Six Sigma at many organizations simply means a measure of quality that strives for near perfection. Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects (driving towards six standard deviations between the mean and the nearest specification limit) in any process -- from manufacturing to transactional and from product to service.
The statistical representation of Six Sigma describes quantitatively how a process is performing. To achieve Six Sigma, a process must not produce more than 3.4 defects per million opportunities. A Six Sigma defect is defined as anything outside of customer specifications. A Six Sigma opportunity is then the total quantity of chances for a defect. Process sigma can easily be calculated using a Six Sigma calculator.
The fundamental objective of the Six Sigma methodology is the implementation of a measurement-based strategy that focuses on process improvement and variation reduction through the application of Six Sigma improvement projects. This is accomplished through the use of two Six Sigma sub-methodologies: DMAIC and DMADV. The Six Sigma DMAIC process (define, measure, analyze, improve, control) is an improvement system for existing processes falling below specification and looking for incremental improvement. The Six Sigma DMADV process (define, measure, analyze, design, verify) is an improvement system used to develop new processes or products at Six Sigma quality levels. It can also be employed if a current process requires more than just incremental improvement. Both Six Sigma processes are executed by Six Sigma Green Belts and Six Sigma Black Belts, and are overseen by Six Sigma Master Black Belts.
According to the Six Sigma Academy, Black Belts save companies approximately $230,000 per project and can complete four to 6 projects per year. General Electric, one of the most successful companies implementing Six Sigma, has estimated benefits on the order of $10 billion during the first five years of implementation. GE first began Six Sigma in 1995 after Motorola and Allied Signal blazed the Six Sigma trail. Since then, thousands of companies around the world have discovered the far reaching benefits of Six Sigma.
Six Sigma is a set of practices originally developed by Motorola to systematically improve processes by eliminating defects.[1] A defect is defined as nonconformity of a product or service to its specifications.
While the particulars of the methodology were originally formulated by Bill Smith at Motorola in 1986[2], Six Sigma was heavily inspired by six preceding decades of quality improvement methodologies such as quality control, TQM, and Zero Defects. Like its predecessors, Six Sigma asserts the following:
- Continuous efforts to reduce variation in process outputs is key to business success
- Manufacturing and business processes can be measured, analyzed, improved and controlled
- Succeeding at achieving sustained quality improvement requires commitment from the entire organization, particularly from top-level management
Six Sigma is a registered service mark and trademark of Motorola, Inc.Motorola has reported over US$17 billion in savings from Six Sigma as of 2006.
In addition to Motorola, companies that also adopted Six Sigma methodologies early-on and continue to practice it today include Bank of America, Caterpillar, Honeywell International (previously known as Allied Signal), Raytheon, Merrill Lynch, 3M and General Electric (introduced by Jack Welch).
There have been a few retail companies that have attempted to adapt this methodology to their business with mixed success. Perhaps the most notable was former CEO Bob Nardelli's attempt to adapt his systems from his former employer, General Electric, to the retail industry. There is one inherent problem with attempting to apply Six Sigma to retail. Retail=people, Six Sigma=defects. So, you have to look at your lacking areas as defects by your employees. Home Depot attempted to solve this by thinning out their workforce and implementing training programs for the remaining employees in order to reduce defects. On paper, this may work well but once the human factor was applied it led to massive frustration from the employees and the customers due to the lack of salespeople on the floor at any one time. Although the employees were better trained, they were now required to help 22.8 customers per hour rather than the previous 13.4. Other retailers are learning from these mistakes of the first big box retailers to attempt this and are tweaking the methodology to better suit their company goals.
Recently some practitioners have used the TRIZ methodology for problem solving and product design as part of a Six sis of some key tools used
Methodology
Six Sigma has two key methodologies: DMAIC and DMADV, both inspired by W. Edwards Deming's Plan-Do-Check-Act Cycle: DMAIC is used to improve an existing business process, and DMADV is used to create new product or process designs for predictable, defect-free performance.
DMAIC
Basic methodology consists of the following five steps:
- Define the process improvement goals that are consistent with customer demands and enterprise strategy.
- Measure the current process and collect relevant data for future comparison.
- Analyze to verify relationship and causality of factors. Determine what the relationship is, and attempt to ensure that all factors have been considered.
- Improve or optimize the process based upon the analysis using techniques like Design of Experiments.
- Control to ensure that any variances are corrected before they result in defects. Set up pilot runs to establish process capability, transition to production and thereafter continuously measure the process and institute control mechanisms.
Basic methodology consists of the following five steps:
- Define the goals of the design activity that are consistent with customer demands and enterprise strategy.
- Measure and identify CTQs (critical to qualities), product capabilities, production process capability, and risk assessments.
- Analyze to develop and design alternatives, create high-level design and evaluate design capability to select the best design.
- Design details, optimize the design, and plan for design verification. This phase may require simulations.
- Verify the design, set up pilot runs, implement production process and handover to process owners.
Implementation Roles
One of the key innovations of Six Sigma is the professionalizing of quality management functions. Prior to Six Sigma, Quality Management in practice was largely relegated to the production floor and to statisticians in a separate quality department. Six Sigma borrows martial arts ranking terminology to define a hierarchy (and career path) that cuts across all business functions and a promotion path straight into the executive suite.
Six Sigma identifies several key roles for its successful implementation.
- Executive Leadership includes CEO and other key top management team members. They are responsible for setting up a vision for Six Sigma implementation. They also empower the other role holders with the freedom and resources to explore new ideas for breakthrough improvements.
- Champions are responsible for the Six Sigma implementation across the organization in an integrated manner. The Executive Leadership draws them from the upper management. Champions also act as mentors to Black Belts. At GE this level of certification is now called "Quality Leader".
- Master Black Belts, identified by champions, act as in-house expert coaches for the organization on Six Sigma. They devote 100% of their time to Six Sigma. They assist champions and guide Black Belts and Green Belts. Apart from the usual rigor of statistics, their time is spent on ensuring integrated deployment of Six Sigma across various functions and departments.
- Experts This level of skill is used primarily within Aerospace and Defense Business Sectors. Experts work across company boundaries, improving services, processes, and products for their suppliers, their entire campuses, and for their customers. Raytheon Incorporated was one of the first companies to introduce Experts to their organizations. At Raytheon, Experts work not only across multiple sites, but across business divisions, incorporating lessons learned throughout the company.[citation needed]
- Black Belts operate under Master Black Belts to apply Six Sigma methodology to specific projects. They devote 100% of their time to Six Sigma. They primarily focus on Six Sigma project execution, whereas Champions and Master Black Belts focus on identifying projects/functions for Six Sigma.
- Green Belts are the employees who take up Six Sigma implementation along with their other job responsibilities. They operate under the guidance of Black Belts and support them in achieving the overall results.
- Yellow Belts are employees who have been trained in Six Sigma techniques as part of a corporate-wide initiative, but have not completed a Six Sigma project and are not expected to actively engage in quality improvement activities[10].