Six Sigma was first developed by Motorola in the 1980s and was made popular by its application and results at General Electric during the 1990s. Jack Welch was its most fervent promoter, who made it possible to increase the company's value by an astonishing 4,000%.
It focuses on improving customer satisfaction and business results by reducing process variability. All work is a process, and all processes have variability. Variability is part of nature, it’s everywhere.
DNA makes us unique human beings. Even with upbringing in the same environment, with the same family and learning at the same schools, brothers and sisters differ greatly in their personality. And much the same happens with organizations. Employee motivations vary, and employees may respond differently to the same salary increase or the same set of orders from a superior. Products differ from one another despite being manufactured using the same set of machinery, and service mileage varies even with the same employee. A thorough knowledge of variation will demonstrate, however, that problems need to be attributed to system issues, not to people being unwilling to do their jobs.
If we want to eliminate the sources of variation so that we can offer our customers consistently high product quality, we need to reduce the noise in the system. To achieve this, we need to base our decisions on hard data, as opposed to gut feeling. That way, we will be able to incorporate the changes that will really impact our results, improve the efficiency of our resources, reduce non-value added costs, and boost team morale.
Why Six Sigma?
Where does the term ‘Six Sigma’ originate from? In essence, Six Sigma refers to a statistical concept that refers to six standard deviations between the process mean and the nearest specification limit on either side. The first quality management standard is 1 sigma, which has a broader error tolerance threshold, while the finest quality management standard is 6 sigma, with which you will only have 3.4 errors or defects per million opportunities (DPMO). The standard deviation is measured in sigma units and represented by the Greek letter σ (sigma).
If your process is 5 sigma, it means that you have 233 DPMO and if it is 3 sigma, you have 66,811 DPMO. Imagine if a hospital has a 3 sigma level -there would be more than 60,000 incorrect drug prescriptions every year! Unfortunately, this is the quality level that is currently the norm in industry.
For a typical company operating at a 3 sigma level, the inevitable costs of countering and resolving errors could be as much as 25 to 40% of its sales, while with a 6 sigma standard, this could be cut down to below 5%.
Fortunately, the airline industry is on the right track. The sigma level of landings is around 6. Companies like Delta and Southwest use the Six Sigma methodology to continually improve performance. Nevertheless, no airline is currently using 6-Sigma for Customer/Passenger Satisfaction.
|Sigma level||Defects per million opportunities||% cost of quality|
|2||308.300||>40 percent of sales|
|3||66.807||25-40 percent of sales|
|4||6.210||15-25 percent of sales|
|5||233||5-15 percent of sales|
|6||3,4||<5 percent of sales|
A Cultural Issue
Six Sigma follows a step-by-step approach to problem solving known as DMAIC: define, measure, analyze, improve and control. As Juran -one of the pioneers of quality management- once put it, “all improvement happens project by project, and in no other way”. The idea is that if you get your employees to develop improvement projects every time they have a problem, they will start to get involved in the quality culture. Their approach towards problem solving will eventually change and they will start embracing continuous improvement. The power of projects is that everyone involved:
- Applies theory to practical situations and practices the use of quality tools
- Understands how they impact their processes
- Feels more empowered as they help to design a better process
- Enhances the quality of their daily work and contributes to increased efficiency
- Learns to work in teams, sometimes even in cross-functional ones
- Inspires others to improve
To finish off, another great plus with the project-by-project approach is that it’s cost effective, as you don’t need a huge investment to begin with. All you need to do is train your team, and projects delivering quality results will follow. Sounds easy, don’t you think?
Learn this an much, much more with a Lean Six Sigma professional training course that prepares you for the Lean Six Sigma Green and Black Belts!