Introduction to Six-Sigma methodology
Six Sigma (6σ) has emerged over time, as a set of techniques and tools for process improvement. Initially introduced by Bill Smith while working at Motorola in 1980, Jack Welch adapted it to business strategy at General Electric in 1995.
Statistically, a six sigma process has a probability of 99.99966% acceptance or defect-free occurrences. The rate is also expressed as 3.4 defects per million opportunities (DPMO).
In essence, Six Sigma stands for a holistic set of project management approach, tools, techniques, data management, process / systemic improvement by objectives etc., towards a very high rate of success or minuscule rate of nonconformance in the business processes.
Six Sigma strategy seeks to improve the quality of the output of a process by identifying and removing the assignable and chance causes of defects and minimizing variability in manufacturing / service or business processes. It uses a set of quality management methods, mainly empirical, statistical methods, and creates a special infrastructure of people within the organization who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence and has specific value targets, for example: reduce process cycle time, reduce pollution, reduce costs, increase customer satisfaction, and increase profits.
In comparison to various prevailing quality improvement approaches, Six Sigma has remained very popular owing to:
- A clear focus on achieving measurable and quantifiable financial returns from any Six Sigma project
- An increased emphasis on strong and passionate management leadership and support
- A clear commitment to making decisions on the basis of verifiable data and statistical methods, rather than assumptions and guesswork
Six Sigma philosophy highlights:
- Continuous efforts to achieve stable and predictable process results (e.g. by reducing process variation from assignable / chance causes) are of vital importance to business success
- Manufacturing, service and business processes have characteristics that can be defined, measured, analyzed, improved, and controlled
- Achieving sustained quality improvement requires commitment from the entire organization, particularly from top-level management
The approach follows the Deming Cycle of Plan-Do-Study-Act (PDSA). Consequently, Six Sigma concepts address Define, Measure, Analyze, Improve, Control (DMAIC) steps for project management in business process improvements:
- Define the system, the voice of the customer and their requirements, and the project goals, specifically
- Measure key aspects of the current process and collect relevant data; calculate the 'as-is' Process Capability
- Analyze the data to investigate and verify cause-and-effect relationships. Determine what the relationships are, and attempt to ensure that all factors have been considered. Seek out root cause of the defect under investigation
- Improve or optimize the current process based upon data analysis using techniques such as design of experiments, poka yoke or mistake proofing, and standard work to create a new, futuristic process. Set up pilot runs to establish process capability
- Control the new, improved process to ensure that any deviations from the target are corrected before they result in defects. Implement control systems such as statistical process control, production boards, visual workplaces, and continuously monitor the process. This process is repeated until the desired quality level is obtained.
Creating new product or process designs follows Define, Measure, Analyze, Design, Verify (DMADV) steps:
- Define design goals that are consistent with customer demands and the enterprise strategy
- Measure and identify CTQs (characteristics that are Critical To Quality), measure product capabilities, production process capability, and measure risks
- Analyze to develop and design alternatives
- Design an improved alternative, best suited per analysis in the previous step
- Verify the design, set up pilot runs, implement the production process and hand it over to the process owners
Six Sigma ideas are also combined with lean manufacturing concepts to create a methodology named Lean Six Sigma – with a strong objective of minimizing wastes / defects, process flow design for minimum variation etc. GE, Accenture, Verizon, GENPACT, IBM are known practitioners of Lean Six Sigma.
International standards such as ISO 13053, ISO 18404 provide guidance on Six Sigma and related aspects. Several institutions and Consultants have developed implementation and self-certification programmes based on Six Sigma.
As with other strategic initiatives, the success of Six Sigma is extremely reliant on top management leadership, organizational culture, awareness / competence and data based decision making. In the right environment, organizations from the Manufacturing, Engineering and Construction, Finance, Supply chain, Healthcare sectors have found Six Sigma an effective business process improvement methodology.