Modern firms compete fiercely in today’s fast-paced, international commercial world. In this environment, every competitive edge counts, regularly prompting business managers to seek new management tools, strategies, and leadership approaches. However, it may not be a new methodology that gives the best solution. Instead, as companies fine-tune their processes for optimal efficiency and work to maintain superior quality standards, a Six Sigma approach might be the ticket for success. Six Sigma is a set of quality-control tools businesses can use to eliminate defects and improve processes to boost their profits. It was created by a scientist in the 1980s while working at Motorola. This blog on what is Six Sigma? Will provide you with an extensive description of six sigma.
First, let us talk about the history of Six Sigma.
History of Six Sigma
Today, Six Sigma has a remarkable track record of improving processes with its diverse set of tools and techniques. Six Sigma (6?) is a collection of tools and techniques for process improvement. It was developed by American engineer Bill Smith while working at Motorola in 1986. A six sigma process is one in which 99.99966% of all opportunities to generate some part feature are statistically expected to be free of defects. Sigma Belts – individuals trained in some or all aspects of six sigma – are in high demand by companies looking for individuals to improve their business performance. However, not many people are proficient in the origins of the methodology they rely upon when their business operations are underperforming.
Six Sigma is a methodology that focuses on reducing defects and variation of a process by focusing on the process customer. Six Sigma has its underlying foundations in Statistical Process Control (SPC) and Total Quality Management (TQM) (TQM). It has been referred to as lean six sigma since the late 1990s when it adopted many lean manufacturing ideas created by the Toyota Production System (TPS). Moreover, Six Sigma has grown in popularity over the years, from mainstream manufacturers like Maytag and Allied Signal to industry-leading service providers like GEICO, Best Buy, and Xerox (Bright Hub Inc., 2010). The United States government also uses six sigma across all military branches. DoD contractors (Northrop Grumman, Boeing, Lockheed Martin, etc.) must illustrate six sigma proficiency to bid for government contracts. The breakdown of the world financial markets in 2008 also brought six sigma methodology into the mortgage, banking, and healthcare industries.
Before going to the depth of the topic, first, we need to understand the definition of six Sigma.
What is Six Sigma?
The name comes from the Greek symbol “sigma” or “?,” which defines the deviation from the mean in statistics. Six Sigma is a collection of management tools and techniques intended to improve business by decreasing the likelihood of error. It defines various techniques and management tools to make business processes more efficient and effective. In addition, it provides statistical tools to eliminate defects, identify the cause of the error, and reduce the possibilities of error. Thus, six sigma fosters an environment of continuous process improvement, enabling businesses to offer better products and services to customers.
Six Sigma can be used in any process in any industry to create a management system for identifying errors and eliminating them. It outlines methods to improve the efficiency of business structure and quality of processes, enhancing the business’s profitability. The methodology provides a high level of quality that makes every attempt to reach perfection in products or services sold by a company. In addition, this method will describe quantitatively how processes are performing. Simply put, a defect is anything that is outside customer specifications. This popular tactic has evolved and is now commonly used by the business world.
We got the definition of six sigma. Now, let us try to understand the six sigma methodology?Six Sigma methodology
Six Sigma is an innovative and flexible set of methodologies geared toward improving the efficiency and effectiveness of corporate processes. It uses two different methodologies, DMAIC and DMADV, as lenses to examine and address complementary aspects of business processes. The DMAIC and the DMADV distinctions aim to view different business sectors simultaneously but address them separately. Despite unique differences, the methodologies overlap during the evaluation process and share the same end goal – improvement of business processes. Each methodology has its guidelines and goals to improve business processes through data collection and statistical tools.
DMAIC
Six Sigma uses a methodology called DMAIC, which stands for define, measure, analyze, improve, and control. It is a statistically driven methodology used to improve, optimize, and stabilize business processes. Six Sigma uses another methodology called DMADV, which designs or redesigns different product manufacturing or service delivery processes. Following are the steps of DMAIC:
Define
This step motives to explain clearly the business problem, the target, potential resources, project scope, and timeline of the high-level project. But, first, you need to identify what you currently know, set goals for your business, and assemble the project team.
Measure
The essential data is identified and collected in this step. First, the initial metrics of the situation are measured. These metrics can demonstrate what may cause the problem, provide insights to the team for understanding the full picture, and assist in setting the process performance benchmarks.
Analyze
In this step, the team determines the root cause of process errors. To achieve that, each input is separated and tested as the source of the problem during analysis.
Improve
This step targets to develop the process performance. After the analysis step, possible solutions are considered and implemented to eliminate the errors.
Control
The group adds controls to the process to guarantee that the solution works and the process doesn’t become ineffective once more.
DMADV
DMADV stands for define, measure, analyze, design, and verify. This approach utilizes Six Sigma when existing processes do not fulfill customer requirements, even after advancement, or when the implementation of new techniques is essential. Following are the steps of DMADV:
Define
The goals of the first phase are to identify the purpose of the project, process, or service, to identify and then set realistic and measurable goals as seen from the perspectives of the organization and the stakeholders, to create the schedule and guidelines for the review and to identify and assess potential risks.
Measure
The next step in DMADV is Measure. This step defines what the customer wants to create a specification. The specification measurably defines the product or service, allowing data to be collected and compared with the specified requirements. Above all, this is essential for ensuring the final product meets the customer’s needs.
Analyze
At this stage, the proposed process or product is analyzed and studied to determine better ways to achieve the desired results. Areas that need adjustment or improvement, both in the product and the process of making the product, are identified. A prototype may be built at this stage and analyzed. Moreover, the purpose of this step is to come up with alternatives, analyze those alternatives, and incorporate those alternatives that improve the process or product.
Design
This stage of DMADV includes both a detailed and high-level design for the selected alternative. First, the design elements are prioritized, and a high-level design is developed. Once this step is complete, a more detailed model will be prototyped to identify where errors may occur and make necessary modifications.
Verify
The final step involves verifying that the result meets or exceeds the customer’s requirements. This includes verifying the product is being made as it is apparent to be made and whether it meets the specification’s requirements. In addition, this is an ongoing process. Customer feedback should encourage and incorporate into future designs even after release. Above all, the desired result is a product that perfectly meets the customer’s requirements and desires.
Now, let us grab some ideas on the importance of six sigma in the next segment.
Importance of Six Sigma
Since the 1980s, the six sigma methodology has become a well-known technique broadly applied in many industries. Six Sigma is a powerful solution to understanding actual processes and reducing possible errors in highly complex situations, considering today’s complex processes. The following are the main reasons why applying the six sigma methodology to your company is critical right now:
1. Understanding the full picture of processes
While six sigma focuses on decreasing the deviation in processes, it is a data-driven approach that empowers businesses to measure their performance metrics to understand processes. With the implementation of new methodologies and updates in procedures, companies might not be fully aware of their “actual” processes. Even if they know what their processes should look like, they need to have an “as-is” picture of processes that must accomplish by data-driven analysis. Moreover, six sigma uses increasing data to help businesses gain insights into their processes. These insights allow them to take proper action to improve process performance.
2. Mapping or flowcharting of processes
Six sigma uses process mapping, which it defines as a flowcharting process to document a particular business process. Documentation includes different business processes like employee roles and decision points in overall work performance required for meeting specific client needs. In addition, these flowcharts use to make improvement suggestions.
3. Elimination of variation and waste
After identifying improvement ideas, six sigma techniques can eliminate waste and variation in business processes. Waste is characterized as anything that doesn’t help produce the service or product required to be delivered to a customer.
4. Standardized processes
The increased complexity of today’s systems allows for more diversity among similar activities. This circumstance makes tracking business performance more difficult and leads to other errors. Businesses keep their complex processes standardizing the six sigma technique, even if new integrations and requirements are made to procedures. Companies will eliminate errors when doing their activities due to standardization.
5. Reduced Defects
One of the reasons why the implementation of six sigma is significant is that it helps reduce defects. Using six sigma techniques, employees can identify problem areas and recurring issues that affect the overall quality expectation or product.
6. Continuous improvement
In light of today’s fast-paced business tactics, businesses should continuously enhance their performance. To accomplish so, business executives must first have complete control over their processes at all times and be aware of areas for improvement, thanks to real-time data. Six Sigma is a data-driven methodology for detecting problems and bottlenecks in processes and assisting businesses in continually improving their performance.
Disadvantages of Six Sigma
Following are the main disadvantages/limitations of six Sigma:
- The concept of six sigma is a complicated and well-defined ideology. It makes it difficult for managers with only a rudimentary understanding of management to comprehend it adequately
- The approach presents several changes that a business needs to implement effectively. This increases bureaucracy and rigor in the systems of the business
- Six Sigma requires adequate attention and commitment from the management of the company. As a result, it becomes difficult for the company’s management to pay attention to other signs that may not be sent under this approach or are special to a given organization’s commercial environment.
- Six Sigma necessitates a considerable amount of resources, both human and financial. Due to high costs, it may become difficult for small businesses to implement it. However, such businesses can either make a partnership arrangement with larger businesses already implementing the system or outsource the function
- A wide range of tools can implement six sigma in business. Selecting the most relevant tool for a particular business can become difficult
Next, we will move towards the principles of six sigma.
Principles of Six Sigma
The perception of Six Sigma has a simple aim– delivering near-perfect goods and services for business transformation for optimal customer satisfaction (CX). Experts recommend that you keep these five key Lean leadership principles in mind to help ensure the success of your six sigma project. In addition, it achieves the goal through a two-pronged approach: identifying the problem and solving the problem. Six Sigma has its establishments in five key principles:
Focuses on Customer Requirements
The initial phase in the six sigma process is defining the “quality” from the customers’ point of view. Every customer defines quality differently. A business requires to measure quality in a similar way its customers do. Further, addressing the requirements of the customer business can define the quality of the customer.
Uses data to determine the variation in the process
There are two types of variations: special cause and natural variations. External factors cause special cause variation. Natural variation is the random variation present in the process. Six Sigma motives to reduce the special cause variation. To determine the root cause of the variation, understating the process is necessary. Therefore, the understanding of the process should be profound and extensive. It is impossible to get knowledge about the process without first studying it. Therefore, it is critical to have complete information about the process to comprehend it fully.
Improves the procedure regularly to eliminate variation
Once the issue has been found, alter the process to eliminate variance and consequently defects. Next, eliminate any steps in the process that do not bring value to the consumer. Moreover, if the value stream does not show the source of the problem, tools can assist in identifying outliers and trouble areas.
Involves people from various levels of management and process
Six Sigma forms the foundation of good teams. Good teams comprise people who take responsibility for the Six Sigma processes. The people on the team need training in six sigma’s methods. In addition, forming a cross-functional team with people from different backgrounds will help identify variation.
Ensures a Responsive and Flexible Ecosystem
The bottom line of six sigma is business transformation and change. An inefficient process eliminates and changes the work practice and employee approach. A strong culture of flexibility and responsiveness to changes in procedures can ensure streamlined project implementation. In addition, the people and departments adapt to change with ease, so processes will design for quick and seamless adoption to facilitate this. Ultimately, the company with an eye fixed on the data examines the bottom line periodically, adjusts its processes where necessary, and can gain a competitive edge.
Six Sigma Techniques
The Six Sigma methodology uses statistical and data analysis tools such as process mapping, design, proven qualitative and quantitative techniques to accomplish the proper outcome. In addition, there are many helpful qualitative and quantitative six sigma techniques in the six sigma toolbox. The following are some of the techniques in six sigma:
1. Brainstorming
Brainstorming is the important process of any problem-solving method and frequently utilizes the “improve” phase of the DMAIC methodology. It is a significant process before anyone starts using any tools. In addition, it involves bouncing ideas and creatively approaching a problem through intensive freewheeling group discussions.
2. Voice of the Customer
This is the process for capturing the “voice of the customer” or customer feedback by either internal or external means. The technique aims at giving the customer the best products and services. It captures the changing requirements of the customer through direct and indirect methods. The voice of the customer technique utilizes the “define’ phase of the DMAIC method, typically to further define the cause of a problem
3. Root Cause Analysis/The 5 Whys
This technique helps get to the root cause of the problems under consideration. It utilizes the “analyze” phase of the DMAIC cycle. The question “why” is told directly and again in the 5 Whys method, finally leading up to the core issue. Although “five” is a good rule of thumb, the actual number of questions can be more or less whatever it takes to gain clarity.
4. The 5S system
This technique is based on the Japanese principle of workplace energies. The 5S system aims to remove waste and eliminate bottlenecks from inefficient tools, equipment, or resources in the workplace. The five steps employed are Seiri (Sort), Seiton (Set In Order), Seiso (Shine), Seiketsu (Standardize), and Shitsuke (Sustain).
5. Kaizen (Continuous Improvement)
The Kaizen technique is a dominant strategy that powers a continuous engine for business improvement. It is the practice of continuously monitoring, identifying, and executing improvements. This is a particularly good practice for the manufacturing sector. When even the tiniest inefficiency is seen, collective and continual improvements assure waste reduction and rapid change.
6. Benchmarking
Benchmarking is a technique that employs a set standard of measurement. It involves comparing with other businesses to attain an independent appraisal of the given situation. Following are the things benchmarking may include:
- Comparing key processes or departments inside a business (internal benchmarking)
- Contrasting similar workspaces or functions with industry pioneers (functional benchmarking)
- Comparing identical products and services with that of contenders (competitive benchmarking)
7. Poka-yoke (Mistake Proofing)
This technique’s name derives from the Japanese phrase meaning “to avoid errors” and involves preventing the chance of faults from occurring. In the poka-yoke technique, employees spot and eliminate inefficiencies and human defects during the manufacturing process.
8. Value Stream Mapping
The value stream mapping strategy charts the current flow of materials and information to design a future project. The goal is to remove waste and failures in the value stream and create leaner operations. Above all, it identifies seven types of waste and three types of waste removal operations.
Now, we’ll discuss six sigma tools.
Six Sigma Tools
Six Sigma tools are defined as the problem-solving tools used to support Six Sigma and other process improvement efforts. The Six Sigma professional uses qualitative and quantitative techniques to drive process improvement. Although the tools themselves are not unique, they will apply and integrate as a system. In conclusion, some of the tools commonly used in Six Sigma are:
1. Cause and Effect Analysis
The cause-and-effect diagram is also known as the fishbone diagram because, on paper, it takes the shape of a fish skeleton. Cause-and-effect diagrams are tools that Six Sigma professionals use to obtain the perspectives of individual members of a project team. The cause-and-effect diagram is a graphical brainstorming tool used to help capture the possible causes. In addition, this tool can be in the analysis stage to determine the underlying causes of a problem or identify potential failure modes in the improvement stage.
2. Flow Chart
A flowchart (flow diagram) is a graphical tool that depicts distinct steps of a process in sequential order. The basic concept is to include all of the important steps to the process. Also, flowcharts are frequently overlaid with performance data.
3. Pareto Chart
A Pareto chart is a way of finding out the most common factors that lead to an error. To conduct a graphical analysis of the data, the Pareto Chart can help define the significant drivers for the employed method and thus prioritize the behavior in line with it. Pareto charts are a valuable tool in project management, notably in Six Sigma.
4. Histogram
A Histogram is a graph that represents the frequency (count) of items falling into different categories of a given population or sample. It looks similar to a bar graph. It has vertical bars with different heights (The height of the bar signifying the frequency of that group). However, each group has a corresponding bar representing it in the graph. A Histogram can mirror the voice of the process.
5. Check Sheet
The Check Sheet is a simple document useful for collecting data in real-time and at the data source. A document is often a blank form built for quick, easy, and efficient recording of accurate quantitative or qualitative data.
6. Scatter Plot
A scatter plot (scatter chart or scatter graph) is a mathematical diagram displaying values for two variables for a data set and making predictions based on the data. In addition, it consists of an X-axis (the horizontal axis), a Y-axis (the vertical axis), and a series of dots. Each dot’s position represents its X and Y-axis values. Therefore, it’s an awesome tool with the ability to show nonlinear relationships between variables.
7. Control Chart
A Six Sigma control chart is a simple yet powerful tool for evaluating the stability of a process or operation over time. Creating a control chart requires a graph covering a period, a centerline that shows the results of a process during that time, and upper and lower control limits that indicate whether process variation is within an accepted range.
Now, we’ll discuss a case study of how companies implemented six sigma in their organization.
Case Study
Six Sigma best practices are designed to assist companies in reducing the number of defects in business processes. Companies of any size can benefit enormously from Six Sigma strategies, and the ones who decide the outcome is worth the commitment and sacrifice can be highly successful. Six Sigma can effectively manufacture high-quality products. Many industries such as logistics, IT, healthcare, construction, government, aerospace, and aviation deploy Six Sigma. In addition, it has proven to be a successful tool for organizations seeking to identify problems, remove roots of errors or failures, and improve their business processes.
Case Study 1: 3M Company
The 3M Company is an American multinational conglomerate corporation operating in worker safety, U.S. health care, and consumer goods. It is the world’s 3rd most innovative technology company. Six Sigma specializes in management strategy methods that have evolved and modernized since its origin in 1986. It focuses on proactively deterring issues in production and corporate operations. In addition, McNerney grew 3M other enterprises such as Global Sourcing, 3m Acceleration, Productivity, and Indirect Cost Control. As a result, 3M began 2005 with over 30,000 employees Six Sigma certified, with a minimum Green Belt training for all technical and sales staff. Combining the Six Sigma methodology with strong leadership, 3M consistently practices an ever-improving production process with increasing profits to match.
Case Study 2: General Electric
General Electric is an American multinational conglomerate company that operates through various segments, including aviation, healthcare, power, renewable energy, digital industry, lighting and oil, gas, etc. A study conducted on GE subsidiaries showed positive enhancements in the companies using Six Sigma problem-solving frameworks such as DMAIC, DFSS, DMADV, and statistical tools and software, including Minitab and Crystal Ball. General Electric, perhaps the best company executing Six Sigma, has assessed benefits on order for $10 billion during the initial five years of execution.
Conclusion
Six Sigma is a methodology intended to carry perfection to the process of product or service delivery. It is a collection of quality management tools and theories that use a data-driven approach to remove deficiencies. So, Six Sigma has been a method that has been around for quite a time now. It has been helpful for some companies, and it does not apply to others. New innovative approaches are now challenging, but it remains a good way to improve processes.
Invensis Learning is one of the world’s leading and best professional certification training providers. For professionals interested in discovering more about six sigma methodology play out in a variety of business contexts or how they could make an impact for your business, consider pursuing additional education in the field of Six Sigma. Therefore, you need to get a six sigma certification at the earliest to start your career. Invensis Learning offers some of the popular quality management courses that individuals and enterprise teams can take up are: Lean Six Sigma Green Belt Certification Training, Lean Six Sigma Black Belt Certification Training, Lean Six Sigma Yellow Belt Certification Training, Lean Fundamentals Training, RCA through Six Sigma Training, and Six Sigma Awareness Certification Training.
