Six Sigma under TBEM

Developed by Motorola in
12 August 2002

Mumbai: Webster's dictionary defines quality as "a degree or grade of excellence or worth". For the best companies in today's global business environment, the term means much, much more. They see quality as the cornerstone of their enterprise, and the ability to enhance it as the defining principle of profitability. Tata Engineering, which turned the corner recently, has come to understand this better than most.

India's top automotive manufacturer is now reaping the rewards of a comprehensive quality improvement initiative that it embarked upon in September 2000. The initiative is one of the key contributors to the company's turning around quickly, from a loss of Rs 500 crore in the year ended March 2001 to a profit of Rs 28 crore in the first quarter of 2002-03.

While the cost-cutting measures undertaken by Tata Engineering have been a major factor in this revival, the quality initiative has played a role just as important. The potential for improvement that the initiative creates is endless.

Six Sigma under TBEM
The quality improvement project at Tata Engineering operates under the umbrella of the Tata Business Excellence Model, an open-ended framework that drives business excellence in group companies. But the main component of the quality undertaking is Six Sigma, a disciplined, precise and widely proven methodology that aims for near-flawless products and services.

Developed by Motorola in 1986, Six Sigma employs a range of strategies and tools to eliminate defects in processes. Sigma, a letter in the Greek alphabet, is used by statisticians to denote the standard deviation of a process. To achieve Six Sigma quality, a process must produce no more than 3.4 defects per million opportunities (an opportunity is defined as a chance for non-conformance, or not meeting the required specifications). The higher the number of defects, the lower is your Sigma score.

There were many Sigma defects that Tata Engineering had to eliminate to get back on track. The weight of competition, ever-increasing customer expectations and shifting market conditions made change an absolute imperative. The company's older vehicles were getting obsolescent, and its newer ones were lagging behind in terms of customer satisfaction.