Six Sigma: Principles, Objective, Challenges, Methodology & Calculation of sigma 2020.
Six Sigma :
At the most basic definition, 6sigma is a statistical representation for what many experts call a "perfect" process. Technically in a six sigma process there are only 3.4 defects per million opportunities. In 5 that means 99.99966% accuracy process experience 233 errors per million opportunities.
- Six Sigma is a set of techniques, & tools for process improvement. It was developed by Motorola in 1986.
- Mr. Bill Smith the "Father of six sigma " introduce this quality improvement Methodology to Motorola company.
- Six sigma is now an enormous 'brand' in the world of corporate development.
- Six Sigma is an important and popular development in the quality field. It has saved huge amounts of money & improvement the customer experience for a lager no. of organization across the world, yet it is applied in consistent & often reductive fashion in many companies.
- The Six Sigma is the comprehensive & flexible system for achieving, sustaining & maximizing business success. Six Sigma is uniquely driven by close understanding of costumer needs, disciplined, improving, & reinvesting business process.
- Six Sigma focus on quality & consistency, through process & improvement & variation reduction.
Common Six Sigma Principles :
- Continuous Process Improvements :
In six sigma method is continuous process improvements. An organization that completely adopt a six sigma methodology never stop improving. It identifies & prioritizes area of opportunity on a continuous basis. Once one area is improved upon, the organization moves on to improving another area. If a process is improved from 4 sigma to 4.4 sigma, the organization consider way to move the sigma level up further. The goal to move ever closer to the perfect level of 99.99966 accuracy for all processes within an organization while maintaining other goals & requirements, such as financial stability, as quickly as possible.
- Customer Focus Improvements :
In the illustration about the food plant, we saw the six sigma process doesn't just make improvement for the sake of driving up sigma levels. A primary principle of the methodology is a focus on the customer . By combining that knowledge with measurements, ultimately bolstering profit, customer retention, & loyalty. A detailed understanding of the customer and customer desires not only lets business customize products offering & services, but also lets organization.
- Offer additional features customer want & are willing to pay for.
- Prioritize product development to meet current needs.
- Develop new ideas based on customer feedback.
- Understand changing trends in the market.
- Identify areas of concern.
- Prioritize work on challenges based on how customer perceive various problems or issues.
- Test solution & ideas before investing time & money in them.
- Variation :
One of the ways to continuously improve a process is to reduce the variation in the process. Every process contains inherent variation
example : in a call center with 20 employees variation will exist in each phone call even if the calls are scripted. Infection, accents, environmental concern & caller moods are just some things that lead to variation in this circumstances. By providing employees with a script or suggest comments for common scenarios, the call center reduces variation to some degree.
- Removing Waste :
Removing waste item, action or people that are unnecessary to the outcome of a process reduces processing time, opportunities for errors & overall costs. While waste is a major concern in the six sigma methodology, the concept of waste comes from a methodology known as a lean process management.
- Controlling Process :
Often six sigma improvement address processes that are out of control. Out of control process meet specific statistical requirement. That goal of improvement is bring a process back within a state of statistical control. Then after improvement are implemented, measurements, statistics & other six sigma tools are used to ensure the process remains in control. Part of any continuous improvement process is ensuring such controls are put place and that the employees who are hands on with the process on a regular basis know how to use the controls.
Objectives of Six Sigma :
- Overall Business Improvements :
Six sigma methodology focuses on business improvement beyond reducing the no. of defects present in any given no. of products.
- Remedy Defects :
Any business seeking improved number must be reduce the number of defective products or serving it produce. Defective products can harm customer satisfaction levels.
- Reduce Costs :
Reduced costs equals increased profits. A company implementing Six sigma principles has to look to reduce costs wherever it possibly can without reduce quality.
- Improve Cycle Time :
Any reduction in the amount of time it takes to produce a product or perform a service mean money saved, both in maintenance costs & personnel wages. Additionally customer satisfaction improves when both retailers & end user receive products sooner than expected.
- Increase Customer Satisfaction :
Customer satisfaction depends upon successful resolution for six sigma's other objectives but customer satisfaction is an objective all its own.
Challenges of Six Sigma :
Lack of support :
- Staff that is fearful of change, especially in an environment when changes has historically caused negative consequence for employees.
- leaders that are unfamiliar with or doesn't understand the six sigma process.
- Leaders willing to pursue improvement initially but who lose interest in overseeing & championing project before they are completed.
- Department heads or employees who constantly champion their own process and needs & are unwilling to enter into big-picture thinking.
- Employees who are resistant to change because they believes improvement might make them obsolete, drastically changes their job, or make their job harder.
Lack of Resources or Knowledge :
Lack of resources can be challenge to six initiatives but they don't have to be a barrier. Lack of knowledge about how to use and implement six sigma is one of the first issues small and mid-sized companies face. Smaller businesses can't always afford to hire dedicated resources to handle continues process improvement but the availability of resources and six sigma training makes it increasingly possible for organizations to use some of the tools without an experts or to send in-house staff to be certified in six sigma.
Poor Projection Execution :
Companies implement six sigma for the first time, especially in a project environment, often turn away from the entire methodology if the first project or improvement falls flat. Proponents six sigma within any organization really have to hit it out of the ballpark with the first project if leadership & others are on the fence about the methodology .Team can do help avoid poor project performance by taking extreme care to execute every phase of the project correctly. By choosing low risk, high reward improvement, team can also stack the deck in their favor with first time project.
Data Access Issues :
- Discovering that an improvement process metric is not being captured.
- Automated data process that capture enormous amount & create scope challenges.
- The use of manual data process in many processes.
- Data that is skewed due to assumption, human interaction in the process, or incorrect capture.
- Industry or company compliance rules that make it difficult to gain access to necessary data.
- Lengthy times between raw data capture and access.
Concerns about Using Six Sigma in a Specific Industry :
Six Sigma originated in the manufacturing industry and many of the concepts and tools of the methodology are still taught in the context of a factory or industry environment. Because of this, organizations often discount the methods or believe they will be too difficult to implement in other industries.
6 Sigma Tools/Six Sigma Methodologies :
1 . DMAIC
2 . DMADV
1. DMAIC :
The DMAIC project methodology has five phases.
- Define :
Define the system, the voice of customer & their requirements & the project goals specifically.
- Measure :
Measure key aspects of the current process & the collect relevant data.
- Analyze :
Analyze the data to investigate & verify cause & effect relationship. Determine what the relationship are & attempt to ensure that all factor have been consider.
- Improvement :
Improve the current process based upon the data analysis using technique such as design of experiment, poka yoke or mistake proofing & standard work to create a new, future state process. Set up pilot runs to establish process capability.
- Control :
Control the future state process to ensure that any derivations from target are corrected before they result in defects. Implementation control system such as statistical process control, production board, visual workplace & continuously monitor the process.
2. DMADV :
- Define :
Define design goals that are consistent with customer demands and the enterprise strategy.
- Measure :
Measure & identify CTQs( Characteristics that are Critical to Quality), product capabilities, production process capability & risks.
- Analyze :
Analyze to develop & design alternatives.
- Design :
Design an improved alternative, best suited per analysis in the previous steps.
- Verify :
Verify the design, set up pilot runs, implement the production process and hand it over to process owner.
Six Sigma Calculation/Calculation Sigma Level:
Organization and team can calculate the sigma levels of a products or process using the equation :
# of opportunities- # of defects /# of opportunities *100 = Yield
Consider a process in a marketing department that distribution letters to customers or prospects. For the purpose of the example imagine that the process insert 30000 letters in preaddressed envelops each day. in a given business week, the process outputs 150000 letters.
The marketing department begins receiving complaints that people are receiving letters in envelops that are addressed to them, but the letter inside are addressed to or relevant to someone else. The marketing department randomly selected 1000 letters from the next week's batch and find that 5 of them error applying that to the total amount they estimate that as many as 750 letter could have errors.(sampling and extrapolation are covered in depth in the advanced chapters on statistics).
The letter process has 150000 opportunities for error each week & an estimated 750 defects.
( 150000-750)/150000)*100= a yield 0f 99.5
Looks up a yield of 99.5 in the abridge sigma table below & you'll see the process describe above is currently between 4 & 4.1 sigma.
Yield DPMO Sigma Levels
99.7450 2550 4.3
99.6540 3460 4.2
99.5340 4550 4.1
99.3790 6210 4.0
99.1810 8190 3.9