This methodology, developed at Motorola, has been adopted by companies such as General Electric, Allied-Signal, Ford Motor Company and others. It is routinely debated in periodicals, and dozens of books, courses and consulting firms promote it. However, many executives, managers and engineers still do not understand what six sigma is or how it can help them.
Six Sigma has at least three meanings, depending on the context.
First, it’s a level of quality. Sigma is a statistical measure of variation in a process. Sigma (the Greek letter δ) is the symbol in statistics for standard deviation, a measure of the variation in a distribution of values.
Achieving a six-sigma level of quality means that processes are producing only 3.4 defects per million opportunities (DPMO). In other words, they are working nearly perfectly.
Second, Six Sigma is a problem-solving methodology that can be applied to any process to eliminate the root causes of defects and associated costs. There is also a methodology for designing processes.
Third, Six Sigma is a management philosophy. It’s a customer-based approach that recognizes that defects decrease satisfaction and customer loyalty and increase costs. Because the organization that provides goods and/or services of the highest value for the lowest cost is the most competitive, Six Sigma is a strategy for achieving critical results.
Specifically, six sigma refers to a process capability that generates 3.4 defects per million opportunities.
So, in short, Six Sigma is several things:
- A statistical basis of measurement: 3.4 defects per million opportunities
- A methodology for reducing variation in processes
- A philosophy and a goal: as perfect as practically possible
A basic concept of Six Sigma is process. That’s any repetitive action—in any manufacturing, services, or transactional environment. The Six Sigma methodology collects data on variations in outputs associated with each process so that it can be improved and those variations can be reduced.
Six Sigma is a methodology for using tools to reduce variation and defects in order to deliver products and services that meet customer specifications. As we’ll discuss later, the sigma level of a process is calculated in terms of the number of defects in ratio to the number of opportunities for defects. Many companies believe that dealing with errors is just part of the cost of doing business. But you don’t have to accept that faulty logic. The central idea of Six Sigma management is that if you can measure the variation and defects in a process, you can systematically figure out ways to reduce or even eliminate them, to approach a quality level of near zero defects, which allows you to reduce your costs and better satisfy your customers.
Now, if you want an elevator version of the explanation of Six Sigma, you could use one or more of the following:
- Six Sigma is a program that focuses on the control of a process to the point of ± six sigma (standard deviations) from a center-line, which means 3.4 defects per million items. It includes identifying factors critical to quality as determined by the customer, reducing process variation, and improving process capabilities, increasing stability, and designing systems to sustain the gains.
- Six Sigma is a methodology that provides businesses with tools to improve the capability of their processes by decreasing variation, which leads to a reduction in defects and an improvement in profits, employee morale, and quality of products and services.
- Six Sigma is a problem-solving technology that uses your human assets, data, measurements, and statistics to identify the vital few factors to decrease waste and defects while increasing customer satisfaction, profit, and shareholder value.
- Six Sigma is a disciplined, data-driven approach to process improvement aimed at the near-elimination of defects from every product, process, and transaction. The purpose of Six Sigma is to gain breakthrough knowledge on how to improve processes to do things better, faster, and at lower cost. It can be used to improve every facet of business, from production, to human resources, to order entry, to technical support. Six Sigma can be used for any activity that is concerned with cost, timeliness, and quality of results. Unlike previous quality improvement efforts, Six Sigma is designed to provide tangible business results, cost savings that are directly traceable to the bottom line.
Successful use of the data-driven six sigma concepts helps organizations to eliminate waste, hidden rework and undesirable variability in their processes, resulting in quality and cost improvements, driving continued success. My following articles elaborate the six sigma methodology in detail.
(Shivesh Pratap is a Six Sigma Certified Professional)
