What Is Six Sigma?
This chapter is an introduction to Six Sigma
This chapter is an introduction to Six Sigma. It aims to give a basic idea of Six Sigma, its application, scope and origin. However, Six Sigma is a complex concept involving principles of statistics and process dynamics. Six Sigma is a business concept that answers customers' demand for high quality and defect-free business processes. Customer satisfaction and its improvement should be the highest priorities of any business.
Sigma is a Greek alphabet that is used in statistics to define standard deviation. Standard deviation indicates how tightly values are clustered around the mean in a set of data. Six Sigma is a business approach for improving quality by identifying and eliminating defects and their causes in business processes.
Six Sigma measures how much a process varies from perfection, based on the number of defects per million opportunities. Although Six Sigma level of product or service quality refers to a process that is able to consistently generate not more that 3.4 defects per million opportunities, the main goal of Six Sigma is continuous improvement. Thus 6s is 3.4 defect per million opportunities (DPMO) i.e. error found / measure when activity repeated million times. I.e. standard deviation is use to Quantify how good or bad a process is performing. The 6s is goal of near perfection and management philosophy focused on eliminating mistake, waste and rework. Six Sigma is a highly disciplined process that helps focus on developing and delivering near-perfect products and services
Why Six "Sigma"?
Six Sigma differs from traditional performance improvement programs in its focus on input variables. While traditional methods depend on measuring outputs and establishing control plans to shield customers from organizational defects, Six Sigma approach demands that problems be addressed at the root level, eliminating the need for unnecessary and rework processes. Six Sigma helps you identify what you don't know, indicates what you should know, and helps reduce the errors and rework that cost you time, money, opportunities and customers.
Six Sigma's focus is on the process rather than on the final outcome. But why should companies focus on the process rather than on the final outcome? Final outcomes or results are dictated by what happens during the process. You may have set an objective; say, develop some new solution in record time. But if your emphasis was on the final outcome and you did not really keep a check on the process, then, when you are asked to develop the same software again, you may well repeat the same mistakes, come across the same problems and all you have is your memory to fall back on. On the contrary, if the process was documented, you or anyone else can repeatedly produce the same output again and again. You would also avoid making the same mistakes. You might even manage to reduce the development cycle. By focusing on collecting and improving process measures, you would eventually improve the entire process. Six Sigma and the Implementation Strategy
Six Sigma drives measurable results. Financially, the first set of projects usually justifies the entire cost of the Six Sigma deployment. Focusing the Six Sigma methodology on properly scoped projects will drive savings to organizational bottom line.
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.
Variation is the cause of defects and out-of-control processes. And defects that reach the customer are significant problems. When a company has achieved a six sigma rate of improvement, it has limited defects to 3.4 per million opportunities-virtual defect-free performance. Leading global companies have attained six sigma; most companies, however, are operating at levels of around four sigma, or approximately 6,000 defects per million, according to estimates.
Benefits of Six Sigma
*Improve Customer Satisfaction
*Increase Profit Margins
*Increase productivity
*Improved process flow, capacity and output
*Reduction in total defects
*Increase in product reliability
*Shorten Cycle Times
*Reduce Costs
*Decrease in work-in-process
*Accelerates the rate of improvements
*Execute strategies change
*Decrease in work in process
Six Sigma is a long-term strategy and takes 3 to 5 years to implement. It is applicable to all types of industries and companies, be they manufacturing or services.
Objective of Six Sigma
The objective of the 'Six Sigma' approach is to move towards zero defect level. It encompasses all facets of business, such as planning, operations, maintenance, delivery, and quality, which can lead to customer dissatisfaction. Six Sigma is based on a foundation of Metrics. These metrics can be organizational objectives (example On-Time delivery), departmental objectives (such as Cycle-time reduction) or process objectives (such as Orders processed). It might be worthwhile linking this concept with ISO 9001-2000, which has a strong inclination for Metrics.
It creates a better process by eliminating opportunities for defects even before they can occur. This has a direct impact on the bottom line in terms of:
1. Reduced costs
2. Improved customer service
3. Waste elimination
When we say a process is 'Six Sigma', we are saying that it is the best in its class. Such a level of capability will result in having only something like 3 to 4 nonconformance in a million opportunities.
Six Sigma - Impact on Cost
Research and studies show that Six Sigma has had a direct impact on Cost of Quality by directly contributing to all the components of Quality cost.
DMAIC MODEL:
Six Sigma is deployed as projects, which is based on the DMAIC model. DMAIC is (Define, Measure, Analyse, Improve and Control). The approach involves definition of the project and the process to be improved, after which the current base-line performance is measured. The data collected during this phase is analysed for bottlenecks and constraints for improvement in the Analyse phase. The improvement phase looks at eliminating defects as well as non-value add activities in a process. In the control phase the improved process is deployed and controlled using statistical process control as well as other management control systems.
Simply defined, the Six Sigma is a methodology that helps you to identify and eliminate defects or errors within your organizational processes, products or processes with a structured, data-driven, problem-solving method of using rigorous data-gathering and statistical analysis.
Conclusion
Six Sigma is a statistical concept whereby a process is it is operating so well that it allows for less than 3.4 defects per million opportunities. If a process accepts outputs only if they fall within Six Sigma from the average for all outputs, then it is essentially delivering no defective outputs at all. Six Sigma has two major goals; Cost reduction and Total customer satisfaction. Implementation Strategy provides the means to achieve Six Sigma goal through a highly focused system of problem solving.
by: jamesmiller
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