Six Sigma

Introduction

In the dynamic arena that is modern business, organizations are constantly on the alert to gain a competitive edge. It is those organizations that continually deliver better quality products and services than rivals that beat competition and thrive in their industry. The Six Sigma method has proven to help companies achieve this, while cutting costs and boosting performance. The best news is - this system is relevant for all business areas.

In its simplest form, Six Sigma can be defined as a measure of quality that strives for near-perfection, represented by 3.4 Defects Per Million Opportunities (DPMO), or 99.9997 percent perfect. At its most complex - Six Sigma is a comprehensive and flexible system for achieving, sustaining, and maximising business success by close understanding of customer needs, disciplined use of data, facts, and statistics, and diligent attention to managing, improving, and reinventing business processes.

The overall goal of Six Sigma implementation is to increase profitability by eliminating variances, defects and waste that undermine customer loyalty. The approach is best viewed as a "get rich slow" plan, as it takes time for company culture to adapt and grow in sync.

Six Sigma Process

Six Sigma is essentially the process of comparing actual process outputs against customer requirements. To get processes operating at less than 3.4 defects per million opportunities means that the company must continuously strive to meet targets of near perfection, with the customer setting the bar. In fact, as part of Six Sigma methodology, a defect is any instance or event in which the product or process fails to meet a customer requirement.

Before further investigating the Six Sigma process, it is useful for us to understand the structure of such an organization, and meet the people that make things happen. Six Sigma improvement initiatives can only be successful if significant resources and training are devoted to their management. The successful Six Sigma organization will have a cadre of specially trained professionals dedicated to the continuous improvement vehicle. These people are:

Quality Leader/Manager (QL / QM)

This is the executive, usually director level, to which overall responsibility for quality in the organization is assigned. Specific functions of this top management position include: establishing the roles and infrastructure of the Six Sigma initiative, sponsorship of Six Sigma projects, periodically reviewing the process of various projects, and offering ideas and help.

Master Black Belt (MBB)

Master Black Belts are experts in the use and implementation of six sigma tools and techniques. They are seen as teachers who can guide improvement projects, and also train Black Belts and Green Belts. Adaptable, knowledgeable, expert in project management and influencing skills; MBBs are of enormous value to any organization. For example, Bernie Shaw MBB at Citizens Bank saved an average of Ј250K per annum over a five year period with the company.

Process Owner (PO)

This is the person who assumes a new, cross-functional responsibility for process improvements that will provide value to an internal or external customer. PO responsibility is normally delegated at Operations Manager or Team Leader level. The PO functions include; maintaining process documentation, monitoring process performance, identifying problems and opportunities, maximising process performance, communicating with other processes and with functional managers.

Black Belt (BB)

Black Belts are technically orientated senior change agents, who take a direct hand in organising improvement teams. Key skills at this position are concerning: operating systems, databases, advanced analytical and statistical skills, presentation, communication, project management. BBs are expected to be adaptable and in many cases, they act as coaches to Green Belts. Usually BBs will undertake 2-3 weeks training and carry out five projects successfully.

Green Belt (GB)

These are Six Sigma improvement Team Leaders, capable of forming teams and managing projects from creation to completion. Key skills of Green Belts include; Project Management, facilitation, quality tools, problem solving and data analysis. Training includes 5 - 10 days classroom and successful completion of two projects.

Now that we appreciate the hierarchy of Six Sigma implementation we can better understand the actual improvement process.

Two methods may be used to implement Six Sigma, depending on the process involved. For new processes DMADV may be used; Define, Measure, Analyse, Design, Verify. However, the most common process improvement method used by a plethora of companies worldwide is DMAIC.

As a method of improving existing processes, Six Sigma can be broken down into five phases: Define, Measure, Analyse, Improve, Control - or DMAIC.

DMAIC

The DMAIC improvement model encourages incremental improvement throughout the process.

The 'Define' stage is where senior management define the project goals and customer deliverables; this is followed by 'Measure' where the project team, guided by the Black Belt, measure the process to determine the current performance. The third stage is 'Analyse', this is when the team analyse and determine the root and cause of the defects. The fourth stage 'Improve' is concerned with the improvement of the process by eliminating defects. The final stage is where controls are put in place to monitor future process performance.

Customer Focus

At the heart of the Six Sigma methodology, as with the majority of successful business designs, is the customer. When applied with a strategic perspective, it is the voice of the customer that is the necessary starting point for Six Sigma initiatives. It follows from this that it would be the voice of the customer that is instrumental in deciding the key metrics to be used for the measurement of Six Sigma effectiveness.

Metrics

An organization's profitability