Overview of Six Sigma

Six Sigma is one of the most popular quality methods lately. It is the rating that signifies “best in class”, with only 3.4 defects per million units or operations (DPMO).

Its concept works and results in remarkable and tangible quality improvements when implemented wisely. Today, Six Sigma processes are being executed in a vast array of organizations and in a wide variety of functions.

Fueled by its success at large companies such as Motorola, General Electric, Sony, and Allied Signal, the methodology is proving to be much more than just a quality initiative. Why are these large companies embracing Six Sigma? What makes this methodology different from the others?

The goal of Six Sigma is not to achieve six sigma levels of quality, but to improve profitability.

 Prior to Six Sigma, improvements brought about by quality programs, such as Total Quality Management (TQM), usually had no visible impact on a company's net income.

In general, the consequences of immeasurable improvement and invisible impact caused these quality programs gradually to become the fad of the moment.

In 1891, British physicist Lord Kelvin wrote :

When you can measure what you are speaking about, and express it in numbers, you know something about it.

Mikel Harry, a noted Six Sigma authority, extends the thought as :

we donot know what we donot know;

we canot act on what we donot know;

we would not know until we search;

we will not search for what we donot question;

we donot question what we donot measure.

Both imply that if you failed to quantify the results of what you were doing, in a way, it means that you might not understand what you were really doing.

Hence, organizations that are unable to track the impact of quality improvements on profitability can not know what changes need to be made to improve their profit margins.

And most importantly, profitability is the natural concern of management in organizations. If a quality initiative failed to present its quantitative bottom-line value to the management, it will lose the management's commitment to it and, eventually, fade away.

In contrast with other quality initiatives, Six Sigma recognizes that there is a direct correlation between the number of product defects, wasted operating costs, and the level of customer satisfaction.

In the short term, Six Sigma is a method to eliminate defects and the opportunity for defects. It utilizes a statistical unit of measurement to measure the capability of the process, then achieve defect free performance, and ultimately increase the bottom-line and customer satisfaction.

How Does Six Sigma Work

Six Sigma is a disciplined and quantitative approach involving setting up a system and process for the improvement of defined metrics in manufacturing, service, or financial processes.

The approach drives the overall process of selecting the right projects based on an organization's business goals and selecting and training the right people to obtain the results.

Improvement projects follow a disciplined process defined by a system of five macro phases: Define, Measure, Analyze, Improve, Control (DMAIC).

Define Phase

The preliminary step, define, relates to the appropriate selection of projects and problem definition. The problem must be chronic and impact ful.

Measure Phase

Measure the existing systems. Establish valid and reliable metrics to help monitor progress towards the project goals. Customer expectations are defined to determine “out of specification” conditions.

Analyze Phase

Analyze the system to identify ways to eliminate the gap between the current performance of the system or process and the desired goal.

In this phase, project teams explore underlying reasons for defects. They use statistical analysis to examine potential variables affecting the outcome and seek to identify the most significant root causes. Then, they develop a prioritized list of factors influencing the desired outcome.

Improve Phase

In this phase, project teams seek the optimal solution and develop and test a plan of action for implementing and confirming the solution. The process is modified and the outcome is measured to determine whether the revised method produces results within customer expectations.

Control Phase

Control the new system. Ongoing measures are implemented to keep the problem from recurring. Institutionalize the improved system by modifying policies, procedures, operating instructions, and other management systems.

Statistical Meaning of Six Sigma

The term sigma is a Greek alphabet letter (σ) used to describe variability.  In Six Sigma, the common measurement index is DPMO (Defects Per Million Operations) and can include anything from a component, piece of material, or line of code, to an administrative form, time frame or distance.

A sigma quality level offers an indicator of how often defects are likely to occur, where a higher sigma quality level indicates a process that is less likely to create defects.

Consequently, as sigma level of quality increases, product reliability improves, the need for testing and inspection diminishes, work in progress declines, cycle time goes down, costs go down, and customer satisfaction goes up.

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