Category Archives: Six Sigma

More Six Sigma Basics

Six Sigma as we discussed in our earlier post is not intended to as a quick fix but is rather a systematic process and procedure that is focused on ongoing quality improvement. The ultimate goal of a Lean Six Sigma project is continually improved and sustained quality through an improved and more efficient process.



Six Sigma delivers these improvements by focusing on reducing and removing defects and eliminating waste. This is accomplished through research and data collection so it’s not a quick process but rather one that requires time. Organizations can over time reduce errors and rework saving the company time, lost business opportunities and money. The real goal like other quality improvement projects is to ensure that the product or service meets the standards of the customer!

To accomplish this, organizations need to meet several deliverables under the DMAIC model.

Define

  • Build a project team capable of actually accomplishing the objectives & committed to solving the problem(s). Ensure that management buy-in includes all the necessary resources to actually solve the issues.
  • Identify the issues that actually matter & develop a project charter which should include the known business processes.

Measure

  • Identify the key measures and come up with a plan to ensure that this information can be obtained. Create an initial baseline and communicate this to all parties.

Analysis

Improve

  • Probably the most critical stage, but also the most difficult. Define and develop possible solutions, along with an implementation plan.

Control

  • Standardization is the key with control. Standardize the processes, document procedures and implement the monitoring plan to ensure that the improvements have had the desired effect.

The Basics of Six Sigma

Six Sigma’s goal is process improvement and variation reduction. By improving processes and reducing defects, customer satisfaction is naturally improved.

Minimizing defects in production through continuous improvement. Six Sigma focuses on measuring the impact of an improvement project and uses the following phases:

  • Defining
  • Measuring
  • Analyzing
  • Improving, and
  • Controlling


We’ve seen this before in the DMAIC process that we discussed when talking about KPIs & the Importance of Measurement.

A sigma is a measurement of variance and denotes the variance from a mean average of an event. “Six Sigma” assumes a failure rate of 3.4 parts per million or 99.9997%. Six Sigma focuses on efficiencies and reducing costs. It also accounts for the “cost” of poor quality and works to reduce it.


Reducing Poor Quality

We’ve talked about Quality and Customer service before, but it bears repeating again. To reduce poor quality, there are certain actions that need to be taken:

  • Understand who your customers are and what matters to them.
  • Understand customer feedback (the Voice of the Customer) and see how that applies to your product/service & then prioritizing resolution based on the issues related to your product
  • Understand your internal processes and what causes variation
  • Understand the right metrics to measure and how to standardize
  • Understand what causes a defect and how it can be addressed
Once you realize that every process can be measured and analyzed, it’s not too far a leap to understand improvements based on the analysis are possible. By continuing this process of improvement (continuous improvements) you can gradually reduce variations and improve the final product.


The Meaning of Six Sigma


I talked in an earlier post about 99% uptime and how great that sounds but in reality, it’s pretty horrible. 99% uptime actually equates to –

  • Unsafe drinking water almost 15 minutes each day. 
  • 5,000 incorrect surgical operations per week. 
  • Two airplane accidents at most U.S. major airports each day. 
  • 200,000 wrong drug prescriptions each year. 
  • No electricity for almost 7 hours each month.
As you can see, that’s a pretty dire state of affairs. By contrast:
  • At the 1st Sigma level – 690,000 defective parts/million occur
  • At the 2nd Sigma level – 308,538 defective parts/million occur
  • At the 3rd Sigma level – 66,807 defective parts/million occur
  • At the 4th Sigma level – 6,210 defective parts/million occur
  • At the 5th Sigma level – 233 defective parts/million occur 
  • At the 6th Sigma level – 3.4 defective parts/million occur (99.9997%)
Business success depends on improving business process and results in combination with great customer service. Some tangible and realistic benefits based on implementing the methodologies promoted by Six Sigma include:
  • Reduced repair times
  • Increased customer satisfaction
  • Reduced order delays
  • Reduced defects
  • Increase productivity
  • Decreased Measurement Error


History of Continuous Improvement


Shewart and Deming helped define quality in the early 1900s. In 1920 Walter Shewart explained that three sigma is the point at which a process needs to be corrected. This is where a product would need to be remade as it would fail a quality audit. Edwards Deming, on the other hand, pointed to management and made it clear that it is their responsibility to improve the systems so that workers can work more effectively. Based on his research, management owned 80% of the quality problems and the workers could only influence 20% … by the way, any chance you’ve seen that ratio before?

If that name sounds familiar then you’ve probably heard of the Deming Cycle before (pictured above). Deming taught something called the System of Profound Knowledge which had four related parts. The theory of (1) Optimization, (2) Variation, (3) Knowledge, and (4) Psychology. 

Six Sigma and Process Improvement

Once upon a time some very smart and intelligent people looked at the world around them and realized that the way things are working now is not the only way in which things can work.  These people realized that the businesses exist to service a need and the need they are fulfilling is what people are willing to pay for.  At the same time they also saw that by giving customers a more valuable and quality focused product they would be able to ensure that those customers would continue to come back.  Some of these extremely smart people were W. Edwards Deming, Michael Hammer and Joseph Juran and they focused on a a very fundamental truth: The main source of waste and inefficiencies are problems in the process.
After careful analysis and much further work by other visionaries over the years Six Sigma was born.  What is Six Sigma you may ask?  At its simplest you could say that 99% quality is One Sigma.  Businesses that state they function at this level seem laudable until you do some more digging though –

99% “good quality” means:

Unsafe drinking water almost 15 minutes each day.
5,000 incorrect surgical operations per week.
Two airplane accidents at most U.S. major airports each day.
200,000 wrong drug prescriptions each year.
No electricity for almost 7 hours each month.
Conversely Six Sigma is a striving for 99.9999% quality.  As you can well imagine reaching this lofty goal is NOT an easy matter and takes significant effort and focus.  Not just in the initial stages but on an ongoing basis.  However those companies that are able to reach this goal are some of the best run and most profitable in the world.  Their clients are the happiest and most loyal and the products that they sell some of the most ubiquitous ones out there.
One of the ways in which Six Sigma is achieved is through analysis of existing processes (A process is a repeatable sequence of operations, organized to produce a set of desired outcomes) in a search for things that are going wrong and don’t make sense.  Interestingly, when organizations first analyze their critical processes they are usually struck by how complex they are.  Many processes that are absolutely central to the success of an organization were not designed; they just evolved. They consist of activities passed on from one generation of managers and workers to the next.
By analyzing the process and removing some the complexity an immediate impact can be made and this is where the different tools of Six Sigma come into play – things like the Spaghetti Tree and Kaizan events and others.  Once you know what isn’t working and WHY you can take the necessary next steps to resolve them.  However the thing that should be kept upermost in your thoughts at all times is that Six Sigma is a quality improvement and the person who determines the final quality of your product is your customer!
If quality or expected performance is below expectations when people do their jobs as designed, then asking them to “do better” is managerial nonsense. The process must be significantly improved or redesigned. Doing the job right when saddled with a flawed process inevitably results in sub-standard performance.  The only way to improve performance is to understand and correct the process that generates problems. Fix the process, and the problems will vanish.