SIX SIGMA

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Overview

 

Six Sigma (6σ) is a methodology, philosophy, measure of product, service, and process quality, and set of tools and techniques, most of which are statistical in nature.

 

Six Sigma DMAIC, an acronym for Define, Measure, Analyse, Improve, and Control, is a methodology for improving existing processes, products, and services. It was introduced in 1986 by the American quality engineer Bill Smith, while he was working at Motorola.

 

Jack Welch, the CEO of General Electric, made it central to his business improvement strategy at in 1995.

 

The maturity of a manufacturing process can be described by a sigma rating indicating its yield or the percentage of defect-free products it creates - specifically, to within how many standard deviations of a normal distribution the fraction of defect-free outcomes corresponds.

 

Motorola set a goal of long-term "six sigma" goal, corresponding to 3.4 DPMO, for its manufacturing processes. A six sigma process is one in which 99.99966% of all opportunities to produce some feature of a part are statistically expected to be free of defects. This corresponds to 3.4 defects per million opportunities (DPMO) to produce a defect.

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Six Sigma strategies seek to improve the quality process outputs, in the form of products or services, by identifying and removing the root causes contributing to unacceptable levels of variation and defects, and minimizing their impact in manufacturing and service processes.

 

Six Sigma uses a set of quality management methods, that are mainly empirical, and are based on the practical application of statistical process control (SPC) methods, tools, and techniques.

 

Adoption and deployment of six sigma is based on a special type of supporting infrastructure, comprising of people within the organization, who are experts in these methods.

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The hierarchy of Six Sigma “Belts”

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Six Sigma practitioners:

• Are known as Six Sigma “belts”

• Have “belt titles”, within the hierarchy of "belts", such as White Belt,

      Yellow Belt, Green Belt, Black Belt, and Master Black Belt.

 

Each "belt title" is based on the practitioner's:

• Level of Six Sigma knowledge, experience, and expertise

• Competence in the application of Six Sigma methodologies, such as

      DMAIC, DFSS/ DMADV, and BPM

• Competence in the selection and use of six sigma tools and

      techniques, to solve business-related problems.

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Six Sigma Project Selection and Commissioning

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The deployment of six sigma in organisations adopting its philosophy and methodologies, is based on:

• Training of "waves" of six sigma belts

• Selection, commissioning, and successful completion of six sigma projects, that deliver a range of benefits to the organisation and its stakeholders.

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​Each Six Sigma project is selected based on:

• A Business Case, supporting the reason(s) why a proposed project is important for the organisation, and justifying the project from a business perspective

• A robust project selection process and set of criteria defined by the business.

 

The main factors, and the corresponding estimated values, that are taken into consideration during the project selection process are:

• Project duration

• Project cost

• Risk associated with successful project completion probability of project success)

• (Hard/ financial) benefits, deriving from the project outcomes/ deliverables over a pre-determined period set by the business, known as “benefits realisation period”.

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The above factors, together with a business problem statement, and the proposed approach to solve it (goal or objective statement) are covered in the Business Case.

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Six Sigma Projects

 

Each Six Sigma project, commissioned by an organization that has adopted Six Sigma, or Lean Six Sigma:

• Has a clear start and end

• Follows a defined sequence of stages

• For each stage there are specific objectives, deliverables, and a range of tools and techniques that can be used to solve business problems.

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How Six Sigma Works

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Six Sigma is a disciplined and quantitative approach involving setting up a system

and process for the improvement of defined metrics in manufacturing, service, or

financial processes.

 

The approach drives the overall process of selecting the right projects based on

an organization's business goals and selecting and training the right people to

obtain the results.

 

Improvement projects follow a disciplined process defined by a system of 5 macro

phases: Define, Measure, Analyse, Improve, and Control (DMAIC).

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The figure to the right illustrates how the DMAIC methodology works.

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S​ix Sigma Project Benefits

 

Each project is selected based on cost/ benefits analysis, duration, and risk. The aim is to deliver "hard benefits", in the form of e.g. operating cost reduction (see note), through improved process performance and efficiency due to:

• Lead Time and Cycle Time reduction

• Reduced number of people required to operate the end-to-end process

• Improved product or service quality

• etc.

 

Hard (financial) benefits are typically:

• Expressed in monetary figures in $, £, €, etc.

• Are easier to calculate and quantify than “soft benefits”

 

Examples of "soft" (non-financial) benefits include increase in customer satisfaction and loyalty (Customer Satisfaction Index), increased brand recognition, competitive advantage in the marketplace, compliance with legal/ regulatory requirements (*), etc.

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(*) Compliance is typically associated with cost avoidance, estimated in monetary terms as the cost associated with fines imposed from regulatory bodies in case of non-compliance.

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The origins of the term “Six Sigma”

 

The term "six sigma" originated from the field of applied statistics, and is used in statistical quality control, which evaluates business process capability.

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Originally, it referred to the ability of manufacturing processes to produce a very high proportion of output within specification limits (tolerance) determined by the customer (Voice of the Customer, or VOC) or industry norms.

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Process performance is higher when it is monitored and measured over a short period of time, e.g. 4 weeks, after it has been improved. This is the "over-optimistic" level of  sigma quality, experienced by the supplier, and is known as "short-term" sigma.

 

When the above process is is monitored, and its performance measured, over a longer period of time, e.g. several months, the sigma level is expected to shift by ± 1.5 sigma. This level of process sigma is known as "long-term" sigma, and is experienced by the customer.

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Example: a 6σ level of short-term process quality (σst) is anticipated to be (usually reduced) to 4.5σ level over the long-term.

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Note: 6σ corresponding to a DPMO value of 3.4 corresponds to the long-term sigma, i.e. it takes into consideration the +/- 1.5σ shift.

 

Should ALL business processes perform at 6σ level of quality?

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The short answer is "it depends on the importance and criticality of the business process". ​Six Sigma's implicit goal is to improve all business processes, but not necessarily to the 6 level. Some processes, known as "core", must perform close to, or at, 6σ level, whereas it could be acceptable for other processes, known as "management" and "supporting, to perform at 3σ level.

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Organizations must:

• Determine an appropriate sigma level for each of their businesses, including “core”/ mission-critical,  "management" and  "supporting" ones

• Strive to achieve these sigma levels.

 

As a result of this goal, it is incumbent on management to identify and prioritize business areas that need improvement.

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For definition of the terms "business process architecture", and "core", "management", and "supporting processes" click here.

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Six Sigma is registered trademark of Motorola

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The term Six Sigma:

• Originated from terminology associated with statistical modelling and statistical process control of manufacturing processes.

• "Six Sigma" was registered June 11, 1991 as U.S. Service Mark 1,647,704.

• Is capitalized because it was written that way, when registered as a Motorola trademark on December 28, 1993.

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Recent developments related to Six Sigma

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By the late 1990s, about two-thirds of the Fortune 500 organizations had begun Six Sigma initiatives with the aim of reducing costs and improving product and service quality.

 

​​In 2005 Motorola attributed over US$17 billion in operating savings to the deployment of Six Sigma across its organisation. Other early adopters of Six Sigma include Honeywell and General Electric, where Jack Welch introduced the method as part of a strategic business initiative.

 

Lean Six Sigma

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​In recent years, some practitioners have combined the philosophy,

methodology and set of tools and techniques of Lean Manufacturing and

Six Sigma to create a methodology known as Lean Six Sigma.

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Lean Six Sigma, abbreviated as LSS, is a powerful, team-based approach

for improving existing business processes, products and services by 

eliminating the 8 forms of Lean waste (muda) and reducing process

variation. This increase quality and efficiency, thus contributing to

improved customer experience, lower operating costs, and more satisfied

and productive members of staff.

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Lean Six Sigma, as discipline, promotes business and operational

excellence (OPEX).

 

The two elements of LSS contribute as illustrated in the figure to the right:

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​Six Sigma and ISO Standards

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In 2011, the International Organization for Standardization (ISO) published the first standard "ISO 13053:2011- Quantitative methods in process improvement - Six Sigma, comprising two parts:

• Part 1 covers the subject of the DMAIC methodology

• Part 2 covers the Six Sigma tools and techniques

 

The above standard was last reviewed in 2016 and the 2011 version is still in effect.

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In 2015 ISO published another relevant standard, ISO 18404:2015, which defines the competencies for the attainment of specific levels of competency with regards to Six Sigma, Lean, and "Lean & Six Sigma" in individual practitioners, such as Black Belts, and Green Belts, and their organizations.

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BT&CS Ltd provides LSS training courses based on the above standards/ best practices.

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For an overview of our training courses please click here.