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INDIATIMES NEWS NETWORK[ FRIDAY, MARCH 31, 2006 12:00:28 AM]

To understand what is Six Sigma, first let us be clear about what it is not. It is neither a secret organisation nor a form of marshal art.

For many companies, Six Sigma is a measure of quality with a continuous improvement programme aspiring for perfection.

Six Sigma is a disciplined, data-driven approach and a methodology for identifying and eliminating defects (driving towards six standard deviations between the mean and the nearest specification limit) in any process -- from manufacturing to transactional and from product to service.

Commonly defined as 3.4 defects per million opportunities, Six Sigma can be defined and understood at three distinct levels: metric, methodology and philosophy.

What is the history of Six Sigma?

In the early and mid-1980s with Chairman Bob Galvin at the helm, Motorola engineers decided that the traditional quality levels -- measuring defects in thousands of opportunities -- didn't provide enough granularity.

Instead, they wanted to measure the defects per million opportunities. Motorola developed this new standard and created the methodology and needed cultural change associated with it.

Six Sigma helped Motorola realise powerful bottom-lines - in fact, they documented more than $16 billion in savings as a result of Six Sigma.

Since then, hundreds of companies around the world have adopted Six Sigma as a way of doing business. This is a direct result of many of America's leaders openly praising the benefits of Six Sigma.

Leaders such as Larry Bossidy of Allied Signal (now Honeywell), and Jack Welch of General Electric Company. Rumor has it that Larry and Jack were playing golf one day and Jack bet Larry that he could implement Six Sigma faster and with greater results at GE than Larry did at Allied Signal. The results speak for themselves.

Why do we need Six Sigma?

Increasing global travel and access to more information about what is happening in the world contributes significantly towards raising customer awareness.

As soon as customers have a good experience with a business, their expectations are raised and they begin to demand similar good experiences with other businesses.

Thus the customer expectations keep rising. Time to market has become critical. Product development cycles are getting shorter and shorter.

Order placement to merchandise delivery time is getting shorter. Customers are demanding cost reduction. With a vibrant economy, it is a real challenge to retain good employees.

Finally, managing continuous change is a significant challenge. Therefore, management is always looking for ways and means to address all these challenges.

That is where Six Sigma comes into the picture. Successful implementation of Six Sigma can meet these challenges and create benefits on all levels, for all players.

How does Six Sigma work?

There are five steps to Six Sigma:

Define: A Six Sigma project team¡ªled by a black belt¡ªidentifies a project based on business objectives as well as customer needs and feedback.

The team identifies CTQs (critical to quality characteristics) that the customer considers to have the most impact on quality. It also separates the "vital few" from the "trivial many" (the projects that will have the most impact versus those that could stand improvement but are not critical).

Measure: The team identifies the key internal processes that influence CTQs and measures the defects currently generated relative to those processes.

Analyze: The team discovers why defects are generated by identifying the key variables that are most likely to create process variation.

Improve: The team identifies the maximum acceptable ranges of the key variables and validates a system for measuring deviations of the variables. The team modifies the process to stay within the acceptable range.

Control: Tools are put in place to ensure that the key variables remain within the maximum acceptable ranges over time.

What are the costs and benefits of Six Sigma?

In the world of Six Sigma quality, it takes money to save money using the Six Sigma quality methodology. You can't expect to significantly reduce costs and increase sales using Six Sigma without investing in training, organizational infrastructure and culture evolution.

Sure you can reduce costs and increase sales in a localised area of a business using the Six Sigma quality methodology -- and you can probably do it inexpensively by hiring an ex-Motorola or GE Black Belt.

You can think of that scenario as a "get rich quick" application of Six Sigma. But is it going to last when a manager is promoted to a different area or leaves the company? Probably not.

If you want to produce a culture shift within your organization, a shift that causes every employee to think about how their actions impact the customer and to communicate within the business using a consistent language, it's going to require a resource commitment.

It takes money to save money.

How to implement the Six Sigma training and for whom?

Implementing Six Sigma within an organisation is similar to implementing any other company-wide initiative. Determining the content and framework, developing the materials, and rolling it out to the company is only half of the necessary work.

The other half is changing the culture.

Six Sigma Training is one of the most important factors that contributes to and helps modify and shape an organization's culture.

This article will help identify who in your organization is required to be Six Sigma trained and what type of Six Sigma training they should receive.


Senior Management

Senior Management, also known as 'C-Level Management' (CEO, CIO, CFO and peers), are the individuals that set, communicate and drive the overall business objectives.

They are also the individuals that are required to incorporate Six Sigma objectives into their operational plans. Examples of objectives might include:

X% of employees through Six Sigma training by a certain date

Y% reduction in defects for all customer visible processes by quarter end

Z% in back-office projects savings by year end

Six Sigma training for Senior Management should include a program overview, business and financial benefits of implementation, real-world examples of successful deployments, specific application to business/industry, and the required Six Sigma training and tools to ensure successful implementation.

Depending on Senior Management's time availability and their desire to learn the details, Black Belt training is also recommended.

Functional / Process Managers

Functional and Process Managers are the level of management directly reporting to the Senior Management.

Depending on the size of the organisation, they might include functional managers from areas such as human resources, finance and training, and process managers from areas such as assembly, production and call center.

These managers are sometimes referred to as 'sponsors' and 'champions' because they are known to champion the cause within their business organization.

These champions translate Senior Management's strategic directions into tactical objectives and actions with the help of their Quality Leader and Project Leaders. Six Sigma training for Functional and Process Managers is more detailed than that for Senior Management.

Topics include the Six Sigma concept, methodology, tools and requirements to ensure successful implementation within their organization.

Quality Leaders

Quality Leaders, also known as Quality Managers and Master Black Belts, help Functional and Process Managers set and lead the Six Sigma vision within their specific areas.

They maintain rolled up budgets, track business cost savings, ensure training goals are met, coach Functional and Process Managers, Project Leaders and Employees, review projects at milestones, share best practices, and ensure appropriate use of tools and methodologies.

Six Sigma training for Quality Leaders includes detailed information about the concept, methodology and tools, as well as detailed statistics training and computer analysis tool use. Depending on the instructor, the duration is usually between three and four weeks.

Project Leaders

Project Leaders, also known as Black Belts, implement the Six Sigma methodology and tools within the business.

They lead the intra- and inter-function projects, maintain time lines and budget, determine appropriate tool use, perform analyses, and act as the central point of contact for specific process improvement projects.

Six Sigma training for Project Leaders includes detailed information about the concept, methodology and tools.

Depending on the instructor, the duration is usually between two and four weeks, and may include one of more weeks in between sections. Statistics is included in the agenda, but typically does not include as much detail as that provided to Quality Leaders.


Employees

Employees, also known as Green Belts, may also take Six Sigma training courses developed specifically for part time Project Leaders.

Six Sigma training for Green Belts is similar to Black Belt training, but shorter in duration because less detail on complex tools and statistics is provided. Employees are instead told to ask their Black Belt for help in specific areas.


How does the Six Sigma organisational structure work?

Roles and responsibilities

Quality Leader/Manager (QL/QM) - The quality leader's responsibility is to represent the needs of the customer and to improve the operational effectiveness of the organization.

The Quality function is typically separated from the manufacturing or transactional processing functions in order to maintain impartiality. The quality manager sits on the CEO/President's staff, and has equal authority to all other direct reports.

Master Black Belt (MBB) - Master Black Belts are typically assigned to a specific area or function of a business or organization. It may be a functional area such as human resources or legal, or process specific area such as billing or tube rolling.

MBBs work with the owners of the process to ensure that quality objectives and targets are set, plans are determined, progress is tracked, and education is provided. In the best Six Sigma organizations, process owners and MBBs work very closely and share information daily.

Process Owner (PO) - Process owners are exactly as the name sounds ¨C they are the responsible individuals for a specific process.

For instance, in the legal department there is usually one person in charge -- maybe the VP of Legal -- that's the process owner. There may be a chief marketing officer for your business -- that's the process owner for marketing.

Depending on the size of your business and core activities, you may have process owners at lower levels of your organizational structure.

If you are a credit card company with processes around billing, accounts receivable, audit, billing fraud, etc., you wouldn't just have the process owner be the chief financial officer, you would want to go much deeper into the organization where the work is being accomplished and you can make a big difference.

Black Belt (BB) - Black Belts are the heart and soul of the Six Sigma quality initiative. Their main purpose is to lead quality projects and work full time until they are complete.

Black Belts can typically complete four to six projects per year with savings of approximately $230,000 per project (see earlier reference). Black Belts also coach Green Belts on their projects, and while coaching may seem innocuous, it can require a significant amount of time and energy.

Green Belt (GB) - Green Belts are employees trained in Six Sigma who spend a portion of their time completing projects, but maintain their regular work role and responsibilities.

Depending on their workload, they can spend anywhere from 10% to 50% of their time on their project(s). As your Six Sigma quality program evolves, employees will begin to include the Six Sigma methodology in their daily activities and it will no longer become a percentage of their time -- it will be the way their work is accomplished 100% of the time.


Is Six Sigma the answer to all your dreams?

If you are already operationally excellent and want to squeeze out defects and increase efficiency, Six Sigma is for you.

If your business is built on intangibles, stuff that's awfully hard to subject to statistical analysis, then Six Sigma is not for you. If you want to be a product leader competing primarily on quality, but not first-to-market, then get out your wallet.

Beware, though: Data collection is the Achilles' heel of many a Six Sigma effort. This sort of woe, often caused by an amalgamation of disparate computer platforms thrown together in a merger or acquisition, is common at the large companies that have been early adopters of Six Sigma.

Making matters worse, there is currently no software program that goes across a variety of computing platforms to collect data for Six Sigma analysis.

©Bennett, Coleman and Co., Ltd. All rights reserved.