What is Six Sigma?

Principles

Six Sigma focuses on defects and variations. It begins by identifying the critical-to-quality elements of a process – the attributes most important to a customer. It analyzes the capability of the process and aims at stabilizing it by reducing or eliminating variations. The key concepts are as follows:

• Defects: failing to deliver what customer needs
• Variation: what the customer sees and feels
• Critical to quality: attributes most important to the customer
• Process capability: what the process are and are they able to deliver what the customer needs
• Design for Six Sigma: designing projects to meet customer needs and process capability.

In other words, Six Sigma is about linking quality improvement to financial results. The Six Sigma goal is to link internal processes and systems management to end-consumer requirements. Six Sigma is a scientific approach to management processes that entirely driven by data.

Process

Sigma is the mathematical symbol for standard deviation. As an example, about 93% of all results from a normal population (ie results are equally distributed above and below the mean) fall within 3 standard deviations. The use of six sigma in a manufacturing situation means that the company uses all the total quality tools to improve a process so that the tolerances for the process is at or better than six standard deviations of the process spread. This would result in no more than 3.4 failures in 1 million units of production.

Let’s see the processes involved here.

Six Sigma implementation is top to down process. The CEO is usually the driving force and executive management provides the champion for each project. The champion is responsible for the success of the project. His role is providing necessary resources and breaking down organizational barriers. Getting upper level management involved in the project selection helps guarantee that the projects will have large impact on the business.

The project leader is called a black belt and project team members are called green belts. It is important that Six Sigma project participants such as black belts and green belts tend to be agents of change. They are open to new ideas and are used to evaluate new ideas.

Actually there is no standard procedure for Six Sigma. Instead it must be tailored to account for each organizations strengths and weaknesses and leverage from them accordingly. The Six Sigma methodology uses statistical tools to identify the factors that matter most for improving the quality of processes and generating bottom line results. In order of importance, the key steps in creating a Six Sigma infrastructure are leadership, customer focus, goals, improvement project selection, training and execution, organization’s resources and communication. These key steps can be formulated as a Six Sigma implementation strategy comprising of the following major steps:

1. Recognize
2. Implement
3. Evaluate and sustain

Recognize

Each of these three major steps consists of several steps and elements. During the Recognize phase following steps have to be considered:

• Clarify the vision, mission and identify the goals
• Identify key business issues and customer needs
• Identify critical projects and determine training needs

Implement

Next is the Implementation phase. Implementation usually started with training Six Sigma champions, black belts and green belts. Then priorities for improvement are determined. Then DMAIC process is applied. This process consists of the following five phases:

• Define         the projects, the goals and the deliverables to customers, both internal and external. In the Define phase, each opportunity identified into clearly defined Six Sigma project. Then during this phase, Black Belt candidates are selected and assigned these Six Sigma projects
• Measure the current performance of the process. The Measure, Analyze and Improve phases are at the heart of the problem solving process. These phases focus on determining the relationship between key leverage variables and process outputs. This is characterized by using the inputs and outputs of a process with equation y=f(x)
• Analyze and determine the roots of causes of the defects
• Improve the process to eliminate defects
• Control the performance of the process. This phase is the time for implementation of the solutions identified earlier. It is also the time to establish controls and accountabilities for the proper operation of the process once the Black Belt moves on.

(bmgi.com)

Evaluate

Here firms generally track the results and benefits of the Six Sigma project. This is accomplished through tracking and measuring the solutions implemented by the Six Sigma team. It is important to understand that firm needs not only achieve the results but also sustain this achievement for the future and go further for new achievements, new projects following the steps below:  

• Evaluate the gain: business development
• Sustain the gain: develop control plan and communicate success, select new projects.

DMAIC considered as core Six Sigma process. In summary again Define phase sets the targets for the Six Sigma project, the Measure and Analyze phases characterize the process and the Improve and Control phases optimize the process and maintain it.

Need to be noted that Six Sigma also looks at the soft stuff such as an organization’s culture and behavior. For example many corporate cultures are fear based. This is the reason that employees learn to hide defects. Best results from Six Sigma receive organizations that have open and safe environment.

 Critical Components

There are three critical components in implementing Six Sigma project and these are as follows

• Complete executive management engagement
• Effective communication
• Planned project

Executive engagement refers to upper management establishing a visible support system and taking an active role in communication and reward. They need to assure that Six Sigma project is linked and is the part of corporate strategy. Management also needs to prioritize Six Sigma project relative to other initiatives, programs and priorities. Six Sigma requires the use of facts and data in order to support actions at all levels of decision making. Management must also create accountabilities, expectations, roles and responsibilities for the organization in a whole. Finally it needs to conduct regular reviews to assure and verify progress.

Effective communication is very important. A first step is to create and communicate a human resources plan to support Six Sigma roles. There needs to be regular written communications on Six Sigma news and success. This will motivate the employees and workers and help them understand their role. This will also help management when communicating with employees in company meetings.

At last, successful project management depends on a strong link between Six Sigma project to critical business and customer needs. Established projects need to be of appropriate size and scope. Otherwise they would not be effective. The assignment of the appropriate champion and black belt is also very critical since someone needs to be held accountable for the project. Finally there needs to be a project tracking system to facilitate replication and to measure results.

Importance

Six Sigma is not just another management catch phrase. Rather, it is a highly disciplined process that helps a business develop and deliver near perfect products and services. By accurately measuring the number of defects in a process, you can systematically eliminate them. Achieving Six Sigma indicates you have less than four defects per million transactions. Needless to say how important it is. Just imagine at three sigma you have at least 54,000 defective drug prescriptions a year, more than 40,500 newborn babies accidentally dropped in the hospital each year and unsafe drinking water almost two hours each month. Comparing with above mentioned at Six Sigma quality level we would get only one wrong drug prescription, in 25 years, three newborn babies dropped in 100 years and unsafe drinking water only one second every 16 years.

Six Sigma goes beyond small point improvements in product quality to the very fabric of the organization as a whole. It is a process for both improving performance and ensuring consistency in the delivery of a product or service. Most importantly, Six Sigma focuses on the customer. It continuously and rigorously measures those elements the customer identifies as "critical-to-quality."

In other words, importance of Six Sigma is in its ability to transform abstract business scenarios into tangible and fact based situations thus minimizing guessing in solving business issues.

Here I would like to point out that it is very important for managers to realize that Six Sigma can be implemented together with other quality systems and assurance programs that already established within the organizations. Six Sigma has necessary tools to complement existing programs. For example many service oriented organizations for decades have implemented TQM programs to increase quality, improve customer satisfaction and enhance financial performance. Although many organizations achieved notable success initially with TQM, today’s TQM programs often compliance driven rather than quality improvement driven. Integrating Six Sigma with existing TQM programs returns the focus to process improvement through root-cause analysis. Attachment of Six Sigma to currently used TQM efforts will cause minimal disruption and cost to the organization. The Six Sigma methodology reduces errors and thereby improves quality through its distinctive metric approach. Its focus on concurrent process analysis requires virtually every component of every service to be reported, measured and recorded on a regular basis. Using detailed data, organizations can better study their processes and implement a drill-down approach to improvement. Without these detailed data required by Six Sigma it is near to impossible to perform root-cause analysis. Thus Six Sigma’s metric approach refocuses the organization on the original objective – that is process improvement.

Integration of Six Sigma with other quality assurance programs also provides a measure of comparability that can be used to facilitate process improvement. Companies can use Six Sigma metric to compare internal projects as well as to develop external benchmarks. Internal project comparisons can be used for recourse allocations by identifying high-need projects while identification of benchmark performers and efficiency of their processes will encourage shared knowledge and ultimately improved processes.

Thus Six Sigma is very important it helps identify improvement opportunities, benchmark competitors and objectively monitor and assess performance. Six Sigma is able to take existent quality systems to the next level, level that focused on process improvement in quality and service.    

Problem Areas

As Six Sigma system is about measuring and controlling number of defective outcomes of the certain process, the first and most difficult task is defining of the process and defects. It is very easy to do in for simple or moderate manufacturing processes. But imagine that we need to apply Six Sigma methodology for example to software development. Although we can measure number of satisfied customers, or users of the software but it will be very difficult to define the process and the properties of the “production” and to measure them. Thus the first problem here is identifying the measurement parameters. Next is the fact that software defects in not easy to define. If we try to determine the part of software code that is defective we probably will spend more time than we spend on writing of that code. Another problem in Six Sigma application is determining a Root-cause of the defect. If software program is not satisfying our customer, we need to determine what the reason was. Was it an ambiguous customer, an incomplete functional specification or poor programmer? At last, for complete analysis we need a large number of defects to run statistical tests, which is certainly not the case here.

The moral of the story is that Six Sigma can provide as with tools and the framework, but we need carefully consider how and for what processes we can use them, how much it will cost the company and are the benefits greater than costs that involved. If company is using Six Sigma techniques in manufacturing, adapting it to other hard-to-determine processes (such as software example) may be a difficult but a natural progression, as management and employees have familiarity with Six Sigma concepts. But if Six Sigma is something totally new, one will need to consider carefully before implementing Six Sigma.

Conclusion

Six Sigma has proved to be a successful business strategy to achieve competitive advantage in many world-class companies such as GE, Motorola, ABB, Sony, Honeywell and Texas Instruments for nearly a decade. Based on the evidence of several new Six Sigma journals, magazines, websites, textbooks, seminars, workshops, conferences and the amount of training going on Six Sigma still appears to be on the way up. I personally feel that Six Sigma will evolve over time like many other initiatives we have witnessed in the past. However the key concepts, the principles of statistical thinking, tools and techniques of Six Sigma, will stay for many years, irrespective of whatever the 'next big thing' will be. I also believe that the Six Sigma toolkit will be enriched by the continuous emergence of new useful tools and techniques, especially in the software, finance and healthcare applications. I also like to raise the point that Six Sigma promotes the concept of statistical thinking for both engineers and business leaders. Statistical thinking - consisting of core principles such as process, variation and data - may be used to create a culture that should be deeply embedded in every employee within any organization embarking on Six Sigma programs.

Mclaskey’s Law, states that all initiatives will eventually disappear. They will either die or sink into the culture. In order to maintain momentum, people have to come up with something new. Right now it’s Six Sigma. Next is something new. And it is not always necessary that this new would be something totally different. Now some talk about using Lean Sigma which represents combination of Lean technologies, which is about improvement in business process performance through the elimination of waste, together with Six Sigma methodology.

Next “betterment” step is adding features to Lean Sigma to make it even better. Four additional features added to Lean Sigma to create so called Fit Sigma:

• Formal senior management review process at regular intervals.
• Periodic self-assessment with a structured checklist.
• Continuous learning and knowledge management program.
• Extension of the program across whole business with shifting of the Six Sigma as variation control to the integration of a faultless organization.

These additions made Fit Sigma a management philosophy and continuous improvement process. In order to implement the Fit Sigma philosophy, a systematic process is recommended. This process is not a set of unknown tools; in fact, these tools and culture have been proven to yield excellent results at Six Sigma times.  

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References:

Antony, Jiju, (2005), “A perspective on the future”, Manufacturing Engineer, (Feb/Mar), Vol. 84 Issue 1, p12

Jing, Garry, Ning Li, (2004), “Claiming Six Sigma”, Industrial Engineer, (February), Vol. 36 Issue 2, p37

Basu, Ron, (2001), “Six Sigma to Fit Sigma”, IIE Solutions, (July), Vol. 33 Issue 7, p28

Revere, Lee, Ken Black, (2003), Integrating Six Sigma with TQM, Journal of Health Care Management (Nov/Dec), Vol. 48 Issue 6

ReVelle, Jack, (2004), “Six Sigma”, Professional Safety (October)

Biolos, Jim, (2002), “Six Sigma Meets Service Economy”, (November), Harvard Management Update

Rownalds, Hefin, (2003), “Six Sigma: A New Philosophy or Repackaging of Old Ideas?” (April), Engineering Management.

 Romanchik, Dan, (2004), “Six Sigma’s not for everyone”, (June), Ashrae Journal  

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Attachment

List of the companies (115) that have implemented 6-sigma:

3M, A.B. Dick Company, Abbott Labs, Adolph Coors, Advanced Micro Devices, Aerospace Corp, Airborne, Alcoa, Allen Bradley, Allied Signal, Ampex, Apple Computers, Applied Magnetics, ASQC, Atmel, Baxter Pharmaseal, Beatrice Foods, Bell Helicopter, Boeing, Bombardier, Borden, Bristol Meyers - Squibb, Bryn Mawr Hospital, Campbell Soup, Cellular 1, Chevron, Citicorp, City of Austin, TX, City of Dallas, TX, Clorox, Cooper Ind, Dannon, Defense Mapping Agency, Delnosa ( Delco Electronics in Mexico), Digital Equipment Corp, DTM Corp, Eastmen Kodak, Electronic Systems Center, Empak, Florida Dept. of Corrections, Ford Motor Company, GEC Marconi, General Dynamics, General Electric, Hazeltine Corp, Hewlett packard, Holly Sugar, Honeywell, Intel, Junior Achievement, Kaiser Aluminum, Kraft General Foods, Larson & Darby, Inc, Laser Magnetic Storage, Lear Astronics, Lenox China, Littton Data Systems, Lockhee Martin, Loral, Los Alamos National labs, Martin Marietta, McDonnell Douglas, Merix, Microsoft, Morton Int'l, Motorola, NASA, Nat'l Institute of Corrections, Nat'l Institute of Standards, Nat'l Semiconductor, Natural Gas Pipeline Company of America, Northrop Corp, PACE, Parkview Hospital, Pentagon, Pharmacia, PRC, Inc, Qualified Specialists, Ramtron Corp, Rockwell Int'l, Rohm & Haas, Seagate, Society of Plastics Egineers, Solar Optical, Sony, Star Quality, Storgae Tek, Symbios Logic, Synthes, Technicomp, Tessco, Texaco, Texas Commerce Bank, Texas Dept. of Transportation, Texas Instruments, Titleist, Trane, TRW, Ultratech Stepper, United States Air Force, United States Army, United technologies, UPS, USAA, Verbatim, Walbro Automotive, Walker parking, Woodward Governor, Xerox.

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