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What is Six Sigma?

August 20, 2019
Volodymyr Rudyi

For hundreds of years, the world of industry has been striving to create the best efficiency and quality when it comes to end products. This idea started with people like Taylor and Shewhart back in the early 20th century, but improvements have been consistently implemented. Each of these methods is tested, posited, and reviewed before it is ever implemented. However, one of the most popular lean manufacturing methods from the last 35 years is Six Sigma. While it was originally formulated for the manufacturing industry, it is also used in finance, healthcare, and many other places.

Today, we want to look at what Six Sigma actually is, what kind of tools it involves, how it has affected development and manufacturing, and how you can be certified in the agile technology. We’ll also look at the benefits Six Sigma can make in quality management and a more efficient business environment.

Why Six Sigma Has the Name it Does

Six Sigma is derived from manufacturing statistical process modeling. When you look at a sigma, that is a standard deviation that is abbreviated as a lowercase s or the Greek letter σ. As long as something is over or under 6s, Six Sigma considers it a well-controlled process. That means there is only a small amount of deviation from the standard that is tolerated. Sometimes Six Sigma will be written as 6σ. The name with capital letters was trademarked in the 1990s by Motorola.

What Six Sigma is All About

When Six Sigma is practiced in the best way, it can be a powerful tool. Six Sigma is both a set of tools and a method for quality management and business process improvement. What it does is help find defects, understand why they are there, and change processes, so that the results are repeatable and accurate every time. When there are fewer defects and better efficiency, the product quality and timeliness improve, which can have a positive effect on employee confidence as well as the bottom line of the company.

Six Sigma is concerned with trying to create a nearly perfect output and it does that by looking at statistical methods to determine problems and improve various processes. Specific steps in a certain sequence are used to reach improvement goals using value targets that speak to what improvement is wanted. Teams who have an expert level of knowledge about the Six Sigma methodology come together to manage and complete the projects.

While this methodology used in agile and lean manufacturing started in the 1980s in the United States, it has now grown and is used around the globe. Those who appreciate Six Sigma explain that it can reduce waste, reduce production time, increase understanding of customer needs, and offer huge cost savings.

Understanding Lean Six Sigma

Lean manufacturing has adapted Six Sigma to work with it as well. The focus is on reducing waste and production cycle time while Six Sigma looks to reduce the variation among products made. Six Sigma could be said to focus on finding defects and fixing them later in the process while lean manufacturing is used to prevent defects from the very beginning. That means than lean is used to increase initial efficiency while Six Sigma can fine-tune those things. Lean Six Sigma is used by IT, manufacturing, finance, healthcare, and more.

The History Behind Six Sigma

While the term sigma, used with a lowercase s, has been used all the way back into the 1920s in statistical process control, Six Sigma was first implemented as a quality goal in 1984 by Motorola. Previous quality improvement theories like Zero Defects and Total Quality Management from the 60 years before helped created the methods that are known in the world of today.

Motorola came to realize over time that the methods and tools that could be used to offer fewer defects when manufacturing items could also be used in other aspects of the business. As time went on, companies like Allied Signal also tapped into this methodology. However, it wasn’t until the 1990s when Six Sigma really hit popularity as GE’s chairman boasted about the huge savings that Six Sigma made possible.

The first certification for Six Sigma was released by the International Organization for Standardization (ISO) in 2011. However, there is no organization using Six Sigma that publishes the entire body of knowledge. Different consulting companies, businesses, and schools offer training and standards, but they may differ to some degree.

As of 2000, lean manufacturing and a focus on improving process flow along with reducing waste combined with Six Sigma to create what is known as Lean Six Sigma. This combination allows organizations a way to streamline their processes while looking for defects and getting rid of them as they come.

Six Sigma Processes Defined

When it comes down to the wire, Six Sigma is concerned with ensuring that 99.99966% of deliverable products have absolutely no defects. In a large scale, this means there are 3.4 defects in a product line of a million. Sigma levels can also be used to think about how close a production process is to perfect. You have to remember that a defect is something that customers will find unacceptable. When you strive to meet Six Sigma, most products are going to be offering joy to customers. There are numerous Sigma levels, which we’ll explain below:

  • Sigma Level One – 691,462 defects per million – 69% defects
  • Sigma Level Two – 308,538 defects per million – 30% defects
  • Sigma Level Three – 66,807 defects per million – 6.7% defects
  • Sigma Level Four – 6,210 defects per million – 0.67% defects
  • Sigma Level Five – 233 defects per million – 0.023% defects
  • Sigma Level Six – 3.4 defects per million – 0.00034% defects

Not all businesses are going to find that the level processes are needed, and some may find that they aren’t going to offer enough. It depends entirely on the business, which is why considering it and your needs are so important.

The Many Benefits of Using Six Sigma Quality Management

Six Sigma allows you to measure, define, improve, analyze, and control existing processes through one methodology while it also looks at new processes to define, analyze, measure, verify, and design them. There are all sorts of benefits to most businesses using Six Sigma and we want to share a few of the biggest ones.

Better Level of Customer Loyalty

Every business knows it’s important to keep their customers. It can offer a huge amount of success for any computer. However, the only way to ensure customer retention and loyalty is by offering the highest levels of customer satisfaction. Studies show that customers stop visiting a business most often based on employee attitude or unsatisfying experiences. Most companies will never know that their customers are not satisfied, because the customers will simply take their business elsewhere.

When Six Sigma is implemented to your company, your risk of dissatisfied customers is going to go down. There are going to be very few situations where a customer is going to be upset about your product. One of the best was to find out how you are doing is by having a customer survey available, so you get an idea of what product attributes are most important to your customers and ensure products are successful.

Higher Level of Time Management

Using your time wisely is something else that can be useful for any business. Six Sigma lets employees use time effectively for a more productive environment and an efficient business. Users know what their goals are and then can use the principles of Six Sigma to reach them. This means looking at three things: performance, learning, and fulfillment.

For example, under the learning priority, you might look at how often your work is interrupted and whether all of those interruptions are actually useful. As for performance, it might be looking at how certain practices help someone meet professional goals, which leads to an action plan. This can make employees happier and feel as if they have a better work-life balance.

Reduced Time of Cycle

In many cases, businesses end up extending their deadlines when the product changes scope or a change is made in the policy of management. When you use Six Sigma, a group of knowledgeable employees from all parts of the company and all levels of the organization can be set into a team. Those teams are then able to find what factors might negatively affect the project, which leads to those extended cycle times.

Once those problems have been around, the team can start working to find solutions for them. With this method in use, the business can drop down their cycle times so schedules can be adhered to. Many of the businesses that use Six Sigma find that their cycle times drop, sometimes up to as much as 35%.

Higher Level of Employee Motivation

If you want your business to succeed, no matter what industry or sector you are involved in, you need to have employees who are passionate about what they are doing. This means that every employee should have the motivation to come in each day and do their very best. When an organization has engaged employees ready to get going every day, it can lead to 25 to 50% more productivity, which leads to higher profits for the business itself. When you share problem-solving techniques and tools of Six Sigma, employees have the option to develop themselves and become more motivated about what they do each day.

The Option for Strategic Planning

If you are in the process of working toward building a strategic vision or your company, Six Sigma can help with that. After you have a company mission statement and you have gone through the process of a SWOT analysis, Six Sigma is there to help you learn where to focus for improvements that will make a difference.

As an example, maybe you run a company that wants to be the cost leader for your market. Six Sigma can then be used to increase yields, improve your internal processes, eliminate extra levels of complexity, or maintain or gain the lowest supplier agreements as far as cost goes. No matter what strategy you are working with, Six Sigma can help you do it right from the start.

Improved Supply Chain Management

As we mentioned earlier, Six Sigma aims to have a defect rate of 3.4 per million or less and part of what helps you meet or fail to meet that target is your suppliers. One of the ways to prevent defects is by knocking down the number of suppliers your company uses, which in turn can create less risk of defects that will turn off your customers. You also need to be aware at any time if the suppliers you use are going to be making any changes. Even something like a change in machinery can lead to far-reaching changes that you may not expect. Those who want to be the most successful are the ones that take Six Sigma improvements all the way up the supply chain as far as possible.

Getting Trained in Six Sigma

There are many different organizations that offer training and certification in Six Sigma. Many companies and schools offer their own version of training. Some consultancies and institutions work together to create a version that works for a larger group of people. One example if the Council for Six Sigma Certification, which offers accreditation to Sigma trainers to ensure their curriculum hits the basic standards needed to be useful.

You can be trained online, in a classroom, onsite at a business, through a self-paced program, or through any combination of these things. Those who successfully complete a written exam online or on paper will be provided with a certificate. While some workplaces require this type of training, it also looks great on any resume and can be as competitive as an MBA. It’s well worth looking into for anyone involved in manufacturing or other industries where the certification is desired.

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