SIX SIGMA

The term six sigma (6σ) originated as a performance measure or a measure of quality.
Using six sigma, process goals are set in parts per million (PPM) in all areas of the
production process. Since its origin, six sigma has now evolved into a methodology for
improving business efficiency and effectiveness by focusing on productivity, cost
reduction, and enhanced quality.

Six Sigma has its roots back with the efforts of Joseph Juran and W. Edwards
Deming. Their programs for Zero Defects and Total Quality Management in Japan,
lead to the adoption of the six sigma philosophy by Motorola.

The name six sigma comes from the statistical use of the sigma (σ) symbol, which
denotes standard deviations. The six identifies the number of standard deviations around
the mean. Hence, six sigma says that you have to go out beyond six standard deviations
around the mean before you find failure. With a high enough number of sigmas (beyond
six), you would approach the point of "zero defects." For example, a move from 3σ to 4σ
represents an 11-fold improvement; a move from 4σ to 5σ represents another 27-fold
improvement; and a move from 5σ to 6σ represents an additional 69-fold improvement.
Thus the overall improvement from 3σ to 6σ is more than 20,000-fold.

At the 3σ level, the number of defects per million totals 66,807 (or 93.3 percent
accuracy). At the 4σ level the number of defects drops to 6,210 (or 99.4 percent
accuracy). At the 5σ level the number of defects drops still further to 233 (or 99.97
percent accuracy). At the 6σ level the number of defects would be 3.4 per million. This
equates to a 99.9997 percent accuracy. In today's world, where 98 percent or 99 percent
accuracy is considered excellent, 6σ is now becoming the universally recognized standard
of quality.
THE PRINCIPLES OF SIX SIGMA

A key principle of six sigma is measurement. Unfortunately that also means that if you
measure the wrong things, you'll get the wrong results. For example, measuring
throughput may speed up production, but at the cost of quality. Measuring quality may
increase quality, but decrease customer service. So one of the toughest challenges in six
sigma measurement is to identify the measurement system that will trigger the correct
collection of responses.

A second key principle of measures in the six sigma environment is that all the measures
should be openly visible. Openly displaying all measures on charts and graphs is a
primary motivator toward the correct response.

A third principle to remember is that the change curve applies. When change happens,
performance will initially go down before it recovers and goes back up. This drop in
performance is often scary, but a little patience will soon see its recovery.

A principle of success or failure in the six sigma world is the requirement for cultural
change or change readiness. If the organization is not primed for change, then an
environment for change must be instilled prior to starting six sigma, or the project is
doomed to failure. This requires training, team bonding, and team based goal setting. The
resistance that exists because of a lack of understanding of what the six sigma process is
attempting to achieve, can be avoided with proper training.

Six sigma concentrates on measuring and improving those outputs that are critical to the
customer. The tools to accomplish this include a range of statistical methodologies that
are focused on continuous improvement using a statistical thinking paradigm. This
paradigm includes the following principles:

• Everything is a process.
• All processes have variations that are inherent within them.
 • Data analysis is a key tool in understanding the variations in the process and in
identifying improvement opportunities.

It is in the management methodology where the key, underlying benefits of six sigma can
be found, which includes a problem solving and process optimization methodology. Six
sigma creates a leadership vision utilizing a set of metrics and goals to improve business
results by using a systematic five-phased problem solving methodology. There are two
common problem solving project management methodologies that are commonly
associated with six sigma. The first is DMAIC (Define, Measure, Analyze, Improve,
Control), and the second is DMADV (Define, Measure, Analyze, Design, Verify)

Six sigma is a measurement-based strategy that focuses on reducing variations through

monitoring and measurement tools. It is based on a philosophy that holds that every
process can and should be repeatedly evaluated and significantly improved, with a focus
on time required, resources, quality, cost, etc. The philosophy prepares employees with
the best available problem-solving tools and methodologies using the five-phased
DMAIC process. Explaining each of the steps in the process in more detail we have:

• Define—At the first stages of the process we look for and identify poorly
performing areas of a company. We then target the projects with the best return
and develop articulated problem and objective statements that have a positive
financial impact on the company.
• Measure—At this stage we are trying to tie down the process under
consideration. Where does it start and end? What should we be measuring to
identify the deviation? What data characteristics are repeatable and identifiable?
What is the capability of the process? We use tools like process mapping, flow
charting, and FEMA (Failure Model Effects Analysis). We develop a baseline for
the targeted area and implement an appropriate measurement system.
• Analyze—Having identified the who and what of this problem, we now target the
where, when, and why of the defects in the process. We use appropriate statistical
analysis tools, scatter plots, SPC and SQC, Input / Output matrixes, hypothesis
 testing, etc., and attempt to accurately understand what is happening in the
process.
• Improve—At this point we should have identified the critical factors that are
causing failure in the process. And, through the use of experiments, we can
systematically design a corrective process that should generate the desired level of
improvement. This improvement will then be monitored to assure success.
• Control—In the control phase we implement process control tools that can
manage and monitor the process on an ongoing basis. The DMAIC process is now
in full operation, but it does not stop here. The continuous monitoring of the
process will not only assure the success of this change process, but it will also
identify future opportunities for improvement.

Six sigma is an organization-wide strategy that develops employees and gives them the
tools and capabilities to solve complex problems in a rapid fashion. Employees now have
the capabilities to improve overall performance through their step-by-step improvements,
always from a customer and financial perspective. Six sigma helps employees use
statistical and measurement tools to deliver breakthrough results throughout the
organization.

Six sigma requires full participation, from senior management to the factory floor
workers. Each assumes a specific role in the six sigma process. At the top of the pecking
order we find the Champions. These individuals are responsible for coordinating the
business goals and objectives, which are set towards achieving the six sigma standard
within the organization. They are responsible for providing the logistics and
informational resources that will be needed for the successful completion of the project.
They also select the project and identify the scope of the projects to be worked on. They
identify the team that should work on the project, and work to remove barriers that may
block the success of the project.
Most companies go on to use a classification methodology similar to the one created by
Motorola to describe the abilities of their six sigma user. Six Sigma identifies several key
roles for its successful implementation.

Executive Leadership includes the CEO and other members of top management.
They are responsible for setting up a vision for Six Sigma implementation. They also
empower the other role holders with the freedom and resources to explore new ideas
for breakthrough improvements.

Champions take responsibility for Six Sigma implementation across the organization
in an integrated manner. The Executive Leadership draws them from upper
management. Champions also act as mentors to Black Belts.

Master Black Belts, identified by champions, act as in-house coaches on Six Sigma.
They devote 100% of their time to Six Sigma. They assist champions and guide Black
Belts and Green Belts. Apart from statistical tasks, they spend their time on ensuring
consistent application of Six Sigma across various functions and departments.

Black Belts operate under Master Black Belts to apply Six Sigma methodology to
specific projects. They devote 100% of their time to Six Sigma. They primarily focus
on Six Sigma project execution, whereas Champions and Master Black Belts focus on
identifying projects/functions for Six Sigma.

Green Belts are the employees who take up Six Sigma implementation along with
their other job responsibilities, operating under the guidance of Black Belts.

Some organizations use additional belt colours, such as Yellow Belts, for employees that
have basic training in Six Sigma tools.
Each of the successful six sigma users have customized the process to fit their own
culture and methodology. In order to accomplish this, it is important to identify the key
business goals and objectives of the organization, and then to adapt the six sigma
methodology and philosophy to fit this goal set. We need to develop an action plan
identifying how we are going to focus the six sigma tool so as to focus on the big returns
and avoid any waste in investment. Hence, it is useful to identify the areas where six
sigma performs well. These include:

• Transformation of the level of customer awareness and expectation throughout all

the employees of the organization.
• Improved customer-supplier relationship.
• Drives operational process improvements with savings in cost, improvements in
service and productivity, and increased returns.
• Drives information flow improvements.
• Drives a deeper, organization wide understanding of the organization's operation.
• Improved sales force effectiveness.
• Introduces all employees to new tools that will enhance performance.
• Provides a vehicle for the development of a training program.

Six sigma is not an all or nothing venture. Six sigma is a collection of tools and you pick
selectively from those tools in order to gain the desired result. It is also not an increase in
the level of organization bureaucracy. In fact, if use properly, it will reduce the level of
bureaucracy within the organization.

Certification
In the United States, Six Sigma certification for both Green and Black Belts is offered by
the Institute of Industrial Engineers and by the American Society for Quality. In addition
to these examples, there are many other organizations and companies that offer
certification. There currently is no central certification body, either in the United States or
anywhere else in the world.
Origin and meaning of the term "six sigma process"

Graph of the normal distribution, which underlies the statistical assumptions of the Six
Sigma model. The Greek letter σ (sigma) marks the distance on the horizontal axis
between the mean, µ, and the curve's inflection point. The greater this distance, the
greater is the spread of values encountered. For the curve shown above, µ = 0 and σ = 1.
The upper and lower specification limits (USL, LSL) are at a distance of 6σ from the
mean. Because of the properties of the normal distribution, values lying that far away
from the mean are extremely unlikely. Even if the mean were to move right or left by
1.5σ at some point in the future, there is still a good safety cushion. This is why Six
Sigma aims to have processes where the mean is at least 6σ away from the nearest
specification limit.

The term “six sigma process” comes from the notion that if one has six standard
deviations between the process mean and the nearest specification limit, as shown in the
graph, practically no items will fail to meet specifications. This is based on the
calculation method employed in process capability studies.

Capability studies measure the number of standard deviations between the process mean
and the nearest specification limit in sigma units. As process standard deviation goes up,
or the mean of the process moves away from the center of the tolerance, fewer standard
deviations will fit between the mean and the nearest specification limit, decreasing the
sigma number and increasing the likelihood of items outside specifications.

Sigma level DPMO Percent defective Percentage yield

1 691,462 69% 31%

2 308,538 31% 69%

3 66,807 6.7% 93.3%

4 6,210 0.62% 99.38%

5 233 0.023% 99.977%

6 3.4 0.00034% 99.99966%

7 0.019 0.0000019% 99.9999981%

Criticism

Lack of originality

Noted quality expert Joseph M. Juran has described Six Sigma as "a basic version of
quality improvement", stating that " there is nothing new there. It includes what we used
to call facilitators. They've adopted more flamboyant terms, like belts with different
colors. I think that concept has merit to set apart, to create specialists who can be very
helpful. Again, that's not a new idea. The American Society for Quality long ago
established certificates, such as for reliability engineers."
Role of consultants

The use of "Black Belts" as itinerant change agents has (controversially) fostered an
industry of training and certification. Critics argue there is overselling of Six Sigma by
too great a number of consulting firms, many of which claim expertise in Six Sigma when
they only have a rudimentary understanding of the tools and techniques involved

Based on arbitrary standards

While 3.4 defects per million opportunities might work well for certain
products/processes, it might not operate optimally or cost effectively for others. A
pacemaker process might need higher standards, for example, whereas a direct mail
advertising campaign might need lower standards. The basis and justification for
choosing 6 (as opposed to 5 or 7, for example) as the number of standard deviations is not
clearly explained. In addition, the Six Sigma model assumes that the process data always
conform to the normal distribution. The calculation of defect rates for situations where
the normal distribution model does not apply is not properly addressed in the current Six
Sigma literature.

Advantages of six sigma:

• IT FOCUSES ON MAXIMISING CUSTOMER SATISFACTION BY

MINIMISING THE DEFECTS. IT TARGETS THE CUSTOMER DELIGHT
AND NEW INNOVATIVE WAYS TO EXCEED THE CUSTOMER
EXPECTATION.

• THE IMPLEMENTATION OF SIX SIGMA METHODOLOGY LEADS TO

RISE IN PROFITABILITY AND REDUCTION IN COST.
 • IT FOCUSES ON THE PROCESS IMPROVEMENT RATHER THAN FINAL
OUTCOME.

• IT FOCUSES ON PREVENTION OF DEFECTS RATHER THAN FIXING IT.

• IT IS SUCCESSFULLY IMPLEMENTED IN VIRTUALLY IN EVERY

INDUSTRY AND BUSINESS STRATEGY INCLUDING RETURN ON
SCALE, RETURN ON INVESTMENT ,EMPLOYMENT GROWTH & STOCK
VALUE GROWTH.

Practical Examples

Motorola was able to achieve a 200-fold improvement in production quality and saved a
reported $2.2 billion using this tool. In 1988, Motorola Corp. became one of the first
companies to receive the Malcolm Baldrige National Quality Award. The first five years
of Six Sigma implementation were highly rewarding for Motorola as sales grew
dramatically and products of better quality were introduced. The company regained its
reputation of developing high quality products. In the fifteen years after its launch,
Motorola transformed its initial approach of counting defects in product manufacturing to
managing variation and systematically improving not just manufacturing but all its
business processes.

General Electric has also become the strong proponent of six sigma where it claims
extensive successes. GE used six sigma during the reign of Jack Welch, where he made it
the biggest corporate initiative in GE's history and received global recognition.
 GE Financial Results

Other users include Texas Instruments and Allied Signal. Allied took six sigma to an
even higher level by incorporating it not just in production but by making it a system of
leadership.

Other current users include JP Morgan Chase, Sun Microsystems, American Express,
and Lloyds TSB.

Today, six sigma is branded as a management methodology that utilizes measures as a

foundational tool for business process reengineering.