What is Six Sigma?
What is Six Sigma And Why Is It Important for Improvement?
What is Six Sigma?
Six Sigma is the method that provides organizations with tools and techniques to improve the business process capability.
Using this disciplined and data-driven approach helps eliminate defects in the process.
The term was coined in 1986 by an engineer named Bill Smith while working with Motorola.
The method was later tailored for business strategy in 1995 by Jack Welch at GE. Since then, many organizations in several domains including leaders in manufacturing, IT, and healthcare have adopted this statistically-oriented approach.
In this article, first, we will explain a bit more about what Six Sigma is, and then we will dig into some examples:
What is Six Sigma - by the numbers?
Sigma, written as σ, is the Greek letter that signifies standard deviation.
A Six Sigma process would rate the following by the defects associated with the process.
For example, consider an event in which there are 1,000,000 opportunities, and there are only 3.4 defects.
In this instance, your project has achieved the Six Sigma level!
In statistical terms, a six sigma product results in a yield of 100% and a DPMO of 3.4.
DPMO signifies Defects Per 1 Million Opportunities.
A six sigma calculator can be used for calculation. For reference, the following is how DPMO and the Sigma level are correlated.
| Sigma Level | DPMO |
|---|---|
| 1 | 691,462 |
| 2 | 308,538 |
| 3 | 66,807 |
| 4 | 6,210 |
| 5 | 233 |
| 6 | 3.4 |
Advantages of Six Sigma
What is Six Sigma used for?
Process improvement!
As we can see, when the sigma value increases, the number of defects reduces and the process starts seeing improvements.
The project will automatically see many advantages as a result; namely:
- Performance improvement – Increased productivity
- Reduction in operational costs
- A decrease in process variation
- Improved quality in product
- Increase in profit due to the improvement in quality
- Efficient work processes, timelines, and milestones
- Happier clients and improved employee morale!
Methods – How do we do it?
The methods associated with Six Sigma are primarily DMAIC and DMADV.
DMAIC is associated with projects that have a goal to improve a particular process.
The phases in this method are:
- Define - The team works together and defines the system. This includes understanding the voice of the customer and their requirements.
- Measure - The team collects data associated with the scope of the project.
- Analyze – The team analyzes the data to identify the area of change to implement as they check for root causes of inefficiencies in the business process.
- Improve – The team implements this change to improve the process.
- Control – The team uses metrics to monitor the updated process.
DMADV is associated with the development of a new process.
Here, DMADV stands for Define, Measure, Analyze, Design, Verify.
These additional methods are as follows:
- Design – The team includes the plan for the approach selected.
- Verify – Seeking approval and validation of the design with the stakeholders.
To summarize, DMAIC is associated with the current process being addressed, thereby reducing defects.
It’s considered to be a reactive process and includes specific solutions.
DMADV is associated with a new design process and conceptually prevents defects as a proactive approach.
Six Sigma can be a way for your company to increase employee morale with a continuous improvement approach.
The more employees you have that are trained in Lean Six Sigma techniques, the higher the chance of success.
When management invites employees to bring forward their ideas and thoughts, and truly contribute, this increases the chance of positive change.
A great opportunity to get higher employee engagement in your business!
And become an industry leader.
Tools
Six Sigma measures the product quality, literally striving for perfection. We use powerful tools to help make this happen.
Different tools are associated with each phase.
Here is a sampling:
- Define phase – Affinity diagram, FMEA, Process mapping, Value stream mapping, The 5S, etc.
- Measure phase – Pareto chart, Histogram, etc.
- Analyze phase - The 5 Whys, Ishikawa Diagram, Regression Analysis, etc.
- Improve phase – Kaizen, Poka Yoke, etc.
- Control phase – SPC, Standardized work, etc.
Principles
The Six Sigma methodology is built on a strong foundation of five principles:
1. Always ensure focus on the customer’s requirements and goals.
2. Rely on data – Six Sigma is purely a data-driven approach. Use statistical analysis tools to help understand variations, identify the root cause of issues, etc.
3. From the perspective of the data, to continuously improve and eventually eliminate any variation, errors, and defects.
4. Involve all people concerned in the process - even if it is a cross-functional team.
5. Be flexible and thorough
How do you certify?
In order to get a Six Sigma certification, you will need to learn the tools and techniques associated with improving the process in question.
From there, a certified individual is confirmed to possess specific Six Sigma knowledge to help identify errors and defects in the process and is qualified to work towards eliminating them.
Perhaps you’ve asked yourself what is black belt six sigma?
One can be certified for the following levels:
- White Belt (the basic level)
- Yellow Belt
- Green Belt
- Black Belt
- Master Black Belt (the highest level)
The following are a few of the organizations that offer Six Sigma certifications and courses:
- American Society for Quality (ASQ).
- The International Association for Six Sigma Certification (IASSC)
A use case scenario example
A small business was doing well until their business started growing and they faced issues in the management of their accounting processes.
As their team grew, and their client base increased, the company experienced challenges in handling advanced pricing rules, more human error across the board, etc.
To help solve these issues and improve the process, the organization decided to apply the tools and techniques of the Six Sigma approach. They adopted the DMAIC method and discovered the root cause of the issue, for which there was a relatively simple solution.
All that needed to be implemented was an efficient accounting software to manage their growing business instead of the MS-Excel that no longer provided adequate analysis.
The change they had to make was as straightforward as that!
Accordingly, they then chose Quickbooks as their accounting software. The personnel in this department were easily capable of learning this new process. The Quickbooks training was well planned, resulting in quick and positive results.
The improvements in the process directly addressed the challenges that the company had experienced through rapid growth.
So What Is Six Sigma? Conclusion
In understanding better what Six Sigma is, we can certainly see that Six Sigma drives change!
What slows down your business performance?
When projects move towards Six Sigma goals, there is a resulting higher level of efficiency in the work environment. This is due to reduced variation in the process and decreased defects.
Lastly, thanks to a magnified customer focus-driven approach, the updated process will also eventually increase customer satisfaction.
After all, the customer is king. And implementing this approach can turn a business around!
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Dan Martin has vast experience in Six Sigma techniques, building teams and coaching others to foster innovation and solve real-time business problems. He has hands-on experience in digital marketing since 2007. Dan also enjoys photography and travelling.
