Definition of Six Sigma:- Six Sigma is a smarter way to manage business or department. It is a vision of quality that equates with only 3.4 defects for million opportunities for each product or service transactions, Strives for perfection. Ultimate objectives of the methodology to solve problems, improve the quality, profitability and customers satisfaction. Six Sigma is the tool through which we can improve the Quality and profitability by removing the cause of defects and variability in manufacturing and business processes.
Statistically, Six Sigma refers to a process in which the range between the mean of process quality measurement and the nearest specification limit is at least six times the standard deviation of the process.
Six Sigma was invented at Motorola in the 1980s The invention was motivated by the high cost of poor quality discovered at Motorola Like many companies at that time, it was as high as 15% to 20% of the sales revenue. Due to that cause large portion of product fail to meet customer requirement which led to scrap, rework and other services. Six Sigma was started in Motorola by engineer Bill smith in order to address the company‘s chronic problems of meeting customer expectations in a cost effective manner. Within improvement projects quality problems were systematically analyses at the front end of the process & continued throughout the manufacturing process using four phases (Measure, Analyses, Improve, and Control).
Six sigma efforts target three main areas:-
- Improving customer satisfaction.
- Reducing cycle time.
- Reducing defects.
Three key characteristics separates six sigma from quality programs of the past:-
- Six Sigma is a customer focused.
- Six sigma projects produce major returns on investments.
- Six sigma changes how management operates.
SIX SIGMA AS A DEFECT RATE METRIC
Definition:- The very first definition of Six Sigma is that it is a defect rate metric, specifically, it means 3.4 DPMO. This is actually the origin of the name Six Sigma. Statisticians have used the Greek letter Sigma to refer to standard deviation. Six Sigma is simply six standard deviations. What it truly means is that a process is highly capable that customer specifications are actually six standard deviations away from the process center. Since a product will only be considered defective if it is produced outside of customer specifications, a process with such a high capability will almost produce no defect.
The concept of process Sigma level is closely related to Six Sigma and is just the reversed side of the definition. If a process produces a certain number of DPMO, what is the number of Sigma of the process, i.e., process Sigma level then? The calculation is the same as described above but reversed. For example, a process producing 1300 DPMO is a 4.5 Sigma level process. To simplify the matter for practicing managers, consultants have constructed a table showing the translation between defect rate and Sigma level. It is easy to see that a process’s Sigma level actually reflects a process’ capability. The higher the Sigma level, the higher the process capability.
Reason to create six sigma:-
- The first one is the motivation to avoid resistance of statistics from ordinary employees. It is generally accepted that ordinary American employees do not like statistics and consider it a boring subject. Since most of the quality improvement tools and techniques are intimately related to statistics, it makes sense to create terms that can make matter simpler for easier acceptance.
- The second reason is the need to establish a common language across industries. Processes from different industries can be vastly different, yet they can be measured on their sigma level or whether they have achieved Six Sigma level quality. This enables easy cross-industry learning. In the practitioner’s literature, it is actually one important selling point for Six Sigma that a bank can learn from a healthcare organization if the latter’s process has a higher process Sigma level, regardless of the dramatic difference between the two organizations.
DPMO versus DPMU:- One issue worth noting is the letter “O” in the acronym DPMO. The letter “O” refers to “opportunities.” According to Six Sigma consultants, a process many have multiple “opportunities” to make a defect. Hence the calculation of DPMO takes the number of opportunities into consideration. This means DPMO is not the same as defects per million units (DPMU). DPMO is always lower than DPMU because the number of opportunities is included in the denominator.
Using DPMO has some interesting implications. To calculate DPMO, process owners or operators must first identify opportunities that lead to defects. This is actually a necessary and essential step toward process improvement. In contrast, DPMU is only concerned with the final output. DPMO also makes it “easier” to achieve Six Sigma level quality. The more opportunities identified, the easier to obtain a low DPMO. A complicated process with sizeable defect rate can still achieve Six Sigma quality level because of the large number of opportunities identified. This makes Six Sigma more attractive to service industries because Six Sigma is no longer an unattainable goal. Service processes tend to involve more customer interactions and have more opportunities to produce defects than manufacturing processes. The process Sigma level of service processes is usually within the range of 1.5 to 3, if calculated based on DPMU. However, if DPMO is used instead, many service processes can actually achieve Six Sigma quality level simply because of the large number of opportunities identified.
Six Sigma as a set of tools and techniques, or an improvement method:- A more common definition of Six Sigma is that it is a set of tools and techniques for problem solving or process improvement. Some define Six Sigma as an improvement method that holds the set of tools and techniques together. This definition reflects the evolution of Six Sigma over time. While viewing Six Sigma as a defect rate metric is free of dispute, Six Sigma today means much more than a metric. Over time, many tools and techniques have been developed to help firms improve their processes to achieve Six Sigma level quality. The use of these tools and techniques is guided by an overarching structured improvement method known as DMAIC (Define, Measure, Analyze, Improve, and Control). In fact, DMAIC is so well known that many consider it a synonym to Six Sigma.
DMAIC is a structured problem solving method. It has five stages with each letter in the acronym stands for one.
- A problem must be first clearly Defined, usually in the form of defects produced by a process.
- Then the Metrics for the problem are established.
- In the Analysis phase, data is collected to explore the root causes of the problem.
- Improvement solutions can then be developed to address the root causes.
- Finally, the effectiveness of solutions are Controlled after the implementation. Different tools and techniques are used in each stage.
The DMAIC method emphasizes data analysis and fact-based decision making. The method guides a structured exploration of reasons leading to the problem. The essence of the DMAIC method is to reduce variation in a process to achieve high conformance quality in customers’ terms.
Six Sigma as an improvement approach or an improvement program:- A more comprehensive definition of Six Sigma is that it is an improvement approach or an improvement program. While DMAIC is at the core of Six Sigma, equating Six Sigma to DMAIC is too narrow a definition. Such a definition ignores the human resources practices developed for Six Sigma such as Black Belt and Green Belt. The other important aspects such as project selection and project benefits tracking are also not considered in such a definition. A precise definition of Six Sigma needs to consider all these aspects.
A good definition of Six Sigma is given recently:- Six Sigma is an organized, parallel-meso structure to reduce variation in organizational processes by using improvement specialists, a structured method, and performance metrics with the aim of achieving strategic objectives. This definition captures several distinctive characteristic of Six Sigma:- an organizational approach, statistical tools and techniques for variation reduction, a structured method, and metrics orientation, although it leaves out the aspects of customer orientation and project-based implementation.
Six Sigma as an improvement philosophy:- Our review also found that Six Sigma has been defined as an improvement philosophy, particularly by GE. GE claims that Six Sigma is its business strategy, corporate culture, company DNA and value, and “the way we live”. Some Six Sigma advocates also hold the same view. Regardless of the terms used, the essence is to define Six Sigma as an improvement philosophy. Defining Six Sigma as an improvement philosophy is very inspiring and it could lead to major cultural change and performance improvement in an organization.
While inspiring, the Six Sigma philosophy can hardly be differentiated from the philosophy of continuous improvement or pursing performance excellence. Researchers define Six Sigma as an improvement philosophy will face serious challenge on establishing discriminant validity. To date, none of the research papers appeared in topic journals defined Six Sigma this way.
Implementation of six sigma in Healthcare Sector:- Six sigma principles and the healthcare sector are very well matched because of the healthcare nature of zero tolerance for mistakes apotential for reducing medical errors. Some of the successfully implemented six sigma projects include improving timely and accurate claims reimbursement (Lazarus and Butler, 2001), streamlining the process of healthcare delivery (Ettinger, 2001), and reducing the inventory of surgical equipment and related costs (Revere and Black, 2003). The radiology film library at the University of Texas MD Anderson Cancer Center also adopted six sigma and improved service activities greatly (Benedetto, 2003). Also in the same institution‘s outpatient CT exam lab, patient preparation times were reduced from 45 min to less than 5 min in many cases and there was a 45% increase in examinations with no additional machines or shifts (Elsberry, 2000).