Why Six Sigma

All businesses are under tremendous pressure to remain competitive. Six Sigma helps
customers achieve this goal by delivering services better, faster and at a lower cost, whilst
increasing levels of customer satisfaction. Six Sigma can be applicable to all industrial sectors,
making it attractive to both private and government. Due to extremely high cost savings and
efficiency gains, Six Sigma is now seen as mandatory in many organisations. Six Sigma is
designed to provide tangible business results and cost savings that are fully accountable, e.g.:
consistently delivering services quicker, cheaper, with less variation, less waste or increased
reliability as dictated by the marketplace. It provides reduced; defects, failure costs, complaints,
fault calls, higher process productivity, lower process costs, better response to process changes
or requirements. e.g. order process, invoice and delivery. However, the success of the Six Sigma
concept is significantly governed by the client.

The Six Sigma Story

Six Sigma - What is it? How does it work? Is it a technique or a culture change programme? The
answer to these questions and further information regarding Six Sigma is provided below.

Six Sigma is the name given to a management concept originated by Motorola in the late 1980's
with stunning results. It enabled them to become one of the first winners of the prestigious
'Baldrige Award for Quality' and is claimed to be responsible for very impressive improvements
in all aspects of business performance. Other star performers such as GE, Allied Signal,
Navistar, Polaroid, Bombardier, etc., also developed Six Sigma programmes.

During 1998, a number of British subsidiaries and suppliers to these large companies found
themselves being introduced to the concept by their American customers with the result that
now Six Sigma has become an important new approach to business performance improvement.

Sigma is the mathematical symbol for standard deviation and Six Sigma can simply mean
predicting a particular level of quality achieved by a "process". For example ±6 sigma or six
standard deviations would mean the process would be unlikely to produce more than 4 defects
in a million. Mostly this would be considered an impressive performance. The "process" being
referred to is often thought to be a manufacturing process, possibly mass producing cars, but
this would be extremely short sighted. In fact, it is a popular misconception that Six Sigma is
only applicable to the volume manufacturing processes - it is not.

The Six Sigma concept has developed into a methodology that focuses on process improvement
and variation reduction, through the use of a measurement-based strategy. This strategy is
realised through the application of a Six Sigma improvement project. This Six Sigma
methodology is often accomplished through the use of two sub-methodologies: Define, Measure,
Analysis, Improve, Control. (DMAIC) and Define, Measure, Analyse, Design, Verify ((DMADV), but
more usually DMAIC. In the main the originator of this Six Sigma strategy is generally
considered to be Motorola and more specifically Bob Galvin who successfully used the approach
as part of their Malcom Baldridge 1988 Award. GE and Allied Signal are also often credited with
developing the Six Sigma methodology.

1. Define: The customer, their problem and the processes or services involved. The
scope and project objectives, determine the exact project problem and
goal. For example, why is there such a large variation of salesmen's
performance?
 2. Measure: The performance of the process or service involved, the process variables
(Xs) and outputs (Ys). Determine what, when and how frequently to measure,
establishing the baseline performance of the process to demonstrate (eventually) what
has improved (without measurement you cannot improve). For example; The top ten
percent of the salesmen provide eighty percent of the sales volume. The bottom ten
percent of salesmen are failing to meet sales targets - A Sales Non-conformance - a
defective unit.
3. Analyse: The collected data, evidence and information is analysed to determine
dominant source of variation (possibly the root cause of the problem) and the
opportunity for improvement. For example; product and sales skills, experience, and
training, sales areas, salesmen profiles (age, time in the job, etc.) .
4. Improve: Develop (including alternatives), generate, implement, test and verify the
agreed action plan designed to improve or resolve the identified issues. For example;
Salesmen's profiles would indicate the skill set required for the job. Then focus the
salesmen's training against the required skill set.
5. Control: Communicate the project's success inspiring others to replicate. Identifying
where these process improvements can be repeated. Monitor the success of the
enhanced process performance. Providing means to measure, control and maintain the
process at the new enhanced performance levels. For example; Monitoring of the
salesmen's performance and use the salesmen's profile when selecting people for this
function.

There is a very clear and defined hierarchy associated with

Six Sigma which is based on the original structure defined by
Motorola. Six Sigma is normally structured within an
organisation with Green belts (part-time), Black Belts (full
time), Master Black Belts (full-time coaches) and Champions
or Sponsors.

Champions or Sponsors

The role of the Champions and Sponsors is to promote and

maintain the Six Sigma principles and strategy within the
organisation. Ensuring that all the stakeholders are
adequately supported, resourced and funded. Actively
participating in project coordination, so that projects are
established and monitored appropriately for success. With
correctly assigned and highly motivated personnel (Green
belts, Black belts, etc.) associated with the project.
Champions would be expected to be trained and understand
the approach, application and implementation of the Six Sigma improvement methodology.

Updated: November 2009

Six Sigma Tools

Some of the common Six Sigma Tools are as follows:

5 Whys
Analysis of variance
ANOVA Gauge R&R
Axiomatic design
Business Process Mapping
Catapult exercise on variability
Cause & effects diagram (also known as fishbone or Ishikawa diagram)
Chi-square test of independence and fits
Control chart
Correlation
Cost-benefit analysis
CTQ tree
Design of experiments
Failure mode and effects analysis (FMEA)
General linear model
Histograms
Homoscedasticity
Quality Function Deployment (QFD)
Pareto chart
Pick chart
Process capability
Regression analysis
Root cause analysis
Run charts
SIPOC analysis (Suppliers, Inputs, Process, Outputs, Customers)
Stratification Taguchi methods
Taguchi Loss Function
TRIZ

WHAT IS SIX SIGMA?

Six Sigma is a fact-based data driven structured methodology that is used to create
breakthrough improvements in business processes with a strong focus on customer needs. It is
used to solve tough business problems when the root cause of the problem or the solution is not
known.

What is Lean?
Lean is a philosophy that looks at constant elimination of wastes within a company to make all
tasks or activities value adding from the customer's point of view. Lean is also about flow and
velocity. A lean enterprise is one in which the work flows rapidly from the suppliers all the way to
the customers without getting stuck anywhere in the company.

Why do we need Six Sigma?

Six Sigma is the most powerful methodology that is currently available to attack and eliminate
"pain" areas within a company. A company that gets rid of its persistent problems provides the
best value at the lowest cost to its customers, thus providing a tremendous advantage over its
competitors. In today's business climate, as more and more companies practise Six Sigma, it has
become imperative for all companies to practise Six Sigma in order just to stay in business.

Why do we need Lean?

Lean is a powerful philosophy that enables the enterprise to leverage the knowledge and skills of
its workforce to attack all forms of waste across the company's supply chain. Lean is usually
deployed throughout the entire organization making this initiative an enabler for changing the
culture in an organization. A Lean enterprise is highly responsive to customer needs. Similar to
Six Sigma, it provides a company with tremendous advantages. To stay competitive in today's
environment, it is imperative for all companies to practise Lean.

Examples of companies that have deployed Six Sigma

The number of companies that have deployed Six Sigma runs into the thousands. Six Sigma has
been deployed in all types of industries including manufacturing, IT, ITES, services, healthcare,
design, BPO etc. Some example companies that have realized huge benefits are GE, Motorola,
Caterpillar, Microsoft, Ford, Wipro, HP etc.

Examples of companies that have deployed Lean

Large number of companies have deployed Lean with the pioneer being Toyota. Lean has been
deployed in all types of industries including manufacturing, IT, ITES, services, healthcare, design,
BPO etc. Few companies that have realized huge benefits are Toyota, GE, Caterpillar, Satyam,
GM etc.

Why have some companies struggled with Six Sigma deployments?

ven though the tool kit and methodology to solve problems is the best that is available, the
success that companies experience depends on how Six Sigma is deployed within a company.
There are several crucial enablers that need to be in place for a company to reap the benefits of
Six Sigma - example, the support and buy-in from the senior management within a company.
The utilization of a neutral third party to review the deployment and provide recommendations
to improve the program become important especially if your Six Sigma program has recently not
performed as expected.

What situations warrant initiation of Six Sigma and/or Lean?

1. Your competition is using this methodology to improve their processes.
2. You want to reduce the number of defects and improve your image with the customer.
3. You want to spend less money on non-value added activities such as cost of non quality.
4. Some of your clients demand that you continuously improve your processes over time.
5. Even if your operational processes are excellent, you still have opportunities to improve in
transactional areas.
6. You want to emphasize the importance of a quality work culture in your organization.
7. You want to gain an edge over your competition in order to charge a premium for your
services.
8. You want your managers to make decisions based on facts rather than their "gut" feel all the
time.
9. You would like to quantify the benefits realized of improvement opportunities.
10. You don't want to be left behind on the learning curve.