Overview of Six Sigma
P J Swamy
Dinfoka Consulting Group , Mumbai


With the opening up of the Indian Industry to International competition, the pressure on Indian Industry to match international norms as regards quality and value addition is mounting day by day.Gone are the day’s when the industry could provide for and get okayed for material wastages as high as 20% and rejections at 5-10%. The overall efficiency in terms rework and scrap is several layers below world class level.
Simultaneously , the domestic market is getting saturated and exports is the only solution for survival.
To meet global competition , the Indian Industry need to adapt breakthrough strategies that will help reduce rejection and eliminate waste.Six Sigma is one such proven strategy that has done wonders in several organizations by adding millions of dollars to the bottom line. Indian Industry should take advantage of this.

What is Six Sigma
At superficial level Six Sigma consists of two fairly familiar words : Six and &Sigma
The Greek letter SIGMA is a mathematical term that simply represents a measure of variation, the distribution or spread around the mean or average of any process or procedure in manufacturing, engineering, services or transactions. It is represented by symbol ?

Standard Deviation
Standard deviation or Sigma is unique to a process at a given level . If the process is normal , then it follows what is known as Gaussian distribution

Process Width
A process has its own spread or width. The process does not understand tolerance , it only operates at its own variation .
This is called VOP or Voice of the Process in Six Sigma

Relation between process variation ? and process width
For example , if a process has a standard deviation of ? , and if the process is normal,
then the process width is equal to +/- 3 ? over mean or the process spread is equal to 6 ?

A process is an activity that converts an input into output .The requirements of the out put are given by customer .The variation in the out put is governed by process.

Customer Standard or Specification
The Customer usually provides a specification that has a mean or target value. He also provides limits to account for process variation-
LSL- Lower Specification Limit and
USL- Upper Specification Limit

Specification Range (R)
The specification range is

Process Capability & Process Sigma Level

Process Capability(Cp)
This is a measure of how capable the process is as compared to specification range
= Specification Range / Process Width

One Sigma Process
1 sigma process is one that has range equal to +/-1 ? from the mean
1 sigma process is same as the one with process capability 0.33
In a 1 Sigma process, 31.73 % of the out put lies out of spec.
At this level of quality no company survive.

2 Sigma Process
A 2 sigma process is one that has range equal to +/-2 ? from the mean
2 sigma process is same as the one with process capability 0.66
In a 2 Sigma process, 4.55 % of the out put lies outside the spec.

3 Sigma Process
A 3 sigma process is one that has range equal to +/-3 ? from the mean
3 sigma process is same as the one with process capability 1.00
In a 3 Sigma process, 0.27 % of the out put lies out side the spec.

4 Sigma Process
A 4 sigma process is one that has range equal to +/-4 ? from the mean
4 sigma process is same as the one with process capability 1.33
In a 4 Sigma process, .0063 % of the out put lies outside the spec.

5 Sigma Process
A 5 sigma process is one that has range equal to +/-5 ? from the mean
5 sigma process is same as the one with process capability 1.66
In a 5 Sigma process, .000057 % of the out put lies outside the spec.

6 Sigma Process
A 6sigma process is one that has range equal to +/-6 ? from the mean
6 sigma process is same as the one with process capability 2.00
In a 6 Sigma process, only .0000002 % of the out put lies outside the spec.

What is wrong with 3 Sigma Process

Let us see what can happen in key areas of life if things were to be at 3 sigma level or only

  1.    One Hour Of Unsafe Drinking Water Every Month

  2.    Two Long Or Short Landings At Every Major Airport Each Day

  3.    400 Letters Per Hour Which Never Arrive At Their Destination

  4.    500 Incorrect Surgical Operations Each Week

  5.    3,000 Newborns Accidentally Falling From The Hands Of Nurses Or Doctors Each Year

  6.    4,000 Incorrect Drug Prescriptions Per Year

  7.    22,000 Checks Deducted From The Wrong Bank Account Each Hour

  8.      32,000 missed heartbeats per person per year

Life with Six Sigma

13 wrong drug prescriptions per year as against 4000
10 newborns accidentally falling from the hands of nurses or doctors each year as against 3000
1 lost article of mail per hour as against 400

Six Sigma for Orgnaisational Survival

Survival of an Organisation depends on Business Growth
Business Growth depends on Customer Satisfaction
Customer Satisfaction depends on Quality Price and Delivery
Quality Price and Delivery depends on Process Capability
Process Capability depends on Limited Variation
Limited Variation depends on Application of Right Knowledge
Six Sigma is the Right Knowledge which is a break through strategy

What is a break through strategy and how do we know that Six Sigma is a proven methodology to achieve business growth?

Breakthrough Strategy is to ask a new set of questions -Questions that take you out of your comfort zone.
Can you continue to be in business when your cost of quality is as high as 25%?
Can you remain in hotel business if the check in time takes more than five minutes?
Can you be in business if your inventory is more than 3 days?
Will any customer float an enquiry if you take more than a day for quotation?

It also challenges things you have taken for granted.

10 hours tool changeover time is the minimum that one can think of . My customers have been accepting        this for years.
In our type of business, 20 % rework is quite common
80 % efficiency is excellent and nothing better can be done !

And ultimately provides you with new directions to find answers. And this is where six sigma has powerful tools

The origin and development of Six Sigma

The origin of six sigma

The foundation for the development of Six Sigma concept was laid down at Motorola in 1979 when executive Art Sundry stood up at a management meeting and dared to say “The real problem at Motorola is that our quality stinks!”

Art Sundry’s criticism was based on the fact the Motorola was spending 5 to 10 % of annual revenues and sometimes even up to 20% in correcting poor quality. This translated into a whopping $800 to 900 million each year

Spurred by the comment of Sundry , a Motorola executive by name Bill Smith started a work that studied the relation between a product’s field life and how many times it was repaired and okayed during process before being dispatched.

Bill Smith’s study concluded that –

If a product was found defective and corrected for some defects during the process , other defects were bound to be missed and found later by the customer during early use of the product. However, if the product is made error free, then it rarely had any failures at customers end.
This means hidden defects kill product performance.

Till the findings of Bill Smith, all American companies believed that it is cheaper to fix defects than make products defect free. And once a product is inspected, it would go out defect free.

Bill’s study had shaken this belief at Motorola and the question he put to all was-

If hidden defects caused a product to fail shortly after the customer started using it , something needed to be done to improve the process

.It also made to rethink the trade off between cost of quality and cost of the product .

It is this quest to meet a make a product defect free and yet make it cost effective that led to the birth of the Six Sigma strategy at Motorola

This technique was first tried for the development of Bandit pager. For a budget pegged at $10million* , 23 Motorola engineers had come out in a record 18 months time with a pager that

Was the cheapest in the market
Had an average life expectancy of 150 Years(No typing mistake) and
Could be produced within seventy two minutes (again no typing mistake for hours or days) after a sales man places an order by computer from any of Motorola offices!
*( Motorola was losing $800million annually on cost of quality)

Motorola had formalized the strategy by giving it a name “Six Sigma” and in three years saved $ 2.2 billion .

By 1993 , Motorola was operating at near six sigma at all its plants and the success of Six Sigma at Motorola spread like wild fire and the first strategist to take quick advantage of this was Lawrence A Bossidy of Allied Signal and the first visionary to see its potential was Jack Welch of General Electric

The Development of six sigma- Allied Signal

In seven years time from 1991 to 1998 by adapting Six Sigma Strategy Allied Signal could raise its market value from $4 billions to $29 billions and save a whopping $2 billion dollars and this is what Bossidy had to say at the end –

“Every time we think we have generated the last dollar out of our business , by using Six Sigma Strategy , we uncover new ways to harvest cash as we reduce cycle times , lower inventories , increase out put and reduce scrap. The outcome is better and more competitively priced products , more satisfied customers who give us more business – and improved cash flow.”

The test of Six Sigma - GE

At the time when Allied Signal was reaping rich rewards under Six Sigma Strategy , General Electric was at its peak performance under the dynamic leadership of Jack Welch. Jack Welch had guided the growth of GE from a market value of $12 billion in 1981 to about $280 billion in 1998.
And Jack was known for his allergy to management fads and quality programs including TQM. He believed that they were all heavy on slogans and light on results.

Lawrence A Bossidy was an ex GE Vice Chairman and a long time friend of Jack. He happened to share with Jack the benefits that Six Sigma strategy brought to Allied Signal. Welch had requested Bossidy help assess where GE was and implement Six Sigma to make it best in class.

In 1996 , GE was at 3 Sigma and the gap between being a three sigma and six sigma company was costing GE an astounding 7 to 10 billion dollars and immediately Welch saw a gold mine and proclaimed in 1996 AGM-

“Six Sigma- GE Quality by 2000- will be the biggest , the most personally rewarding , and , at the end , the most profitable undertaking in our history. We have set ourselves the goal of becoming , by year 2000, a six sigma quality company , which means a company that produces virtually defect free products , services and transactions.”

Due to the six sigma strategy GE could generate additional profits of $ 250 millions in 1997 itself- in just one year time.

Six Sigma is not just a Quality Tool...

Six sigma is a Philosophy-

A philosophy which believes that” whatever the halo of esteem a company has in the eyes of the society, no company is truly excellent unless it makes profits”

A philosophy which believes that the possibility of making mistakes and creating waste is equally in both hard and soft areas of organization

A philosophy which believes that the yard stick to assess errors should be common to all areas –manufacturing , purchase accounts etc (Six Sigma has a uniform standard measuring scale for manufacturing and non manufacturing – this is called DPMO- Defects Per Million Objectives.)

A philosophy which truly believes in customer as god and helps organisations listen to his voice- VOC. Voice Of the Customer-is a major philosophy on which six sigma concept is built.

Six Sigma is a Vision

A vision which envisages continuous and drastic changes in the customer improvements in reduction in defects- the vision to achieve a defect level of 3.4 DPMO.

Six sigma is a vehicle for customer focus

Six sigma is a vehicle which drives you towards your customer satisfaction and delight by synchronizing the activities of entire organisation to that of customer needs.

Six sigma is an aggressive goal

Unlike kaizen and other incremental improvement techniques , Six Sigma is very aggressive goal that aims at not incremental improvements but aggressive goals-

Reduce mould change over time by ½
Improve profitability by 10 times
Reduce rejection level by ½

It is a management system

It is a management system that has absorbed and aligned several management techniques into one comprehensive management system called Six Sigma Management System.

Six Sigma is a strategy that embraces loss function philosophy as against goal post mentality

Goal Post Mentality

In a badminton game, when your opponent misses to return the ball, what are the possible out comes ?

If the ball hits the ground within the boundary, you gain a point

If the ball hits the boundary or anywhere outside , you lose a point.

This is called goal post mentality

Loss Function

Goal post mentality which is applicable in sports is not at all applicable in process.

The loss function does not treat all parts within spec as of equal quality. This is called loss function mentality as propounded by Taguchi.

Loss function describes the loss that occurs when a process does not produce a product that meets target value.

Loss is minimised when there is no variation and the best response is achieved in all areas of product design.

Loss function


K= loss factor
Y= the value of the parameter that is under assessment
m= mean value of the process

Six Sigma is a universal capability measuring scale

Six Sigma – A universal Scale which can answer the following questions :

The ID of 100 steel tubes was inspected with go –no go gauge and found 10 not ok.
What is the process capability?

95 invoices have been made and out of them 8 are found defective
What is the process capability?

The telephone operator received 85 phone calls and diverted 6 calls to a wrong extension
What is the process capability?

In hotel , every day morning for breakfast 5 out of 100 times , you have been served with wrong dish.
What is the process capability?

An airline boasts of maximum 10 minutes time lapse from the time the plane lands to the time the luggage starts coming out of conveyer. 5 out of 100 times, it is more than 10 minutes .
What is the process capability?

An airlines recommends customer to give their food preference . Five out of 200 cases, the passenger gets non veg when he ordered veg
What is the process capability?

Six Sigma Methodology tells you how to calculate the Sigma Level of such processes . Since sigma scale is applicable to every transaction , it can be used in any area of business.

How to calculate Sigma Level
First define Defects, Units and opportunities


Any thing that causes customer dissatisfaction


Any thing that can be inspected for defects- it can be a finished part or an assembly or sub assembly.
Example- a television set is a unit for final customer, but Printed Circuit Board is a unit for the person who assembles TVs


The possible defects in a product that may result in customer complaint . Customer complaints are normally treated as irritants whereas they should be treated as opportunities to correct . Hence the usage opportunities.

Calculate DPU

Defects Per Unit= Total Defective Units / Total Units Inspected

Calculate DPMO

Defects Per Million Opportunities = DPU x 1,000,000

Calculate Sigma corresponding to the DPMO from Table 1


A Six Sigma company is not a company that has to have all process running at Six Sigma process level.
A six sigma company is that company which has adopted six sigma strategy in its business operations.
A six sigma company is that company which has shifted from goal post mentality to loss function mentality Six Sigma strategy is a proven breakthrough technology that has a vast reserve of tools and techniques If these tools and techniques are applied wisely , they can make a company prosperous.

                    Table 1

Number of defects per million possibilities of making an error Number of defects per hundred possibilities of making an error Associated Sigma Levels
66810 6.68 3.00
38950 3.89 3.25
22750 2.27 3.50
11870 1.18 3.75
6210 0.62 4.00
2890 0.28 4.25
1350 0.13 4.50
560 0.056 4.75
233 0.023 5.0
86 0.0086 5.25
32 0.0032 5.50
10.25 0.0010 5.75
3.4 0.00034 6.0

                   Exhibit 2

Process Designation Process Capability % Output Out of Spec PPM OUT OF SPEC
1 Sigma .033 31.73 3,17,300
2 Sigma 0.66 4.55 45,500
3 Sigma 1.00 0.27 2700
4 Sigma 1.33 0.0063 63
5 Sigma 1.66 .0000057 0.57
6 Sigma 2.00 0.0000002 0.002
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