer ou t i ng was found t o be de t r imen t a l t o c l o s ing s a l e s s i nce i t was a t a busy t ime o f yea r when cus tomer s p r e f e r r ed no t t o be away f rom the i r o f f i c e s . Chang ing t h i s p roce s s r e su l t ed i n an i nc r ea se o f more t han 10 pe rcen t o f s a l e s f o r t he p roduc t a s we l l a s a dec r ea se i n t he cos t o f ma rke t i ng t h i s p roduc t .

Aim o f FFA i s t o r emove o r con t a in r e s t r a i ne r s and t o i nc r ea se fo r ce s wh ich he lp s t he d r i ve r s .

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BOOKS ON SIX S IGMA QUALITY MANAGEMENT

Breyfog l e FW. Implement ing S ix S igma: Smar t e r So lu t i ons Us ing S t a t i s t i c a l Me thods . John Wi l ey & Sons , New York , 1999 , 791 pa GE . A heavy we igh t t ex t , w i t h a h igh l eve l o f equa t i ons and s t a t i s t i c s . No t f o r t he f a i n t a t hea r t .

Eckes G . The S ix s i gma Revo lu t ion - How Gene ra l E l ec t r i c and O the r s Tu rned P roce s s i n to P ro f i t s . New York : John Wi l ey & Sons , 2001 , 274 pa GE . One o f t he mos t r e adab l e books , w i th m in imum s t a t i s t i c s , bu t s t i l l t r e a t s p roce s s c apab i l i t y i n a quan t i t a t i ve manne r . C l ea r l y d i s t i ngu i she s be tween t he i nd i r ec t me thod o f e s t ima t i ng t he p roce s s s i gma-me t r i c f rom coun t i ng de fec t s and t he d i r ec t me thod o f c a l cu l a t i ng t he s i gma-me t r i c f rom the obse rved s t anda rd dev i a t i on o f t he p roce s s . My f avo r i t e book so f a r , even t hough i t ' s wr i t t en by a p sycho log i s t .

Harry M, Schroeder R . S ix S igma : The Break th rough Managemen t S t r a t egy Revo lu t i on i z ing t he Wor ld ' s Top Corpo ra t i ons . Cu r r ency , New York , 2000 . The mos t popu l a r o f t he cu r r en t books , i t m ixes concep t s and i dea s w i th succe s s s t o r i e s f rom we l l -known compan i e s . No equa t i ons and l i t t l e d i s cus s ion o f p roce s s c apab i l i t y and qua l i t y con t ro l .

Naumann E , Ho i s ing ton SH. Cus tomer Center S ix S igma: Link ing Cus tomer s , P roce s s Improvemen t s , and F inanc i a l Resu l t s . ASQ Pre s s , Mi lwaukee , 2001 , 340 pa GE . Ha l f o f t he book i s abou t cus tomer s a t i s f ac t i on and su rveys ; t he o the r ha l f i s abou t do ing some th ing t o make improvemen t s . Doesn ' t work fo r me , bu t m igh t be appea l i ng t o t he ma rke t i ng o r i en t ed pe r son .

Pande PS , Neuman RP, Cabanagh RR. The S ix S igma Way: How GE , Mo to ro l a , and O the r Top Compan i e s a r e Hon ing The i r Pe r fo rmance . McGraw-Hi l l , New York , 2000 , 422 pa GE . Organ i zed a round t he t hemes o f I . Execu t i ve

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Overv i ew , I I . GE a r i ng up and adap t i ng S ix S igma t o you r o rgan i za t i on , and I I I . Imp lemen t ing S ix S igma - Roadman and t oo l s . Good ove ra l l t r e a tmen t o f qua l i t y managemen t and improvemen t . Ma in ly focuse s on p roce s s y i e ld and de fec t s , w i t h l i t t l e d i s cus s ion o f p roce s s c apab i l i t y and con t ro l cha r t s .

Pyzdek T . The S ix S igma Handbook: A Comple t e Gu ide fo r Greenbe l t s , B l ackbe l t s , & Mana GEs a t A l l Leve l s . McGraw-Hi l l , New York , 2001 , 711 pa GE . Th i s handbook we ighs i n a s one o f t he b ig GEt books ava i l ab l e . I t p rov ide s a t ho rough cove ra GE p ro j ec t improvemen t me thodo logy and g roup p rob l em-so lv ing t oo l s , managemen t t oo l s , con t ro l cha r t s , and de s ign o f expe r imen t s . I t t ake s S ix S igma a s t he t heme and un i t e s t he qua l i t y improvemen t me thodo logy beh ind t ha t t heme .

Smi th GM. S ta t i s t i ca l Proces s Contro l and Qua l i ty Improvement : P r en t i c e Ha l l , 2000 , 650 pa GE . Focuse s on s t a t i s t i c a l p roce s s con t ro l (SPC) , bu t p rov ide s a b road pe r spec t i ve on how SPC f i t s i n to t he ove ra l l managemen t o f qua l i t y . Chap t e r 1 p rov ide s a good i n t roduc t i on t o s t a t i s t i c a l t oo l s f o r p roce s s con t ro l . Chap t e r 2 r ev i ews TQM, Deming , C rosby , Ma lco lm Ba ld r i d GE award c r i t e r i a , and ISO-9000 . Chap t e r 6 i n t eg ra t e s p roce s s c apab i l i t y i nd i ce s w i th s i x - s i gma qua l i t y . The r e s t o f t he book i s abou t s t a t i s t i c a l QC, d i f f e r en t t ypes o f cha r t s and t e chn iques .

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Which is the best Six Sigma book?

'The S ix S igma Way" co -au tho red by Pe t e r S . Pande , Robe r t P . Neuman , and Ro land R . Cavanagh . I t i s an imp lemen ta t i on gu idebook t ak ing you f rom i s S ix S igma r i gh t f o r you r o rgan i za t i on t o p rov id ing check l i s t on t he va r i ous phase s o f DMAIC.

TOTAL QUALITY MANAGEMENT

Tota l Qua l i t y Managemen t , o r TQM, was ve ry popu l a r i n t he 1980s and 1990s a s a way o f b r i ng ing abou t ma jo r chan GE wi th in o rgan i s a t i ons .

• To t a l - eve ryone i s i nvo lved f rom sen io r managemen t t o t he l owes t company j un io r

• Qua l i t y - t he a im i s t o improve p roduc t s and s e rv i ce s t o t he cus tomer

• Managemen t - a s suming t ha t t h ings GE be t t e r i f you mana GE them

TQM i s we l l cons t ruc t ed a s a me thodo logy , and ha s a r an GE o f power fu l t oo l s f o r a i d ing and b r i ng ing abou t chan GE . I t i s one o f t he be s t me thods fo r b r i ng ing abou t cu l t u r a l and p roce s s chan GE in an o rgan i s a t i on .

The f a i l u r e o f TQM to be adop t ed l ong t e rm i s t ha t

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• I t i s a t oo l and no t a goa l i n i t s e l f

• I t ha s no v i s i b l e measu re o f succe s s

• Improvemen t s ga ined a r e o f t en l o s t ove r t ime

S ix S igma Qua l i t y Me thodo logy u se s TQM too l s and t e chn iques t o a i d p roce s s improvemen t and chan GE , bu t f u l l y add re s se s t he f a i l i ngs o f TQM by p rov id ing a t a r GE goa l and a measu re by wh ich improvemen t c an be j ud GE and sus t a ined . S ix S igma a l so f i rm ly p l ace s t he emphas i s on t o t a l and comple t e cus tomer s a t i s f ac t i on , whe re TQM may have been u sed by o rgan i s a t i ons t o cu t co s t s r a t he r t han de l i ve r pe r f ec t i on t o t he cus tomer .

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CONCLUSION

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Six S igma i s succe s s fu l l y u sed i n manufac tu r i ng i ndus t ry fo r two decades . The cha l l en GE was t o emp loy S ix S igma i n so f twa re deve lopmen t . I n t h i s t he s i s r e sea r ch we have conc luded t ha t S ix S igma i s app l i c ab l e i n so f twa re ’ s . The re a r e d i f f e r ences be tween so f twa re and manufac tu r i ng p roce s s , bu t i f we t ake ca r e o f t hem S ix S igma Works we l l i n so f twa re ’ s . I t c an b r i ng l a r GE bene f i t s t o so f twa re compan i e s . The re a r e so f twa re doma ins whe re S ix S igma i s h igh ly bene f i c i a l i . e . complex sy s t ems , m i s s ion c r i t i c a l sy s t ems e t c . S ix S igma t oo l s a r e ve ry u se fu l f o r so f twa re p roce s s improvemen t . The ma in cha l l en GE o f S ix S igma i n so f twa re a r e t o i den t i fy t he CTQs ( c r i t i c a l t o qua l i t y ) and t o e s t ab l i sh cos t e f f i c i en t p ro j ec t Yes t ha t c an be u sed t o i den t i fy roo t c ause , and measu re improvemen t s . Ano the r cha l l en GE i s t ha t t he p roce s se s u sed have qu i t e l ong l i f e span ( a deve lopmen t p ro j ec t c an t ake 2 -3 yea r s ) and t he p roce s se s a r e fu r t he rmore no t t o be c l a s s i f i ed a s s t ab l e and r epea t ab l e . We have p roposed s t eps fo r t he imp lemen ta t i on o f S ix S igma i n so f twa re . The s t eps a r e p roposed a f t e r i n t e rv i ews and ca se s t udy r ev i ews . We be l i eve t ha t t he s t eps a r e r e l i ab l e . The f i na l r e sea r ch r e su l t w i l l he lp so f twa re compan i e s and r e sea r che r s s t ep by s t ep t o a ch i eve t he i r qua l i t y goa l s

SUMMARY

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Six S igma i s a con t i nuous improvemen t me thodo logy deve loped a t Mo to ro l a t ha t i s de s igned t o sy s t ema t i c a l l y r educe de f ec t s r e cogn i z ing two impor t an t r e l a t i onsh ip s .

1 . The ove ra l l y i e l d o f a g roup o f r e l a t ed p roce s se s i s much l ower t han t he y i e ld s o f t he i nd iv idua l p roce s se s . Fo r example , i f t he i nd iv idua l y i e ld s a t e ach o f a s e t o f dependen t p roce s se s i s . 99 , t he ove ra l l y i e l d fo r 100 p roce s se s o r ope ra t i ons wou ld be . 99100 = . 366 .

2 . The t o t a l co s t o f a p roduc t o r s e rv i ce i s d i r e c t l y r e l a t ed t o t he de f ec t r a t e , i . e . , To t a l co s t = (Un i t co s t ) (1+ de fec t r a t e ) .

The s i x s i gma l eve l i s whe re t he pe r fo rmance a t e ach func t i on , p roce s s , o r ope ra t i on i s nea r l y pe r f ec t , GE ne ra t i ng a de f ec t r a t e o f . 000034% o r on ly 3 .4 de f ec t s pe r m i l l i on . Fo r compa r i son , a t h r ee s i gma l eve l o f pe r fo rmance GE ne ra t e s 66 ,807 de fec t s pe r m i l l i on a s i nd i ca t ed i n t he t ab l e be low .

Sigma* Defects per million Long term yield %

3 66,807 93.32

4 6,21 99.379

5 233 99.9767

6 3.4 99.999966

*A s igma i s a s t a t i s t i c a l un i t o f measu re r e f e r r ed t o a s t he s t anda rd dev i a t i on .

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Nowadays , t he qua l i t y p rope r ty o f p roduc t i s becoming much more impor t an t t han i t be fo re . To examine t he qua l i t y , we shou ld cons ide r d i f f e r en t app roaches wh ich i nc lude cus tomer , t r anscenden t -ba sed , p roduc t , manufac tu r i ng , and p roduc t va lue . No t a l l app roaches sha l l be u sed i n one p roduc t , bu t we u se d i f f e r en t ones i n d i f f e r en t pa r t s . Improv ing qua l i t y i s no t f r e e . I t co s t s a l o t o f money , t ime and r e sou rce s . Howeve r , t he bene f i t s a r e a l so a t t r a c t i ve . No t on ly i nc r ea s ing p ro f i t s , bu t a l so can ob t a in l oya l t y , s t r on GE marke t pos i t i on and l e ad t ime , r educed cos t s , h ighe r p roduc t i v i t y , and more j ob oppo r tun i t i e s . P rope r qua l i t y improvemen t does no t mean l o s ing money i n bus ine s s , i t means fu tu r e i nves tmen t . So f twa re demands h igh qua l i t y . F ive app roaches shou ld a l so be cons ide red . Based on t hose app roaches , p roce s s improvemen t i s GE ne ra t ed t o fu l f i l l t hem. I t p rov ide s p ro j ec t member s a r egu l a r me thod o f u s ing t he s ame way t o do t he s ame work . De fec t s f ound i n p r ev ious e f fo r t s a r e f i xed i n t he nex t e f fo r t s . One b r i l l i an t me thod i s S ix S igma . S ix S igma app roach have been i nven t ed fo r more t han two decades . I t i s succe s s fu l l y and con t i nua l l y u sed i n manufac tu r i ng . Now i t was sp r ead t o many o the r f i e l d s a l l ove r t he wor ld . S ix S igma app roach focuse s on p roce s s improvemen t . Af t e r i t was i nven t ed , S ix S igma’ s de f i n i t i on ha s r e ached t h r ee l eve l s – a s a me t r i c , a s a me thodo logy , and a s a managemen t sy s t em. As a me t r i c , i t a ims t o r educ ing de fec t s . The h ighes t l eve l “6σ” equa t e s t o 3 .4 de f ec t s pe r m i l l i on oppo r tun i t i e s . As a me thodo logy , i t f ocuse s on improv ing p roce s s . DMAIC and DMADV mode l s a r e t he mos t common used . As a managemen t sy s t em, i t combines t he me t r i c and me thodo log i e s fo r execu t i ng t he bus ine s s s t r a t egy , and a ims t o con t i nuous improv ing p roduc t qua l i t y .

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ANNEXURES

Six Sigma Applications

Objec t ive s : -

The S ix S igma ha s de f i n i t i ons a t t h r ee l eve l s i . e . ma t r i x , me thodo logy and s t r a t egy . A t ma t r i x l eve l S ix S igma i s 3 . 4 de f ec t s pe r m i l l i on oppo r tun i t i e s wh ich means 99 .9997% de fec t f r e e p roduc t . S ix S igma app roach a t me thodo logy l eve l i s no t j u s t coun t i ng de fec t s i n a p roce s s o r p roduc t , bu t i t i s u sed t o improve p roce s se s . When we l ook a t S ix S igma a s a me thodo logy , t he r e a r e many mode l s ava i l ab l e fo r p roce s s improvemen t l i ke DMADV, DMAIC e t c . A t s t r a t egy l eve l , t h rough expe r i ence , Mo to ro l a ha s found t ha t u s ing S ix S igma a s a me t r i c and a s a me thodo logy a r e no t enough t o d r i ve t he b r eak th rough improvemen t s i n an o rgan i za t i on . Mo to ro l a ensu re s t ha t S ix S igma me t r i c s and me thodo logy a r e adop t ed t o improve oppo r tun i t i e s wh ich a r e d i r ec t l y l i nked t o t he bus ine s s s t r a t egy . Now S ix S igma i s a l so app l i ed a s a managemen t sy s t em fo r execu t i ng t he bus ine s s s t r a t egy .

Need for the Top ic : -

Six S igma app roach can be app l i ed i n so f twa re compan i e s i f we i nvo lve t he r i gh t peop l e , so lv ing t he r i gh t p rob l em, and u s ing t he r i gh t me thod . A t t he s ame t ime , a l t hough u s ing S ix S igma app roach fo r p roce s s improvemen t cos t s a l o t , i t wor th . Few de fec t s , f a s t e r de l i ve ry and i nc r ea sed cus tomer s a t i s f ac t i on w i l l GE ne ra t e more po t en t i a l p ro f i t s t han you t h ink . The d i f f e r ences be tween so f twa re and manufac tu r i ng a r e obv ious and unavo idab l e . The ma in d i s t i nc t f a c to r s o f so f twa re a r e non - r epe t i t i venes s , un ique i npu t and ou tpu t , cogn i t i on , v i sua l i z a t i on , and some ex t e rna l f a c to r s such a s emp loyee ’ s sk i l l and knowled GE . These d i f f e r ences a r e r e f l e c t ed on t he so f twa re p roduc t and so f twa re p roce s s . S t i l l app ly ing S ix S igma app roach i n so f twa re compan i e s i s

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bene f i c i a l . F i r s t l y , a l l deny op in ions and mi sconcep t i ons a r e bu i l t on t he mi sunde r s t and ing o f S ix S igma app roach and un fami l i a r w i th t he so f twa re . Second ly , we neve r s ay app ly ing S ix S igma app roach i n so f twa re i s j u s t t he copy o f manufac tu r i ng ’ s me thod . The d i f f e r ences do ex i s t . Acco rd ing t o t hem, we need t o mod i fy t he S ix S igma app roach , a s t he s ame t ime w i th t he so f twa re p roce s s . Chan GE them to f i t f o r so f twa re ’ s p roce s se s . And t ha t demands fu r t he r r e sea r ch and more expe r imen t s . I t c an he lp so f twa re compan i e s t o r educe de f ec t s , improve qua l i t y , i nc r ea se cus tomer ’ s s a t i s f ac t i on , and enhance marke t - sha re . Tha t i s a l so t he answer o f why so f twa re compan i e s choose S ix S igma , e spec i a l l y fo r complex sy s t ems , m i s s ion c r i t i c a l sy s t ems , and l ega l r e spons ib i l i t y .

Methodo logy and Procedure o f Work: -

The re i s no a spec i f i c t oo l o r t e chn ique fo r one spec i f i c phase i n S ix S igma . Any t oo l t ha t i s he lp fu l f o r t he p roce s s improvemen t c an be app l i ed i n S ix S igma p ro j ec t . Howeve r s even qua l i t y t oo l s a r e mos t w ide ly u sed i n a l l k i nds o f qua l i t y improvemen t . They a r e Cause -e f f ec t D iag ram, Pa re to Cha r t , F low Cha r t , H i s t og ram, Check Shee t , Con t ro l Cha r t , and Sca t t e r P lo t . The o the r spec i a l t oo l s a r e ga the red f rom succe s s fu l S ix S igma ca se s wh ich i nc lude Bra in s to rming , Af f i n i t y D iag ramming , S IPOC Diag ram, MSA, VOC Me thod , Kano Ana lys i s , and so on . Us ing t he p rope r t oo l i n t he r i gh t p l ace i s t he key f ac to r wh ich i n f l uences succe s s .

Sta t i s t i ca l Techn iques to be used: -

DMAIC mode l d iv ide s S ix S igma p ro j ec t i n to f i ve phase s . I n e ach phase , t he r e i s a c l e a r l y de f i ne i npu t and ou tpu t . The ou tpu t o f t he p r ev ious phase no rma l ly i s t he i npu t o f t he nex t phase . I n e ach phase , t he r e a r e s eve ra l s t eps t o a ch i eve phase goa l . Number s o f qua l i t y t oo l s a r e i n t roduced t o e ach s t ep . The re i s on ly one c r i t e r i on fo r qua l i t y t oo l s e l e c t i on – f i t ne s s fo r u se . When t he S ix S igma p ro j ec t i s t e rmina t ed , ga ined expe r i ence s w i l l be documen ted and

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app l i ed i n o the r S ix S igma p ro j ec t s . Some t imes t he p ro j ec t goa l c anno t be ach i eve by on ly one S ix S igma p ro j ec t . Then more S ix S igma p ro j ec t s c an be o rgan i zed acco rd ing t o s i t ua t i on . The sp i r i t o f S ix S igma app roach i s t owards a l ong - t e rm improvemen t .

II ) References

"F ree S ix S igma Les sons , " Moto ro l a Un ive r s i t y , 2008 . h t t p : / /www.moto ro l a . com/con t en t . j sp?g loba lOb jec t Id=3069-5787 .

"The H i s to ry o f S ix S igma , " iS ix S igma LLC, 2008 . h t t p : / / so f twa re . i s i x s igma .com/ l i b r a ry / con t en t / c020815a . a sp .

"Wha t i s S ix S igma?" Moto ro l a Un ive r s i t y , 2008 . h t t p : / /www.moto ro l a . com/con t en t . j sp?g loba lOb jec t Id=3088 .

"Norma l d i s t r i bu t i on , " Wik iped i a , 2008 . h t t p : / / en .w ik iped i a .o rg /w ik i /Norma l_d i s t r i bu t i on .

"DMAIC Ver sus DMADV," iS ixS igma LLC, 2008 . h t t p : / / so f twa re . i s i x s igma .com/ l i b r a ry / con t en t / c001211a . a sp .

"S ix S igma , " Wik iped i a , 2008 . h t t p : / / en .w ik iped i a .o rg /w ik i /S ix_S igma .

“S ix S igma Qua l i t y Too l s and Templa t e s , " iS ixS igma , 2008 . h t t p : / /www. i s i x s igma .com/ t t / .

S ix S igma Tab l e , " Wes tga rd QC, 2001 . h t t p : / /www.wes tga rd . com/s ix s ig t ab l e . h tml .

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III ) L i s t o f F igures , Char t s , Diagrams Page Nos .

Sta t i s t i c a l D iag rams 16

F igu re 8 -5 Pa re to D iag ram 36

F igu re 8 -6 F i shbone D iag ram 37

F igu re 3 -11 X-Ba r Con t ro l Cha r t 38

F igu re 3 -12 R Con t ro l Cha r t 38

S ix S igma Va r i ance D iag ram 39

Proces s de s ign S igma-me t r i c Ca l cu l a to r 46

QC Des ign Ca l cu l a to r (C r i t i c a l Sys t ema t i c E r ro r ) 46

GE ' s T ransac t i on l i f e cyc l e 67

Bu i ld ing a S ix S igma Organ i za t i on 80

Cu l tu r a l change D iag ram 80

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S4 P roces s Map 81

Cus tomer Feedback 81

Areas Unde r t he Norma l Curve D iag ram 85

IV) L i s t o f Tables

Conve r s ion u s ing t ab l e w i th a l l owance fo r 1 .5 s sh i f t 23

Tab l e 1 DPMO to s i gma conve r s ion t ab l e 27

Tab l e 1 (Company began S ix S igma) 42

Tab l e 2 (S ix S igma Cos t And Sav ings By Company) 42

S ix S igma De fec t s pe r m i l l i on Tab l e 84

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Detailed Information of Guide

Name: Sanjay Kumar

Address: A-3/77, Paschim Vihar New Delhi

Qualification: MBA in Operation Management from ISBM, Pune

Designation: Assistant Manager

Special Field of Work: Quality Control

Experience: 3 Years of Experience

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