Six Sigma-amol Shende Pm

PROJECT REPORT ON SIX SIGMA “A QUALITY DEVELOPMENT TECHNIQUE”

Presented by, AMOL P. SHENDE ROLL NO.EF03547 T.E. PRODUCTION VJTI,MATUNGA 09

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INDEX 1. 2. 3. 4. 5. 6. 7. 8.

Overview of six sigma………………………………………………… 3 Process………………………………………………………………………… 5 Statistic Definition of Six Sigma………………………………… 9 Six Sigma for Services………………………………………………… 10 Cost of Quality……………………………………………………………… 12 Launching Six Sigma…………………………………………………… 14 Implementation of Six Sigma……………………………………… 18 Case Study…………………………………………………………………….21

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1. Overview of Six Sigma Six Sigma aims to give a basic idea of Six Sigma, its application, scope and origin. However, Six Sigma is a complex concept involving principles of statistics and process dynamics. We shall define Six Sigma only later once you have an understanding of the principles.

What is Six Sigma? A statistical concept that says that a process is operating so well that it allows for less than 3.4 defects per million opportunities. The Greek letter ó in statistics measures the variation of all the outputs in a process. If a process allows for outputs to be acceptable only if they fall within Six Sigma or Six standard deviations from the average for all outputs in the process, then you have a process that is essentially delivering no defective outputs at all. Six Sigma is a long-term strategy and takes 3 to 5 years to implement. It is applicable to all types of industries and companies, be they manufacturing or services.

Objective of Six Sigma The objective of the `Six Sigma' approach is to move towards zero defect level. It encompasses all facets of business, such as planning, operations, maintenance, delivery, and quality, which can lead to customer dissatisfaction. Six Sigma is based on a foundation of Metrics. These metrices can be organizational objectives (example On-Time delivery), departmental objectives (such as Cycle-time reduction) or process objectives (such as Orders processed). It might be worthwhile linking this concept with ISO 9001-2000, which has a strong inclination for Metrices. It creates a better process by eliminating opportunities for defects even before they can occur. This has a direct impact on the bottom line in terms of: 1. Reduced costs 2. Improved customer service 3. Waste elimination When we say a process is `Six Sigma', we are saying that it is the best in its class. Such a level of capability will result in having only something like 3 to 4 nonconformancesin a million opportunities.

Why Six Sigma? In any industry, organization or daily process, when you don’t know what you don’t know, the hidden costs are huge. In a Jam manufacturing unit, the nozzle filling up the bottles often fills either excess or less than the specified quantity. In the former case, jam over flows out of the bottles thus soiling the bottles as well as the conveyor belt. For bottles that have a lesser quantity of jam, it is poured manually into the bottles, and in this process too the result is sticky bottles. To clean the bottles, hot water has to be sprayed to avoid damaging the bottles that contained hot jam. Thus we see that a single error often goes unnoticed or is not given much importance. But when all the possible errors that exist in a system are considered,

4 the monitory impact on overall productivity, customer satisfaction and profitability multiplies dramatically. Six Sigma helps you identify what you don’t know, indicates what you should know, and helps reduce the errors and rework that cost you time, money, opportunities and customers. Six Sigma’s focus is on the process rather than on the final outcome. But why should companies focus on the process rather than on the final outcome? Final outcomes or results are dictated by what happens during the process. You may have set an objective; say, develop some new solution in record time. But if your emphasis was on the final outcome and you did not really keep a check on the process, then, when you are asked to develop the same software again, you may well repeat the same mistakes, come across the same problems and all you have is your memory to fall back on. On the contrary, if the process was documented, you or anyone else can repeatedly produce the same output again and again. You would also avoid making the same mistakes. You might even manage to reduce the development cycle. By focusing on collecting and improving process measures, you would eventually improve the entire process.

Six Sigma and the Implementation Strategy A business can improve its profitability dramatically in every sphere by using the Six Sigma Implementation Strategy. Six Sigma and the Implementation Strategy are two distinct aspects. Six Sigma is the philosophy with the goal of reducing the defects frequency to 3.4 defects per million opportunities. The Implementation Strategy provides the means to achieve that goal through a highly focused system of problem solving. Implementation Strategy is also called Breakthrough strategy (term coined by the Six Sigma Academy) Summary Six Sigma is a statistical concept whereby a process is it is operating so well that it allows for less than 3.4 defects per million opportunities. If a process accepts outputs only if they fall within Six Sigma from the average for all outputs, then it is essentially delivering no defective outputs at all. Six Sigma has two major goals; Cost reduction and Total customer satisfaction. Implementation Strategy provides the means to achieve Six Sigma goal through a highly focused system of problem solving.

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2. Process What is a process? “A process is a combination of machinery, materials, procedures and manpower that are used to produce a product or deliver a service.” A process reveals information or data. Six Sigma methodology collects this data to accurately assess the time, waste, defects or other variations associated with a process. And this provides the information needed to improve the process itself. Take for example, the customer complaint handling process. The quality of this process could be quantified using certain parameters like the number of complaints received, the response time for each complaint and reduced repetitiveness of the same complaint. This is the data given out by the process. To enhance any of these parameters, say to reduce the response cycle time, action needs to be taken over the entire process. So the data from the process is used to improve the entire process.

Key Characteristics The features in a product or service that are most important to the user are called the key characteristics of a product. Typically, you would look at features that are most important to the customer and call these the Key characteristics. For example, while developing a software for the integration of databases and legacy applications for a client, the emphasis would be on a bug free solution, interoperability, stability and of course, on the client not losing any of his old databases. Statistical process control and capability measures should be applied to key characteristics. Non-key characteristics are not unimportant. They will still receive the same attention they have received traditionally. By focusing on the Key characteristics, quality teams over time can analyze and control most, if not all, of a company’s processes. .

Another way of looking at key characteristics is to use the loss function concept. From this point of view, key characteristics are those whose variations cause the greatest loss and would possess steep sided loss functions. This would indicate significant potential losses owing to variation. Flat loss function indicates low potential losses and represents non-key characteristics. Action on the Key Characteristic of the process Actions on a process are most economical when taken on key-characteristics varying far from target value. This maintains stability and variations within acceptable limits. Action taken on output is not economical. Unless the root cause is removed, the problem or non-conformance may appear once again. Focusing on key characteristics provides a method to allocate quality resources in the most effective manner

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Data and Variation and Process Capability Data Facts - Basic nature of data Two kinds of data are normally found in any organization: 1. Continuous Data Data which can be measured and which characterizes a product or some process features in terms of its size, weight and volts. This type of data is said to be continuous by nature. In other words, the measurement scale can be meaningfully divided into finer and finer increments using the concept of least count. 2. Discrete Data When data cannot be measured but only observed and when it occurs in the form of frequency of occurrences; e.g., the number of times some events happen or fail to happen. For example, the number of typing errors or number of days an employee is absent cannot be measured but can be counted. The validity of inferences made from discrete data depends a lot upon the number of observations. The more the number of observations the more would be the accuracy of inference. Thus, a sample size required to characterize discrete data would be typically much larger than that required when continuous data is used.

Data Facts - Location and Variation Estimates Location and variation quantify essential information about output of the process. Location is the most central part of the process. For example, bolts manufactured may vary in their thickness. Location refers to that value which represents the setting of the process. It could be the mean of all the values; could be the median or the mode. Of these, mean is the most commonly used measure. Variability is the spread or range of the process where most values occur. Measures of variation can be either Standard Deviation or Range. .

Variation The need for quality control arises from the fact that even after the quality standards have been specified, variation in quality is unavoidable due to process variation. For example, “A machine is producing 100,000 bolts per day of 2 inch lengths each. It is very unlikely that all bolts measure exactly 2 inches. If the measuring instrument is sufficiently good, we can detect some bolts that are slightly less than 2 inches and some that are slightly more than 2 inches. This leads to a search for the possible causes of variation in the product.” A measure of variation or dispersion is one that measures the extent to which there are differences between individual observations and some central or average value. Note that in measure of variation we would be interested in the amount of variation or its degree and not in the direction. For example, a measure of 4 inches below the mean has just as much variation as a measure of six inches above the mean.

Types of variation The variation of a quality characteristic can be divided under two heads: 1. Chance variation 2. Assignable variation

Chance variation

7 These are variations that result from many minor causes. These causes behave in a random manner. This variation follows statistical property like Normal distribution, and hence, we say it is predictable variation. This type of variation is permissible and actually inevitable in a practical manufacturing environment. There is no way in which it can completely be eliminated - when the variability present in a production process is confined to chance variation only, the process is said to be in a state of statistical control.

Assignable variation These variations may be attributed to special non-random causes. This variation does not follow any statistical law and hence, we can say it is unpredictable. Such variations can be a result of several factors such as a change in the raw material, a new operation, an improper machine setting, broken or worn-out parts, mechanical faults in plants etc. .

The value of Quality control lies in the ability to detect these variations in a process. In fact, these variations can be discovered before the product becomes defective.

Understanding Distribution curve Distribution can differ in: 1. Spread: The distribution curve 1 represents two distributions with same mean but with different dispersions. 2. Location: The distribution Curve 2 has two distributions that have the same dispersion but with unequal means X1 and X2. 3. Shape: The two distributions have unequal dispersion.

Process Capability Process Capability represents the best performance (i.e. minimum spread) of the process, when the process is operating in a state of Statistical control due to no assignable causes. It indicates only the natural fluctuations that take place in Key characteristic of a process. When a process is in a state of statistical control the only variations in the process are due to the chance causes. Thus Capability is determined by the variation that comes from chance causes. Mathematically, Capability = Six Sigma calculated from a set of individual measurements.

Potential capability (Cp). This is the simplest and most straightforward indicator of process capability. It is defined as the ratio of the specification range to the process range; using ± 3 sigma limits we can express this index as: Cp = (USL-LSL)/(6*Sigma) Put into words, this ratio expresses the proportion of the range of the normal curve that falls within the engineering specification limits.

Capability ratio (Cr) This index is equivalent to Cp; specifically, it is computed as 1/Cp A drawback of the Cp index is that it really evaluates only process spread and ignores the process average. If the system is not centered at the middle of the

8 specifications, the Cp index may be misleading. Assuming the system is centered, a Cp value of 1 indicates that the system is producing 99.73% of output within specification limits.

Lower/upper potential capability (Cpl, Cpu.) A major shortcoming of the Cp (and Cr) index is that it may yield erroneous information if the process is not on target, that is, if it is not centered or if the process shows one-sided specifications such as minimum length, etc. For non-centered distribution (such as in the diagram shown) upper and lower potential capability indices can be computed which would aptly reflect the deviation of the observed process mean from the LSL and USL.

Demonstrated Excellence It is denoted by Cpk and takes the value of either Cpl or Cpu based on which value is lower. Cpk = Smaller value of [(USL - Mean)/ 3 Sigma, (Mean - LSL)/3 Sigma] Unlike potential capability, demonstrative excellence takes into account the centering of the key characteristics of the process. While Cp is a function of the range, Cpk is the function of the average i.e. the mean. The Cpk tells how well a system can meet specification limits while accounting for the location of the average. The Cpk index modifies the Cp index to account for the location of the average (or center). A Cpk of 1 indicates that the system is producing at least 99.73% within the specification limits.

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3.Statistic Definition of Six Sigma We know that process outputs vary. This variation follows some pattern known as Distribution. Tchebyeff’s Theorem states that: “No matter what the shape of the distribution is, at least 75 percent of the values will fall within ± 2 standard deviations from the mean of the distribution, and at least 89 percent of the values will lie within ± 3 standard deviations from the mean.” For a normal distribution, the following relationships hold good: Mean ± 1 sigma covers 68.27% of the items Mean ± 2 sigma covers 68.45% of the items Mean ± 3 sigma covers 99.73% of the items Most output processes have output that follows a normal distribution as shown by curve X in the diagram. A process that is naturally centered at O will have a natural spread around O of plus or minus three-sigma standard deviation. In the case of Six Sigma, this process variation is only half the width of the design tolerances for the process, that is to say, the difference between the upper specification limit (USL) and lower specification limit (LSL). Since, 99.9973 per cent of the process output is contained by this natural spread, a process running at O is highly capable of meeting the design specifications and only 0.002 defects per million opportunities will arise since only 0.002 parts per million are outside this curve.

Six Sigma and Process Capability We have seen that all processes will have some variation. In a stable process, this variation will be equal to Plus or Minus 3 Sigma from its own average. This plus or minus 3 Sigma (six Sigma) is called Process Capability. If process capability is less that the tolerance or expectations then the process will produce lesser defects. Six Sigma and Defect per million opportunities Six Sigma brings about process improvement by reducing Defects per million opportunities in the process. Process Shift Concept Regulating processes so that they always remain on target may not be feasible in the long term. In practical scenarios the process is likely to deviate from its natural centered position by approximately one and a half standard deviations. Under these circumstances, one side will be 7.5 Sigma and the other side will be 4.5 Sigma. Under Six Sigma we focus on the long-term capability, which means that we have to account for a 1.5 Sigma shift in the process average.

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4. Six Sigma for Services Aim Six Sigma concepts given earlier are easy to visualize in a manufacturing environment simply because the process here involves data that is measurable. For example, the thickness of a pen, the width of Steel plate etc. The business world follows Darwin’s Theory of Natural Selection: Survival of the fittest. So organizations that do not improve do not survive. Continuous improvement requires clearly defined goals or targets. How does one set progressive targets without measuring the state of the present setup? Any organization has to learn to measure its process. So even in the Service industry, management should look at quantifying or measuring the process. Take for example a call center. The customer call handling process can be quantified in terms of the time taken to answer a call, the time taken to provide a solution, the waiting time, the number of calls attended per day, etc.

Setting Six Sigma targets In product related industry for example, the customer or buyer can define certain specifications, which help identify and quantify parameters for Six Sigma implementation. In the service industry however, output being intangible, the company has to set its own targets by identifying all the key characteristics of their service and identifying the process measures that have a direct impact on these key characteristics. Once these targets are achieved, the organization can continuously improve by benchmarking itself with better companies. These Benchmark data can be used for defining newer targets and the cycle goes on.

Six Sigma in the Accounts department As a part of its services, Actix manages the accounts related functions for its clients. The management notices that most of the customer complaints are related to vouchers handled by the company. To reduce the number of customer complaints, the company should aim to reduce the number of errors in the vouchers. The first step would be to identify the errors that are Critical to Quality (CTQ). The CTQs identified in the accounts department, are errors pertaining to Amount, Tax, Code and Date. Next the team needs to find out the Defects per million opportunities. For this they have to analyze sample vouchers. These should be selected randomly. Let us say that the team inspected 1000 vouchers. And found a total of 120 defects. Therefore, defects per invoice = 120/1000 = 0.12 And Defect per CTQ = 0.12/4 = 0.03 This value is then expressed in terms of Defects per million opportunities. It thus becomes 30,000 ppm. The Defects per Million Opportunities helps find out the present sigma level of the company. To find out the sigma level, we calculate DPMO and then use the Sigma Chart to find out the Sigma level that relates to this defect density. Chart below shows that 30,000 defects would amount to approximately 3.35 Sigma. That means that the process is at present at 3.35 sigma. With this as the starting point, the company can now plan for improvements. To improve the Sigma level in the accounts department, the numbers of errors need to be reduced. How would the department go about bringing up the sigma level?

11 Typically, the Six Sigma implementation strategy would suggest that the company takes the following steps: • Identify the CTQ that is the most significant • Identify the root cause • Design a solution that would address this root cause • Implement this solution • Verify the effect of the solution by conducting audits at regular intervals • Improve the process if needed Improvement is a continuous process. It is important that the organization conducts regular checks, identifies possible areas for improvement, implements the improvements plans and verifies that the desired results have been obtained.

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5.Cost of Quality What is Cost of Quality? A Cost of Quality System is used to quantify quality problems in the language of money and turn those costs into bottom-line income in an organization. It is a term used by many organizations to quantify the costs associated with producing quality products. Typical factors taken into account are prevention costs (training, work process analyses, design reviews, customer surveys), appraisal costs (inspection and testing), and failure costs (rework, scrap, customer complaints, returns).

Benefits of Cost of Quality The cost of quality assessment provides an opportunity for companies to: 1. Set the tone for the improvement process and the projects that follow 2. Show support for the improvement process by making resources available, 3. Set a constructive attitude for uncovering and dealing with poor quality practices 4. Demonstrate commitment to the improvement process by encouraging and supporting the timely identification and elimination of the root causes of poor quality

Cost of Quality In many companies, the cost of quality assessment may be one of the first quality or process improvement projects undertaken. For example if the costs due to internal failures contribute the most while costs towards prevention are minimal. However, if the company spends relatively more on prevention, the number of failures would also come down and cut down the costs drastically too. The Six Sigma philosophy supports this very concept.

How would you decide on what process to act upon? The COQ actually gives an indication of this too. You should first analyze which failures contribute the most to the Cost of Quality. In our example, Press Downtime seems to be the major factor. You could draw a Pareto diagram to isolate the defects or errors that have the maximum impact on the Cost of Quality. Next look for contributors in the process that cause these errors and act on these contributors to reduce/remove defects. With the defects reduced, the costs against failures go down. This cost reduction is substantial as compared to an increase in the cost due to implementation of preventive measures. Six Sigma is a program that works on minimizing defects. Cost of Quality is an output measure expressing waste in financial terms.

Six key areas for improving Cost of Quality Key Drivers: Basic Issue 1. Basic organizational capabilities • Skills and tools required to implement improvements in business processes are lacking 2. Industrial process variations • Poor industrial process capabilities result in high COPQ (rework, scrap, field failure) • Customer demands are frequently not passed on to engineering • Inefficient front-end engineering

13 3. Business process variations • Product cost estimation is often widely off the mark, resulting in poor financial performance and incorrect manufacturing decisions 4. Engineering/design process and documentation • Engineering systems and design processes and documentation are often inadequate and flawed 5. Quality of specifications • Specifications sent to suppliers are not accurate. • Subcontractors vary considerably in their quality, resulting in poor-quality parts 6. Supplier capabilities • Lack of quality suppliers, resulting in poor-quality parts/services, late deliveries, higher parts/service costs, etc. Six Sigma and Cost of Quality

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6. Launching Six Sigma Creating a Six Sigma Focus To achieve Six Sigma, companies must determine how to focus and deploy the Six Sigma Breakthrough Strategy so that key business priorities and strategy issues are addressed. A company that has recently had substantial losses, such as shrinking market share or losses due to high labor costs, might decide to focus on short-term cost reduction. On the other hand a company enjoying strong profits may decide to focus on longterm projects aimed at strengthening its business by improving overall quality and customer satisfaction. Another company might want to reduce costs by, focusing on reducing its cycle time. How a company decides to focus its Six Sigma projects heavily influences the way Six Sigma is deployed. Standards must be established and consistently met. Bringing about improvement is one thing; sustaining it is often more difficult and requires greater diligence. Here are some of the ways a company might choose to focus its Six Sigma efforts: Focus 1: On Project cost savings. • By focusing on project cost savings, a company can determine the number of projects it needs to complete to save a specific dollar amount • Projects are selected for potential reductions in fixed and/or variable costs, and not necessarily for their effect on the root drivers of process capability • This is a more limited approach, and will likely do little to spread Six Sigma throughout the organization Focus 2: On Deliverable. • Identify the product family or system that is the greatest cause of poor customer satisfaction in a product or service that is important to a company’s overall strategy • High warranty costs, for example, can signal products that might benefit from the Breakthrough Strategy • This kind of focus requires that companies examine a number of processes that contribute to the product or service • Companies should be wary of selecting projects that focus solely on products. Focusing on problems such as high warranty returns and customer complaints will highlight a product's symptoms but not the processes that create the symptoms • A management system that requires regular system audits Focus 3: Standardize best-in-class management system practices • Standardization at the operations level is no different from standardization at the business level • Once the business has uncovered a best in-class management practice, it should seek to standardize it and transfer the knowledge to all relevant sectors within the business • The best-in-class practices of other businesses can be investigated and applied, allowing the company to leapfrog its way to a higher retention rate • Once a company has standardized a particular Six Sigma practice, it must

15 integrate the practice into the fabric of its operations, reinforcing it through a reward and recognition systems Focus 4: Integrate standardized six sigma practices into policies and procedures • Integration at the operations level is no different from what takes place at the business level • Once a Six Sigma practice is standardized, it must be integrated into the fabric of the operations • Practices become institutionalized when their cross-applicability is interwoven into operating policies and procedures and then reinforced through reward and recognition systems

How does a Six Sigma work? There are five main steps in the Breakthrough strategy of Six Sigma: 1. Select key Problem areas 2. Select and train the right people 3. Develop and implement improvements 4. Manage Six Sigma Projects 5. Sustain the gains

Step 1: Selecting key problem areas Key problem areas in an organization would be those that: 1. Have a high impact on customer 2. Are critical to success 3. Show fastest or largest return

Step 2: Select and train the right people Successful implementation of quality initiatives needs complete participation from every employee in an organization. They should be well informed, trained and motivated. A few people have to own the Six Sigma process.

Six Sigma Experience Levels Six Sigma improvement efforts depend upon the contributions and teamwork of skilled participants at the following experience levels.

Executive Leaders Executive Leaders keep the Six Sigma program focused on real business problems • They provide overall alignment with both the culture of the organization and its strategic vision of the future, and they create the system context for the Black Belt projects Project selection approvals, liaise with the CEO or Chair of the Board, Communications, Deployment, Company Metrics, Command and Control functions, recognition of individuals and teams, and establishment of business targets all depend upon Six Sigma Executives.

Project Champions Project Champions take their company's vision, missions, goals, and metrics and translate them into individual unit tasks. • Additionally, Champions must remove any roadblocks to the program's success. • Project Champions are involved in selecting projects and identifying Black and Candidates Green Belt.

16 • They set improvement targets, provide resources, and review the projects on a regular basis so that they can transfer knowledge gained throughout the organization.

Master Black Belts They are the technical leaders of Six Sigma. • They serve as the instructors for both Black and Green Belts and also provide ongoing coaching and support to project teams to assure the appropriate application of statistics • A built-in part of the long-term Six Sigma infrastructure, Master Black Belts help to create most of the key elements, such as metrics, enterprise maps, and training • In addition, they provide strategic and operational assistance to project Champions and management in the formulation and deployment of the Six Sigma program

Black Belts Black Belts are the backbone of Six Sigma deployment and continuous improvements. • They build teams and attack problems by managing projects and then driving the teams for solutions that work, resulting in delivery of bottom-line results • As the Executive Leaders and the Project Champions work through deployment and resolve issues concerned with the ‘recognize and define’ phases of Six Sigma, Black Belts work through each project using the principles measure, analyze, improve, and control

Green Belts Green belts provide internal team support to Black Belts. • Are able to assist in data collection, computer data input, analysis of data using the software, and preparation of reports for management • Are respected workers who can manage the team in the absence of the Black

Belt • Are part-time workers on a team and may migrate to this position because of their skills using basic quality analysis tools and methods and their ability to facilitate team activities • May become Black Belts over time as they build a personal base of experience that boosts them into a more technical role

Step 3: Develop and implement improvements Broadly this has five important steps: 1. Define 2. Measure process 3. Analyze process 4. Improve process 5. Control process There are 5 fundamental steps involved in applying the implementation strategy to achieve the Six Sigma process: 1. Plan 2. Assess 3. Evaluate 4. Enhance

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Step 4: Manage Six Sigma Projects As a manager of the Six Sigma initiatives, it is necessary that you: 1. Lead a focused effort 2. Frequently review process and remove barriers 3. Check real business impact 4. Continuously communicate progress to executive leadership and those involved in projects

Step 5: Sustain the gains The most difficult part is to sustain the gains that have been achieved. 1. Implement effective control plans 2. Conduct regular Six Sigma training to reinforce the initiative throughout the company 3. Review the project’s effectiveness at regular scheduled intervals 4. Continually identify and launch new Six Sigma projects Successful implementation of Six Sigma Successful implementation depends on the following principles: 1. Highly visible top-down management commitment to the initiatives. 2. A measurement system (metrics) to track the progress. This brings accountability into the initiatives and provides a tangible picture of the efforts. 3. Internal and external benchmarking of the organization's products, services, and processes. This information helps the organization understand its "real" market position motivating them to adopt a breakthrough philosophy. 4. Concept of stretch goals. This would allow people to focus on changing the processes by which the work gets done, rather than "tweaking" the existing processes. This would show exponential rates of improvement. 5. Educating all levels of the organization. Without the necessary training, people cannot bring about breakthrough improvement.

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7. Implementation of Six Sigma Six Sigma Breakthrough Strategy Every project has a process or design problem that must be solved. The Breakthrough Strategy directs people's energies to finding solutions and improving bottom lines. It shows companies how much information (and therefore money) they are losing out on. The Breakthrough Strategy takes executives through the maze of business, technology, manufacturing, quality, production, and delivery system issues. In doing so, it initially raises more and more questions. Identifying a problem is simple compared with defining the underlying causes. Underlying causes are often masked by layers of skewed financial reports, irrelevant data, or a corporation's cultural bias.

Five fundamental steps of the Six Sigma Breakthrough Strategy There are five fundamental steps or stages involved in applying the Implementation Strategy to achieve Six Sigma quality in a process, division, or company. These phases are: • Plan • Assess • Evaluate • Enhance • Control

Planning Phase This is the project selection phase. Steps taken in this phase are: 1. Identify the problem 2. Define the scope & requirements 3. Define the goals & objectives 4. Set targets & measures 5. Define the time-scales 6. Define the cost of poor quality 7. Obtain project approval 8. Team selection, roles & responsibilities for Black Belt, Green Belt & Yellow Belt. A team of experienced people from both the Line and Staff function should first get together and come up with the project definition. Next, they need to identify the scope, target and measures.

Assess Phase This includes a review of the types of measurement systems and their key features. For this the employees in the company must have a good understanding of the nature and properties of data collection and reporting. Four important steps to look at in this phase are: 1. Areas where errors can occur 2. The frequency with which defects occur 3. The process capability that governs the creation of defects 4. Potential impact faulty measurements can have on a project's success In the Six Sigma project on parts failing after final machine delivery, in the assess phase the product yield was determined. The number of defects was collected to get the overall defect yield. This was then used to calculate the sigma value.

19 In the Evaluate phase, the Breakthrough Strategy offers specific statistical methods and tools to isolate key pieces of information that are critical to explaining the number of defective products. In the Evaluate phase, practical business problems are turned into statistical problems. To conclude, data evaluation steps include: 1. Analyzing the data 2. Identifying & confirming key process factors

Enhance Phase In the Enhance phase, the Implementation Strategy focuses on discovering the key variables that cause the problem. The Enhance phase encompasses the process known as Design for Six Sigma (DFSS), as well. Using DFSS, the processes that create the products or services are designed from the beginning or reconfigured in such a way that they produce six sigma-quality goods and services. To summarize, steps included in this phase are: 1. Develop ideas to remove root causes 2. Trail & test the solution(s) 3. Implement & standardize the solution(s) 4. Ensure error-proofing techniques are applied to the solution(s) Explore the use of Lean tools

Control Phase Finally, in the Control phase, the Breakthrough Strategy ensures that the same problems don't reoccur by continually monitoring the processes that create the product or service. In this phase you would have to: 1. Establish standard measures to maintain performance 2. Monitor the process & continually improve it 3. Explore the use of further Lean Tools Control charts and audits can be used to control processes.

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**Case Study We shall now use these concepts and reduce defect density in Actix, a company we had talked of earlier while discussing Six Sigma for Services. A quick recap Actix is a Utah based financial service provider. As a part of its services, it manages the accounts related functions for its clients. The management in Actix noticed that most of the customer complaints were related to vouchers handled by the company. *Planning Phase To reduce the number of customer complaints, the company decided to reduce the number of errors in the vouchers. The first step was to identify the errors that are Critical to Quality (CTQ). The CTQs identified in the accounts department were errors pertaining to Amount, Tax, Code and Date. *Assess Phase Next the team calculated the defects per million opportunities as 30,000 ppm. Which meant that the company was at that stage functioning at Sigma level 3.35. The company should aim to reach a Six Sigma level by reducing the defect density to 3.4 ppm. An important question that needed to be addressed was that of which CTQ contributed the most to the total count of errors. A Pareto diagram drawn to show the frequency of each of these CTQs is given below. The next step would be to analyze and find out various causes for Wrong entry of Tax in the vouchers. We can use the Cause and Effect diagram to arrive at the causes. *Evaluate Phase The team studied the various causes and narrowed down to the root cause: - Applicability not understood by all in the same manner To verify that this was the root cause, the team conducted a quiz to test the knowledge of applicability for all the concerned people. Poor performance in the quiz was proof enough of the fact that many employees involved lacked a proper comprehensive understanding of the technique of tax calculation. *Enhance Phase Since large number of people were involved in this operation, the team was faced with the challenge of designing and implementing a solution that would not cause high turnover, yet train the employees without investing too much on training; and if possible, use a training method that would be reusable. Hence they decided to create an easy to use Computer based training program that was mandatory for every employee. A team of two people was given the responsibility to update the CBT on a regular basis. An employee was allowed to prepare vouchers only after he underwent a test on the CBT. *Control Phase The company strictly implemented the training schedule for the next six weeks. After six months they took a sample of 1000 vouchers and checked the defect level. The defect density was found to be 14 across 1000 vouchers. Therefore, defects per voucher = 14/1000 = 0.014

21 And Defect per CTQ = 0.014 /4 = 0.0035 This value when expressed in terms of Defects per million opportunities is 3500 DPMO, i.e., approximately 4.2 Sigma. This success motivated the personnel to further apply the principles of Problem Solving on a continuous basis to move towards a Six Sigma level. By continuously improving the process, the company can manage to reach the Six Sigma level, where they would report only 3.4 DPMO. However, they realized that to improve further from 4.2 Sigma, the efforts involved would be much more rigorous than what they had put in as of now.

When is a company a Six Sigma company? Six Sigma implementation happens in a phased manner. Each department identified four Critical to Quality parameters; Tax, Amount, Code and Date which are major factors that contributed towards the total number of errors in a voucher. Step 1. Six Sigma Characteristic In the first step the company would try to implement Six Sigma for each of these characteristics and reduce errors. That is to say, that the Account department should reduce errors related to calculating Tax in the voucher, to writing the amount, the Code and the date. Step 2. Six Sigma Part or Product By applying the Plan, Assess, Evaluate, Enhance and Control phases for every characteristic of the voucher, the overall process comes under Six Sigma. Thus by removing all possible types of errors, the voucher itself would show no error. The voucher here is the Part. Step 3. Six Sigma Department The Accounts department should then identify every output or service that it provides and measure it using some unit, such as errors in payment cheques, errors in PF calculations, IT calculations, cycle time to release employees’ pay etc. Each of these should be enhanced to finally bring all the services and products in the department under Six Sigma. Step 4. Six Sigma Company By bringing all the departments in the company under Six Sigma, the entire company becomes a Six Sigma company.