Six Sigma Blog

Six Sigma Defined

By Priya Jestin, Staff Writer

We’ve probably gone so much into the intricacies of the process that we have probably forgotten to ask ourselves a very pertinent question: What Is Six Sigma? For those who came in late, here is a small orientation course on the management mantra that has taken the corporate world by storm.

The corporate environment today is highly charged and you have absolutely no room for error. Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services.

So what’s in the name? The word Sigma is a statistical term that measures how far a given process deviates from perfection. The basic idea behind Six Sigma is that if you can measure the number of "defects" in a process, you can systematically figure out how to eliminate them. This will help you get as close to "zero defects" as possible. To achieve Six Sigma Quality, a process must produce no more than 3.4 defects per million opportunities. An "opportunity" is defined as a chance for nonconformance, or not meeting the required specifications.

The Significance of Six Sigma

Why is Six Sigma so important in the improvement process? We talk of Six Sigma level implementations having an accuracy of 99.99966 percent. Do we need to be so accurate? Isn’t it enough to be accurate, say, 99 percent of the time? Well, after reading the following statistics compiled by the American Society for Quality, you will agree that it definitely is not!

Being 99 percent accurate means that:

• As many as 50 babies are dropped in hospitals every day.
• There is no electric power for nearly 7 hours every month.
• Every hour, at least 20,000 letters are lost in the mail.
• Over 200,000 errors are made in medical prescriptions on an annual basis.
• Every week, doctors botch up 5,000 surgeries.
• Major airports report 2 incorrect landings every day.

Now, doesn’t that 0.99966 percent sound worthwhile?

How Six Sigma Differs from Traditional Quality Model

Six Sigma is completely different from the traditional quality model of process capability. Traditional quality model was applied only to manufacturing processes, while Six Sigma is applied to all important business processes. Traditional quality model was known as Three Sigma.

Three Sigma had a process standard deviation of less than one-sixth of the total allowable spread. Six Sigma requires the process standard deviation at less than one-twelfth of the total allowable spread. These differences are far more reflective than one might realize.

Read my previous post titled "Driving Value through Lean Six Sigma" to know more about Lean Six Sigma.

Quality Companion 2 for Six Sigma Professionals

Minitab Inc. has announced the release of Quality Companion 2 process improvement software. It has been designed specifically to help Six Sigma professionals manage and execute their projects. The new product complements the company's flagship product, Minitab Statistical Software. Six Sigma professionals rely on this software to tackle the sophisticated statistical data analysis at the heart of every Six Sigma project.

Quality Companion 2 simplifies many other challenges involved in quality improvement. It helps teams plan, execute, document and report on their projects. The software brings together all the elements critical to Six Sigma success. You can read our previous post titled “Six Sigma in Small Businesses” to know more about Six Sigma methods.

Fire alarms: The Dell notebook scare and Six Sigma defect control

You have probably read news reports about several Dell notebooks going up in flames, apparently because of a short circuit. Dell has since recalled all such notebooks from the market. Interestingly, the notebooks are armed with a Sony battery backup, and naturally, both Dell and Sony are worried about the financial fallout.

However, according to Sony, the ratio between the total number of Dell notebooks in the market and those that caught fire is too low to warrant real concern. Shrugging off the episode, in a report by CIO, Sony cites Six Sigma measures and standards to show that the number of defects is below the Six Sigma figure of 3.4 defects per million opportunities.

True, the defective units might be within the Six Sigma stipulations, but the apprehension caused among Dell users shows that the prospect of an exploding notebook far outweighs the fact that the production process meets Six Sigma standards of defect management.

How Six Sigma Helps Sales

In the recent years, business requirements have gone through a sea change. Customer relationship management has come into fore and it has become an integral part of the game plan of any organization. Another question that is doing round is whether trained employees can use customer relationship management more effectively. If there is a real need of special training for employees in an organization, the first thing comes into mind is Six Sigma. In my opinion, all organizations must master Six Sigma disciplines.

To achieve real growth, you must get closer to the customers. From this perspective, Six Sigma should start in customer-facing groups such as sales, marketing and after-sales service. Six Sigma focuses on creating value through the quality of business, and not through the business of quality. It finds ways to add value to customers. The balanced scorecard is more about measuring the progress. Six Sigma will definitely meet all your organizational requirements and boost your sales prospects further.

Six Sigma Users on Regulatory Compliance

Companies that regularly use Six Sigma methodologies are more likely to have full confidence that they are complying with regulations from Occupational Safety and Health Administration (OSHA). Most Six Sigma users are confident that they companies are meeting the legal requirements. Here, it is important to note that Six Sigma users include the companies that are in process of implementing Six Sigma. Part of standard Six Sigma methodology is to document processes. Documentation is related to everything from tracking data to taking corrective action. It also includes reporting back to the regulatory body.

Six Sigma adds the quality dimension to BPO/ITES sector

As Western countries continue to make a beeline towards India because of its multifarious advantages—good infrastructure, favorable government policies, rock-steady economic environment and cost benefits—competition is also making its presence felt in countries like Australia, China, the Philippines and Ireland. To ward off such challenges in the BPO/ITES sector, India-based vendors are now looking to add a new dimension to their offerings—quality control of business processes through the adoption of the Six Sigma methodology.

You might ask: Why Six Sigma?

Well, Six Sigma has proven itself as a successful strategy to identify and measure defects, and then eliminate such defects using the application of statistical methods. By focusing on innovation or improvements of the existing product and service design through the DMAIC and DFSS principles, Six Sigma helps identify defects that affect customers, who are the key components in any business venture.

Click here for more on Six Sigma strategies, and how they have helped companies like GE, Motorola, American Express, 3M, Raytheon, Sun Microsystems, DuPont, Bank of America, Rolls Royce and Boeing.

Data Quality Process with Six Sigma

Six Sigma is referred to controlling a process to limit output defects to the minimum. A defect always should be outside customers' requirement specifications. Most companies use Six Sigma in their applications. In the industrial segments, Six Sigma is known as the goal of achieving near-perfect quality for a product or service through new or improved processes and tools.

Six Sigma and data quality improvement share the same goal of reducing defects. Data certification improvement programs are natural choices for the application of Six Sigma methodologies. Success of Six Sigma and data certification depends on the ability to measure data quality throughout the entire process. The ability to certify data is determined by the following standards:

· Accuracy
· Completeness
· Reliability
· Availability
· Timeliness
· Consistency
· Uniqueness

Controlling data quality is all about wrapping a process around the tasks of sourcing, transforming and publishing data that enable data quality or data certification. Six Sigma provides a complete framework around the collection and control of these processes to improve the level of data quality.

Software Cos. Have Poor QA

A study by research firm Compuware has found that most European software developers are falling short in assuring quality during the application development process. In spite of all the buzz about best practice initiatives such as Six Sigma and Capability Maturity Model (CMM), nearly 80 percent of the companies surveyed said they had no formal quality assurance (QA) methodology in place. One fourth of the respondents said they did not have properly trained or experienced members in their QA team, while a third said they did not have a dedicated team manager. 

Statement Makes Mission Possible

A mission statement is critical to the success of a Six Sigma project. The mission of the project should fall under the umbrella of the organization’s mission, which is why a mission statement has to:

• Be defined in precise terms
• Be clear and unambiguous
• Outline the criticality of each problem
• Outline how the success of the project at hand will bring about a positive change in the organization
• Define clear-cut, non-overlapping missions for each team
• Focus on the root cause of each problem
• Define expect outcome of the project in precise terms
• Verify that the project at hand will be around for some time, without being subject to changes in the near future

Lean And Six Sigma Services Introduced

As part of its strategy to help organizations that wish to enhance efficiency in their operations, improve customer retention, and bring down overall costs, ISO consulting company Management Systems International LLC has introduced ImprovePlus Lean and Six Sigma consulting services. These services extend beyond ISO by focusing on the weakest and strongest points of an organization, and helping to increase profits in the process. By following Lean and Six Sigma principles, companies can standardize processes and reduce waste. ISix Sigma reports:

"Implementing Six Sigma and Lean methodologies is the next logical step for ISO certified companies," states Diana Procter, MSI's president. "Studies have shown that a Six Sigma Black Belt consultant can save a medium-sized company over $1 million annually." According to the Six Sigma Academy, Black Belts save companies approximately $230,000 per project. Typically, a Black Belt can complete four-to-six projects annually.

ARDEC wins gold for excellence in Lean and Six Sigma

Francis J. Harvey, the Secretary of the United States Army, has identified three commands for distinction in establishing and practicing good business processes. Amoing them is U.S. Army Armament Research, Development and Engineering Center (ARDEC), Picatinny Arsenal, N.J., which won gold for excellence in the practice of Lean and Six Sigma. This command has established a benchmark for other Army commands to adopt.

ARDEC has more than 2,500 employees, and has distinguished itself in the areas of leadership, strategic planning, customer and market focus, measurement analysis, and knowledge management accomplishments during 2004. The silver went to Fort Stewart and Hunter Army Airfield, while Minnesota Guard took the bronze. Army News Service quotes Dr. Joseph A. Lannon, ARDEC director:

"Our objective is to be the best organization possible. Through our dedication to an integrated approach to continuous improvement, we ensure that the real winners in this achievement are the war fighters whose lives depend on the best technical armament solutions and support to develop and field products in the shortest time possible."

Six Sigma in the hotel industry

Express Hospitality reports that Six Sigma is many things rolled into one single concept—it is a metric, a tool, a methodology, and a discipline that is applied in business processes to improve efficiency by removing variations and defects in the process. After its successful implementation by Motorola in the 1980s, the Six Sigma tool has been successfully implemented by many leading companies including GE, Allied Signals (now Honeywell), Ford, American Express, and Chase JP Morgan. 

However, since the focus of Six Sigma implementation is the importance attached to the customer, it is time that the concept was applied in the hotel industry. Starwood Hotels and Resorts has already implemented the Six Sigma approach. Six Sigma at Starwood has helped improve the financial performance of the group by ushering in the quality and consistency of the customers' experiences. Six Sigma has also provided the guidelines and tools to create a consistently superior guest experience at all properties, and simultaneously improve the bottom line. The Six Sigma organization in the group reports to divisional leadership and is aligned with the division’s goals and priorities.

After this success story, it is imperative that the hotel chains in India also realized the importance of Six Sigma in improving functioning.

AllZone Management Solutions: A BPO company with six-sigma quality level

AllZone Management Solutions is a six sigma affiliated global solution provider, and this translates into good quality services that are implemented and checked at each stage of the production process.

AllZone provides solutions for common entrepreneurial problems such as increasing costs, staff management, and maintenance of the company infrastructure. Among its clients are companies dealing with medical billing, litigation support, electronic data discovery, data conversion, tax computation, finance, and accounting. AllZone completes all its commitments within the set period. PRWeb.com reports:

Increasing Revenues and reducing cost for Healthcare, Financial and Litigation companies. A business process outsourcing company that focuses on high value solutions, which reduces cost up to 50 percent with six sigma quality level. 

Lean kaizen and Six Sigma principles help Solectron win Best Plants Award

IndustryWeek Magazine has recognized Solectron Corporation's manufacturing plant in West Columbia, S.C., as one of North America's top ten plants. Solectron is a provider of management services, including materials management, product manufacturing, and product warranty. The company has attributed its success to the successful implementation of Lean kaizen and Six Sigma principles. Through such implementations, the company has been able to cater to customer requirements and expectations.

According to John Petta, general manager at Solectron, the company is combining the Six Sigma principle with Lean processes, thereby providing a cost-effective, responsive, and error-free business process. The criteria which guided IndustryWeek in deciding the winners included management strategy, community development, productivity, and relationship of the management with the employee, customer, and supplier. TMCnet quotes Marc Onetto, executive vice president, Operations, at Solectron:

This world class performance is a direct result of empowered people applying the Solectron Production System(TM) (SPS)—our own winning combination of Lean kaizen and Six Sigma principles. In our view, what makes Solectron stand out as a winner is our dedication to meeting and even exceeding our customers' expectations.

Read More: Solectron Receives 2005 IndustryWeek Best Plants Award; Annual Award Program Recognizes the 10 Best Manufacturing Facilities in North America

GE Looks AWAY from Six Sigma for Growth

In what may be a major blow to the popularity of Six Sigma, General Electric CEO Jeffrey Immelt has acknowledged recently that corporate efficiency may have come at the expense of the customer.  The company who made famous the Six Sigma efficiency program is not branching out of that model to achieve greater success the company must focus not only on cost efficiency, but on growth as well.  The success of the company has meant that opportunities for accelerated growth are increasingly more difficult to find, so the company will need to offer a wider variety of innovative products as well as more comprehensive service.  This strategy diverges from the cost cutting efficiency oriented focus of the company which has helped it to achieve the phenomenal profits and success that it is known for. DestinationCRM.com Reports:

G.E. has launched an aggressive campaign to transform itself into a new-idea-generating innovation machine.  The effort is commendable, and as G.E. is learning it's difficult to teach potatoes to become carrots. 

Read More: The Search for Growth Through Innovation

Applying Six Sigma in Health Care

While Six Sigma has spread throughout the corporate world, it is just now making inroads into the health care industry.  In hospitals, this has meant initiatives to achieve more efficient and satisfactory patient care and business organization.  A more profound incorporation of the program seems to be on the horizon, however, as increasing numbers of hospital CEOs are showing interest in the program.  For hospitals this would mean the need to break down actions into their component parts and examine each part for inefficiencies and errors.  For many in the industry this seems to run counter to the belief that each patient should be treated individually and actions should accordingly be individual.  What such an interpretation fails to understand however, is that all patients must undergo similar imputting and basic care processes. Health Facilities Management Reports:

Six Sigma does not simply focus on cutting budgets. It focuses on the processes themselves--doing them better and faster and, consequently, doing them at lower cost.  Six Sigma can be applied to any activity or transaction in the health facilities management department where quality, timeliness and costs are concerns. 

Read More: Analyze This!

Six Sigma for Health Facilities and Hospitals

Six Sigma's abilities have long been recognized within the business community, however, the process is relatively unknown in the health care industry.  According to some experts that development is just a matter of time.  This is because modern health care facilities have large repitition numbers through complex actions such as intake to the simplistic action patterns of the hospital elevators.  These processes, along with thousands of others can be streamlined and made immensely more efficient through Six Sigma. hospitalconnect.com Reports:

It may surprise some, but utility reliability, or uptime can also be improved by Six Sigma.  A hostpital utility system (such as electricity, chilled water and steam) operating at Six Sigma reliability would be out of service less than two minutes per year.

Further examples of facilities management functions that might benefit from Six Sigma include a work order process, a call center's operating procedure for handling hot and cold calls, and a plant operations protocol for acknowledging and responding to equipment and system alarms.

Read More: Analyze This!

Juran Institute Gives Advice for Getting Lean with Six Sigma

According to a recent report by Joe De Feo, President of the Juran Institute, there are concrete ways ways to achieve improvements in quality and consistency through Six Sigma.  Those include guidelines such as maintaining consistent leadership, maintaining regular contact with the customer throughout any mergers or acquisitions, and keeping one's eyes open for larger macroeconomic issues which can effect the company.  Contol Engineering Reports:

1. Winning: do not get stuck on early results and celebrate; 

3. Keep the effort fresh so the organization doesn't tire of it;

Read More: How to get lean, do Six Sigma

6 Simple Rules in Efficiency Program Implementation

At a recent Quality Control conference Joe De Feo, President of the Juran Institute outlined some concrete ways in which companies can improve service quality and accuracy.  The Institute, which advocates a lean Six Sigma approach to service quality proclaims that throught the incorporation of Six Sigma major savings can be achieved through waste reduction, cycle time reduction methodology, and overall increases in inventory and cost efficiency.  The recommendations, although seemingly commonsensical, are often overlooked because of their simplicity by many management teams, costing companies a great deal of potential savings.  Reed Business Information Reports:

1. Winning: do not get stuck on early results and celebrate;
2. Do not change leadership before the initiative takes hold;
3. Keep the effort fresh so the organization doesn’t tire of it;
4. Maintain the infrastructure to ensure the implementation happen effectively (and continue training);
5. Do not forget the customer during a merger or acquisition;
6. Observe and consider effect of macroeconomic events outside the organization.

Read More: How to get lean, do Six Sigma

Honeywell Recieves Accolades for its Incorporation of Six Sigma

Honeywell Electronic Materials has recieved numerous accolades for its service quality including a "Best Quality Award" from Samsung and a "Supplier Excellence Award" from Infineon.  The company cites its incorporation of service quality programs into the daily business regimen for their success.  Such programs include one in which Honeywell elicits and incorporates customer suggestions regarding its internal processes, an annual planning strategy which focuses on the 5-year needs of current and future customers, and finally an incorporation of Six Sigma.  IndustryWeek Reports:

All employees participate in "Green Belt" classes with some earning "Black Belt" and "Master Black Belt" status.

Read More: Honeywell's Customers Say Thank You

Human Sigma

The benefits of implementing a Six Sigma quality improvement program have been gaining recognition for years.  Only recently, however, has the quality metric been extended to the human side of business.  Born out of research conducted on over 80,000 managers in more than 400 companies by Gallup, the approach emphasizes the often overlooked importance of the engagement levels of employees and customers in achieving a better bottom line.  The Human Sigma approach takes such knowledge about individuals in the work environment and applies it to create a more productive and consistent workforce.  Express Pharma Pulse Reports:   

Human Sigma is a measure that focuses on reducing variance in key employee and customer outcomes by improving an organization's human performance and moving it towards excellence.  Simply put, the human sigma approach shows how to manage - and maximise - the human difference.

Read More: The human sigma of performance

Performance and Productivity Initiatives: A Tale of Four Companies

Mary Ethridge of the Beacon Journal investigates four regional companies in Northeast Ohio who are implementing a variety of efficiency and productivity initiatives to remain competitive in increasingly difficult markets. One company has hired a local business professor to investigate streamilining possibilities, another has developed its own program, while the final two have implemented the Six Sigma program.  The success of the Six Sigma program is evident in a number of very tangible examples of costs savings.  Akron Beacon Journal Reports:

In another case, a [Six Sigma] team noticed an unusual number of service calls on some newly installed ATM machines. 

The dispensers appeared to be in working order, so the team began to hunt for a reason for the calls.  They found the new ATM's were set to generate a repair call if they didn't spit out cash within 30 seconds.  By resetting the parameters, the company saved 4,049 hours of labor.

Read More: Managers create new cultures at work

Voltaix Inc. Incorporates Six Sigma to Improve Customer Relationships

With the profits attainable through Six Sigma becoming ever more apparent to companies in a variety of fields, Voltaix Inc announced this week that some fifteen employees have recently attained Six Sigma Green Belt Certification.  Voltaix Inc., a leading manufacturer of chemicals and gasses, believes that their investment in training will reap dividends through improving customer support relationships and product solutions.  In addition, the company, like most Six Sigma implementers, hopes to attain greater product consistency and thus profitability.  mysan.de Reports:

"Six Sigma will enable the Voltaix team to deploy problem-solving tools to improve product consistency and usability, which translates to yield and throughput improvements for our customers," commented Dr. Matthew Stephens.  "Yield and throughput are more important than ever, given the high capital equipment expenditures associated with 300mm wafer processing.  Further, new technology integration issues drive the need for closer customer-supplier relationships.

Read More: Voltaix Undertakes Six Sigma Initiative to Enable Deeper Customer Relationships

Survey Shows Six Sigma Delivers Profits

While the value of Six Sigma implementation is already widely known, the monetary benefits for a single company to train an individual are rarely quantified.  A recently released survey entitled The Customer Dashboard, however, attempts to rectify this gap.  It indicates that 86% of Six Sigma Black Belts contributed $500,000 to annual performance goals, while almost one in three (32%) contribute $5 million.  The survey also touts the benefits of Six Sigma on an anecdotal basis, allowing the effects of the program to be seen within a single company.  PR Newswire Reports:

Six Sigma implementation enabled a top company to save $400 million in costs- translating into a profit of $100 million. The long-run annual goal is to save $7 to $10 billion, resulting in an earnings increase of $5 billion.

Read More: Lean & Six Sigma: From the Top to the Troops - Case Studies in Excellence

American Society for Quality Releases Quarterly Index

The American Society for Quality released this week a massive survey which indicates a customer satisfaction for services has been in constant decline over the past decade.  While some consumer goods such as soft drinks, food, and beer recieved high marks, other goods such as airlines, resaurants and cellular service are seeing rapidly declining customer satisfaction ratings.  The study, which covers an wide variety of service related goods and services, also highlights some industries with significant satisfaction increases.  Yahoo Finance Reports: 

The life insurance industry realized the greatest gain over the last 10 years, with an increase of 2.7% in customer perceived quality. This is likely the result of a well-defined process of interacting with customers after the initial policy sale.

Hotels have one of the highest perceived-quality scores for the service industry, showing gains in both perceived quality and value over the last decade. During that time, several hotel chains have implemented major quality improvement efforts. For example, Starwood Hotels and Resorts, which registered a 7.1% gain, implemented Six Sigma extensively throughout the organization.

Read More: The American Society for Quality Debuts Quarterly Quality Index With 10-Year Analysis