Six Sigma Basics

For the legendary Jack Welch, a self-proclaimed cynic of quality programs, Six Sigma was not another quality tool that was heavy on slogans and light on results. Under Welch’s regime, GE splurged $ 450 million in two years on training its employees for Master Black Belts, Black Belts and Green Belts (leaders for Six Sigma initiatives within the company).

So what was special for Six Sigma? Simply speaking, it is a vision, a tool for quality improvement, a benchmark and a profit improvement methodology all rolled into one. Started by Motorola in the US in 1985, it was used, among other things, to manufacture a virtually defect-free pager. The methodology has been extensively used for achieving defect-free products.

Although Motorola applied Six Sigma extensively for manufacturing areas, GE chose Six Sigma as a corporate vision and applied it for all their service outputs (non-manufacturing) to achieve the Six Sigma level of defect-free outputs (99.99967 per cent defect-free products). The Six Sigma methodology is based on the paradigm that a zero defect in any product or process is possible. It believes that the Six Sigma level of quality — just 3.4 defects per million opportunities — would be attainable if the products and processes are designed properly.

The Six Sigma approach to quality ensures that the defects are eliminated progressively by identifying the root causes and eliminating the source of variation. As the defects are eliminated, the yield improves, work in process comes down, customer satisfaction improves and the profitability of the company goes up.

While implementing Six Sigma the first task at hand is identifying the factors critical to quality and pinning down defects that put a question mark on quality. As C R Nagaraj, corporate vice president, Mission:Quality, Wipro Limited, explains, “Six Sigma converts a business problem into a statistical problem and finds a statistical solution. It then converts the statistical solution into a business solution.”

This is the basic template for all the Six Sigma project methodologies. There are tools and techniques at different stages that help one understand the problem, diagnose root causes, validate critical root causes and implement corrective action. For example, a tool like the Design Customer Satisfaction and Manufacturing (DCAM) would be used for designing and manufacturing new products, while the cross-functional process mapping (CFPM) would be used for large processes that run through the business.

Variation that induces defects is caused by two factors: chance factors and assignable factors. Chance factors are those that are generated by the system and over which the operator has little control. For instance, in a manufacturing process, when a lot of bearings in a machine wear out, they produce variation in the product under manufacture. Similarly, deviations in the quality of raw material or power supply produce variations. These are chance factors that the management has to control.

The variation produced by chance factors is about 85 per cent. “These chance factors are resolved by acting on the system and by management action alone. No amount of operator skill can control these,” says Nagaraj.

On the other hand, the assignable factors that constitute 15 per cent of the variation is dependent on the person who is operating the system and factors such as skills, diligence begin their role at this stage. “The management is most responsible for the variation that is produced, which includes putting up the right processes, putting up metrics for understanding process behavior and plan corrective action,” says Nagaraj.

Six Sigma differs from other quality initiatives in terms of its structured approach to achieve profitability improvement through the competitive advantage. Importantly, while other quality initiatives take an operations point of view, Six Sigma approaches problems from the customer’s side.

Sigma is the statistical measurement for variation in any output, and when companies talk of + - 6 times the Sigma within a specification, it means that 99.99967 per cent of the products manufactured are within specification. The higher the sigma level, the better the quality. For example, a Three Sigma level of quality means 93.32 per cent of the products or processes are within specification. Among Indian companies the average Sigma level is estimated by consultants to be in at 2.5 Sigma level.

So how does the Six Sigma work? The methodology focuses mainly on the strategically important outputs of an organization that affect customer satisfaction. The most critical to quality features are attacked first and the rest follow in order of importance. A Six Sigma scale provides a means of establishing a measure of performance for any tangible and intangible outputs.

There are eight fundamental steps or stages involved in applying the breakthrough strategy to achieve Six Sigma quality in a process, division or a company. These eight stages are: Recognize, Define, Measure, Analyze, Improve, Control, Standardize and Integrate. The highly skilled teams known as Black Belts work full time on Six Sigma projects and lead teams through each of the core four phases Measure, Analyze, Improve and Control (MAIC) that affect key process.

Case Study: Six Sigma – Mumbai Dabawala’s .

 They make one Error on every 16 million transactions. The world renowned Forbes magazine has selected them as a colossal example of six sigma's success.. 

Logistics at its best.

 The Mumbai Tiffinwallas are international figures now thanks to Forbes Global.

 The Forbes story details the efficiency which with they delivers the Tiffins of their customers. Around 5000 Tiffinwallas deliver 175,000 lunches everyday and take the empty Tiffin back. They make One Mistake in 2 months.

This means there is one Error on every 16 million transactions. This is thus a 6 Sigma performance (a term used in quality assurance if the percentage of correctness is 99.999999) - the performance which has made companies like Motorola world famous for their Quality.

  Following is the complete story:

 Mumbai's "tiffinwallahs" have achieved a level of service to which Western businesses can only aspire. "Efficient organization" is not the first thought that comes to mind in India, but when the profit motive is given free rein, anything is possible. To appreciate Indian efficiency at its best, watch the tiffinwallahs at work.

 These are the men who deliver 175,000 lunches (or "Tiffin") each day to offices and schools throughout Mumbai, the business capital of India. Lunch is in a tin container consisting of a number of bowls, each containing a separate dish, held together in a frame. The meals are prepared in the homes of the people who commute into Mumbai each morning and delivered in their

own Tiffin carriers. After lunch, the process is reversed. And what a process - in it's complexity, the 5,000 tiffinwallahs make a mistake only about once every two months, according to Ragunath Medge, 42, president of the Mumbai Tiffinmen's Association. That's one error in every 8 million deliveries, or 16 million if you include the return trip. "If we made 10 mistakes a month, no one would use our service," says the craggily handsome Medge.

 How do they do it? The meals are picked up from commuters' homes in suburbs around central Mumbai long after the commuters have left for work, delivered to them on time, then picked up and delivered home before the commuters return.

Each Tiffin carrier has, painted on its top, a number of symbols which identify where the carrier was picked up, the originating and destination stations and the address to which it is to be delivered. After the Tiffin carriers are picked up, they are taken to the nearest railway station, where they are sorted according to the destination station. Between 10:15 a.m. and 10:45 a.m. they are loaded in crates onto the baggage cars of trains. At the destination station they are unloaded by other Tiffinwallas and re-sorted, this time according to street address and floor.

The 100-kilogram crates of carriers, carried on tiffinwallahs' heads, hand-wagons and cycles are delivered at 12:30 p.m., picked up at 1:30 p.m., and returned where they came from.

  The charge for this extraordinary service is just 150 rupees ($3.33) per month, enough for the tiffinwallahs, who are mostly self-employed, to make a good living. After paying Rs. 60 per crate and Rs.120 per man per month to the Western Railway for transport, the average Tiffinwallas clears about Rs.3, 250. Of that sum, Rs. 10 goes to the Tiffinmen's Association. After minimal expenses, the rest of the Rs. 50,000 a month that the Association collects go to a charitable trust that feeds the poor.

 Superb service and charity too. Can anyone ask for more?

 Comments:

What is wonderful about this system is that it extends the design and uses the Tiffinwallas, the end user and their cognitive and memory structure as well. Since one Tiffinwallas is not going to pick more than 10-20 Tiffin, he can easily sort recognize at the originating station and deliver it to the owner. Also within a building, the Tiffinwala knows which floor to deliver. Within a floor a owner can recognize his Tiffin amongst others. Thus these Tiffins carry only * A symbol (not name) of the originating station * A symbol for the destination station * A symbol for the building where the addressee is.

And what is more amazing is that this is run by people, most of whom are illiterate.

 Salaam ( Salute) to the Spirit of Mumbai !!

Six Sigma management practice is an ongoing improvement process similar to CMM, ISO9000, ERP, CRM, SCM etc, and it is not a one time process. 

Message: Spend continuously to save continuously. No spending, no improvement, no saving.