Abstract
six
sigma programs are raging through corporations worldwide, with some
corporations citing savings in the $US billions resulting from six sigma
implementation. Six sigma has both proponents and detractors with some arguing
that nothing new is involved and others identifying it as revolutionary. The
view espoused herein argues for six sigma as a methodology within the larger
framework of total quality management - a blend of old and new in the sense
that the tools of six sigma are often familiar ones, but are applied with an
eye that is more strategically focused than historic use of those tools
ordinarily indicates.
TOTAL QUALITY MANAGEMENT:- (CONCEPT)
TQM is a management strategy with a
customer focus, deploying suitable technique to eliminate waste. In all
activities of an organization and seeking continuous improvement. It is
management technique. It is a leadership philosophy with a customer focus. It
is a way of doing business & it is not just a programme. It is a management
strategy. Any strategy has a policy detailed by objectives, a method to meet
the objectives and where the method deploys different techniques and the
techniques supported by goals.
*Continuous
improvement
*Continuous wide
programme
*Management as leader
OBJECTIVES OF TOTAL QUALITY MANAGEMENT:-
1. Meeting the customer requirement.
2. Continuous improvement of quality at
the every level at every state and at every place.
3. Participative problems solving
process.
4. Focused and continuous cost
reduction.
5. Interlink and integrate various
subsystem of the organization.
TQM IMPLIMENTATION / PDCA:-
One
of the guru of the quality ‘WE Deming’ explained PDCA cycle (plan-Do-Check and
ACT) for implementation of TQM in any of the organization.
Plan:
(1)
Lay down and plan policies and objectives of TQM.
(2)Plan method to achieve the objectives of
TQM.
DO
(3) Provide education and training to workers
and managers to Achieve Objectives.
(4)Implement
TQM by introduction never things.
(5)
Check the result by observing them and find cause of the nonConformance
(6) Analyze the results.
(7)
try to act for the preventing undesired effects. (8) Measure the improvement
and design for future.
BLOCK DIAGRAM NO:- 1 (PDCA CIRCLE
INTRODUCTION TO SIX SIGMA:-
Six Sigma was pioneered
by Bill Smith at Motorola in the 1986 and popularized by General Electric (GE)
in the 1990’s. Bill Smith did not really "invent" Six Sigma in the 1980s;
rather, he applied methodologies that had been available since the 1920s
developed by luminaries like Shewhart, Deming,
Juran,
Ishikawa,
Ohno,
Shingo,
Taguchi
and Shainin.Organizations
including Honeywell, Citigroup, Motorola, Starwood Hotels, DuPont, Dow
Chemical, American Standard, Kodak, Sony, IBM, Ford have implemented Six Sigma
programs across diverse business operations ranging from highly industrial or
high-tech manufacturing to service and financial operations . Although not yet
widespread in Vietnam Vietnam Vietnam
What is Six Sigma: -
First, what it is not. It is
not a secret society, a slogan or a cliche. Six Sigma is a highly disciplined
process that helps us focus on developing and delivering near-perfect products
and services. Six Sigma is a statistically-based process improvement
methodology that aims to reduce defects to a rate of 3.4 defects per million
defect opportunities by identifying and eliminating causes of variation in
business processes. Six Sigma focuses on developing a very clear understanding
of customer requirements and is therefore very customer focused.
Why the name Six Sigma: -
Why "Sigma"? The word
is a statistical term that measures how far a given process deviates from
perfection. The term "six sigma process" comes from the notion that if one
has six standard deviations between the mean of a process and the
nearest specification limit, he will make practically no items that exceed the
specifications. The central idea behind
Six Sigma is that if you can measure how many "defects" you have in a
process, you can systematically figure out how to eliminate them and get as
close to "zero defects" as possible. To achieve Six Sigma Quality, a
process must produce no more than 3.4 defects per million opportunities. The "3.4 Defects Per
Million Opportunities (DPMO)" is a gross confusion of the following
situation, for example: A population of 1,100,000 units is manufactured. A
perfect inspection/test process removes the 100,000 defective units. The
remaining 1,000,000 units are thus the intended population and contain no
defective units. Approximately three to four of these measure at Short-term
Mean ±4.5 Sigma or more extreme. The "3.4 per million" is thus a
characteristic of the Normal Distribution that is true of the intended
population, not the defects or defective units.
Key themes in Six Sigma: -
Some of the key themes of Six Sigma can
be summarized as follows:
·
Continuous focus
on the customer’s requirements
·
Using
measurements and statistics to identify and measure variation in the production
process and
other business processes
·
Identifying the
root causes of problems
·
Emphasis on
process improvement to remove variation from the production process or other
Business processes and
therefore lowers defects and improves customer satisfaction
·
Pro-active management
focusing on problem prevention, continuous improvement and constant
Striving for perfection
·
Cross-functional
collaboration within the organization; and
·
Setting very high
targets.
Methodologies of Six Sigma: -
1. DMAIC: - The Six Sigma DMAIC process is
an improvement system for existing processes falling below specification and looking for incremental improvement.
2. DFSS: - The Six Sigma DFSS methodology
has two variations named DMADV (Define, Measure, Analyze, Design, Verify) and DMADOV process (Define, Measure,
Analyze, Design, Optimize, Verify). DFSS is used to develop new processes or
products at Six Sigma quality levels. It can also be employed if a current
process requires more than just incremental improvement. Both Six Sigma
processes are executed by Six Sigma Green Belts and Six Sigma Black Belts and
are overseen by Six Sigma Master Black Belts.
Besides
this the two key methodologies commonly used are: -
1.DMADV: -
Basic Methodology consists of following five steps: -
·
Define the goals of the design
activity of the consistent with customer demands and enterprise strategy.
·
Measure and identify CTQs
(critical to qualities), product capabilities, production process capability,
and risk assessments.
·
Analyze to develop and design alternatives, create high-level design
and evaluate design capability to select the best design.
·
Design details, optimize the design, and plan for design
verification. This phase may require simulations.
·
Verify the design, set up pilot runs, implement production
process and handover to process owners.
2. DMAIC: -
Basic methodologies consists of following five steps: -
- Define the process improvement goals that are consistent with customer
demands and enterprise strategy.
- Measure the current process and collect relevant data for future comparison.
- Analyze to verify relationship and causality
of factors. Determine what the relationship is, and attempt to ensure that
all factors have been considered.
- Improve or optimize the process based upon the analysis using techniques like
Design of Experiments.
- Control to ensure that any variances are corrected before they result in
defects. Set up pilot runs to establish process capability, transition to
production and thereafter continuously measure the process and institute
control mechanisms.
Which quality management systems process
improvement tools have yielded the greatest results?
Six
Sigma
- 53.6 % Problem Solving - 23.2 %
Process
mapping - 35.3
% ISO
9001 -
21.0 %
Root
cause analysis -
33.5 % Process Capability - 20.1 %
Cause-and-effect
analysis - 31.3 % Statistical Process Control - 20.1 %
Lean
thinking/manufacturing - 26.3
% Performance
Metrics - 19.2 %
Benchmarking - 25.0 % Control Charts - 19.2 %
Costs of Six Sigma Projects: -
Although Six Sigma projects can have many benefits and help the company
to save money over the long run, there are also costs associated with Six Sigma
projects. They typically include the following:
·
Direct Payroll -
Payroll expenses for individuals dedicated to the Six Sigma project on a full
time basis.
·
Indirect Payroll
– The cost of time devoted by senior executives, team members, process owners
and others in the implementation of the Six Sigma project.
·
Training and
Consulting – The cost of teaching people Six Sigma skills
·
Improvement
Implementation Costs – The costs of improving the production process to
eliminate the sources of variation identified in the Six Sigma project. This
might involve new equipment, new software, additional personnel costs for newly
formed positions, etc.
·
Software – Some
software such as Minitab Inc.’s Minitab statistical software or Microsoft’s
Visio, for generating flow-charts, may also be required. More advanced software
tools sometimes include Popkin’s System Architect, Proforma’s Provision or
Corel’s iGrafx Process 2006 for Six Sigma.
The six sigma methodology utilizes the Define-Measure-Analyze-Improve-Control (DMAIC) cycle to achieve process excellence.
BLOCK
DIAGRAM NO :- 2
Six Sigma origins
The history of Six
Sigma is a well-documented one and hence we note only briefly here that its
origin as a quality improvement approach in the 1980s can be traced to the
American electronic giant, Motorola where a goal of improving all products -
goods as well as services - by an order of magnitude (e.g. a factor of ten)
within five years was established. This provided an important focus on the improvement
rate and, in particular, that simply “better” may not be sufficient, but that
the critical consideration is that of becoming sufficiently better
expeditiously. Six Sigma clearly focused resources at Motorola, including human
effort, on reducing variation in all processes, that is to say
manufacturing processes, administrative processes and all other
processes. To set a clear measure on the improvement work, the program called
Six Sigma was launched in 1987
defects at a rate of
3.4 defects per million opportunities (DPMO) for defects to arise. Note that
this almost certainly implies more than 3.4 defective units per one million
units, since typically any given unit is sufficiently complex so as to allow
multiple
.It is generally
possible to calibrate the “cost of quality” or - more accurately - the “cost of
poor quality” (CPQ) with the sigma level at which processes perform. Six Sigma
performance levels are generally considered to be world class with the CPQ
being less than 1 per cent of sales. By contrast sigma levels of three, four,
and five produce DPMO rates of 66,807, 6,210, and 233, and corresponding CPQ
ranges of 25-40 percent, 15-25 per cent, and 5-15 percent. These numbers
substantiate the importance of reducing process variation across all key primary
and support processes in an organization as well as variation of that obtained
from suppliers. Without significant divergence from our discussion this clearly
illustrates sound reasoning behind reduction in the number of suppliers used by
an organization that extends beyond negotiation/relationship issues into
statistical ones. A straightforward example of process sigma level estimation
is provided in the first chapter of Harry and Schroeder (2000).
Signs of significant
success at Motorola quickly became apparent. In fact, from 1987 to 1997
Motorola achieved a fivefold growth in sales with profits climbing nearly 20
percent per year, cumulative savings at $US14 billion and stock price gains
compounded to an annual rate of 21.3 percent. Motorola was also cited as the
first winner of America
Soon other companies
became interested in the program and successively more companies were able to
demonstrate good results. As examples, AlliedSignal attained savings of $US2
billion during a five-year period while General Electric saved $US1 billion
over a two year window. Indeed, “big dollar impact” is one of five key reasons
cited by Hoerl (1998) for the success of Six Sigma. The other four reasons
cited by Hoerl for Six Sigma success are ones that any quality advocate should
embrace: continued top management support and enthusiasm, emphasis on a
quantitative and disciplined approach to process improvement, value placed on
understanding and satisfying customer needs, and the manner in which it
combines right projects with the right people and tools.
employees, the year
2000 saw 14 people attending a seven month Black Belt (deep knowledge in Six
Sigma philosophy and methods) education program on a half-time basis, 20 more
people attending a two-day course on Six Sigma, and ten people in the top
management group attending a one-day course on Six Sigma. Six Sigma
applications at this factory saved about $US0.5 million during the first ten
months of 2000 - about $500 per employee over the entire employee base, but
closer to $10,000 per employee trained in Six Sigma methods. In the early
stages of Six Sigma program implementation these figures indicate something on
the order of simple cost recovery with return on investment promised for the
near future, since We believe that the “new” of Six Sigma is its explicit
linking of the tactical with the many companies have reported savings on the
order of $150,000 per Black Belt project with each Black Belt completing four
to six such projects annually.
Is Six Sigma really something new?
While typically
applied consistently within a company, the content of the Six Sigma approach
varies from company to company, consultant to consultant, and author to author.
Generally, however, Six Sigma programs do have some common features, among
which are the following:
It is a top-down,
rather than bottom-up approach.
It is a highly
disciplined approach that typically includes four stages: measure, analyse,
improve and control.
It is a
data-oriented approach, making sound and heavy use of various statistical decision
tools.
It is our position
that from a content perspective Six Sigma does not, in principle, contain
anything new. Its focus on processes and variation is central to what is
historically thought of as “quality control” and can be found in works by W. Edwards
Deming and Walter A. Shewhart. Design of experiments and statistical process
control, both of which are featured in Six Sigma programs, are not new - though
their proactive use to improve processes and products is certainly laudable.
Systematic application of quality tools such as Pareto diagrams and Ishikawa
diagrams in Six Sigma is praiseworthy, but it is with good reason that these
are counted among the so-called “old tools” of quality as these were developed
by the late Kaoru Ishikawa of Japan
So what is it, if
anything, that is new about Six Sigma?
Reed (2000) contends
that there is nothing at all new about Six Sigma and that it “has been around
for many years, just called something else”. She goes on to say that Six Sigma
“could be called problem solving, team building, SPC, plan, act, do, check,
whatever you want ...”.
Carnell and Lambert
(2000) assert what we all know - that Six Sigma is no silver bullet and that
like most change processes involving people it is difficult to
institutionalise. The perspective offered by these two “in the trenches” Six
Sigma professionals is that it is a tactical tool of great value in achieving
operational excellence. Operational excellence is, of course, required for the
overall attainment of business excellence - something that also requires
customer-related, financial, and marketplace performance excellence (Edgeman,
2000).
Strategic. That is,
what is new in Six Sigma is that efficient, often statistical
Techniques are used in
a systematic way to reduce variation and improve processes and there is a focus
on results - including customer-related ones that lead to enhanced marketplace
performance and hence improved bottom-line financial results.
The point is that Six Sigma is of great value in attainment of business
excellence and measurement of that progress
so that appropriately configured and deployed Six Sigma programs may be highly
consistent with the results-orientation underlying various international
quality awards, such as the European Quality Award, America's Malcolm Baldrige
National Quality Award, the Canada Excellence Awards, and the Australian
Quality Award. Mikel Harry[1], key developer and proponent of the Six Sigma
program at Motorola, has defined Six Sigma as “a disciplined method of using
extremely rigorous data gathering and statistical analysis to pinpoint sources
of errors and ways of eliminating them”. Well-known statistician and quality
consultant Ron Snee (2000) has indicated that “Six Sigma should be a strategic
approach that works across all processes, products, company functions and
industries” and Bajaria (2000) reinforces this idea - a “nuts and bolts”
point-counterpoint discussion of each of 14 key Six Sigma ideas.
In order to
efficiently use statistical tools to base decisions on fact, substantial effort
and resources are dedicated to education and training of staff members.
Responsibility and authority are distributed in a structured way by using a
“belt” system similar to that used in Korean karate, to identify experience and
mastery of Six Sigma tools and application thereof. Indeed, the terms “green
belt”, “black belt” and “master black belt” convey particular meanings within
the Six Sigma vocabulary.
Here Six Sigma has
actively contributed to the creation of a comprehensive infrastructure within
the practising organization that includes clear routines for control and
reporting. It is a non-trivial issue, however, as regards how to get more
people - not only Black Belts and other formalised problem solvers - involved
in conquering mental barriers and using statistical methods more routinely in
daily work. For example, understanding of variation has been pointed out as an
important aspect for successful implementation of a Six Sigma program and has
been featured within the Deming management approach for several decades.
Six Sigma seen contextually
Six Sigma provides a
structured means of pushing product and process improvement, but we do not see
it as an alternative to TQM. It is important, instead, to position Six Sigma in
a larger context. As illustrated in BLOCK DIAGRAM NO.4, we regard TQM as a
management system consisting of values, methodologies and tools that aims to
improve customer satisfaction with a reduced amount of resources. TQM starts in
most descriptions from values such as the six provided in BLOCK DIAGRAM NO.4 focus
on customers, focus on processes, base decisions on facts, let everybody be
committed, improve continuously and top management commitment[2]. These values
contribute to creation of organizational culture. To attain this, the values
have to be supported, systematically and continuously, by suitable
methodologies and tools.
Of course,
“everybody's commitment” cannot be obtained by simply proclaiming that “it is
one of our deeply held organizational values”. As is commonly said, the proof
is in the pudding and organizational values reflect organizational practices so
that “everybody's commitment” and other values can be made part of the
organizational fabric through use of suitable methodologies in such a way that
the values permeate the work being done, whether that work is performed by
improvement groups or through goal deployment to individual goals. Robust and
sturdy tools are also needed to support, systematize and facilitate the work. As
examples, Ishikawa diagrams and Pareto diagrams are tools commonly used by
improvement groups
whereas deployment of
goals might well be facilitated through use of matrix diagrams. These are
reflective of approaches that may assist in embedding a value for fact-based
decision-making in the organization's culture. An organizational value of
focusing on processes can be obtained through use of Process Management, but
within that methodology tools such as process maps and control charts are
needed to map and control key organizational processes.
In building or
transforming an organizational culture we must identify those values that we
desire. We should then choose methodologies supporting those values and finally
tools supporting those methodologies. Methodologies are not unambiguous but
naturally some steps within a methodology may differ depending on the situation
or organization. Of course, some methodologies may support several values and
in general we need to employ multiple methodologies to support the various
values. More or less random acquisition and employment of methodologies and
tools that do not support organizational values should be avoided.
With this view it is
obvious to us that Six Sigma is a methodology within TQM. The reason why this
methodology has been so successful is that it is structured and systematic and
uses several efficient tools. But it is also important to note that Six Sigma
in fact supports all six values in Figure 1. Methodologies, supporting several
values are important to the success of TQM. Six Sigma also illustrates that the
management system is dynamic. New methodologies and new tools will appear and
be developed and Six Sigma is an excellent example of this. But still Six Sigma
is a methodology within - not an alternative to - TQM in much the same way as
business process reengineering launched in the 1990s by Hammer and Champy
The main conclusion of
this article related to application of Six Sigma methodology by an organisation
is the following: Six Sigma is a methodology that might cut costs for your
organisation; however, think about how the Six Sigma methodology supports the
values of your organization and how you choose the tools and, above all, do not
forget the totality of TQM.
Notes
1. Six Sigma is
sometimes called “cowboy quality” in part because of the ranch and rodeo
lifestyle of its main proponents Mikel Harry and Richard Schroeder.
2. The number of
values varies between different sources. For example the European Quality Award
is based on eight values and the Malcolm Baldrige National Quality Award is
said to be based on 11 values. The six values in Figure 1 is the basis applied
by Bergman and Klefsjö (1994).
BLOCK DIAGRAM NO.:-3
Six Sigma is a highly disciplined process that helps
us focus on developing and delivering near-perfect products and services. Six
Sigma is a statistically-based process improvement methodology that aims to
reduce defects to a rate of 3.4 defects per million defect opportunities by
identifying and eliminating causes of variation in business processes. Six
Sigma focuses on developing a very clear understanding of customer requirements
and is therefore very customer focused.
Why "Sigma"? The word is a
statistical term that measures how far a given process deviates from
perfection. The term "six sigma process" comes from the notion that if one
has six standard deviations between the mean of a process and the
nearest specification limit, he will make practically no items that exceed the
specifications. The central idea behind
Six Sigma is that if you can measure how many "defects" you have in a
process, you can systematically figure out how to eliminate them and get as
close to "zero defects" as possible. To achieve Six Sigma Quality, a
process must produce no more than 3.4 defects per million opportunities. The "3.4 Defects Per
Million Opportunities (DPMO)" is a gross confusion of the following
situation.
Key themes in Six Sigma: -
Some of the key themes of Six Sigma can
be summarized as follows:
·
Continuous focus
on the customer’s requirements
·
Using
measurements and statistics to identify and measure variation in the production
process and
other business processes
·
Identifying the
root causes of problems
·
Emphasis on
process improvement to remove variation from the production process or other
Business processes and
therefore lowers defects and improves customer satisfaction
·
Pro-active
management focusing on problem prevention, continuous improvement and constant
Striving for perfection
·
Cross-functional
collaboration within the organization; and
·
Setting very high
targets.
Six Sigma is that
efficient, often statistical, techniques are used in a systematic way to reduce
variation and improve processes and there is a focus on results - including
customer-related ones that lead to enhanced marketplace performance and hence
improved bottom-line financial results.
The point is that Six Sigma is of great value in
attainment of business excellence and measurement of that progress so that appropriately configured and deployed Six
Sigma programs may be highly consistent with the results-orientation underlying
various international quality awards, such as the European Quality Award,
America's Malcolm Baldrige National Quality Award, the Canada Excellence
Awards, and the Australian Quality Award. Mikel Harry[1], key developer and
proponent of the Six Sigma program at Motorola, has defined Six Sigma as “a
disciplined method of using extremely rigorous data gathering and statistical
analysis to pinpoint sources of errors and ways of eliminating them”.
Well-known statistician and quality consultant Ron Snee (2000) has indicated
that “Six Sigma should be a strategic approach that works across all processes,
products, company functions and industries” and Bajaria (2000) reinforces this
idea - a “nuts and bolts” point-counterpoint discussion of each of 14 key Six
Sigma ideas.
