1. What is Six Sigma?
Six Sigma has been defined in a variety of manners since inception at Motorola in 1987. There are three basic categories that Six Sigma fall into: a quality initiative that is focused on financial results for a business, a statistically based process improvement method, and a statistical measure of process/product capability. Six Sigma is all of these and has been evolving since it was first developed. A process engineer concerned about his company’s failure to maintain market share due to product non-conformances had the original thought. Dr. Mikel Harry and other statisticians then validated the concept with mathematical and statistical modelling. Six Sigma was born.
Six Sigma – The Initiative
The Six Sigma initiative is the latest quality and management improvement movement to hit a variety of industries. This movement started at Motorola where it was focused primarily on the reduction of quality defects to sustain their semiconductor business. It was then adopted across all areas of Motorola, seen as a valuable improvement initiative for all product lines.
AlliedSignal made the next significant change to the Six Sigma methodology as they focused it on projects with significant financial impact. The methods were applied not only to manufacturing process improvement but also to the development and commercialisation of new products.
General Electric, after seeing how Six Sigma benefited AlliedSignal, adopted the practices and made the next significant contribution to the evolution of Six Sigma by applying it to more non-manufacturing businesses. Insurance, leasing of buildings, and credit services all saw tremendous benefits through improving their processes and yielded millions of dollars in the process.
Six Sigma is continuously evolving in its application to different aspects of business, in a variety of industries. It’s not just for manufacturing anymore…
Six Sigma – The Method
Most people in the Six Sigma deployment world know the initials DMAIC – Define, Measure, Analyze, Improve, and Control. These are the five phases of the commonly accepted and followed process improvement roadmap used in Six Sigma. In each phase, there are a number of Subjective and Objective tools and techniques used to focus the Project Leader on the critical aspects of the process that impact the output of the process, and ultimately, the customer. Subjective tools include Process Mapping, Failure Mode and Effect Analysis (FMEA), and Quality Function Deployment (QFD). Objective tools include statistical tests, Design of Experiments, and Capability Analysis to mention only a few.
Project Leaders are instructed in the proper timing and application of the multitude of Subjective and Objective tools and methods, always focusing on improving the process to provide financial and strategic benefit to the company.
Six Sigma has expanded to include Design, Technology, Marketing, and Business Process areas of the company as well as Manufacturing/Operations. Though many of the Objective tools remain the same, their timing and application change dependent on the functional area they are applied to.
Design for Six Sigma (DFSS) is focused on the development of a product, not on the process to create the product. The Product Development Cycle is the roadmap followed for DFSS, where the Objective and Subjective tools are applied accordingly during the appropriate Stage of the product development cycle. The focus is the development of products that are designed to meet customer needs and expectations with a high degree of capability through understanding the process and supplier capability to produce the product. This incorporates the design for reliability, manufacturability and serviceability.
Six Sigma – The Metric
The measure Six Sigma, or six standard deviations, is a statistical representation of the variation of a process as it is compared to the acceptable tolerance window provided by the customer. A standard deviation, represented by the Greek symbol sigma (s), is a measure of variability. If one measures a normally distributed process or product, approximately 99.73% of the values would be within +/- 3 standard deviations of the mean, or average, value. Six Sigma means that the customer specification limits (what they are willing to accept) are 6 standard deviations (hence, Six Sigma) on either side of the average value. With this level of performance, the customer will only observe 3.4 parts per million (PPM) outside of their specification limits.
2. How Six Sigma can be applied to my Organization?
Many have thought that Six Sigma applies to manufacturing because it was fundamentally focused on defect reduction, quality improvement and cost reduction. The reality is that Six Sigma applies to ANY process. Processes exist in every business, industry and walk of life. Businesses that have seen millions of dollars in bottom-line benefits include:
- Law firms
- Transportation companies
- Chemical processing plants
- Energy supply facilities
- Financial institutions
- Health care providers
- Government agencies
- Automotive and electronic assembly facilities
- Insurance providers
- Leasing companies
- Military organizations
- Textile production
Each of these entities has one thing in common: they all complete their business through the use of processes. Six Sigma can be utilized to improve any process, the key is determining which process (es) would benefit the company through the application of Six Sigma. Identifying and improving Core and enabling processes is paramount to the effective and efficient application of Six Sigma. This may include processes like:
- Financial transactions
- Logistics and scheduling
- Order processing
- Customer call centres
- Design functions
- Supplied goods receipt
- Inventory management
- Manufacturing processes
- Customer service
- Marketing and advertising
- Quality auditing and control
Six Sigma has shown to be instrumental in improving a variety of processes in a multitude of industries. Odds are that it could be applied to your business too.
3. What is the trend in Six Sigma?
Six Sigma was first implemented in the Manufacturing processes of electronics manufacturers. Many manufacturing oriented companies continued to apply the successful techniques but the efforts became less beneficial over time since the focus was constantly on cost reduction and productivity improvement on the manufacturing floor. Soon many chemical and continuous process companies adopted Six Sigma and saw tremendous impacts, but still focused in production.
The vision for Six Sigma is not only about bottom-line savings. Within the last two years a new phenomenon within Six Sigma has emerged that goes beyond the focus for savings. Design for Six Sigma (DFSS) was incepted to focus on stimulating top line growth by focusing on critical aspects of company centric design processes. It all begins with a robust process for extracting the voice of the customer, processing it into a quantitative specification for design requirements, and then applying the best tools to creating the best products and services that fulfil customer expectations. In fact, companies have seen DFSS not only create superior bottom-line savings by enhancing the design process, but they have seen extraordinary growth from the types of products that not only fulfil customer standards and uses, but they also fulfil customer’s unrealized latent expectations.
Some companies have gained the vision that Six Sigma, when applied to non-manufacturing or Business Process areas, can yield significantly larger gains than in the manufacturing areas. Significant improvements in Inventory Turns, Throughput, Cash Flow, Schedule Attainment and Customer Retention measures have been achieved in areas of both manufacturing and service industries.
In the past decade, the companies implementing Six Sigma were typically only the large corporations with large consulting budgets. Today, regional programs and corporate programs are available to assist any size company in successful implementation of Six Sigma in their business.
So where is Six Sigma application headed? Marketing, technology development, customer cantered business development are but a few of the pioneering areas Six Sigma is infiltrating. As the Six Sigma maturity level of a business increases, the need for expanded application of improvement techniques becomes more relevant. AFOES Consultants continues to innovate in these pioneering areas and they seek excellence for all their customers.
var _gaq = _gaq || ; _gaq.push(['_setAccount', 'UA-451483-1']); _gaq.push(['_trackPageview']);