Contents

#### 1.1 Introduction

Six Sigma is a broadly accepted methodology that focuses on improving an organization’s operational performance, business practices and systems by identifying and preventing ‘defects’ and ‘inconsistencies’ in processes.

Over the years, we built on this methodology to include the use of statistical tools, and a step-by-step process to drive improvement, innovation and optimization. Through the direction of Bob Galvin, they made the Six Sigma methodology available to the world.

Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services.

Six Sigma is a term used in manufacturing process improvement methodologies and it refers to the variability of a process. Say, for example a company is manufacturing steel rods of 1m length. Because the process is not perfect, the lengths of some steel rods will be 0.998m, some 0.999m length and so on. As far as the customer is concerned, this is OK as long as the length of each steel rod is between 0.997m and 1.003m. If the process is a ‘Six Sigma’ process, it will produce only 3.4 bad rods – rods shorter than 0.997m and longer than 1.003m – for every million rods made.

The table given below maps the Sigma and %accuracy.

Defects per Million Opportunities (DPMO)

% Accuracy

One Sigma

691,500

30.85%

Two Sigma

308,500

69.15%

Three Sigma

66,810

93.32%

Four Sigma

6,210

99.38%

Five Sigma

233

99.977%

Six Sigma

3.4

99.9997%

Seven Sigma

0.020

99.999998%

The word Sigma is a statistical term that measures how far a given process deviates from perfection. The central idea behind Six Sigma: 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 and specifically it means a failure rate of 3.4 parts per million or 99.9997% perfect.

#### 1.2 What is Six Sigma?

It is important to recall that every customer always values consistent and predicable services and/or products with near zero defects. Therefore they experience the variation and not the mean. Mean is their expectation, and our target.

If we can measure process variations that cause defects i.e. unacceptable deviation from the mean or target, we can work towards systematically managing the variation to eliminate defects.

Six Sigma is a methodology focused on creating breakthrough improvements by managing variation and reducing defects in processes across the enterprise. Sigma is a Greek symbol represented by “σ”.

Why is Six Sigma called Six Sigma, and not Four or Five Sigma or Eight Alpha (another Greek symbol)? Sigma is a statistical term that measures process deviation from the process mean or target. Mean is also referred to as average in common language. The figure of six was arrived statistically by looking at the current average maturity of most business enterprises. We would like to revise this figure to 8 or may be 9, provided the world becomes a more orderly and predictable (even with increasing entropy or chaos) place to live in.

Example – Consider a pizza delivery shop that guarantees the order delivery within 30 minutes from the time of accepting an order. In the event of a delivery time miss, the customer is refunded 100% money. How often do we notice timely delivery from a thirty-minute pizza delivery shop? In contrast, we always take note of delayed deliveries, or that shop’s variation. This pizza shop will have to make 99.9997% deliveries within 30 minutes to be called a six sigma shop.

It is evident that the “delivery time” is a critical-to-quality parameter from the customer perspective and has a significant impact on profits. In addition, it is an entry barrier for the competition. Such a parameter is called a CTQ and its definition in context of our pizza shop is given below:

CTQ Name : Timely Pizza delivery

CTQ Measure : Time in Minutes

CTQ Specification : Delivery within 30 minutes from the order acceptance time

Now we can easily define a defect:

Defect : Delivery that takes longer than 30 minutes

Unit : Order

Opportunity : 1 per order i.e. only “1” defect can occur in “1” order

The Six Sigma conversion graph illustrating the relationship between sigma values and defects/million opportunities is given below:

This graph is on a logarithmic scale. Notice the increasing rate of improvement. For example, 1 sigma to 3 sigma is only 10 times improvement; 3 sigma to 4 sigma is a big 10 times improvement; whereas 5 sigma to 6 sigma is a whooping 1825 times change. That is why it is essential to achieve breakthrough improvements to reach such a level of maturity. Six Sigma provides a methodology to achieve this.

Six Sigma is a rigorous, focused and highly effective implementation of proven quality principles and techniques. Incorporating elements from the work of many quality pioneers, Six Sigma aims for virtually error free business performance. Sigma is a letter in the Greek alphabet used by statisticians to measure the variability in any process. A company’s performance is measured by the sigma level of their business processes. Traditionally companies accepted three or four sigma performance levels as the norm, despite the fact that these processes created between 6,200 and 67,000 problems per million opportunities! The Six Sigma standard of 3.4 problems per million opportunities is a response to the increasing expectations of customers and the increased complexity of modern products and processes.

If we are looking for new techniques, don’t bother. Six Sigma’s magic isn’t in statistical or high-tech razzle-dazzle. Six Sigma relies on tried and true methods that have been around for decades. In fact, Six Sigma discards a great deal of the complexity that characterized Total Quality Management (TQM). By one expert’s count, there were over 400 TQM tools and techniques. Six Sigma takes a handful of proven methods and trains a small cadre of in-house technical leaders, known as Six Sigma Black Belts, to a high level of proficiency in the application of these techniques. To be sure, some of the methods used by Black Belts are highly advanced, including the use of up-to-date computer technology. But the tools are applied within a simple performance improvement model known as DMAIC, or Define-Measure-Analyze-Improve-Control.

#### 1.3 Features of Six Sigma

Six Sigma’s aim is to eliminate waste and inefficiency, thereby increasing customer satisfaction by delivering what the customer is expecting.

Six Sigma follows a structured methodology, and has defined roles for the participants.

Six Sigma is a data driven methodology, and requires accurate data collection for the processes being analyzed.

Six Sigma is about putting results on Financial Statements.

Six Sigma is a business-driven, multi-dimensional structured approach for:

Improving Processes

Lowering Defects

Reducing process variability

Reducing costs

Increasing customer satisfaction

Increased profits

#### 1.4 Key Concepts of Six Sigma

At its core, Six Sigma revolves around a few key concepts.

Critical to Quality : Attributes most important to the customer.

Defect : Failing to deliver what the customer wants.

Process Capability : What your process can deliver.

Variation : What the customer sees and feels.

Stable Operations : Ensuring consistent, predictable processes to improve what the customer sees and feels.

Design for Six Sigma : Designing to meet customer needs and process capability.

Our Customers Feel the Variance, Not the Mean. So Six Sigma focuses first on reducing process variation and then on improving the process capability.

#### 1.5 Benefits of Six Sigma

- Six Sigma offers six major benefits that attract companies:
- Generates sustained success
- Sets a performance goal for everyone
- Enhances value to customers
- Accelerates the rate of improvement
- Promotes learning and cross-pollination
- Executes strategic change

#### 1.6 How Companies Define Six Sigma

It is enlightening to compare how various world-class companies—including leading proponents of Six Sigma—define it for their employees and their customers.

** 1.6.1 General Electric: What Is Six Sigma?**

“First, what it is not. It is not a secret society, a slogan, or a cliche. 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. Six Sigma has changed the DNA at GE—it is now the way we work—in everything we do and in every product we design”.

#### 1.6.2 Honeywell: Six Sigma Plus

“Six Sigma is one of the most potent strategies ever developed to accelerate improvements in processes, products, and services, and to radically reduce manufacturing and/or administrative costs and improve quality. It achieves this by relentlessly focusing on eliminating waste and reducing defects and variations”.

“Leading-edge companies are applying this bottom-line enhancing strategy to every function in their organizations—from design and engineering to manufacturing to sales and marketing to supply management—for dramatic savings”.

“Now, Honeywell has developed a new generation of Six Sigma . . . Six Sigma Plus is Morris Township, NJ–headquartered Honeywell’s principal engine for driving growth and productivity across all its businesses, including aerospace, performance polymers, chemicals, automation and control, transportation, and power systems, among others. In addition to manufacturing, Honeywell applies Six Sigma Plus to all of its administrative functions”.

Six Sigma is a tool that if used correctly, can identify key areas of business processes that need attention to lower defect rates. One of the greatest advantages is that all the measured improvements achieved through this technique can be directly converted into financial results. In fact, more and more shareholders even require that Six Sigma method be implemented

Reshma Sanchu is a {insert_profession} at {insert_company|interesting_place}. When he/she is not {insert_awesome_hobby}-ing he/she can be found writing groovy blog posts for .

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