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Operational Excellence Team

Denim Fabric Div. Arvind Ltd.
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Contents
Six Sigma History & Introduction
Overview of DMAIC Methodology
Define Phase
Measure Phase
Analyze Phase
Improve Phase
Control Phase

Six Sigma History

Motorola : The first advocate of Six-Sigma in the 80s. Saved $16

Billion in 10 Yrs.
Father Of Six Sigma

More recently, other companies have embraced Six Sigma:

GE / Allied Signal / Bombardier / Sony
GE annual reports states that Six Sigma delivered:

$300 million to its operating income in 1997

$750 million to the bottom line in 1998

Top-down program with Executive and Champion support

Outwardly focused on Voice of the Customer, inwardly focused
on using statistical tools on projects that yield high return on
investment

Purpose of Six Sigma

Basic unit for improvement : Process
Purpose of process improvement :

To Increase performance &

To Decrease performance variation

In Summary Six Sigma Focuses On :

Defect Reduction,
Yield Improvement,
Improved Customer Satisfaction,
Higher Net Income &
Continual Improvement and Business Excellence
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What Is Six Sigma?

The name Six Sigma derives from statistical
terminology; Sigma(s) means Standard Deviation
For a production process, the Six Sigma
standard means that the defective rate of the
process will be 3.4 defects per million units
Applies a structured & data centric methodology
towards Problem Solving through : DMAIC &
DMADV approach

`
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What is Six Sigma Performance

Lower
Spec

Mean =
+1

Upper
Spec

? Times

+1 +2 +3 +4 +5 +6

No. of times Standard Deviation () can fit in between the

Specification Limit & Mean = Sigma Level (Z Value)
If is quite small & we can fit in 6 times between mean &
Specification Limit the process is said to have
Sigma Level (Z Value) = 6

Z = (USL - x) / S

or

Z = (x - LSL) / S

What Does Six Sigma Process Mean ?

Lower
Specification Limit

Mean / Target

Upper
Specification Limit

Higher
Probability
of Failure

66807 Defects
Per Million
Opportunities

3 1s
Higher this
these
numbers,
number,
Lower the
chance of
producing a
defect

3 1s

6 2s

Much Lower
Probability
of Failure

3.4 Defects
Per Million
Opportunities

6 2s
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Six Sigma : Critical Success Factors

1.
2.
3.
4.
5.

Top Management Support & Commitment

Well Defined Project Selection Process
Full Time Six Sigma Leaders
Business Improvement Process Framework
Quantifiable & Measurable Results

Six Sigma Conversion Table

Cost of Poor Quality

Sigma Level

Defect per Million Opportunities

Cost of Quality

308,537 (Non-competitive companies)

Not Applicable

66,807

25-40% of Sales

6,210 (Industry Average)

15-25% of Sales

233

5-15% of Sales

3.4 (World class)

< 1% of Sales
Source: Six Sigma by Mikel Harry

Being Better is Cheaper

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Overview of DMAIC Methodology

What is DMAIC?
Define, Measure, Analyze, Improve & Control
Where is DMAIC used?
DMAIC is used when both, Root Causes and Solutions are
Unknown

Unknown

Brainstorming

DMAIC

Task force

Quick Fix Approach

Solution

Known
Known

Root Cause

Unknown
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More varying and complex the combination of

causes more the difficulty in pin-pointing them
Cause
Cause

Cause

Cause

Cause

Cause

Cause
Cause

Single cause
Why Why Analysis

Multiple causes
Fish Bone Analysis

Variable complex combination

DMAIC

Difficulty in pinpointing cause

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When to Use the Lean Six Sigma Process

When to Use:
Issues that are valuable for the Business Unit to resolve
Problems that have stood the test of time
Solution is not known
You want a more robust solution than traditional methods
can provide

When NOT to Use:

You already have a solution and course of action

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DMAIC Concept Focus

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Overview of DMAIC Methodology

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Roles in DMAIC Project

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1.

Deployment Champion :
Responsible for the overall Six Sigma program within the
company
Reviews projects periodically
Adds value in project reviews since he is hands-on in the
business
Clears road blocks for the team
Has the overall responsibility for the project closure

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2.

Process Owner :
Takes over the project after completion
Manages the control system after turnover

3.

Project Sponsor :
Head of Deptt. Where the project is being run
Acts as a surrogate process owner until an owner is
named
Updates tracker with relevant documents & project data
Part of Senior Mgmt. responsible for selection / approval
of projects

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Project Leader

4.

5.

Leads the project team

Is responsible for the overall outcome of the project

Subject Matter Expert (SME) :

Is an expert in specific functional area
Team may invite him/her to specific team meetings but
not necessary all of them
Provide guidance to project teams on as needed basis

6.

Team Members :
Chosen for specific skill or competency
Helps in designing the new process
Drive the project to completion

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Define Phase

20

Define Phase

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Define Phase Steps

Step 1

Generate Project Ideas

Step 2

Select Project

Step 3

Finalize Project Charter & High Level

Map

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Step 1 : Generate Project Ideas

VOB
VOC

COPQ

Identification of
CTQs

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Step 2 : Select Project

Criterion For Project Selection

Result : It should have a significant impact on customer
satisfaction or business goals
Duration : It should be manageable such that it can be
completed in 3-6 months
Size & Scope: Neither should be a bean-sized nor a
world-hunger project
Cause & Solution : Both should be Unknown

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Output Measures

Output Metrics quantify the overall performance of the

process including :

How well customer needs & requirements were met

How well business needs & requirement were met

Y= f (X)
To get results, should we focus our behavior on the Y or X ?

Y
Dependent
Output
Effect
Symptom
Monitor
Response

X1 . . . XN
Independent
Input-Process
Cause
Problem
Control
Factor
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Primary & Secondary Metrics

Primary Metric :

Output of the process that we can measure which if we

improve will lead to greater customer satisfaction

Secondary Metric :

Metrics that we need to track to ensure that we are not

adversely affecting the process by just focusing on the
primary metric alone

Example : Project to improve OTIF

Reduce time from order acceptance to order delivery,

(Primary Metric)
without increasing inventory & affecting quality of output
(Secondary Metric)
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Step 3 : Finalize Project Charter

A project charter is a written document that works as an

agreement between management & the team about what
is expected from the project
The charter :
Tells the team where it should go
Clarifies what is expected of the team
Keeps the team focused & aligned with organizational
priorities
Remember : The Project Charter does NOT solve the
problem

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Elements Of A Project Charter

1.
2.
3.

4.
5.
6.

Business Case
Project Scope
Opportunity or Problem Statement
Goal Statement
Team Selection
Project Plan

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Project Charter Elements

Business
Case

Project
Scope

Problem
Statement

What is the benefit ?

How does this project align with the business strategy ?
What is the quantified value of the project ?

What are the boundaries of the initiative (Start & End Points of the
process) ?
What is not within the scope ?

What Pain are we or our clients experiencing ?

What is wrong or not working ?
When and where do the problems occur?
How big is the problem & what is the impact ?
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Opportunity or Problem Statement

Example of a Bad Opportunity or Problem Statement:

The Order Delivery process needs to be improved. XYZ Plant
has received numerous customer complaints. XYZ associates
also confirm there is a problem. Improving the process will
increase Customer Satisfaction scores and Economic Profit.

Example of a Good Opportunity or Problem Statement:

The XYZ Plant shipped $5.6 million of products in July, many of
which were late (what). Data collected from customers for the
last 6 months (when) indicates that an average of 56% of West
Coast customers (where) experienced problems but only 9%
of others customers experienced problems. During the month
of July, XYZ had 30 late shipments (extent) to the West Coast
worth $790,000.
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Project Charter Elements

Goal
Statement

What are our improvement objectives and targets?

Is the Goal Statement SMART ?
How will success be measured ? What specific parameters will be
measured ?

Team
Selection

Who are the team members ?

What is their role ?
How much time will be dedicated to the project ?

Project
Plan

How are we going to get this done ?

When are we going to complete the work ?
What are the major milestones ?
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SIPOC : Provides an at-a-glance perspective of the process with

requirements of key suppliers inputs, outputs and customers.
Requirements

Why use it?

To get a high-level understanding
of the process in the project
along-with measurable
requirements for output & inputs

S
Supplier

I
Input
Measures

Requirements

Process

Output

C
Customer

Measures

Process
Map

What does it do?

Gives a numerical expression of the measure properties of inputs from suppliers,
effectiveness and efficiency properties of processes, and properties of outputs delivered
to customers
Defines project boundaries
Describes process flow at the highest level which can be further detailed to reveal
where to collect data
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The SIPOC map...

SIPOC Map
PROCESS:
Inputs
Supplier(s)

Input

Process

Measurable
Requirements

Key Process
Steps

Outputs
Output

Measurable
Requirements

Customers

Start
point
1
2
3
4
5
6
7
End Point
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Focused Improvement Project Charter

General Information
Project No:
Project Location:

Project Name:
Project Champion:
Business Case:

Project Details
Problem Statement:
Goal/Objective:
Project Scope/Constraints:
Constraint :

Sr. No.

Name

Scope

Dept.

Role in the Project

Signature

1
2
3
4
5
6
Baseline for Project
Project Metric(s)/ KPI name:
Project Metric(s)/ KPI Value at start:
Criteria for selecting Baseline value:
Benefits

Project Review Schedule

Activity
Date

Bottom line Savings

(Rs. lacs)

Start
Define
Measure
Analyse
Improve
Control
Closure and handover

Other benefits

Team Leader Name:

OE
Champion

Sign
Name:
Sign

Authorisation
Project Champion

Name:

Finance representative

Sign
Name:
Sign

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35

Measure Phase

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Measure Phase Steps

Step 4

Finalize Project Y
Performance Standards for Y

Step 5

Validate Measurement
System for Y

Step 6

Measure Current
Performance & Gap

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Measure Phase Roadmap

Identify Output Metrics: Identify what metric

information must be gathered to determine the
root causes of current performance
Develop operational Definitions: Clearly define
each metric, to provide clarity
Develop data collection plan: Develop a formal
data collection plan.
Validate measurement system: Validate that the
measurement system output is meaningful

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Measure Phase Roadmap

Collect Baseline Data: Gather baseline

information on identified metrics
Determine Process Performance / Capability:
Compare the Voice of the Process (VOP) and
Business (VOB) requirements. The difference is
the Gap or opportunity for the project.
Validate Business Opportunity: Modify the
Project Charter, as necessary ,to reflect
differences between the measured Gap and the
objectives identified in Project Charter.

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Analyze Phase

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Analyze Phase Steps

Step 7

List All Probable Xs

Step 8

Identify Critical Xs

Step 9

Verify Sufficiency of Critical

Xs for the project

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Analyze Phase Roadmap

Identify Key Input & Process Metrics: Identify what

metric information must be gathered to determine
the root causes of current performance
Identify Potential Xs & Propose Critical Xs: Propose
possible hypothesis for the current state process
performance
Prioritize Critical Xs: Sort & reduce the hypothesis list
by those unlikely to be valid or impossible /
unrealistic to validate
Conduct Root Cause Analysis on Critical Xs: Conduct
statistical analysis to establish a mathematical
relationship between the Potential Critical Xs &
current process performance, the Ys
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Analyze Phase Roadmap

Validate Critical Xs : For validated hypothesis,

validate the statistical result
Estimate the Impact of Each X on Y: Establish the
magnitude of the impact for each Critical X on
each process performance metric, the Ys
Quantify the Opportunity: Financially quantify
the opportunity for each validated root cause
Prioritize Root Causes: Rank the root causes
based on their financial opportunity

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List all Potential Xs

Narrow down the enlisted inputs to potential

inputs through brainstorming by a cross
functional team. Following tools could be useful : Qualitative Analysis

Affinity Diagram / 5-Why Analysis / Fishbone Diagram

Process Map Analysis

Value & Non Value Add Analysis
Risk Analysis Failure Modes & Effects Analysis

Graphical Analysis
Pareto Plots for prioritization
Box Plots, Histogram & Scatter Diagram
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Qualitative Analysis : Fishbone Diagram

Also known as Cause & Effect Diagram / Ishikawa Diagram

Useful in terms of identifying potential factors causing an
overall effect and to help identify the root cause & their
probable solutions
Causes in the diagram are based on 6Ms : Man, Machine,
Method, Material, Measurement & Mother Nature
Causes derived from brainstorming sessions & grouped
appropriately under the above mentioned headings
Step 1: Identify the problem
Step 2: Work out the major factors involved
Step 3: Identify potential causes
Step 4: Derive probable solutions for the identified causes

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M A

Improve Phase

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Measure Phase Steps

Step 10

Generate and Evaluate Alternative

Solutions

Step 11

Select and Optimize Best Solution

Step 12

Pilot, Implement and Validate the

Solution

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M A

Step 10 : Generate Alternative Solutions

Ways to develop alternative solutions: Process Mapping
Ideation Techniques
Brainstorming
Creative Thinking (De Bonos Six Thinking Hats)
Creative Thinking by Probing
Benchmarking

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Brainstorming

M A

Structured method of generating unconstrained

ideas / solutions and gaining engagement in the
improvement process
Produces many ideas / solutions in a short time
Facilitates creative thinking process
Separates idea generation from the organizing /
assessment of ideas

** Do NOT criticize any idea

** Encourage participation of all
** Avoid dominance of some persons

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Control Phase

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Control Phase Steps

Step 13

Implement Control System

for Critical Xs

Step 14

Document Solution and

Benefits

Step 15

Transfer to process Owner,

project Closure

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Outputs of Control Phase

Control Plan
Documentation of Project Findings
Training & Communication Plan
Transfer to Process Owner
Validation of Financial Benefits

The main output of the

Control Phase is the
Control Plan
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Control Phase Roadmap

Develop Control Plan which includes SOPs, Training Plans and

Process Control Systems, etc. to ensure that the process
improvements endure over time
Implement Process Changes and Controls Keep Xs within tolerance
by using appropriate controls (Risk Management, Mistake Proofing,
etc.) and apply control charts to critical Xs and Ys to monitor and
control variation.
Monitor & Stabilize Process to ensure the performance goals are met
Transition of Project to Process Owner
Identify Project Replication Opportunities to drive rapid improvement
in other departments / sections or processes
Calculate Financial Benefits to validate the project savings

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Step 13 Implement Control System for Critical Xs

Complete strategy for maintaining the improved process performance

over time
Identifies specific actions & tools required for sustaining process gains
The objective is :
To ensure that our process stays in control after the solution has been
implemented.
To quickly detect the out of control state and determine the associated
special causes so that action can be taken to correct the problem
before non conformances are produced
Elements of Control Plan
Process Documentation
Mistake Proofing Systems
Process Ownership
Audit / Inspection Plans

Data Collection Plans

Response / Reaction Plans
Risk Mitigation(FMEA)
Statistical Process Control (Control Charts)
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Step 14: Document Solution and Benefits

Appropriate documentation of solution is important for
review and replication purpose.
Control plan is formulated to maintain all the improvements
except those where Mistake-Proofing is applied
Existing control systems and procedures of the process must
incorporate the control of Xs
The responsibility of ensuring that the control plan is
followed, must be transited from the Project Leader to the
Process Owner

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Step 14: Document Solution and Benefits

Standards and procedures : Must be clearly defined and specific
Written in language of the person doing the work
Easy to understand Have pictures if required
Include procedures, checklists, metrics, flowcharts
Should be approved by authorities
Should incorporate : Purpose, scope, control parameters,
methods, measurement techniques, decision criteria,
assumptions (if any)

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Step 14: Document Solution and Benefits

Validation of Financial Savings : Upon project completion, financials for the project should be
reported to a financial analyst nominated by Mgmt.
Financial analyst reviews the calculations for the benefits and
validates the benefits and finally signs-off the document
The results of the improvement and financial benefits need
to be monitored (generally) for one year
At the end of one year, the project financial report is closed

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Step 15: Transfer to Project Owner, Project Closure

Hand over the Control Plan to the Process Owner

Schedule a project handoff meeting with the process

owner

The project is handed over with documentation and

control plan to the process owner

Any changes recommended are incorporated, monitoring

methods are discussed

Get a formal sign off of the Sponsor, Process Owner on the

results of the project.

Identify Best practices and replication opportunities and

advise the Process owner on the same.
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