What Is Six Sigma?
Six Sigma is a strategy model designed to help businesses embark on a continuous improvement process by limiting errors and defects. The Six Sigma methodology aims to eliminate waste, inconsistency, and discrepancies that challenge the quality of products and services of a business, company, or organization.
For nearly a century, industries have strived to improve efficiency to increase their output while still producing high-quality products. To satisfy this quest, experts have designed models, reviewed, and tested them for their practicality in the business world.
In 1986, Bill Smith developed the Six Sigma methodology, which today, companies and organizations use as a measure of quality near perfection. This article explains the Six Sigma methodology and covers the following sections:
- Understanding Six Sigma
- What is Lean Six Sigma?
- Six Sigma Methodologies
- What are the Six Sigma Levels?
- How is Six Sigma a Strategy Toward Operational Excellence?
Understanding Six Sigma
The Six Sigma methodology comes from the field of statistical quality control. It follows a data-driven and statistical approach at a granular level to detect errors in business processes.
In Statistics, the lower-case Greek letter Sigma (σ) denotes the standard deviation from the mean value. Therefore, the sigma concept would mean that there would be errors to eliminate at any point of deviation. In the 1920s, Walter Shewhart followed this concept and introduced a three sigma from the mean methodology to improve lean manufacturing processes.
Six Sigma comes from the statistical bell curve, where one Sigma denotes one standard deviation from the centerline of a control chart. An "extremely low" defect is when the process has six Sigma, 3 below, and 3 above the centerline.
Even though Shewhart's methodology was effective and remained a standard for decades, there were still significant errors in the processes that slowed it down or incurred more costs. So, in 1986, Bill Smith proposed a more comprehensive methodology that involved collecting and analyzing data, with six Sigma as the point of correction. Today, a company using the Six Sigma methodology collects data and then uses statistical tools to determine the baseline sigma. Using the baseline sigma, the company can tell their deviation from the Six Sigma and identify defects that need future improvements.
Six Sigma is now a standard methodology after publication by the International Organization for Standardization (ISO) under the publication number ISO 13053:2011. Meaning professionals and organizations can receive Six Sigma certifications after successfully using the publication for Six Sigma training.
What is Lean Six Sigma?
Most companies use Lean manufacturing as a strategy to eliminate waste and improve their bottom line. Lean manufacturing companies incorporated Six Sigma into their lean concept to create the Lean Six Sigma methodology. Lean Six Sigma is a quantity-driven strategy that works best in large-scale production environments and is prone to high quantity waste. It focuses on using the Six Sigma methodology to reduce even more waste while improving efficiency.
Companies using Lean Six Sigma can speed up production, improve quality, cut production costs and remain competitive.
Six Sigma Methodologies
The Six Sigma strategy aims to optimize business processes for near-perfect performance by minimizing variability. A two-pronged approach makes this possible:
- Problem Identification - You determine what you have and what you should have. At this point, you identify the errors and determine their impact on the overall outcome.
- Problem-Solving - You devise a model that fixes the errors and implements them to move from what you have and achieve what you should have.
Two quality management methodologies come into play for Six Sigma to achieve these results. They come in five phases that a business has to follow to get results. They include:
Let's discuss each of these methodologies.
DMAIC is the most common methodology among Six Sigma adopters. It focuses on improving current processes incrementally and stands for: Define, Measure, Analyze, Improve, and Control.
Organizations can use this data-based method for process improvement projects. It should follow the prescribed order to be effective.
Here's a breakdown of the five-step process:
Before you can deal with a problem, you must first define it. So, in this step:
- Clearly identify the 'what' in the problem
- State the goal of the project
- Outline the scope of the project
- Identify the available resources
- Set a timeline for the project
Simply put, this step allows you to table whatever information you have on the process improvement project and seek clarification. Using that information, you can identify the problem, your customer's needs, what you require to meet those needs, and set other project goals.
Collect data on the project and use it to determine the scope of the problem. By doing this, you'll better understand the problem and position yourself to solve it. The data collected at this point will act as a reference point to measure your progress at the end of the project.
The problems identified in the first step have a root cause that must be eliminated. This step allows you to analyze the multiple root causes using complex data analysis tools, validate them, and select them for elimination.
The most common analysis techniques include:
Establish creative ways to eliminate the problem from the root cause. Test the simple solutions first and see whether they suffice. A plan-do-check-act (PDCA) cycle ou cycle planifier-faire-vérifier-agir (PDCA, « plan-do-check-act » en anglais) can also help you test the identified solutions and allow you to create a workable implementation plan.
Using a tool for monitoring action plans, which are numerous in these projects, also helps navigate the process. UTrakk’s Project Module is a good example, but here are some other tools and methodologies commonly used at this stage:
In this step, you need to implement activities to ensure the sustainability of the implemented improvements. These could include Standard Operating Procedures (SOPs), control charts, audits, and also recommendations for future projects.
Control and sustainability are often the weakest links of improvement processes. Active supervision tours are an excellent way to follow up with staff members. Including specific checkpoints in your Gemba Walk checklists help maintain awareness and accountability toward processes and results.
On the other hand, DMADV focuses on optimizing new processes or products to adhere to Six Sigma standards. It stands for Define, Measure, Analyze, Design, and Verify.
For example, the DMADV approach would be efficient when implementing a new ERP.
Here's a breakdown of all five steps.
Consider all the available information to determine what you have and what you need to achieve. Thus, you'll be able to determine the issue, list the available resources, and clearly define the goals for the project.
Get more information on the project through data collection. You'll also get to measure the project's scope and better understand the issue.
Using your data, explore all aspects of the current situation or issue. Having a deeper understanding of the issue will make it easier to solve.
Using this model for a new project will help you develop a process that results in customer satisfaction.
Test the process you have created to ensure that it meets your customer's needs and efficiently works as you designed it.
Reminder: DMAIC is best for already established businesses, while DMADV works best for a new project or a new business.
Six Sigma Tools
Tools are also crucial in the Six Sigma practice. Here are some of the most common Six Sigma methods and tools:
- Statistical process control
- ANOVA (Analysis of variance)
- Gage R&R (Repeatability & Reproducibility)
- Taguchi method
- CTQ Tree (Critical To Quality)
- Control Chart
- Flow Chart
- Check sheet
- Scatter plot
- Pocess mapping
- Pareto Charts
- Cause and effects analysis
- Ishikawa diagram
- Fishbone diagram
What are the Six Sigma Levels?
You'll need to source trained practitioners throughout your organization's hierarchy to make Six Sigma happen. Leadership should align the right people with suitable projects to achieve and sustain success. Six Sigma borrows the practice of designating various mastery levels using the concept of belts from martial arts:
A newcomer can start with this most straightforward stage. They:
- Team up with others on problem-solving adventures
- Gain basic knowledge of Six Sigma concepts
The Six Sigma Yellow Belt participant works as a team member and:
- Review improvements
- Grasp DMAIC and other methodologies
Here, the candidate should have at least three years of full-time employment and:
- Six Sigma methodologies skills
- Experience in business transformation projects
- Can manage Six Sigma Green Belt level teams or projects
Members at this stage need to have at least three years of full-time employment, plus:
- Hands-on experience in a critical area
- Completion of at least 2 Six Sigma projects
- Expertise in using multivariate metrics in diverse ecosystems
- Ability to manage various teams
- Ability to train teams
Master Black Belt
To attain a Six Sigma Master Black Belt, a participant should have a Six Sigma Black Belt certification and:
- At least five years of full-time employment
- Completed at least 10 Six Sigma processes
- A portfolio with specific requirements
- Have coached Black and Green Belts
- Develop core strategies
- Hands-on experience as a company Six Sigma technologist
How Is Six Sigma a Strategy Toward Operational Excellence?
Operational excellence involves everyone working in an organization at every level. Therefore, you should employ the Six Sigma improvement strategy to consider every level's effort into growing the business.
To implement Six Sigma successfully, you can follow the following action plan.
1. Analyze and Understand the Situation
Involve every team member in understanding the project and how to implement the Six Sigma methodology. With that knowledge, you can make strategic goals contributing to the ultimate goal.
2. Ensure Everyone Is on Board with the Six Sigma Methodology
Engage all the members and stakeholders in Six Sigma implementation. Then, explain why it's essential for your business and the roles they will play in each step of the methodology.
3. Explain the Processes
Once everyone is reading from the same page, introduce the standard method you'll follow in your organization to reach your goal. Everyone will then know what to do regarding shifts and other processes.
4. Have a Common Problem-Solving Approach
There are different ways to carry out a Six Sigma methodology with other processes such as data collection. Although, you need to align the problem-solving approach so that all the stakeholders follow one straightforward process.
5. Monitor Performance at Every Step and Set New Goals
Every step you make towards problem-solving should bring in some results. So, by monitoring performance, you can identify problem root causes and know how to eliminate them.
6. Make Creative and Sustainable Changes
Integrating new skills into the Lean Six Sigma methodology will be a great way to provide solutions to the process. It will be easy to adapt to the changes and set new goals. The changes will also ensure continuous improvement, especially if you instill it into your company's culture.
7. Ensure Your Managers Are Well-Skilled
Six Sigma is based on project management and statistics; your managers may not have a statistical background. Therefore, you can organize training for your management team members to ensure they are all on board with the process.
Tip: Operational excellence happens when a company focuses on creating a long-term continuous improvement culture through investing in the proper practices.
Six Sigma is one way to attain operational excellence, but like other strategy models, it requires professional input that you might not have in your organization.
At times, it's difficult to tell what works and what doesn't and to successfully implement the best approaches toward operational excellence, leadership development, and management digitalization. Our experts are here to help.