Total Quality Management - CII Institute of Logistics

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Total Quality Management 5.2 What is Six Sigma? Six Sigma is a statistical measure that says that in a well-managed process be it manufacturing or service, you encounter only 3.4 Defects Per Million Opportunities (DPMO). In the parlance of Six Sigma, any thing that inhibits the attainment of customer expectation and satisfaction is a defect. First, we compute the ratio between the actual defects and the total number of opportunities for the organization to make mistakes from the customers’ angle. If this ratio is multiplied by one million, you get the Sigma level achieved by your organization. This level may be far from Six Sigma. For example, it may correspond to 2 Sigma, 3 Sigma or 3.5 Sigma. In the context of Six Sigma, we are 99.99966% confident that the product or service delivered by us is defect free. Only 0.00034% of the times the product or service delivered are defect prone. When multiplied by one million, this becomes 3.4 DPMO. Six Sigma measure is based on the bell shaped normal distribution. Normal distribution is the foundation stone upon which the entire statistical inference is built. The following diagram succinctly captures the meaning of Six Sigma CII Institute of Logistics 92 Website: www.ciilogistics.com
Total Quality Management Please note that 3.4 ppm is shown in the graduated scale corresponding to the number 6.0 in the graph above. This is same as saying that there are 3.4 defects per million opportunities. Six Sigma entirely focuses on PROCESS IMPROVEMENT. The idea is to achieve Six-Sigma process performance with the help of Statistical Techniques to measure, monitor and control the actual performance of a process. A Process is a sequence of activities that transforms inputs to produce value for the stakeholders. It is the fulcrum of business that needs to be professionally managed so as to make the business add value to the inputs. One distinguishing feature of Six Sigma is that it emphasizes on measurement much more than the other quality management tools. In fact, it is interwoven with statistical analysis tools in every conceivable process with a view to meeting customer specifications. Everything starts from customers’ perspective; then the process performance is aimed at Six Sigma level so that virtually you produce zero defects, which in the parlance of Six Sigma implies 3.4DPMO. Six Sigma practices can be applied to manufacturing as well as service sector. A Motivating Story Motorola the pioneer in Six Sigma, in the year 1979, articulated openly “Our Quality Stinks” and therefore started the journey of Six Sigma with a view to achieving excellence in its products’ and services’ quality. At this point in time, many American firms believed that quality costs money. Motorola understood CII Institute of Logistics 93 Website: www.ciilogistics.com
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Total Quality Management - CII Institute of Logistics

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