Six Sigma is one of the key undertakings underway at Indo-British Garments, one of the oldest practitioners of The IdeaSmith’s lean ideology. The project began with a baseline of 15 Defects per hundred units or DHU (equivalent to a Sigma level of 2.54). Today, the readings rest at 8.24 DHU i.e. a Sigma level of 2.89. The company is poised to take the figures further to a leaner DHU level of 2.8% and hence reach the 3.4th Sigma, which The IdeaSmith team looks at achieving by October 2016.
Plausibly as the defect rates come down, so will the associated Cost of Poor Quality (COPQ) – a metric usually left unmeasured. “With all years of experience and having worked with several companies all over the world, I can with authority state that the Cost of Poor Quality (COPQ) in almost all the companies works out to the tune of 14-20% of the company’s top line,” avers Nimish Dave, Founder, The IdeaSmith. Conceptually, COPQ takes into account Prevention costs, Appraisal costs, Internal failure costs as well as External failure costs.
Six Sigma sounds quite complicated but in essence it is a simple yet highly effective tool which all companies can easily deploy and see remarkable results and significant reductions in the Cost of Poor Quality by at least 30-40% in the very first year. If companies deploy Define, Measure, Analyse, Improve and Control (DMAIC) tools effectively, they will be able to lead the organisation to achieve stronger performance standards and achieve leadership in Quality.
At IBG, the transformation has taken shape through intensive collaborations of The IdeaSmith and Indo-British Garments on the lines of DMAIC methodology. The tools used included Root Cause Analysis, data analysis for the past 6 months, Operation wise defect capturing by instituting Real Time Quality Monitoring Systems on the shop floor, subsequent operator training, Poka-Yoke, and Kaizen.
The key leads for the intervention were derived from the analysis of data of past 6 months of the defects encountered to identify the top 25 defects. These identified defects were run through the root cause analysis process and accordingly resolved in Kaizen sessions which involved cross-level brain storming sessions.
“Eventually, the savings with this intervention at IBG will be to the tune of 70% of the current cost of poor quality,” envisions Nimish.