Feature

Chopping costs with Six Sigma

As India Inc. adopts Six Sigma, green and black belts are much in demand. Srinivasa Rao Dasari comments upon this trend

Quality and timely delivery have become crucial for the Indian IT industry to sustain its current position and expand further in the global market. Six Sigma holds the promise of making this possible. Many companies have realised the advantages of deploying the Six Sigma philosophy across different departments. IT majors such as Satyam, Wipro and Infosys are pushing Six Sigma practices across all levels, and training hundreds of staff members in its methodologies.

Training focus

From the CEO to the shop-floor worker, everybody should be involved in the Six Sigma training process. The deployment involves training team members to become champions, black belts and green belts. (There are no martial arts involved here, but martial art terminologies have been used for Six Sigma ever since it was first used at Motorola.)

The champions are senior executives and managers who are accountable for the results of the Six Sigma projects. The Master Black Belts have proved themselves to be effective problem-solvers, the mentors who ensure the success of the project. They have Six Sigma technical proficiency, mentoring/consulting skills, and the ability to apply the Six Sigma methodology to a function or business process. Black Belts are senior and middle level managers who lead teams to successful project completion.

Green Belts are mid-managers who support the Black Belts, but are not full-time on the job. Interestingly, organisations introducing Six Sigma mostly run into resistance at the middle management level as these managers have the toughest job.

Generally, Black Belt training involves 23 days spread over four months—roughly one week in the classroom and three weeks in application time. Most of the training involves working on real projects. The Black Belts should have good people skills. A Black Belt is a key change agent for the Six Sigma process. Candidates have to be the best of the best, working on chronic issues that negatively impact the company’s performance. They should have a demonstrated track record of success. One to three percent of all employees become Black Belts. It has been found that candidates need phase training to help them understand project selection, take a peek at what life will look like for the next 18-24 months, and prepare them to use the statistical tools required to make Six Sigma successful.

Green Belts are the project team members or employees who execute Six Sigma as part of their jobs. As they become more proficient, they can increase the Black Belt’s effectiveness. The optimum ratio of Black Belts to Green Belts is 1:5. The Six Sigma Green Belt course is designed to enhance technical problem-solving skills. Instruction is application-focused, requiring all participants to successfully complete a project while completing the classroom portion of the training.

Certification

Six Sigma certification is a confirmation of an individual’s capabilities with respect to particular competencies. It indicates that the individual has met the requirements necessary to be certified. These requirements vary from company to company, though generally it involves training, written tests, and a hands-on display of competencies.

While there is no single body that provides Six Sigma certification, most of the companies providing Six Sigma training and consultancy certify a client’s employees.

When you change your job, it is possible that your next employer will value your Six Sigma certification, or might insist in getting you re-certified. This is actually a rather fuzzy area as there is no standard method or benchmark for judging an individual’s competency. However, if you have been certified from a leading Six Sigma business such as Motorola or GE, it will hold a lot of value. Certification from a company which is not well-known will naturally hold less value.

Then there are experts who believe that Six Sigma is only hype. Says Ramaswami Viswanathan, software Six Sigma practice head of QAI: “People are certified, not companies. Besides, there are no global accreditation bodies for Six Sigma certification as there are global quality agencies for SW CMM or CMMI (SEI is the body) or ISO. Moreover, there are no audits or assessments for Six Sigma. Sigma levels are totally self-declared. Six Sigma is initiated, directed and managed by the firm itself, with no external validation. Hence Six Sigma teams face no external audits or assessments. It is a strategic initiative, not a quality initiative.”

Organisational impact

Six Sigma brings many changes in the work culture wherever it has been deployed, creating an open and transparent culture where ideas are invited from everyone, there is lack of hierarchy, and the focus is on a learning environment. It leads to quality thinking at every level and in every operation in a software development organisation.

The world over, the processes of different industry verticals such as manufacturing, cement, pharmaceuticals and software are much below the standard 3.5 level of Six Sigma—and the preferred requirement level is 4.8. A Six Sigma practice contributes significantly to the bottom-line of an organisation. It is estimated that the practice results in a contribution of about eight percent to the bottom-line, though of course it varies from project to project and company to company.

Wipro takes the lead

Wipro Technologies has more than 200 Black Belts to monitor projects. It has evolved three methodologies—TQSS, DSS+, and DMAIC, a customised methodology. It initiated Six Sigma processes in 1997 with consultation services from Motorola.

Says Rama Bhagi, manager (SQA), Wipro Technologies, “I don’t say it is a different process altogether, but Six Sigma helps address a particular problem. Instead of running around to solve a problem, we can find a solution with a tool of methodology that is based on Six Sigma. We also address our customers’ problems through the same process. On an average, most projects run every year, and all the projects are above the 4.5 level. Each project group is given a target of cost savings. We also provide consultancy services on Six Sigma to other companies, mostly to our customers. It helps improve operational efficiency, customer satisfaction, and business parameters.”

Satyam’s initiative

Satyam has embarked on a major drive to implement Six Sigma, and has already achieved the 4.8 level in more than 300 projects. The company is implementing an action plan to equipped all of its associates with analytical skills through Six Sigma training. It plans to complete a minimum of 500 projects of different processes and services that impact business and customer deliverables as it needs to bring in significant cost savings through productivity improvements in all these processes and services.

Explains C R Nagaraj, Satyam’s senior vice-president (quality), “To optimise any process, we require Six Sigma, and this practice saves a lot in costs—we expect savings of Rs 50 crore per annum for the company. The cost savings have already touched Rs 10 crore this year. Next year it will be more. All of us operate at 3 and 3.5 levels of Six Sigma, and we can take the process to the level of 4.5 without any further investment. However, attaining the level of 4.8 reflects a huge improvement in processes. We have set a target to take all our projects to the level of 4.8 in the near future, maybe in another six months.” At present Satyam has 711 trained Green Belts who have been deployed in 180 improvement projects. About 182 qualified Black Belts under a core team of 4 Master Black Belts mentor Green Belts in executing improvement projects.

For Satyam’s BPO arm Nipuna, investment made in Six Sigma has primarily been in the form of hiring dedicated resources to drive the initiative. Benefits from this programme are in the form of cost savings through defect and cycle-time reduction, and additional business generated by showcasing Six Sigma projects to both existing and potential clients.

Nipuna has 30 trained Green Belts. It has initiated 10 high-impact Six Sigma projects across various client engagements and support functions. The estimated average benefits from these projects are close to Rs 5 lakh per project.

Future plans include training an additional 50-75 Green Belts, and initiating an additional 5-10 key Six Sigma projects in the next few months. There are also plans for increasing the size of the team in line with Nipuna’s growth plans.