Production And Operation

Management

SIX SIGMA

WHAT IS SIGMA ?

A term (Greek) used in statistics to represent standard deviation from mean value, an indicator of the degree of variation in a set of a process.

Sigma measures how far a given process deviates from perfection. Higher sigma capability, better performance

What is Six Sigma? Six Sigma is a disciplined, data-driven approach and

methodology for eliminating defects (driving toward six standard deviations between the mean and the nearest specification limit) in any process – from manufacturing to transactional and from product to service.

Wise application of statistical tools within a structured methodology

Repeated application of strategy to individual projects

What is Six Sigma? In 1986, Bill Smith, a senior engineer and scientist at Motorola,

introduced the concept of Six Sigma to standardize the way

defects are counted. Six Sigma provided Motorola the key to addressing quality

concerns throughout the organization, from manufacturing to

support functions. The application of Six Sigma also

contributed to Motorola winning the Malcolm Baldrige

National Quality award in 1988. Since then, the impact of the Six Sigma process on improving

business performance has been dramatic and well documented

by other leading global organizations, such as General Electric,

Allied Signal, and Citibank.

Six Sigma Methods Production

DesignService

Purchase

HRM

Administration

QualityDepart.

Management

IT

Where can Six Sigma be applied?

WHY SIX SIGMA ? Six Sigma emerged as a natural evolution in

business to increase profit by eliminating defects

The Current business environment now demands and rewards innovation more than ever before due to:

Customer Expectations Technological Change Global Competition

Sigma Levels Screenshot_2015-03-09-18-13-38.png

SIX SIGMA METHODOLOGY(It takes money to save money)

BPMS Business Process Management System

DMAIC Six Sigma Improvement Methodology

DMADV Creating new process which will perform at Six Sigma

BUSINESS PROCESS MANAGEMENT SYSTEM

BPM strategies emphasize on process improvement and automation to derive performance.

Combining BPM strategies with sigma six is most powerful way to improve performance.

Both strategies are not mutually exclusive but some companies produced dramatic results by combining them.

WHAT IS DMAIC?(Define,Measure,Analyse,Improve.Control)A logical and structured approach

to problem solving and process improvement.

An iterative process (continuous improvement)

A quality tool which focus on change management style.

PHASESPhases of Six Sigma are:

Define specific goals to achieve outcomes, consistent with customers demand and business strategy

Measure reduction of defectsAnalyze problems ,cause and

effects must be considered Improve process on bases of

measurements and analysisControl process to minimize

defects

WHAT IS DMADV?

Acronym for: Define the project Measure the opportunity Analyze the process options Design the process Verify the performance

TOOLS & TECHNIQUES 7QC tools Check Sheets (collect data to make

improvements) Pareto Charts( define problem and frequency) Cause and effect diagram (Identify possible

causes to solve problem) Histogram (Bar charts of accumulated data to

evaluate distribution of data) Scatter diagram (plots many data points and

pattern between two variables) Flow Chart (Identify unwanted steps) Control charts (Control limits around mean

value)

Pareto chart ( define problem and frequency)

A pareto chart is used to graphically summarize and display the relative importance of the differences between groups of data.

What Questions the Pareto Chart Answers

What are the largest issues facing our team or business?

What 20 percent of sources are causing 80 percent of the problems (80/20 Rule)?

80/20 Rule Applications

• 80 percent of process defects arise from 20 percent of the process issues.• 20 percent of your sales force produces 80 percent of your company revenues.• 80 percent of customer complaints arise from 20 percent of your products or services.

Cause and effect diagram (Identify possible causes to solve problem)

It is particularly useful in a group setting and for situations in which little quantitative data is available for analysis.

Histogram (Bar charts of accumulated data to

evaluate distribution of data) histogram is used to graphically summarize and display the distribution of a process data set.

What Questions the Histogram Answers

What is the most common system response?

What distribution (centre , variation and shape) does the data have?

Does the data look symmetric or is it skewed to the left or right?

Scatter diagram (plots many data points and pattern

between two variables) A scatter plot, also called a

scatter diagram or a , is a basic graphic tool that illustrates the relationship

between two variables.   It is a tool used to visually

determine whether a potential relationship exists between an input and an outcome.

Flow Chart (Identify unwanted steps)

  A flowchart is a type of diagram that represents an algorithm, workflow or process, showing the steps as boxes of various kinds, and their order by connecting them with arrows. This diagrammatic representation illustrates a solution model to a given problem.

It represents the entire process from start to finish

Flow Chart Symbol

Control charts (Control limits around mean value)

Control charts have two general uses in an improvement project.

The most common application is as a tool to monitor

process  stability and control.

KEY ROLES FOR SIX SIGMA

Six Sigma identifies several key roles for its successful implementation:

Executive leadershipChampions Master Black Belts (Identify projects&

functions)Black Belts (Identify non value added

activities)Green Belts ( works on small projects )

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Six Sigma Certificate

USAGE OF SIX SIGMA

Six Sigma Companies

Six Sigma and Financial Services