“Six Sigma” as you already know, is an approach/methodology adopted by companies to reduce defects thereby improves revenue and increase customer satisfaction. In this article we will look at some key facts that you should know about ‘Six Sigma’. Some points may be repeated, but it is for the purpose of reiteration.
1. Six Sigma is considered as a philosophy: It establishes any process as a relationship between an Output variable ‘y’ and many input variables ‘x’s. The entire philosophy revolves around identifying, analyzing and controlling the various ‘x’s to manage ‘y’ at the desired range.
y=f(xi)
Where, y is the output variable or the process result and xi are the input variables that affect the performance of the process y.
The number of input variables will differ depending on the nature of the process and output variable.
2. ‘Six Sigma’ is a set of Tools: This approach defines Six Sigma as a set of Statistical and Management tools, that when applied together helps a process eliminate variation and reduce defects. Some of the tools include Statistical Process Control, Control charts, FMEA, Process Mapping, Design of Experiments, Accelerated Life Testing, Hypothesis Testing etc.
3. ‘Six Sigma’ is a Methodology: It considers all work as processes that can be defined, measured, analyzed, improved and controlled. It employs the two methods: DMAIC – Define, Measure, Analyze, Improve and Control for process improvement & correction and DMADV – Define, Measure, Analyze, Design and Validate for process design and re-engineering. Basically Six Sigma does the below three actions to achieve its results: Process improvement, Process design & re-design and process control.
4. ‘Six Sigma’ is a Metric: Worldwide, Six sigma performance means lesser than or equal to 3.4 defects per million opportunities (DPMO). The below table is very important in understanding Six Sigma:
The Six Sigma Levels and their corresponding defects per million opportunities (DPMO)
For the purpose achieving process control, it uses Normal distribution and standard deviation. Any output variable is plotted in a Normal distribution marking 3 standard Deviation units from it central point (mean). A typical ‘Six Sigma’ process has 99.9997% of its values between +3σ and -3σ limits.
5. ‘Six Sigma’ follows factual based process improvement techniques. Anything that should be improved is defined in a measurable format and then analyzed for improvement. For this purpose it employs techniques and concepts from Probability, Statistics, and Operations Research etc. It inculcates the culture of “Statistical Thinking” and “Objective (or Data based) decision Making” within the organization.
6. ‘Six Sigma’ follows a project based approach. Each problem or a related group of problems affecting a single output is defined as a project initiated for improvement. Several such projects are initiated and managed for baseline improvement of a product/service line or an organization. Each project is run by a cross functional team that are trained on multiple aspects including Six Sigma concepts.
7. ‘Six Sigma’ requires a very strong and consistent support from Top management to drive it as a management strategy. Otherwise there is a huge risk or opportunity loss of Six sigma being shrunk as a small scale process improvement tool.
8. ‘Six Sigma’ follows a rigid Organization structure or role definition apart from the existing Organization structure. They are Project Champion, Master Black belt, Black Belt and Green belt. The roles of these designations and their contribution towards six sigma projects are predefined.
9. The benefits of Six Sigma are significant!
Some of them are:
- Improved Customer Satisfaction levels
- Increase in Revenue
- Reduction in cost
- Reduced Process variation
- Boost in Employee morale and increased participation and ownership
10. Six Sigma aims to convert all the benefits into tangible ones and link or convert them to monetary savings. This is why many organizations are employing Six Sigma as their management strategy and reaping unimaginable success in terms of Revenue, market share and competitive advantage.