66Presented By:Presented By: Sanjay GuhathakurtaSanjay Guhathakurta

What is Six Sigma….. A brief History & Philosophy.

Introduction to Six Sigma Key Concepts.

Purpose of Six Sigma

Components of Six Sigma.

Six Sigma Problem Solving Method.

DMAIC Methodology.

eRevMax …the Six Sigma Way.

Six Sigma— Benefits?

Questions.

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1980’s Motorola Develops Six Sigma Raised Quality Standards.

GE Promotions, Profit Sharing (Stock Options), etc. directly tied to Six Sigma training.

Other Companies Adopts Six Sigma :Dow Chemical, DuPont, Honeywell, Whirlpool.

Origin of Six SigmaOrigin of Six Sigma

Philosophy

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It is a PhilosophyIt is a Philosophy– Anything less than

ideal is an opportunity for improvement

– Defects costs money– Understanding

processes and improving them is the most efficient way to achieve lasting results

It is It is a Process :a Process :- To achieve this level

of performance you need to:

- Define,- Measure, - Analyse, - Improve and - Control

It is Statistics:It is Statistics: 6Sigma processes will

produce less than 3.4 defects per million opportunities

OverviewOverview of Six Sigmaof Six Sigma

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Six sigma differs from traditional quality improvement programs by Six sigma differs from traditional quality improvement programs by focusing on controlling inputs, as opposed to monitoring outputs. focusing on controlling inputs, as opposed to monitoring outputs.

Six Sigma OverviewSix Sigma Overview

While traditional process improvement methods depend on While traditional process improvement methods depend on measuring outputs and establishing control plans to shield measuring outputs and establishing control plans to shield customers from organizational defects, a six sigma program customers from organizational defects, a six sigma program demands that problems are addressed at the input root-cause demands that problems are addressed at the input root-cause level. This eliminates the need for unnecessary inspection and level. This eliminates the need for unnecessary inspection and rework of output products or servicesrework of output products or services.

While traditional process improvement methods depend on While traditional process improvement methods depend on measuring outputs and establishing control plans to shield measuring outputs and establishing control plans to shield customers from organizational defects, a six sigma program customers from organizational defects, a six sigma program demands that problems are addressed at the input root-cause demands that problems are addressed at the input root-cause level. This eliminates the need for unnecessary inspection and level. This eliminates the need for unnecessary inspection and rework of output products or servicesrework of output products or services.

In its most fundamental form, Six Sigma is a measure of the In its most fundamental form, Six Sigma is a measure of the number of defects in a specific process or operation -- for example, number of defects in a specific process or operation -- for example, a manufacturing process used to make a specific part. In Six a manufacturing process used to make a specific part. In Six Sigma, you're not Sigma, you're not worried about defective parts as a whole, but about defective parts as a whole, but something called something called defect opportunitiesdefect opportunities. A defect opportunity takes . A defect opportunity takes into account three important variables:into account three important variables: All of the different defects that occur on an assembled part.All of the different defects that occur on an assembled part. The number of places on that part where the defects can occur.The number of places on that part where the defects can occur. And every production step that could cause one or more of theAnd every production step that could cause one or more of the defects on the part.defects on the part.

As an example, we are developing Software. Two major defects As an example, we are developing Software. Two major defects typically related to these software are a) typically related to these software are a) Server Connection failure b) Server Connection failure b) Application Interface not Supported by HDD. Application Interface not Supported by HDD. Now let's say those Now let's say those defects are found only on 3 of products out of 6. Finally lets assume defects are found only on 3 of products out of 6. Finally lets assume there are 3 steps in the developing process where those defects are there are 3 steps in the developing process where those defects are typically introduced. Clearly, there are several typically introduced. Clearly, there are several opportunitiesopportunities for a for a defect to occur. defect to occur.

To calculate how many, you simply multiply: 2 x 3 x 3, for a total of To calculate how many, you simply multiply: 2 x 3 x 3, for a total of 18 opportunities. Now, if you find connection failure in 5 percent of 18 opportunities. Now, if you find connection failure in 5 percent of the software that come off the develop line, the number of defects the software that come off the develop line, the number of defects per opportunity is .00278 (.05 divided by 18). To find the number of per opportunity is .00278 (.05 divided by 18). To find the number of defects per thousand opportunities, you multiply .00278 by 1,000 to defects per thousand opportunities, you multiply .00278 by 1,000 to get 2.78. get 2.78. Motorola engineers decided that the defects-per-thousand metric Motorola engineers decided that the defects-per-thousand metric wasn't sensitive enough for their new Six Sigma initiative.They wasn't sensitive enough for their new Six Sigma initiative.They decided that defects per million opportunities (DPMO) eliminated decided that defects per million opportunities (DPMO) eliminated errors due to small sample size and made for a more accurate errors due to small sample size and made for a more accurate determination of quality. To find the number of defects per million determination of quality. To find the number of defects per million opportunities in our example above, we multiply .00278 by 1,000,000 opportunities in our example above, we multiply .00278 by 1,000,000 to get 2,780 DPMO.to get 2,780 DPMO.

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Six Sigma is a highly disciplined process that helps us focus Six Sigma is a highly disciplined process that helps us focus on developing & delivering near-perfect products and on developing & delivering near-perfect products and

services.services.

““Sigma” is a statistical term that measures how far a given Sigma” is a statistical term that measures how far a given process deviates from perfection.process deviates from perfection.

What is Six What is Six Sigma?Sigma?

11 122 3 4 5 6 7 8 9 10 11

1 1 1 1 1166

LSLLSL USLUSL

s()

22 69.1%

33 93.32%

44 99.379%

55 99.9767%

66 99.99966%

% Non-Defective

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2 308,537

3 66,807

46,210

5 233

6 3.4

Sigma DPM

A MeasurementA Measurement

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PracticalPractical MeaningMeaning

99% Good99% Good 99.99966% Good99.99966% Good

Postal System

20,000 Lost Articles Of Mail / Hr20,000 Lost Articles Of Mail / Hr 7 Lost Articles / Hr7 Lost Articles / Hr

Airline System

Two Short/Long Landings / DayTwo Short/Long Landings / Day 1 Short / Long Per 5 Years1 Short / Long Per 5 Years

Medical Profession

200,000 Wrong Drug Prescriptions / Year200,000 Wrong Drug Prescriptions / Year 68 Wrong Drug Prescriptions68 Wrong Drug Prescriptions

Width of landing Width of landing stripstrip 1/2 Width1/2 Width

of landingof landingstripstrip

If pilot always lands If pilot always lands within 1/2 the landing strip within 1/2 the landing strip width, we say that he has width, we say that he has Six-sigma capability.Six-sigma capability.

Pilot’s Six-Sigma PerformancePilot’s Six-Sigma Performance

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Purpose of Six Sigma Purpose of Six Sigma KANO Model of Customer KANO Model of Customer NeedsNeeds

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So far customer satisfaction was mostly seen as a one-So far customer satisfaction was mostly seen as a one-dimensional construction - the higher the perceived product dimensional construction - the higher the perceived product quality, the higher the customer’s satisfaction and vice quality, the higher the customer’s satisfaction and vice versa. The basic questions to face were, versa. The basic questions to face were, Which products and services can be used to obtain a high Which products and services can be used to obtain a high level of customer satisfaction? level of customer satisfaction? Which product features have a more than proportional Which product features have a more than proportional influence on satisfaction, andinfluence on satisfaction, and which attributes are an absolute must in the eyes of thwhich attributes are an absolute must in the eyes of the e customer?customer?But fulfilling the individual product requirements to a great But fulfilling the individual product requirements to a great extent does not necessarily imply a high level of customer extent does not necessarily imply a high level of customer satisfaction. It is also the type of requirement which defines satisfaction. It is also the type of requirement which defines the perceived product quality and thus customer the perceived product quality and thus customer satisfaction.satisfaction.

In his model, Prof. Kano (Kano, 1984) distinguishes In his model, Prof. Kano (Kano, 1984) distinguishes between three types of product requirements which between three types of product requirements which influence customer satisfaction in different ways when met influence customer satisfaction in different ways when met ::

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Must-be requirements/ Basic Attributes: Must-be requirements/ Basic Attributes:

If these requirements are not fulfilled, the customer will be If these requirements are not fulfilled, the customer will be extremely dissatisfied. On the other hand, as the customer extremely dissatisfied. On the other hand, as the customer takes these requirements for granted, their fulfillment will takes these requirements for granted, their fulfillment will not increase his satisfaction. The must-be requirements are not increase his satisfaction. The must-be requirements are basic criteria of a product. Fulfilling the must-be basic criteria of a product. Fulfilling the must-be requirements will only lead to a state of "not dissatisfied". requirements will only lead to a state of "not dissatisfied". The customer regards the must-be requirements as The customer regards the must-be requirements as prerequisites, he takes them for granted and therefore does prerequisites, he takes them for granted and therefore does not explicitly demand them. Must-be requirements are in not explicitly demand them. Must-be requirements are in any case a decisive competitive factor, and if they are not any case a decisive competitive factor, and if they are not fulfilled, the customer will not be interested in the product fulfilled, the customer will not be interested in the product at all.at all.One-dimensional requirements / Performance Attributes: One-dimensional requirements / Performance Attributes:

With regard to these requirements, customer satisfaction isWith regard to these requirements, customer satisfaction isproportional to the level of fulfillment - the higher the level proportional to the level of fulfillment - the higher the level of fulfillment, the higher the customer’s satisfaction and of fulfillment, the higher the customer’s satisfaction and vice versa. One-dimensional requirements are usually vice versa. One-dimensional requirements are usually explicitly demandedexplicitly demanded by the customer.by the customer.

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Attractive requirements/ Excitement Attributes: Attractive requirements/ Excitement Attributes:

These requirements are the product criteria which have the These requirements are the product criteria which have the greatest influence on how satisfied a customer will be with a greatest influence on how satisfied a customer will be with a given product. Attractive requirements are neither explicitly given product. Attractive requirements are neither explicitly expressed nor expected by the customer. Fulfilling these expressed nor expected by the customer. Fulfilling these requirements leads to more than proportional satisfaction. If requirements leads to more than proportional satisfaction. If they are not met, however, there is no feeling of they are not met, however, there is no feeling of dissatisfaction.dissatisfaction.

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UnspokenUnspoken

SpokenSpoken

PerformancePerformance

CustomerCustomerDisatisfactionDisatisfaction

Change

Change

Time

Time

Customer Customer SatisfactionSatisfaction

Excitement features:Initiate satisfaction if they are offered. They increase the noticed benefit of the core functionality

Performance features:Attributes which lead as well to satisfaction as to dissatisfaction

Basic features:Minimum features which represent the Core functionalityof a product or a service

Exceeds all Customer’sExceeds all Customer’srequirementsrequirements

+ Better Communication with the + Better Communication with the customerscustomers + Understand customers and their + Understand customers and their needsneeds + Ultimately Customer Satisfaction+ Ultimately Customer Satisfaction

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So Why Six Sigma ? So Why Six Sigma ? or or

What ‘s the Purpose of Six Sigma What ‘s the Purpose of Six Sigma

Helps Improving performance by flawless Helps Improving performance by flawless execution.execution.

Achieving rapid breakthrough improvement.Achieving rapid breakthrough improvement.

Applying advanced breakthrough tools that work.Applying advanced breakthrough tools that work.

Making a positive and deep cultural change.Making a positive and deep cultural change.

Retaining People.Retaining People.

Reducing Cycle Times. Reducing Cycle Times.

Keeping up with Technology Advances. Keeping up with Technology Advances.

Structuring for Flexibility.Structuring for Flexibility.

Responding More Quickly.Responding More Quickly.

Growing Overseas MarketsGrowing Overseas Markets..

Getting Real Financial Results..

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Define Phase

Module 1: Capture Voice of Customer Identifying the Customer - clients and end users

Capturing the Voice of Customer (VoC) - surveys, complaints, monitoring results. Map VoC to Critical to Quality (CTQ) measures

Module 2: Project Charter and Plan High Level Process Mapping from End to End Develop Project Team Charter Select Process Ys the critical differentiators in the ITeS industry

•Measure Phase

Module 3: Process Performance Metrics through looking at internal and external benchmarks or customer expectations and identifying units, defects and opportunities Module 4: Collecting and Summarizing Data covering data collection plans and sampling Module 5: Measurement Systems e.g. calibration, skill measurement Module 6: Analyze Process Capability particularly in the context of SLA and business objectives Module 7: Improvement Goal for e.g. increases FTR by 5%, reduce AHT by 5%, improve transaction accuracy by 2%

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•Analyze Phase

Module 8: Exploratory process and data analysis to identify causes e.g. agent vintage, agent background, training score, transaction type etc. Module 9: Hypothesis Testing to narrow down to few vital Xs

•Improve Phase

Module 10: Solution Generation and Design of Experiments (DOE) e.g. AHT vs. transaction quality, service level vs. customer satisfaction Module 11: Risk Mitigation through piloting, FMEA and error proofing Module 12: Measurement System Reanalysis

•Control Phase Module 13: Controlling through documentation, Statistical Process Control and Response Plan Module 14: Project Closure

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Some of the key Six Sigma Tools which could be used for the Six Sigma Analysis of eRevMax Process.

Cause & Effects Matrix Fishbone Charts Basic Statistics Failure Modes & Effects Analysis(FMEA) Control Charts and Statistical Process Control (SPC) Measurement Systems Analysis Gage R&R Pareto Charts Sigma Capability Computations Multi-Vari Analysis Hypothesis Testing Design of Experiments Mistake Proofing Control Plans ANOVA Linear and Multiple Regression Chi Square Tests

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Implementing a Customer Satisfaction MetricImplementing a Customer Satisfaction MetricOrganizations evaluate themselves by measuring customer satisfaction with their products or Organizations evaluate themselves by measuring customer satisfaction with their products or services. As organizations evolve, the measurement of customer satisfaction across the entire services. As organizations evolve, the measurement of customer satisfaction across the entire organization becomes imperative. The first step is for an organization to implement a metric for organization becomes imperative. The first step is for an organization to implement a metric for tracking customer satisfaction.tracking customer satisfaction.To develop a metric, an organization should explore these questions: To develop a metric, an organization should explore these questions: •Who are its customers? Who are its customers? •What type of survey should be administered to them? What type of survey should be administered to them? •How will satisfaction be measured across the organization?How will satisfaction be measured across the organization?The answers to these issues, along with an understanding of the Servqual survey framework and a The answers to these issues, along with an understanding of the Servqual survey framework and a voice-of-the-customer (VOC) matrix, will aid in the implementation of a customer-satisfaction metric. voice-of-the-customer (VOC) matrix, will aid in the implementation of a customer-satisfaction metric. Understanding the CustomerUnderstanding the CustomerA rule for implementing a satisfaction metric is that customer satisfaction must be measured for A rule for implementing a satisfaction metric is that customer satisfaction must be measured for every function and every service of an organization. There are usually many interlinks among the every function and every service of an organization. There are usually many interlinks among the services and products within an organization. For instance, a typical information technology (IT) services and products within an organization. For instance, a typical information technology (IT) company provides a variety of different products in the market and, in addition, a number of company provides a variety of different products in the market and, in addition, a number of services for those products, such as help-desk or desk-side support, IT infrastructure, and network services for those products, such as help-desk or desk-side support, IT infrastructure, and network security.security.In such a complex IT organization, the services get classified into functions, such as sales and In such a complex IT organization, the services get classified into functions, such as sales and operations. Thus, the first step is to identify the customers, both internal and external, for each of operations. Thus, the first step is to identify the customers, both internal and external, for each of the functions throughout the organization.the functions throughout the organization.For example, for the application development team, customers would include the application users, For example, for the application development team, customers would include the application users, along with some internal people to whom services are catered.along with some internal people to whom services are catered.Dimensions of Customer SatisfactionDimensions of Customer SatisfactionThe next step is to determine the strategy for collecting the VOC. The challenge is to develop survey The next step is to determine the strategy for collecting the VOC. The challenge is to develop survey questionnaires to measure customer satisfaction with the various aspects of a product or service, such as the questionnaires to measure customer satisfaction with the various aspects of a product or service, such as the actual product, the processes followed (for instance, for a warranty), and the quality of service.actual product, the processes followed (for instance, for a warranty), and the quality of service.There are different theories for understanding customer needs and arriving at specific factors for measuring There are different theories for understanding customer needs and arriving at specific factors for measuring customer satisfaction. One widely used framework for measuring customer satisfaction is Servqual, developed in customer satisfaction. One widely used framework for measuring customer satisfaction is Servqual, developed in the 1980s by Valarie A. Zeithaml, A. Parasuraman and Leonard L. Berry. The method is also known as the the 1980s by Valarie A. Zeithaml, A. Parasuraman and Leonard L. Berry. The method is also known as the RATER model, because it prescribes measuring satisfaction in these five dimensions: RATER model, because it prescribes measuring satisfaction in these five dimensions: •Reliability –Reliability – A company’s ability to perform the promised service dependably and accurately A company’s ability to perform the promised service dependably and accurately •Assurance –Assurance – The knowledge, competence and courtesy of employees and their ability to convey trust and The knowledge, competence and courtesy of employees and their ability to convey trust and confidence confidence •Tangibles –Tangibles – Physical facilities, equipment and appearances that impress the customer Physical facilities, equipment and appearances that impress the customer •Empathy –Empathy – The level of caring, individualized attention, access, communication and understanding that the The level of caring, individualized attention, access, communication and understanding that the customer perceives customer perceives •Responsiveness –Responsiveness – The willingness displayed to help clients and provide prompt service The willingness displayed to help clients and provide prompt service

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StatisticalStatisticalProcessProcessControlControl

ContinuousContinuousImprovementImprovement

ProcessProcessDesign/ResignDesign/Resign

AnalysisAnalysisOfOfVarianceVariance

BalanceBalanceScorecardScorecard

Voice ofVoice ofTheTheCustomerCustomer

CreativeCreativeThinkingThinking

Design ofDesign ofExperimentsExperiments

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