Six Sigma Basics

Six Sigma is the most effective methodology available for improving the performance of any organization by minimizing the defects in its products or services. Every error committed, has a cost associated to it in form of losing customers, redoing a task, replacing a part, waste time/material or losing efficiency.

The Six Sigma methodology was first endorsed at Motorola in the mid-1980s. The company was trying to devise a methodology that could measure defects at a granular level than previous methods and thus help in reducing these defects. This resulted in an astounding increase in the quality levels of several Motorola products, and the company received the inaugural Malcolm Baldrige National Quality Award in 1988. Motorola shared the Six Sigma secret openly, and soon various companies started reaping rewards. And by year 2003, total combined savings accumulated to over $100 billion.

Understanding the Sigma Scale: The Sigma scale is a universal measure of the performance of any business or organization. Sigma (σ) is a statistical term to represent standard deviation which is a measure of variation in a dataset. Higher sigma score indicates better performance or more precise results. In other words, if the output is defective sixty-nine percent of the time, it implies that the performance is One Sigma compliant. On the other hand if it is defective thirty-one percent of the time, it means that the performance is demonstrating Two Sigma compliance.

As mentioned in the table above, Six Sigma implies almost perfect output resulting in only 3.4 defects per million opportunities (DPMO).

DPMO: The term ‘defect’ can be explained as the non conformities present in the output that falls beyond the satisfactory customer limits. The number of defects present per million opportunities (DPMO) is used to determine as to which Sigma scale a particular process corresponds to. Most of the organizations around the world deliver results in the Three to Four Sigma band which implies that they are losing around a quarter of total revenue due to the presence of defects in their organizations.

Application of Six Sigma: DMAIC and DFSS are the elementary methodologies that exist for two potential scenarios

DMAIC: To modify an existing process or the application of DMAIC: This methodology (DMAIC) is required to modify an existing process and make it Six Sigma compliant, hence more efficient.
DMAIC refers to:

• Define the goals for process improvement in coherence with the customer’s demand and the organization’s strategies.
• Measure the current performance and amass relevant data for future
• Analyze the current setting and observe the relationship between key parameters and performance.
• Improve the process based on the analysis to further optimize the process.
• Control the parameters before they affect the outcome.

DFSS: To start a new process from scratch or the application of DFSS: When a new process is started, straight from scratch, such that it is Six Sigma compliant, the DFSS or Design For Six Sigma methodology is incorporated. It is sometimes considered as an offshoot of Six Sigma while other times, it is considered as an entirely different methodology. DFSS requires IDOV approach that refers to:

• Identify and define the process goals in consistence with the customer’s demands and industry standards.
• Design includes reckoning all the possible solutions and selecting the optimal solution.
• Optimize the performance by the application of advanced simulations and statistical modeling.
• Validate or verify the selected solution.

At times, DMAIC ends up in DFSS when the process under study requires a complete redesign to achieve the desired standards.

Implementation of Six Sigma: Six Sigma professionalized the quality management roles. Six Sigma has adopted martial arts ranking nomenclature to define the hierarchy that covers all kinds of business functions. Six Sigma has identified certain roles for its implementation. These designations define a promotion path.

• Executive Leadership refers to top management including the CEO. They are the visionaries who authorize other team members and provide them with resources for process improvement.
• Champions or Quality Leaders implement and integrate Six Sigma methodology throughout the organization. They are chosen from the upper management by the Executive Leadership. They also act as mentors to Black Belts.
• Master Black Belts, identified by Champions, are expert coaches on Six Sigma. They act as guide Black Belts and Green Belts and assist Champions to implement Six Sigma and integrate the methodology throughout the organization including all departments and their respective functions and processes.
• Black Belts operate under the guidance of Master Black Belts and their task is to apply Six Sigma methodology to various projects specified. Their primary focus is the execution of Six Sigma project, as against to Champions and Master Black Belts who primarily focus on identifying functions and goals for the Six Sigma project.
• Green Belts work on Six Sigma implementation along with other job responsibilities unlike Black Belts, Master Black Belts and Champions who devote 100% of their time on Six Sigma execution. They are guided by Black Belts and provide them support in achieving the desired results.
• Yellow Belts are employees who are trained in Six Sigma techniques, but have not practically applied their knowledge to a Six Sigma project.

1.5 Sigma Shift: It has been observed that the accuracy or efficiency of any process erodes with time. In other words, processes do not work as efficiently in long term as they do in short term i.e. the quality or the Sigma level is likely drop over a stretched period of time. Taking this drop in account, an empirical 1.5 Sigma shift is introduced in statistical calculations. If a process is Six Sigma compliant in a short run is likely to deliver 4.5 Sigma level outcomes. Therefore, the popular 3.4 DPMO in reality corresponds to 4.5 Sigma level viz. 6 Sigma minus 1.5 Sigma.

Why is Six Sigma Used?

• The quality of the product and the productivity of the company improve immensely.
• The number of possible defects per million opportunities reduces immensely. Thus, the quality of the product improves further.
• The result of any process is defined, based on collective data and facts rather than assumptions.
• The profit-level of the company increases immensely and thereby provides a growth in the corporate sector.
• It calls for a more integrated and correlated approach to solve the existing problem.
• Rather than adopting the conventional cost cutting method, it prefers removing costs that give no value to the customers.
• The net production cost incurred while manufacturing a product reduces.
• By reducing the number of defect, it provides the company a ray of hope for higher expectations.
• The need and expectations of the customers are met by providing them the same product with a better quality.
• The internal understanding between the departments increase, thereby the employees tend to be more aware of the techniques and strategies used for solving a particular problem.
• There is a better prospect of job satisfaction for employees, because of which, the internal communication within the organization increases.
• The production time spent while manufacturing a product decreases; thereby the delivery of the service is fast.
• The market value of the company improves.

The Other Side of Six Sigma: Even though the Six Sigma standard of 3.4 defects per million opportunities sounds fantastic, this quality standard may not be optimal for some processes. A process concerning a human being’s health may require a higher quality standard. On the other hand, certain other operation might work well with lower Sigma levels. There is no clear justification for choosing the number Six.

Because of this capriciousness, several Quality Managers do not rate Six Sigma methodology very highly.