Six Sigma

Continuing with its perennial quest towards organisational excellence, Ispat Industries Limited undertook an initiative to attain Six Sigma Certification at its Dolvi plant in July 2002.

Using this globally acknowledged quality process, the company aims to improve critical business processes and optimise the utilisation of resources, through cost reduction, productivity improvement and service improvement projects. Its mission is to employ Six Sigma as a tool to enhance customer and employee satisfaction, and to boost profits and value for shareholders.

Six Sigma is a disciplined, data-driven approach and methodology that aims to eliminate defects in any process (from manufacturing to transactional and from product to service). Since the quality of any product or service that a company offers directly influences the manner in which the customer perceives the company, Six Sigma is a vital tool to commanding customer respect. It serves to enhance quality within an organisation by minimising the various defects inherent in business processes. The Six Sigma approach aims to optimise the efficiency level of a business process to an ideal of less than 3.4 defects in a million opportunities.

At Dolvi, the Six Sigma initiative involves the phase-by-phase implementation of a measurement-based strategy that focusses on process improvement and defect reduction, through the application of Six Sigma improvement projects.

Introduction Phase
The period from July'02 to March '04 was the introductory phase, wherein Six Sigma concepts, tools and breakthrough performances were introduced with the help of a consultancy firm. The top management made a commitment to consciously adhere to the Six Sigma concepts. Projects that could be targeted for this initiative were selected (this is an ongoing process) and training schedules devised for Six Sigma champions.

Expansion Phase
The period from April '04 to March '05 is slotted to witness the integration of all work processes and skill sets. Integration with other systems and initiatives like TS16949 and Total Productivity Management (TPM) is also on the cards. Additionally, initiatives for Six Sigma integration with suppliers and customers will be put in place. During this phase, attempts will be made to scroll up the sigma level for the organisation and replicate Six Sigma projects across Group companies.

Settle Phase
The period from April '05 onwards will be aimed at bringing about an organisational transformation at Ispat, using the Six Sigma principles. Some of the measures to be undertaken in this respect include the setting up of a Six Sigma Academy, Six Sigma branding and patenting of important projects, consultancy within and outside Ispat and the integration of Six Sigma processes with knowledge management.

Benefits Accrued
IIL accrued benefits of Rs 5,817 lakh for FY '03-'04, on account of its Six Sigma initiatives.

Activities Planned for FY 04-05
Programmes to train employees to function as Six Sigma black belts, champions and green belts are in the pipeline. These activities are forecast to have a benefit accrual capacity of Rs 75 crore for IIL for FY 2004-05.

Current Six Sigma Project Status
Out of 165 projects at Dolvi since July '02, 64 projects have been closed under the Six Sigma initiative, with cumulative savings to the order of 63.89 lakh being posted. Out of a total strength of 1805, 1093 employees were trained between June '02 and February '04. Selected personnel were trained as Six Sigma champions, black belts and green belts. The Ispat black belts in turn provided training to the employees.

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