Six Sigma Forum Six Sigma – A Strategy for Achieving World Class Performance

What Is Six Sigma? Sigma is a letter in the Greek Alphabet Degree of variation; Level of performance in terms of defects; Statistical measurement of process capability; Benchmark for comparison; Process improvement methodology; It is a Goal; Strategy for change; A commitment to customers to achieve an acceptable level of performance

Six Sigma Definitions Business Definition Technical Definition A break through strategy to significantly improve customer satisfaction and shareholder value by reducing variability in every aspect of business. Technical Definition A statistical term signifying 3.4 defects per million opportunities.

Sigma Level Defects Per Million Opportunities Rate of Improvement 1  690,000 2  308,000 2 times 3  66,800 5 times 4  6,210 11 times 5  230 27 times 6  3.4 68 times

Who is Implementing Six Sigma At least 25% of the fortune 200 claim to have a serious six sigma program - Michael Hammer. Financial - Bank of America, GE Capital, Electronics - Allied Signal, Samsung, Sony Chemicals - Dupont, Dow Chemicals Manufacturing - GE Plastics, Johnson and Johnson, Motorola, Nokia, Microsoft, Ford. Airline - Singapore, Lufthansa, Bombardier And hundreds of others in Americas, Europe, Sub Continent.

Six Sigma Project Methodology Control Define Measure Analyze Improve Establish standards to maintain process; Design the controls, implement and monitor. Evaluate financial impact of the project Identify, evaluate and select projects for improvement Set goals Form teams. Collect data on size of the selected problem, identify key customer requirements, Determine key product and process characteristic. Analyze data, establish and confirm the “ vital few “ determinants of the performance. Validate hypothesis Improvement strategy Develop ideas to remove root causes Design and carry out experiments, Optimize the process. Final solutions Project Phases

Define - Critical to Quality (CTQ) Focus on customers generating annual revenue of USD 400,000/-. Customer needs Improved delivery performance Level 1 CTQ Timely delivery Level 2 CTQ On time delivery to schedule Level 3 CTQ Delivery within +/- 1 hour of scheduled delivery time Current process sigma level - 2.43 or 175889 DPMO

Define - Goal Statement Reduce number of delayed deliveries by 50 % by 31st December Y 2002 to better meet customer requirement of timely delivery defined as within +/- 1 hour of scheduled delivery.

Measure and Analyze Driver and Distance identified as key factors influencing delivery performance. Driver selected for focus. Potential root causes as to why Driver influenced the time: Size of the vehicle Type of engine Type of tyres Fuel capacity

Improve Experiments designed and conducted using truck type and tyre size. Findings: Larger tyres took longer time at certain routes where area was cramped and time lost in maneuvering. High incidence of tyre failures since tight turns led to stress on tyres thus increasing number of flat tyres. Team modified planning of dispatch process by routing smaller trucks at more restrictive areas.

Control Test implementation. Process sigma level up from 2.43 or 175889 DPMO to 3.94 or 7353 DPMO. Performance still fell short of best in class 4.32 or 2400 DPMO. Improvement led to significant customer satisfaction. Process continually monitored and data on new cycle times, tyre failure collected as per defined methods and frequency, analysed and monitored. Customer satisfaction measured and monitored.

Key Lessons Learnt Define Measure Difficulty in identifying the right project and defining the scope; Difficulty in applying statistical parameters to Voice of the Customers; Trouble with setting the right goals; Measure Inefficient data gathering; Lack of measures; Lack of speed in execution;

Key Lessons Learnt Analyse Improve Control Challenge of identifying best practices Overuse of statistical tools/ under use of practical knowledge Challenge of developing hypotheses Improve Challenge of developing ideas to remove root causes Difficulty of implementing solutions Control Lack of follow up by Managers/ Process Owners Lack of continuous Voice of the Customer feedback Failure to institutionalize continuous improvement.

What Makes Six Sigma Different? Versatile Breakthrough improvements Financial results focus Process focus Structured & disciplined problem solving methodology using scientific tools and techniques Customer centered Involvement of leadership is mandatory. Training is mandatory; Action learning (25% class room, 75 % application) Creating a dedicated organisation for problem solving (85/50 Rule).

Benefits of Six Sigma Generates sustained success Sets performance goal for everyone Enhances value for customers; Accelerates rate of improvement; Promotes learning across boundaries; Executes strategic change

THANK YOU -PHARMA STREET