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What is Six Sigma?

What is Six Sigma?

Table of Contents

    Six Sigma Introduction

    Six Sigma is a data-driven, customer-focused, and result-oriented methodology that uses statistical tools and techniques to systematically eliminate defects and inefficiencies to improve processes. It is a systematic method to measure and analyze the business processes to identify critical factors affecting business results, thereby improving the processes and establishing controls around the improved processes.

    Six sigma is a widely accepted quality concept in the corporate world today. Six Sigma started its journey in the 1980s as a data-driven method to reduce variation in electronic manufacturing processes in Motorola in the USA. Six Sigma became famous when Jack Welch made it his successful business strategy at General Electric in 1995. Today it is used as a business performance improvement methodology all over the world in diverse industry including general manufacturing, construction, banking and finance, healthcare, education, government, KPO/BPO, IT/ Software. At present, IT/ ITES sector companies are dynamically implementing Six Sigma and it is no more confined to the manufacturing sector.

    The term ‘six sigma’ comes from statistics and is used in statistical quality control (SQC). SQC evaluates process capability i.e. the numerical measure of the ability of a process to meet the customer specifications. It was originated from terminology associated with manufacturing which refers to the ability of the manufacturing process to produce a very high proportion of output within specifications. The sigma rating of a process indicates its yield or percentage of defect-free outputs it produces. A six sigma process is the one that produces 99.99966% statistically defect-free outputs which is equivalent to 3.4 defects per million opportunities (DPMO).

    Calculation of this 3.4 DPMO
    99.99966% defect-free means 99.99966 in 100. This implies to 999,996.6 defect-free in 1,000,000 (i.e. 1 million). If you add 3.4 defects in 999,996.6 defects free it becomes 1 million opportunities. That is why it is called 3.4 DPMO mean 6 sigma.

    Six Sigma uses a set of quality management and statistical methods and creates a team of experts within the organization (Executive Leadership, Champions, Black belt, Green Belt, Yellow Belt, etc.) having specific skill sets required to carry out the six sigma project. Each six sigma project carried out within an organization follows a defined sequence of phases with quantifiable value targets of certain metrics. These metrics can be a reduction in process cycle time, reduce cost, increase in quality rating/ customer satisfaction index, reduction in defect rate, etc.

    Other Sigma

    Sigma ScoreDefects per Million Opportunities (DPMO)Percentage
    2308,53769.15%
    366,80793.32%
    46,21099.38%
    523399.98%
    63.499.99966%

    Road Map of a Six Sigma project

    1. Identify the areas of improvement.
    2. Define the problem statement and goals for improvement in quantifiable terms.
    3. Determine the resources required for the project.
    4. Create a project plan with deliverables and milestones.
    5. Establish performance parameters/ metrics.
    6. Gather baseline information about the process
    7. Validate measurement system for the process output (Y)
    8. Examine the data collected in the earlier phase to determine a prioritized list of sources of variation.
    9. Explore potential causes (potential X’s for causation) and determine the impact of each X has on the response Y
    10. Determine the optimum level of vital few X’s
    11. Validate measurement system for X’s
    12. Verify process improvement.
    13. Develop a control mechanism to ensure the sustenance of the improved process.

    Some of benefits of Six Sigma are given below

    • Six Sigma helps companies to reduce costs and improve productivity.
    • Six Sigma improves the quality of projects output by reduction of inefficiencies and defects
    • Six Sigma increases customer satisfaction and loyalty.
    • Certified Six Sigma Professionals can help increasing ROI significantly

    Six Sigma versus Traditional Quality

    Six SigmaTraditional Quality
    Decisions are driven by dataDecisions are taken based on a combination of data and ‘gut feel’.
    Control process inputs (Focus on X’s)Inspection method (Focus on Y)
    Structured use of statistical tools to help in problem solvingNo formal structure exists for the application of tools
    Structured training in applied statisticsLack of structured training
    Root cause approachBand aid approach
    Prevention over inspectionInspection over prevention

    Six Sigma Characteristics

    • Customer-centric
    • Process focused
    • Data-driven
    • Involvement and support of the top management
    • Cultural change
    • Breakthrough performance gains
    • Structured improvement deployment
    • Validation through key business results
    • Reduction in variation
    • Elimination of defects
    • Improvement in yield
    • Enhancement in customer satisfaction
    • Strengthening of the bottom line

    Six Sigma Methodologies

    There are mainly two methodologies of Six Sigma namely DMAIC and DMADV.

    DMAIC

    DMAIC is a data-driven Six Sigma methodology for improving existing products and processes. The DMAIC process should be used when an existing product or process can be improved to meet or exceed the customer’s requirements. DMAIC methodology consists of five phases: D – Define, M – Measure, A – Analyze, I – Improve, C – Control.

    • Define – Define the project targets and customer (internal and external) deliverables.
    • Measure – Measure the process to determine the current process performance (baseline).
    • Analyze – Find out the root causes of the defects.
    • Improve – Improve the process by eliminating defects.
    • Control – Control the future performance.

    DMADV

    DMADV is a common DFSS (Design for Six Sigma) methodology used to develop a process or product which does not exist in the company. DFSS is an application of Six Sigma which focuses on the design or redesigns of the different processes used in product manufacturing or service delivery by taking into account the customer needs and expectations. DMADV is used when the existing product or process does not meet the level of customer specification or Six Sigma level even after optimization with or without using DMAICDMAIC methodology consists of five phases: D – Define, M – Measure, A – Analyze, D – Design, V – Validate.

    • DEFINE the project goals and customer deliverables
    • MEASURE the process to determine the current performance level
    • ANALYZE and determine the root causes of the defects
    • DESIGN the process in detail to meet customer needs
    • VALIDATE the design performance and its ability to meet the customer needs

    Six Sigma Certifications

    At a high-level process and approaches remain the same but the rigor of implementation depends upon the tools selected, how they are used, how people are trained, what has been emphasized during training or consulting etc. There are many certification bodies for Six Sigma certification and every organization has its way of training and implementation. The cost of the training and consulting depends upon the expertise of the people involved from their side, tools used, their market brand, etc. Keeping big brands or big companies aside for an MSME (Micro, Small and Medium-size Enterprises) even if you go with one good training and you have serious people to get it implemented plus an organizational will to improve then you need not pay heavily for the fancy high brands.

    For Individuals

    The growing popularity and acceptability of Six Sigma and Lean have created a great demand for certified professionals in the job market. To grab the opportunity and join this growing community it makes sense.

    For Organizations

    Six Sigma and Lean certified professionals help organizations in increasing the ROI of six sigma project management within the organization.

    6sigmastudy Certification Hierarchy

    6sigmastudy certified professionals help organizations with an improved level of processes and quality outputs that lead to increased ROI. They have knowledge pertaining to and can anticipate issues related to the practical implementation of Six Sigma.

    Beneficiaries of Six Sigma

    Demand for Six Sigma – 6sigmastudy survey – 2013

    Conclusion

    If you are owning a business and you have a good team then to scale your business in terms of production, larger market size, lesser cost of production, etc. you need to focus on process aspects of your business. For that, it is recommended that you start learning and implementing a six sigma framework at your workplace. If you are a job seeker and looking for a managerial position then understanding people and process is equally important for your job success. And to understand process six sigma is a very good starting point.

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