What is Six Sigma ?
Contrary to the popular belief of Six Sigma being just a rigorous statistical tool for quality control, it is a mechanism that delivers overall business excellence by dramatically improving every process of an enterprise & has proven its affect in a wide spectrum of industries ranging from software to manufacturing, IT to health care, insurance services and telecommunications.
A Fun fact to consider: Six Sigma is related to reducing the defects to just 3.4 faults per million opportunities!
Consider a Service Delivery - a customer always expects timely and a zero defect service or product; which means they experience any variation that could occur and not the mean. Mean is their expectation and our target.
If we can manage the possible variations that could cause the defects, which is unacceptable deviation from the target or mean; we are working towards a zero defect model.
Six Sigma is this process of managing the variations that could take place that would otherwise result in defects in various aspects across the enterprise.
Looking at another example - Pizza delivery is guaranteed within 30 minutes of accepting an order. In the case of a delivery miss, 100 % of the money is refunded. So while evaluating, when do we ever count the times the delivery is on time; in contrast, the amount of times service delivery fails is what is taken note off, or that shops’ variation. So for a model six sigma company, this delivery process needs to be 99.9997% deliveries right within 30 minutes.
What is really evident is that the critical quality parameter in this case would be the service delivery time from a customer’s perspective and has significant impact on the profits. In addition, it is an obstacle for competition to enter the same market.
A defect in this case can be easily defined as:-
Defect: Delivery when taken longer than 30 minutes
Unit: Every order.
Opportunity: 1 per order, that is, only 1 defect is the scope and possibility with each order.
The driving force for the six sigma framework comes with the primary focus of “bringing breakthrough improvements in a manner which is systematic and routed by managing variations and defects”. Such culture poses difficult changes that are absolutely essential and to raise the bar significantly forcing the team members to think out of the box and be innovative with solutions. To put it in different words and summarize the objective, it is to stretch but stretch physically not mentally!
Types of Six Sigma Methodologies
There are only two possible scenarios - First, that a process exists but is working only “reasonably” well; the second being there is no process at all. A non-productive process is as bad as a process that does not exist.
The first scenario dwells upon changes that would be required in in existing processes and improvements that could be made using DMAIC
• Define - design the process goals in terms of key parameters that require attention and focus (critical to quality and production) on the bases of customer requirements.
• Measure - Understand of the length and alignment of current procedures with the newly set goals. Identify if the goals and processes are in sync.
• Analyze - Study the current scenario with respect to the causes of variations that could occur and the possible defects.
• Improve - Smoothen the process systematically by reducing the causes of variation and eliminating the defects.
• Control - the continuity of processes needs to be addressed and managed and progress of the performance needs to be monitored.
The second scenario where there is no process in place; the below would apply- the design for Six Sigma- (DMADV)
• Define Measure - It is most necessary to first understand the goals, internal and external customer deliverables.
• Analyse - Review of all the possible process options that would meet client needs and specifications.
• Design - Once the process is finalized; it needs to be designed in detail to meet all requirements with the necessary detailing which would call upon the next step.
• Verify - To make sure the process is working in a way that meets goals and exceeds client expectations.
Many cases, a DMAIC project becomes a DMADV when it requires complete redesigning to bring about the desired improvements. Such shifts happen in the improvement phase of DMAIC.
It is extremely important to remember that Six Sigma is not just about product quality where only three products in a million are defective. It is about what is important or critical to the customer, whether internal or external. It focuses on value in context of the customer and the market.
For example, Polaroid had a sale of over US$ 2 billion in 1988 and was doing very well on stock exchange. It embraced Six Sigma and became a Six Sigma company sometime around 1997. In late 2001, they filed for bankruptcy. This is because Polaroid only focused on improving the quality of their products and failed to assess the needs of their customers.
Today Six Sigma focus has moved from simple "defect reduction" to "cost reduction" to "value creation", as pointed out by Mikel Harry. The objective is not to achieve the magic number of 3.4 DMPO but to beat your nearest competition by just 0.5 sigma in overall business excellence.
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