six sigma

SIX SIGMA -AN OVERVIEW

YOGESH JADHAV ROLL NO: HPGD/OC14/0094 SPECIALIZATION: OPERATIONS MANAGEMENT

WELINGKAR INSTITUTE OF MANAGEMENT DEVELOPMENT & RESEARCH YEAR OF SUBMISSION: SEPTEMBER, 2016 1/61

ABSTRACT

Six Sigma techniques are the most powerful Quality Improvement Technique so far in the world. The process entitled Six Sigma was ‘invented’ by Motorola in the 1980s and designed to target manufacturing defects, and then reduce them to a small level (less than 3.4 defects per million opportunities. saving millions of dollars in the process. This “six sigma technique Became very popular in Europe and many corporations revolutionized their business culture after implementing this program. They showed drastic results on record and improved their profitability and productivity in multiples. Understanding the six sigma method allows organizations to better support their strategic directions, and increasing needs for coaching, mentoring, and training. It also provides opportunities to better implement six sigma projects. This paper examines the evolution, benefit of six sigma practices and identifies the key factors influencing successful six sigma project implementations. It integrates the lessons learned from successful six sigma projects and considers further improvements to the six sigma approach. Effective six sigma principles and practices will succeed by refining the organizational culture continuously. Cultural changes require time and commitment before they are strongly implanted into the organization.

The Study of industries success stories of Six Sigma, reveals the importance & the need of six sigma implementation for energy, cost & overhead savings in organizations. It is a great fact that almost of every industrial sectors six sigma can be applied & implement. This may be the uniqueness of the study of six sigma success stories.

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TABLE OF CONTENTS 1

Introduction

05

2

What is Six Sigma?

06

3

Two perspectives of six sigma processes

10

4

Origin of Six Sigma

11

5

Six Sigma Methodology & its Benefits

12

6

Six Sigma Phases

16

7 Quality management tools and methods used in Six Sigma

20

8

Industries Success Stories Of Six Sigma

37

9

Six Sigma at General Electric – Case Study

38

10 Six Sigma at Motorola – Case Study

45

11 Six Sigma at Wipro Technologies – Case Study

48

12 Six Sigma at DHL – Case Study

54

13 Conclusion 14 Recommendations 15 Bibliography

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1. Introduction The Six sigma method is a project-driven management approach to improve the organization’s products, services, and processes by continually reducing defects in the Organization, it is a business strategy that focuses on improving customer requirements understanding, business systems, productivity, and financial performance. Dating back to the mid 1980s, applications of the six sigma methods allowed many organizations to sustain their competitive advantage by integrating their knowledge of the process with statistics, engineering, and project management (Anbari, 2002). Numerous 3/61

books and articles provide the basic concepts and benefits of the six sigma method (Harry and Schroeder, 2000) (Hoerl, 1998, 2001). The challenges and realities in implementing the six sigma method successfully are immense. However, the benefits of applying the six sigma method to technology-driven, project-driven organizations are equally great. The objective of this study is to review and examine the evolution, benefits, and challenges of six sigma practices and identify the key factors influencing success of its implementation. Successful six sigma projects and their potential applications in managing traditional projects and considers further improvements to the methodologies used for managing six sigma projects. Wider applications of six sigma principles to the organization will succeed through senior management involvement, organizational commitment, cultural change, and effective project management. Motorola claims that its people invented Six Sigma, but the principles behind the methodology date back to 1809. That's when Carl Gauss, a German mathematician, published "Theoria Motus Corporum Arithmeticae." In this book, Gauss introduced the concept of the bell curve, a shape that can often represent the variation that occurs in a controlled process.

2. What is Six Sigma?

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

Six Sigma is a quality management tool and strategy for process improvement

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Six Sigma aim is to eliminate waste and inefficiency, thereby increasing customer satisfaction by delivering what the customer is expecting.

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Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services.

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Six Sigma follows a structured methodology, and has defined roles for the participants.

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Six Sigma is a data driven methodology, and requires accurate data collection for the processes being analyzed.

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Six Sigma is about putting results on Financial Statements.

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Six Sigma is a business-driven, multi-dimensional structured approach to:

o

Improving Processes

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Lowering Defects

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Reducing process variability

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Reducing costs

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Increasing customer satisfaction

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Increased profits

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Six Sigma Pathways

The word Sigma is a statistical term that measures how far a given process deviates from perfection. The central idea behind Six Sigma is that if you can measure how many "defects" you have in a process, you can systematically figure out how to eliminate them and get as close to "zero defects" as possible and specifically it means a failure rate of 3.4 parts per million or 99.9997% perfect. Originally, it referred to the ability of manufacturing processes to produce a very high proportion of output within specification. Processes that operate with "six sigma quality" over the short term are assumed to produce long-term defect levels below 3.4 defects per million opportunities (DPMO). Six Sigma's implicit goal is to improve all processes, but not to the 3.4 DPMO level necessarily. Organizations need to determine an appropriate sigma level for each of their most important processes and strive to achieve these. As a result of this goal, it is incumbent on management of the organization to prioritize areas of improvement. 6/61

Six Sigma Applicability

Six Sigma Equation is –

Where, Y = Dependent X = Independent

Application in various business functions

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Where Six Sigma can be applied?

Six sigma can be applied in various functions of the organization, to apply this quality tool the requisites are – There has to be a process There has be a parameter to measure the variation in the process There is should be opportunity in application of a six sigma as variation in the process can be managed There is a wide scope in the application of a six sigma

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3. Two perspectives of six sigma processes I. Statistical viewpoint Six sigma method has two major perspectives. The origin of six sigma comes from statistics and statisticians. Six sigma is method from a statistical, probabilistic, and quantitative point of view. From the statistical than 3.4 defects per million opportunities or a success rate of 99.9997% where sigma is a term used to represent the variation about the process average. If an organization is operating at three sigma levels for quality control, this is interpreted as achieving a success rate of 93% or 66,800 defects per million opportunities. Therefore, the six sigma method is a very rigorous quality control concept where many organizations still performs at three sigma level.

II. Business viewpoint In

the business world, six sigma is defined as a ‘business strategy used to improve business

profitability, to improve the effectiveness and efficiency of all operations to meet or exceed customer’s needs and expectations. The six sigma approach was first applied in manufacturing operations and rapidly expanded to different functional areas such as marketing,

engineering,

purchasing,

servicing,

and

administrative

support,

once

organizations realized the benefits. Particularly, the widespread applications of six sigma were possible due to the fact that organizations were able to articulate the benefits of six sigma presented in financial returns by linking process improvement with cost savings.

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4. Origin of Six Sigma 

Six Sigma is a set of tools and strategies for process improvement originally developed by Motorola in 1985.Six Sigma became well known after Jack Welch made it a central focus of his business strategy at General Electric in 1995, and today it is used in different sectors of industry.

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Six Sigma is a quality management tool seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes.

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The term Six Sigma originated from terminology associated with manufacturing, specifically terms associated with statistical modeling of manufacturing processes. The maturity of a manufacturing process can be described by a sigma rating indicating its yield or the percentage of defect-free products it creates. A six sigma process is one in which 99.99966% of the products manufactured are statistically expected to be free of defects (3.4 defects per million), although, as discussed below, this defect level corresponds to only a 4.5 sigma level. Motorola set a goal of "six sigma" for all of its manufacturing operations, and this goal became a byword for the management and engineering practices used to achieve it.

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5. Six Sigma Methodology & its Benefits Establish Roles Six Sigma is most successful when leadership is truly committed to the philosophy and methodology it entails. In larger companies, a Director or other high-level employee takes the lead role in creating and guiding Six Sigma efforts. Also for large-scale efforts, Black Belts should be trained up front as they will be responsible for leading improvement projects, and in some cases for advising process owners on establishing appropriate metrics and procedures. Within each operational area of an organization, the Process Owners need to be identified. These are the individuals who will be responsible for tracking their group's processes and performance and determining what action to take when improvement is needed. Green Belt training may also be established so that Process Owners and other key employees have the basic understanding and tools for working with Black Belts and managing processes. Create a Dashboard Once personnel are in place, the team needs to start at the highest level, by determining how it defines the organization's success. In its simplest form, success for a for-profit entity is typically defined using measures of profitability and shareholder satisfaction, customer satisfaction, and employee satisfaction. For nonprofits and other organizations serving the community, the definition will include measures of alignment with the mission, achievement of the mission and vision, and satisfaction of donors, employees, and the community. The dashboard is essentially a summary of the key metrics for an organization. In the early stage it will likely consist solely of metrics related to results, but as time goes on the team will establish input measures that strongly influence results, and those will be included as well. Many measures can be incorporated into a dashboard, so it is the team's responsibility to clarify its own values and ensure those values are reflected in a balanced dashboard.

Establish Performance Expectations Now that the key metrics have been clarified, the next step is determining what level of performance in each area is acceptable. For instance, what threshold level of customer 11/61

satisfaction does the company expect to maintain, and how much should sales increase year over year? These performance levels can be incorporated into the dashboard in a variety of ways, for instance by showing in green any metric that meets the performance requirement, in yellow or orange any metric that is at risk of shifting out of spec, and in red any metric that is not at an acceptable level. Identify Improvement Needs Once an area has its dashboard in place, leaders should be regularly monitoring process performance. When performance does not reliably meet the established requirement, leaders will need to determine whether and how to act. Typically there will be quite a few opportunities for improvement at any given time, so decisions will be necessary regarding which hold greatest priority. The Six Sigma leadership team should establish a standard method of prioritizing potential improvement opportunities, and of determining what type of methodology is best for each case. Determine Improvement Approaches In many cases, the reasons for inadequate performance are fairly obvious, and the solution is equally obvious. In those cases, a Six Sigma project should not be chartered, instead the business manager should "just do it" and address the problem. In other cases, the details of a problem are not known, or the causes of a problem are not clear. For those situations the DMAIC process is ideal, and chartering a DMAIC project would be the best move. In some cases, usually in organizations further along with their Six Sigma implementation, a design project (DMADV or DFE) can be initiated to create a new process or product or to completely re-create a process that is fundamentally not working.

Follow Improvement Methodology For any process improvement projects that are established, the methodology should be followed closely. For instance for a DMAIC project, a project team is created, and the team works through

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the standard DMAIC phases: Define, Measure, Analyze, Improve and Control. Similarly, a design project should follow the standard methodology chosen. Once the improvement goal has been achieved, the project is closed out, and the dashboard is updated to reflect the new performance level. Additional improvement initiatives may then be chartered based on new findings uncovered during the original project, or based on priorities established earlier for potential projects. Maintain the Framework Improvement projects have built-in steps to ensure that the gains established by each project are maintained. At a higher level, a successful Six Sigma initiative requires continuous attention to ensure that the established procedures, culture, and responsibilities are maintained. On an ongoing basis, leadership should be training employees, updating the dashboard with current performance levels and changes to key metrics, and revisiting priorities and procedures for selecting projects. Documenting these high-level procedures will also prove beneficial as employee turnover occurs and the individuals involved change.

Benefits of Six Sigma A systematic approach to ascertain how good each business process is and to orient various functions of the organizations to achieve the goal of organizational excellence consistently, many world class organizations like Motorola, Xerox, General Electric and Allied Signal have benefited tremendously by using Six Sigma management. These organizations achieved superior quality, higher productivity, perfect delivery performance, overall customer satisfaction and enterprise excellence all with lower cost. Six-Sigma is perhaps the most successful management approach available today.

Other factors that contributes in success are – •

Helps organizations produce products and services better, faster and cheaper.

•

Remove Wastage

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Maximize Customer Satisfaction 13/61

•

Maximize Product/Service Quality.(Develop Close to Zero Defect Products/Services)

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Increase Sales

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Increase overall Organizational Productivity

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Save Costs

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Make the Organization a Data-driven organization

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Faster Cycle Time

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Empower Employees

6. Six Sigma Phases

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The Six Sigma includes two key methodologies: DMAIC and DMADV. DMAIC is used for an existing process. DMADV is used when creating a new product or process. Using DMADV for new projects usually results in a more predictable process and ultimately higher quality product.

DMAIC 15/61

There are 5 important steps included in DMAIC. They are: 

D – Define goals to improve the overall process between the company’s strategy and the customer’s demands (can also refer to the group or individuals being supported)

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M – Measure the current processes. Collect relevant data on the current processes and then use this data as a baseline for future comparisons.

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A – Analyze your relationship within the process. It is important to understand the relationship to determine factors that can ensure that the company’s strategy is in line with customer demands.

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I – Improve the process. It is important to constantly improve and optimize the process with analysis and other techniques. One technique that is often used is Design of Experiments. This is a technique that uses acceptable experimental design to help test a hypothesis.

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C – Control. It is important to ensure that any variances can be controlled and corrected in order to avoid possible costly defects and loss of quality. Pilot runs are often set up to study process capability and production transition. These pilot runs can help fine tune or add additional control mechanisms.

DMADV There are 5 important steps included in DMADV. They are: 

D – Define goals that are consistent between the business strategy and customer demands.

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M – Measure CTOs (Critical To Qualities). CTOs consist of production process, capabilities producing a product, a product’s capability, and any risk assessments.

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A – Analyze and evaluate many different designs and choose the best design for its overall qualities.

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D – Design details. It is important not only to design a product, but to optimize the design features. In order to fully optimize a design feature, it may be necessary to create multiple designs or simulations. 16/61

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V – Verify the design. Important steps to verifying a design include setting up pilot runs and running a short production. This step also requires that the design be handed over to process owners.

Implementation of Roles in Six Sigma Methodology There are many roles that are used in the Six Sigma Methodology. While most of the roles below are used in many organizations’ Six Sigma implementation, it should be noted that they are not universal. The roles include: Executive Leadership – Top level executives are responsible for vision and to ultimately implement the Six Sigma Methodology. They also empower others to take initiative and ownership of the Six Sigma principles. Champions – Champions are usually members of upper management who are responsible for the implementation of Six Sigma throughout their organization. Master Black Belts – Champions usually hand pick them to coach others within the organization about the Six Sigma methodologies. They allocate either all or most of their time to the Six Sigma methodologies. It should also be noted that they usually have the responsibility of mentoring lower roles including Black Belts and Green Belts (see below). Experts – while this role is not a part of every organization, it can play a huge role in major engineering or manufacturing sectors. They improve overall services, products, and processes for their customers. Black Belts – Black Belts focus on six sigma executions. They are usually middle managers. Green Belts – Employees who help Black belts execute specific projects usually take on these roles and other job responsibilities. Downsides of the Six Sigma Methodology

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The Six Sigma methodology has helped most organizations become competitive and reduce costs. However, some downsides do exist. In order to implement the Six Sigma methodology in an organization, it is extremely important that employees on all levels buy into it. If associates, middle managers, or high level executives are not enthusiastic about using the Six Sigma Methodology, it can ultimately lead to failure. Another downside of using Six Sigma is that in some instances, Six Sigma’s effectiveness has never been measured or is unable to be measured. As a result, it is unclear whether Six Sigma is actually helpful. Finally, many organizations use the Six Sigma methodology as a way of protecting themselves from liability. For instance, if a company produces a product that is low in quality or can harm its user, the organization can use the defense that quality is at the forefront in order to be viewed positively. In this respect, it is unclear if an organization has implemented Six Sigma for its methodology or to cover its liability

7. Quality management tools and methods used in Six Sigma 18/61

Within the individual phases of a DMAIC or DMADV project, Lean Six Sigma utilizes many established quality-management tools that are also used outside Six Sigma. The following table shows only some important methods used. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33.

5S Analysis of variance (ANOVA) ADOPT Business Process Mapping Capability Analysis Cause & effects diagram (also known as fishbone or Ishikawa diagram) Check sheet Chi-squared test Control chart Correlation Cost-benefit analysis CTQ tree Design of experiments (DOE) Failure modes and effects analysis (FMEA) General linear model Histograms Pareto analysis Pareto chart Poka Yoke (Mistake Proofing) Process flow diagram (PFD) Project Charter Quality Function Deployment (QFD) Quantitative marketing research through Enterprise Feedback Management systems Regression analysis Rolled throughput yield Root cause analysis Run charts Scatter diagram SIPOC analysis (Suppliers, Inputs, Process, Outputs, Customers) Stratification Taguchi methods TRIZ Why-Why analysis (5 Whys)

1. 5S 5S is the name of a workplace organization method that uses a list of five Japanese words: seiri, seiton, seiso, seiketsu, and shitsuki. Transliterated or translated into English, they all start with the letter "S". The list describes how to organize a work space for efficiency and effectiveness by identifying and storing the 19/61

items used, maintaining the area and items, and sustaining the new order. The decision-making process usually comes from a dialogue about standardization, which builds understanding among employees of how they should do the work.

Example –

2. Analysis of variance (ANOVA) Analysis of variance (ANOVA) is a collection of statistical models used to analyze the differences between group means and their associated procedures (such as "variation" among and between groups)

Example –

3. ADOPT Formal

Six Sigma programs adopt a ranking terminology (similar to some martial arts systems) to define a hierarchy (and career path) that cuts across all business functions. 20/61

4. Business Process Mapping Business process mapping refers to activities involved in defining what a business entity does, who is responsible, to what standard a business process should be completed, and how the success of a business process can be determined.

5. Capability Analysis Way to report process capability and process performance is through the statistical measurements of Cp, Cpk, Pp, and Ppk. This article will present definitions, interpretations and calculations for Cpk and Ppk though the use of forum quotations.

6. Cause & effects diagram (also known as fishbone or Ishikawa diagram) The fishbone diagram is a graphical method for finding the root causes of an effect. The effect can be either a negative one, such as a process defect or an undue process variation; or a positive one, such as a desired process outcome. Example –

7. Check sheet The check sheet is a form (document) used to collect data in real time at the location where the data are generated. The data it captures can be quantitative or qualitative. When the information is quantitative, the check sheet is sometimes called a tally sheet. 21/61

Example –

8. Chi-squared test A chi-squared test, also referred to as chi-square test or test, is any statistical hypothesis test in which the sampling distribution of the test statistic is a chi-squared distribution when the null hypothesis is true, or any in which this is asymptotically true, meaning that the sampling distribution (if the null hypothesis is true) can be made to approximate a chi-squared distribution as closely as desired by making the sample size large enough. Example –

9. Control chart Control charts, also known as Shewhart charts (after Walter A. Shewhart) or processbehavior charts, in statistical process control are tools used to determine if a manufacturing or business process is in a state of statistical control. 22/61

Example –

10. Correlation In statistics, dependence refers to any statistical relationship between two random variables or two sets of data. Correlation refers to any of a broad class of statistical relationships involving dependence. Example –

11. Cost-benefit analysis Cost benefit analysis (CBA), sometimes called benefit–cost analysis (BCA), is a systematic process for calculating and comparing benefits and costs of a project, decision or government policy (hereafter, "project"). 23/61

Example –

12. CTQ tree A CTQ tree (critical-to-quality tree) is used to decompose broad customer requirements into more easily quantified requirements. CTQ trees are often used in the six sigma methodology. Example –

13. Design of experiments (DOE) In general usage, design of experiments (DOE) or experimental design is the design of any information-gathering exercises where variation is present, whether under the 24/61

full control of the experimenter or not. However, in statistics, these terms are usually used for controlled experiments Example –

14. Failure modes and effects analysis (FMEA) Failure mode and effect analysis (FMEA) was one of the first systematic techniques for failure analysis. It was developed by reliability engineers in the 1950s to study problems that might arise from malfunctions of military systems. A FMEA is often the first step of a system reliability study. Example –

15. General linear model The general linear model (GLM) is a statistical linear model. It may be written as[1] 25/61

where Y is a matrix with series of multivariate measurements, X is a matrix that might be a design matrix, B is a matrix containing parameters that are usually to be estimated and U is a matrix containing errors or noise. The errors are usually assumed to follow a multivariate normal distribution. If the errors do not follow a multivariate normal distribution, generalized linear models may be used to relax assumptions about Y and U. Example –

16. Histograms In statistics, a histogram is a graphical representation of the distribution of data. It is an estimate of the probability distribution of a continuous variable and was first introduced by Karl Pearson Example –

17. Pareto analysis 26/61

Pareto analysis is a statistical technique in decision making that is used for selection of a limited number of tasks that produce significant overall effect. It uses the Pareto principle – the idea that by doing 20% of work, 80% of the advantage of doing the entire job can be generated.

Example –

18. Pareto chart A Pareto chart, named after Vilfredo Pareto, is a type of chart that contains both bars and a line graph, where individual values are represented in descending order by bars, and the cumulative total is represented by the line. Example –

19. Poka Yoke (Mistake Proofing) 27/61

Poka-yoke [poka yoke] is a Japanese term that means "mistake-proofing". A pokayoke is any mechanism in a lean manufacturing process that helps an equipment operator avoid (yokeru) mistakes (poka). Its purpose is to eliminate product defects by preventing, correcting, or drawing attention to human errors as they occur. Example –

20. Process flow diagram (PFD) A process flow diagram (PFD) is a diagram commonly used in chemical and process engineering to indicate the general flow of plant processes and equipment. The PFD displays the relationship between major equipment of a plant facility and does not show minor details such as piping details and designations. Another commonly-used term for a PFD is a flow sheet. Example –

21. Project Charter 28/61

In project management, a project charter, project definition or project statement is a statement of the scope, objectives and participants in a project. It provides a preliminary delineation of roles and responsibilities, outlines the project objectives, identifies the main stakeholders, and defines the authority of the project manager. It serves as a reference of authority for the future of the project. The terms of reference is usually part of the project charter. Example –

22. Quality Function Deployment (QFD) Quality function deployment (QFD) is a “method to transform user demands into design quality, to deploy the functions forming quality, and to deploy methods for achieving the design quality into subsystems and component parts, and ultimately to specific elements of the manufacturing process.” Example –

23. Quantitative marketing research through Enterprise Feedback Management systems 29/61

Quantitative marketing research is the application of quantitative research techniques to the field of marketing. It has roots in both the positivist view of the world, and the modern marketing viewpoint that marketing is an interactive process in which both the buyer and seller reach a satisfying agreement on the "four Ps" of marketing: Product, Price, Place (location) and Promotion.

Example –

24. Regression analysis In statistics, regression analysis is a statistical technique for estimating the relationships among variables. It includes many techniques for modeling and analyzing several variables, when the focus is on the relationship between a dependent variable and one or more independent variables. Example –

25. Rolled throughput yield 30/61

During manufacturing processes, it is ideal to assemble something once and pass any tests deemed necessary on the first try. The measurement of this manufacturing ideal is the Rolled throughput yield (RTY). Rolled throughput yield and rolled throughput yield loss (RTYL) are methods used to calculate the probability of creating a defectfree unit during the multiple processes manufacturing (typically used in Six Sigma). These methods are also used to calculate statistical control limits for measurement of procedural performance. Example –

26. Root cause analysis Root cause analysis (RCA) is a method of problem solving that tries to identify the root causes of faults or problems that cause operating events.RCA practice tries to solve problems by attempting to identify and correct the root causes of events, as opposed to simply addressing their symptoms. Example –

27. Run charts 31/61

A run chart, also known as a run-sequence plot is a graph that displays observed data in a time sequence. Often, the data displayed represent some aspect of the output or performance of a manufacturing or other business process. Example –

28. Scatter diagram A scatter plot or scatter graph is a type of mathematical diagram using Cartesian coordinates to display values for two variables for a set of data. The data is displayed as a collection of points, each having the value of one variable determining the position on the horizontal axis and the value of the other variable determining the position on the vertical axis.

Example –

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29. SIPOC analysis (Suppliers, Inputs, Process, Outputs, Customers) In process improvement, a SIPOC (sometimes COPIS) is a tool that summarizes the inputs and outputs of one or more processes in table form. The acronym SIPOC stands for suppliers, inputs, process, outputs, and customers which form the columns of the table. It was in use at least as early as the Total Quality Management programs of the late 1980s and continues to be used today in Six Sigma and Lean.

Example –

30. Stratification Stratification is the building up of layers. Stratified is an adjective referring to the arranging of layers, and is also the past form of the verb stratify, to separate or become separated into layers. Example –

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31. Taguchi methods Taguchi methods are statistical methods developed by Genichi Taguchi to improve the quality of manufactured goods, and more recently also applied to engineering, biotechnology, marketing and advertising. Professional statisticians have welcomed the goals and improvements brought about by Taguchi methods, particularly by Taguchi's development of designs for studying variation, but have criticized the inefficiency of some of Taguchi's proposals Example –

32. TRIZ TRIZ a problem-solving, analysis and forecasting tool derived from the study of patterns of invention in the global patent literature". It was developed by the Soviet inventor and science fiction author Genrich Altshuller and his colleagues, beginning in 1946. In English the name is typically rendered as "the theory of inventive problem solving", and occasionally goes by the English acronym TIPS. Example –

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33. Why-Why analysis (5 Whys) The 5 Whys is an iterative question-asking technique used to explore the cause-andeffect relationships underlying a particular problem.[1] The primary goal of the technique is to determine the root cause of a defect or problem. (The "5" in the name derives from an empirical observation on the number of iterations typically required to resolve the problem.)

Example –

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8. Industries Success Stories Of Six Sigma Seeing the impact that Six Sigma is having on some leading companies sets the stage for understanding how it can impact your business. As we relate some of these results, we will also be reviewing the history that has brought Six Sigma to be forefront.

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9. Six Sigma at General Electric – Case Study

GE’s tryst with Six Sigma started in 1995 when CEO Jack Welch made it a corporate goal to be a Six Sigma company by 2000. He led from the front and ensured GE attained its Six Sigma goals within the stipulated period. Read on to find out more about Six Sigma and GE. General Electric’s (GE) focus on quality started in the late 1980s with the launch of the “Work-Out” program that opened GE culture to ideas from everyone and everywhere. The resultant learning environment prepared the ground for Six Sigma. Credit for the implementation of Six Sigma at GE goes to CEO Jack Welch, who made it a corporate policy to attain Six Sigma goals by 2000. GE adopted most of its Six Sigma concepts and methodology from pioneers such as Motorola. Training 

Six Sigma implementation at General Electric started with a heavy emphasis on training the workforce for data-based problem analysis.



GE required all exempt employees to undertake a 13-day, 100 hour training program in Six Sigma methodologies and complete a Six Sigma project by the end of 1998.

The training covered the DMAIC procedure:

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Why GE’s Six Sigma Success Story Is Still Relevant The Six Sigma business management strategy developed by Motorola in 1986 has come to be synonymous with quality and success. After over 20 years, why do companies continue to seek out Six Sigma help? What does it take to have a successful Six Sigma rollout? In order to answer these questions, this article will explore GE’s experience launching Six Sigma in the mid-1990s. Though more than 10 years have passed, the GE story remains relevant – their results have been duplicated over and over again by other companies. GE is one of the greatest success stories in business and is still considered to be one of the best companies in the world for innovation and financial success. The purpose of this article is not to give all the details on how to use the tools and methodology of the Six Sigma discipline. The focus is on sharing how powerful Six Sigma can be in driving tangible business results and how to create a culture in which this methodology can flourish. First, let’s discuss the basic background of Six Sigma. Why do companies adopt Six Sigma? The answer is simple – to make money. Poor quality and a failure to focus on customers ultimately cost organizations a lot of cash. The fundamental goal of the Six Sigma methodology is to drive a measurement-based approach that focuses on process improvement and variation reduction with the goal of improving financial results and meeting customer needs. Note the emphasis on “measurement-based.” Companies should only measure what they value – quality, customer satisfaction, and productivity. GE was able to internalize this truth, to the benefit of the entire organization. Jack Welch, the former CEO of GE, explains “that only when GE’s Six Sigma efforts started focusing on external customers did they start to see the value of Six Sigma.” In Jack’s book, Jack, Straight from the Gut, he writes that in the 1990s GE pursued four major initiatives: globalization, services, Six Sigma, and e-business. He said that the decision to implement Six Sigma sprang out of an employee survey in 1995 that uncovered that employees felt GE’s quality was okay, but it could be a lot better. When looking at tools and methodologies to address the quality issues, Jack commented that “the earlier quality programs they attempted were too heavy on slogans and light on results…or were too theoretical.” However, his investigation into Six Sigma convinced him to make this one of his top four multiyear priorities. Let’s take a look at some of the key aspects of Jack’s approach when launching the Six Sigma program: 38/61

Leaders of every business unit championed Six Sigma, so the project was sponsored from the top. Six Sigma projects were reviewed quarterly at the executive level, providing visibility to leadership on what was important. GE’s top talent was assigned to lead every initiative, even taking them out of their jobs to become Black Belts. Rewards and recognition went to the Six Sigma community because they were the best, driving home the message of how important this methodology was to the organization. Extensive, multi-month training was provided for the leaders of the initiatives. Training on concepts and tools to solve problems in everyday work was provided to thousands of Green Belts, in the famous workout sessions you may have read about. Every project had to tie into the business objectives and the bottom line of GE, directly contributing to the company’s success. To give you an idea of how serious GE was about Six Sigma, in the first year of the implementation they changed the bonus structure to 60 percent financial success and 40 percent Six Sigma success. In addition, by 1998 no one was considered for a management job unless they had at least the Green Belt training. They also screened management-level new hires based on Six Sigma qualifications and commitment to the methodology. So you might be wondering – how big of an impact did this have? Jack attributes the Six Sigma implementation to driving more than $10 billion dollars of benefits at GE and also drove up operating margins from 14.8 percent to 18.9 percent in four years. Here are some specific examples of success at GE: In GE Capital, over 24 percent of incoming calls in the mortgage division were going to voicemail. A Six Sigma team found that one branch had a near perfect percentage of answered calls. After the team analyzed its system, process flows, equipment, physical layout, and staffing, this branch model was duplicated everywhere and the company met customer calls with a live GE person on the first try 99.9 percent of the time. In GE Plastics, they were shut out of bidding on contracts to provide Sony CD-ROMs due to quality issues. A black belt ran the process though the Six Sigma methodology, and implemented a change in the production process. They went from 3.8 Sigma to 5.7 Sigma and won the Sony contract. 39/61

3.8 Sigma = 12,000 defects per million opportunities or a 1.2 percent probability of failure 5.7 Sigma = 10 defects per million opportunities or a .00001% probability of failure One business unit found that by using Six Sigma it could increase the capacity of their factories and thus avoid incurring the investment to add capacity by adding factories. In the Power Systems division, they were incurring forced outages in newly-designed gas turbine power plants. The problem was that rotors were breaking, resulting in 37 units that had to be removed and replaced. After the Six Sigma team examined the process, no units had to be removed from an install base of about 210 units, and GE was considered to then have a lead in the technology. This fix occurred just before the market for power units exploded, and as a result, GE was able to claim a major share of the global market for new power plants just as the demand was just taking off. In the Medical Systems business, the first Six Sigma-designed product was a new CT Scanner called the Light Speed that reduced the time it took to do a chest scan from three minutes to 17 seconds. The other win was that the machine could be taken out of a box and used immediately. Jack said that in 2001 51 percent of the Medical Systems revenue was from Six Sigma designs, and at the time of writing his book, 100 percent of the Medical System products came from Six Sigma. The examples above hopefully give you a perspective of the power of Six Sigma and why it is still alive at GE today. Not all companies launched Six Sigma programs the same way as GE, and many of them have had great results while others have had less impressive outcomes. It is clear that significant focus on the culture that Jack Welch put in place made a significant difference for employee careers and shareholder value. As Jack Welch says, “The big myth is that Six Sigma is about quality control and statistics. It is that –but it’s a helluva lot more. Ultimately, it drives leadership to be better by providing tools to think through tough issues. At Six Sigma’s core is an idea that can turn a company inside out, focusing the organization outward on the customer.”

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10. Six Sigma at Motorola – Case Study

Kuala Lumpur, Malaysia, 21 February 2008 – Motorola, Inc. (NYSE: MOT) today announced that more than 400 delegates comprising senior Motorola leaders and customers gathered to share industries' practices and experiences at the inaugural Motorola Six Sigma Conference Asia Pacific2008. Organized by Motorola University Asia Pacific, the two-day conference took place at Kuala Lumpur Convention Centre and was officiated by the honorary Datuk Seri Dr. Jamaludin Jarjis, Minister of Science, Innovation and Technology

Focusing mainly on existing and potential Motorola customers, this exclusive event provided a conducive learning experience and interactive platform for Six Sigma practitioners to present their views and successes in implementing the world-renowned business process improvements and defect-reducing methodologies.

“The impressive response to the conference clearly reflects Six Sigma’s effectiveness and continued successful applications in the Asia Pacific region,” said Kamaldin bin Nordin, Director of Motorola University Asia Pacific and Malaysia HR Country Director. “Peer education remains one of the most effective methods of learning. Hence, it made perfect sense to provide an avenue for

the

Six

Sigma

community

to

exchange

expertise

and

experiences.”

The conference focused on four key areas: Six Sigma Strategy and Leadership Alignment, 41/61

Innovation through Design for Six Sigma, Leading Six Sigma with Lean Thinking and Six Sigma Achievement in Services. The uniqueness of this conference was the sharing of the showcases by the actual practitioners from various organizations.

Delegates benefited in discovering how to enhance their respective businesses by learning to align their business strategies and goals, incorporate new methodologies into their innovations and applying Lean Six Sigma principles. In addition, the conference helped delegates to better understand customer expectations and requirements by employing the Six Sigma concepts and tools that offer the most impact to the services industry.

One such session showed delegates how the application of Design for Six Sigma concept, using the DMADV (Define, Measure, Analyse, Design, Verify) methodology, can help to build good leadership strategies that focused on a strong innovation culture, leading to long-term growth and sustainability. The DMADV methodology is not commonly known or practiced in the industry, but it encourages breakthrough innovation which is an effective way to create a new product or a new process

design.

Leading Six Sigma with Lean Thinking is a great example of how delegates can apply Motorola University’s Lean Six Sigma principles and tools in conjunction with the Six Sigma rigor and methodology to achieve rapid and significant improvements with greater speed and reduced process variation and wastage. Delegates also learnt how to play their roles and effectively manage, support and motivate their teams, and apply project management skills to achieve desired goals. In addition, delegates learnt how Six Sigma can be successfully applied to the service industries. A host of 18 speakers from six countries - Malaysia, Singapore, India, China, Taiwan and USA led the sessions, which comprised 12 case studies by organizations spanning practices from six industries: electronics, telecommunications, information technology, banking, manufacturing and Plantation.

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Kamaldin stated that although Six Sigma was originally designed to reduce defects in manufacturing processes, the methodologies have evolved over time and have proven to be applicable and effective beyond manufacturing industries.

“In order to improve service quality, focus on service processes is necessary. Six Sigma is a philosophy which concentrates on the improvement of process and if properly applied is highly applicable to a wider range of services. The wider applicability of Six Sigma depends on the identification of key performance indicators (KPIs) for different types of service processes,” he said. “The presence of some of our customers from the services sector, including that of Call Center and IT industries further testify to the evolution of Six Sigma; how it has transformed from a process-defect reduction exercise into a strategic management program across multiple industry practices, ”headded.

Conceptualized in 1986, the program has since been adopted by thousands of companies worldwide. Six Sigma projects boast a Return on Investment (ROI) ratio between 1:10 and 1:50 and have resulted in a total savings of about USD$17 billion for Motorola Inc. Created by Motorola, Six Sigma is one of the world’s leading business process improvement initiative, offering tools and techniques to improve efficiency, maximizing human capital, and empowering leadership through its Six Sigma Black and Green Belt programs. Motorola is a globally recognized leader in corporate education and is the creator of Six Sigma. As the learning arm of Motorola, it supports the company’s continued development and breakthroughs in marketing, supply chain management and engineering by training people and optimizing quality. The university offers a compelling spectrum of professional training and education programs in different areas of management.

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11. Six Sigma at Wipro Technologies – Case Study

Wipro Technologies is a global services provider delivering technology-driven business solutions that meet the strategic objectives of clients. Wipro has 40+ ‘Centers of Excellence’ that create solutions around specific needs of industries. Wipro delivers unmatched business value to customers through a combination of process excellence, quality frameworks and service delivery innovation. Wipro is the World's first CMMi Level 5 certified software services company and the first outside USA to receive the IEEE Software Process Award. Wipro has one of the most mature Six Sigma programs in the industry ensuring that 91% of the projects are completed on schedule, much above the industry average of 55%. Six Sigma provides the tools for continuous improvement on existing processes thereby helping sustain the SEI-CMM Level 5 and CMMi certifications. This case focuses on the initiatives taken by Wipro Technologies to implement the Six Sigma Quality tool to achieve sustained strategic business results. It explores the implementation procedure at Wipro Technologies and the benefits reaped by the company on account of adopting Six Sigma. The case also throws light on the recent developments in the Six Sigma concept including Wipro’s Six Sigma Skill base and consulting experience and explains how the company intends to build its expertise and experience – to bring continuous process improvement to the organization.

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Backdrop Wipro Limited was established in 1945 and commenced its operations in 1946 as a vegetable oil company. In the early 1980s, Wipro diversified into the Information Technology sector with Liberalization hitting India in the 1980s. This has been a fascinating transformation from a vegetable oil company into a global IT services giant. Today, Wipro Technologies has become a global service provider delivering technology driven business solutions that meet the strategic objectives of clients. Wipro has 40+ ‘Centers of Excellence’ that create solutions related to specific needs of Industries. Wipro can boast of delivering unmatched business value to customers through a combination of process excellence quality frameworks and service delivery innovation. A strong emphasis upon building a professional work environment, leaders from within, and having a global outlook for business and growth have led to innovation of people processes on a continued basis. Over the years, Wipro has significantly strengthened its competency based people processes and demonstrated innovative practices in talent acquisition, deployment, and development, based on strategic needs. A leading provider of communication networks in the US required improvement in the product performance of a telecom application using Six Sigma methodologies. Thus, with the growing importance on aligning business operations with customer needs and driving continuous improvement, Wipro began moving towards focusing on Quality, thereby, Creating a learning environment that led to implementation of Six Sigma. Integrating Six Sigma concepts was also intended to bring rigor in effective upstream processes of the software development life cycle. Implementation of Six Sigma methodologies brought in quantitative understanding, cost savings, and performance improvement towards product quality. Some of the key challenges involved were: 

Reduce the data transfer time



Reduce the risk



Avoid interruption due to LAN/WAN downtime



Parallel availability of the switch for the other administrative tasks during the same period

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Evolution of Six Sigma at Wipro Wipro is the first Indian company to adopt Six Sigma. Today, Wipro has one of the most mature Six Sigma programs in the industry ensuring that 91% of the projects are completed on schedule, mush above the industry average of 55%. As the pioneers of Six Sigma in India, Wipro has already put around ten years into process improvement through Six Sigma. Along the way, it has scaled Six Sigma ladder, while helping to roll out over 1000 projects. The Six Sigma program spreads right across verticals and impacts multiple areas such as project management, market development and resource utilization. Six Sigma at Wipro simply means a measure of quality that strives for near perfection. It is an umbrella initiative covering all business units and divisions so that it could transform itself in a world class organization. At Wipro, it means: (i) Have products and services meet global benchmarks (ii) Ensure robust processes within the organization (iii) Consistently meet and exceed customer expectations (iv) Quality a culture within Difficulties encountered by Wipro and learning from them Build the Culture: Implementation of Six Sigma required support from the higher level managers. It meant restructuring of the organization to provide the infrastructure, training and the confidence in the process. Wipro had to build this culture and that took time in implementation. Project selection: The first year of deployment was extremely difficult for Six Sigma success. They decided to select the project on the basis of high probability of their success and targeted to complete them in a short period to assess the success. These projects were treated as pilot projects with a focus to learn. For the selection of the right project the field data was collected, process map was developed and the importance of the project was judged from the eyes of customers.

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Training: After the set up, the first step of implementation was to build a team of professionals and train them for various stages of Six sigma. The training was spread in five phases: Defining, measuring, analyzing, improving and controlling the process and lastly increasing customer satisfaction. These phases consisted of statistics, bench marking and design of experiments. To find the right kind of people and train them was a difficult job. This motivated Wipro to start their own consultancy to train the people.

Resources: It was difficult to identify resources that required for short-term basis and long-term basis as it varied from project to project. Wipro did it on the basis of seriousness and importance of the project. Project Reviews: As timely reviews play a very crucial role to judge the success of a project. Wipro had to develop a team of experts for this purpose. The task assigned was to see the timeliness, find out gap, week areas and to check the outcome as per the plan. Implementation of Six Sigma at Wipro Wipro has adopted the project approach for Six Sigma, where projects are identified on the basis of the problem areas under each of the critical Business Processes that adversely impacts the business significantly. Wipro has evolved following Six Sigma methodologies (Exhibit 2): (I) For developing new processes: (i) DSSS+ Methodology –Wipro employs DSSS methodology for software development. The methodology uses rigorous in-process metrics and cause analysis throughout the software development lifecycle for defect free deliveries and lower customer cost of application development. (ii) DSSP Methodology – used for designing new processes and products

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(iii) DCAM Methodology – used for designing for customer satisfaction and manufacturability (II) For Improving Existing Processes: (i) TQSS Methodology –used for defect reduction in Transactional processes. (ii) DMAIC Methodology -used for process improvement in Non-transactional process.

(III) For Reengineering: CFPM Methodology - used for cross functional Process mapping. The list of players at Wipro is as below: 

Executive Management



Six Sigma Champions and Deployment Leaders



Financial Executives



Black Belts



Green Belts



Yellow Belts

Six Sigma projects at Wipro are (Exhibit 3): (i) Driven by business heads, also called Champions for the projects. (ii) Led by Green Belts (GB) Assisted by Black Belts (BB) The Management of the project at Wipro follows the following tools for implementation Of Six Sigma: 

Ideation



Definition



Selection



Tracking



Reporting

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Currently 15000+ employees are trained in Six Sigma methodologies. Wipro has also built up a Six Sigma skill base of over 180 certified black belts while helping to roll out over a 1000 projects. Future Focus and Challenges: Six Sigma certainly produces breakthrough improvement. But to achieve this Wipro will have to combine the power of the Six Sigma method and tools with stretch goals, goals that almost seem too aggressive, too optimistic.. Also Wipro will have to benchmark itself against the competition on the level of performance achieved by rivals.. This focus will lead to the adaptation of newer dimensions of the quality management framework towards embodying a totality of process, people, product, and technology for achieving high process capability. Six Sigma projects require continuous change. Black Belts and Green belts develop improvements to systems and processes for which they are not accountable. And when these participants are done with their project, they ask the real system or process owner to implement and sustain their solution and hence the challenge before Wipro lies in bringing the commitment towards continuing its process optimization theory. The Challenge will be to transform Six Sigma from a tool for improving product quality to an overall business improvement methodology. The company’s aim will be at having 100% of its management trained in Six Sigma. To summarize, the quality system will continue to be based on incremental optimization, with rigorous implementation and sustenance of the same. The goal will be to make quality as the No.1 objective for all employees.

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12. Six Sigma at DHL – Case Study

DHL taps people power

Company acquisitions, as well as the objective of cementing its position as market leader, led Deutsche Post DHL to implement a fresh approach to dealing with customers within its various global divisions. Prior to Deutsche Post acquiring a majority interest in DHL in 2002, the German logistics group had purchased Swiss logistics provider Danzas and AEI (Air Express International) in 1999. The acquisition of British logistics company Exel in 2005 added another culture into the group. In 2007 Deutsche Post DHL launched a new program – First Choice – to promote customer loyalty by making the logistics group the ‘first choice’ of current and potential customers. A fresh approach meant adopting a new philosophy through the employee ranks of Deutsche Post DHL. The organisation is of firm belief that keeping employees busy equates to a stable workforce – inactivity breeds boredom and workers will look for greener pastures. In addition, an integral component of the First Choice program is the empowerment of employees. “Every employee has a voice as much as every customer has a voice,” says DHL Global Forwarding’s Chief Executive Officer, South Asia Pacific, Amadou Diallo. “We listen to the voice of our customers but we listen as well to our employees and try to get our staff as motivated as possible in order for them to resolve all potential issues that we can have while processing goods. “That keeps our staff motivated because they have less damages, they have less complaints, 50/61

and the service level they deliver is higher and then we can grow our business.” Heading up the First Choice program in the Asia Pacific region is New Zealand-born Jonathon O’Leary, who has the lengthy title of Senior Director, First Choice and Performance Improvement Management. O’Leary has been with DHL for more than 12 years, moving from New Zealand to Dubai and Australia before basing himself in Singapore in 2002. “We went through a large period of acquisition, from ’97 right through to 2007. So with all these acquisitions you’ve got a lot of processes that are cross-fertilised from different companies and different systems,” O’Leary explains. “We knew work needed to be done to improve our processes.” Despite only beginning the first staggered rollouts of First Choice in early 2007, O’Leary believes the group has made exceptional progress from a “push” to a “pull” culture. “The culture change and the real change management is still ongoing,” he says. “Some people are now really pulling. They’re saying, ‘I’ve got this problem, come on, let’s do it, let’s get together and work on it’. “Some we still need to push a little bit and say, ‘hey, you’ve got these issues here, we’re coming in and we’re going to use this method and we’re going to help’. So we’re kind of in the halfway along the change.” An important factor of First Choice is utilising the experience of the employees in their individual roles. O’Leary’s team of regional senior advisors travel to all parts of the Asia Pacific region, interacting with and training workers to the new program. For O’Leary. the scenario is refreshing, especially as he has witnessed life from both sides of the fence. “I used to work in a warehouse and we were the guys at the bottom of the line getting yelled at – ‘get that freight out the door’,” he recalls. “Now, no longer is a forklift driver just a forklift driver; he’s somebody helping to do our process better. They know their job and they know what they’re doing. That’s the exciting bit. “It’s probably the thing I’ve taken most out of these three years is seeing the engagement in these initiatives.” THE SIX SIGMA MANDATE The First Choice approach comes via the Six Sigma DMAIC (Define, Measure, Analyse, Improve, Control) methodology and the Lean process. While DMAIC arrived at DHL from technology companies such as GE and Motorola, Lean has its origins in manufacturing. “We started off with support from external consultants and a lot of these external consultants 51/61

came from GE and Motorola, so it’s kind of the link we have with them,” O’Leary says. “There are also some key people within our organisation that we have from GE and Motorola as well.” Motorola is also one of the customers who have responded to DHL’s customer satisfaction survey. “We’re very open about the initiatives we’re working on,” O’Leary says. “If they say ‘we’ve got a documentation accuracy issue’, say from Shanghai to Brazil, we’ll work on initiatives and we’ll share them with all our documentation because they’re on the same mindset. They’re thinking along the same process lines.” Thanks to customer feedback, knowing there is an invoicing problem is the easy part. Identifying what area of invoicing has the problem is, O’Leary says, probably one of the biggest learnings they have had during the past three years. “Initially we tried to save the world in our first wave of initiatives, and now as our internal senior advisors, or [Six Sigma] black belts, have got up to speed we’re a lot better and scoping down and focussing on a size that we can really fix with the resources that we’ve allocated to do that. “Then we have the key initiatives themselves, and I think the key point here is that frontline staff have been involved again. We want to empower people on the ground to help fix their own problems, we don’t want them to come to work and we have to pop down and tell them what to do. “These guys know their processes, they know what they’re doing back to back, and we’re really empowering them by helping them, by saying, ‘we want your advice on how to fix this, you’re the guys doing it, let’s all work together to fix it’. So they’re involved, and they’re important on the initiative side.” O’Leary says Australia, in particular has been quick to embrace First Choice methodology, especially in complaint handling and streamlining invoicing processes. “We’re doing a lot of customer focus initiatives in Australia and implementations are improving our service quality through the implementation of initiatives that we’ve done,” he says. “For some specific customers, our clearance documentation has been reduced by three or four days in Sydney; we’ve done initiatives on invoicing timelines in Sydney and Melbourne, and in Brisbane we did an initiative for ocean freight.” O’Leary says the layout of DHL’s new Melbourne facility (see box item) is an ideal example of improving efficiencies, right down to employee seating arrangements. “The whole layout of that facility is using one of the First Choice tools. Spaghetti diagrams show where a document comes in, where it goes to, where people need to sit, and how close 52/61

they are to printers,” he says. AUSTRALIAN INITIATIVE According to Amadou Diallo, roughly 85 percent of DHL employees in the Asia Pacific region have undergone First Choice training. He reiterates that Australia in particular has been at the forefront of culture change, pointing to Phil Dean – Sub Regional Advisor at DHL Global Forwarding in Melbourne – as the organisation’s first Six Sigma ‘black belt’. “We have had a lot of black belts in the meantime across the globe, but he was the first in our organization,” Diallo says. “In most of the innovative ideas within the organisation, Australia usually runs faster. And they have been helping the DHL organisation in broadening the tools and services and putting it as a DNA of all the employees world wide.” Another Australian, Brad Harris, is the General Manager of the DHL Singapore hub, the largest air express hub in Change Airport. Not far away is DHL’s Healthcare and Life Sciences Hub, which delivers end-to-end supply chain management solutions to companies in the pharmaceutical, hospital and medical equipment sectors. Diablo, originally from Senegal but now based in Singapore, is also DHL Global Forwarding’s Chief Executive Officer for Angola, as well as being globally responsible for DHL’s Fashion and Apparel Centers. He says it’s not uncommon for DHL executives to have multiple functions. “We believe people should utilize their resources where they add value to the company and not just be locked into geography,” he says. He points to Sam Nag, Chief Executive Officer for South East Asia, who is also regionally responsible for DHL’s energy sector across Asia from China down to Papua New Guinea. The new DHL Asia Pacific Oil and Energy Centre of Excellence, located in Change South, is the largest such centre in the group. Hermann Due, CEO of DHL Global Forwarding Freight, says the growing global demand for energy, and the exploration of alternative energy sources, presents key opportunities for logistics companies. “DHL is well-positioned to develop new approaches and set new benchmarks in the industry,” Due says. With Asia as the centre point, DHL is basing its growth across the board on fundamental trends towards the three “triangles of trade”. One triangle links the Middle East and Africa to Asia, another from Latin America to Asia, and lastly within the Asia region itself which also includes Australia. Notably North America and Europe, already boasting a sizeable DHL presence, are not in loop for major expansion. 53/61

“To service the Latin American market we have set up a hub in Australia where we concentrate all the goods coming from Asia on an air freight service to get into the Latin American market,” Diablo says. “This gives us an alternative to flying over Los Angeles or flying across destinations in Europe, because it is a much faster route. “Australia did not go through a recession and we have been capable of doing our business in a double digit manner.” Despite DHL’s US origins and Deutsche Post DHL being headquartered in Germany, the organization’s various global centers have very much a local identity. “I do not feel like I am working in a German company,” Diablo says. “In Asia I feel like I’m working in an Asian company and the same for the people in Africa, they feel like they’re working in an African company. “So if you go in Australia, our people in Australia working in DHL don’t feel like they’re working in an American organization or a German organization. It’s pretty much an Australian organization.”

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13. Conclusion



Successful implementation and growing organizational interest in six sigma method have been exploding in the last few years. It is rapidly becoming a major driving force for many technology-driven, project-driven organizations.



Factors influencing successful six sigma projects include management involvement and organizational commitment, project management and control skills, cultural change, and continuous training.



Understanding the key features, obstacles, and shortcomings of six sigma provides opportunities to practitioners for better implement six sigma projects.



Six sigma allows them to better support their organizations’ strategic direction, and increasing needs for coaching, mentoring, and training.



The statistical aspects of six sigma must complement business perspectives and challenges to the organization to implement six sigma projects successfully.



Integrating the data-driven, structured six sigma processes into organizations still has room for improvement.



Cultural changes require time and commitment before they are strongly implanted into the organization.



Effective six sigma principles and practices are more likely to succeed by refining the organizational culture continuously.

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14. Recommendations



Six Sigma is a quality tool developed & designed for the improvement & acceleration in the manufacturing or the administrative section of the organization.



Six Sigma can be implemented and integrated with the existing improvement approach, Total Process Management, TPMG or others.



Six Sigma is customer-focused, data-driven philosophy which can be applied in various functions of the department.



Six Sigma can be used to attack the most complex problems, while TPMG handles the many day-to-day issues.



Six Sigma will provide a structure (DMAIC) and training in tools, thereby ensuring that the tools are used at the right time and in the right way.



Every organization must adopt the Six Sigma methodology in order to achieve their goals & obtain the maximum of benefit from the available resources.



Identify processes/methodologies used to support innovation and other activities; Use six sigma to improve such processes Innovation Maturity Model Next generation organizational behaviors



Instead of applying Six Sigma in silos, use it for the processes of the entire organization

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15. Bibliography 

Wilson G. (2005). “Six Sigma and the product development cycle”.



Elsevier/Butterworth-Heinemann.



Martin J.W. (2008). “Operational excellence: using lean six sigma to translate customer value through global supply chains”. Auerbach Publications.



Cox I. et al. (2010). “Visual six sigma: making data analysis lean”. John Wiley & Sons.



Internet/Websites – Google, Wikipedia & others sources

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Schonberger R.J. (2008). “Best practices in lean six sigma process improvement: a deeper look”. John Wiley & Sons.

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Martin J.W. (2007). “Lean six sigma for supply chain management: the 10-step solution process”. McGraw-Hill.



Lunau S. et al. (2008). “Six sigma + lean toolset: executing improvement projects successfully”. Springer.

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Burton T.T. and Sams J. (2005). “Six sigma for small and mid-sized organizations: success through scalable deployment”. Ed. J. Ross.



El-Haik B. and Al-Aomar R. (2006). “Simulation-based lean Six-Sigma and design for Six-Sigma”. John Wiley & Sons.



Eckes, George. (2001) The Six Sigma Revolution: How General Electric and Others Turned Process into Profits. p.5. New York, New York: John Wiley & Sons.



Pande, P.S., Neuman, R.P., & Cavanagh, R.R. (2000). The Six Sigma Way: How GE, Motorola and other Top Companies are Honing Their Performance. New York, New York: McGraw Hil

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