Six Sigma - A Breakthrough Strategy

FICCI
Six Sigma - A Breakthrough Strategy

FICCI
Contents
• 400 State-of-the-art training slides on concepts of Six

Sigma, implementation methodologies, tools for
achieving Six Sigma and training of black belts.
• Self assessment utility package.
• Quality promotional posters.
Jointly developed by FICCI Quality Forum and Competitive Edge, Management consultants
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Index
CLICK on the boxes below to navigate
1. Basic concepts of Six Sigma
2. Fundamentals of the breakthrough strategy
3. Define phase
4. Measurement phase
5. Analysis phase
6. Improvement phase
7. Control phase
8. Implementation and deployment
9. Measurement of business excellence
End slide show

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1. Basic concepts of Six Sigma
Most effective strategy

Limitation of other tools
What is Sigma
Six Sigma and defect rate
Old and new concept of quality
Six Sigma and cost of quality
How Six Sigma works
Reasons to adopt Six Sigma
Global acceptability and success stories
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Most effective strategy
Six Sigma is the most effective breakthrough strategy ever

devised. It enables companies to make substantial
improvements in their bottom-line by designing and
monitoring every day business activities in ways which
minimizes all types of waste and non-value adding
activities and maximizes customer satisfaction.
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Limitations of other tools
Many organizations have earlier tried Downsizing, Outsourcing,

Activity based costing, Business process reengineering, Just in time,
Kaizen & TQM for improving quality and business results. While all
these tools are useful in their own ways, they often fail to make
breakthrough improvements in bottom line and quality.
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Limitations of other tools
Kaizen, for example, means doing little things better and continuously
reaching for better standards, work well till 3 or 4 sigma in specific
processes. These small improvements may not necessarily translate
into overall business improvement. This is because Kaizen only uses
basic tools. For reaching 5 or 6 sigma standards, the organization will
have to use sophisticated tools like Quality Function Deployment
(QFD), Failure Mode and Effect Analysis (FMEA) and Design of
Experiments (DOE) to achieve optimum throughput at minimum cost.
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What is Sigma
The term ‘Sigma’ taken from the Greek alphabet, is used

to designate the distribution or spread about the mean
(average) of any parameter of product, process or
procedure. In the context of business or manufacturing
process, Sigma capability is a metric which indicates how
the process is behaving. Higher the Sigma value, better the
capability of the process to produce defect free work and
vice versa.
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Six Sigma and error or defect rate
At present most companies, when their processes are under

control, are able to achieve 3 sigma capability which represents
99.7% performance i.e 3 defects per 1000. With rapid
technological advances and development of complex products,
this level of quality is no longer acceptable.
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Six Sigma and error or defect rate
As manufacturing of most of the products involves large number of

processes and if each process has a maximum quality capability of 99.7%,
the quality of finished product would be considerably less. Therefore, if the
companies have to compete in the global markets, they have to achieve a
much higher level of quality capability.
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Levels of Sigma and defect rate
Quality level % Quality Defective PPM*
3 Sigma 99.73 66807
4 Sigma 99.9937 6210
5 Sigma 99.999943 233
6 Sigma 99.9999998 3.4
*Parts Per Million

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Old concept
of quality
Past concepts of quality focused on “conformance to standards”. This

definition assumed that as long as the company produced quality products
and services, their performance standard was correct regardless of how
those standards were met. Moreover, setting of standards and
measurement of performance was mainly confined to the production areas
and the commercial and other service functions were managed through
command and control.
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New concept of quality
In Six Sigma, the concept of quality encompasses manufacturing,

commercial and other service functions of an organization because all
these functions directly or indirectly affect products/service quality &
customer satisfaction. It also embodies a structured system of capturing
all types of errors and their quantified measurement for subsequent
analysis and improvement.
Under the new approach, quality is a state in which Value enrichment
is realized for the customer and provider in every aspect of business
relationship.
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Value enrichment
The term ‘Value enrichment’ for the company means that they must
strive to produce highest quality products at the lowest possible costs to
be competitive in the global markets.
For customers, the term ‘Value enrichment’ means that they have the
right to purchase high quality products/services at the lowest cost.
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Knowing characteristics critical to customer
Value enrichment for the company and the customer is done by

measurement based approach of Six Sigma, which enables us to find :-
• Vast areas of business about which we do not know enough.
• When we do not know about a parameter or a characteristic which are
important to customers, we do not value it.
• If we do not value a parameter or a characteristic, we do not measure it.
• If we do not measure, we can not improve.
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Six Sigma and cost of quality
Six Sigma has a very significant impact on the cost of quality. As

the Sigma level moves up, the cost of quality comes down and vice
versa. Traditionally recorded quality cost generally account for
only 4 to 5 percent of sales which mainly comprise of cost of scrap,
re-work and warranty.
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Hidden costs of quality
There are additional costs of quality which are hidden and do not
appear in the account books of the company, as they are intangible and
difficult to measure. These additional costs could be as high as 20-25%
of sales and comprise of low conversion efficiency of materials, cost of
resolving customer problems, inadequate resource utilization, high
inventory, long cycle times, more set-up times, penalties due to late
delivery and lost customer loyalty and goodwill.
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Visible and hidden costs
•Scrap
•Rework
Visible costs
•Warranty costs
• Conversion efficiency of materials
• Inadequate resource utilization
• Excessive use of material
• Cost of redesign and re-inspection Hidden Costs

• Cost of resolving customer problems
• Lost customers / Goodwill
• High inventory
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Cost of quality at various levels of Sigma
Sigma Defect rate(PPM) Cost of quality Competitive level
6 3.4 <10%
World
5 233 10-15% Class
4 6210 15-20%
Industry
3 66807 20-30% Average
2 308537 30-40%
Non
>40% Competitive
1 6,90000
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How Six Sigma works
Six Sigma is a high performance data driven approach

focused on analyzing the root causes of business
problems and solving them. It ties the outputs of a
business directly to market place.
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Clear focus on the bottom line
Six Sigma places a clear focus on getting the bottom line

results along with the time frame. No Six Sigma project is
approved until the bottom line or the success factors are
clearly spelt out. Each project must be completed within a
given time frame which is usually 3-6 months.
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Objectives of Six Sigma
At the strategic level, the goal of Six Sigma is to align an

organization to its marketplace and deliver real improvements (in
terms of rupees/dollars) to the bottom line.
At the operational level, the Six Sigma goal is to move the
business product or service attributes within the zone of customer
specifications and to significantly shrink process variation.
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Impact of Six Sigma
The Six Sigma strategy affects five fundamental areas

of business :-
1. Process improvement
2. Product & service improvement
3. Customer satisfaction
4. Design methodology
5. Supplier improvement
The business improvement mechanism is shown in the

next slide.
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Six Sigma business improvement mechanism
Critical
Business Process
Suppliers Inputs Customer
Process Outputs
Requirements
Defects
Variation in output of processes

causes defects
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Aspects of Six Sigma
Six Sigma approach integrates the human and process

elements of improvement to produce breakthrough
results.
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Human elements
• Strong leadership
• Training
• Customer focus
• Project teams
• Culture change
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Process elements
• Analysis of variation
• Disciplined approach
• Quantitative measures
• Statistical methods
• Process improvement
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In the past, quality programs adopted by organizations focused on meeting

customer’s needs without due consideration of visible and invisible costs.
Thus, many organizations managed to produce high quality goods, but at a
comparatively high cost.
However, today in the fiercely competitive market, the organizations have
no choice but to offer the best quality products and services at the
minimum cost - which is the purpose and objective of Six Sigma.
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• Organizations which achieve significant quality

improvement earn 8 - 10 % better prices.
• Organizations which achieve a superior quality position are
3 times more profitable than those with inferior levels of
quality.
• Organizations which improve their quality, gain 4-5 % in
market share each year.
• Each significant positive shift in process capability equates
to 10 times improvement in profitability.
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Global acceptability
Six Sigma approach was initially developed in Motorola

and greatly refined during its application in General
Electric. This is what CEO, GE Power systems has to
say about Six Sigma.
“Quality (Six Sigma)… The Pride and Commitment is the most
pervasive and all encompassing initiative we (GE) have ever
launched. Quality is the fabric by which all of us will be bound
together, and how our daily activities and contributions can be
measured both internally and externally by our customers when
they vote with their next order”.
Mr. Robert.L.Nardelli
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Global acceptability
The world over, organizations seeking better ways of

improving their profitability have adopted Six Sigma
because of its ability in giving quick tangible results.
These organizations include General Electric, Allied
signal, Honda, Sony, Canon, Polaroid, Texas instruments
and many more fortune 500 companies across the globe.
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Success stories - General Electric
General Electric’s, Jack Welch describes Six Sigma as

the most important initiative GE has ever undertaken. GE
had an operative income of 10% for decades and they were
not able to improve this despite various efforts. After
implementation of Six Sigma GE was able to improve its
operative income from 10% in 1995 to 16.7% in 1998.
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Allied Signal
Allied Signal, which was on the verge of bankruptcy was

made profitable by CEO Larry Bossidy through Six Sigma.
The company implemented Six Sigma program in 1994.
The cumulative impact on the savings in the direct costs
during this period was more than US$ 2 billion.
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Asea Brown Boveri
ABB, after application of Six Sigma has reduced

measurement equipment error by 83%. The company also
made drastic improvements in material handling resulting in
an annual estimated cost savings of US $775000.
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Challenge for the Indian companies
It is high time, that Indian companies also start

implementing Six Sigma for making breakthrough
improvements and to remain globally competitive.
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2. Fundamentals of the breakthrough strategy
Fundamental steps
Six sigma roadmap
Strategies at various levels
Business perspective of strategy
Operations perspective of strategy
Process perspective of strategy
Players and their responsibilities
Black Belt training program
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Fundamental steps
There are 6 fundamental steps involved in applying the

breakthrough strategy for achieving Six Sigma. These 6
steps are :-
• Define
• Measure
• Analyze
• Improve
• Control
• Standardize
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The Six Sigma roadmap- Breakthrough strategy
Stage Phase Objective
Identify key business

BREAKTHROUGH STRATEGY
Identification Define
issues
Measure Understand current

Characterization performance levels
Analyze
Improve Achieve breakthrough

Optimization Control improvement
Integrate Six Sigma in

Institutionalization Standardize
day to day functioning.
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Define phase
This phase defines the project. It identifies critical

customer requirements and links them to business needs.
It also defines a project charter and the business processes
to be undertaken for Six Sigma.
Note: This phase is extensively covered in a separate chapter “Define phase”.

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Measurement phase
This phase involves selecting product characteristic, mapping

respective process, making necessary measurements and
recording the results of the process. This is essentially a data
collection phase.
Note: This phase is extensively covered in a separate chapter “Measurement phase”.

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Analysis phase
In this phase an action plan is created to close the “gap”

between how things currently work and how the organization
would like them to work in order to meet the goals for a
particular product or service. This phase also requires
organizations to estimate their short term and long term process
capabilities.
Note: This phase is extensively covered in a separate chapter “Analysis phase”.

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Improvement phase
This phase involves improving processes/product performance

characteristics for achieving desired results and goals. This phase
involves application of scientific tools and techniques for making
tangible improvements in profitability and customer satisfaction.
Note: This phase is extensively covered in a separate chapter “Improvement phase”.

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Control phase
This phase requires the process conditions to be properly

documented and monitored through statistical process control
methods. After a “settling in” period, the process capability
should be reassessed. Depending upon the results of such a
follow-up analysis, it may be sometimes necessary to revisit
one or more of the preceding phases.
Note: This phase is extensively covered in a separate chapter “Control phase”.

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Standardization phase
This phase requires institutionalizing Six Sigma into day to

day working of the organization. In this phase the Six Sigma
gains derived by certain specific projects are applied to the
other projects as well for optimum business results.
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The breakthrough strategy
Each phase is designed to ensure that :-

• Companies apply the breakthrough strategy in a systematic
way.
• Six Sigma projects are systematically designed and
executed and
• The results of these projects are incorporated into running
the day-today business.
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Strategy at various levels
Almost every organization can be divided into 3 basic

levels :-
1. Business level
2. Operations level
3. Process level.
It is extremely important that Six Sigma is understood and
integrated at every level.
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Strategies at various levels
• Executives at the business level can use Six Sigma for

improving market share, increasing profitability and
organizations long term viability.
• Managers at operations level can use Six Sigma to improve
yield and reduce the labor and material cost.
• At the process level engineers can use Six Sigma to reduce
defects and variation and improve process capability leading to
better customer satisfaction.
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Business perspective of the breakthrough strategy
• Define what plans must be in place to realize improvement of

each state.
• Measure the business systems that support the plans.
• Analyze the gaps in system performance benchmarks.
• Improve system elements to achieve performance goals.
• Control system-level characteristics that are critical to value.
• Standardize the systems that prove to be best-in-class.
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Operations perspective of the breakthrough strategy
• Define Six Sigma projects to resolve operational issues.

• Measure performance of the Six Sigma projects.
• Analyze project performance in relation to operational goals.
• Improve Six Sigma project management system.
• Control inputs of project management system.
• Standardize best-in-class management system practices.
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Process perspective of the breakthrough strategy
• Define the processes that contribute to the functional problems.

• Measure the capability of each process that offers operational
leverage.
• Analyze the data to assess prevalent patterns and trends.
• Improve the key product/service characteristics created by the
key processes.
• Control the process variables that exert undue influence.
• Standardize the methods and processes that produce best-in-
class performance.
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Six Sigma players and their responsibilities

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Champions - Qualification
The CEO should be the main driver of the Six Sigma

program. Under him departmental / functional heads such
as vice president or director manufacturing or marketing
have to take charge in implementing the program. The
champions must have complete hands-on experience with
sound knowledge of advanced statistical tools.
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Champions - Responsibilities
• Create the vision of Six Sigma for the organization.

• Define the road map to implement Six Sigma across the
organization.
• Select the right people.
• Develop a training plan for implementing breakthrough
strategy.
• Carefully select high impact projects.
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Champions - Responsibilities
• Support development of statistical thinking.

• Realize the gains by supporting Six Sigma projects
through allocation of resources and removal of
roadblocks.
• Recognize and reward people.
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Selecting the right people
The success of Six Sigma to a very large extent depends

upon selection of right people. The CEO must therefore
ensure that the selected experts have suitable qualification,
mental attitude to challenge the status-quo and a missionary
zeal to implement change. These experts are also known as
“black belts”. The qualification, responsibilities and
training program of black belts is discussed on the
following slides.
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Why the name “Black Belts”?
The name black belts comes from the sport of Karate.

Both Karate and Six Sigma depend on mental discipline
and systematic, intensive training. Just as black belts in
Karate depend on power, speed and decisiveness, Six
Sigma black belts should also depend on the same
qualities. Just as the black belts continuously reposition
their bodies, Six Sigma black belts also must be able to
reposition themselves as they move from one project to
another.
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Characteristics of Six Sigma Black Belt
• Understands the “big picture” of the business.

• Focuses on results and understands the importance of the bottom line.
• Speaks the language of money, time, organizational objectives.
• An expert in SPC and continuous improvement tools.
• Capable of consulting, mentoring and coaching.
• Drives change by challenging conventional wisdom.
• Anticipates and confronts problems proactively and solves them.
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Master Black Belts - Qualification
They are usually Chief Engineers or Head of departments /

functional heads.They must posses a technical degree and
have sound knowledge of statistical tools.
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Master Black Belts - Responsibilities
The master Black Belts should take the main responsibility

of implementing Six Sigma program. They must assist the
organization in identifying Six Sigma projects and also
develop and train Black Belts under them.
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Master Black Belts - Responsibilities
• Take on leadership of major programs.

• Participate in project reviews to offer technical expertise.
• Organize training and development programs for Six Sigma
team members/black belts.
• Facilitate sharing of best practices across the organization.
• Ensure successful implementation of Six Sigma projects from
start to end.
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Black Belts - Qualification
They must posses a technical degree or must have minimum 5

years of relevant experience. They must have good knowledge
of statistical tools.
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Black Belts - Responsibilities
• Act as a breakthrough strategy expert.

• Identify barriers or roadblocks.
• Lead and direct teams in project execution.
• Report progress to management.
• Determine the most effective tools to apply.
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Black Belts - Responsibilities
• Prepare detailed project report in all the phases.

• Get inputs from operators, first line supervisors and
team leaders.
• Train others.
• Ensure that the results are sustained.
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Black Belt training program

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Black Belt training
While the Six Sigma methodology needs the involvement of

all people across the organization, the bulk of implementing
the breakthrough strategy rests on black belts. Black Belts
possess the Six Sigma knowledge and skills necessary to
implement, sustain and lead a highly focussed Six Sigma
initiative within the organization.
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Black Belt training
Black Belt training is divided into four sessions. Each session

is organized around the four core phases of break through
strategy i.e. Measurement, Analysis, Improvement & Control.
Usually the black belt training is completed in four months
with one week devoted to class room instructions for each
phase followed by three weeks in application of knowledge to
the assigned project. The training program for each phase is
depicted on the following slides.
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Black Belt training - Measurement phase

Training period 4 weeks ( 1 Week classroom instructions, 3 weeks on projects )
Components of training Tools used*
• Select CTQ characteristic Customer surveys, QFD, FMEA
• Define performance standards Blue prints, customer surveys
• Establish data collection plan, Histograms, control charts

validate measurement system &
collect data.
*These tools have been covered in the relevant chapters.

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Black Belt training - Analysis phase

• Establish process capability Process capability indices (Cp, Cpk),
• Define performance objective Benchmarking
• Identify variation sources Control charts, FMEA, Cause &

effect diagram, Histograms.
*These tools have been covered in the relevant chapters

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Black Belt training - Improvement phase

• Screen potential causes Pareto Analysis, FMEA, Cause

& Effect.
FMEA, Process flowcharting,

• Discover variable relationships
Cause & Effect.
• Establish operating tolerances

Design of Experiments, Process
& pilot solution
capability study.

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Black Belt training - Control phase

Components of training Tools used
• Validate measurement system Process flowcharting
• Determine process capability Capability indices
• Implement process control Mistake proofing, SPC,

system & project closure Risk management.

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3. Define phase
Objectives of define phase

Key steps of define phase
Projects critical to customers
Develop team charter
Define process map
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Objectives of define phase
• To identify the process or product for improvement.

• To develop an action plan.
• To obtain formal project approval.
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Key steps of the define phase
A. Identify project which are critical to customers.

B. Develop team charter / action plan.
C. Define process map.
Each step is discussed in detail in the following slide.
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A. Identify projects critical to customers
The following steps are required for this purpose :-
I. Identify present & future customers.

II. Analyze voice of the customer.
III Translate customer needs into Critical to Quality (CTQ)
requirements.
IV. Integrate CTQs with business strategies.
V. Identify projects for breakthrough improvements.
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A. Identify projects critical to customers
The following sources of input can be used to build the

database on the customers and for identification of CTQs.
• Customer surveys
• Customer complaints
• Internal problems
• Benchmarking data with key competitors and
• Brainstorming
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B. Develop a team charter
The following steps are required for developing a team

charter / action plan:-
I. Develop a business case - Relevance of the project,
consequences of not undertaking the project and how does
it fit with the business goals.
II. Define problem / goal statement - Why are we not
meeting our customer requirements, how significant is the
problem, when & where do the problems occur and what is
the impact of the problem.
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Develop a team charter
III. Assess project scope - Which processes will the team

focus on, resources available to the team, the start & the
end point.
IV. Define timeframe - This should contain complete list
of activities to be undertaken alongwith realistic time
frames.
V. Define roles and responsibilities - Define the roles and
responsibilities of various team members.
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C. Define process map
The following steps are required for process mapping :-

I. Define process
II. Connect the customer to your process
III. Map business process - The process map for the project
includes customer and their key requirements, inputs,
suppliers, process steps and outputs.
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4. Measurement phase
Objectives of Measurement phase

Understanding and controlling variation
Accuracy and precision
Measurement of accuracy
Measurement of precision
Understanding normal distribution
Meaning of a sigma process
Various levels of sigma process
Picturisation of accuracy and precision
Calculating non-conformities
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Objectives of Measurement phase
• Collect data for identified projects.

• Characterize data by using mean, standard deviation
and z value.
• Understand various levels of sigma process.
• Measure non-conformances.
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Understanding & controlling variation
Variation is a basic phenomenon of nature. This effects all

entities including products and processes. Variation is found
in all stages of product life cycle including design &
development, manufacturing, service and supplier processes.
Controlling process variation is a key to achieving Six Sigma
quality.
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Variation is responsible for the difference between one unit of

product and another. It can also be defined as the difference
between specifications and customer requirements. Variation
is present in all processes. When it is present in one or more
characteristics of a product or process, it causes poor quality
and customer dissatisfaction.
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Products and processes are expected to vary because no two

things are exactly alike. Differences result from material
characteristics, methods, people, machine and
environmental factors as depicted on the next slide.
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Sources of variation
Material Methods Environment

•Assemblies •Procedures •Noise level
•Components •Policies •Humidity
•Suppliers •Accounting •Temperature
•Consumables •Lighting
Variation
People Machine Measurement

•Training •Technology •Counting
•Experience •Variability •Instruments
•Skill •Tooling •Gauging
•Attitude •Fixtures •Tests
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Causes of variation
Causes
Chance / Inherent Causes Special / Assignable Causes

They have the influence on They influence the output
the output all the time. only once in a while.
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Chance / inherent causes of variation
Chance or inherent causes are sources of variation which are

always present because of small day-to-day variables. These
causes are inherently part of the process (or system) and
affect everyone working in the process. They are typically
due to a large number of small random sources of variation.
Chance causes also contribute to the output variability
because they themselves vary.
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Chance / inherent causes of variation
Each chance/inherent cause typically contributes a small

portion to the total variation in process outputs. Inherent
causes usually have a nonsystematic, random appearance.
Process or system variability is defined in terms inherent causes
because they are regular contributors. The variables involved in
inherent causes may change slightly from day to day, but this is
natural. They will always be present, and the best way to stay
ahead of this situation is to plan for it.
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Special / assignable causes
These are causes that do not occur naturally and are unusual.
These types of causes are not inherent part of the process (or
system) all the time or do not affect everyone but arise because
of specific circumstances. Special causes are sporadic
contributors and are due to some specific circumstances.
Process or system variability is defined without them. Special
causes can be identified and efforts can be made to minimize
their influence on the process.
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Accuracy & Precision

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Visually summarising data - Histograms
Histograms are one of the simplest ways to summarize the

data in the visual form. Histograms give us the graphical
picture of the data . It graphically depicts the frequency of
occurrence of an event. On the X axis, the measured values
or scale is plotted, and on the Y axis the frequency is
plotted. Histograms are extremely important in analyzing
variation in the processes.The example of an histogram is
shown on the following slide.
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Visually summarising data - Histograms
60
50
40
Frequency
30
20
10
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
Thickness of output in mm
CTQ ( Critical to quality ) characteristic
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Measurement of central tendency -Accuracy
Accuracy is defined as closeness of agreement between

observed values and known reference standard.
Accuracy can be measured by measuring central tendency of
the process.
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Accuracy
There are three popular measures of accuracy:-
• Mean
• Mode
• Median
The most commonly used measure of accuracy is mean ( simple

arithmetic mean). Hence for the purpose of Six Sigma we
confine our study on Mean only.
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Measurement of accuracy
Mean - it is the arithmetic average of the measurements.

To find the mean, all the measurements X1, X2, X3, ……, Xn
are added and their sum is divided by the number of
measurements, n. Mathematically it is represented as:-
( X1 + X2 + X3 +……+ Xn)
Mean X =
n
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Measurement of dispersion - Precision
Precision is the measure of dispersion between several individual

observations of relevant quality characteristics. Precision describes
consistency of the process. Precision can be measured through :-
1. Range: Range is the difference between the largest and smallest

measurement in a given set of observations.
2. Standard Deviation: Standard deviation in general terms is a measure of

mean variation of values from the central tendency.
Standard deviation is more reliable method of measuring precision, hence

for the purpose of Six Sigma, we will confine our study on Standard
deviation.
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Measurement of precision
Mean Deviation of values from central tendency can also be

used to measure dispersion. However, there is one difficulty
in the use of this measure, that the algebraic sum of all
deviations is zero.
Standard deviation is calculated as root mean square of the
deviations of observations from the mean which henceforth
will be represented by abbreviation SD.
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Calculation of standard deviation
Standard deviation can be calculated by the following formula :-

If X1, X2 ,X3…………Xn are individual observations
And X is the arithmetic mean
(X12 + X22 +….+Xn2) - n ( X ) 2

Variance, V =
(n - 1)
Standard Deviation, SD = V
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Example to calculate standard deviation
Calculate standard deviation of 10, 11, 12, 13 , 14
Sl. X X (Square)
1 10 100
2 11 121
3 12 144
4 13 169
5 14 196
T otal 60 730
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Calculation of Standard Deviation

60
X= = 12
5
(X12 + X22 +….+Xn2) - n ( X )2

Variance, V =
(n - 1)
730 - 5 x (12) 2
=
(5 - 1)
= 2.5
SD = 2.5 =1.5811
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Sigma
Standard deviation is also referred to as the Greek letter

sigma in quality management literature. Consequently
process variation can be described by how many sigmas ( i.e
how many multiples of standard deviation or SD ) fit within
the specification limits.The higher this number, the better is
the quality and vice versa.
Sigma is a statistical measure of the quality consistency for
a particular process / product.
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Understanding normal distribution

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Normal Distribution
In practice generally we come across data which is of

variable type and is measured on continuous scale. If there
are no extraneous factors it follows a systematic pattern
known as “Normal Distribution”. It can be derived after
plotting histogram as explained in the next slide.
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Histogram
60
50
40
Frequency
30
20
10
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
CTQ
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Normal curve
Normal Curve is a smooth symmetrical bell shaped curve as shown below.
60
50
40
Frequency
30
20
10
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
CTQ
FICCI
Most commonly used intervals
In normal distribution, the most common intervals are :
1. Process mean - SD and process mean + SD i.e 1 Sigma
2. Process mean - 2 SD and process mean + 2 SD i.e 2 Sigma
3. Process mean - 3 SD and process mean + 3 SD i.e 3 Sigma

FICCI
% Population between Mean - SD & Mean + SD (1Sigma)

Mean = 10, SD = 2
Mean-SD =8 Mean+SD =12
% Population
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
- SD + SD
% population between Mean - SD and Mean + SD or 1 Sigma = 68.3,

This implies that 68.3% population lies between dimensions of 8 and 12
FICCI
% Population between Mean - 2 SD & Mean + 2 SD (2Sigma)
Mean = 10, SD = 2
Mean-2 SD=6
Mean+2 SD=14
% Population
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
-2 SD +2 SD
% population between Mean - 2 SD and Mean +2 SD or 2 Sigma = 95.5

This implies that 95.5% population lies between dimensions 6 &14
FICCI
% Population between Mean - 3 SD & Mean + 3 SD (3 Sigma)
Mean = 10, SD = 2
Mean - 3SD =4 Mean + 3SD =16
% Population
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
- 3 SD + 3 SD
% population between Mean - 3 SD and Mean +3 SD or 3 Sigma = 99.73

This implies that 99.73 % population lies between 4 & 16
FICCI
Range of observations for nearly 100% population
Range of observations for nearly 100% population (to be

precise 99.73%) depends upon, mean of the process and
standard deviation of the process. If it follows normal
distribution the population lies between -
Mean - 3 SD & Mean + 3 SD i.e ( 3Sigma )

FICCI
What is a Sigma process

FICCI
Meaning of a Sigma process
From a sigma process we come to know that at what

distance, in terms of the standard deviation, the
specification limits are placed from the target value.
FICCI
Move beyond 3 sigma
Until a few years back all statistical process controls

were designed on the basis of 3 sigma limits. It is only in
the recent years that this concept has been challenged and
the organizations have started looking for quality levels
beyond 3 Sigma.
FICCI
3 Sigma process
Mean=8
LSL SD = 2 USL
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
- 3 SD + 3 SD
Note : LSL is Lower specification limit and USL is Upper specification limit.
FICCI
4 Sigma process
LSL Mean=8 USL

SD = 1.33
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
- 4 SD + 4 SD
FICCI
5 Sigma process
Mean=8
LSL SD = 1.07 USL
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
- 5 SD + 5 SD
FICCI
6 Sigma process
Mean=8
LSL SD = 1 USL
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
- 6 SD + 6 SD
FICCI
Precision
Lesser the standard deviation of the process, more precise or

consistent is the process
FICCI
3 Sigma Vs 6 Sigma
The goal of Six Sigma program is to reduce the variation in

every process to such an extent that the spread of 12 sigmas i.e.
6 Sigmas on either side of the mean fits within the process
specifications. The figure on next slide shows what this looks
like.
FICCI
3 Sigma Vs 6 Sigma
6 Sigma curve
LSL USL
3 Sigma curve
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
In a 3 sigma process the values are widely spread along the center line,
showing the higher variation of the process. Whereas in a 6 Sigma
process, the values are closer to the center line showing
less variation in the process.
FICCI
3 Sigma Vs 6 Sigma
The comparison on the previous slide also shows a process in

which the process spread of Six Sigmas (ie. 3 Sigmas on either
side just fits within the specifications). In this case one must be
extremely careful to ensure that the process average never slips
off the target, otherwise the curve will shift and non-
conforming items will increase. With Six Sigma requirement
the process mean can shift by as much as 1.5 sigma before the
likelihood of non-conforming items is increased. Even if the
process mean does shift off center by as much as 1.5 sigma,
only 3.4 non-conforming items per million parts should result.
FICCI
Amount of process shift allowed
1.5 SD 1.5 SD
LSL USL
SD = 1
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
FICCI
Picturization of accuracy & precision

Accurate and Precision
Accuracy & precision of a process can
be best explained by using the analogy
of a rifle firing at a target.
FICCI
Accuracy and precision
With the center of the target taken to be the true value of the
characteristic being measured and by the rifle shots
representing the measured values, there are four combinations
of accuracy and precision as depicted in the following slides.
FICCI
Inaccurate and imprecise
+
FICCI
Accurate and imprecise
+
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Precise but inaccurate
+
FICCI
Accurate and precise
+
FICCI
Six Sigma objective
As observed from the Picturization in the preceding slides, the

objective of moving towards Six Sigma quality is to
continuously achieve greater consistency of the processes by
reducing the variation.
FICCI
Calculating non conformities

FICCI
The number of observations falling within the distribution

frequency curve can be co-related with the area under the
curve.
Finding area ( percentage of non conformities ) under a
normal curve requires the use of standard normal distribution
table. It is conventional to use the letter z to denote the
standard normal variate. The table for areas under normal
curve are given at the end of this section.
FICCI
Sigma ratings in terms of Z
The z value corresponding to USL or LSL* tells us how many

sigma the USL or LSL is from the process setting. Thus the z
value corresponding to the specification limit gives the sigma
rating of the process.
Note 1: As we know that most of the variable data that we come across in the
industry follows normal distribution with certain mean and standard deviation. We
define a variate ‘Z’( standardized normal variate ) which has a mean value 0 and
standard deviation 1. This is done in order to make use of Standard Normal Tables.
* LSL is the lower specification limit & USL is the upper specification limit
FICCI
LSL USL
Non Non
conformities conformities
FICCI
Formula for calculating % non conformities
With respect to LSL,

ZL = ( LSL - X )/SD
With respect to USL

ZU = ( USL-X )/SD
Where X= Process mean

SD = Process Standard deviation
USL = Upper specification limit
LSL = Lower specification limit respectively.
FICCI
Illustration for calculating

% non conformities
FICCI
Histogram for rolling thickness
Spec: 1.6+/- 0.1 mm Mean=1.58

SD=0.042
50
LSL USL
40
30
20
10
0
1.465 1.505 1.545 1.585 1.625 1.665 1.705
Thickness
FICCI
Normal curve for the population
Spec: 1.6+/- 0.1 mm Mean=1.58

SD=0.042
50
LSL USL
40
Proportion Proportion
of defects of defects
30
20
10
0
1.465 1.505 1.545 1.585 1.625 1.665 1.705
Thickness
FICCI
With respect to LSL,
ZL = ( LSL - X )/SD = ( 1.50-1.58 )/0.042 = -1.90
With respect to USL,
ZU = ( USL-X )/SD = ( 1.70-1.58 )/0.042 = 2.86
The Percentage of values falling beyond specification limits, corresponding

to the z value can be read from the standard normal table as 0.0287 and
0.0021 for ZU and ZL respectively. Total percentage of non conformities
=2.87+0.21=3.08. (While referring to Normal distribution table, only
absolute value of z should be taken.)
FICCI
Areas under normal curve - Normal distribution table
Area
z Area z Area z Area z Area

0.00 0.500000 0.20 0.420740 0.40 0.344578 0.60 0.274253
0.01 0.496011 0.21 0.416834 0.41 0.340903 0.61 0.270931
0.02 0.492022 0.22 0.412936 0.42 0.337243 0.62 0.267629
0.03 0.488033 0.23 0.409046 0.43 0.333598 0.63 0.264347
0.04 0.484047 0.24 0.405165 0.44 0.329969 0.64 0.261086
0.05 0.480061 0.25 0.401294 0.45 0.326355 0.65 0.257846
0.06 0.476078 0.26 0.397432 0.46 0.322758 0.66 0.254627
0.07 0.472097 0.27 0.393580 0.47 0.319178 0.67 0.251429
0.08 0.468119 0.28 0.389739 0.48 0.315614 0.68 0.248252
0.09 0.464144 0.29 0.385908 0.49 0.312067 0.69 0.245097
0.10 0.460172 0.30 0.382089 0.50 0.308538 0.70 0.241964
0.11 0.456205 0.31 0.378281 0.51 0.305026 0.71 0.238852
0.12 0.452242 0.32 0.374484 0.52 0.301532 0.72 0.235762
0.13 0.448283 0.33 0.370700 0.53 0.298056 0.73 0.232695
0.14 0.444330 0.34 0.366928 0.54 0.294599 0.74 0.229650
0.15 0.440382 0.35 0.363169 0.55 0.291160 0.75 0.226627
0.16 0.436441 0.36 0.359424 0.56 0.287740 0.76 0.223627
0.17 0.432505 0.37 0.355691 0.57 0.284339 0.77 0.220650
0.18 0.428576 0.38 0.351973 0.58 0.280957 0.78 0.217695
0.19 0.424655 0.39 0.348268 0.59 0.277595 0.79 0.214764
FICCI
Area

0.80 0.211855 1.00 0.158655 1.20 0.115070 1.40 0.080757
0.81 0.208970 1.01 0.156248 1.21 0.113140 1.41 0.079270
0.82 0.206108 1.02 0.153864 1.22 0.111233 1.42 0.077804
0.83 0.203269 1.03 0.151451 1.23 0.109349 1.43 0.076459
0.84 0.200454 1.04 0.149170 1.24 0.107488 1.44 0.074934
0.85 0.197662 1.05 0.146859 1.25 0.105650 1.45 0.073529
0.86 0.194894 1.06 0.144572 1.26 0.103835 1.46 0.072145
0.87 0.192150 1.07 0.142310 1.27 0.102042 1.47 0.070781
0.88 0.189430 1.08 0.140071 1.28 0.100273 1.48 0.069437
0.89 0.186733 1.09 0.137875 1.29 0.098525 1.49 0.068112
0.90 0.184060 1.10 0.135666 1.30 0.096801 1.50 0.0668072
0.91 0.181411 1.11 0.133500 1.31 0.095098 1.51 0.0655217
0.92 0.178786 1.12 0.131357 1.32 0.093418 1.52 0.0642555
0.93 0.176185 1.13 0.129238 1.33 0.091759 1.53 0.0630084
0.94 0.173609 1.14 0.127143 1.34 0.090123 1.54 0.0617802
0.95 0.171056 1.15 0.125072 1.35 0.088508 1.55 0.0605708
0.96 0.168528 1.16 0.123024 1.36 0.086915 1.56 0.0593799
0.97 0.166023 1.17 0.121001 1.37 0.085343 1.57 0.0582076
0.98 0.163543 1.18 0.119000 1.38 0.083793 1.58 0.0570534
0.99 0.161087 1.19 0.117023 1.39 0.082264 1.59 0.0559174
FICCI

Area

1.60 0.0547993 1.80 0.0359303 2.00 0.0227501 2.20 0.0139034
1.61 0.0536989 1.81 0.0351478 2.01 0.0222155 2.21 0.0135525
1.62 0.0526161 1.82 0.0343794 2.02 0.0216916 2.22 0.0132093
1.63 0.0515507 1.83 0.0336249 2.03 0.0211782 2.23 0.0128736
1.64 0.0505026 1.84 0.0328841 2.04 0.0206751 2.24 0.0125454
1.65 0.0494714 1.85 0.0321567 2.05 0.0201821 2.25 0.0122244
1.66 0.0484572 1.86 0.0314427 2.06 0.0196992 2.26 0.0119106
1.67 0.0474597 1.87 0.0307419 2.07 0.0192261 2.27 0.0116038
1.68 0.0464786 1.88 0.0300540 2.08 0.0187627 2.28 0.0113038
1.69 0.0455139 1.89 0.0293789 2.09 0.0183088 2.29 0.0110106
1.70 0.0445654 1.90 0.0287165 2.10 0.0178643 2.30 0.0107241
1.71 0.0436329 1.91 0.0280665 2.11 0.0174291 2.31 0.0104440
1.72 0.0427162 1.92 0.0274289 2.12 0.0170029 2.32 0.0101704
1.73 0.0418151 1.93 0.0268034 2.13 0.0165858 2.33 0.0099031
1.74 0.0409295 1.94 0.0261898 2.14 0.0161773 2.34 0.0096418
1.75 0.0400591 1.95 0.0255880 2.15 0.0157775 2.35 0.0093867
1.76 0.0392039 1.96 0.0249978 2.16 0.0153863 2.36 0.0091375
1.77 0.0383635 1.97 0.0244191 2.17 0.0150034 2.37 0.0088940
1.78 0.0375379 1.98 0.0238517 2.18 0.0146286 2.38 0.0086563
1.79 0.0367269 1.99 0.0232954 2.19 0.0142621 2.39 0.0084242
FICCI

Area

2.40 0.00819755 2.60 0.00466120 2.80 0.00255519 3.00 0.00134999
2.41 0.00797623 2.61 0.00452715 2.81 0.00247711 3.10 0.00096660
2.42 0.00776023 2.62 0.00439650 2.82 0.00240123 3.20 0.00068714
2.43 0.00754941 2.63 0.00426930 2.83 0.00232744 3.30 0.00048342
2.44 0.00734365 2.64 0.00414532 2.84 0.00225574 3.40 0.00033693
2.45 0.00714284 2.65 0.00402462 2.85 0.00218600 3.50 0.00023263
2.46 0.00694686 2.66 0.00390708 2.86 0.00211829 3.60 0.00015911
2.47 0.00675565 2.67 0.00379258 2.87 0.00205243 3.70 0.00010780
2.48 0.00656915 2.68 0.00368118 2.88 0.00198847 3.80 0.00007235
2.49 0.00638717 2.69 0.00357264 2.89 0.00192630 3.90 0.00004810
2.50 0.00620967 2.70 0.00346702 2.90 0.00186586 4.00 0.00003167
2.51 0.00603658 2.71 0.00336421 2.91 0.00180721 4.10 0.00002066
2.52 0.00586778 2.72 0.00326413 2.92 0.00175023 4.20 0.00001355
2.53 0.00570315 2.73 0.00316679 2.93 0.00169486 4.30 0.00000854
2.54 0.00554264 2.74 0.00307202 2.94 0.00164115 4.40 0.00000541
2.55 0.00538617 2.75 0.00297282 2.95 0.00158894 4.50 0.00000340
2.56 0.00523365 2.76 0.00289011 2.96 0.00153828 4.60 0.00000211
2.57 0.00508493 2.77 0.00280285 2.97 0.00148904 4.70 0.00000130
2.58 0.00494003 2.78 0.00271803 2.98 0.00144130 4.80 0.00000079
2.59 0.00479883 2.79 0.00263548 2.99 0.00139493 4.90 0.00000048
5.00 0.00000029
FICCI

Area
z Area
5.10 0.00000180
5.20 0.00000107
5.30 0.00000063
5.40 0.00000037
5.50 0.00000021
5.60 0.00000012
5.70 0.000000070
5.80 0.000000040
5.90 0.000000022
6.00 0.000000012
Note: Only absolute values of z should be taken while referring to this table.
FICCI
5. Analysis phase
Objectives of Analysis phase

Definition of process capability
Need for process capability
Factors influencing process capability
Estimating process capability
Empirical rule
Process capability indices - Cp index
Process capability indices - Cpk index
Benchmarking
FICCI
Objective of Analysis phase
• The objective of this phase is to study the stability, shape,

center and spread of the process.
• To establish an improvement goal or the performance
objective through benchmarking.
FICCI
Process capability
Process
A combination of equipment, materials, people, methods and
environment that act together to produce an output. The
quality of the process is judged by the quality ( characteristic )
of the output.
FICCI
Process capability
Process capability
The inherent variability of a quality characteristic that the
process is capable of maintaining, when in a state of statistical
control under a given set of conditions.
Assuming normal distribution of the quality characteristic

Process Capability = +/- 3 SD = Total spread of 6 SD.
FICCI
Process capability
Process capability is judged by comparing process

performance with process requirements. Since meeting
specification limits is one of the most basic requirements of
a process capability study, it is extremely important to
accurately verify and define the specification limits.
FICCI
Need for process capability
 For meeting customer requirements/ specifications.

 To compare actual performance of equipment with
manufacturer’s claim.
 To compare the performance of two processes.
 To provide more realistic tolerances for component
dimensions.
 Provide a basis for process control.
FICCI
Factors influencing process capability
1. Condition of machine/ equipment.

2. Type of operation and operational conditions.
3. Raw materials.
4. Skill of operators.
5. Measurement method / instruments.
6. Inspector’s skill.
FICCI
Estimation of process capability
• Visual from run chart.

• Frequency distribution and histogram.
• Control charts.
• Analysis of variances.
• Probability papers.
Note : Reduction of variability can be achieved through use of SPC

tools and Design of Experiments.
FICCI
The empirical rule
We have seen in the earlier chapter that almost all (to be

accurate 99.73%) the process output from a normally
distributed process lies between (process mean - 3 SD)
and (process mean+ 3 SD).
The total spread of the process can thus be described as 6 SD

FICCI
99.73% population between process mean +/- 3 SD
LSL USL
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
- 3 SD + 3 SD
FICCI
Process capability indices : The Cp index
A major reason for quantifying process capability is to

compute the ability of a process to hold product tolerances.
A measure of this relationship is process capability ratio or
Cp. Process capability is also known as potential capability.
The Cp index is given by:-
Cp = Tolerance
6 SD
Where Tolerance = USL - LSL
SD = Standard Deviation
FICCI
Process capability indices : The Cp index
Interpretations of Cp
Cp > 1 : The process is quite capable
Cp = 1 : The process is just capable
Cp < 1 : The process is incapable
The recommended value of Cp is 1.33 ( minimum)

In order to achieve Six Sigma quality in the organization, we
must reduce the variation in the process so as to achieve the
value of Cp=2.
FICCI
Calculating defective PPM at various levels of sigma.
Quality level Cp z Defective PPM
2 Sigma 0.67 2 22750
3 Sigma 1.00 3 1350
4 Sigma 1.33 4 32
5 Sigma 1.67 5 0.3
6 Sigma 2.00 6 0.001
Refer normal distribution table for finding defective parts per

million ( PPM ) for corresponding z values.
FICCI
Impact of process capability
For individual parts, the ideal design is Cp = 2; in other words,

the design specification is twice as “wide” as the true capability
of the process. This is where the phrase “Six Sigma Quality”
originated. Since the process capability is +/- 3SD, a design
specification twice as wide would be +/- 6 SD.
FICCI
Impact of process capability
However, it is learnt from the industry experience across the

world, that the processes rarely stay centered on their targeted
nominals, shifts of 1.5 SD to either side of the mean are
common, even in well controlled processes.
Therefore in practice, an ultimate z-value of 4.5 is considered

Six Sigma Quality. Consulting the z-table, we find that the
probability of producing non conformities associated with a z-
value of 4.5 is 0.0000034. If this value is obtained, then only
3.4 out of every million parts manufactured will be defective.
FICCI
Calculating defective PPM with permissible shift of 1.5 SD

at various levels of sigma. ( practical situation )
Quality level Cp z Defective PPM
2 Sigma 0.17 0.5 308538
3 Sigma 0.50 1.5 66807
4 Sigma 0.83 2.5 6210
5 Sigma 1.17 3.5 233
6 Sigma 1.50 4.5 3.4
Refer normal distribution table for finding defective PPM for

corresponding z values.
FICCI
Drawbacks of Cp
Cp however is not a very reliable measure as it does not tell us

all.
Consider the following four processes producing the same
output X with specification 20+/- 4. Each of these processes
have the Standard deviation of 1.
FICCI
Process 1
X=20
SD=1
LSL USL
Cp=1.33
FICCI
Process 2
X=22
SD=1
LSL USL
Cp=1.33
FICCI
Process 3
X=15
SD=1
LSL USL
Cp=1.33
FICCI
Process 4
X=25
SD=1
LSL USL
Cp=1.33
FICCI
Calculation of Cpk index
Cpk is a measure of process performance capability

The process performance index Cpk is given by:-
Cpk = Min [ USL - x , x - LSL ]

3SD 3SD
Example :
Specification : 20 +/- 4, SD = 1
Cp = Tolerance/6SD = 8/6 = 1.33
FICCI
Calculation of Cpk index - Example
Example :
Specification : 20 +/- 4, SD = 1
Cp = Tol/6 SD = 8/6 = 1.33
x = 20, Cpk = Cp = 1.33
x = 22, Cpk = 0.67
x = 15, Cpk = -0.33

x = 25, Cpk = -0.33
FICCI
Calculation of Cpk index
In the previous slide we observe that, although the Cp

value = 1.33 in all the four cases, but because of the shift
in the process setting level we are getting Cpk values as
0.67 in 2nd case and hence the non conformities. Similar
observations are noticed in 3rd and 4th case where we get
the Cpk as -0.33.
FICCI
The Cpk index
Thus Cpk = Cp means the process is centered.

Cpk < 1 means non- conformances are being produced.
Cpk < 0 indicates that the process has been set beyond either of
the two specification limits.
Note : Cpk is always less than or equal to Cp.

FICCI
Cp and Cpk indices
Therefore, the first step is to bring Cpk=Cp by proper

centering of the process. The second step should be to
improve the Cp value by decreasing the variation.
FICCI
Process capability indexes for one sided tolerances
One-sided Tolerances - The Cp and Cpk indexes are used

for characteristics with two-sided tolerances - that is,
processes with both upper and lower specification limits.
Since many characteristics have only one-sided
specifications, it is also convenient to have one-sided
capability indexes.
FICCI
Process capability indexes for one sided tolerances
For processes that have only a Lower specification limit, LSL,

the lower capability index Cpl is defined by:-
Cpl = x - LSL
3 SD
Correspondingly, when only an Upper specification exists,

we define an upper capability index by:-
Cpu = USL - x
3 SD
FICCI
Establish a goal for improvement
Once the organization has completed the process

capability study, the next step is to benchmark the
processes with the best in class or world class parameters.
Benchmarking is discussed on the following slides.
FICCI
Benchmarking
FICCI
Benchmarking
Benchmarking is quality by comparison for achieving

better standards. In the global movement today, the
competition is improving at a faster rate, and the only way
to improve your relative quality and move upwards is to
find out and implement the best industry practices.
FICCI
World Class
Recognized as the best
Benchmarking :- Benchmarked by others
Stages of improvement
Best in Class
Exceeds customer expectations, outperforms
all competitors and has clear competitive edge
Efficient
Meets all internal requirements for cost margins,
asset utilization, cycle-time and measures of excellence
Effective
Satisfies all customer requirements
Incapable
Is ineffective, inefficient and at the risk of failing.
Needs major redesign
FICCI
Benchmarking methodology
Benchmarking can be of various types - competitive

benchmarking, product benchmarking, process
benchmarking and best practices benchmarking. Whatever
be the category chosen by the organization, the
benchmarking methodology remains the same in each case.
Benchmarking methodology is explained through 5 simple
steps in the following slide :-
FICCI
A. Identify processes to Benchmark
• Select processes to benchmark.
• Measure current process capability and define goal.
• Understand detailed process which needs improvement.

FICCI
B. Select organization to Benchmark
• Select organizations which perform your process.
• Compile a list of world class process parameters.

FICCI
C. Compile the required information
• Develop a detailed questionnaire to obtain desired

information.
• Obtain the desired information. The information can be

obtained from various sources viz: internet, trade journals,
professional associations, industry publications, industry
experts, libraries etc.
FICCI
D. Analyze gaps
Too much information is as bad as too little. Gather and

analyze only the information you need to make a direct
comparison of performance. Compare like with like.
Identify the performance gaps and develop an action plan
to close the gaps. Also highlight and quantify the
consequences of not closing the gap.
FICCI
E. Develop an action plan
• Review observations of the gap analysis.
• Set new performance standards.
• Develop an action plan for meeting the new performance

standards, identify process owners with their
responsibilities and move to improvement phase.
FICCI
6. Improvement phase
Objectives of Improvement phase

Histograms
Pareto analysis
Control charts
Root Cause Analysis
Process flowcharting
Failure Mode & Effect Analysis
Quality Function Deployment
Design of Experiments ( DOE )
FICCI
Objectives of Improvement phase
• To develop a proposed solution to the existing problems.

• To confirm that the proposed solution will meet the desired
quality improvement goals.
• To identify resources required for successful
implementation of the solution.
• To plan and execute actual improvements.
The tools and techniques for making improvement are

discussed on the following slides :-
FICCI
Histogram
The frequency histogram can be described as a bar graph

displaying the frequency distribution of specific processes,
items and devices. This tool provides a valuable means for
tracking variation. For instance, it can categorize product defect
levels or distribution. The primary difference between the
histogram and any other bar diagram is that the horizontal scale
of the histogram represents a numerical scale.
FICCI
Histogram
A frequency histogram provides the basis for understanding the

variation of both production and service scenarios with the
visualization to identify opportunity easily with each area
(histogram bars) while keeping track of variation. It must be
pointed out that frequency histograms do not tell the total
sources of variation and do not present a specific pattern over
time.
FICCI
Constructing a Histogram
Constructing a histogram is quite simple. Microsoft bar chart

can be used to draw a histogram. The following simple steps
should be followed :-
1. Select insert Microsoft bar graph.
2. Feed in scale and their respective frequencies.
3.Since there is no gap between the bars in a histogram, select
“format data series”. Click on “options” field and make the gap
width between the bars=0.
Please see the example of a histogram generated by Microsoft
graph on the next slide.
FICCI
Constructing a Histogram
35
30
25
20
15
10
5
0
5 6 7 8 9 10
Machine set up time in minutes
FICCI
Pareto analysis
The Pareto principle is to concentrate on “vital few” rather

than “trivial many” in tackling quality problems. The Pareto
diagram is a tool for identifying few actually important causes
for defectives which result in large proportion of defectives,
instead of concentrating on large number of causes which
contributes to a small proportion of the total defectives.
FICCI
Constructing a Pareto chart
A Pareto diagram is a bar chart of number of defectives with

bars representing the number of defectives due to different
sources arranged in descending order of their importance. A
line graph of cumulative number of defectives (Ogive) is also
drawn in the same chart. The causes are given along the x axis,
the number of defectives are given on the left y axis and the
cumulative %defectives is given along the right y axis.
FICCI
Constructing a Pareto chart
Data on defective cords
S No. Source of defectives No. of Percentage

defectives defectives
1 Wrong Ply TPM 75 25

2 Plyless Feeding 150 50
3 Single end 30 10
4 Wrong Cable TPM 45 15
Total 300 100

FICCI
Arranging data in descending order
Data on defective cords
S No. Source of defectives No. of Percentage Cumulative

defectives defectives % defectives
1 Plyless Feeding 150 50 50

2 Wrong Ply TPM 75 25 75
3 Wrong Cable TPM 45 15 90
4 Single end 30 10 100
Total 300 100

FICCI
Pareto analysis of defective cords

300
100%
250
80%
200
60%
150
40%
100
50 20%
0 0%
Plyless Wrong ply Wrong Single
feeding TPM cable TPM end
FICCI
Control charts - P charts
The p charts are used to control the overall number of defective

units in a process. The proportion of non conforming items are
plotted on this chart which gives us the graphical display of
variability of the data.
FICCI
Example -construction of P charts
Day Rejects Tested Proportion

1 14 286 0.049
2 22 281 0.078
3 9 310 0.029
4 19 313 0.061
5 21 293 0.072
6 18 305 0.059
7 16 322 0.050
8 16 316 0.051
9 21 293 0.072
10 14 287 0.049
11 15 307 0.049
12 16 328 0.049
13 21 296 0.071
14 9 296 0.030
15 25 317 0.079
16 15 297 0.051
17 14 283 0.049
18 13 321 0.040
19 10 317 0.032
20 21 307 0.068
21 19 317 0.060
22 23 323 0.071
23 15 304 0.049
24 12 304 0.039
25 19 324 0.059
26 17 289 0.059
27 15 299 0.050
28 13 318 0.041
29 19 313 0.061
30 12 289 0.042
Total 493 9155
FICCI
Construction of P charts
Number of defective units
Data points P=
Number of units in the sample
Total defective units

Process Average P= = 0.053
Total units observed
Upper control Limit ( UCL ) = P+3 P ( 1-P )

= 0.0926
n
= P-3 P ( 1-P )
Lower control Limit =0.1508
n
n=Average sample size= 305*
* Since the data size do not vary much around the mean value, P chart is simplified
by taking the average sample size to calculate he control limits.
FICCI
Construction of P charts
The construction of control charts is very simple. Simply

select the range of data points ( “proportion” column in the
excel sheet ) and click the graph button. Select “Line graph”
and the p chart is automatically calculated. The average, UCL
and LCL can be manually displayed by drawing three
additional lines on the graph. Please refer the next slide for the
graph.
FICCI
P chart
0.1
0.09 UCL
0.0926
0.08
0.07
0.06
CL
0.05 0.053
0.04
0.03
0.02
LCL
0.01 0.015
0
5 Days 15 25
FICCI
NP charts
The NP chart is used for plotting number of defectives instead

of proportion defectives. This is another version of P chart and
its applicability depends upon the interest of the end user.
FICCI
Example -construction of np charts
Day Rejects Sample size

1 10 100
2 12 100
3 10 100
4 11 100
5 6 100
6 7 100
7 12 100
8 10 100
9 6 100
10 11 100
11 9 100
12 14 100
13 16 100
14 21 100
15 20 100
16 12 100
17 11 100
18 6 100
19 10 100
20 10 100
21 11 100
22 11 100
23 11 100
24 6 100
25 9 100
Total 272 2500
FICCI
p = X1 + X2 + X3 +…..Xk 275
= = 0.1088
kn 25*100
np = 0.1088*100 =10.88
UCL = np + 3 np ( 1-p ) =20.22
=1.54
LCL = np - 3 np ( 1-p )
n = subgroup sample size = 100

FICCI
25
20 UCL
20.22
15
Rejects
Np
10 10.88
5
LCL
1.54
0
5 15 25
Days
FICCI
Root cause analysis
In any organization numerous problems exist in all facets of its

activities. The efficiency and survival of the organization
depends on how promptly these problems are recognized and
their root causes are isolated and eliminated.
A systematic analysis of each potential problem area should be
carried out to recognize the root causes which are responsible
for creating the problem. This analysis is called Root Cause
Analysis. This is more of a philosophy or a discipline rather
than any isolated technique for continuous improvement.
FICCI
Tools & techniques for root cause analysis
 Ishikawa or cause and effect diagram

 Histogram
 Pareto Analysis
 Control charts
 Brain Storming
 Flow Charting
 Process Capability Analysis
 Scatter diagram and regression analysis
 Statistically Design Experiment ( Design of Experiments )
FICCI
Cause & Effect diagram - Major and subsidiary causes
Procedures Noise level

Assemblies
Temperature
Consumables Humidity
Components Accounting
Suppliers Lighting
Policies
Effect
Variability
Instruments
Training
Experience Tests
Technology
Tooling
Attitude Gauging
Skill Fixtures Counting
Men Machine Measurement

FICCI
Example of Cause & Effect diagram

Inadequate High Noise level
High lead time process control
poor review Heat

system
High inventory
Poor QC
Poor quality
of vendors Poor Lighting
Poor MIS Low
operating
High profit
Inadequate
variation Instruments
Inadequate
Training
Lack
of Experience
Old machines
Poor No SPC
Maintenance
Low Frequent Inadequate

motivation breakdowns measurement
FICCI
Typical causes for non conformance/ defects

Machine factors
• Inadequate process capability

• Incorrectly designed tooling
• Worn tools, jigs or dies
• Poor maintenance
• Equipment effected by environmental factors such as heat,
humidity etc.
FICCI

Material factors
• Use of untested materials

• Mix-up of materials
• Substandard material accepted on concession because of
non-availability of correct material
• Inconsistency in specifications on the part of vendors
FICCI

Men factors
• Incorrect knowledge of setting up machines

• Careless operator and inadequate supervision
• Undue rush by the operator to achieve quality targets
• Lack of understanding of drawing instructions relating to a
process
• Operator does not possess requisite skill for operating
machines
FICCI

Method factors
• Inadequate process controls

• Non availability of proper test equipments
• Test equipment out of calibration
• Vague inspection/ testing instructions
• Inspectors do not possess the necessary skill
FICCI
Click on the boxes to enter your Cause & Effect

Click to enter
click

FICCI
Process flow Charting
Flow charting provides the basis for understanding the standard

process procedures, the relationship between people and work
to be done. Flowcharting is a very good tool for understanding
and identifying process bottlenecks such as delays, excessive
transportation, waiting time and queuing time. It also identifies
key customers, suppliers and process owners by operational
work unit, performance level, quality level and productivity at
each process point. Flow charts can also identify source of
errors, decision points and non-value adding operations.
FICCI
Flow chart of Printed circuit board Assemble parts in PCB
Receive PCB Return part to

Parts from vendors vendors
Test assembled PCB Rework & Analyze
Inspect parts Wait for Mfg.
Inspect PCB
Parts
good Bad
or
bad Parts
good Bad
or
Good bad
Good
Inspect parts
Pack & Ship

FICCI
Sample : Seeking customer feedback and taking corrective action flow diagram.
Customer
Issue satisfaction
owners dept.
International
Surveys Customer marketing
satisfaction •Review actions
dept •Emerging issues
Administration
•Action plan
Complaints
•Issue Domestic
identification Marketing
Customer
•Prioritization
Critical •Ownership Technical
Situations
Delivery
Other
Service
•Develop action plans

•Resolve issues
•Improve
FICCI
Failure Mode and Effects Analysis (FMEA)
FMEA is a structured analysis for identifying ways &

methods in which the product or processes can fail and
then plan to prevent those failures. FMEA is a proactive
tool for reducing defects and non-conformities.
FICCI
Failure Mode and Effects Analysis (FMEA)
FMEA is a structured approach in :-

• Identifying ways in which a process can fail to meet
critical customer requirements.
• Estimating the risk of causes with regard to these failures.
• Evaluating control plan for preventing these failures.
• Prioritizing the actions for improving the process.
FMEA is an extremely important tool for each phase of Six

Sigma strategy viz. Measure, Analyze, Improve, Control.
FICCI
Advantages of FMEA
• For improving the reliability and safety of the

products.
• For improving customer satisfaction.
• Tracking actions to reduce non-conformities.
• New product development.
FICCI
Definition of terms
Failure Mode : It is a manner in which a part or a process

can fail to meet specifications. It is usually associated with
defect or non-conformities.
Examples : Missing part, Oversized, Undersized, Incorrect

price, Offspec parts.
FICCI
Definition of terms
Cause : Causes are sources of variation which are

associated with key process inputs. Cause can be best
defined as a deficiency which results in a failure mode.
Examples : Instructions not followed, Lack of experience,

Incorrect documentation, Poor handling etc.
FICCI
Definition of terms
Effect : Effect is the impact on the customer (both internal

& external) if the failure mode is not prevented or
corrected.
Examples : Customer dissatisfaction, Frequent product
breakdowns, Customer downtime.
FICCI
Relationship of cause, failure mode & effect
Failure
Cause Effect
Mode
FICCI
FMEA through Cause & Effect Diagram

Causes Causes Causes
Prevent
or Detect
Failure
Mode
Effect
Causes Causes Causes

FICCI
Steps in FMEA process
1. Develop a process map and identify process steps.

2. List key process outputs for satisfying internal and
external customer requirements.
3. List key process inputs for each process steps.
4. List ways the process inputs can vary (causes) and
identify associated failure modes and effects.
5. Assign severity occurrence and detection rating for each
cause.
FICCI
Steps in FMEA process
6. Calculate risk priority number ( RPN) for each potential

failure mode.
7. Determine recommended actions to reduce RPN’s.
8. Establish time frame for corrective actions.
9. Take corrective actions.
10. Put all controls in place.
FICCI
Ranking terms used in FMEA calculations

Scale:1(Best) to 10 ( Worst)
• Severity (SEV) : Severity indicates how severe is the impact of the effect
on the customer.
• Occurrence (OCC) : This indicates the likelihood of the cause of the
failure mode to occur.
• Detection (DET) : This indicates the likelihood of the current system to
detect the cause or failure mode if it occurs.
• Risk priority number : This number is used to place priority to items for
better quality planning.
RPN = SEV X OCC X DET
See next slides for specimen best to worst ratings on a 10 point scale.
FICCI
Best to Worst ratings for FMEA calculations

Rating Degree of Severity Likelihood of Occurrence Ability to detect
1 Customer will not at all observe Very remote possibility Sure that the potential failure
the adverse effect will be detected & prevented
before reaching the next
customer
2 Customer will experience Low failure with supporting Almost sure that the potential
slight discomfort documents failure will be detected before
reachig the next customer
3 Customer will experience Low failure without supporting Less chances that the
annoyance because of slight documents potential failure will reach the
degradation of performance next customer undetected
4 Customer dissatisfied due to Occasional failures Some controls may detect

reduced performance the potential from reaching the
next customer
5 Customer is uncomfortable Moderate failure rate with Moderate chances that the
supporting documents potential failure will reach the
next customer
FICCI
Best to Worst ratings for FMEA calculations

Rating Degree of Severity Likelihood of Occurrence Ability to detect
6 Warranty repairs Modearate failure rate without Controls are not likely to detect
supporting documents or prevent the potential failure
from reaching the next
customer
7 High degree of customer High failure rate with supporting Less chances that the potential
dissatisfaction documents failure will be detected or
prevented before reaching
the next customer
8 Vey high degree of customer High failure rate with supporting Very less chances that the
dissatisfaction documents potential failure will be detected
or prevented before reaching
the next customer
9 Negative impact on the Failure is almost certain Existing controls will not detect
customer the potential failure
10 Negative impact on the Assured failure Existing controls will not detect
customer, people & society the potential failure
FICCI
FMEA Form: ( Column 1 to 9 )
Rank severity Rank how well

Rank occurrence List how the cause
on 1 to 10 cause/failure
on a 1 to 10 is presently
scale can be detected
scale being controlled
on 1 to 10 scale
1 2 3 4 5 6 7 8 9
Process Potential failure mode Potential failure effect SEV Potential causes OCC Current Controls DET RPN
Part No.
1
2
3
4
5
List failure List effects List causes

RPN=
modes for each of each for each failure
SEV*OCC*DET
step failure mode mode
FICCI
FMEA Form contd: ( column 10 to 15 )

Designates people RPN is recalculated
responsible for on completion of
corrective action corrective action
10 11 12 13 14 15
Actions Recommended Responsibility SEV OCC DET RPN
List actions
recommended
on RPN pareto
FICCI
Quality Function Deployment ( QFD )
No matter how effectively a company meets the initial

needs of the customers, it must remain constantly alert
and responsive to the changing and increasing needs of
the customers. Because if the company is not
responsive to these changing needs, the passage of time
will erode the early competitive advantages.
FICCI
QFD
QFD is a scientific technique for translating the voice of

the customer into development of products and
services. It is a complete product planning process as
opposed to problem solving and analysis. The technique
was invented by Akashi Fukuhara of Japan and first
applied with very good results at Toyota.
FICCI
Putting QFD into practice

FICCI
Step 1 : List customer requirements and rank
Importance
Customer Requirements on 10 point
scale
Very Important
Moderately Important
Slightly important
FICCI
Step 2 : List technical requirements to meet customer requirements
Technical Requirements
FICCI
Step 3 : Comparing product with the nearest competitor
Customer competitive
evaluation on 5 point scale( 5 high , 1 low )
Rank
1 2 3 4 5 Action
Customer Requirements
Competitor product Our product

FICCI
Step 4 : Establish relationship between customer requirement

and technical requirements
Strong relation
Moderate relation
Weak relation
Rank
FICCI
QFD matrix overview after step 4
Competitive evaluation
Rank
FICCI
Step 5 : Do competitive technical Assessment
Customer Requirements Rank
5
Competitive 4
Technical Competitor assessment
3
Assessment 2 Our assessment
1
FICCI
Step 6 : Mention operational targets or action points
Customer Requirements Rank
Competitive
Technical
Assessment
Operational
New Product
Targets
FICCI
QFD - customer’s voice
The whole process of the QFD can be linked to GIGO (

Garbage in garbage out ). This is because, if the voice of the
customer has not been captured properly, the final product
will also not be the one actually desired by the market place.
It is therefore extremely important to capture the correct
voice of the customer before taking any other step in the
QFD planning process. We will explain this by the
forthcoming example of new car development.
FICCI
Example : new car development

FICCI
A product development team wants to determine what the

customers want in a new car. After interviewing about 120 car
drivers, the team came out with the following chart of the
customer requirements :
FICCI
Desired product attributes in a new car

Requirement Rank
• Easy to drive 5
• Quiet riding , no squeaks or rattles 4.8
• Excellently finished 4.6
• Smooth riding even on rough road 4.5
• Excellent gas mileage 3.9
• Aerodynamic design 3.8
• Hugs the road 3.7
• Free from breakdowns 3.6
• Fast acceleration 3.5
• Virtually maintenance free 3.4
• Durable - will last 150000 miles 3.3
• Protects the driver and passenger in case of accident 3.2
• Classic styling 3
• Has instruments to read critical functions 2.2
• Has many electronic devises 2
• Has convertible roof 1.4
FICCI
Translating into technical requirements
The product development team is all set to translate the requirements

of the customer into technical requirements as per the QFD matrix.
Fallacy : The survey is based on aggregate data management and its
basic assumption is that there is one best answer for every one.
FICCI
Classification of needs
The product development team is asked by the CEO to

classify the needs of various drivers and then give it a rating
instead of proceeding simply with the aggregate data
management. After the market survey the product
development team divided the customer into two broad
categories :-
1. The performance driver and
2. The practical driver
The team then came with the following findings -
FICCI
Two different profiles of desired product attributes

Performance driver 5 Practical driver
•Fast acceleration •Excellent gas mileage
•Aerodynamic design •Virtually maintenance free
•Hugs the road •Free from breakdowns
4 •Easy to drive
•Easy to drive •Durable
•Excellently finished •Quiet riding
•Quiet riding •Smooth ride
•Classic styling •Protects driver
•Smooth riding •Excellently finished
3
•Free from breakdowns

•Excellent gas mileage •Many electronic devises
2 •Aerodynamic design
•Protects drivers
•Durable •Hugs the road
•Many electronic devices •Instruments to read functions
•Convertible roof •Classic styling
•Virtually maintenance free •Convertible roof
•Fast acceleration
1
FICCI
New Car
The classification of the customer requirements clearly reveals

that the attribute which is most important for the
performance driver, is least important for the practical
driver and vice versa. A simple listing of the customer
requirements would have definitely ended up in the
development of incorrect product for the market. Reading the
voice of the customer is therefore the most critical and
challenging aspect of the whole QFD process.
FICCI
QFD - Conclusion
It is therefore very important that your organization is

constantly looking for the living customers instead of
mythological ones created by aggregate data management.
Once the voice of the customer has been properly captured,
translating them into technical requirements should not be
much of a difficulty.
FICCI
Design of experiments
FICCI
Design of experiments
Design of experiments (DOE) is a valuable tool to optimize

product and process designs, to accelerate the development
cycle, to reduce development costs, to improve the transition of
products from research and development to manufacturing and
to effectively trouble shoot manufacturing problems. Today,
Design of Experiments is viewed as a quality technology to
achieve product excellence at lowest possible overall cost.
FICCI
Objectives of Experimentation
The following are some of the objectives of

experimentation in an industry :
• Improving efficiency or yield
• Finding optimum process settings
• Locating sources of variability
• Correlating process variables with product characteristics
• Comparing different processes, machines, materials etc
• Designing new processes and products.
FICCI
Various terms used in Experimentation
In the context of discussion on experimental designs, the

common frequently used terms are :
• factor
• Level
• Treatment combination
• Response
• Effect
• Interaction
FICCI
Traditional approach
The traditional approach to product and process

optimization is to conduct one variable at-a-time
experiments. This approach though simple to plan and
execute, suffers from several drawbacks. For instance,
varying factor ‘A’ from its nominal value ‘A1’ to some
other value ‘A2’ may produce a given change in the quality
of the product, when other factor ‘B’ is at a value ‘B1’.
However a different change in the quality of the product
will result, when factor ‘B’ is at a value ‘B2’. This effect
known as interaction effect, can not be detected under
traditional approach..
FICCI
Statistically designed experiments
A statistically designed experiment permits simultaneous

consideration of all the possible factors that are suspected
to have bearing on the quality problem under investigation
and as such even if interactions effect exist, a valid
evaluation of the main effect can be made. Scanning a
large number of variables is one of the ready and simpler
objectives that a statistically designed experiment would
fulfill in many problem situations.
FICCI
Statistically designed experiments
Even a limited number of experiments would enable the

experimenter to uncover the vital factors as which further
trials would yield useful results. The approach has number
of merits, it is quick, reliable and efficient.
FICCI
Basic principles of experimentation
Basic principles of Experimentation are :

• Randomization
• Replication
• Local Control
FICCI
Basic principles of experimentation
• Randomization : is described as an insurance against

extraneous factors.
• Replication : increases the sensitivity of the experiment i.e
power of detecting differences between treatments.
• Local Control : reduces the effect of natural variability of
materials, environmental conditions etc.
FICCI
Planning for experimentation
It is known widely that a properly well planned experiment

helps to achieve better efficiency and hence certain amount
of thinking must be done before deciding to carry out the
experiment and actually conducting the experiment.
FICCI
Planning for experimentation
The various steps to be followed in this direction are listed

below :
 Selection of area of study : Pareto analysis
 Proof of the need for experimentation
 Brain storming and Cause & Effect diagram : To list all the
possible factors
 Classification of factors
 Interactions to be studied
 Response and type of model for analysis
Note : Pareto Analysis, Brain storming and Cause & Effect diagrams have
already been covered in the previous slides.
FICCI
Proof of the need for experimentation
After having selected the area for experimentation we have

to ensure that the problem is of ‘Break through’ or
‘Improvement’ nature and not a problem of ‘control’
nature. For this purpose past data should be suitably
analyzed and plotted on some process control chart to
check whether the process is within statistical control or
not. If the analysis shows lack of control or statistical
instability, then it is a problem of ‘control’ nature and
experimentation may not be needed.
FICCI
Proof of the need for experimentation
However if the problem is of chronic nature and there is

stability in the process, then it establishes the need for
experimentation. Before deciding to carry out
experimentation the need for experimentation must be
established.
FICCI
Classification of factors
Tools like brainstorming and cause & effect diagrams

helps in identification of factors and preparing a complete
list of the factors involved in any experiment. Factors
listed can be classified into three categories :
1. Experimental Factors
2. Control Factors
3. Error or Noise Factors
FICCI
1. Experimental factors are those which we really

experiment with by varying them at various levels.
2. Control Factors are those which are kept at a constant
(controlled) level throughout experimentation.
FICCI
3. Error or Noise factors are those which can neither be

changed at our will nor can be fixed at one particular level.
Effect of these factors causes the error component in the
experiment and as such these factors are termed as error or
noise factors.
Note : At the planning stage itself all the factors viz. Experimental,
Control and error should be recognized. This will help to tackle them
appropriately during experimentation.
FICCI
Response and type of model for analysis
The ultimate observations or data generated by the

experiment is known as the response. The response may be :
• Continuous or measurement type and follows a normal
distribution
• Continuous or measurement type but does not follow normal
distribution
FICCI
7. Control phase
Objectives of control phase

Tools for effective control system
Risk management
Mistake proofing techniques
Product design controls
FICCI
Objectives of control phase
• To ensure that our processes stay in control after the

improvement solution has been implemented and
• To quickly detect the out of control state and determine the

associated causes so that actions can be taken to control the
problem before non-conformances are produced.
FICCI
Control phase
Having achieved the improvement, it needs to be sustained. There is a

general tendency for all processes to degrade unless there is an
effective control mechanism which is able to detect incipient deviation
in the process, which are then analyzed and necessary corrective action
is taken to bring the process back to the state which was attained after
planned improvement was effected. These control mechanisms must be
integrated in the form of a quality management system document
which should be made mandatory.
FICCI
Control phase
Unless we control the business processes in the form of

documentation and ongoing process controls, processes
will tend to degrade overtime and shall loose the gains
achieved in the improvement activities.
FICCI
Tools for effective control system
I. SPC - This has already been covered in “Measurement and

Analysis section”.
II. Risk management
III. Mistake proofing
IV. Product design controls
FICCI
Risk management
FICCI
Risk management
Risk can be defined as the probability of an undesirable

event occurring and the impact/consequence of that event.
Risk management is a process of managing risk using risk
abatement plans.
FICCI
Objectives of risk management plan
• To identify and quantify risk elements viz. Technical, cost, marketing

risk.
• To reduce risk by means of risk abatement plans integrated into
processes
• To Monitor progress of abatement plan
• To Highlight and manage risk as early as possible.
FICCI
Key steps of a risk management process
• Identify risk elements and risk types

• Assign risk ratings i.e. probability and consequence of risk
• Prioritize risk as high medium and low
• Identify risk abatement plans for high and medium risks
• Incorporate the risk abatement plans into work plans.
FICCI
Ways to identify risk
1. FMEA (This has been already discussed in the chapter on

“Measurement”
2. Past experience
3. Brainstorming
Whatever be the method it is important to analyze risk in terms of
complex design issues, cutting edge technology issues, untested
techniques, new manufacturing processes and high cost uncertainties.
FICCI
Methods of risk abatement
• Involve customers/suppliers/manufacturing/field early in

the process
• Model or simulate the process
• Use robust design
• Test
• Conduct periodic project reviews
• Complete analysis earlier
• Assure proper resourcing
FICCI
Mistake Proofing
FICCI
Mistake proofing
Mistake proofing is a scientific technique for improvement

of operating systems including materials, machines and
methods with an aim of preventing problems due to human
error. The term “error” means a sporadic deviation from
standard procedures resulting from loss of memory,
perception or motion.
FICCI
Defect Vs errors
It is important to understand that defects and errors are not

the same thing. A defect is the result of an error, or an
error is the cause of defects as explained below.
Cause Result
Error Defect
FICCI
Prevention of defects
Cause Intermediate result End result
Machine
Take action zero
or Detect error
feedback defect
human error
Stop errors from

turning into defects
FICCI
Types of error
• Error in memory of PLAN : Error of forgetting the

sequence/ contents operations required or restricted in
standard procedures.
• Error in memory of EXECUTION : Errors of forgetting

the sequence/contents of operations having been finished.
• Error in PERCEPTION of type : Error of selecting the

wrong object in type or quantity.
FICCI
Types of error
• Error in perception of MOVEMENT : Error of

misunderstanding/misjudging the shape, position, direction
or other characteristics of the objects.
• Error in motion of HOLDING : Error in failing to hold
objects.
• Error in motion of CHANGING : Errors of failing to
change the shape, position, direction, or other
characteristics of object according to the standard.
FICCI
Human error provoking situations
• Inadequate written standards

• Too many parts
• Mix up
• Too many steps
• Specifications or critical conditions
• Too many adjustments
• Tooling change
• Frequent repetition
• Environmental factors
FICCI
Principles of mistake proofing
The principles of mistake proofing can be categorized into groups:
A. Prevention of occurrence
B. Minimization of effects
FICCI
A. Prevention of occurrence
Methods under this principle aim to prevent the occurrence

of human errors from all stages of operations and make
corrections unnecessary.This can be done through the
following 3 methods :-
• Elimination
• Replacement
• Facilitation
FICCI
Elimination
Elimination method aims to remove the system properties

which generate operations/restrictions susceptible to human
errors so as to make them unnecessary. Consider the error of
an operator touching a high temperature pipe and getting
burnt. One method of preventing this error is to make the pipe
safe by covering it with insulating material. This improvement
removes the property of the pipe which generates the
restriction.
FICCI
Replacement
The replacement method aims to use more reliable methods

than operators and make it unnecessary for operators to
perform such functions as memory, perception or motion.
The use of specially partitioned parts boxes holding specified
number of parts to prevent the error of supplying incorrect
number of parts is an example of foolproof method based on
replacement.
FICCI
Facilitation
The principles of elimination and replacement described

above make it unnecessary for operators to perform
operations or note restrictions. In contrast to these, the
purpose of facilitation is to make such functions as
memory, perception and motion required in operations
easy for the operators, and thus reduce the occurrence
rate of human errors.
FICCI
B. Minimization of effects*
Methods under this principle aim to minimize the effects of

human error and focus on processes where the errors
develop into serious problems of quality,safety or
efficiency. This can be divided into two categories :-
1. Detection and
2. Mitigation
*This principle is also known as Stop-in-time.

FICCI
Detection
The concept of detection is that even if a human error occurs,

the deviations from standard states caused by it can be
detected and corrected in the succeeding operation steps.
The methods of correcting the detected deviations are
classified into two types :-
1. Operators are informed or find by themselves the
deviations and take necessary corrective action.
2. The deviations are automatically corrected without
operators.
FICCI
Detection
There are two methods of informing the operator. The first

method is to bring to the operator’s notice by alarms or
the remained parts and the second method is by making the
successive operations impossible.
FICCI
Mitigation
The mitigation method aims to make operations redundant

or incorporate shock absorbing/protecting materials so as to
mitigate the effects of human errors in their development
process.
Example : Consider the error of burning out the motor of a
production machine by forgetting to switch off the power
supply. The mitigation countermeasure is to install a fuse
which cuts off the power supply when the temperature reaches
certain point.
FICCI
Product Design Controls
Product design controls can be categorized in 3 parts

• Means of knowing the product
• Means of testing designs
• Means of regulating designs
FICCI
Means of knowing the product
 Do the designers know the variety of application of the

product.
 Do they have complete information on the operating
environments.
 Do they have access to the user to discuss applications.
 Do they know the potential field misuses of the product.
FICCI
Do they have clear understanding of product requirement

on :-
 Performance
 Life
 Warranty period
 Reliability
 Maintainability
 Accessibility
 Safety
 Operating costs
FICCI
 Have the non quantitative features of the product been

defined in some manner?
 Do the designers know the level of product
sophistication suitable for the user involved?
 Are adequate design guidelines, standards, handbooks
and catalogues available?
 Do the designers understand the interaction of their
part of design with remainder of the design?
FICCI
 Do the designers understand the consequences of a failure

or other inadequacies of their designs on:-
1. The functioning of the total system
2. Warranty costs and
3. User costs ?
 Do they know the relative importance of various
components & characteristics within components?
 Do the designers know what are the manufacturing
capabilities relative to the design of tolerances?
FICCI
 Do the designers derive tolerances based on

customer/functional needs or just use standard tolerances?
 Do the designers know the shop and field costs incurred
because of incomplete design specifications or designs
required in change?
FICCI
Means of testing designs
 Do the designers have the means of testing their design

with regard to the following :-
 a. Performance & reliability tests
 b. Tests for unknown design interaction or effects
 c. Pilot run
 Is their an independent review of design?
 Have the detailed drawings been checked?
FICCI
 Do the designers record analysis for the design?

 Do the designers receive adequate feedback from
development tests, manufacturing tests, acceptance tests and
user experience?
 Are the results quantified where possible including
frequency of problems and costs to the manufacturer and
user?
FICCI
 Does failure information contain sufficient technical details

on causes?
 Are the designers aware of material substitutions or
process changes?
 Do the designers receive notice when their designs
specifications are not followed in practice?
FICCI
Means of regulating Design
 Have the designers been provided with the means of

regulating the design process?
 Are they provided with information on new alternative
materials or design approaches?
 Have they been given performance information on previous
designs?
 Are the results of research efforts on new products transmitted
to the designers?
FICCI
 Are the approvals required from the designers to use

products from the new suppliers?
 Do the designers participate in defining the criteria for
shipment of the product?
 Can the designers propose changes involving trade-offs
between functional performance, reliability and
maintainability?
FICCI
 Are designers told of changes to their designs before they are

released?
 Have causes of design failures been determined by thorough
analysis?
 Do designers have the authority to follow their designs
through the prototype stage and make design changes where
needed?
 Can the designers initiate design changes?
FICCI
 Are field reports reviewed with designers before making

decisions on design changes?
 Do designers understand the procedures and chain of
command for changing a design?
FICCI
8. Implementation & deployment
Awareness of the present status

Critical issues and superior choices
Prerequisites of successful implementation
Creating six sigma focus
Deployment schedule
Awareness of the present status
It is extremely important for an organization to carry out an

overall assessment of the present status to know their strengths
and weaknesses. The following steps are important in
conducting the assessment :-
FICCI
Steps in conducting assessment
Agree on the assessment parameters and criteria. Whatever

be the criteria, it is important to cover all the major aspects
like leadership, information and analysis, strategic planning,
human resource utilization, quality assurance, business
results and customer satisfaction.
FICCI
• Educate the management in the criteria and adapt the

criteria.
• Form the internal information gathering team.
• Train the team in the criteria and in the information
gathering process.
• Plan and conduct the information gathering process.
FICCI
• Collate the information and write the factual report.

• Have objective external experts validate and assess the
facts and provide feedback to senior management.
• Use this feedback as input to the strategic planning
process, and plan the actions required to cause
improvement.
FICCI
Organizational assessment
On the basis of business excellence model
Please answer the following questions about your organization.

Each question must be rated on a scale of 1-5, 1 being lowest and
5 being highest.
FICCI
Leadership
1. Is the top management having personal visible involvement in all aspects

of quality management?
2. Do they actively participate in creating and reinforcing customer focus

throughout the organization?
3. Do they provide active support to the change program by providing

appropriate resources?
4. Do they actively involve themselves in recognizing the employee/ team

contributions?
FICCI
Strategic planning
5. Does the company have a common vision which is shared by all the
employees in its true sense?
6. Does the company’s strategic planning address realignment of work

processes to improve customer focus and operational performance?
7. Are the company’s strategies targeted for quantified measurable

improvement in important areas and Is building for future seen as more
important than short term benefits?
FICCI
Strategic planning
8. Is commitment to resources for new facilities, process improvements and

training done considering long term objectives?
9. Does the company’s long term projections of operational performance

effectively incorporate comparisons with competitors?
FICCI
Information management
10. Does the company’s working system and procedures promote easy
upward flow of information?
11. Do the employees feel free to share the information?
12. Is the company’s information management system accessible to every

one without any difficulty?
FICCI
Information management
13. Does the company periodically update its information

management system?
14. Is the information system reliable and accurate for people to

make decisions in time?
FICCI
Human resource focus
15. Does the company’s business plan consider human resource capabilities
for addressing quality leadership opportunities?
16. Is the investment in education and training decided considering

employee needs and future business needs?
17. Does the company evaluate its human resource planning using employee
feedback?
18. Does the company have an effective system for setting both quantitative
and qualitative targets?
FICCI
19. Are the employees generally aware and meet the expected
performance standards?
20. Does the company make effort to integrate employees job performance
with key quality improvement targets and business results?
21. Does the company have an effective appraisal system which takes care
of the career progression of all the employees?
FICCI
22. Is the company concerned about employee well being?
23. Is the good performance suitably rewarded?
24. Is the employee motivation level high and good performance

suitably rewarded ?
FICCI
Human resource satisfaction
25. Is the company able to realize the full potential of its people and
people’s commitment to job is visible?
26. Are the existing system of incentive and reward adequate for
maximum employee contribution?
27. Is the company’s image as an employer good and the company is

able to attract the best talent?
FICCI
Customer and market focus
28. Does the company address future needs taking into account
competitors and changing customer expectations?
29. Does the company regularly evaluate and improve its processes
based in changing customer expectations?
30. Does the company set performance standards and reviews

them for further improvement?
31. Does the company trace system performance, with reference to

set expectation level, using quality measures?
FICCI
32. Does the company regularly evaluate and improve their

commitments for service performance to match customer
expectations?
33. Does the company promptly resolve all formal and informal
customer complaints?
34. Does the company regularly determine customer’s current

and expected requirements?
35. Does the company determine specific product feature and their
relative importance using customer listening techniques like
QFD?
FICCI
36. Does the company analyze and use information on customer

loss/gain and product performance to develop future strategies?
37. Does the company effectively determine customer satisfaction

and make effective efforts to improve it further?
38. Does the company’s customer satisfaction measure capture key

information that reflects their likely future behavior?
39. Is the customer satisfaction level effectively compared with

that of your key competitors by studies and independent surveys?
FICCI
Customer satisfaction
40. Does the company improve its system of determining

customer satisfaction on a regular basis?
41. Does the company effectively use customer dissatisfaction

indicators for making improvements?
42. Has the company achieved better customer satisfaction for

its products and services in relation to its key competitors?
FICCI
Supplier focus
43. Does the company evaluate supplier performance with specified

requirements/parameters through mutually agreed plans?
44. Does the company effectively communicate its quality requirements to

the suppliers?
45. Does the company effectively evaluate if suppliers are meeting its
quality requirements?
46. Does the company organize training programs for the suppliers to
improve their ability to meet key requirements and response times?
FICCI
Supplier focus
47. Does the company have a system to generate healthy competition

among suppliers of similar items to improve performance?
48. What is the level of your supplier satisfaction?
49. Are the suppliers paid in time ?
50. Does the company constantly endeavor for development of capabilities

of its suppliers?
FICCI
Processes
51. Does the company’s product design consider customer’s implied and
future needs?
52. Does the company validate its product designs taking into account
performance, process and supplier capabilities?
53. Does the company evaluate and improve design and design processes
so as to improve product quality and cycle/response time?
54. Does the company determine the cause of variation, make corrections
and integrate them into the process?
FICCI
Processes
55. Does the company analyze processes to achieve better quality, reduced
cycle/response time and better operational performance?
56. Does the company regularly evaluate and the key business processes,
their requirements, quality and operational performance?
57. Does the company regularly analyze and simplify the processes to
achieve better quality, cycle-time and operational performance?
58. Does the company effectively use alternative technology for

improvement?
FICCI
Processes
59. Does the company effectively use information from customers for
business and support service process improvement?
60. Does the company make efforts to find out information from best in the
class and make use of this information for process improvement?
61. Is the criterion of benchmarking well defined and documented?

FICCI
Processes
62. Does the company’s work culture ensure precedence to quality over
cost and response time considerations?
63. Is there a judicious planning for balancing cost, quality and time in
every decision taken in the organization?
FICCI
Impact on society
64. Is the company effectively satisfying the needs and expectations of

the society at large?
65. Does the company effectively evaluate possible impacts of its

products and operations on society?
66. Does the company promote ethical conduct in all activities hat it
does and are the company’s ad-campaigns truthful and reflect facts?
67. Does the company effectively consider energy conservation and

preservation of global resources?
FICCI
Company specific business results
68. Does your company enjoy product quality leadership for the range of
products it deals with?
69. Is the company’s growth over the last financial year comparable with
the industry growth?
70. Are the overall financial results better that the last financial year and
have the shareholder expectations been met?
Analyze your score
• 281 - 350 : Excellent. You are doing very well, but there is
no room for complacency.
• 211 - 280 : Good. With a little effort you can do better.
• 141 - 210 : Average. Your direction is clear, but you need
to intensify your efforts to move up.
• Less than 140 : Serious situation. You may not survive
for a long time. Immediate action is required to change the
present situation.
FICCI
Assessment report
At the end of the assessment, management should have a

report that includes :
• Factual account that sets out how the organization operates
today.
• A list of existing strengths and weaknesses to build
upon.
• A list of present and future opportunities.
• A list of six Sigma projects to be undertaken.
FICCI
Critical issues & superior choices

in Six Sigma implementation.
FICCI
A. Method focus versus problem focus.
It is a general tendency amongst organizations to latch on the

ideas like SPC, JIT, QFD & DOE as if they were the panacea to
all the problems. As soon as the new quality tool is introduced it
becomes the focus of the company. Nobody is willing to pose a
question of the real problem faced by the company. With the
problem solving focus the question is “what is the problem?”.
A problem focus enables us to select the appropriate solutions.
FICCI
B. Focus on productivity versus focus on quality

improvement.
Even with a lot of talk on quality, management focus is

generally directed towards productivity improvement with
quality improvement as a by product. Management by & large
has not understood that the focus on quality results in
improved productivity as a by product. For Six Sigma to be
really effective, organizations must focus on quality with
productivity as a by product & not vice-versa.
FICCI
C. Soft progress versus hard progress.
Many organizations have a tendency to describe quality

progress in soft terms (intermediate results) instead of hard
terms(end results). Once such a practice is considered
acceptable it almost becomes a norm. Some companies will
describe how many black belts have been trained rather than
how many have actually resolved problems that has resulted
in breakthrough improvements. The top management must
require progress reports in hard terms rather than soft
terms.
FICCI
D. Improvement of manufacturing systems versus
all other systems .
Six Sigma efforts are usually talked about in the

manufacturing sense. Other areas of business, which are
equally important somehow receive scant attention. Many
times organizations fail to define measurement metrics for
marketing, Purchase, Quality assurance, Product engineering,
Suppliers, Employees & Customers. Please see chapter on
“Measurement of business excellence” for more details.
FICCI
 Highly visible top down management commitment to

the initiatives.
 A proper measurement system to track the progress.
This weaves accountability into six sigma initiatives and
provides tangible picture of the organization’s efforts.
 Internal and external benchmarking of the
organization's products, services and processes.
FICCI
 Stretch goals to focus on changing the processes.

 Appointment and training of champions and black belts
to promote initiatives . The champions must be able to
provide necessary planning, teaching, coaching and
consulting at all levels in the organization.
 Training and development at all levels.
FICCI
Creating Six sigma Focus
Six Sigma projects can be selected on the basis of

any of the following criteria :-
• Focus on project cost savings
• Focus on Deliverables
• Focus on the processes
• Focus on the problems
FICCI
Focus on project cost savings
Under this criteria the Six Sigma projects are selected for
potential reductions in the fixed or variable costs. The
organization should however be aware about the limitation
of this approach, particularly when they are trying to
propagate quality.
FICCI
Focus on deliverables
Under this approach the organization identifies the areas that

are the greatest cause of customer dissatisfaction. High
warranty costs is one area that the organization may want to
look into. However this approach is also short sighted as it
focuses on defects rather than the processes that create the
defects.
FICCI
Focus on the processes
To select the Six Sigma projects by focussing on the processes

is the best way to attack the root causes of defects and
customer satisfaction concerns. It is important for the
organization to identify critical processes which are operating
at low sigma levels.
FICCI
Focus on the problems
Another way to select the Six Sigma project is to straightaway

focus on the problem. Many a times there may be nothing
wrong with the process, but the products may still not be
doing very well. One example could be weak design of the
product. The organization can straightaway focus on redesign
of the products.
FICCI
Six Sigma deployment schedule
Week Activities
1 Champions create the vision of Six sigma in the organization
2-5 Define the road map with comprehensive training plan
6 Identify high impact Six sigma projects
7 Class room training of Black belts on MEASURE phase
8-10 Black belts work on projects & apply knowledge gained in the MEASURE phase
11 Class room training of Black belts on ANALYZE phase
12-14 Black belts work on projects & apply knowledge gained in the ANALYZE phase
15 Class room training of Black belts on IMPROVE phase
16-18 Black belts work on projects & apply knowledge gained in the IMPROVE phase
19 Class room training of Black belts on CONTROL phase
20-22 Black belts work on projects & apply knowledge gained in the CONTROL phase
23-24 The Black belts review the results and select other areas of high impact
FICCI
9. Measuring business excellence
Measures of business excellence

Non financial measures
Employee related
Operations related
Customers related
Financial measures
FICCI
After implementing Six Sigma, the organization must assess the

impact of the program on overall business results. Since six sigma has
an impact on all the business functions, the organization must measure
all the functions through quantifiable measures of excellence. To
facilitate this assessment, sample measures of excellence for various
functions are given on the following slides.
FICCI
The measures of business excellence can be broadly

classified into following two categories :-
A. Non financial measures
B. Financial measures
FICCI
A. Non financial measures
Non financial measures can be further classified into three

categories :-
I. Employee related
II. Operations related
III. Customers related
FICCI
I. Employee related
• Employee satisfaction
• Awards presented
• Internal promotions
• Employee turnover
• Safety and health
• Suggestions received and implemented

FICCI
II. Operations related
Operations related measures can be classified further into following categories:

• Marketing
• Purchase
• Manufacturing
• Product Engineering
• Quality Assurance
• Product reliability
• Accounting
FICCI
Operations related :- Marketing
1. Accuracy of forecast assumptions.
2. Number of incorrect order entries.
3. Overstocked field supplies.
4. Contract errors.
5. Late deliveries.
6. Customer complaints.
7. Warranty cost as a percentage of sales.

FICCI
Operations related :- Purchase
1. Premium freight cost/ demurrage charges.
2. Down - time because of parts shortages.
3. Number of Off specification parts used to keep line going.
4. Cycle time from start of purchase request until items in house.
5. Excess inventory.
6. Percentage of purchased material rejected on receipt.

FICCI
Operations related :- Manufacturing
1. Yield per ton of raw materials.
2. Percentage of parts scrapped.
3. Percentage of parts reworked.
4. Percentage of parts accepted on concession.
5. Percentage of final product graded as seconds.
6. Production per man / machine.

FICCI
Operations related :- Product engineering
1. Number of engineering changes per document.
2. Number of errors found during design review.
3. Number of errors found in design evaluation test.
4. Percentage of time over- run compared to planned time for

development.
5. Percentage of cost over - run over estimated cost of development.
6. Number of tooling redesign after trial production.

FICCI
Operations related :- Quality Assurance
1. Percentage of lots rejected due to errors.
2. Percentage of products having defects detected by customers.
3. Number of engineering changes that should have been detected in

design review.
4. Errors in inspection / test reports.
5. Cycle time to get corrective actions.
6. Percentage of appraisal cost compared to production cost.

FICCI
Operations related :- Product reliability
• Mean time to failure.
• Failure rate.
• Probability of failure occurrence during given time interval.
• Probability of failure non-occurrence during given time interval.
• Mean life time.
• Mean time to first generate overhaul.
• Mean time to repair.

FICCI
Operations related :- Accounting
1. Percentage of late payments.
2. Time to respond to customer request for information.
3. Billing errors.
4. Incorrect accounting entries.
5. Payroll errors.
6. Errors in cost estimates.

FICCI
III. Customer related
• Market share
• Market penetration
• New markets identified
• Overall customer satisfaction
• Customer complaints
• Customer retention
• R&D expenditure as a percentage of sales
• New products and services introduced
• Sales per employee

FICCI
B. Financial measures
The normal business pressures in today’s world tend to

cause more time to be spent on financial measures than any
other element of business. We need to be sure that the
strong signals sent by this attention in no way
underestimates the importance of the non financial
measures as discussed in the previous slides to improve the
overall business performance.
FICCI
Financial measures
In addition, to the standards set of revenue and cost

accountancy measures, the organizations must reduce their
quality costs and eliminate all the non value adding
activities from their system.
Various categories of quality cost are given on the
following slides :-
FICCI
Quality costs - Prevention costs
• Market research
• Quality training programs.
• Contract review
• Design review
• Field trials
• Supplier evaluation
• Process plan review
• Process capability review
• Design and manufacture of jigs and fixtures
• Preventive maintenance
FICCI
Quality costs - Appraisal costs
 Proto type testing

 Vendor surveillance
 Incoming material inspection
 Process inspection/control
 Final inspection
 Laboratory testing / measurement
 Quality audits
FICCI
Quality costs - Internal failure
 Design changes/ corrective action

 Scrap due to design changes
 Excess inventory
 Rectification / reject disposition of purchased material
 Rework/rejection in manufacturing
 Downgrading of end product
 Downtime of plant & machinery
 Trouble-shooting & investigation of defects
FICCI
Quality costs - External failure
 Processing / investigation of customer complaint

 Repair/replacement of sold goods
 Warranty claims
 Product liability & litigation costs
 Interest charges on delayed payment due to quality problems
 Loss of customer goodwill & sales
FICCI
Size of categories of quality costs
In most of the organizations working at 2 or 3 sigma there

is less emphasis on prevention, and their main quality
efforts are on appraisal with very little control on internal
and external failure costs. Organizations must intensify
their efforts on the preventive costs to reduce their overall
cost of quality.
FICCI
1-10-100 Rule
1
Prevention Rs
10
Stages
Correction Rs
Rs
Failure 100
Rs
Rs
FICCI
Computing cost of poor quality
Am ount Percentage
Prevention Costs
Quality Administration
QualityEngineering
Reliability Engineering
Training
Total Prevention
Appraisal Costs
Inspection
Test
Vendor Control
Measurement Control
Materials Consumed
Qulaity Audits
Total Appraisal
FICCI
Computing cost of poor quality
Am ount Percentage
Internal Failure Costs
Scrap
Repair & rework
Vendor Losses
Failure Analysis
Total internal
External Failure Costs
Failures-manufacturing
Failures-Engineering
Failure-Sales
W arranty charges
Failure Analysis
Total External
T otal Quality Costs

FICCI
Financial measures
• Cost of quality as a percentage of sales
• Profit before interest and financial charges
• Profit before and after tax
• Growth in profits over last year
• Return on assets
• Return on capital employed
• Return on sales
FICCI
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FICCI

Six Sigma - A Breakthrough Strategy

• 400 State-of-the-art training slides on concepts of Six

• Self assessment utility package.

• Quality promotional posters.

2. Fundamentals of the breakthrough strategy

8. Implementation and deployment

9. Measurement of business excellence

End slide show

1. Basic concepts of Six Sigma

Most effective strategy

Most effective strategy

Six Sigma is the most effective breakthrough strategy ever

Limitations of other tools

Many organizations have earlier tried Downsizing, Outsourcing,

Limitations of other tools

The term ‘Sigma’ taken from the Greek alphabet, is used

Six Sigma and error or defect rate

At present most companies, when their processes are under

Six Sigma and error or defect rate

As manufacturing of most of the products involves large number of

Levels of Sigma and defect rate

Quality level % Quality Defective PPM*

3 Sigma 99.73 66807

4 Sigma 99.9937 6210

5 Sigma 99.999943 233

6 Sigma 99.9999998 3.4

*Parts Per Million

Past concepts of quality focused on “conformance to standards”. This

New concept of quality

In Six Sigma, the concept of quality encompasses manufacturing,

Knowing characteristics critical to customer

Value enrichment for the company and the customer is done by

Six Sigma and cost of quality

Six Sigma has a very significant impact on the cost of quality. As

Hidden costs of quality

Visible and hidden costs

• Conversion efficiency of materials

• Inadequate resource utilization

• Excessive use of material

• Cost of redesign and re-inspection Hidden Costs

• Lost customers / Goodwill

Cost of quality at various levels of Sigma

Sigma Defect rate(PPM) Cost of quality Competitive level

How Six Sigma works

Six Sigma is a high performance data driven approach

Clear focus on the bottom line

Six Sigma places a clear focus on getting the bottom line

Objectives of Six Sigma

At the strategic level, the goal of Six Sigma is to align an

Impact of Six Sigma

The Six Sigma strategy affects five fundamental areas

The business improvement mechanism is shown in the

Six Sigma business improvement mechanism

Variation in output of processes

Aspects of Six Sigma

Six Sigma approach integrates the human and process

Reasons to adopt Six Sigma

In the past, quality programs adopted by organizations focused on meeting