Vishwadeep Khatri

One question I got recently is- How can an individual benefit from Lean Six Sigma? My answer was - Lean Six Sigma builds the following in an individual. Ability to identify improvement projects and shortlist the best out of them. Ability to attack problems and challenges in a structured manner. Ability to guide and involve teams in complex situations through stimulating exercises that yield results. Ability to generate powerful recommendations for top/ senior management based on data driven approach. Ability to present recommendations to senior management effectively. Ability to implement recommendations with very high success rates. Ability to sustain/ control process improvements.

The more difficult question is - Who is not using Six Sigma? or Who cannot use Six Sigma? Six Sigma can be applied in all industries/companies as work always takes place in processes and the following hold true for every company (in any industry). Everything that anyone does is a part of a process. A process is efficient or inefficient depending on the output to input ratio. (this ratio could be productivity measure, cost measure, time measure or any other useful metric) Very few processes are defect free and most have unacceptable level of defects or delays (as per industry standards, company's own philosophy towards defects or based on customer expectations). Here, for many processes there is an internal customer (instead of or in addition to an external customer). Meeting customer (internal, external or both) expectations with reasonable cost is a key success criterion. Variation in process inputs or improper controls result in reduced efficiency or dissatisfied customers, which increases costs and breeds further inefficiency. Six Sigma requires that you define success criteria for key processes, eliminate defects (or reduce their severity or occurrences), and measure outcomes for exceeding industry standards or creating new benchmarks, thereby leading to competitive advantage in terms of cost or value for customers.

Although HR is not a big department in most organizations, HR processes have a major impact on the employee's efforts for delivering services or product. HR people handle the responsibility of retaining the employees while balancing the financial needs of the company. Compensation and benefit areas taken care of by the HR department include payroll administration, time and attendance management, leave policy, stock options and so on. Six Sigma Projects such as reducing time for the paycheck deposition process, faster performance review systems and eligibility study for ESOPs can be considered for the betterment of these activities of the HR. There could be a need for Six Sigma projects like improving multiple payroll systems for remote locations and reducing errors in employee information database. HR personnel have to take care of areas like employee absenteeism, dispute resolution, health and safety issues, union negotiations, interpersonal communication and discrimination and harassment issues. Six Sigma projects can be undertaken to address the discrimination and harassment by way of monitoring and compliance audit, systems for improved communication among employees and executives Six Sigma projects can aim at overall organizational development with regards to improvements in the career and succession planning, leadership, change management, workplace planning and organization, performance improvement and communication programs. Staffing, Training and Retention - One basic responsibility of the HR department is staffing, background checks, selection and training and retention of employees. They have to design and schedule training and development programs for new employees, as well as existing ones. They also have to handle employee contracts for permanent and temporary employees and manage the process of relocation and outsourcing of employees. They have to manage the retrenchment issues and exit interviews. There can be projects like creating self-learning and evaluation modules for the employees. Projects to improve the hit rate for job postings followed by quick responses to the applicants, reduction in unnecessary security checks and so on can be undertaken by the HR department as Six Sigma projects.

As per our experience, good improvement projects are feasible in most processes in Retail industry including inventory management waste reduction & waste management stock replenishment barcoding effectiveness transportation efficiency repacking effectiveness managing returns turnaround times in queues consumer satisfaction enhancement, etc.

The number of drug recalls has risen sharply in recent years - three-quarters of which are attributed to manufacturing defects. The reject percentage in the pharmaceutical industry ranges from 5 percent to 10 percent (<2 Sigma), compared to 0.0001 (6 Sigma) in the semiconductor industry. This reject-percentage costs the industry between US$ 4.5 billion and US$ 9 billion per year based on US$ 90 billion/year spent on manufacturing. Several years ago Dowpharma followed parent company Dow's lead and adopted Six Sigma and got huge benefits. There are possible improvement projects that involve determining the cost of unplanned events, or one-off occurrences that cannot be traced to systemic problems. For example, misloading a batch, temperature controls drifting out of range, or someone accidentally turning off process machinery during operation. Since it is impossible to reconfigure or re-blend a batch, significant unplanned events are always very costly in pharmaceutical manufacturing. In another successful Six Sigma project in pharma, yield improvement from 40% to 87% by more tightly controlling two process variables and increased the capacity of a plant by a factor of 7.5 through an add-on investment, amounting to just 3% of the cost of the facility. The average cycle time for manufacturing, including formulation, packaging, and quality activities, is about 60 days and average inventory turns are currently less than two per year. Cycle time can be reduced by 75% in many cases to the two-three week range and inventory turns increased to four. The combination of reduced inventory and the tremendous efficiency gains in manufacturing justify running a process more frequently. Formulation and quality operations are two areas ripe for Lean/Six Sigma improvement. Currently, these activities take about two months per batch, 90% of that time is wasted waiting for a piece of equipment to free up for signatures on various records or for changing the status of a computer from working to completed. Streamlining these non core operations through strategies as simple as better scheduling makes a huge dent in cycle time. Ref : http://www.pharmafocusasia.com...igma_manufacturing.htm

Here is a News article about implemantation in pharma sector. Click here to read the article. Do follow up with your comments and ideas.

Dear All, Here is an article that shall give you some examples about Six Sigma implementation in Logistics. Click here to read the article. Comments and discussion on this topic is welcome.

SEI has an important publication in this regard. Click here to view information regarding this publication

Hotel-wide Enhance Customer Loyalty Reduce Employee attrition Productivity/Efficiency Improvement Improve Work-life balance Reduce Billing errors/losses Developing better performance measures/ metrics Increase Revenue Reduce Cost Front Office Operations/ Sales & Marketing Reduce wait time during peak check-in time Reduce wait time during peak check-out time Eliminate billing errors and improve accuracy Reduce No shows Increase Occupancy Optimal utilisation of the current product mix (rooms) to increase revenue Increase customer delight at the Executive Club Reduce/eliminate loss calls (Operators area) Accuracy of information Food and Beverage Service / Production To maintain optimal inventory Minimize wastage/pilferage Standardized output of Food and Beverage Reduce the time from order to service Optimal utilization of current product mix (F&B/Outlets) to increase revenue Accommodation Operation (Housekeeping) Reduce the turnaround time of making/turning down a room Standardization of cleanliness across areas Purchase/Stores Reduce Inventory surplus Cost Benefit Analysis between cost of inventory and cost of storage of products where prices vary seasonally Standardize the operating procedure of issuance to various departments Reduce the turnaround time of issuance to various departments Human Resources/ Personnel Accuracy of payroll Documentation management Reduce the turnaround time of recruitment Reduce the turnaround time of relieving Increase the employee satisfaction rate

Dear All, An article appeared in 2005 where efforts of some of the Pharma Companies were highlighted. I highlighted at that forum that it is a mistake to consider GMP as the greatest achievement. Without revealing the names of companies, I am happy to say that our association has paid some rich dividends in this sector.

Dear All, Here is an example of Six Sigma project that succeeding in bringing down door-to-balloon time from 90 minutes to 60 minutes for Heart Attack patients in a Hospital. Click here to read the article I invite comments from Health care fraternity on their views about implementation in core healthcare operations in addition to billing, administration, ward related functions (where we see most Six Sigma action generally). Regards, VK

Cummins has planned Six Sigma implementation with entire IT workforce after years of success at Manufacturing. Click here to read the article

Dear Namrata, The next step could be a Benchmark Six Sigma Green Belt training. Once you complete the training, you shall be a part of community with thousands of members (includes health services participants) that helps each other with good application of Six Sigma techniques on similar projects. Regards, VK

Here is detail provided by one participant who is planning to initiate a Six Sigma project on change requests. Data available is list of CRs (Defects are called as Change requests), entered date, closed date, whether a CR is a Critical one or not. Month-on month there are 200 CRs with about 20 Critical ones. How do we calculate sigma value for such data for Product quality? We only have a continuous data of CRs. The application is very old and there are about 1400 open CRs as of date. Clarification 1: Pl let me know how to compute current sigma level for this type of assignment. Cost optimization is one of the key Ys. This is dependent on customer staff, our side staff and ongoing maintenance expenses. But for this we do not have customer resource loading info and also salary cost. Clarification 2: So how to consider these customer cost parameters? Second important Y is reducing Critical CRs. This is dependent on Specification clarity, development quality, QA quality etc. But how to measure these aspects quantitatively? Hence all my research is ending up in qualitative analysis. Pl help me in making this quantitative and arrive at data based action points. Opinions on clarifications are welcome.

Here is a link from Toyota way of thinking. Click Here to View Some of them seem simple but very important. Missing the Go, See can be very risky. Blind reliance of data can hide facts. Comments are welcome.

The general feedback is that BPO's have good growth prospects due to following reasons. The cost pressures are leading to a larger need for outsourcing. Global financial crisis is resulting in job cuts.Many of these jobs are going to be outsourced with a cheaper cost.However, the pressures and stress levels are also on the rise as BPOs have to deliver at lower costs and adhere to stricter standards. This leads to need for Six Sigma projects. The good news for many BPOs is that clients are more willing to partner in Six Sigma projects due to their pressing needs. As clients are willing to contribute and are flexible in bringing changes, there is bigger scope for Black Belt projects which were hampered in the past due to client non-involvement.

Following tools are commonly used in Software Quality Assurance. Control ChartsCorrelation and Regression AnalysisHypothesis Testing - ANOVA, t test, F test, Chi square testNon parametric tests (for data that does not follow a distribution)Forecasting modelsOrthogonal arrays for test cases.Pugh matrixQuality Function Deployment All these tools can be understood well through a Six Sigma training program along with underlying philosophy and software practice.

Dear Yatin, Your ideas seem good. You just need to see that each project should pose a reasonable challenge and should make business sense. Reasonable challenge - The problem statement should be such where the cause and the solution are unknown. Also, if the solution can be reached with some data analysis and a brainstorming session, it may not be worthwhile to be taken up as a Six Sigma project. Business Sense - The project should promise good business benefit for business leaders to like it and approve it. Regards, VK

Dear Lokesh, Attendance and Payroll processes may have opportunities of improvement in terms of accuracy (correctness), productivity (turn around time improvement). You need to identify a pain area (or an improvement area) and convert that into a project charter. Regards, VK

Namrata, Application in tourism can also be similarly understood. Example projects in tourism - Eliminating delay in pick-up service. Improving guest expectation capturing processes. Enhancing guest experience on key parameters. Reducing or eliminating defects/ errors in itinerary/tickets. Improving guest feedback in tourism services If you elaborate your interest areas, I can elaborate more. Regards, Vishwadeep Khatri

Hello Namrata, Six Sigma is about identifying and carrying out worthwhile improvement projects using tried and tested management techniques. Example projects in Healthcare - the following types of projects are being carried out in health care. Reducing or eliminating invoicing errors Reducing patient checkout time. Reducing patient complaints Reducing complaint resolution time Control spending over time Reducing admitting delays Reducing medicine administration errors Reducing medication delays Improving bed utilization Increasing number of surgical operations per week. Improving patient and relative feedback Examples of companies who have been implementing Six Sigma in Healthcare- Among users in the healthcare early pioneers include GE Healthcare Florida Hospital, Memorial Hermann Southwest Hospital in Houston, Texas, have reported excellent benefits with Six Sigma. Healthcare Excellence Institute in US has helped hospitals in bed management and faster processing utilizing lean management methods. Among Indian companies, Benchmark Six Sigma has had participation in training programs from leading healthcare organizations including Apollo Hospitals.

Dear Basker, As per the most accepted definition, Six Sigma is a Business Improvement Methodology. If you are using the methodology, you are implementing Six Sigma. If you are referring to Six Sigma as a measure, we check defects or probability of defects. You may have a product, that is flawless and you may rate the process to be performing at Sigma Level equal to Six or more. (similar to Dabbawalas of Mumbai). To me, you shall be considered a Six Sigma enthusiast if you embrace the methodology and benefit from it. You shall be a Six Sigma expert if you gather expertise in using the world best techniques in a wide variety of situations and generate business benefit out of them. I am curious about your product. Can you elaborate about your flawless product? Regards, VK

Fowzie, My views are - If you report out every day, you will need sample size based on daily volumes. In case you report out on a monthly basis and data is fairly randomized (similar call types on different days of the week), it may be OK to take 1800/20 = 90 daily if 1800 is your monthly sample size. Any comments by others on this opinion are welcome.

Fowzieh, To calculate sample size in your example, we can proceed like this - Margin of error - Let us assume 1%. This means when you report 98% as accuracy, it could actually vary between 97% and 99% Confidence Level - 95%. This means that 95% of the case shall lie within margin of error. Population size - 4000 Response Distribution - 95% This means you expect 95% accuracy normally. If you do not know what to expect this should be taken as 50%. Now use http://www.raosoft.com/samplesize.html to get sample size. You can use a formula alternatively. You shall get a sample size of 1254. If you are willing to accept 2% margin of error, the sample size reduces to just 410. If you do not know response distribution (and assume 50%) you shall get large sample sizes. In this case, instead of 1254, you shall get a size of 2825. You can notice that if you are willing to live with higher margin of error (say 5%), you can manage with smaller sample sizes. Let me know if you have any questions. Regards, VK

Yes definitely you can. You need to identify a customer pain area or a business pain area or worthwhile opportunity for improvement. Just make sure that the improvement if realized shall make business sense and the idea does not seem to be very high risk idea (this means the probability of success should not be too low) If you have already identified one such area, do mention it here and I shall provide you some more inputs on how to proceed. If you have not done so, speak to business managers and explore if you can find one. Cheers! VK