History of 6Sigma

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History of 6Sigma

n year 1986, an engineer named Bill Smith invented a plan where through all the products weremanufactured with a minimal error rate, respecting the error less standard of that time of 99.9997 percent.Afterwards, the adoption process among the top companies of the Fortune 500 chart was helped by Jack Welsh, the famous CEO of General Electric. The six sigma phenomenon can be easily explained. In asimple explanation of the name, the six and sigma terms have different mathematical significations.However, the six sigma concept is more than just a number and a Greek letter in business and industry. Itrepresents a statical measure and a management philosophy, focused on quality, but in a special way.

Every time someone hears about six sigma, this process receives the complicated mark required by themanagement, voluntarily and coherently not embraced by the whole organization. As a matter of fact, thingscan be very simple. The implementation force consists in the fact that the ones responsible with the sixsigma projects are the mid managers. They are the most appropriate members to combine the power given

by the organization leaders with the power of the processes.

Just like in sports for example, in business or industry there are also various strategies for big shows and for profits behind the scenes. Some such strategies bring money and glory with big investments, often andtireless innovations, acquisitions, consolidations and scandalous processes, while others content withminimizing the number of errors. Preventing the errors, leaks and losses might bring a lot of money for acompany, all the more so as the strategy is applicable on a large scale, from the top management to the baseof the pyramid. This is why, the six sigma concept needs the support of the whole organization. It is amanagement philosophy focused on eliminating the errors in loop, without any results. It determinesmeasurable methods of increasing the satisfaction of the customers. It trains the employees to get tomaximum performances through scientific methods, based on statistics and discipline.

From a more technical perspective, the six sigma concept measures the variation and deviation from thestandard process. Therefore, in the analysis phase, it is a measurement meant to appreciate the performanceof a process and provide direction to the company for the improvement. In less words, it monitors thenumbers of errors produced in the whole process.

Six Sigma is a business management strategy originally developed by Motorola , USA in 1986. [1][2] As of 2010, it is widely used in many sectors of industry, although its use is not without controversy.

Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects(errors) and minimizing variability in manufacturing and business processes .[3] It uses a set of qualitymanagement methods, including statistical methods , and creates a special infrastructure of people within theorganization ("Black Belts", "Green Belts", etc.) who are experts in these methods. [3] Each Six Sigma projectcarried out within an organization follows a defined sequence of steps and has quantified financial targets(cost reduction or profit increase) .[3]

The term six sigma originated from terminology associated with manufacturing, specifically termsassociated with statistical modelling of manufacturing processes . The maturity of a manufacturing processcan be described by a sigma rating indicating its yield, or the percentage of defect-free products it creates. Asix-sigma process is one in which 99.99966% of the products manufactured are statistically expected to befree of defects (3.4 defects per million). Motorola set a goal of "six sigmas" for all of its manufacturingoperations, and this goal became a byword for the management and engineering practices used to achieve it.

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Contents

[hide]

1 Historical overview 2 Methods

o 2.1 DMAICo

2.2 DMADV or DFSSo 2.3 Quality management tools and methods used in Six Sigma

3 Implementation roleso 3.1 Certification

4 Origin and meaning of the term "six sigma process"o 4.1 Role of the 1.5 sigma shifto 4.2 Sigma levels

5 Software used for Six Sigma 6 Application 7 Criticism

o 7.1 Lack of originalityo 7.2 Role of consultantso 7.3 Potential negative effectso 7.4 Based on arbitrary standardso 7.5 Criticism of the 1.5 sigma shift

8 See also 9 References

10 Further reading

[edit ] Historical overview

Six Sigma originated as a set of practices designed to improve manufacturing processes and eliminatedefects, but its application was subsequently extended to other types of business processes as well. [4] In SixSigma, a defect is defined as any process output that does not meet customer specifications, or that couldlead to creating an output that does not meet customer specifications .[3]

Bill Smith first formulated the particulars of the methodology at Motorola in 1986. [1] Six Sigma was heavilyinspired by six preceding decades of quality improvement methodologies such as quality control , TQM , andZero Defects ,[5][6] based on the work of pioneers such as Shewhart , Deming , Juran , Ishikawa , Taguchi andothers.

Like its predecessors, Six Sigma doctrine asserts that:

Continuous efforts to achieve stable and predictable process results (i.e., reduce process variation )are of vital importance to business success.

Manufacturing and business processes have characteristics that can be measured, analyzed,improved and controlled.

Achieving sustained quality improvement requires commitment from the entire organization, particularly from top-level management.

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Features that set Six Sigma apart from previous quality improvement initiatives include:

A clear focus on achieving measurable and quantifiable financial returns from any Six Sigma project. [3]

An increased emphasis on strong and passionate management leadership and support. [3] A special infrastructure of "Champions," "Master Black Belts," "Black Belts," "Green Belts", etc. to

lead and implement the Six Sigma approach. [3] A clear commitment to making decisions on the basis of verifiable data, rather than assumptions and

guesswork .[3]

The term "Six Sigma" comes from a field of statistics known as process capability studies. Originally, itreferred to the ability of manufacturing processes to produce a very high proportion of output withinspecification. Processes that operate with "six sigma quality" over the short term are assumed to producelong-term defect levels below 3.4 defects per million opportunities (DPMO). [7][8] Six Sigma's implicit goal isto improve all processes to that level of quality or better.

Six Sigma is a registered service mark and trademark of Motorola Inc. [9] As of 2006 Motorola reported over US$17 billion in savings [10] from Six Sigma.

Other early adopters of Six Sigma who achieved well-publicized success include Honeywell (previouslyknown as AlliedSignal ) and General Electric , where Jack Welch introduced the method. [11] By the late1990s, about two-thirds of the Fortune 500 organizations had begun Six Sigma initiatives with the aim of reducing costs and improving quality. [12]

In recent years, some practitioners have combined Six Sigma ideas with lean manufacturing to yield amethodology named Lean Six Sigma.

[edit ] Methods

Six Sigma projects follow two project methodologies inspired by Deming 's Plan-Do-Check-Act Cycle .These methodologies, composed of five phases each, bear the acronyms DMAIC and DMADV. [12]

DMAIC is used for projects aimed at improving an existing business process. [12] DMAIC is pronounced as "duh-may-ick".

DMADV is used for projects aimed at creating new product or process designs .[12] DMADV is pronounced as "duh-mad-vee".

[edit ] DMAIC

The DMAIC project methodology has five phases:

D efine the problem, the voice of the customer, and the project goals, specifically. M easure key aspects of the current process and collect relevant data. A nalyze the data to investigate and verify cause-and-effect relationships. Determine what the

relationships are, and attempt to ensure that all factors have been considered. Seek out root cause of the defect under investigation.

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I mprove or optimize the current process based upon data analysis using techniques such as design of experiments , poka yoke or mistake proofing, and standard work to create a new, future state process.Set up pilot runs to establish process capability .

C ontrol the future state process to ensure that any deviations from target are corrected before theyresult in defects. Implement control systems such as statistical process control , production boards , and visual workplaces , and continuously monitor the process.

[edit ] DMADV or DFSS

The DMADV project methodology, also known as DFSS ("Design F or Six Sigma"), [12] features five phases:

D efine design goals that are consistent with customer demands and the enterprise strategy. M easure and identify CTQs (characteristics that are C ritical To Q uality), product capabilities,

production process capability, and risks. A nalyze to develop and design alternatives, create a high-level design and evaluate design capability

to select the best design. D esign details, optimize the design, and plan for design verification. This phase may require

simulations. V erify the design, set up pilot runs, implement the production process and hand it over to the process

owner(s).

[edit ] Quality management tools and methods used in Six Sigma

Within the individual phases of a DMAIC or DMADV project, Six Sigma utilizes many established quality-management tools that are also used outside of Six Sigma. The following table shows an overview of themain methods used.

5 Whys Analysis of variance ANOVA Gauge R&R Axiomatic design Business Process Mapping Cause & effects diagram (also known as

fishbone or Ishikawa diagram ) Chi-square test of independence and fits Control chart Correlation Cost-benefit analysis CTQ tree Design of experiments Failure mode and effects analysis (FMEA)

General linear model

Histograms Quality Function Deployment (QFD) Pareto chart Pick chart Process capability Quantitative marketing research through use

of Enterprise Feedback Management (EFM)systems

Regression analysis Root cause analysis Run charts SIPOC analysis ( Suppliers, Inputs, P rocess,

O utputs, C ustomers) Taguchi methods Taguchi Loss Function

TRIZ

[edit ] Implementation roles

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One key innovation of Six Sigma involves the "professionalizing" of quality management functions. Prior toSix Sigma, quality management in practice was largely relegated to the production floor and to statisticians in a separate quality department. Formal Six Sigma programs borrow martial arts ranking terminology todefine a hierarchy (and career path) that cuts across all business functions.

Six Sigma identifies several key roles for its successful implementation. [13]

Executive Leadership includes the CEO and other members of top management. They areresponsible for setting up a vision for Six Sigma implementation. They also empower the other roleholders with the freedom and resources to explore new ideas for breakthrough improvements.

Champions take responsibility for Six Sigma implementation across the organization in an integratedmanner. The Executive Leadership draws them from upper management. Champions also act asmentors to Black Belts.

Master Black Belts , identified by champions, act as in-house coaches on Six Sigma. They devote100% of their time to Six Sigma. They assist champions and guide Black Belts and Green Belts.Apart from statistical tasks, they spend their time on ensuring consistent application of Six Sigmaacross various functions and departments.

Black Belts operate under Master Black Belts to apply Six Sigma methodology to specific projects.They devote 100% of their time to Six Sigma. They primarily focus on Six Sigma project execution,

whereas Champions and Master Black Belts focus on identifying projects/functions for Six Sigma. Green Belts are the employees who take up Six Sigma implementation along with their other job

responsibilities, operating under the guidance of Black Belts.

Some organizations use additional belt colours, such as Yellow Belts , for employees that have basic trainingin Six Sigma tools.

[edit ] Certification

In the United States, Six Sigma certification for both Green and Black Belts is offered by the Institute of Industrial Engineers [14] and by the American Society for Quality .[15]

In addition to these examples, there are many other organizations and companies that offer certification.There currently is no central certification body, either in the United States or anywhere else in the world.

[edit ] Origin and meaning of the term "six sigma process"

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Graph of the normal distribution , which underlies the statistical assumptions of the Six Sigma model. TheGreek letter ( sigma ) marks the distance on the horizontal axis between the mean , , and the curve'sinflection point . The greater this distance, the greater is the spread of values encountered. For the curveshown above, = 0 and = 1. The upper and lower specification limits (USL, LSL) are at a distance of 6from the mean. Because of the properties of the normal distribution, values lying that far away from themean are extremely unlikely. Even if the mean were to move right or left by 1.5 at some point in the future(1.5 sigma shift), there is still a good safety cushion. This is why Six Sigma aims to have processes wherethe mean is at least 6 away from the nearest specification limit.

The term "six sigma process" comes from the notion that if one has six standard deviations between the process mean and the nearest specification limit, as shown in the graph, practically no items will fail to meetspecifications. [8] This is based on the calculation method employed in process capability studies .

Capability studies measure the number of standard deviations between the process mean and the nearestspecification limit in sigma units. As process standard deviation goes up, or the mean of the process movesaway from the center of the tolerance, fewer standard deviations will fit between the mean and the nearestspecification limit, decreasing the sigma number and increasing the likelihood of items outsidespecification. [8]

[edit ] Role of the 1.5 sigma shift

Experience has shown that processes usually do not perform as well in the long term as they do in the shortterm. [8] As a result, the number of sigmas that will fit between the process mean and the nearest specificationlimit may well drop over time, compared to an initial short-term study .[8] To account for this real-lifeincrease in process variation over time, an empirically-based 1.5 sigma shift is introduced into thecalculation. [8][16] According to this idea, a process that fits six sigmas between the process mean and thenearest specification limit in a short-term study will in the long term only fit 4.5 sigmas either because the

process mean will move over time, or because the long-term standard deviation of the process will begreater than that observed in the short term, or both .[8]

Hence the widely accepted definition of a six sigma process as one that produces 3.4 defective parts per million opportunities (DPMO). This is based on the fact that a process that is normally distributed will have3.4 parts per million beyond a point that is 4.5 standard deviations above or below the mean (one-sidedcapability study). [8] So the 3.4 DPMO of a "Six Sigma" process in fact corresponds to 4.5 sigmas, namely 6sigmas minus the 1.5 sigma shift introduced to account for long-term variation. [8] This takes account of special causes that may cause a deterioration in process performance over time and is designed to preventunderestimation of the defect levels likely to be encountered in real-life operation .[8]

[edit ] Sigma levels

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A control chart depicting a process that experienced a 1.5 sigma drift in the process mean toward the upper specification limit starting at midnight. Control charts are used to maintain 6 sigma quality by signalingwhen quality professionals should investigate a process to find and eliminate special-cause variation .See also: Three sigma rule

The table [17][18] below gives long-term DPMO values corresponding to various short-term sigma levels.

Note that these figures assume that the process mean will shift by 1.5 sigma toward the side with the criticalspecification limit. In other words, they assume that after the initial study determining the short-term sigmalevel, the long-term C pk value will turn out to be 0.5 less than the short-term C pk value. So, for example, theDPMO figure given for 1 sigma assumes that the long-term process mean will be 0.5 sigma beyond thespecification limit (C pk = 0.17), rather than 1 sigma within it, as it was in the short-term study (C pk = 0.33).

Note that the defect percentages only indicate defects exceeding the specification limit to which the processmean is nearest. Defects beyond the far specification limit are not included in the percentages.

Sigma level DPMO Percent defective Percentage yield Short-term C pk Long-term C pk 1 691,462 69% 31% 0.33 0.172 308,538 31% 69% 0.67 0.173 66,807 6.7% 93.3% 1.00 0.54 6,210 0.62% 99.38% 1.33 0.835 233 0.023% 99.977% 1.67 1.176 3.4 0.00034% 99.99966% 2.00 1.57 0.019 0.0000019% 99.9999981% 2.33 1.83

[edit ] Software used for Six Sigma

Main article: List of Six Sigma software packages

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[edit ] Application

Main article: List of Six Sigma companies

Six Sigma mostly finds application in large organizations .[19] An important factor in the spread of Six Sigmawas GE's 1998 announcement of $350 million in savings thanks to Six Sigma, a figure that later grew tomore than $1 billion. [19] According to industry consultants like Thomas Pyzdek and John Kullmann,

companies with less than 500 employees are less suited to Six Sigma implementation, or need to adapt thestandard approach to make it work for them. [19] This is due both to the infrastructure of Black Belts that SixSigma requires, and to the fact that large organizations present more opportunities for the kinds of improvements Six Sigma is suited to bringing about. [19]

[edit ] Criticism

[edit ] Lack of originality

Noted quality expert Joseph M. Juran has described Six Sigma as "a basic version of quality improvement",stating that "there is nothing new there. It includes what we used to call facilitators. They've adopted moreflamboyant terms, like belts with different colors. I think that concept has merit to set apart, to createspecialists who can be very helpful. Again, that's not a new idea. The American Society for Quality long agoestablished certificates, such as for reliability engineers." [20]

[edit ] Role of consultants

The use of "Black Belts" as itinerant change agents has (controversially) fostered an industry of training andcertification. Critics argue there is overselling of Six Sigma by too great a number of consulting firms, manyof which claim expertise in Six Sigma when they only have a rudimentary understanding of the tools andtechniques involved. [3]

[edit ] Potential negative effects

A Fortune article stated that "of 58 large companies that have announced Six Sigma programs, 91 percenthave trailed the S&P 500 since". The statement is attributed to "an analysis by Charles Holland of consulting firm Qualpro (which espouses a competing quality-improvement process)." [21] The summary of the article is that Six Sigma is effective at what it is intended to do, but that it is "narrowly designed to fix anexisting process" and does not help in "coming up with new products or disruptive technologies." Advocatesof Six Sigma have argued that many of these claims are in error or ill-informed. [22][23]

A BusinessWeek article says that James McNerney 's introduction of Six Sigma at 3M may have had theeffect of stifling creativity. It cites two Wharton School professors who say that Six Sigma leads toincremental innovation at the expense of blue-sky work .[24] This phenomenon is further explored in the

book, Going Lean , which describes a related approach known as lean dynamics and provides data to showthat Ford 's "6 Sigma" program did little to change its fortunes. [25]

[edit ] Based on arbitrary standards

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While 3.4 defects per million opportunities might work well for certain products/processes, it might notoperate optimally or cost effectively for others. A pacemaker process might need higher standards, for example, whereas a direct mail advertising campaign might need lower standards. The basis and

justification for choosing 6 (as opposed to 5 or 7, for example) as the number of standard deviations is notclearly explained. In addition, the Six Sigma model assumes that the process data always conform to thenormal distribution . The calculation of defect rates for situations where the normal distribution model doesnot apply is not properly addressed in the current Six Sigma literature. [3]

[edit ] Criticism of the 1.5 sigma shift

The statistician Donald J. Wheeler has dismissed the 1.5 sigma shift as "goofy" because of its arbitrarynature. [26] Its universal applicability is seen as doubtful .[3]

The 1.5 sigma shift has also become contentious because it results in stated "sigma levels" that reflect short-term rather than long-term performance: a process that has long-term defect levels corresponding to 4.5sigma performance is, by Six Sigma convention, described as a "6 sigma process." [8][27] The accepted SixSigma scoring system thus cannot be equated to actual normal distribution probabilities for the statednumber of standard deviations, and this has been a key bone of contention about how Six Sigma measuresare defined. [27] The fact that it is rarely explained that a "6 sigma" process will have long-term defect ratescorresponding to 4.5 sigma performance rather than actual 6 sigma performance has led severalcommentators to express the opinion that Six Sigma is a confidence trick .[8]

No matter what type of business you run, there will be several tasks high on your list for increasing productivity and profit. One is improving business processes so the entire operation runs more smoothly.Eliminating waste is usually on top of the list as this resolves many potential issues that could occur. Thisalso helps to reduce costs in many different situations. Because of this, management teams have begunfocusing on three main tools to support the efforts. They are: Lean, Six Sigma, and Enterprise ResourcePlanning. Some companies have only chosen to adopt one method as this works well for their needs;however, those who clearly understand how they all work together will make faster progress.

All three tools and methodologies mentioned above are used to improve business processes. Lean is used toeliminate waste thereby enabling organizations to produce more at a lesser cost. Six Sigma is used toimprove quality by reducing variability and improving overall business processes. Enterprise ResourcePlanning, or ERP as it is commonly called, employs new technology and best practices in an effort to enable

processes to improve.

There are various other methods and tools utilized within these three, all of which can be used inconjunction with one another to increase overall productivity.

When implementing an Enterprise Resource System, organizations will modify business processes so the best practice function is delivered to enable the use of the software right out of the box. While the threetools can conflict in the market, they can still be used quite easily. Proponents of Lean and Six Sigma oftenargue that short term-process improvements are a better investment all around than Enterprise ResourcePlanning. ERP software companies, however, market their products as being Lean compliant. The systemsare promoted as providing best practices that will deliver significant improvements in productivity whenimplemented. This, of course, translates into an increase in profits for all aspects of the company.

Aveta Solutions - Six Sigma Online ( http://www.sixsigmaonline.org ) offers online six sigma training andcertification classes for lean six sigma, black belts, green belts, and yellow belts.

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6 Sigma

According to Six Sigma methodology, the process equals the total number of sequences, series, andarrangements of events, steps, or measurements, done repeatedly for the purpose of producing quality

products or services. When it comes to implementation of a Six Sigma improvement program, the first stepis to change a process in order to reduce costs and improve quality. There are several different types of graphical representations that enable organizational leaders to see the flow types of all actions andconclusions that take place in various processes. Process maps along with flowcharts and other diagrams can

be used to graphically represent the process being analyzed.

A flowchart is a graphical representation of a process that shows the input, activities, and output of a particular process. It is used to represent the process from start to finish, and acts as an instructional manualfor facilitating more detailed analysis, while improving work flow and delivery of service. It is used to attainthe entire process at a level of observation that is very detailed in nature. Flowcharts are also useful tools inthe successful implementation of Six Sigma programs, which is one reason why they are so widely used inconjunction with this methodology.

Flowcharts are utilized within the Six Sigma methodology for a number of reasons, and cover manydifferent processes. They make viewing the information easy, and allow company executives to see whathas gone in and come out of a particular process. Flowcharts are easy to create and provide a wealth of information. The easier it is to analyze, the more quickly the solutions can be discovered and implemented.This greatly increases productivity levels in all aspects of business and enables companies to become more

profitable. The information in flowcharts is also easy to interpret which is yet one more reason why they areso widely used

Six sigma and lean manufacturing both are the toolkits that are helpful to reduce the waste involved in business processes. With the help of six sigma and lean manufacturing, the clients can save a lot of capitalas well as time. There are three types of wastes in any Business process that can be removed by leanmanufacturing:1. non-value-added work known as "muda"

2. overburden known as "muri"3. unevenness known as "mura"

Lean Manufacturing is the first step to reduce the cost and increase the turnover by reliably andsystematically wiping out functions that do not add values in any business process. Basically leanmanufacturing helps any production unit to achieve projected ratio of production by acquainting techniquesthat are simple and user friendly. On the other hand Six Sigma is also a method that is designed to bringimprovement in any business or manufacturing process. Six Sigma is a quality measure and bettermenttechnique. By reducing the waste, the quality of process and production can be bettered and the cost can also

be reduced.

Difference: Below given are the points that will differentiate the six sigma and lean manufacturing. Lean works on five principles while Six-sigma has a DMAIC model. To assure the reliability and in-time delivery lean applies a total productive maintenance technique whileSix Sigma employs project methodology to check the defective process. A cross function team with black belt has to support Six sigma operations while a small team operation isenough for Lean Manufacturing process. The process mapping is used in Six Sigma while Lean has to follow value flow. The Six Sigma strategy follows a specific designed strategy while lean involves a strategy known as

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Kanban. Lean manufacturing utilizes SMED process to ensure fast turnaround time, on the other hand Six Sigmafollows advice of Master Black Belt.

Now we will explore the advantages of both Lean Manufacturing and Six Sigma:

Advantages of Lean Manufacturing: Impressively reduces the waste chain processes. Reduces the requirement of inventory. Generates more strong and powerful production system. Formulates befitting systems for material delivery. Enriches more flexible layouts.

Advantages of Six Sigma: Can reduce the 50 % of cost as well as the waste chain processes. Perfect analysis of client requirements. Brings betterment in delivery and quality operation. Better understanding of changing requirements of client. Generates more strong and powerful production system. Generates rapid development in the processes with the help of domestic resources.

Which is Better?:

Irrespective of choosing any out of the two techniques, Lean Manufacturing can provide the good results.The fact is that without Six Sigma the potential development and improvement operations in any businessunit will always be limited. Both the technology single handed will not be able to give 100 % quality checksor process improvements and reduction in wastes.

The important point here is that if both the techniques are blend well together and utilized the results willreally amaze anyone easily. Both have their own limitations and expertise that are necessary. So it solelydepends on the type of business problem which technique should be applied for.

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Documents

History of 6Sigma