Six sigma is a revolutionary business process designed to significantly reduce organizational inefficiencies thereby increasing bottom-line profits. The concept is to eliminate defects that take time and effort to repair, not to mention make customers unhappy. It is a management philosophy that eliminates defects by emphasizing understanding, measuring and improving process.
Six Sigma, the quality improvement methodology made famous by Motorola in the 1980s, has generated a multitude of articles and hundreds of books by many authors for good reason. it has produces significant cost savings and reductions in waste for the organizations that have embraced it. Although its roots are in manufacturing industries as financial services, healthcare and food processing. Even the public sector is embracing the methodology because of its proven record in private industry. But what exactly is it?
Six sigma is a revolutionary business process designed to significantly reduce organizational inefficiencies thereby increasing bottom-line profits. The concept is to eliminate defects that take time and effort to repair, not to mention make customers unhappy. It is a management philosophy that eliminates defects by emphasizing understanding, measuring and improving process.
Six sigma is a management framework that, in the past 15 years, has evolved from a focus on process improvement using statistical tools to a comprehensive framework for managing a business. The result that world-class companies such as general electric. Johnson & Johnson. Honeywell, Motorola, and many others have accomplished speak for themselves.
Six sigma has become a synonym for improving quality, reducing cost, improving customer loyalty, and achieving bottom-line results.
HISTORICAL PERSPECTIVE ON SIX SIGMA
In the mis-1980s, Motorola, under the leadership of Rober W. Galvin, was the initial developer of Six Sigma. Most credit the late Bill Smith for inventing Six sigma; Smith, a senior engineer and scientist within Motorola’s communications Division, has noted that its final product tests had not predicted the high level of system failure rates Motorola was experiencing. He suggested that the increasing level of complexity of the system and the resulting high number of opportunities for failure could be possible causes for his. He came to the conclusion that Motorola needed to require a higher level of internal quality, and he brought this idea to then-CEO Bob Galvin’s attention, persuading him that Six Sigma should be set as a quality goal. This high goal for quality was new, as was Smith’s way of viewing reliability of a whole process (as measured by mean time to failure) and quality (as measured by process variability as defect rates).
Motorola has always been a pioneer in the areas of productivity and quality. In the 1980s, Motorola has been the site for presentation of quality improvement programs by a number of experts, including Joseph M. Juran, Dorian Shainin, Genichi Taguchi, and Eliyahu Goldrattand Mikel Harry. now president of the Six Sigma Academy and coauthor of Six sigma. the
Breakthrough Management Strategy.
Mike Harry development a program for the Government Electronics Division of Motorola that included Juran’s quality journey. Statistical Process Control (SPC), and Shainin’s advanced diagnostic tools (ADT) and planned experimentation (PE). Harry then worked with Smith on the Six sigma initiative. Harry led Motorola’s Six Sigma institute and later formed his own firm specializing in the subject. Smith and Harry’s initial Six Sigma umbrella including SPC, ADT, and PE. Later, they added Design for Manufacturability (Product capability and product complexity), accomplishing quality through projects and linking quality to business performance. Meeting the challenge Galvin has set in 1981 to improve quality by tenfold and developing Six Sigma helped Motorola to win the first Malcolm Baldrige National Quality Award in 1989. In line with Galvin’s Policy of openness and in response to the interest generated by the Baldrige Award, Motorola shared the details of its six Sigma framework widely.
In the Mid – 1990s, AlliedSignal’s Larry Bossidy and GE’s Jack Welch saw in Six Sigma a way to lead their organizations’ Cultural change through Six Sigma initiatives and also achieve significant cost savings. In 1998, Business week reported that GE has saved $330 million through Six Sigma, double welch’s previous predicted. Interest in six Sigma really took off after that article appeared, an interest that was fed GE’s continued success with Six Sigma and Javck welch’s speeched and books.
SIX SIGMA DEFINED
The six Sigma of today speaks the language of management, bottom-line results. It institutionalizes a rigorous, disciplined, fact-based way to deliver more money to the bottom line through process improvement and process design projects-selected by the top leadership and led by high potentials trained as Black Belts or Master Black Belts in Six Sigma-that aim to create near-perfect process, products and services all aligned to Delivering what the customer wants. In successful implementation, the majority of Six Sigma projects are selected for measurable bottom-line or Customer impact that is completed within two to six months.
The project deliver through the application of a well-defined set of satisfied tools and process improvement techniques by well-trained people in an organization that has made it clear that Six Sigma is career accelerator.
Do you know, do you really know, what’s going in your organization? The assertion that knowledge is power rings as true today as it did four centuries ago. In any industry. organization, or daily process, when you don’t know what you don’t know, it’s going to cost you. For too many organizations the cost (often hidden) of defects and waste in the way they operate are huge.
Having process in which errors occasionally occur may not seem such a big deal. But when you consider how many errors may be lurking in company-wide processes, the monetary impact on overall productivity, customer satisfaction, and profitability multiplies dramatically: The Six Sigma approach to managing is all about helping you identify what you don’t know as well as emphasizing what you should know, and taking action to reduce the errors and rework that cost you time, money opportunities, and customers. Six Sigma translates that knowledge into opportunities for business growth.
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. With Six Sigma. you can eliminate most errors, reduce your costs, and better satisfy your customers.
Six Sigma is a statistical concept that measures a process in terms of defects. Achieving six sigma means your process are delivering only 3.4 defects per million opportunities (DPMO) – in other words, they are working nearly perfectly. Sigma (the Greek letter) is a term in statistics that measured something called standard deviation. In its business use, it indicates defects in the outputs of a process, and helps us to understand how far the process deviates from perfection.
A Sigma represents 691462.5 defects per million opportunities, which translates to a percentage of non-defective outputs of only 30.854%. That’s obviously really poor performance. If we have processes functioning at a three sigma level, this means we’re allowing 66807.2 errors per million opportunities, or delivering 93.319% non-defective outputs. That’s much better, but we’re still wasting money and disappointing our customers.
How well are your process operating? Are they three sigma? Four sigma? Five? Most organization in the U.S. are operating at three to four sigma quality levels. That means they could be losing up to 25% of their total revenue due to processes that deliver too many defects-defects that take up time and effort to repair as well as creating unhappy customers.
Is that good enough? The answer is simple. No it’s not when you could be doing a lot better.
The central idea of six sigma managements is that if you can measure the defects in a process, you can systematically figure out ways to eliminate them. to approach a quality level of zero defects. So, in short, Six Sigma is several things.
• A Statistical basis of measurement 3.4 defects per million opportunities
• A Philosophy and a goal as practically possible
• A Methodology
• A symbol of quality
A comprehensive and flexible system for achieving sustaining and maximizing business success. Six Sigma is uniquely driven by close understanding of customer needs, disciplined use of facts, data and statistical analysis, and diligent attention to managing, improving and reinventing business process.”
Six Sigma can be described as a business improvement approach that seeks to find a eliminate causes of defects and errors in manufacturing and service process by focusing on outputs that are critical to customer and a clear financial return for the organization.
Process. Any repetitive action-be it in a transactional, manufacturing, or services environment. The Six Sigma methodology collects data on variations in outputs associated with each process, so that it can be improved and those variations reduced.
Sigma. A term used in statistics to represent standard deviation, an indicator of the degree of variation in a set of measurements or a process.
Six Sigma. A statistical concept that measures a process in terms of defects-at the six sigma, level, there are only 3.4 defects per million opportunities. Six Sigma is also a philosophy of managing that focuses on eliminating defects through practices that emphasize understanding, measuring, and improving processes.
Defect A Measurable characteristic of the process or its output that is not within the acceptable customer limits, i.e. not conforming to specifications. Six Sigma is about practices that help you eliminating defects and always deliver products and services that meet customer specifications. The signal level of a process is calculated in terms of the number of defects in ratio to the number of opportunities for defects.
A defect, or non-conformance, is any mistake or error that is passed on to the customer. A Unit of work is the output of a process or an individual process step. A common measure of output quality is defect per unit (DU), computed as Number of defects discovered / Number of units produced, and in Six Sigma metrics, defects per million opportunities (DPMO) – DPU X 1,000,000/opportunities for error. A six-sigma quality level corresponds to at most 3.4dpmo.