The roots of Six Sigma as a measurement standard go back to Carl Frederick Gauss (1777-1885) who introduced the concept of normal curve. Six Sigma as a measurement standard in product variation can be traced back to the 1920’s when Walter Shewhart showed that three sigma, from the mean is the point where a process requires correction. As history would seem to have it, the beginnings of Six Sigma really come from 1979 when an exasperated Motorola executive named Art Sundry said, at a meeting, “The real problem at Motorola is that our quality stinks! “.
Apparently, this statement led to series of activities that in turn led to the discovery of the crucial correlation between higher quality and lower development costs in manufacturing products of all kinds. The problem was that the common thought was that quality initiatives simply cost too much money. What Motorola realized is that if these initiatives were done right, improving quality would actually reduce costs. Motorola decided to take the approach that high quality products should actually cost less to produce. Motorola reasoned that the highest quality producer should be the lowest cost producer.
THEORETICAL ANALYSIS OF THE CONCEPT OF SIX-SIGMA What is Six-Sigma Six-Sigma has at least three different meanings depending upon the context; there is not one answer to what is Six-Sigma. The first answer to what is Six-Sigma is that it is a management philosophy. Six-Sigma is a customer based approach realizing that defects are expensive. Fewer defects mean lower costs and improved customer loyalty. The lowest cost, high value producer is the most competitive provider of goods and services. Six-Sigma is a way to achieve strategic business results.
Another answer to what is Six-sigma is Six-Sigma is a statistic. Six-Sigma processes will produce less than 3,4 defects or mistakes per million opportunities. Many successful six sigma projects do not achieve a 3,4 defects or less. That just indicates that there is still opportunity. A third answer to what is six sigma is that six sigma is a process. To implement the Six-Sigma management philosophy and achieve the Six-Sigma level of 3,4 defects per million opportunities or less there is a process that is used. The Six-Sigma process is define, measure, analyze, improve and control DMAIC.
When answering the question what is Six-Sigma we must understand that Six-Sigma is not a set of new or unknown tools. Six-Sigma tools and techniques all are found in total quality management. Six-Sigma is the application of the tools on selected important projects at the appropriate time. Statistical Six-Sigma Definition – How does it work? What does it mean to be “Six Sigma”? Six-Sigma at many organizations simply means a measure of quality that strives for near perfection. But the statistical implications of a Six Sigma program go well beyond the qualitative eradication of customer perceptible defects.
It’s a methodology that is well rooted in mathematics and statistics. The objective of Six Sigma Quality is to reduce process output variation so that +six standard deviations lie between the mean and the nearest specification limit. This will allow no more than 3,4 defect Parts Per Million (PPM) opportunities, also known as Defects Per Million Opportunities (DPMO), to be produced. As the process sigma value increase from zero to six, the variation of the process around the mean value decreases. With a high enough value of process sigma, the process approaches zero variation and is known as “zero defects. ”
APPLICATIONS AND BENEFITS OF SIX-SIGMA – Integrating Six Sigma and Lean Manufacturing When companies such as Mercedes, Pella, Maytag and hundreds of others began their lean journeys, they turned to the Lean Production System and kaizen to get moving. As they reduced unneeded inventory-like lowering a water line to expose the rocks-they discovered the need for even more advanced methods of determining the root causes of abnormalities. The Lean Sigma transformation has taken these companies from an intuitive level, in which trained operators and engineers can begin to see and – fix issues, to the more complex.
At the higher level, where issues are not obvious to the casual observer, we use statistical tools to uncover abnormalities. Lean Sigma uses both Six Sigma and lean principles to reduce defects and drive cultural change. Focused on lead-time and variability reduction, Lean Sigma is a methodology aligned with a time-based strategy at the speed of Kaizen Breakthrough. Lean Contributions: Identification of defects is immediate with one-piece flow Kaizen is efficient method to eliminate defects because of its bias for action, extensive team involvement, and immediate corrective action.
Six Sigma Contributions: Focused on reducing variation Focused on specific target areas Capable of focusing on defects caused by the interaction of several variables Measurement focused The LeanSigma Transformation Each level of transformation takes place in a cross-functional team environment, with collaboration and data collection and analysis driving cultural change. In the more advanced stage of the transformation, Lean Sigma Champions, Black Belts, and Green Belts are deployed throughout a business to root out variation and abnormality using statistical tools.
To launch this stage successfully, flow should first be established, either on a model line or company-wide. Once flow is established, our “best practice” is first to raise awareness among the professionals who will oversee the Lean Sigma effort: Champions receive a week of training, during which executives assess their current metrics and then focus on defining the business objectives that will drive projects. Black Belts receive four weeks of training, culminating in a project that must show substantial financial benefit to the company.
After training, the Black Belt is ready to initiate projects and mentor Green Belts. The Green Belt receives two weeks of training, plus ongoing mentoring. Green Belts devote a minority percentage of their time to individual projects but are recognized as experts and up-and-coming leaders. The Lean Sigma transformation can take an entire enterprise from an initial kaizen creating the first working cell to deployment of Lean Sigma Black Belts who will discover the causal effects of raw materials and processing on finished quality. Automate, integrate and collaborate
The human nervous system translates information into action in different ways depending on need. Your organization’s nervous system should behave in the same manner. Just as driving skills become automatic, the infrastructure to support the analyze-integrate-control portion of Six Sigma should be automated to shorten cycle times and eliminate redundancy. The analysis of key metrics within the Six Sigma framework is most often handled within a small project format. Once the data are collected, easy-to-use desktop statistical packages are essential to the success of the project.
Other project aspects may best be handled with automation. For example, streamlining the data collection and access process for Black Belts can be accomplished through automating the transfer of data into the desktop analysis package. Automation can reduce redundancies such as the re-entering of data, retyping of comments, reformatting for financial measures and so on. Other tasks lend themselves to automation as well; especially during the control stage of Six Sigma projects and for the monitoring of critical metrics once a process reaches maturity.
Such automation frees the brain of the organization to focus on new and creative ways to achieve customer delight. Once such successful automation of the control stage is occuring within the corporate level of a successful company widely recognized for its use of Six Sigma. The challenge was to deliver Six Sigma quality charts on network availability, performance and utilization as well as problem management time-to-restore in a Web enabled application to internal company customers and major suppliers.
The company is meeting the challenge by implementing a fully automated Web enabled application where all of the charts including attributes and variables charts, defects per million opportunities charts, run charts and so onhave the capability to allow drilling down to detailed data for further investigative purposes. The automation of the control stage for this company provides value by: Increasing productivity by decreasing time needed to generate charts and Web interfaces.
Providing customers with measurable data to compare to service level agreements. Providing measurable data to hold suppliers to service level agreements. Providing internal data to help technicians focus improvement efforts. Allowing common distribution with no client software required due to Web interface. Providing ease of use for intended customers of the application. Ultimately an organization’s IT system should be structured to sustain the benefits realized from Six Sigma.
Process documentation, action items and responsibilities, and systems for monitoring and achieving return on investment are all a part of the Six Sigma process. Sustaining Six Sigma For an entity to sustain the benefits of Six Sigma, it must be collaborative and connected in using its information infrastructure. Black Belts and others need the ability to access data, create information from it and use it intelligently, storing their knowledge within the constructs of a collaborative environment.
They need to link prior knowledge and information to current projects and have the ability to do context sensitive searches for relevant information throughout the information infrastructure. Additionally, management, executive staff and information users need to receive information in a way that simplifies decision making along the value chain. In a truly supported collaborative environment they access and bring multiple sources of relevant information to bear when making decisions. An information infrastructure promoting collaboration will “connect the disconnects” in the organization.
This setup allows everyone to feel connected to the organization’s mission and fosters the cooperation between suppliers and manufacturers, manufacturers and customers, and businesses and consumers that is critical to success in this age of e-business. CRITICAL THINKING ABOUT SIX SIGMA Can Six-Sigma Keep Up With Technological Change? Even with glowing reviews from CEO’s and Stock Markets, a wise business executive must still ask some difficult questions. If Six Sigma is expensive and carries significant risk, what should I consider before I commit?
We need to keep at least one eye on technology trends, even while we focus the other on Six Sigma. Any company that focuses exclusively on improving their existing operations and products risks obsolescence as technology, products, and even entire markets change. Is there a way to make Six Sigma efforts work better, and produce results faster at lower cost? In “Measurements and the Knowledge Revolution,” Thomas Pearson presents a strategy to combine best quality management methods with new information technology to produce maximum results.
By automatically building exactly the right knowledge at just the right time, the results of Six Sigma efforts can be greatly enhanced. “Measurements and the Knowledge Revolution” outlines seven predictive process management (PPM) methods that function simultaneously and iteratively, collecting product and process measurements, monitoring for compliance to plans and schedules, recognizing opportunities for improvement, managing complex dynamic operations for accuracy and flexibility, and maximizing quality, cost, features, and delivery times.
The seven PPM methods reach beyond traditional quality and statistical methods, using the power of modern information technology to accelerate and enhance overall results: Automated statistical process monitoring means all potential causes and effects of both problems and improvements are monitored and automatically recognized. When important changes in process or product occur, the system and operating personnel will know. PPM filters the chaos effects of dynamic systems, making the relationships between customer satisfaction, critical success factors, and key process indicators immediately apparent.
Scientific creativity methods ensure innovation can be effectively applied when and where it is needed, and knowledge supply chain technology ensures that every new lesson learned is immediately available to anyone in the enterprise with a need to know. Six Sigma methods define the tactics. PPM methods incorporate the new technology to make Six Sigma results available quicker, faster, and better, at lower cost and reduced risk. Six Sigma successes to date are impressive and well documented. However, the process is still expensive and time consuming.
The biggest risk may be the accelerating rate of technological change, and a competitive environment where processes, products, and even entire markets can change before traditional quality and improvement methods have time to work their magic. Enterprises that successfully integrate the best of Six Sigma with the best new technologies will be the ones who can not only rise to the top, but maintain their position over time. Why Six Sigma May Fail Like any tool, Six Sigma can be used inappropriately. Some of the most common Six Sigma implementation hazards include the following: 1.
Lack of executive management’s understanding of and commitment to Six Sigma principles. If you can’t link ownership to Six Sigma and there’s no passion for making it happen, then your implementation will run into problems. The biggest reason implementation of Six Sigma fails is a lack of focus. The Six Sigma executive committee must make certain that Six Sigma receives adequate human and financial resources, establish Six Sigma sponsorship in all departments, manage the scope of Six Sigma so the corporate restraint doesn’t become unwiedly, emphasize the need for ongoing support, and plan for Six Sigma renewal. . Choosing the wrong people and failing to keep the right people. If you don’t get the people thing right, nothing else really matters. Successful Six Sigma companies recommend being as proactive as possible on this issue. Work with your HR and compensation departments. Develop company-paid incentives to attract and retain key people and offer completion bonuses. Devote HR time, research, and budgeting to continuous training and retention programs. 3. Business metrics not clearly defined or communicated through the organization.
If you don’t develop an official manual to define clearly business metrics and measurement criteria, confusion and chaos will overwhelm your Six Sigma projects. Make sure your business metrics link you to competitive criteria. Outline how the organization measures critical-to-quality and critical to customer (CTC) issues. How do you define a defect? How do you define a process improvement? The team selected to develop your metrics manual should involve a master black belt, a top executive, and someone from corporate communications. Establish a metrics manual review process to keep standards fresh. . Choosing the wrong process or project.
The size of a project can doom it to failure. Set reasonable goals for your Six Sigma improvements. A safe rule to follow is to undertake projects that can be finished with financial sign-off within the training period for new Black Belt’s or within four months for existing Black Belt’s. 5. Lack of incentives for six sigma improvements and failing to celebrate successes. Older companies deploying Six Sigma find uprooting legacy cultures difficult. Planting the Six Sigma “mind -set” into these established businesses is challenging.
Six Sigma companies use incentive models and methods as diverse as the companies themselves. 6. Unable to link shareholder values to business results driven by Six Sigma. Unsuccessful companies never learn how to ensure that every process produces a return that exceeds its cost. Successful companies do. A Six Sigma approach enables the successful companies to directly align employee and shareholder interests. The result? Employees-whether senior management, part of a quality team, or on the shipping room floor-start to think and act like shareholders.
Fortunately, awareness of these common potential barriers to success, combined with some careful planning, can go far to prevent a Six Sigma improvement effort from failing. Six Sigma Ideals Confront Reality Voices of experience issue forth from the most successful Six Sigma initiatives: integrate Six Sigma with your company’s identity and strategic goals, secure buy-in from top management and the rest of the company will follow, work with Six Sigma suppliers. Whether in the form of instructions (what to do) or warnings (what not to do), the same ideals emerge time after time, forming a set of sacred Six Sigma directives.
Get these critical areas right, say the Black Belts who know and your initiative will progress smoothly. Circumstances, of course, are not always ideal. Can a company realistically expect to be able to adhere to the ideals of Six Sigma? If a company goes into a Six Sigma initiative knowing that the ideals are not feasible, is implementation still advisable? Among the proselytising voices of Six Sigma experts, a small amount of experience does occasionally surface to help answer the questions raised when reality does not conform to ideals.
Six Sigma Ideal: Apply Six Sigma Across All Operations According to Mikel J. Harry, Six Sigma companies-in particular AlliedSignal / Honeywell, GE, and Sony-have come to define quality as “a holistic and multidimensional concept, rather than a compartmentalized practice. ” The advice imparted by Six Sigma elders is that lasting, meaningful results come from a thorough implementation throughout all of a company’s processes. Reality Companies that actively attempt a thorough implementation of Six Sigma do not always succeed in involving all departments.
When Raytheon Company initialized its Six Sigma program in January 1999, management planned company-wide implementation. Because of the significant cultural transformation required, however, the extent to which Six Sigma took hold varied across the corporation. Furthermore, companies that seek to implement Six Sigma only in selected departments have made steady progress: Six Sigma’s diffusion into Air Products and Chemicals has been characterized as “piecemeal,” with various business units implementing Six Sigma at varying times, but implementation is, nevertheless, proceeding.
Continental Teves, Inc. , a brake and chassis supplier has profitably used Six Sigma methods for nearly ten years without seeking organizational implementation until this year. One project increased annual profits from business with only one customer by $100,000, a figure that will dramatically increase when the project extends to transactions with more customers. Isolated Six Sigma projects do seem to have merit on their own, as well as in functioning as trials for overall implementation. While a Six Sigma “culture” can certainly increase the benefits of an effort, it is not a necessity.
Six Sigma Ideal: Involve Your Suppliers Six Sigma efforts do not thrive in isolation. A company may function at six-sigma quality levels, but if it must begin with inferior components, it cannot manufacture six-sigma products. Thus, companies advocate not only selecting suppliers based on quality standards, but also working with suppliers to help them achieve higher goals. GE and the former AlliedSignal have both structured programs for training suppliers and for implementing Six Sigma projects within their supply chains. Reality
Providing Six Sigma support to suppliers can be a financial strain and becomes an easy target for budget cuts. Daniel Burnham admits that Raytheon’s efforts to involve suppliers, at least, initially, were hampered by “financial problems” that “caused top management to narrow their focus considerably. ” Whether budget restrictions come into play or not, supplier performance deserves to be a low priority. True, six-sigma quality can’t be attained with three-sigma components, but the potential for improvement is still great. Companies don’t have to aim for six-sigma quality immediately.
What Can’t Six Sigma Do? As Six Sigma continues to revolutionize processes outside of manufacturing, bringing results to a wider variety of businesses and industries, it is beginning to look like the miracle that will transform the marketplace, the cure for all ailing balance sheets, the saviour of defect-ridden processes. The question arises: is there nothing that Six Sigma cannot do? When isn’t Six Sigma the best choice? Are there certain company goals, certain applications for which Six Sigma is simply not appropriate?
In spite of recent enthusiasm for discovering the multitude of uses Six Sigma might have, there are circumstances that make it inappropriate and ineffective. 1. Six Sigma Can’t Make a Bad Product Marketable. Six Sigma improves processes, not products. Mikel Harry explains, “I could genetically engineer a Six Sigma goat, but if a rodeo is the marketplace, people are still going to buy a Four Sigma horse. ” All of the Six Sigma improvements you initiate cannot salvage a faulty product idea. 2. Six Sigma Won’t Raise Stock Prices.
The market value of a company, like the market value of its products, does not always correlate with its processes. True, Six Sigma can help a company restore profitability. However, if your primary reason for being interested in Six Sigma is to take your company’s stock valuable, Six Sigma, with its expensive price tag, could do more harm than good. David Fitzpatrick of Deloitte Consulting’s Lean Enterprise Practice estimates that Six Sigma will improve the share price of only less than 10% of practicing companies. Aram Rubinson of UBS Warburg agrees that Six Sigma “is unlikely to make weaker companies strong.
3. Six Sigma Won’t Bring Immediate Results. If you are looking toward Six Sigma to turn your company around, you had better be certain that you can last long enough for the gains to manifest themselves. Black Belt training requires one week of training per month over the course of four months, so deployment alone requires a significant time investment. Jerry Blakeslee, Director of the Center of Excellence Six Sigma Services at PricewaterhouseCoopers, elaborates, “You’re not going to get to six sigma in one or two years. It takes you anywhere from four to eight years.
The real gains, he adds, come once a company moves beyond improving existing processes to replacing them with more efficient processes tailored to customer requirements. 4. Six Sigma May Be Too Complex for Young Companies. New companies that are still establishing their business processes are not ready for Six Sigma. Mike Burkett of AMR Research in Boston asserts, “when you’re in a ramp-up mode, you’re moving so fast that there isn’t enough time to put disciplined management practices in place. ”
Once new processes have been solidified, however, and a company functions with some “maturity,” then processes can be measured and improved. . Even if one of the above circumstances does not apply, a company may simply decide that it does not need Six Sigma. Joseph A. DeFeo, President and CEO of the Juran Institute, Wilton, Connecticut, acknowledge that quality levels of four or five sigma may be satisfactory for some companies. Both DeFeo and Quality Magazine’s Nancy Chase agree that a working pattern of hastily reacting to problems without analysing for root causes constitutes the best reason for considering Six Sigma. If this crucial condition is not present, Six Sigma just may not be the most appropriate answer to a company’s quality problems. CONCLUSION
Ultimately, Six Sigma is a superb strategy that addresses leadership, tools and infrastructure issues, some of which were neglected by previous programs. CEOs of leading U. S. firms praise the accomplishments of their Six Sigma initiatives. Outstanding quality professionals and industrial statisticians concur and describe potential roles for their colleagues. Engineering programs have begun to incorporate elements of Six Sigma into their curricula. When have quality professionals ever had such a splendid opportunity to contribute? Constructive criticism of Six Sigma or any other quality program can be useful but it should be informed and fai