Six Sigma Enigma - Taking the Mystery out of the Methodology
By MINITAB

Six Sigma is an information-driven methodology for reducing waste, increasing customer satisfaction, and improving processes, with a focus on financially measurable results. First developed at Motorola Corporation in the 1980’s, Six Sigma is now considered to be a world-class measure of excellence and efficiency. It is perhaps best known because of the well-publicized successes of General Electric and AlliedSignal.

In statistics, "sigma" refers to variation. Six Sigma methodology focuses on reducing variation as a way to improve processes. In particular, it uses sigma to measure the performance of a process to produce defect-free results. A defect is anything that causes customer dissatisfaction, such as a product that doesn't meet the customer's specifications, poor service, or a price tag that's too high.

A Company operating at Six Sigma quality produces 3.4 defects per million opportunities; that is, the work is 99.99966% defect free. Today most organizations operate between 2 and 3 sigma. Operating at a higher level of quality not only results in happier customers, but also saves money
by reducing waste and rework and by decreasing cycle time.

Six Sigma methodology does not apply only to manufacturing or technical processes. In order to successfully implement the program, virtually every facet of an organization, from administration to finance, is examined for opportunities to optimize output and improve performance. A formal plan is established to identify the overall program goals and timeline. Most companies develop a long-term plan that outlines the move from current performance levels to Six Sigma performance levels, with tangible, short-term goals in between.

Once an organization decides to begin a Six Sigma program, one requirement for success is the organization's ability to effectively deploy information about the concepts and company target goals to employees. Involvement of top management and alignment of company leadership are critical. Ideally, training is provided to all employees at all levels to ensure that a common language and standard approach exists throughout the organization. A common set of tools and techniques is internalized and everyone must be working toward the same objectives. Some companies establish a reward and recognition system for all employees that is based on meeting target goals and an infrastructure that supports the plan.

Company leadership must be willing to give teams the tools and the authority to apply Six Sigma concepts to their day-to-day activities. Employees assess how they can contribute to the organization through improvements made with respect to their own jobs. Individual quality goals are set to tie in with the overall company quality improvement goals.

Projects are selected that support the company's overall plan. The size of the project is evaluated carefully so as to provide meaningful benefits to the company while also staying confined to a manageable size and reasonable time frame. The focus is usually tied to a tangible organizational performance measure such as reduction in the number of defects or cycle time. Many companies prefer to select projects that will save at least $100,000. The resources and tools to accomplish the goal must be provided. These include manpower, training and endorsement by a member of management.

Once a process is selected as a candidate for improvement, a problem statement is developed and the objective or desired outcome is defined. Progress measures are established and a cost/benefit analysis is performed.

Next, a map or flowchart of the entire process is created. The purpose of this is to clarify the sequence of steps in the process as it currently exists and to identify all of the response variables within each step. This process "dissection" provides documentation of the process and an opportunity to resolve any misunderstandings of the process. Each step is then classified as critical, major or minor and ranked with respect to its impact on the output. A schedule is developed that outlines the strategy to take the process from its current state to one that is within statistical control and in line with the company's Six Sigma goals.

Data are then collected related to the process from many sources including scrap and defect reports, yield charts, product returns etc. The data are then categorized and studied for trends. Potential sources of variation are identified using tools including Pareto Charts, Cause and Effect Diagrams, Regression and Analysis of Variance (ANOVA).

When potential key characteristics are identified, the use of control charts may be incorporated to monitor these input variables. Statistical evaluation of the data identifies key areas to focus process improvement efforts on, which can have an adverse effect on product quality if not controlled. Special cause variation
can also be documented at this stage. To prove causation, Design of Experiments (DOE) is used to generate and analyze experimental designs.

Once the potential causes for variation are identified, an action plan must be selected and implemented to bring the process into control. This step usually involves a cost/benefit analysis of the planned action. Control charts can be used to show sustainability of the process. Specification limits are set and process stability is monitored. A process control plan is developed that summarizes all of the elements used to control variation within the process.

Once the process is considered stable, a capability analysis study (cpk) is performed to determine the process capability. Advanced problem-solving techniques and tools such as Design of Experiments (DOE), Analysis of Variance (ANOVA), and Regression Analysis are used to improve processes.

Process changes are documented along with benefits realized. A cost/benefit analysis may be conducted to determine impact of the project on the organization. Opportunities for further improvement are identified and the cycle continues.

General Electric has several years' experience Six Sigma. The methodology has infiltrated every aspect of the business and the company refers to Six Sigma as "the way we work." Their goal is to develop products and processes that use tools and capabilities used in Six Sigma, from the beginning, to avoid the expense and waste of redesign and rework of existing products and processes. GE uses the term "Designed for Six Sigma" (DFSS) to describe this use of Six Sigma methods in the early design phases.

Companies all over the world are using this methodology. In Europe, businesses are responding to the new growth opportunities that have occurred due to the initiatives of the European Economic and Monetary Union (ECU). In Asia, the number of organizations using Six Sigma practices is also beginning to increase.
Businesses recognize the importance of incorporating quality improvement practices in their strategy to remain competitive in a global marketplace.

Colleges and universities around the world are also recognizing the importance of exposing students to the basic tools and techniques used in quality improvement programs such as Six Sigma. Dr. Joe Voelkel, Graduate Chair of Rochester Institute of Technology's Center for Quality and Applied Statistics, talks about the importance of Six Sigma to his program and students. "I believe the most important contribution that Six Sigma thinking will have in our program will be to show students a powerful map for process improvement activities," he says. "The courses we teach focus on tools for process characterization and improvement - Six Sigma thinking will tie these tools together. So seeing the big picture is an important role of including Six Sigma into our program."

Dr. Robert Gee, President and Co-Founder, National Graduate School of Quality Management, talks about the importance of Six Sigma to his students and the companies that employ them. "Six Sigma is an umbrella approach that helps with compliance, regulatory, and statistical analysis needs of a company. The right
tools and Six Sigma together make a coherent approach to quality and process improvement."

The road to perfection requires time and commitment. A Six Sigma program will not change the business overnight. In fact, it is an initiative that requires long-term investment of time and effort from the organization, particularly from management. Effective implementation of the tools and techniques equals rewards for both the customers and the bottom line.

top of page