six sigma

SIX SIGMAA PRODUCTION AND OPERATIONS MANAGEMENT

PROJECTBy Arushi Sharma (50240) | Ashrrut Kaim (50243)

Divik Girdhar (50256) | Hisham Ahmed Rizvi (50269)BBS II-B

Contents• Six Sigma : An Overview

• What is Six Sigma?

• Why Six Sigma?

• Six Sigma Phases : Define, Measure, Analyze, Improve and Control

• Tools and Key Roles for Six Sigma

Arushi Sharma | Ashrrut Kaim | Divik Girdhar | Hisham Ahmed Rizvi | BBS II-B

What is Sigma?

A term used in statistics

to represent standard

deviation, an indicator of

the degree of variation in

a set of a process.


What is Six Sigma?

Six Sigma is the measure of quality that strives for near perfection. It is a disciplined, data-driven methodology focused on eliminating defects. A Six Sigma defect is defined as anything that falls outside of a customer's specifications. Six Sigma is a reference to a statistical measuring system, equivalent to just 3.4 defects per every million opportunities.

Source: Snee, 2003


What is Six Sigma?

• A statistical concept that measures a

process in terms of defects – at the six

sigma level, there 3.4 defects per million

opportunities.

• A philosophy and a goal : as perfect as

practically possible

• A methodology and a symbol of quality


Sigma Levels


Sigma Level (Process

Capability)

Defects per Million Opportunities

2 308,537

3 66,807

4 6,210

5 233

6 3.4

Six Sigma = 99.9997%

Sigma Level

Why not four Sigma or 99.379% ?

•Every hour the postal service would lose 20,000 pieces of mail•Every day our drinking water would be unsafe for almost 15 minutes•Every week there would be 5,000 surgical operations that go wrong in some way•Every month we would be without electricity for almost seven hours


Why Six Sigma?


Why Six Sigma?

• At General Motors, Six Sigma added more than $ 12 billion to the bottom line in 1999 alone.

• Motorola saved more than $ 15 billion in the first 10 years of its Six Sigma effort.


Why Six Sigma?

Six Sigma is about practices

that help you eliminate defects

and always deliver products

and services that meet

customer specifications


Cost of Poor Quality

• What is cost of scrap?• What is cost of rework?• What is cost of excessive cycle times and

delays?• What is cost of business lost because

customers are dissatisfied with your

products or services?• What is cost of opportunities lost because

you didn’t have time or the resources to

take advantage of them?


Critical-to-Quality (CTQ)

Elements of a process that significantly affect the output of that process.

Identifying these elements is figuring out how to make improvements that can dramatically reduce costs and

enhance quality.


SIX SIGMA PHASES

DMAIC Approach

Six Sigma Phases


Define

• Define Customers and Requirements (CTQs)

• Develop Problem Statement, Goals and Benefits

• Identify Champion, Process Owner and Team

• Define Resources

• Evaluate Key Organizational Support

• Develop Project Plan and Milestones

• Develop High Level Process Map


Measure

• Define Defect, Opportunity, Unit and Metrics

• Detailed Process Map of Appropriate Areas

• Develop Data Collection Plan

• Validate the Measurement System

• Collect the Data

• Begin Developing Y=f(x) Relationship

• Determine Process Capability and Sigma Baseline


Analyze

• Define Performance Objectives

• Identify Value/Non-Value Added Process Steps

• Identify Sources of Variation

• Determine Root Cause(s)

• Determine Vital Few x's, Y=f(x) Relationship


Improve

• Perform Design of Experiments

• Develop Potential Solutions

• Define Operating Tolerances of Potential System

• Assess Failure Modes of Potential Solutions

• Validate Potential Improvement by Pilot Studies

• Correct/Re-Evaluate Potential Solution


Control

• Define and Validate Monitoring and Control System

• Develop Standards and Procedures

• Implement Statistical Process Control

• Determine Process Capability

• Develop Transfer Plan, Handoff to Process Owner

• Verify Benefits, Cost Savings/Avoidance, Profit Growth

• Close Project, Finalize Documentation

• Communicate to Business, Celebrate


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Define Measure Analyze Improve Control

Deliverables :

• Fully trained team is formed, supported, and committed to work on improvement project.

• Team charter developed, customers identified and high impact characteristics (CTQs) defined, business process mapped.

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Checkpoints for Readiness

Team Readiness :

• Team is sponsored by a champion or business leader.

• Team formed and team leaders assigned.

• Improvement team members fully trained on Six Sigma and DMAIC.


Team Charter :

• Completed project management charter, including business case, problem and goal statements, project scope, milestones, roles and responsibilities, communication plan.

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Customers

• Customer(s) identified and segmented according to their different needs and requirements.

• Data collected and displayed to better understand customer(s) critical needs and requirements.

Business Process Mapping

• Completed, verified, and validated high-level 'as is' (not 'should be' or 'could be') business process map.

• Completed SIPOC representation, describing the Suppliers, Inputs, Process, Outputs, and Customers.

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Deliverables :

• Key measures identified, data collection planned and executed, process variation displayed and communicated, performance baselined, sigma level calculated.

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Key Measures Identified

• Key measures identified and agreed upon.

• High impact defects defined and identified in the business process.

Data Collection Planned and Executed

• Solid data collection plan established that includes measurement systems analysis.

• Data collected on key measures that were identified.

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Process Variation Displayed/Communicated

• Process variation components displayed/communicated using suitable charts, graphs, plots.

• Long term and short term variability accounted for.

Performance Baseline/Sigma Calculation

• Measure baseline process performance (capability, yield, sigma level).

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Deliverables :

• Data and process analysis, root cause analysis, quantifying the gap/opportunity.

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Data and Process Analysis

• Identify gaps between current performance and the goal performance.

Root Cause Analysis

• Generate list of possible causes (sources of variation).

• Segment and stratify possible causes (sources of variation).

• Prioritize list of 'vital few' causes (key sources of variation).

• Verify and quantify the root causes of variation.

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Quantifying the Gap/Opportunity

• Determine the performance gap.

• Display and communicate the gap/opportunity in financial terms.

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Deliverables :

• Generate (and test) possible solutions, select the best solutions, design implementation plan.

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Generating (and Testing) Possible Solutions

• Possible solutions generated and tested.

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Selecting The Best Solution(s)

• Optimal solution selected based on testing and analysis.

• New and improved process ('should be') maps developed.

• Cost/benefit analysis of optimal solution(s).

• Small-scale pilot for proposed improvement(s).

• Pilot data collected and analyzed.

• Improved process ('should be') maps modified based on pilot data and analysis.

• Project impact on utilizing the best solution(s).

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Designing Implementation Plan

• Solution implementation plan established, including schedule/work breakdown structure, resources, risk management plan, cost/budget, and control plan.

• Contingency plan established.

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Deliverables :

• Documented and implemented monitoring plan, standardized process, documented procedures, response plan established and deployed, transfer of ownership (project closure).

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Checkpoints for ReadinessMonitoring Plan• Control plan in place for sustaining improvements (short and

long-term). Process Standardization• New process steps, standards, and documentation are

ingrained into normal operations.

Documented Procedures• Operating procedures are consistent.• Knowledge gained on process is shared and institutionalized.

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Checkpoints for ReadinessResponse Plan• Response plans established, understood, and deployed. Transfer of Ownership (Project Closure)• Transfer ownership and knowledge to process owner and

process team tasked with the responsibilities.


Roles and Responsibilities : Organizational Hierarchy


Six Sigma projects are run by "black belts" employees who have been trained in the philosophy and its application.

Black belts are backed up by "champions". They are usually senior management-level employees.

Master Black Belt refers to the people who

mentor or coach the black belts who work on a variety of projects

Green Belt is a title for someone who is

involved with a Six Sigma project "part-time". That is, they have a job with normal duties and serves as team member or a part time Six Sigma team leader.

Benefits of Six Sigma


1. Places a clear focus on achieving measurable and quantifiable financial returns to the bottom-line of an organisation.

2. Places an unprecedented importance on strong and passionate leadership and the support required for its successful deployment.

3. Integrates the human elements (culture change, customer focus, belt system infrastructure, etc.) and process elements (process management, statistical analysis of process data, measurement system analysis, etc.) of improvement.

Benefits of Six Sigma


4. Creates an infrastructure of Champions, Master Black Belts (MBBs), Black Belts (BBs) and Green Belts (GBs) that lead, deploy and implement the approach.

5. Six Sigma emphasises the importance of data and decision making based on facts and data rather than assumptions and hunches!

6. Six Sigma utilises the concept of statistical thinking and encourages the application of well-proven statistical tools and techniques for defect reduction through process variability reduction methods (e.g.: statistical process control and design of experiments).

Limitations of Six Sigma


1. The right selection and prioritisation of projects is one of the critical success factors of a Six Sigma program.

2. Subjectivity in the classifying what qualifies as a ‘defect’.

3. Six Sigma can easily digress into a bureaucratic exercise if the focus is on such things as the number of trained Black Belts and Green Belts, number of projects completed, etc.

4. There is an overselling of Six Sigma by too many consulting firms. Many of them claim expertise in Six Sigma when they barely understand the tools and techniques and the Six Sigma roadmap.

Six Sigma – Success Stories


• General Electric has reported more than $12 billion in savings due to Six Sigma.

• Motorola reported a saving of $15 million in over 11 years (Foster, 2007).

• Wipro maturity with six sigma resulted into: 30-40% lower total cost of ownership 20-30% higher productivity On-time deliveries (93% projects completed on

time) Lower field defect rates (67% lower than

industry average).

WIPROA Case Study

Background


• Wipro Limited was established in 1945 and commenced its operations in 1946 as a vegetable oil company. In the early 1980s, Wipro diversified into the Information Technology sector.

• Today, Wipro Technologies has become a global service provider.

• Integrating Six Sigma concepts was also intended to bring rigor in effective upstream processes of the software development life cycle. Implementation of Six Sigma methodologies brought in quantitative understanding, cost savings, and performance improvement towards product quality.

• Some of the key challenges involved were:

• Reduce the data transfer time• Reduce the risk• Avoid interruption due to LAN/WAN downtime.• Parallel availability of the switch for the other

administrative tasks during the same period.

Evolution of Six Sigma at Wipro


• Wipro is the first Indian company to adopt Six Sigma. Today, Wipro has one of the most mature Six Sigma programs in the industry ensuring that 91% of the projects are completed on schedule, mush above the industry average of 55%.

• As the pioneers of Six Sigma in India, Wipro has already put around ten years into process improvement through Six Sigma. Along the way, it has scaled Six Sigma ladder, while helping to roll out over 1000 projects.

• It is an umbrella initiative covering all business units and divisions so that it could transform itself in a world class organization. At Wipro, it means:

Have products and services meet global benchmarks Ensure robust processes within the organization Consistently meet and exceed customer expectations Make Quality a culture within.

Difficulties Encountered & Lessons Learnt


• Building the Culture

• Project selection

• Training

• Resources

• Project Reviews

Implementation of Six Sigma at Wipro


Wipro has adopted the project approach for Six Sigma. •For developing new processes:

• DSSS+ Methodology – for software development. • DSSP Methodology – used for designing new processes

and products• DCAM Methodology – used for designing for customer

satisfaction and manufacturability

•For Improving Existing Processes• TQSS Methodology –used for defect reduction in

Transactional processes.• DMAIC Methodology -used for process improvement in

Non-transactional process

•For Reengineering• CFPM Methodology - used for cross functional Process

mapping.

Implementation of Six Sigma at Wipro


Six Sigma projects at Wipro are:• Driven by business heads, also called Champions for the

projects.• Led by Green Belts (GB)• Assisted by Black Belts (BB) The Management of the project at Wipro follows the

following tools for implementation of Six Sigma:• Ideation• Definition• Selection• Tracking• Reporting

Currently 15000+ employees are trained in Six Sigma methodologies. Wipro has also built up a Six Sigma skill base of over 180 certified black belts while helping to roll out over a 1000 projects.

Reaping the Benefits


The financial gain that Wipro has achieved by using Six Sigma has been one of the high points. As the Six Sigma initiative started maturing Wipro identified two major phenomenon's:

•The biggest projects had all been completed•The Yellow-belt culture had cured little problems before they became big ones.



Objective of Six Sigma Implementation at Wipro has continuously been on integrating and implementing approaches through a simultaneous focus on defect reduction, timeliness, and productivity.

This has translated to lower maintenance costs, schedule-overrun costs, and development costs for customers. Towards this, Six Sigma concepts have played an important role in: •Improving performance•Improving the effectiveness in upstream processes of the software development life cycle.•Waste elimination and increased productivity up to 35%.•Cost of failure avoidance.•Tangible cost savings due to lower application development cost for customer.



The results of achieving Six Sigma are rapid and overwhelming at Wipro. Its unique methodology provides Six Sigma knowledge and skills to the client, enabling the client to create ownership, generate results and sustain success.

The maturity of Wipro’s quality processes takes the benefits to another level, ensuring that the customers benefit from:•30-40% lower total cost of ownership•20-30% higher productivity•On-time deliveries (93% projects completed on time)•Lower field defect rates (67% lower than industry average).

The performance enhancement enabled the client to have an improved product with the overriding benefit that the end customer perception of the quality of the client’s product is improved.

Conclusion


• A gauge of quality and efficiency, Six Sigma is also a measure of excellence. Embarking on a Six Sigma program means delivering top-quality service and products while virtually eliminating all internal inefficiencies (Dedhia, 2005).

• A true Six Sigma organization produces not only

excellent product but also maintains highly efficient production and administrative systems that work effectively with the company's other service processes (Lucas, 2002).

• The primary factor in the successful implementation of a six sigma project is to have the necessary resources, the support and leadership of top management.

Thank you.

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