Six Sigma

This post has been prepared by the ProjExc Manufacturing and Supply Chain Specialist, Clifford Hobbs. It is an excerpt from a more detailed review of Six Sigma and Lean methodologies to improve business performance, which no doubt come to light in future posts on the ProjExc Blog.

Introduction - Six Sigma is a highly customer focused improvement tool that is underpinned by a philosophy of rigorous measurement.

'a comprehensive and flexible system for achieving, sustaining and maximising business success. Six Sigma is uniquely driven by close understanding of customer needs, disciplined use of facts, data and statistical analysis and diligent attention to managing, improving and reinventing business processes'

The term 'sigma' means "Standard Deviation". Standard Deviation measures the variability in a given distribution or population of events and can therefore be applied to a process.

Motorola developed Six Sigma in the mid 80's. It was then successfully championed by Jack Welsh at General Electric in the 1990's. Their success stories have prompted many western (and in particular USA) manufacturers to adopt Six Sigma. More recently companies in the service sector have started to introduce and adopt Six Sigma practices.

There are many aspects of Six Sigma that are similar to Total Quality Management (TQM), which preceded Six Sigma and in many peoples view has now been superseded by Six Sigma.

Overview - Sigma can be translated into the number of defects per million "events".

Six sigma represents 3.4 defects per million events and is regarded as the ultimate goal for process performance - as close to perfection as is practicable.

This following gives the sigma to defect conversion ratio:

Six Sigma = 3.4 Defects per Million
Five Sigma = 230 Defects per Million
Four Sigma = 6210 Defects per Million
Three Sigma = 66,800 Defects per Million
Two Sigma = 308,000 Defects per Million
One Sigma = 690,000 Defects per Million.

The ultimate goal of a Six Sigma programme is to reduce the number of defects per million opportunities to 3.4 - the equivalent of a 99.997% quality level.

Methodologies - There are different approaches to implementing Six Sigma although the main principles are as follows:

1.    Identify core processes and key customers
2.    Define customer requirements
3.    Measure current performance
4.    Prioritise, analyse and implement improvements
5.    Expand and integrate the Six Sigma system.

The Six Sigma approach is strongly focused on ensuring effective processes from the perspective of the final customer. Critical processes are identified as part of the analysis of customer requirements, and statistical methods are applied to measure the variation of these processes against customer/market determined "tolerances". Techniques such as SPC and Design of Experiments are used to identify the root cause of poor process capability or to monitor processes in real time.

Improvement cycles are core to Six Sigma. An example being as follows:

1.    Prioritise areas of improvement
2.    Define processes that contribute to problems
3.    Measure the capability of each process
4.    Analyse the data
5.    Control process variability
6.    Standardise methods
7.    Integrate methods into design/process cycle

There are many statistical tools that are used within Six Sigma including: Quality Function Deployment, Run Charts, Pareto Charts, Histograms, Fishbone diagrams, Process Mapping, Design of Experiments, Project Definition, F-tests, Chi-Square Tests, Multivariate Studies, Fractional Factorials and Failure Mode and Effect Analysis.

Summary - Six Sigma pulls together well established operational tools and techniques that have been around for a number of decades. Over the last few years it has become increasingly popular with larger organisations and non manufacturing organisations. This is because it is very customer focused and has a strong emphasis on measurement and delivery of quantifiable benefit.

However, introducing Six Sigma is a high profile company-wide event and therefore the consequence of failure is significant. It is very 'resource hungry', and as with any major change initiative, will require total commitment from across the organisation and the infrastructure and organisation to support it.

The focus of much of the approach is on advanced statistical techniques, which can be complex and inappropriate for the majority of organisations, where the real challenge is to build simple and robust foundations for improvement. The advanced tools have their uses within an organisation that has already put in place the basic foundations of operational good practice, but their premature introduction in the wrong circumstances can place Six Sigma in the 'next failed initiative' category, making further improvement even harder.

Success in a Six Sigma program is subject to the same influences as many other change programmes i.e. leadership commitment to the program, involvement of staff at an early stage, integration of the change programme into the business practices of the organisation, good change management skills, and a clear focus on the end goal. Six Sigma Programmes (and Lean Programmes) are usually total company initiatives involving significant roll out costs, training and dedicated resource.

Effective Six Sigma programmes build on organisational capability and culture such as Continuous Improvement, Best Practice, team working and a measurement focus.

Six Sigma should not be viewed as something new or revolutionary and distinct from the day to day disciplines that companies should build in to their operations.

Comments on this posting from ProjExc Manufacturing and Supply Chain Specialist, Clifford Hobbs, are welcomed on the blog, or if you would like to discuss the subject some more, then contact details can be found on the ProjExc corporate website.

Comments

[Peter]

Great post. Thanks for the information about Six sigma. Sounds interesting. The new tool from ProjExc will help improve the performance of the companies and cater to the customer needs.

[rick maurer]

Thanks for the clearest and most concise description of Six Sigma I have seen. I especially appreciated the attention you give to the human elements involved in the success – or failure – of these major initiatives.

Rick Maurer
www.beyondresistance.com