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Six Sigma Explained – The Beginner’s Tutorial to Understanding Six Sigma

What is the Concept of Six Sigma?

Six Sigma is a quality control concept that enables companies to become world-class operations. To achieve this, practitioners use a variety of “tools” and process improvement methods/steps that enable production output to reach specific value targets. The targets lie within a strict statistical tolerance of plus or minus six standard deviations, which is 99.99966 percent process perfection. Six Sigma experts repeatedly measure the results and improve processes until results are consistently within tolerance. Perfected processes result in improved efficiency, almost no product defects, timely product delivery, and better profits.

The following six, generally accepted principles guide the Six Sigma approach:

  1. It is crucial to business success that continuous efforts are made to achieve consistent process results.
  2. The Six Sigma DMAIC steps always apply to at least some characteristics in manufacturing and business processes.
  3. Everyone in the organization from upper management down must commit to sustained quality improvement.
  4. All processes can be improved, which improves results.
  5. It is crucial that results are continually evaluated.
  6. Minimal variation reduces product defects and saves money.

Why is Six Sigma Used?

Ever since the Industrial Revolution began, manufacturers have been on a quest to make their production lines more efficient and improve the quality of the products they produced. As theories and methods came along, the most useful ones were adopted by manufacturers.

Six Sigma started as a result of a grass roots movement of sorts when, in the mid-1980s, Motorola improved upon the decades-old Zero Defects and Total Quality Management quality improvement theories and tested their methods on their own manufacturing processes and on some of their business applications. The results were impressive. They called their statistically-based, improved methodology Six Sigma. News spread fast that Motorola’s Six Sigma methodology solved problems and offered many benefits.

Although the methodology was, for the most part, created to improve Motorola’s manufacturing processes, Six Sigma has also been applied to business-related processes, both at Motorola and at other companies. In the manufacturing world, products might be placed onto a conveyer belt. In the business world, information might be handed off to the next department in the process. Both worlds experience bottlenecks and other problems that could be resolved by the application of Six Sigma. Today, Six Sigma is used in professional fields such as finance, healthcare, and in Fortune 500 companies located all over the world.

What are the Benefits of Six Sigma?

Many benefits come along once the application of Six Sigma has made production efficient and defective products a thing of the past. Six Sigma benefits customers, employees, partnering companies, and the organization’s bottom line.

Customer satisfaction – When products can be made cheaper because of faster production with almost no waste, price savings can be passed on to the customer. And since nearly every product will be made exactly like the product previously made on the production line, product quality is assured.

Customer loyalty – Happy customers return to purchase more quality products.

Employee satisfaction – A company-wide mission to excellence and understanding of the mission fosters a sense of camaraderie, which is good for productivity and company culture.

Better partnerships – Companies associated with a company that uses Six Sigma tend to keep the partnership with that company. They often also adopt Six Sigma methodologies in their own companies.

Improved bottom line – Six Sigma reduces waste and operational costs. It improves efficiency, controls, accuracy, policy compliance, and regulatory compliance. Products made cheaper and quicker present the company with a choice between making huge profits on every product sold or profiting from selling a higher volume of quality products at a very competitive price. Quality products sold at a competitive price create good word-of-mouth among customers who all return to purchase from the company again and continue to speak well of the company. Publicly held companies whose products are selling fast can experience a rise in share prices.

Two Ways to Practice Six Sigma

The two commonly accepted Six Sigma methods are DMAIC and DMADV.

DMAIC is the method that is most often associated with Six Sigma. It is also the most widely known method. In this method, the existing processes are improved upon incrementally. The steps are define, measure, analyze, improve, and control processes.

DMADV focuses on optimizing brand new processes or products. The steps in DMADV are define, measure, analyze, design, and verify.

A third methodology is emerging that is called DFSS. DFSS is an acronym that stands for Design for Six Sigma – a title rather than listed steps, though two steps are involved. The Six Sigma practitioner first considers what customers want. Then he anticipates and eliminates inefficiencies and defects in the process at the design phase.

DFSS is associated with Lean Six Sigma, which merges Six Sigma with lean manufacturing/lean enterprise to save money and stay competitive through the elimination of waste, cutting production costs, speeding up processes, and improving quality.

Whichever method is used by users of Six Sigma, particular tools are also used. These tools are as follows:

  • Taguchi method
  • A fishbone, cause and effects, or Ishikawa diagram
  • Business Process Mapping or Checksheet
  • Value Stream Mapping
  • Pareto charts
  • ANOVA gauge R&R
  • Process mapping
  • Statistical process control
  • CTQ Tree (Critical to Quality)
  • Root Cause Analysis
  • 5 Whys
  • Control charts

What are the Stages of Six Sigma?

DMAIC

The details of the DMAIC methodology are as follows:

D: Define – Define what the customer needs, what will be required to meet those needs, and what the project’s goals will be.

M: Measure – Measure the main aspects of the current process and gather data on it.

A: Analyze data – Analyze the data to determine what kinds of errors are being made and where they occur. Using the 80/20 rule, try to find the 20 percent of the reasons for problems that cause 80 percent of those problems/defects.

I: Improve processes – Improve the various processes where the causes of problems have been identified. This involves making a change, testing, documenting results, and tweaking the change, and continuing in this cycle until results are optimized to the point that the products are consistently perfect or other goal of the project is met.

C: Control processes – Control the processes to assure that the new ways of doing things is followed by employees in every step along the way. This will assure that employees don’t revert to the old ways of doing things out of laziness, habit, or disbelief in Six Sigma or that his actions would matter in the scheme of things. One by one, employees who don’t join the new Six Sigma company culture and follow suit in the new ways of doing things would directly cause the former problems to creep back in. Individual noncompliance would adversely affect product quality and eat away at the benefits and profits that had been obtained through the implementation of Six Sigma.

DMADV

The details of the DMADV methodology are as follows:

D: Define – Define what the customer’s goals or the company’s goals are.

M: Measure – Measure the characteristics that are critical to quality (CTQs). Also measure what the product’s capabilities are, the capabilities of the production process, and the risks. Notate the findings.

A: Analyze – Analyze the data obtained when measuring things.

D: Design – Design a new process using what was learned during the analysis phase.

V: Verify – Verify that the new process works. Implement the process and then let the owner take things from there.

Understanding the Sigma Scale

Six Sigma’s statistical process modeling uses standard deviations. A sigma is a measure of standard deviation, and standard deviations can represent how far from perfection a manufactured item is. Six Sigma standards dictate that only six sigmas of deviation either way from the control chart’s center line (that place of absolute perfection) can be tolerated.

An organization that has fine-tuned their production output delivers defect-free products that fall within the tolerance range 99.99966 percent of the time. To put that another way, Six Sigma standards only allow for 3.4 defects to occur per million products made. The technical term is defects per million opportunities (DPMO).

Sigma Level 1 has DPMO 691,462 and defect % of 69
Sigma Level 2 has DPMO 308,538 and defect % of 31
Sigma Level 3 has DPMO 66,807 and defect % of 6.7
Sigma Level 4 has DPMO 6,210 and defect % of 0.67
Sigma Level 5 has DPMO 233 and defect % of 0.023
Sigma Level 6 has DPMO 3.4 and defect % of 0.00034
Sigma Level 7 has DPMO 0.019 and defect % of 0.0000019

The six sigma tolerance level suits manufacturing companies, but other tolerance levels better suit other types of businesses. For instance, a much higher level of performance than six sigmas is needed in the semiconductor industry, but only two sigmas are considered high quality in business and finance organizations.

What are the Belts all about?

A company that uses Six Sigma must train every member of the company in Six Sigma to the level of expertise that is appropriate for their job. Borrowing from martial arts, the various levels of expertise in Six Sigma are designated through a belt system.

Executive Leadership – Executive members of the company establish the company vision for the implementation of Six Sigma at the organization level. They also support the managers.

Champions – This group is selected by the executive leaders to make sure the various departments work with each other during the implementation of Six Sigma. They also mentor the Black Belts.

Master Black Belts – This group is selected by Champions to be advisors to employees who are practicing for the various Six Sigma exams. Additionally, they train the Black Belts and the Green Belts. They also keep an eye out for potential Six Sigma projects their company should take on.

Black Belts – This group performs Six Sigma statistical methods for particular projects. They also guide the Green Belts.

Green Belts – This group implements the recommended Six Sigma changes while performing their regular duties. They may also lead a project from time to time.

Yellow Belts – This group includes people who are new to Six Sigma and people who only need a basic understanding of Six Sigma.

White Belts – This group is new to Six Sigma and their certification only takes a few hours to obtain, partially because they are not usually required to take a test.

Six Sigma training teaches students many ways to reduce costs. It teaches how to increase revenue, streamline business processes, and how to encourage Six Sigma culture buy-in. Should an employee desire to leave his company, a Six Sigma certification on that person’s resume sets this highly dedicated applicant apart from other applicants.

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