Overview – Six Sigma

Six Sigma – Quality at the Core

Six Sigma can be defined as a highly disciplined process that
helps in developing and delivering near-perfect products and
services. In today's highly competitive business environment,
companies must delight customers and relentlessly look for
new ways to exceed their customers’ expectations. To achieve
this, it is imperative that Six Sigma Quality becomes a part of
corporate culture. Increased cost efficiency is only one side of
the profit equation, increasing customer value to business and
increasing customer base, belonging to the other side to the
profit equation, are equally important aceas of opportunity
offered by the Six Sigma approach. Global corporations such
as GE, Motorola, and Johnson & Johnson who hasve benefited
immensely from their Six Sigma initiatives demonstrate this
aptly.
The Evolution
Motorola, the US-based mobile equipment giant, is credited for
pioneering the concept of Six Sigma. The company began six
Sigma initiative in the wake of tough competition it faced from
Japanese rivals during the 1980s.
Six Sigma enabled Motorola with a simple and confident way to
track and compare performances based on customers’
requirements (the sigma measure) and an ambitious target of
practically perfect quality (the Six Sigma goal). The Six Sigma
initiative helped Motorola strive for goals which appeared
impossible in the beginning: an initial target in the early 1980s
of ten times improvement over five years, was further raised to
a goal of 10 times improvement every two years – or 100 times
in four years.
Between 1987 and 1997, the company’s sales jumped fie-fold,
while its profits grew at nearly 20 percent per year. Further, it
made a cumulative saving of $14 billion.
The Rewards of Six Sigma
Share a common goal: what everyone has in common is the
delivery of products, services, or information to customers. It
enables each individual, each business unit, and function in the
organization assess their performance against the Six Sigma
goal of near perfect product i.e. 99.997 percent “perfect.”
Value to customers : This can be achieved only when
businesses are able to deliver products or services, which are
defect free and meet their customers’ expectations well. What
value means to customers and planning how to deliver it to
them profitably.
Dealing with strategic changes: As the business environment
becomes more and more tough owning to rapid technological
changes and shifting consumer preferences, bringing
innovative products and services to the marketplace and
tapping new area of growth have emerged as major challenges
for companies.
The Six Sigma Roadmap
The roadmap for establishing the Six Sigma system essentially
comprises five activities
Identifying core processes and key customers
Defining customer requirement
Measuring current performance
Prioritizing, analyzing, and implementing improvements
Expanding and integrating the Six Sigma system
One may likely need to adjust the order of these step, or even
start more than one of them simultaneously.
One of the units of GE spent nearly two years launching
dozens of Six Sigma improvement projects – starting at Step 4
of the Roadmap. However, despite their begets intentions and
efforts to make those projects pay off, the rate of success did
not meet expectations. Having realized it, the company
revisited the Roadmap and then installed systems and
processes to gather real-time voice of the customer data
(step2, as well as measures to evaluate performance against
customer “Critical to Quality” criteria (Step 3)> As a result, the
company’s improvement efforts were focused on real customer
needs.
THE SIX SIGMA APPROACH
“ Six Sigma is a highly disciplined approach used to
achieve break to through improvement in manufacturing,
engineering, and business process. It help to reduce the
process variations to the extent that the level of defects is
drastically reduced to less than 3.4 defects per million
process, product, or service opportunities (DPMO). Six
Sigma projects are identified first, the impact on the
bottom-line next, and family, the impact on customer
satisfaction.”
What is Six Sigma?
Six sigma is a highly disciplined approach used to reduce
the
process variations to the extent that the level of defects are
drastically reduced to less than 3.4 per million process, product
or service opportunity (DPMO). The properties of normal
distribution:
99.73% of the area lies within mean m +3σ
95.46% of the area lies within means m +2σ
68.26% of the area lies within mean m +σ
Another concept that is used as a metric in six sigma is Rolled
Throughput Yield (RTY). Let us assume that a part goes
through ten operations. At each stage 99 percent parts are
good and 1 per cent are rejected. It is not very difficult to
calculate that we get good 90.43 per cent parts at the end of
the tenth stage. This means if we start with a batch of 1000
parts, we get 904 good parts and scrap or rework 96 parts! The
RTY of the process is 90.43 per cent.
Strategies for Six Sigma Introduction
There are three different strategies adopted by difficult
organizations:
The six sigma organization
The six sigma engineering organization
Strategic selection of six sigma projects.

1. The Six Sigma Organization

In this strategy, the whole organization is trained on six sigma
philosophy and methods. The training is of varying depth for
various levels. Six sigma serves as motivational device and
also as metric. Goals are defined in terms of sigma, large
resources are required for training.
The Six Sigma Engineering Orgnaization.
The projects objectives are usually based of new products,
product changes or problem solving. One of the advantages
is the relatively higher level of educational and technical
background of the individuals that enables them to learn at a
faster

pace. On the other hand, individuals from other functions do

not appreciate the efforts in absence of the awareness of the
techniques.
Strategic Selection of Six Sigma Projects
Six sigma projects are identified considering the:
Strategic direction of the company.
Impact on the bottomline.
Impact on customer satisfaction.
The project having impact requires project leaders with high
degree of competence. Full time project (sometimes called the
Black Belts) are selected to execute the project. The project
leaders go through in-depth training of six sigma approach and
tools and work full time on the project. The project is expected
to be completed in about six months. The projects of lesser
complexity may not required full time resource. Project leaders
of such projects are chosen from the same functional area.
These are sometimes called Green Belts.
Some of the engineer tend to get isolated
Communication barrier due to lack of common language.
Failure to develop management understanding.
Criticism on Six Sigma
Many feel that the tools used in the approach have been
existing and only quantification of the metrics and direct relation
to the bottomline makes it somewhat different.
Another major criticism is about the price tag attached to the
six sigma training. Typical price tag of a four-week black bet
course is $ 25,000!
Conclusion
Different strategies are used by organization to introduce and
deploy six sigma approach. Each of these strategies has
advantages and potential failure modes that must be
addressed and avoided.
The Element of Six Sigma
Some of the elements that make up a general Six Sigma
initiative are:
Unit: A unit is any item that is produced or processed which
is liable for measurement or evaluation against
predetermined criteria or standards.
Opportunity: An opportunity is any area within a product,
process, service, or other system where a defect could be
produced or where you fail to achieve the ideal product in
the eyes of the customer. An opportunity is anything that
you inspect, measure, or test on a unit that provides a
chance of allowing a defect.
CTQ: CTQs (critical to Quality) are the key measurable
characteristics of a must be met in order to satisfy the
customer. CTQs are what the customer expects of a needs
quite well but it is up to the business to convert those needs
to measurable terms.
Defect: any type of undesired result is a defect. A failure to
meet one of the acceptance criteria of your customers. At a
very general level, a defect is a failure to conform to
requirements and this is the case whether or not those
requirements have been articulated or specified.
Defect perUnit: DPU or defects per unit is the average
number of defects observed when sampling a certain
population. It is a ratio of the number of defects over the
number of units tested
DPMO: Defects per Million Opportunities (DPMO) is the
average number of defects per unit observed during an
average production run divided by the number of
opportunities to make a defect on the product under study
during that run normalized to one million. Defects per
Million Opportunities is synonymous with Parts per Million
(PPM). To convert the DPU to DPMO you simply multiply
the DPU by 1,000,000.
Defects %: The total number of defects counted on the
population in question divided by the total population count
gives Defects %.
Yield: Yield is the percentage of a process that is free of
defects. Another way to put it is that yield is defined as a
percentage of met commitments (The sum total of defect free
events) over the total number of opportunities for which that
defect could appear. Firs time Yield (FTY) and Rolled
Throughput Yield is the number of good units produced divided
by the number of total units going in to the process. The FTY
(also called the Firs Pass Yield is a good tool that can help
measure the amount of rework in a given process.
A Targeted Approach
Six Sigma can and should be applied as a targeted
approach. Six Sigma is also about asking operational
questions as you implement that targeted approach.
What are our overall business or process results> Are we
meeting deadlines and profit goals? Are there areas
(business units, products, processes) that are
underperforming? Is there a lot of variation in our output
performance?
How effectively do we focus on and meet customer
requirements? Do we compete mainly on price? What kind
of value do we convey to our customers? Does our service
match the quality of our products? How successful are our
new products or service when released to the market?
How efficiently are we operating? What level of rework and /
or waste exists? Are we always solving problems that we
never actually improve things? What is our cost per unit? Are
our processes enhancing our ability to deliver value to
customers or just enforcing rules and policies?
Six Sigma projects begin and end with business considerations.
Project selection and tracking focus on maximizing the benefit
delivered to the business bottomline. Much of Six Sigma project
success is measured in financial terms.
Drive for Perfection; Tolerance for Failure
The customer’s definition of “perfect” changes and the
organization’s will as well. Be willing to accept and manage
occasional setbacks. you have to have this tolerance else you
will never try anything new because of the consequences of
mistakes. Six Sigma is a “comprehensive and flexible system
for achieving sustaining and maximizing business success. Six
Sigma is uniquely driven by close understanding of customer
needs, disciplined use of facts, data, and statistical analysis,
and diligent attention to managing, improving, and reinventing
business processes,”
“Business” is an interconnected system of processes
and customers. A system is a combination of the technology
and people working together to solve problems in order to
reach goals. Quality System is a framework for actions that
are constantly optimizing productivity, communication, and
value within a business in order to achieve the aim of
measuring the attributes, properties, and characteristics of
product in the context of the expectations and needs of
customers and users of the product.
Habits that drive a culture be effective so that they drive
towards customer satisfaction, profitability, and
competitiveness. These are three elements that an
organization is (or should be!) concerned with. You need a
flexible system for sustained improvement. You do not want
to tie your overall strategy into a single method or process but
rather you want a way to improve upon and sustain the
contextual successes of various type of methods and
processes.
As a final note on the focus of Six Sigma, realize that it is
broken up into three Parts:
Business transformation: A major shift in how the organization
works; aka culture change.
Strategic improvement: Targets key strategic or operational
weaknesses or opportunities.
Problem solving: Fixes specific areas of high cost, rework or
delays.
“Six sigma delivers impressive reductions in cost and, it also
brings about improvements in customer satisfaction by
increasing performance and reducing variation potentially. But
there is much more to six sigma than cost reduction.”
Prof. Tony Bendell and Ted Marra explain why.
Six Sigma focuses on Juran’s concept of project-by-project
improvement with clear responsibilities and authority; and
before and after performance measurement, typically on a cost
basis. It also relies (for its power) on the use of 140 statistical
tools and concepts to effectively define, measure, analyze and
control variation.
Typically, a black belt will train for 20 fays and a green belt 10
to15, but the integrated projects approach ensures that the
transfer of theory to application takes place quickly and
effectively.
 Is it about the Customers or not?
Causality with The Simplified Cost
Six Sigma Objectives Down Operational Model

Variation down
and Variation down
performance up and
performance up
Defectivity down
Defectivity down
Customer Cost down
satisfaction Cost down
up
 An Alternative Six Sigma
Causal Model
Variation down
and
performance up

Defectivity down

Cost down Customer

satisfaction up

Sales up through
increased
customer value
and new
customers

Profit up
Three areas of opportunity for six sigma project in
customer-focused organizations are:
• Reductions in costs
• Increasing customer value to the business
• Increasing customer base – if the market is
constant, this would equate to increasing
marketshare.
Which of these three opportunities you focus on largely
reflects the culture in which you are working, but it may
make a major difference to project activity.
The traditional six sigma approach focuses on cost and
time minimization, which is applicable in both
manufacturing as service industries.
Whilst cost down is clearly results-driven, it is more
easily measurable than the other
results categories of customer value and marketshare,
which are slower to respond and more affected by other
influences.
Profit maximization rather than cost minimization should
take place in sales and marketing rather than just
manufacturing but also that different types of project and
project team are required to respond to maximization of
customer value. Projects and project teams should no
longer be so artificially confined to single functional area,
but will need to become multifunctional in nature and
broader and bigger.
How do we implement this broader concept of six sigma?
Keep the six sigma infrastructure - the project basis, clear
responsibility, integrated training etc. – but extend the
toolkit and methodology.
Strategically, the starting point, whether your
organization is new to six
sigma or very experienced, is to take stock of your objectives or
desired outcomes. The next stage is to think through the causal
theory connect your desired objectives or outcome to the
processes of your business.
Customer-focused six sigma is not fundamentally different to
traditional six sigma, it is just more sensible and less limited.
But it does need a cultural change and a less functional way of
organizing – and it’s worth it.
For successful execution of a six sigma project it is important to
have a well laid-out infrastructure in place. The six sigma
infrastructure comprises of mainly four elements, namely,
Project Identification Process; Leadership Training; Practitioner
Training; and Project Tracking and Support. Although, the
success of a six sigma initiative would depend on all of these
four elements, Project Tracking and Support is most often the
determinant of truly successful programs.
Successful executives are highly focused on one fundamental
goal: Increasing the value of the firm while simultaneously
honoring the social responsibility of the firm.
Increasing the value of the firm typically involves three steps
shown in Figure
 Leadership
Pyramid

Value
Increase
Strategy
Methodology &
Infrastructure
Organizational
Activities & Resources
Six Sigma has been utilized in manufacturing as well as in
service and other non-manufacturing environments. It is
successful because no-value added expenses often
represent up to 50 percent of an organization’s cost
structure, thus providing savvy leadership a veritable
goldmine of quantifiable opportunity. Typical opportunities
that are addressed with this approach are: Low yield,
warranty claims, defects, excessive inspection, high
inventory levels, administrative and financial errors, etc.
The six sigma infrastructure consists of the following
elements:

•Project Identification Process

•Leadership Training
•Practitioner Training
•Project Tracking and Support
The Practitioner Training is depending on the ability, time
commitment, and project opportunities, three training levels are
commonly found:
•Greenbelts
•Blackbelts
•Masters
Greenbelts are formally trained for the duration of 5-10 days.
They are exposed to the fundamental tools that are required on
almost any project. Greenbelts are typically not removed from
their day-to-day function and complete project work as part of
their normal task.
Blackbelts are usually trained for 20-25 days over the course
of 4-5 months. They typically attend 5 consecutive days of
classroom training, then apply the learned principles on their
respective projects before they return to the classroom for the
next 5-day-session of training. Blackbelts are typically
dedicated to the improvement effort for the duration of the
training.
Masters are those individuals that may eventually replace the
external consultants. They should be rigorously trained and
gain additional, technically much more complex, project
experience. The duration for Masters training is 12-18 months.
Project tracking and support” Project tracking should be well-
integrated into the business tracking mechanism. Management
must have visibility of project progress, such that poor
performance is immediately recognized and addressed.
Project support is most often the determinant of truly
successful programs. Especially when the organization is
new to the methodology, the availability of both onsite and
offsite support is critical to ensure projects move quickly.
The infrastructure associated with Six Sigma is applicable
across industries, functions and cultures. The detailed
program content, the exact tools and their presentation
must be altered and supplemented to provide the most
efficient tool set given the operational challenges and
opportunities of the specific firm.
In service applications, yet other tools must be provided in
addition to the ones traditionally used in manufacturing.
Six Sigma has proven to be a substantial value generator
for many organizations. If operational opportunities exist,
Six Sigma has proven to be a methodology, executives
can utilize to increase firm value without making large
investments.
Six Sigma’s Intangibles
Tody’s global businesses operate across a diverse range of
geographies and cultures, offering a wide range of products
and services from different business units. Six sigma
companies can become more than the sum of their parts
through a shared problem-solving language that creates
common ground and accelerates the learning process across
organizational and national boundaries.
If six sigma defects per million opportunities is just incidental.
The real benefits are new ways of thinking and a culture of
accountability that manifest when a company earnestly pursues
six sigma.
Statistical Thinking: Variation
Becoming a Six Sigma organization means embracing the
fundamentals of statistical thinking:
 • All outcomes are produced through a series of
interconnected processes
• All processes vary
The keys to success are understanding and reducing
variation.

Most organizations report and manage averages. Customers

don’t experience your average – they experience your
variability.

Understanding the importance of variation gives Six Sigma

companies another evenue for improving. They move their
averages by understanding and reducing the variation of
processes that affect customers.
Causal Thinking and leading Indicators
A third kind of thinking that permeates Six Sigma organizations
is causal thinking. This is often expressed as y = f(x1, x2, x3…
xn).”y” is some outcome you care about. “f” is read” is a
function of” and the x1, x2, x3…xn are the key factors that
influence the outcome you are trying to drive.
For example, you are trying to reduce the cycle time for credit
approvals. Let’s say the credit approval process consists of four
steps: submission, keying, decision and notification. The overall
cycle time is obviously a function of the cycle time of each step.
The cycle time of each sub-step would be a function of other
variable such as resource availability, number of steps, wait
queues, method of transmission/notification, amount of missing
information on the application from, etc.
How do you begin to identify the key xs? The first step is to
make the invisible variation visible. Why is there so much
variation in this process?
Once the key Xs have been identified, they become leading
indicators or early warning systems for the performance of
the Ys (i.e., outcomes) you are trying to improve.

This is the beginning of an internal business dashboard (that

augments the customer dashboard described previously).
These dashboards are displayed and discussed in open
forums and show, in no uncertain terms, whether you’re
getting better.
Even if you never achieved 3.4 DPMO, what would it mean to
have employees in your company thinking about causes,
generating hypotheses, tracking leading measures posted
prominently so you can tell if you’re improving or not?
Common Language and Accelerated Learning
Six Sigma companies have another tool. They become more
than the sum of their parts through a shared problem-solving
language that creates common ground and accelerates the
learning process across organizational boundaries.
Despite internal organizational differences, the need to
increase customer effectiveness and shareholder efficiency are
common denominators. As Six Sigma methodology becomes
part of the way business is done, everyone thinks about and
attacks efficiency and effectiveness challenges with a similar
approach.
This common approach/language facilitates best-practice
sharing and can dramatically accelerate the bearing process
and speed of improvements.
In the face of increasingly fierce global competition, it would be
a mistake to underestimate the kind of competitive advantage
that can be achieved by accelerating the learning process
organization-wide.
A Culture of Accountability
A broad quest for Six Sigma, both inside and outside
operational areas, catalyzes a top-to-bottom change in thinking
and in the way work gets done.
Six Sigma companies understand customer specifications.
Continuously monitor outcome and leading indicator
performance and report performance in open forums.

The synergistic, net effect of these changes is the creation of a

“culture of accountability.” Accountability to customers to drive
out variation and meet their specifications; accountability to
shareholders to improve efficiency of internal processes; and
accountability to employees to make the investments and
remove roadblocks so efficiency and effectiveness
improvements can be achieved and maintained.
When (or even if) achievement of 3.4 DPMO is incidental, the
transformation of your company would have occurred long
before.
Total Customer Satisfaction

Six Sigma projects should focus on the customer and not on

the product. People should look outwards, shifting from an
organizational focus to a customer focus. Improvement can
really begin once companies assessed the defect levels of
their customer’s experience, and the internal defects, which
require rework, and additional inspections, and, this would
hold the key to success for any six sigma initiative.
It’s a concept for now and well into the next century: focusing
on the customer and not the product! It results in a cultural
change in a company, a paradigm shift towards an
expectation of the highest quality, which then drives a passion
for continuous improvement by all the players.
Motorola, whose education and training arm, Motorola
University (MU) teaches the Six Sigma concepts and courses,
has saved billions of dollars for tits worldwide corporation by
following what they teach.
A performance level of Six Sigma equates to 3.4 defects per
one million opportunities – not perfect, but pretty close. At
99.73 percent quality, you have at least 54,00 wrong dug
prescriptions each year, more than 40,500 wrong babies
accidentally dropped in the hospital each year and unsafe
drinking water almost 2 hours each month. In comparison, at
six Sigma quality, you’d get one wrong drug prescription in 25
years, three newborn babies dropped in 100 years and unsafe
drinking water one second every 16 years.
Making a Change
Chairman AH Premji felt that Indian industry needed to
substantially upgrade its understanding and practice of quality
to compate in the international market.
He plunged into researching the methodologies adopted by
Japanese, European and American companies.
The chairman and senior management had a six-day training
retreat, then 12 facilitators, chosen from among successful line
managers, were trained. Six Sigma is attainable with time and
Accepting the Challenge
Making designs more robust and reducing the opportunity for
defects to creep into the final product is a one-time expense. If
it’s not done, the cost of repairs, rework, excessive scrap and
unhappy customers will continue through the product’s life.
Product complexity is growing exponentially. A three-to-four
Sigma level, average for most US companies, can cost a
company as much as 10-15 percent of its revenues. For GE,
that would mean $8-12 billion. Wipro also reports successes in
its first year. “First of all, we now have a common language
across our divisions. People now talk about the customer,
defects, Sigma level and a plan for continuous improvement,
“In India, many people have difficulty giving up the old and
embracing the new. But the mindset is changing. Six Sigma is
making people look outwards, and we are shifting from an
organizational focus to a customer focus,”
The First Step
Other re-engineering programs often advocate tearing down an
organization and rebuilding from scratch. MU’s attitude and
advice is to start where you are, build on current successes and
modify your current processes.

The key components of the MU Six Sigma program are: a goal

of total customer satisfaction; a common language throughout
the organization at all levels and at all functions; common,
uniform quality measurement techniques for all business areas;
goals with identical improvement rates, based on uniform
matrices; coordinated training in “why” and “how” to achieve the
goal. There is no one set procedure. Every company is different
and one must account for each organization’s strengths and
weaknesses and leverage them accordingly.
Management by Facts, not Emotion
Six Sigma champions say there are plenty of things to count
and measure and benchmark regardless of the type of
business, whether it’s an attorney’s office or a car rental
company. And within a company, you can look at all kinds of
divisions – personnel policies, warehousing, security, how to
run the cafeteria.
Perhaps the biggest mandate of Six Sigma is NEVER REST
Many companies who are content with their current quality level
simply don’t understand the real challenge of quality. They
need to determine not only the defect levels their customers
experience, but also the internal defects which require rework,
additional inspections, and product higher costs. Once you
have a full assessment, then improvement can really begin.
Six Sigma – Getting Started
To start a successful Six Sigma implementation, an
organization has to begin with a three-step procedure. In the
first step, the organization has to determine what it knows
about its customers and competitors. The next step is to
develop a vision of how Six Sigma can help the organization
meet its business goals. The third step involves holding Six
Sigma improvement workshops so as to make people
familiar with Six Sigma improvement workshops so as to
make people familiar with Six Sigma methods and strategy
and how they will be integrated into the organization’s
existing business plan to drive improved performance and
lower costs.
Blakeslee’s seven requirements for successful six sigma
investments:
1. Successful six sigma implementations are driven by
committed leaders with ‘edge’… the ability to make tough
decisions with long-term implications.
2. Six Sigma efforts must be integrated with existing
initiatives, business strategy, and key performance
measures.
3. Successful Six Sigma efforts are supported with a
framework of process thinking. Because it’s such a
robust approach to quality improvement, six sigma can help
a company realize quantum leaps in quality and
competitiveness. But getting there requires a highly
focused approach.
4. Six sigma requires disciplined customer and market
intelligence gathering.
5. Six sigma projects must produce real savings or
revenues.
6. Six sigma efforts are led in the trenches by a trained core
of full-time team leaders… known as ‘blackbelts’ and
‘master blackbelts’
7. six sigma is sustained by continuous reinforcement and
reward of leaders who support initiatives and
improvement teams.
Getting Started
1. Organizational assessment: based on interviews with
business-unit leaders and key staff, the team determines
what the organization knows about its customers and
competitors.
2. Executive action planning workshop: Stage two.. find the
CEO convening a two day session with the company’s
top leadership .. to develop a vision of how six sigma can
help the organization meet its business goals .. the CEO
emphasizes that six sigma will be the primary tool by
which the organization stays tied to its customers and
markets.
3. Leading six sigma improvement workshops: “Within
weeks, the lead business unit convenes a series of
working sessions to begin the six sigma implementation
process. These workshops acquaint people with six
sigma methods and strategy and how they will be
integrated into the unit’s existing business plan to drive
improved performance and lower costs.
4. “Just-in-time six sigma team-leader training: With an
initial portfolio of project ideas now defined and
challenging goals to achieve, six sigma team leaders
convene for training. Over the next 90 to 120 days, the team
has much to accomplish. Four weeks of interactive training
will cover the definition and planning of project goals and the
mapping, measurement, and analysis of existing business
processes. Team members must learn how to measure the
factors on which their customers base buying decisions.
They must learn the concept of statistical thinking, and by the
end of training, know how to do regression anlysis and
design of experiments, conduct sampling, and calculate
process sigma. They must also learn to manage the work of
improvement teams and how to incorporate improvements
into the organization.
Training for Six Sigma
All organizations going for six sigma projects face this dilemma-
should they train all employees or start with targeted
employees. One danger of the top-down, full training approach
is that by the time it reaches the Green Bells actually doing the
project, middle and upper managers may be discouraged by
the lack of progress. Therefore, a blended approach where
executive preparation along with green and black belts training
is preferable.
 Sigma Capabilities
σ Defects per Million Yield
Capability Opportunities (DPMO) (no defects)

2 308,537 69.1%

3 66,807 93.3%

4 6,210 9.4%

5 233 99.97%

6 3.4 99.99966%

Define, Measure, Analyze, Improve and Control, commonly

referred to as DMAIC.
 Six Sigma Training Levels
Once committed to six sigma methodology, learning can
be organized by degree of employee involvement:

• Yellow Belt
• Green Belt
• Black Belt
• Master Black Belt
• Champion
Yellow belt is a relatively new level, not yet widely accepted.
A three-to five-day quick overview gives participants a basic
understanding of the Six Sigma methodology, including
DMAIC and simple statistical methods. It is often done
onsite, given the large number of employees who can
participate.
Green Belt is the role of project participant. Training is
typically two weeks, separated by about a month, so that the
learner can participate in a six sigma project. Training
consists of the application of DMAIC, project planning,
process analysis and statistical analysis. Certification as a
Green Belt requires work on a project with a reasonable
bottomline improvement,
Black belt plays the role of project leader and sometimes as
coach for a number of projects. Considered the key change
agent, the Black belt must be technically oriented, a master
or the advanced tools and a project leader. Training is
delivered over four weeks separated so that the learner can
lead a six sigma project. Training consists of advanced
statistical methods, project leadership and advanced six
sigma methods. Certification as a black belt requires leading
a project with a higher bottomline improvement.
Master Black Belt has the role of senior leader, manager of
black belts, internal consultant and in-house trainer. Training
lasts four weeks at minimum, often more depending on
additional content. The weeks are separated so that the learner
can lead a six sigma project. Training consists of advanced
statistical methods, project leadership, six sigma methods,
training capabilities and leadership and communication skills.
The champion role is the senior management leader of Sis
sigma implementation. Training of three to four days includes
the basics of six sigma and is designed to prepare the
Champion to give leadership to the Six Sigma team to prepare
the Champion to give leadership to the Six Sigma team.
Leadership Expectations for the CLO

The chief learning officer become a primary leader of change in

the Six Sigma process.
The CLO must ensure that the organization’s employees are
ready to undertake this initiative with the right skills and
understanding. Six Sigma efforts have failed in some
organizations become of the lack of adequate preparation of
the workforce. At times, the technique was relegated to the
“process specialists” who emphasized the tools and not the
change in mindset and culture.

Since Six Sigma is not an event but a transformation, it takes

the seasoned approach of a CLO to continue the dedication to
the effort. Here are some suggestions for tusing the DMAIC
framework to improve the quality of the learning process:
Define: the development of a CTQ tree is vital to ensure that
the proper critical processes are measured and that
improvements are made that have an impact on customers.
Measure: once the key CTQs have been developed, determine
measurable metrics and collect data from customers to
determine how effective learning and training activities have
been. Calculate the number of defects per million opportunities
and find the sigma capability level.
Analyze: Are there certain topics, locations, trainers, materials
or methods that are more or less effective than others?
Improve: find solutions. This is often the most difficult part of
the process since “ways of doing things” will be challenged.
Can training be prove onsite, or would central locations help
keep the costs down?
Control: once new procedures are in place, work on controlling
the process to prevent sliding back to the old way of doing
things. New incentives? Central control of vendor sourcing and
training expenditures?
Selecting Six Sigma Projects – A New Approach
There has been considerable discussion about which projects
to select and how to select them in virtually all companies who
have been engaged in Six Sigma deployments. The authors
have drawn on their experience to develop a new approach
which is covered in this article.

Ensure the responsibility for project selection is delegated by

the process owner to a new Black Belt who has not yet started
training.
Ensure at least three other groups are working on the same
thing but with different deadlines and no defined metrics.
In order to meet the annual cost reduction target, site Master
Black Belt commit to the savings by signing the project charter
in advance whilst ensuring the finance department is not
involved.
Key Factors
Key factors for good six sigma project include vagueness of
scope, lack of resource availability, no up front buy-in,
misalignment with company objectives, low priority and data
unavailability. Since these are difficult to deal with, the six
sigma projects that work best are, ‘just do it’ projects.
Project Scope
Scoping a project can seem difficult. Fortunately there is a
choice. Choose either a ‘boil a teacup’ project such as reduce
scrap on a specific part from 0.25 percent to 0.23 percent.
Project Duration Guidelines
Ideally projects should take much longer than 6 months. A
project should never take less than 4 months or managers will
think it wasn’t worth doing. If you think the project will take
longer than six months don’t fall into the trap of splitting it into
smaller projects and letting the (trainee) Black Belt off the hook.
Finding Suitable Project Sources
There are 4 main sources for six sigma projects. The first is
process quality. Don’t identify processes that are critical to
customer and operating at high defect levels. Instead focus on
the second source-cost savings projects. Cost targets are set,
and then projects are found that will “make the numbers”. The
third source is product focused. Looking focus on a whole
series of processes that feed the product or service. The fourth
and last source is problem focus. Here projects are selected
based on the magnitude of the problem.
Project Idea Generation
There are 3 main options to generating project ideas. Using a
product or process tree (critical to quality/delivery/cost/safety
tree) to focus on Y=f(s). A top down approach can also be
used. After confirming last night’s latest company
goals/objectives, the major issues that may prevent these
objectives being met are reviewed.
Thirdly, a bottom up approach can be used. Managers can
agree that their people have a better handle on what problems
exist in the business and so they may as well pick the projects.
Financial Saving Potential
Include only hard savings and ignore soft savings. Soft savings
are so called because they are really hard to find and quantify.
 Way to A Successful Implementation Process
By Joe Liddane and John Hutchinson

Six Sigma has been hailed as the next great thing in

operational improvement. But can an approach born in
electronics manufacturing and implemented throughout GE
really help to improve financial services? And what needs to be
done to ensure successful implementation? Many have found
the hard way that one size does not fit all.GE had tested Six
Sigma for months to understand the benefits to its business
and fine-tune the implementation requirement. They knew Six
Sigma wouldn’t replace what they were currently doing; it would
enhance their current improvement efforts.
Making Improvements is a Core Activity
World-class companies see improvement as a critical business
process. Improvement has specific measurable goals, a
business plan to reach those goals and resources dedicated to
implementing the plan.
To reinforce his commitment set specific goals, which had to be
achieved in order for management teams to be eligible for
their annual bonus. Integrate improvement into the
performance review system used for other important
business results. Costs, revenues, profits, marketshare and
improvement were on everyone’s goal sheets.
Developing your Improvement Strategy
Successful companies recognize that every improvement
opportunity requires a unique approach.
1. Waste and slack: “Why improve something if it doesn’t need
doing in the first place?”
2. Variability: When variability is measured in a result, it means
some part of the process is out of control. To get to the root
of the variability, improvement teams track it back ‘upstream’
like a gold miner, to the processes that created it.
3. Process errors: Errors are not defects. The latter are passed on
to customers. Errors are still in process, and must be
stopped or they will add cost and reduce quality.
Four Approaches to improvement:

•Fast
•Comprehensive
•Proactive
•Autonomous
Approach

Fast Comprehensive Proactive Autonomous

Waste

Issues
Variability

Errors
Making Improvement Efforts Successful
Those organizations which have learnt how to develop and
sustain a culture of successful improvement recognize the need
to:
•Set ambitious goals and timescales.
•Work top down and bottom up.
•Learn how to scale up.
Using Six Sigma in Safety Metrics
In an organization, the safety function must prove to be value-
added to the business and work towards a world-class safety
culture that helps to place the business at a distinct advantage
among its competitors. Showing safety performance in six
sigma terms helps to justify the time and resources needed to
continue with safety teams and work on projects that
continually improve safety performance.
The safety function must prove to be value-added to the
business and work towards, a world class safety culture that
helps to place the business at a distinct advantage among its
competitors.
In safety, your customers are the employees. Metrics must be
shown along with goals and action plan that demonstrate
accident and injury reduction, cost of accidents as a percent of
manufacturing coasts, and specific goals and action plans that
ensure continual improvement.
 Six Sigma Process
Capability Vs Errors per Million
Opportunities

Sigma Process Capability Defects per Million Opportunities

6 3.4

5 233

4 6,210

3 66,807

2 308,537
Sigma is a statistical measure of variability in a given process.
In manufacturing, for instance, it could be used to measure the
number of sub-standard products. In a service industry, it could
quantify delays in delivery or other customer requirements.
Variation is the cause of defects and out-of-control processes.
Defects that reach the customers are significant problems that
can result in customer dissatisfaction, resultant loss in
customers and the demise of an organization or business.
Team Approach to Six Sigma Safety Metrics
Motorola’s Six Steps to Six Sigma: 1. Identify the product or
service you provide, 2. Identify the customer(s) for your product
or service, 3. Identify your needs, 4. Define the process, 5.
Mistake proof the process, and 6. Ensure continuous
improvement
TCS (Total Customer Satisfaction) teams working on safety
issues. Our service is to provide a safe and healthy work
environment.
Customers are all associates, as well as contractors and
managers. The needs included those tools, processes,
equipment, and /or programs that would eliminate the type of
injury or hazard being targeted. We defined the process of the
root causes contributing to the hazard or injuries so we could
target each. Mistake-proofing the process required testing and
awareness among everyone involved, and finally, continual
improvement involved institutionalizing the remedies so that
process specifications, procedures and awareness across all
groups and functions prevented or greatly reduced the injury or
hazard type.
Over time you have created a safety culture. A culture of
employees and managers who believe that working safely is
esteemed. Pay back is demonstrated to the businesses when
you show the cost of injuries, direct, hidden and total, and that
these
costs are, in fact, a percent of manufacturing costs. When you
demonstrate continual improvement year over year you are
successfully making the safety function value-added to the
business.
Showing the Metrics
The safety professional must show six sigma safety metrics to
managers in quality and operations reviews in order to keep
safety performance on the agenda. Charts showing injuries as
defects in the system, defects per unit, parts permillion in errors
and sigma educate all the managers that safety and accident
prevention can be managed the same as production and
quality.
 Six Sigma in Software
By Jeff Nyman
Six Sigma is applied into software by breaking things up into
failure and fault. In case of an internet Service Provider, it
measures its performance in uptime of available servers. Every
minute of potential uptime (“the service is available”) is an
opportunity, whereas every minute of downtime (“the service is
not available”) is a defect in the eyes of the customer. Six
sigma helps in bringing down this defect level.

In order for any process capability to be accurately calculated in

a Six Sigma sense, one must properly define and quantify the
process defects, units, and opportunities. In Six Sigma this is a
product or service characteristic that must be met to satisfy a
customers specification or requirement or service level
agreement.
Define your Product/Service Units
It is a measurable and observable output of your business
process. It may manifest itself as a physical unit or, if dealing
with a service, it may have specific start and stop points.
Define your Product/Service Opportunities
Simply stated, opportunities are the total number of chances
per unit to have a defect. In Six Sigma in the “manufacturing
sense”, each opportunity must generally be independent of
other opportunities and, like a unit, must be measurable and
observable. The final requirement of an opportunity is that it
directly relates to the customer CTQ. The total count of
opportunities indicates (in one sense) the complexity of product
or service.
Concept or Process?
A lot of people consider Six Sigma to be “only” a statistical concept.
Others say that it is a structured process. In fact it is a three-part
framework: metric, methodology, and philosophy. The philosophy is
the reduction of variation in your business processes and
the adherence to customer-focused, data-driven decisions. A
method for this is often given as DMAIC (Define, Measure,
Analyze, Improve, Control). The metric is often given as DPM)
(Defects per Million Opportunities).
When an automobile is described as “Six Sigma”, this does not
mean that only 3.4 automobiles out of one million will be
defective. Six Sigma means that within a single automobile, the
average opportunity for a defect of a critical-to-quality
characteristic is only 3.4 defects per million opportunities for
such a defect to occur. The more complex a product is, the
greater is the like hood that a defect will exits somewhere with
the product. So while a complex automobile may have more
defects speaker and the automobile can easily have the same
sigma capability. So rather than stating that a product is Six
Sigma, we say that the average opportunity for mon-
conformance within a product is Six Sigma. It is a measure not
of the product, but of the performance of the product.
I software too Unique
Software has a lot of non-unique components I would maintain
when you look at it from the standpoint of units to be tested or
c9onsidered, processes to be implemented, measures to be
taken, and variations to be analyzed. While elements within an
organization will vary and will certainly be unique, much of the
Six Sigma framework can be applied in a very similar fashion.
(the distinction in Six Sigma is between “common causes of
variation” and “special causes of variation”.) One could make
the same argument for t other processes that exist as well. I
think part of the problem is that everyone thinks software
development is so unique and yet studies like design patterns
and software engineering practices suggest that there are a lot
of common grounding elements to the discipline that make it
amenable to something like Six Sigma.
Simple Example
Let us say that an internet Service Provider measures their
performance in uptime of available servers. Every minute of
potential uptime (“the service is available”) is an opportunity,
every minute of downtime (“the service is not available”) is a
defect in the eyes of a customer. Data is continuously taken
(i.e., the server farm is constantly monitored), the process
capability (to maintain the server farm) is measured, and the
yield is calculated to be 99.9 percent. The internet Service
Provider is satisfied with their current performance and the
customer’s needs are being met.
What is an opportunity here?
An opportunity is the lowest defect noticeable by a customer. An
opportunity could be defined as sixty seconds of uptime. Say that this
was determined to be the lowest (shortest) time period that was
noticeable by a customer. Or one might argue instead for twenty
seconds. Or even three seconds. – about the perceptual limit with
most activities on a we-based platform given other technology
What is a defect here?
A defect is defined by the customer as sixty seconds ( or twenty
seconds or three seconds) of downtime. An additional defect
would be noticed for every time unit that elapsed where the
customer did not have access to the Internet Service Provider’s
services (i.e., the web servers).
Applying Six Sigma in Software Development
Six Sigma is a framework that encapsulates a series of very
powerful concept that have empirically proven their worth (or at
least their capability to be effective if utilized appropriately and
in the right context) and Six Sigma attempts to provide a
unifying system for those concepts ( in much the same way that
Rational Unified Process does, but a t a different level). So
saying “Six Sigma is impractical for software” is, to me, like
saying “the Rational Unified Process is impractical for software
development”. Both statements would be treating the concept
as some “thing” instead of a framework that can be utilized to
varying degrees and for varying purposes based on need.
Lean Six Sigma
Business fundamentally exists to make money, either for
shareholders or owners. Lean Six Sigma is a combination of
methodologies to provide your organization with greater speed,
less variation and more bottomline impact that any other
methodology.