What is Six Sigma: A Complete Overview

Digital transformation has become the hottest buzzword of this decade. New technologies and tools are supporting the transformation journey of companies big and small, as they compete to get a bigger slice of business in a fast-paced competitive environment.  Yet, is it enough to smooth a company’s transformative process? Can a standalone technology implementation remove a bottleneck in the production process or support troubleshooting a service design flaw? Although digital transformation fast-tracks a company’s growth, it has to be equally supported by management methods of quality control and business transformation.

Keeping in tune with emerging markets and processes, the American company Motorola developed a new concept of quality management process in 1986. Over the years, it has been refined and polished into a sound theory of principles and methods, aimed at business transformation through a clearly defined process. This finished product is Six Sigma.

What is Six Sigma?

Six Sigma is a set of management tools and techniques designed to improve business by reducing the likelihood of error. It is a data-driven approach which uses statistical methodology for eliminating defects.

The etymology is based on the Greek symbol “sigma” or "σ”, a statistical term for measuring process deviation from the process mean or target. “Six Sigma” comes from the bell curve used in statistics, where one Sigma symbolizes a single standard deviation from the mean. If the process has six Sigmas, three above and three below the mean, the defect rate is classified as “extremely low.” 

Related read: Click here to know the reasons to get a Six Sigma Certification

The graph of the normal distribution below underscores the statistical assumptions of the Six Sigma model. The higher the standard deviation, the higher is the spread of values encountered. So, processes where the mean is minimum 6σ away from the closest specification limit are aimed in Six Sigma. 

graph of the normal distribution curve in six sigma

Credit: Cmglee, via Wiki Creative Commons CC BY-SA 3.0

The 5 Key Principles of Six Sigma

The concept of Six Sigma has a simple goal – delivering near-perfect goods and services for business transformation for optimal customer satisfaction (CX).

Goals are achieved through a two-pronged approach:

five key principles of six sigma

Six Sigma has its foundations in five key principles:

  1. Focus on the customer 
    This is based on the popular belief that the “customer is the king.” The primary goal is to bring maximum benefit to the customer. For this, a business needs to understand its customers, their needs, and what drives sales or loyalty. This requires establishing the standard of quality as defined by what the customer or market demands.
  2. Measure the value stream and find your problem 
    Map the steps in a given process to determine areas of waste. Gather data to discover the specific problem area that is to be addressed or transformed. Have clearly defined goals for data collection, including defining the data to be collected, the reason for the data gathering, insights expected, ensuring the accuracy of measurements, and establishing a standardized data collection system. Ascertain if the data is helping to achieve the goals, whether or not the data needs to be refined, or additional information collected. Identify the problem. Ask questions and find the root cause.
  3. Get rid of the junk 
    Once the problem is identified, make changes to the process to eliminate variation, thus removing defects. Remove the activities in the process that do not add to the customer value. If the value stream doesn’t reveal where the problem lies, tools are used to help discover the outliers and problem areas. Streamline functions to achieve quality control and efficiency. In the end, by taking out the above mentioned junk, bottlenecks in the process are removed.
  4. Keep the ball rolling 
    Involve all stakeholders. Adopt a structured process where your team contributes and collaborates their varied expertise for the purposes of problem-solving.
    Six Sigma processes can have a great impact on an organization, so the team has to be proficient in the principles and methodologies used. Hence, specialized training and knowledge are required to reduce the risk of project or re-design failures, and ensure that the process performs optimally.
  5. Ensure a flexible and responsive ecosystem 
    The essence of Six Sigma is business transformation and change. When a faulty or inefficient process is removed, it calls for a change in the work practice and employee approach. A robust culture of flexibility and responsiveness to changes in procedures can ensure a streamlined project implementation. The people and departments involved should be able to adapt to change with ease, so in order to facilitate this, processes should be designed for quick and seamless adoption. Ultimately, the company that has an eye fixed on the data, examines the bottom line periodically, and adjusts its processes where necessary, can gain a competitive edge.

The Six Sigma Methodology

The two main Six Sigma methodologies are DMAIC and DMADV. Each has its own set of recommended procedures to be implemented for business transformation.

DMAIC is a data-driven method, used to improve existing products or services for better customer satisfaction. It is the acronym for the five phases: D – Define, M – Measure, A – Analyse, I – Improve, C – Control. DMAIC is applied in the manufacturing of a product or delivery of a service.

DMADV is a part of the Design for Six Sigma (DFSS) process, used to design or redesign different processes of product manufacturing or service delivery. The five phases of DMADV are: D – Define, M – Measure, A – Analyse, D – Design, V – Validate. DMADV is employed when existing processes do not meet customer conditions, even after optimization, or when it is required to develop new processes. It is executed by Six Sigma Green Belts and Six Sigma Black Belts and under the supervision of Six Sigma Master Black Belts. We’ll get to the belts later.

The two methodologies are used in different business settings, and professionals seeking to master these methods and application scenarios would do well to take an online certificate program taught by industry experts.

The Six Sigma Process of Business Transformation

Although Six Sigma uses various methods to discover deviations and solve problems, the DMAIC is the standard methodology used by Six Sigma practitioners. Six Sigma uses a data-driven management process used for optimizing and improving business processes. The underlying framework is a strong customer focus and robust use of data and statistics to draw conclusions.  

The Six Sigma Process of the DMAIC method has five phases:

Five phases of DMAIC methods

Each of the above phases of business transformation has several steps:

  1. DEFINE 
    The Six Sigma process begins with a customer-centric approach.
    Step 1: The business problem is defined from the customer perspective.
    Step 2: Goals are set. What do you want to achieve? What are the resources you will use in achieving the goals?
    Step 3: Map the process. Verify with the stakeholders that you are on the right track.
  2. MEASURE 
    The second phase is focused on the metrics of the project and the tools used in the measurement. How can you improve? How can you quantify this?
    Step 1: Measure your problem in numbers or with supporting data.
    Step 2: Define performance yardstick. Fix the limits for “Y.”
    Step 3: Evaluate the measurement system to be used. Can it help you achieve your outcome?
  3. ANALYZE 
    The third phase analyzes the process to discover the influencing variables.
    Step 1: Determine if your process is efficient and effective. Does the process help achieve what you need?
    Step 2: Quantify your goals in numbers.  For instance, reduce defective goods by 20%.
    Step 3: Identify variations, using historical data.
  4. IMPROVE 
    This process investigates how the changes in “X” impacts “Y.” This phase is where you identify how you can improve the process implementation.
    Step 1:  Identify possible reasons. Test to identify which of the “X” variables identified in Process III influence “Y.”
    Step 2: Discover relationships between the variables.
    Step 3: Establish process tolerance, defined as the precise values that certain variables can have and still fall within acceptable boundaries, for instance the quality of any given product. Which boundaries need X to hold Y within specifications? What operating conditions can impact the outcome? Process tolerances can be achieved by using tools like robust optimization and validation set.
  5. CONTROL 
    In this final phase, you determine that the performance objective identified in the previous phase is well implemented and that the designed improvements are sustainable. 
    Step 1: Validate the measurement system to be used.
    Step 2: Establish process capability. Is the goal being met? For instance, will the goal of reducing defective goods by 20 percent be achieved?
    Step 3: Once the previous step is satisfied, implement the process.

Six Sigma Techniques

The Six Sigma methodology also uses a mix of statistical and data analysis tools such as process mapping and design, and proven qualitative and quantitative techniques, in order to achieve the desired outcome.

Key Six Sigma Techniques in use

Key Six Sigma Techniques in use

Brainstorming

Brainstorming is the key process of any problem-solving method and is often utilized in the “improve” phase of the DMAIC methodology. It is a necessary process before anyone starts using any tools. Brainstorming involves bouncing ideas and generating creative ways to approach a problem through intensive freewheeling group discussions. A facilitator, who is typically the lead Black Belt or Green Belt, moderates the open session among a group of participants.

Root Cause Analysis/The 5 Whys

This technique helps to get to the root cause of the problems under consideration and is used in the “analyze” phase of the DMAIC cycle.

In the 5 Whys technique, the question “why” is asked again and again, finally leading up to the core issue. Although “five” is the rule of thumb, the actual number of questions can be greater or fewer, whatever it takes in order to gain clarity.

Voice of the Customer

This is the process used to capture the “voice of the customer” or customer feedback by either internal or external means. The technique is aimed at giving the customer the best products and services. It captures the changing needs of the customer through direct and indirect methods. The voice of the customer technique is used in the “define’ phase of the DMAIC method, usually to further define the problem to be addressed.

The 5S System

This technique has its roots in the Japanese principle of workplace energies. The 5S System is aimed at removing waste and eliminating bottlenecks from inefficient tools, equipment, or resources in the workplace. The five steps used are Seiri (Sort), Seiton (Set In Order), Seiso (Shine), Seiketsu (Standardize) and Shitsuke (Sustain).

Kaizen (Continuous Improvement)

The Kaizen technique is a powerful strategy that powers a continuous engine for business improvement. It is the practice continuously monitoring, identifying, and executing improvements. This is a particularly useful practice for the manufacturing sector. Collective and ongoing improvements ensure a reduction in waste, as well as immediate change whenever the smallest inefficiency is observed.

Benchmarking

Benchmarking is the technique that employs a set standard of measurement. It involves making comparisons with other businesses in order to gain an independent appraisal of the given situation. Benchmarking may involve comparing important processes or departments within a business (internal benchmarking), comparing similar work areas or functions with industry leaders (functional benchmarking), or comparing similar products and services with that of competitors (competitive benchmarking).

G. Poka-yoke (Mistake Proofing)

This technique’s name comes from the Japanese phrase meaning “to avoid errors”, and entails preventing the chance of mistakes from occurring. In the poka-yoke technique, employees spot and remove inefficiencies and human errors during the manufacturing process.

H. Value Stream Mapping

The value stream mapping technique charts the current flow of materials and information, with the purpose of designing a future project. The objective is to remove waste and inefficiencies in the value stream and create leaner operations. It identifies seven different types of waste and three types of waste removal operations.

The Six Sigma Tools

  1. Cause and Effect Analysis
  2. Flow Chart
  3. Pareto Chart
  4. Histogram
  5. Check Sheet
  6. Scatter Plot
  7. Control Chart

Six Sigma Levels

The Six Sigma training levels conform to specified training requirement, education criteria, job standards, and eligibilities.

White Belt

This is the simplest stage, where:

  • Any newcomer can join.
  • People work with teams on problem-solving projects.
  • The participant is required to understand the basic Six Sigma concepts.

Yellow Belt

Here, the participant:

  • Takes part as a project team member.
  • Reviews process improvements.
  • Gains understanding of the various methodologies, and DMAIC.

Green level

This level of expertise requires the following criteria:

  • Minimum of three years of full-time employment.
  • Understand the tools and methodologies used for problem-solving.
  • Hands-on experience on projects involving some level of business transformation.
  • Guidance for Black Belt projects in data collection and analysis.
  • Lead Green Belt projects or teams.

Black Level

This level includes the following:

  • Minimum of three years of full-time employment
  • Work experience in a core knowledge area
  • Proof of completion of a minimum  of two Six Sigma projects
  • Demonstration of expertise at applying multivariate metrics to diverse business change settings
  • Leading diverse teams in problem-solving projects.
  • Training and coaching project teams.

Master Black Belt

To reach this level, a candidate must:

  • Be in possession of a Black Belt certification
  • Have a minimum of five years of full-time employment, or Proof of completion of a minimum of 10 Six Sigma projects
  •  A proven work portfolio, with certain specific requirements, as given here for instance.
  • Have coached and trained Green Belts and Black Belts.
  • Develop key metrics and strategies.
  • Have worked as an organization’s Six Sigma technologist and internal business transformation advisor.

The Six Sigma Certification Levels

Six Sigma certification is much like the certification system followed in martial arts, where a wannabe Six Sigma professional begins with the White Belt and upskills his way up to become the master of the pack with the Master Black Belt; or take an integrated certification offered by some institutes.

The five-tiered levels of Six Sigma Certification

The five-tiered levels of Six Sigma Certification

What are the Six Sigma Career Choices and Salary Prospects?

Six Sigma is a great way to climb up the career ladder with cool job titles and matching salary prospects. Companies that routinely hire candidates to fill Sigma Six positions include: 3M, Abbott Laboratories, General Electric, The Hershey Company, IBM, Honeywell, Newell Rubbermaid, Siemens, and Wells Fargo.

There are a number of career choices for Six Sigma professionals as manufacturing engineers, compliance engineers, and operating system specialists.

Additionally, there are career opportunities with the following titles, although the precise nomenclature can vary from company to company:

  • Six Sigma Analyst
  • Six Sigma Black Belt
  • Six Sigma Consultant
  • Director of Operational Excellence
  • Functional Project Lead
  • Senior Project Manager
  • Six Sigma Projects Manager
  • Business Process Manager
  • Lead Analyst/Project Manager

In terms of salary, according to Glassdoor, someone Six Sigma Green Belt certified can expect an average yearly salary of $97,919. Salary.com gives a Six Sigma Black Belt certified professional a range from $96,500 to $118,700.

Six Sigma Learning Resources

So whether you are a graduate in any stream, an engineer, or an MBA professional, if you want to enhance your career prospects and salary gains, then make sure to get certified in Six Sigma courses. Begin with a Green Belt and climb your way up to Master Black belt to command your own salary. As a fresher, you can start learning Six Sigma principles by enrolling into Simplilearn's Lean Six Sigma Green Belt certificate program, and then avail the higher certificate levels as you gain work and project experience.

About the Author

Pankaj KumarPankaj Kumar

Pankaj Kumar is an Associate Product Manager at Simplilearn, with 5+ years of experience. He is a transformation leader with rich experience in Project Management, Account Management, Business Development and Product Management.

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