SIX SIGMA

Over the last several years, Six Sigma has almost become a household word. It
has been popularized by Jack Welch and others and was even used by the U.S.
government to fight the war on terror. The point to be considered here is that
Six Sigma methodology has served diverse customer bases. Six Sigma may be
referred to as a philosophy, a methodology, or a tool. Six Sigma is set of
techniques or set of management techniques carried out to improve business
processes by reducing the probability that an error and defect will occur.

Six Sigma is a discipline, using statistical based data driven approach and also
a continuous improvement methodology for eliminating defects in a product,
process or service.

Six Sigma methodology firstly developed by Motorola and company then it

became popular when General Electric achieve the excellence in business by
applying Six Sigma Methodology in the early 1990s. Now there are thousands
of company in the world who are adopted Six Sigma as a way of doing of
business.

Sigma (σ) is a Greek letter used by statisticians to show the variation in a

process. In a Six Sigma (6σ) environment, the standard for variability is
reduced to 3.4 problems per million opportunities. Donald W. Benbow and
T.M.Kubiak’s handbook The Certified Six Sigma Black Belt defines Six Sigma.
Six Sigma is defined here as, “a fact-based, data-driven philosophy of
improvement that values defect prevention over defect detection.”
The term “Six Sigma” is a measure of quality. However; Six Sigma is a business
initiative, not a quality initiative. It is a way of doing business that improves
quality and productivity. It also increases competitiveness & reduces cost.

Principles of Six Sigma: Success of Six Sigma implementation is based upon

five main principles:
 Concentrating on customer requirements
 Using accurate measurements to do error-less statistical analysis
to understand improvement opportunities for building a solution for
identification of root cause of problems (variations)
 Being efficient and capable to eliminate variation to continually
improve the process.
 Involving manpower in Six Sigma cross-functional teams.
 Being thorough and being flexible
 
Main Concepts in Six Sigma
1. DPMO (Defects Per Million Opportunities)

2. Critical to Quality: Critical to quality is one of the major concepts in Six

Sigma methodologies because the quality can affect the whole business
objective or Goal. Critical to quality means the measurable characteristics of a
product or service which must be matches the customer requirement of
product or service.
3. Defect: The defect is defined as a product or service characteristics which
are not the customer want.

4. Process Capability: Process capability can be defined as a ability of your

business process to deliver or produce a service or product which are meeting
the customer demands.

5. Variation: Variation term is a bit different in Six Sigma methodology, here

variation means after delivering service and product the control person can
measure the difference between the what customer sees and what they actual
feels after acceptance of product or service.
6. Stable Operations: Stable operations means not only the stabilizing the
process but businesses have to ensure that the process of business in
consistent to reduce the gap between what customer sees and feels.
Customer & Product driven Features of Six Sigma Methodology:
1. Six Sigma is aim to avoid waste and in effeminacy, so increasing customer
satisfaction by delivering what the customer is really expecting.

2. Six Sigma is strictly structured and disciplined structure methodology,

which has very specific for the particular participants.

3. Six Sigma is statistical data driven methodology which requires accurate or

error-less data to perfectly analyze the process.

4. Six Sigma is not just about the improving quality and increase the sale its
about changing results in the financial statements also.
5. By applying Six Sigma in your business you are successfully achieve the
below milestones what we called the business success facts:

 Improving Process
 Lowering Defects
 Increased Profit
 Increased Customer Satisfaction
 Reducing Costs
 Reducing Process Variability

Six Sigma Methodologies totally revolves around one main cycle called DMAIC

DMAIC: DMAIC is a data driven quality strategy used to identify opportunities

in the process to make improvements and reduce the errors and defects
D - Define-(Defining the problem, opportunities, business objectives,
customer demands)
Here you define what opportunity are you looking for or we can say what
problem you are trying to fix or simply what new business objective or
customer demand you are trying to complete.

M - Measure performance: This is the crucial step for professional who are
seeking out any opportunity to improve the service, process or product.
Measurement is critical in the step and it must be accurate because you are
trying to build solution on the basis of that measurement. In this process the
measurement team has to focus on the process and what customer actually
cares about.
A - Analyze opportunities: In this step the team has to analyze what is
causing the problem and where there will be the opportunity to improve the
process or service quality or cost or product. In this step team spend their
time on finding root causes of problem and building the solution depending
upon the results.
In this step mostly experienced and Six Sigma Green belt  certified person
analyze. The teams have to develop hypothesis according to finding and
results and then define then work to prove or disprove the hypothesis.

I – Improve Performance: After implementing solution into process the

teams have to concentrating on the factors which are crucial for improving the
process or service or product. In this step the team have to collects data to
check if there is measurable improvement or not if yes then the team will
follow these process as a core process than pilot process and then finally
improve the baseline ultimately it leads to improve the service quality or
product quality which finally meets the customer satisfaction.

C - Control performance: This is the step in which team have to control the
process and sustain the changes and improvement they made in the process
or service. This is one of the most important activity required by the business
because sustaining the improved process is very important to hold the service
quality or product quality ultimately to hold the customer.
Benefits of Six Sigma to Businesses:
1. Lowering Defects: Six Sigma completely revolves around only one
principle reducing defects and ultimately increase the quality of product or
service. So when a organization have Six Sigma implemented in their process
then the business will totally focus on that one principle based statistical data
driven approach.
2. Reducing Cost: This is one of the final and long-term benefits businesses
get when they have implemented Six Sigma in their process because Six Sigma
implementing ultimately leads to reducing the defects which means saving of
time, resources, power, manpower efforts and ultimately money.
3. Increased Customer Satisfaction: Six Sigma and DMAIC implementation
starts with measuring the variation means measuring the gap between what
the customer actually sees and feels. So, the successfully implementation
completed and if it is sustainable for business then it will ultimately reduce
the variation their services or product that means increased customer
satisfaction and increased customer loyalty.
4. Higher Salary: As per the survey on Payscale.com you can see that Six
Sigma certified persons are getting highest

5. Increase your Managerial and Leadership ability : When you are

working as a Six Sigma professional in an organization then you have to
undertake all the factors like finance, manpower, resources before taking any
decision or before implementing any changes in any process or service or
product.
Those who are achieved with Six Sigma Black Belt Certification are work as a
Change Agent in their organization they have better understanding and
knowledge about process and how to make it make it better.

To work as a leader in Six Sigma field you must have knowledge and
understanding of financial management and risk assessment to perform a job
without a error.

6. Large scope for Six Sigma across all the Industries: Many individuals
thinks that Six Sigma is only beneficial to manufacturing industry but actually
six sigma is applicable to all types of industry. Service industry like IT,
healthcare, hospitality needs to improve their service to provide 100%
satisfaction to customers with completing their business objectives so all the
service sector needs six sigma professionals to improve their overall business
process and to complete business objectives.
7. Increase your productivity and capability: After completing six sigma
certification you are completing responsibility by doing less effort so the
ultimate result will be increased productivity and capacity to handle large
projects easily with sustainability.
8. Customer Complaints: If Six Sigma project aims at minimizing the reasons
for a customer complaint, then business units will be able to reduce the cost of
customer complaints to the organization. Customer complaints can affect the
bottom line drastically in cases; where the product or service has some critical
faults. Moreover; complaints can lead to the loss of repeat business from an
existing client. Six Sigma project is also aimed towards improving customer
satisfaction score for a process, product, or service.
9. Improve Efficiency or Timeliness: Six Sigma projects help improve the
efficiency of the overall process. Moreover; improving the timelines in
delivering the process output or improving the on-time delivery of products
or service every time can be the focus areas for Six Sigma projects.

To improve timeliness, Six Sigma projects can be targeted towards reducing

the number of machine setups or set-up hours in a manufacturing process,
improving the productivity of production or assembly lines, fully or partially
automating the process wherever manual intervention in the process or
function is higher than required and so on. 

10. Improve Accuracy, Controls, and Policy Compliance: Six Sigma projects
help improve accuracy by reducing Defects-Per-Million-Opportunities
(DPMO) across the value stream in the process. The word ‘opportunity’ means
the chance to commit an error. DPMO is a probabilistic measure of error rate
or capability of a business or manufacturing process. This measure takes into
account both actual defects & number of probable defects in every
opportunity. 

As DPMO increases, sigma-level of the process goes down and vice versa. Six
Sigma project help measure baseline and target process accuracy in terms of
DPMO & Sigma Level. It is a systematic way to measure process accuracy as it
aims to prevent the occurrence of defects.

According to the Six Sigma methodology, the process which is in a state of

statistical control is the stable process. With the help of graphical & Statistical
Process Control (SPC) tools i.e., Control Charts and Run Charts, Six Sigma
project helps track and monitor the stability of the process on an ongoing
basis. There are different types of control charts; according to the type of data
under consideration.

The word ‘Compliance’ refers to conforming or adhering to the rule or

protocol. The compliance can be internal as well as external. Six Sigma tools &
techniques help assess deviation from the plan, forecast, budget, or
expectations. These techniques also help determine if customers or parties
comply with the Service Level Agreements (SLAs).

11. Improve Customer Service: The image of the company is created in large
part by its interaction with customers. Any company would want this
interaction to be as stable as possible. The reason being disappointed
customers are vocal critics. Six Sigma projects can help identify the number of
variations customers are experiencing, what is driving that variation, and
ultimately, how the number of dissatisfied customers can be minimized. Such
Six Sigma projects can also be aimed at improving customer & vendor
satisfaction. 

Six Sigma projects can be undertaken for fully knowing customers and not just
their issues or concerns. The methodology can also help business anticipate
customer needs and address them through a streamlined process. Six Sigma
projects help assess the need to automate customer service function too. Six
Sigma projects can be undertaken to address critical customer service issues.
This depends on the industry that the company is operating in.
12. Improve Cash Flow: Six Sigma projects can also be targeted towards
improving DSO i.e., Days Sales Outstanding in the business. If DSO improves,
then cash flow improves as well. The higher the DSO, the lesser the ability of
the company to convert credit sales into cash. Six Sigma projects can be aimed
at reducing variation in Invoicing Process, Accounts Payable Process,
Accounts Receivable process, Inventory Management Process, etc. 

Multiple critical defects, which are measurable, will have to be identified

across all the aforesaid processes to improve cash flow. It is a must to narrow-
down the scope of improvement too.

13. Improve Regulatory Compliance: Normally, there are three aspects of

regulatory compliance. The first one is Finance & Audit, the second one is
Information Technology, and the third one is Legal. Six Sigma projects can be
undertaken in each of these aspects; depending on the kind of defects
identified.

Under the umbrella of Finance & Audit, projects can aim towards improving
the fund allocation process, reducing the cycle time or turnaround time in the
cost estimation process, etc. 

In the area of information technology or information security, a project can

aim towards reducing the risk of non-compliance, improving the service
quality of IT help-desk service, etc. 

In case of legal, Six Sigma project can aim towards improving documentary &
auditory compliance, the compilation process of critical & non-critical
documents, etc.
Conclusion: Six Sigma is a journey; however, along the way, an organization
will begin to experience transformation & excellence. After completing several
rounds of projects in multiple critical & non-critical functions, the newly
developed organization culture will help the leadership team to start shifting
blame away from the employees & blame poor process design. Six Sigma will
help management to develop empowered employees to identify and drive
improvement ideas. 
Six Sigma Concepts in Quality Management

Much like a basic quality-control program, Six Sigma quality control works to
find and identify areas in need of improvement. Six Sigma provides an answer
to the question of what's the difference between quality assurance (QA) and
quality control (QC). Six Sigma quality control not only identifies a problem,
but it also provides a solution and monitors the situation continually. In this
way, Six Sigma delivers on both quality assurance and quality control. It
promotes quality in the processes as well as in the products themselves.