What is Six Sigma?

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James Gauci

This article provides an introductory level overview of Six Sigma, which has experienced widespread use and success across both manufacturing and service sectors in recent decades.

Six Sigma Defined

Six Sigma is a customer centric methodology which focuses upon reducing the extent of variation that exists within manufacturing and/or service processes through rigorous data analysis in order to eliminate defects. The extent of customer centricity is reflected by the typically accepted Six Sigma definition of a defect being any process output that does not meet customer specifications. The term sigma originates from the Greek language, which refers to the standard deviation within a data set population. Incorporating statistical theory, Six Sigma in a process context involves the concept that six standard deviations between the process mean and the nearest specification limit will yield just 3.4 defects per million opportunities. Put another way, the process will perform defect free 99.99966 percent of the time.

Differences between Six Sigma and Lean

Lean is a philosophical way of working which emphasizes the removal of waste within a process. The aim is to create enhanced efficiencies and improve the speed of a process. Both Lean and Six Sigma focus upon continuously improving processes.

Origins of Six Sigma

Motorola, the North American multinational telecommunications corporation, is credited with developing contemporary Six Sigma methodologies during the early to mid 1980s. It is widely acknowledged, however, that Six Sigma is heavily inspired by preceding quality improvement methodologies such as Total Quality Management (TQM), Zero Defects, and Quality Control Systems. Early adopters of Six Sigma were predominantly other North American multinationals, including Allied Signal and General Electric. Collectively, these organizations have declared financial business benefits from the use of Six Sigma totalling in excess of US$100 billion. Today, Six Sigma has been utilized by many manufacturing and services organizations throughout the world.

Six Sigma Belts

Six Sigma Belts have been known to range from entry level White Belts through to Yellow Belts, Green Belts, Black Belts and Master Black Belts. Conceptually, these Six Sigma Belts are similar in principle to those within the martial arts, where one’s technical capabilities, training and experience are certified to a particular (color) standard.

The Six Sigma Methodology

The Six Sigma methodology is often applied using one of the following phase approaches:

  1. DMAIC — designed for eliminating/reducing defects and variation within existing processes

    Define — What is the problem?

    Measure — How are we doing today?

    Analyze — Where are the problems, and what is going wrong?

    Improve — How do we fix the problem and implement improvements?

    Control — How do we make the changes last?

  2. DMADV — utilized to develop new processes which will sustainably achieve targeted specifications

    Define — What are customer requirements for the product/service enabled by this process?

    Measure and identify the critical to quality characteristics required of this process

    Analyze to develop and create high-level process designs, then evaluate to select the best one

    Design the new process to achieve process optimization and design verification

    Verify the effectiveness of the design through a process pilot/ implementation, ensuring sustainable process capability

How Six Sigma Differs from Other Popular Process Improvement Methodologies

The following factors describe how and why Six Sigma tends to differ from other popular business process improvement methodologies and provides some insights into its enduring success:

  • Customer focused methodology, which considers processes and their outputs from the customers perspective, resulting in improved organizational competitiveness, product/ service development capabilities, market share, revenues and profitability
  • Emphasis upon delivering measurable and quantifiable business benefits (both tangible and intangible) from any Six Sigma project
  • "Institutionalization" of the Six Sigma methodology and culture, often through the appointment of Six Sigma Champions, Master Black Belts, Black Belts, Yellow Belts, etc. to drive the Six Sigma deployment
  • A leadership commitment to making data driven, fact based decisions regarding process improvements and design rather than relying on intuition and guesswork

How and Where Six Sigma Works Best

The Six Sigma methodology tends to work best when:

  • The actual cause(s) of the business problem is not known
    • If the cause is known, then a solution can often be readily selected
    • Solving a problem with a known cause becomes a "just do it" project, better suited to other methodologies
  • The problem is serious/compelling enough to warrant solving
    • There are significant benefits to be had through improving the process
    • There is a genuinely committed and engaged Six Sigma project sponsor
    • A project team (process subject matter experts) is available to support the Six Sigma project
    • There are additional resources if required, e.g. funding, data collection/extracts
    • There is a need to get it right the first time by applying sustainable solutions that address the cause
    • There is a drive to implement continuous improvement capabilities for process sustainability, e.g. process management dashboards/metrics

While Six Sigma has delivered hundreds of millions ($US) in organizational benefits for both manufacturing and services organizations around the globe, it is in no way a "silver bullet." To be successful, this process improvement methodology must be applied to the appropriate kinds of business problems with strong advocacy at the executive leadership level. Under the right conditions, Six Sigma has proven to be capable of transforming organizations into market leading status, extending to strong customer, employee and shareholder advocacy.

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