Definitions, Tools & Techniques:
What is Six Sigma?
Six Sigma is a rigorous and structured management approach that aims at developing and delivering near-perfect products and services.
Initially set as a manufacturing goal towards zero defect, over time, Six Sigma has evolved into a management philosophy as more service industries adopt the approach. Today, it is widely adopted as a management system and business strategy.
Sigma is a statistical term that represents how far a given process deviates from perfection. It is used as a measure of process capability.
The core idea behind Six Sigma is that if we can measure the "defects" in a process, we can adopt a systematic approach to eliminate them and get as close to "zero defects" as possible.
When a process operates at a Six Sigma level, the deviation is so small that the resulting products and services are 99.9997% defect free or no more than 3.4 defects per million opportunities (DPMO). An "opportunity" is defined as a chance for non-conformance, or not meeting the required specifications. This means we need to be nearly flawless in executing our key business processes.
While Six Sigma corresponds to being 99.9997% defect free, not all business processes need to attain this level of performance. Organizations can also use the Six Sigma approach to identify top opportunities with the highest value and then focus their improvement efforts there.
*DPMO = Defects per million opportunities
What is the difference between Lean & Six Sigma?
Lean and Six Sigma are management philosophies for eliminating productivity loss and increasing customer satisfaction. They are complementary to each other and are sometimes combined together as Lean Six Sigma (or Lean Sigma) to solve problems where speed and quality are critically important.
Lean focuses on the elimination of waste to improve speed and customer value.
Six Sigma focuses on the reduction of variability to improve quality and customer satisfaction.
Benefits of Six Sigma
One of the distinguishing features of Six Sigma from other approaches is a clear focus on achieving bottom-line results within a relatively short period of time.
The benefits of Six Sigma are many. They include the following:
- Defining a measurable way to track performance improvements
- Focusing our attention on process management at all levels of the organization
- Improving customer relationships by addressing “defects”
- Improving the efficiency and effectiveness of processes by aligning them with customers’ needs
After seeing the huge financial successes at Motorola, GE, Caterpilla, American Express, Bank of America and other early adopters of Six Sigma management, many organizations world-wide have now instituted Six Sigma management programs.
Six Sigma Methodologies
Six Sigma projects follow two methodologies which are based on the Plan-Do-Check-Act cycle. These methodologies, comprised five phases each, bear the acronyms DMAIC and DMADV (or DFSS). DMAIC stands for Define-Measure-Analyze-Improve-Control, wheras DMADV stands for Define-Measure-Analyze-Design-Verify. DFSS stands for Design for Six Sigma.
- DMAIC is used for projects aimed at improving an existing business process.
- DMADV is used for projects aimed at creating new product or process designs.
The DMAIC project methodology has five phases and are described as follows:
Define - Define the project goals and customer (internal and external) deliverables
Measure - Measure the process to determine current performance
Analyze - Analyze and determine the root cause(s) of the defects
Improve - Improve the process by eliminating defects
Control - Control future process performance
"Speed is everything. It is the indispensable ingredient in competitiveness."