The Basics of Six Sigma

Six Sigma

For many organisations Six Sigma is simply a way of striving for near perfection in quality. Technically, Six Sigma is a data-driven, disciplined approach to eliminating deviations in any kind of business or industrial process. The original idea is to aim for a “six sigma” quality level, which is six standard deviations between the mean and the nearest limit of specifications — in practice, about no more than 3.4 defects per million opportunities. Of course this is not necessarily a suitable goal for every kind of process where people apply Six Sigma.

Compared with Lean manufacturing (the philosophy developed in the late 1980s by Toyota) Six Sigma aims to reduce variations and approach a theoretical ideal of perfectly consistent process output. Lean manufacturing, on the other hand, seeks to eliminate waste in the process itself. Six Sigma starts with the assumption that the process designer knows what the ideal final outcome is, whereas Lean manufacturing allows those on the “shop floor” to identify unnecessary steps and make improvements which management may not be in a position to predict.

Six Sigma practitioners assume that waste is proportional to process variation (i.e. defects in a product rolling off a production line) whereas Lean practitioners focus on unnecessary steps in the process which fail to add value to the final product.

The Six Sigma methodology is commonly found to have the following benefits:

– Using a self-funded way of making improvements, Six Sigma often reduces costs 50% or more;

– Six Sigma helps companies understand customer requirements better, reduce the waste chain, and improve quality and delivery performance;

– Six Sigma methodology produces robust processes and products, capable of responding to changing customer requirements, and helps use internal resources to drive improvements rapidly.

The fundamental goal underlying the Six Sigma method is to implement a measurement-oriented strategy to focus on improving processes and reducing variation. The implementation happens through “Six Sigma improvement” projects, which in turn use two sub-methodologies depending on whether they are focusing on existing process or developing new ones.

For existing processes, the methodology is called DMAIC, for new processes, the DMADV methodology is used. Both methodologies start with the Define, Measure, and Analyse steps: Define the high-level project goal(s) as well as the current process, then Measure the key aspects of the process to collect relevant data, and then Analyse the collected data to find the underlying causes of defects, preventable waste, and other errors.

If the goal is to improve an exiting process, the methodology then goes in to Improve the process using the previous analysis, and finally Control it using measurement techniques to ensure that the variations are corrected.

For designing new processes, the early Measure step focuses on measuring characteristics which will be “Critical to Quality.” Then, the Improve and Control steps are replaced with Design and Verify steps — the practitioner Designs a process according to the results of the Analyse step, and then Verify the design will work as expected.

Six Sigma implementation is handled by trained Six Sigma specialists inside the company, ranked martial-arts style from Six Sigma Green Belts to Six Sigma Master Black Belts. The Six Sigma Academy states that a Black Belt can save companies around $230,000 per each project and complete 4-6 projects a year on their $80,000 U.S. average salary.

This approach to “professionalising” quality management is a key innovation of the Six Sigma methodology. Before Six Sigma, quality management was largely the province of workers on the production floor as well as statisticians working separately in a quality assurance department. The Six Sigma belt system, on the other hand, sees a clear distinction between roles:

Green Belts are those who have job responsibilities besides Six Sigma.

Black Belts are 100% devoted to Six Sigma implementation and focus on specific projects, generally under the guidance of Master Black Belts.

– Similarly, Master Black Belts are the in-house coaches for Six Sigma implementation, devoting their full time to the process and helping ensure the process is applied consistently in different areas.

Six Sigma has attracted attention especially amongst large organisations as a result of the significant savings it achieved for companies like General Electric, who estimate around $10 billion in benefits from the first five years of their Six Sigma implementation. It was originally invented at Motorola and Allied Signal for manufacturing precision electronic devices. Now it is used in a variety of commercial sectors, from manufacturing to legal, health care, and non-profits.

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About Alex Pejak

Alex Pejak is an economist interested in project management and marketing research. She is currently working on a few projects in Australia, including one for Ensafe Planning Solutions, developing WHS management plans.