Syntel CQA Forum Six Sigma CQA Doc No 26

Introduction 3. Analyze by identifying key causes and

process determinants.
An increasing number of executives are
proving that a revolutionary concept called 4. Improve by changing the process and
Six Sigma produces unparalleled results in optimizing performance.
meeting customer needs by achieving 5. Control by holding the gains.
near perfection in the quality of products
and services of all kinds. The Six Sigma The process is a method of translating a
process has become the new world customer’s needs into separate tasks and
standard for improving quality, reducing defining the optimum specification for
defects and cutting costs. A surprising each, depending on how all of the tasks
bonus is that it also raises employee interact. Based on what the process
professionalism and job satisfaction to new reveals, the steps that follow can have a
heights for organizations of all types. powerful effect on the quality of products,
the performance of customer services, and
Six Sigma is a rigorous, focused and highly in the professional development of
effective implementation of proven quality employees. Six Sigma can reduce defects
principles and techniques. Incorporating in products and services to unprecedented
elements from the work of many quality levels because of its strong emphasis on
pioneers, Six Sigma aims for virtually error statistical analysis and measurement for
free business performance. Sigma, σ is a product design, manufacturing and the
letter in the Greek alphabet used by entire area of customer-oriented activities.
statisticians to measure the variability in
any process. A company's performance is Infrastructure
measured by the sigma level of their A very powerful feature of Six Sigma is the
business processes. Traditionally creation of an infrastructure to assure that
companies accepted three or four sigma performance improvement activities have
performance levels as the norm, despite the necessary resources Six Sigma makes
the fact that these processes created improvement and change the full-time job
between 6,200 and 67,000 problems per of a small but critical percentage of the
million opportunities! The Six Sigma organization's personnel. These full time
standard of 3.4 problems per million change agents are the catalysts that
opportunities is a response to the institutionalize change.
increasing expectations of customers and
Leadership
the increased complexity of modern
products and processes. Six Sigma involves changing major
business value streams that cut across
Today, thanks to many practitioners, the
organizational barriers. It is the means by
five-step approach to Six Sigma has
which the organization's strategic goals
become a standardized process. It is
are to be achieved. This effort cannot be
different from other quality efforts because
lead by anyone other than the CEO, who is
it targets higher standards of quality and
responsible for the performance of the
lower defects, which the customer defines.
organization as a whole. Six Sigma must
It catches mistakes before they happen.
be implemented from the top-down.
More specifically, it is a disciplined effort
that examines a company’s processes for Champions and Sponsors
product designs, production, suppliers,
Six Sigma champions are high-level
services and organizations very precisely.
individuals who understand Six Sigma and
Six Sigma’s five-step process is: are committed to its success. In larger
organizations Six Sigma will be lead by a
1. Define by identifying, prioritizing and
full time, high level champion, such as an
selecting the right project(s).
Executive Vice-President. In all
2. Measure key product characteristics, organizations, champions also include
process parameters and performance. informal leaders who use Six Sigma in
their day-to-day work and communicate
the Six Sigma message at every
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Syntel CQA Forum Six Sigma CQA Doc No 26
opportunity. Sponsors are owners of Staffing Levels and Expected Returns
processes and systems who help initiate
The number of full time personnel devoted
and coordinate Six Sigma improvement
to Six Sigma is not large. Mature Six Sigma
activities in their areas of responsibilities.
programs, such as those of Motorola,
Master Black Belt General Electric, Johnson & Johnson,
AlliedSignal, and others average about
This is the highest level of technical and
one-percent of their workforce as Black
organizational proficiency. Master Black
Belts. There is usually about one Master
Belts provide technical leadership of the
Black Belts for every ten Black Belts, or
Six Sigma program. Master Black Belts
about 1 Master Black Belt per 1,000
must be able to assist Black Belts in
employees. A Black Belt will typically
applying the methods correctly in unusual
complete 5 to 7 projects per year. Project
situations.
teams are lead by Green Belts, who, unlike
Black Belt Black Belts and Master Black Belts, are not
Candidates for Black Belt status are employed full time in the Six Sigma
technically oriented individuals held in program. Black Belts are highly prized
high regard by their peers. They should be employees and are often recruited for key
actively involved in the process of management positions elsewhere in the
organizational change and development. company. After Six Sigma has been in
At a minimum, they should understand place for three or more years, the number
one or more operating systems, of former Black Belts tends to be about the
spreadsheets, database managers, same as the number of active Black Belts.
presentation programs, and word Estimated savings per project varies from
processors. Six Sigma Black Belts work to organization to organization. Reported
extract actionable knowledge from an results average about US$150,000 to
organization’s information warehouse. US$243,000. These are not the huge
Green Belt mega-projects pursued by Re-engineering.
Still, by completing 5 to 7 projects per year
Green Belts are Six Sigma project leaders per Black Belt the company will add in
capable of forming and facilitating Six excess of US$1 million per year per Black
Sigma teams and managing Six Sigma Belt to its bottom line.
projects from concept to completion.
For a company with 1,000 employees the
To lead a Six Sigma revolution, every numbers would look something like this:
CEO must do seven things:
Master Black Belts: 1
• Set up and serve on the company’s
Black Belts: 10
management council to get Six Sigma
started. Projects: = 50 to 70 (5 to 7 per
• Establish goals for the process. Black Belt)
• Lead the deployment process. Estimated saving: US$9 million to
• Allocate needed resources. US$14.6 million (US$14,580 per
• Assign responsibilities for review and employee)
measurement.
• Lead the recognition ceremonies. Conclusion
• Revise the company’s reward system.
Successful deployment of Six Sigma
Top management can overcome the
involves focusing on a small number of
powerful forces in any company that may
high-leverage items. Following are the
resist unity of direction. The answer is to
steps required to successfully implement
find a universal thought process like Six
Six Sigma.
Sigma - a common way of thinking about
quality - that fits all functions in an
organization. • Successful performance improvement
must begin with senior leadership.
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Syntel CQA Forum Six Sigma CQA Doc No 26
• Systems should be developed for of poor quality
establishing close communication with
customers, employees, and suppliers. Minimum number of 3 10 20
• Training needs are to be rigorously projects to be identified
for breakeven
assessed.
• A framework for continuous process Minimum number of 6-8 15- 35-
improvement should be developed, projects to be identified 25 50
along with a system of indicators for for 100% return on
monitoring progress and success. investment.
• Business processes to be improved Source : Motorola
should be chosen by management, and
by people with intimate process (Note : In this analysis several
knowledge at all levels of the assumptions are made about the average
organization. project size, sales, number of employees
• Six Sigma projects are to be conducted to be trained as Six Sigma Green Belt or
by individual employees and teams Black Belt, and the cost of poor quality in a
lead by Green Belts and assisted by company.)
Black Belts.
Although the approach is simple, it is by no
means easy. However, the results justify
the effort expended. Research has shown
that firms that successfully implement Six
Sigma perform better in virtually every
business category, including return on
sales, return on investment, employment
growth, and share price increase.
Depending on the circumstances, it is not
always necessary to achieve Six Sigma,
but you should aim for the levels that will
significantly improve quality and reduce
defects. Using the basic Six Sigma set of
tools, an organization can pursue the
process step by step to achieve the
necessary results for its purposes and not
have to reach the ultimate potential.
Companies must build around their
capabilities and proceed at a level
consistent with their resources.
Cost of implementation
Six Sigma implementation need analysis
table.
Number of employees 10 500 1
0 000
Annual Sales $ (millions) 10 50 100
Cost of implementing 0.5 1.5 3
Six Sigma $ (millions)
Cost of poor quality $ 2 10 20
(millions)
Cost of implementing 25 15 15
Six Sigma as a % of cost
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