Six Sigma consists of a series of techniques and tools to improve an organization’s processes by reducing their variability. This is done through empirical and statistical quality management methods with the help of specialists in the methodology.
Implementing the technique has the potential to increase profits, improve employee morale, and enhance a company’s products or services. The term “Six Sigma quality” is often used to indicate that a process is well-controlled, staying within the process limits of ±3σ from the central line on a control chart.
Also known as Six Sigma, the methodology is an evolution of the PDCA cycle (Plan, Do, Check, Act), which was created by the statistician W. Edwards Deming. The technique works on the philosophy of eliminating defects, with the aim of always meeting customer expectations.
In this article, we will talk about how Six Sigma emerged, what its benefits are, and how to apply it in your organization. We will also discuss the best KPIs to monitor your performance on this journey. So keep reading to learn everything about Six Sigma!
How Six Sigma Emerged
The Six Sigma methodology was created in 1986 at Motorola, a telecommunications company in the United States. The concept was developed by Bill Smith, an external quality control consultant. He developed the technique together with author Mikel Harry, known for writing books on quality management.
They sought to place greater emphasis on identifying and eliminating waste, variations, and defects in their production processes. The idea was to create a rigorous culture of continuous improvement within Motorola.
Origin in Mathematics
The concept of One Sigma comes from mathematics and means one standard deviation — that is, how much the values of a data set vary in relation to the average of that set. American statistician Walter Shewhart is often credited with determining that anything that deviates more than Three Sigmas from the mean requires improvement.
Smith and Harry took this concept and developed it to define that operations should be taken to the next level, Six Sigma. This means a limit of 3.4 defects per million opportunities. Through continuous improvement, organizations can use Six Sigma tools to produce stable and predictable results.
“We recognized that the problem was not building a single part with a characteristic, but building a product with thousands of parts,” said Bill Smith about the process. “If you reduce the total number of defects, you increase customer satisfaction and reduce costs,” he concluded.
The father of Six Sigma passed away from a heart attack in Motorola’s cafeteria in 1993. He was posthumously awarded the Malcolm Baldrige National Quality Award, the most important performance excellence award in the U.S.
Since then, the technique has been adopted by multiple multinational companies leading in their markets. Some examples include the American conglomerate General Electric, Citibank, and the aerospace company AlliedSignal (now Honeywell).
Benefits of Six Sigma
Even as it approaches 40 years old, Six Sigma remains relevant in the corporate landscape. This is because the technique allows for adaptations to technological advancements and the emergence of new global challenges.
Organizations that incorporate Six Sigma into all their departments and processes gain a number of benefits, including reduced errors and waste, optimized resource use, and improved customer reviews.
Now let’s discuss in detail the major benefits of the methodology:
- Less Waste. The Six Sigma ideology aims to help your company optimize processes and reduce inefficiencies. It allows you to identify areas where your organization can improve in this aspect — saving time, money, and resources.
- Reduction in Errors. Six Sigma not only deals with the process but also pays special attention to quality. Work in the manufacturing area doesn’t have an “undo” button, so it’s important to get everything right the first time.
- Greater Efficiency. With formal training, your employees will learn how to use resources to achieve maximum efficiency for their current projects.
- Reduced Legal Risk. The methodology can help your company avoid legal issues. By improving your processes’ compliance, you can stay within international compliance standards.
- Flexibility. Six Sigma can be applied to virtually any industry. Whether your organization is in life sciences, financial services, or education: the techniques and tools of this methodology can be used by any company.
Six Sigma Methods
The Six Sigma philosophy has two main methodologies: DMAIC and DMADV. These are two acronyms with distinct meanings and are used in different business contexts.
DMAIC
DMAIC stands for Define, Measure, Analyze, Improve, and Control. This method is typically applied in product manufacturing or service delivery.
There are 12 steps to apply these five stages of the DMAIC model. Check out all the parts that make up the process, from definition to control:
- Define: Select the project and scope; define the defect to be corrected.
- Measure: Determine and analyze the measurement system; measure baseline performance; select the goal based on performance.
- Analyze: Identify possible causes of variation; determine the main causes.
- Improve: Find the ideal solution; test this solution.
- Control: Incorporate and analyze measurement systems; implement and verify improvement; document and transfer the project.
DMADV
DMADV is part of the Design for Six Sigma (DFSS) process, a strategic-level approach that seeks to address issues related to the development of a new product, service, or process — as well as its implementation or control.
It also has five phases, with the first three repeating those seen in DMAIC: Define, Measure, Analyze. To complete it, there are two new stages: Design and Validate.
This model has been successfully used for over three decades in various industries, including manufacturing, services, and transportation. The method is typically applied when there are processes that do not meet customer requirements, even after optimization. It is also used when it is necessary to develop new methods for your organization.
The goal of the DMADV framework is to ensure the optimal balance between three perspectives: customer needs, company objectives, and the procedure to meet these demands.
To apply this method, you should:
- Define the process and its design objectives.
- Identify and measure the critical-to-quality (CTQ) elements in the service, product, or process.
- Analyze the data to find the best possible design.
- Design the product or service, creating and testing a new prototype.
- Validate the project outcome, ensuring it performs satisfactorily.
How to Apply Six Sigma
Your organization has two options when implementing the Six Sigma methodology. The first is to implement a Six Sigma Program through the use of individual tools and an external consultant.
The second involves creating a Six Sigma Infrastructure, developing a custom methodology for your organization. Let’s explain both methods in more detail:
Six Sigma Program
The Six Sigma Program approach involves teaching statistical tools from time to time to selected employees, who are the practitioners. These employees are then expected to apply these tools in their work whenever necessary. If they need help, they usually have a consultant at their disposal.
Implementing a Six Sigma Program brings unique challenges. These projects are usually created by the lower management of the company, so it is common for them not to have support from upper management.
This form of Six Sigma is often conducted in an on-demand model, where the tools are only applied to selected projects. Employees are trained through specific and punctual classes without the presence of a more structured course.
Six Sigma Infrastructure
The more recommended option is creating a Six Sigma Infrastructure, with the most crucial step being to give autonomy to practitioners to choose the right tool for the right moment. Employees who successfully complete the four-week training over four months are known as “black belts” in Six Sigma.
This certification is only given to those who can explain the philosophies and principles of Six Sigma, including the systems and support tools. To be a “black belt,” an employee needs to demonstrate leadership, understand team dynamics, and determine roles and responsibilities for their team members.
The categorization follows the same order as martial arts:
- White belt. Initial level for those who understand the basic principles and concepts of Six Sigma.
- Yellow belt. Employees with more knowledge than the basics, who participate in team projects and have training in basic statistics.
- Green belt. Manages projects and has a good understanding of the methodology. Aims to ensure the company meets its sector goals and reduces process variability.
- Black belt. The most valuable asset. Has a deep understanding of the Six Sigma methodology.
- Master black belt. Leads projects that focus on changing the direction of the company as a whole. They have the highest possible training, to the point of developing materials and conducting training.
- Blue belt. Executive leaders trained to select and prioritize projects within the methodology.
Project-Based Methodology
To truly create a Six Sigma infrastructure, the organization must adopt a project-based approach. Projects that meet the organization’s business strategy objectives should be selected. Six Sigma can then be used as a roadmap to ensure these goals are met.
Initially, companies often avoid choosing projects that are too large or do not align with their strategic planning. But Six Sigma requires a long-term commitment.
The implementation of the methodology should be treated as a long process, allowing for an objective analysis of all its aspects. To do this, the habit of selecting the best among the projects that have an appropriate scope should be adopted.
At the end of each initiative, review the lessons learned and incorporate the proposed improvements into your next actions. This way, you create a continuous improvement cycle that will bring superior results to your organization.
But to reap these benefits, your company needs to invest the necessary time and the energy of the executives for the adoption of Six Sigma as a business strategy.
Conclusion
Implementing Six Sigma can be a game-changer for your organization. With its structured and data-driven approach, the methodology not only improves the quality of processes and products but also promotes a culture of continuous improvement that involves the entire team.
Adopting Six Sigma means investing in training and cultural change, which requires commitment and patience. However, the benefits obtained justify the effort and investment. The methodology has the potential to bring waste reduction, increased efficiency, reduced legal risk, and greater customer satisfaction.
Remember that success in applying Six Sigma depends on careful project selection, support from upper management, and adequate employee training. By integrating this methodology into your business strategy, you will position your company toward sustainable growth and operational excellence.
Therefore, when considering implementing Six Sigma, assess your needs, plan your team’s training, and be ready to embark on a continuous improvement journey that can significantly transform your company.
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