Wednesday, 6 March 2013

SIX SIGMA





"Data-driven method for achieving near perfect quality. Six Sigma analysis can focus on any element of production or service, and has a strong emphasis on statistical analysis in design, manufacturing and customer-oriented activities." 

— UK Department for Trade and Industry 


Six Sigma is now according to many business development and quality improvement experts, the most popular management methodology in history. 

Sigma is a disciplined, data driven approach and methodology for eliminating defects (driving toward six standard deviations between the mean and the nearest specification limit) in any process, from manufacturing to transactional and from product to service. 

Six Sigma as a management philosophy is a well organized and disciplined approach to business operations. It supports the overall business strategy and create significant benefits by creating business processes without room for error which deliver high quality products and services for the customers, generate operational excellence and improve overall productivity, and create cost savings for the business. Six Sigma is an ongoing process of looking for new ways to exceed customer expectations. 

The word Six Sigma is a statistical term with the idea of creating near perfect processes by creating quality systems for measuring and improving critical processes. By continuously measuring process performances such as number of defects in the process organizations can find ways to improve their performances. Statistically Six Sigma quality means processes with no more than 3.4 defects per million opportunities / chances for nonconformance. Defect means nonconformance or not meeting the requirements. Six Sigma quality process is almost perfect / error free process. Effective Six Sigma approach focuses on the most important drivers of customer satisfaction and the critical for success processes. Six Sigma methodology can save companies millions of dollars. General Electric has estimated cost savings in billions as a result of Six Sigma. Today thousands of companies around the world have implemented the Six Sigma methodology in order to improve their competitiveness. 

Six Sigma can improve processes dramatically often by 70% (or even more). Deploying Six Sigma throughout an organization and creating Six Sigma culture is critical for overall success. Six Sigma deployment is roll out of the Six Sigma methodology across different organizational functions and assigning roles, practices, tools, and procedures for managing the Six Sigma initiative. 




According to motorola, "...Six Sigma has evolved over the last two decades and so has its definition. Six Sigma has literal, conceptual, and practical definitions. At Motorola University (Motorola's Six Sigma training and consultancy division), we think about Six Sigma at three different levels: as a metric, as a methodology and as a management system. Essentially, Six Sigma is all three at the same time." 

Actually, Robert Galvin (who was the CEO of Motorola at the time that Six Sigma was being developed in the company) as a consequence was awarded the Juran Prize by the ASQ. 

General Electric (GE), the first large-scale adopters and advocates of Six Sigma after Motorola, and considered by most experts to have been responsible for Six Sigma's rapidly achieved high profile, provide the following definitions of Six Sigma: 

"...Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services. Why 'Sigma'? The word is a statistical term that measures how far a given process deviates from perfection. The central idea behind Six Sigma is that if you can measure how many 'defects' you have in a process, you can systematically figure out how to eliminate them and 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. This means we need to be nearly flawless in executing our key processes." 

The iSixSigma organisation, the biggest online 'community' of Six Sigma practitioners, was founded in 2000, and is owned and run by a number of 'quality professionals'. Isixsigma provides the following main definition of Six Sigma (which actually serves as an introduction to several other very detailed Six Sigma definitions contained in the iSixSigma resources): 

"...Six Sigma is a rigorous and disciplined methodology that uses data and statistical analysis to measure and improve a company's operational performance by identifying and eliminating 'defects' in manufacturing and service-related processes. Commonly defined as 3.4 defects per million opportunities, Six Sigma can be defined and understood at three distinct levels: metric, methodology and philosophy...". 

Six Sigma means... 
  • Cost savings 
  • Higher customer satisfaction 
  • Lower cycle time 
  • Minimizing errors 
  • Revenue growth 
  • Increased productivity 
  • Increased capacity 
  • Simplifying processes 
  • Market share growth 
  • Higher customer retention 
  • Proactive and data driven culture 
  • Brand recognition 

Six Sigma drives business performances towards achieving overall business strategy. The starting point of any initiative is identifying customers and their requirements/expectations. The goal of Six Sigma is satisfying or exceeding customer requirements. Any event which does not satisfy customer requirements/needs/expectations/specifications is error or defect. This can be product defect or service error. There are internal and external customers so customers in general are those who receive the output of a process. 

Six Sigma is data driven approach which focuses on customer specifications and business goals and targets. Using the right tools and setting goals and targets is essential for Six Sigma. Unlike simple or local quality management initiatives, Six Sigma measures not only technical/process performances but also financial costs and benefits of any initiative. 




Tools used in Six Sigma organizations are quality management tools for designing, managing, and improving critical for success processes, tools for data collection, analysis, and measurement, as well as tools for training and managing organizational Six Sigma knowledge and talents. 

Statistically Six Sigma measures the percent of defects or errors and the higher the sigma the better the quality: 



*Defects per Million Opportunities 


Six Sigma is a set of best practices, know how, tools, procedures, and systems which drives business performances towards achieving organizational breakthrough results. It is a multifunctional approach and can be applied to different business activities such as strategy development, production, service operations, product delivery, customer service, product development, sales and marketing, etc. 

— Sources: iSixSigma, Juran.com, Six Sigma Online. 


HF

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