Collection: Six Sigma & Operational Excellence

Six Sigma is a data driven, customer focused, and result oriented methodology which uses statistical tools and techniques to systematically eliminate defects and inefficiencies to improve processes. It is a systematic method to measure and analyze business processes to identify critical factors affecting business results, thereby improving processes, and establishing controls around the improved processes.

Six Sigma is a widely accepted quality concept in the corporate world today. Six Sigma started its journey in the 1980s as a data driven method to reduce variation in electronic manufacturing processes in Motorola Inc. in the USA. Six Sigma became famous when Jack Welch made it vital to his successful business strategy at General Electric in 1995. Today it is used as a business performance improvement methodology all over the world in diverse industries such as general manufacturing, construction, banking and finance, healthcare, education, government, KPO/BPO, and IT/Software. At present IT/ ITES sector companies are dynamically implementing Six Sigma and it is no longer just confined to the manufacturing sector.

The term ‘Six Sigma’ comes from statistics and is used in statistical quality control (SQC) which evaluates process capability i.e. the numerical measure of the ability of a process to meet the customer specifications. It originated from terminology associated with manufacturing which refers to the ability of manufacturing process to produce a very high proportion of output within the given specifications. The sigma rating of a process indicates its yield or percentage of defect-free outputs it produces. A Six Sigma process is the one which produces 99.99966% statistically defect-free outputs which is equivalent to 3.4 defects per million opportunities (DPMO).

Six Sigma uses a set of quality management and statistical methods and creates a team of experts within the organisation (Executive Leadership, Champions, Black Belt, Green Belt, Yellow Belt etc.) having specific skill sets required to carry out a Six Sigma project. Each Six Sigma project carried out within an organisation follows a defined sequence of phases with quantifiable value targets such as reduction in process cycle time, reduced cost, increase in quality rating / customer satisfaction index, and reduction in defect rate.

History of Six Sigma

The origins of Six Sigma can be traced back to Johann Carl Frederick Gauss, (1777—1855) a legendary German mathematician and physicist. In 1818, he started working on normal distribution, which forms the basis of Six Sigma philosophy. The person who first coined the term “Six Sigma” was Bill Cohen, an engineer with Motorola. Later, in 1986, Bill Smith, a senior scientist at Motorola, standardized the way defects are measured using Six Sigma. A Six Sigma process is one in which 99.9997% of the products manufactured are statistically expected to be free of defects (3.4 defects per million). Instead of measuring defects in thousands of opportunities, Six Sigma provided the ability to measure defects in millions of opportunities—thereby providing significant improvement in quality.

Since that time, several companies, including Motorola, Citibank, General Electric, and Allied Signal, have achieved dramatic success using Six Sigma methodology to improve quality and reduce costs. As the Six Sigma score improves, the variation in the processes reduces drastically, thereby increasing the reliability of the system, which reduces the need for rework. The reduction in amount of rework reduces cycle time and improves customer satisfaction. (For example, Motorola has documented $16 billion in savings due to its Six Sigma efforts.)

There are several factors that make Six Sigma a more effective quality tool when compared with other traditional quality techniques, namely:

• A comprehensive methodology
• A project-based approach
• A cohesive process-based approach
• A quantitative approach
• A commitment from all levels of the organization

Six Sigma Methodologies

There are mainly two methodologies of Six Sigma namely DMAIC and DMADV.

DMAIC is a data-driven Six Sigma methodology for improving existing products and processes. The DMAIC process should be used when an existing product or process can be improved to meet or exceed the customer’s requirements. DMAIC methodology consists of five phases: D – Define, M – Measure, A – Analyze, I – Improve, C – Control.

• Define – Define the project targets and customer (internal and external) deliverables.
• Measure – Measure the process to determine the current process performance (baseline).
• Analyze – Find out the root causes of the defects.
• Improve – Improve the process by eliminating defects.
• Control – Control the future performance.

DMADV is a common DFSS (Design for Six Sigma) methodology used to develop a process or product which does not exist in the company. DFSS is an application of Six Sigma which focuses on the design or redesign of the different processes used in product manufacturing or service delivery by taking into account the customer needs and expectations. DMADV is used when the existing product or process does not meet the level of customer specification or Six Sigma level even after optimization with or without using DMADV. DMADV methodology consists of five phases: D – Define, M – Measure, A – Analyze, D – Design, V – Validate.

• DEFINE the project goals and customer deliverables
• MEASURE the process to determine the current performance level
• ANALYZE and determine the root causes of the defects
• DESIGN the process in detail to meet customer needs
• VALIDATE the design performance and its ability to meet the customer needs

Six Sigma vs Traditional Quality