Six Sigma Basic Concept
published: cw 18, 2007 in Supply Chain ManagementSix Sigma was originally developed by Motorala in 1986 as a way of measuring defects and improving quality. Since then it has been one of the leading methodologies to not only eliminate process waste but to turn it into business growth. Here, we look at the history and basic concepts of Six Sigma.
Quality, Productivity, and Profitability
Six Sigma is a journey for business professionals who are committed to improve quality, productivity and profitability. Six Sigma is not theoretical, it is a practice driven by result.
The Six Sigma story dates back to 1980s, when Motorola adopted it to reduce defects in their products. The philosophy was that if products were assembled free of defects, they probably would not fail at customers end. Later Dr. Mikel Harry, the founder of the Motorola Six Sigma Research Institute, refined the methodology to not only eliminate process waste, but also to turn it into business growth, regardless of the service, product or market sector.
Six Sigma is a metric of capability and performance. The higher the Sigma Level, the better is the performance. Inability to meet requirements (typically of cost, time, or quality) that is specifications around quantifiable and measurable performance indicators are termed as defects in Six Sigma terminology. Every chance or instance where performance can be measured is termed as an opportunity.
At Six Sigma level of performance, there are only 3.4 defects in a million opportunities. In other words, the chances that customer or stakeholder requirements are not met regarding the specifications is 3.4 per million.
Six Sigma is also data driven and is a scientific and logical methodology of achieving excellence in processes and products. It focuses on reducing cost, time, and defects in every process and product. It is a methodology that radically improves processes and products vis-à-vis conventional evolutionary continuous improvement techniques.
Six Sigma is a collection of tools and techniques, encapsulated within a methodology, and driven by a rigorous ‘Project’ framework with organization structure/support and governance mechanisms to improve existing or design new products or processes.
Most of the tools and techniques of Six Sigma are quantitative or statistical in nature, while other improvement techniques provide a logical approach to problem solving.
Deployment in Organizations
Organizations across the world deploy Six Sigma across their projects to improve the most critical business processes or design and develop new products. These projects are in line with the strategic goal of the organization, ‘flowing down’ goals and objectives from the CEO’s dashboard to individual personnel and teams and processes and products.
The Six Sigma projects are typically led by Black Belts or Green Belts (depending on complexity) with a team of other Green / Yellow Belts. The color of the belt indicates the experience and knowledge – depth and width in applying Six Sigma tools and techniques to real life scenarios.
Six Sigma champions are responsible for selecting right projects for execution, scoping them, setting performance goals and timelines, as well as selecting competent project teams and enabling the project teams and projects to success.
Six Sigma is not a quality standard, but a strategic framework. It is about ‘How’ Rather than ‘What’; it is not about compliance, but about effectiveness. Hence unlike ISO or CMMI or COPC, organizations are not audited or assessed or certified. There are no accreditation bodies or standards to comply with. The organization decides where (which process areas, which functional units etc.,) to use six sigma, and what Sigma level to achieve, and by when. Six Sigma deployments are entirely self-initiated and self-managed. The organization may optionally declare at what sigma level its products/processes operate to outside world.
A Six Sigma organization continually uses Six Sigma methodologies, tools and techniques to grow, remain competitive by meeting or exceeding needs of its customer and stakeholders. A Six Sigma organization may have products and processes performing at 2 or 3 Sigma as well as 9 or 12 Sigma. Target Sigma levels are determined by the business stakeholders based on cost of defect, competitive benchmarks, and customer needs.
Source: CapGemini
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