Taking The Mystery Out Of The Methodology

by Minitab on 1st October 2006

provided by

Minitab

Six Sigma Enigma - Taking the Mystery out of the Methodology

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).