Six Sigma is a set of methodologies, tools and techniques with the overall goal of process improvement and lesser defects. Read below about Six Sigma methodology, implementation and more.
Before we define Six Sigma, it's important to understand what "sigma" means. In statistics, sigma is known as the standard deviation, which is calculated by taking the square root of the variance. The variance is the average of the squared differences from the mean (average).
In manufacturing, defects are defined using specification limits separating good from bad outcomes. A Six Sigma process has a process mean that is six standard deviations (sigmas) from the nearest specification limit. Six standard deviations give you enough of a buffer between the natural variation of a process and the predefined specification limits. In other words, if you've determined a product needs to have a thickness between 10.22 and 10.28 inches, then the process mean should be around 10.25, with a standard deviation of less than 0.005 (10.28 is six standard deviations away from 10.22).
Now that we know the technical definition, we can look at Six Sigma as it pertains to manufacturing. Six Sigma is a set of methodologies, tools and techniques with the overall goal of process improvement and minimizing defects. More specifically, it seeks to improve the quality of produced products from a process by identifying and getting rid of the causes of defects and minimizing variability in both manufacturing and business processes.
A successful Six Sigma implementation leads to an increase in performance and a decrease in process variation, which in turn can lead to increased profits, improved product quality and a boost in employee morale. Statistically, 99.99966 percent of all opportunities to produce any feature of a part are expected to be free of defects, or 3.4 defects per million opportunities (this accounts for a 1.5-sigma shift in the mean).
You may run across varying definitions of Six Sigma, but they all share a few common ideologies. All Six Sigma processes should include the following:
Six Sigma can be broken down as a philosophy and a methodology. The philosophy side of Six Sigma considers all work as processes that can be defined, measured, analyzed, improved and controlled. These processes must have an input (x) that produces an output (y). Simply put, if you control the input, you can control the output.
The methodology aspect of Six Sigma comes to life as the DMAIC approach – define, measure, analyze, improve and control. Essentially DMAIC lays out the roadmap each team should follow, beginning with identifying the problem and ending with putting a long-term solution into practice. We'll further discuss DMAIC below.
|Sigma Levels (Z)||Defects per Million
One of the best analogies for understanding Six Sigma and how it relates to variables is that of parking a car in a garage. If your car is wider than the garage, you can't enter it. Next, take a car with a width that is slightly less than the width of the garage. By using a cautious approach, the car can be parked in the garage, but it probably will be scratched up over time due to carelessness. Finally, imagine a car with a width that is half the width of the garage. Anyone can now park the car in the garage, even those coming off working a double shift who can barely keep their eyes open.
In this analogy, the car width represents your organization's current processes and their capabilities. The width of the garage represents the specifications of your customer. Let's take a closer look at the principles of Six Sigma, how you can implement it and how it has helped other companies.
The five principles of Six Sigma are somewhat of a culmination of the principles of lean manufacturing blended with Six Sigma. Lean manufacturing emphasizes the reduction or elimination of the eight types of waste. Six Sigma seeks to reduce product variation and defects using statistical analysis. When these are implemented together, you get the five principles of Six Sigma.
Six Sigma is implemented using one of two methodologies: DMAIC or DMADV. DMAIC (define, measure, analyze, improve and control) is used when an organization wants to improve its existing processes. DMADV (define, measure, analyze, design and verify) is employed when an organization is creating new processes. The two methodologies are similar in a few ways. They are both used to:
Let's take a look at a snapshot of how the two methodologies defer from one another.
DMAIC focuses on:
DMADV focuses on:
The success of a Six Sigma program ultimately relies on the team as a whole. Properly implementing Six Sigma requires a significant amount of training, especially if you are going to lead a team. While it's a good idea for team leaders to earn a Six Sigma professional certification, it helps if team members have at least some level of certification to gain basic knowledge and understanding of the process. Six Sigma uses belt levels to denote skill level, experience and knowledge, similar to those found in martial arts.
Green belts normally lead the process of identifying waste and implementing improvements throughout the organization through gathering and analyzing data. Green belts should have strong analytical and communication skills, and typically are employees in a mid- to upper-level management role.
In addition to serving as teachers and mentors to black and green belts, master black belts are tasked with communication with senior-level executives and solidifying potential Six Sigma projects. Master black belts normally don't act as a full-time member of any team. They typically take on the role of mentor or consultant for multiple teams to help them overcome obstacles and answer any questions that may arise.
It's one thing to read about the inner workings of implementing Six Sigma and imagining how it could help eliminate waste and minimize defects within your organization, but let's take a look at some of the most famous examples of how it has helped some well-known brands.
Ford began implementing Six Sigma in 2000, making it the world's first automaker to put Six Sigma into practice on a large scale. Ford wanted to implement a Six Sigma initiative based on improving four factors: cost, quality, customer satisfaction rates and environmental impact.
Once Ford trained its leadership, nearly 10,000 people were certified as green, black and master black belts, with 2,500 of those individuals holding a black belt certification. Ford's goal was to reduce the number of defects to one per every 14.8 vehicles produced. After investing $6 million in training licenses, as well as thousands of hours in training, new equipment and software, the company hit its goal. This change rippled through other processes and, coincidently, improved the four factors mentioned above.
Six Sigma contributed $52 million to Ford's bottom line in 2000 alone. Ultimately, the company has eliminated more than $2.19 billion in waste to date since implementing Six Sigma techniques like data-driven process improvement, completing nearly 10,000 improvement projects to date. Ford has also increased its customer satisfaction rating by five points.
Ford's Six Sigma success wasn't without some hiccups along the way. The company ran into a few obstacles that needed to be worked through in order to implement a successful Six Sigma program. Ford experienced issues with employee commitment from all levels. Skepticism also made it difficult for the automaker to put its nearly 350 high-level managers and leaders through weeks of training. Along with a lack of commitment, Ford also faced time and money concerns when it came to training employees.
Lastly, Ford was ill-equipped to manage the amount of data needed to implement a Six Sigma initiative. It was forced to create and implement new measurement systems to collect enough data for a proper picture of the current value stream. Working through these issues required full commitment from everyone at the company. Once all personnel were onboard, significant results inevitably followed.
It took just 40 years for Starbucks to go from a single coffee shop in Seattle to more than 29,000 stores across 80 countries. This rapid growth has forced the coffee giant to transition from a calm, relaxing coffeehouse atmosphere to more of a fast-food-style operation. As the company continues to grow, its customers have forced it to adopt two practices for which it has become known: speed and accuracy. People want their coffee made fresh and ready within minutes.
Starbucks management sought to find a way to offer the speed of a fast-food restaurant without sacrificing the human element and personal touch of a mom-and-pop coffeehouse. After going through Six Sigma training, company management came up with two process changes, transforming how people order coffee and their in-store experience.
To accomplish the first change, Starbucks provided new training to its baristas. Assuming a more proactive role as customers came to the cash register to pay, baristas took orders before the customer actually paid for them. This significantly sped up wait times. Additionally, Starbucks developed a mobile app, allowing customers to preorder drinks and pay for them before arriving at the store. Ready-to-go drinks are then organized by name and are waiting at the bar when customers arrive.
Keeping the human element in mind, management also encouraged baristas to engage with customers and make each transaction personal. Finally, for customers who use the mobile app regularly, Starbucks implemented a rewards program.