1. 6σ &
Kaizen

2. KAIZEN

3. KAIZEN-The Concept Kaizen….means improvement Kaizen Philosophy
Ongoing improvement
Involves everyone
Both Managers & Workers
Kaizen Philosophy
Our way of life need to be constantly improved
Working life, social life, home life
Kaizen embodies
Productivity Improvement
Total Quality Culture
QC Circles
Zero Defects
…..etc.

4. KAIZEN-The Concept
Masaki Imai

5. KAIZEN-The Concept

6. KAIZEN-The Concept
KAIZEN
INNOVATION

7. KAIZEN-The Concept Process Oriented Approach People Oriented Approach
Leads to Improved Results
Focus on the process improvement without loosing sight of the expected results.
People Oriented Approach
Focus on ….
Discipline
Time Management
Skill Development
Participation and Involvement
Morale
Communication

8. KAIZEN-The Practice Management Group Individual Tools Involves Target
Seven QC Tools
New Seven Tools
Professional Skills
Common Sense
Involves
Managers and Professionals
QC Circles
Everyone
Target
Systems and Process
Group Work area
Individual work area
Implementation Cost
Small investment
Mostly inexpensive
Inexpensive
Results
New System and Facility improvement
Improved work procedures
On the spot improvement

9. KAIZEN-The Practice Just In Time- Management Oriented Kaizen
Exact number of required units brought to each successive stage of production at the appropriate time
The advantage of JIT
Shortened Lead Time
Reduced time spent on non-process work
Reduced inventory
Better balance between processes
Problem clarification

10. KAIZEN-The Practice Group Oriented Kaizen- SMALL GROUP ACTIVTIES
Informal, voluntary small groups, organized within the company
Carry out specific improvement activities
Many forms:-
QC circles, Suggestion Groups, Workers group………
QC Circles…the most famous
Emphasis on problem solving in the work area
Advantages of QCC
Sense of teamwork
Improved communication
Improved morale
Acquire new skills
Labor-Management relationship improved

11. KAIZEN-The Practice Individual Oriented Kaizen- SUGGESTION SYSTEM
Individual provides suggestion on how to improve his work area.
Helps the individual to be Kaizen conscious.
Also helps in….
Workers to speak out.
Opportunity for management to help workers.
An valuable opportunity for two way communication
Suggestions normally covers:-
Savings in energy, material and other resources
Improvement in working environment
Improvements in machines, processes, jigs and tools
Improvements in customer services

12. KAIZEN- Implementation
Seven Conditions for Successful Implementation of Kaizen Strategy
Top management commitment
Top management commitment
Setting up an organization dedicated to promote Kaizen
Appointing the best available personnel to manage the Kaizen process
Conducting training and education
Establishing a step-by-step process for Kaizen introduction.

13. KAIZEN &
INNOVATION

14. Figure 2.2 Ideal pattern from innovation
Time
Figure 2.3 Actual pattern from innovation
Time

15. INNOVATION plus KAIZEN
New Standard
KAIZEN
INNOVATION
New Standard
KAIZEN
INNOVATION

16. KAIZEN and INNOVATION KAIZEN INNOVATION 1. Effect 2. Pace
Long-term and business as usual
Short term and dramtic
2. Pace
Small Steps
Big Steps
3. Time frame
Continuous and Incremental
Intermittent and non-incremental
4. Change
Gradual and constant
Abrupt and volatile
5. Involvement
Every-one
Selected champions
6. Approach
Collective group efforts, systems approach
Individual ideas and efforts
7. Mode
Maintenance and Improvement
Scrap and Rebuild
8. Effort Orientation
People
Technology
9. Practical Requirements
Little investment but great efforts to maintain
Large investment but little effort to maintain
10. Advantage
Works well in slow growth economy
Better suited in fast growth economy

17. Another comparison of Innovation and KAIZEN
Creativity
Individualism
Specialist-oriented
Attention to great leaps
Technology-oriented
Information: closed, proprietary
Functional (specialist) orientation
Seek new technology
Line + staff
Limited feedback
Adaptability
Teamwork (systems approach)
Generalist-oriented
Attention to details
people-oriented
Information: open, shared
Cross-functional orientation
Build on existing technology
Cross-functional organization
Comprehensive feedback

18. 6 Sigma

19. About Six Sigma
Six Sigma Was Developed at Motorola in the 1980’s As a Method to Improve Process Quality.
It Was First Used to Improve Manufacturing Process Capability and Then Migrated to Business Processes Capability
Companies That Have Deployed Six Sigma: Bank of America, Motorola, GE, IBM, Kodak and Many More
The Basic Premise Is, All Processes Have Variation. Variation Is the Enemy.

20. Six Sigma Philosophy Know What’s Important to the Customer (CTQ)?
Know What’s Important to the Customer (CTQ)
Reduce Defects (DPMO)
Center Around Target (Mean)
Reduce Variation (Standard Deviation)
GE Company Proprietary
November 1998

21. SIX SIGMA-Definitions
Business 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.

22. SIX SIGMA DEFINATIONS If your yield is… Your DPMO is…. Your Sigma is…
30.9% 1σ
69.2% 2σ
93.3%
66 800 3σ
99.4%
6 210 4σ
99.98%
320 5σ %
3.4 6σ

23. SIX SIGMA-Definitions
In brief, Six Sigma is a process control method to improve the quality of products or services in a continuous manner.
This method uses six standard deviations of a normal distribution as the limits of customers’ acceptance of the system’s products.
This method is applicable to manufacturing as well as service industries.
With six sigmas, only 3.4 defects per million are allowed, or an acceptable level of % is required

24. Six Sigma Performance With 99 % Quality With Six Sigma Quality
For every letters delivered
3,000 misdeliveries
1 misdelivery
For every week of TV broadcasting per channel
1.68 hours of dead air
1.8 seconds of dead air
Out of every 500,000 computer restarts
4100 crashes
Less than 2 crashes
Source: The Six Sigma Way by Peter Pande and Others

25. 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.

26. Six Sigma Results Company Annual Savings General Electric
$2.0+ billion
JP Morgan Chase
*$1.5 billion (*since inception in 1998)
Motorola
$ 16 billion (*since inception in 1980s)
Johnson & Johnson
$500 million
Honeywell
$600 million
Six Sigma Savings as % of revenue vary from 1.2 to 4.5 %
For $ 30 million/yr sales – Savings potential $ 360,000 to $ 1.35 million.
Investment: salary of in house experts, training, process redesign.

27. Key Concepts of Six Sigma
At its core, Six Sigma revolves around a few key concepts.
Critical to Quality: Attributes most important to the customer
Defect: Failing to deliver what the customer wants
Process Capability: What your process can deliver
Variation: What the customer sees and feels
Stable Operations: Ensuring consistent, predictable processes to improve what the customer sees and feels
Design for Six Sigma: Designing to meet customer needs and process capability

28. Dissecting Process Capability
Premise of 6 Sources of variation can be:
Identified
Quantified
Eliminated or Controlled
Unstable Parts & Materials
Inadequate Design Margin
Inadequate Process Capability
LSL
USL
Defects
Acceptable
Defects
Process Capability

29. “Common sense” doesn’t mean “commonly done” or when done, done well.
Six Sigma Methodology
Define
Define the problem and customer
requirements.
Measure defect rates and document
the process in its current incarnation.
Analyze process data and determine
the capability of the process.
Improve the process and remove
defect causes.
Control process performance and
ensure that defects do not recur.
Control
Measure
Improve
Analyze
“Common sense” doesn’t mean “commonly done” or when done, done well.

30. Six Sigma 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

31. Six Sigma – Case Study Service Organisation
Background
M/s Alpha Inc. manages out bound cargo from a distribution centre to different stores.
Deliveries made on trucks - owned and hired.
Customers dissatisfied at delivery schedules.
Leadership decision to deploy Six Sigma;
Team of 1 Black Belt and 3 Green Belts formed
Sponsor of the project – Distribution Manager

32. 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 or DPMO

33. 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.

34. Define - Performance Standards
Output unit
A scheduled delivery of freight
Output characteristic
Timely delivery
Project Y measure
Process starts when an order is received
Ends when goods are received & signed for at customers desk.
Process measurement – Deviation from scheduled delivery time in minutes.
Specification limits
LSL = -60 minutes
USL= +60 minutes
Target
Scheduled time or zero minutes deviation
Defect
Delivery earlier or later than 1 hour.
No. of defect opportunities per unit
1 opportunity for a defect per scheduled delivery of freight.

35. Detailed process maps drawn
Define - SIPOC Diagram
Supplier
Stores Manager
Input
Stores Order
Process Steps (high level)
Receive order
Plan delivery
Dispatch Driver with goods
Deliver goods to stores
Receive delivery
Output
Received freight with Documents
Customer
Store Manager
Detailed process maps drawn

36. 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

37. 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.

38. Control Test implementation.
Process sigma level up from 2.43 or DPMO to 3.94 or 7353 DPMO.
Performance still fell short of best in class 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.

39. 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;

40. Key Lessons Learnt Analyse 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.

41. Key Lessons Learnt
“ Define “ ranked most important step but gets the lowest resource allocation
Project scoping and its definition is critical to its success/ failure;
“Measure” is considered most difficult step and also gets the highest resources
Source: Greenwich Associates Study Y 2002

42. 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).

43. 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

44. 6 Sigma vs
Kaizen

45. Six Sigma & Kaizen- The Difference
Quality Improvement
YES
Continuous Improvement
Approach
Improve Existing System
Human Based
Statistical Method
Improvement Framework-DMAIC
Implementation
Simpler and Low cost
Difficult and High Cost
RELIES UPON GROUP DYNAMICS
FIXED PLAN OF IMPLEMENTATION

46. Kaizen Six Sigma Japanese Origin Western Origin
Culture Methodology (or Culture)
Kaizen Umbrella Road Maps
Continuous Improvement Immediate Perfection
Mistakes as Possibility for Improvement Reducing Variation and Defects
Long-term Results Short-term Results Possible
Every Possible Improvement Prioritising Projects
Providing Quality Ensuring Profitability
Participation of Every Single Employee Creation of Project Teams

47. Thank You