Six Sigma

Six Sigma
Name	Six Sigma
Founded	1986
Key people	Bill Smith, Mikel Harry, Jack Welch
Industry	Business management, Quality management

Six Sigma. It is a set of techniques and tools for process improvement, originally developed by Motorola in 1986. The methodology seeks to improve the quality of process outputs by identifying and removing the causes of defects and minimizing variability in manufacturing and business processes. It uses a collection of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization who are experts in these methods.

Overview

The term Six Sigma originates from statistical modeling of manufacturing processes, specifically from the concept of the normal distribution. A six sigma process is one in which 99.99966% of all opportunities to produce some feature of a part are statistically expected to be free of defects. The foundational pioneers of the methodology include Bill Smith, an engineer at Motorola, who is often credited as its principal inventor, and Mikel Harry, who helped develop the training framework. Its adoption and highly publicized success at General Electric under Jack Welch propelled it to widespread fame in the business world during the 1990s. The philosophy relies on a defined sequence of steps and quantifiable financial targets, aiming to reduce process variation and improve product quality.

Methodology

The core of Six Sigma is built around two key project methodologies inspired by the Plan–Do–Check–Act cycle. The DMAIC method is used for improving existing business processes and stands for Define, Measure, Analyze, Improve, and Control. The DMADV method, used for creating new product or process designs, stands for Define, Measure, Analyze, Design, and Verify. These methodologies are executed by personnel who have undergone formal training and certification, following a belt system borrowed from martial arts, such as Yellow Belt, Green Belt, Black Belt, and Master Black Belt. Each phase of DMAIC or DMADV employs specific statistical tools and requires rigorous data collection to guide decision-making and verify results.

Implementation

Successful implementation typically requires strong commitment from senior management and a significant cultural shift within the organization. Companies like General Electric, Honeywell, and Bank of America have deployed Six Sigma company-wide, often establishing a dedicated leadership council to oversee projects. Implementation involves selecting high-impact projects with clear financial benefits, training a cadre of certified belts, and defining a clear governance structure. The role of the Champion, often a senior executive, is critical to provide resources, remove obstacles, and ensure projects align with business strategy. Many organizations integrate Six Sigma with Lean manufacturing principles, creating a hybrid approach known as Lean Six Sigma.

Tools and techniques

A wide array of tools supports the Six Sigma methodology, many rooted in statistics and quality control. Common graphical tools include the histogram, scatter plot, and control chart, which help visualize data and process behavior. Analytical tools such as regression analysis, analysis of variance (ANOVA), and design of experiments (DOE) are used to identify relationships between variables and optimize processes. Problem-solving tools like the cause and effect diagram (also known as an Ishikawa diagram or fishbone diagram), failure mode and effects analysis (FMEA), and the Five Whys technique are employed to drill down to root causes. Software from companies like Minitab or JMP is frequently used for complex statistical analysis.

Applications

While born in manufacturing at Motorola, Six Sigma has been applied across a vast spectrum of industries and functions. In the financial services sector, firms like American Express have used it to reduce errors in statement processing and improve customer service. Within healthcare, organizations such as the Cleveland Clinic and Johns Hopkins Hospital have applied its principles to reduce medication errors and improve patient discharge processes. It is also prevalent in telecommunications with Verizon, in logistics with DHL, and even in non-profit and government agencies seeking operational efficiency. The methodology's focus on data-driven decision-making makes it adaptable to any process with measurable outputs.

Criticisms and limitations

Despite its popularity, Six Sigma has faced several criticisms from academics and practitioners. Some argue that its rigid, formulaic approach can stifle innovation and creativity, as seen in critiques from figures like Steve Jobs of Apple Inc.. The heavy reliance on statistical methods can lead to an overemphasis on metrics that are easily measured at the expense of more subjective qualities like employee morale or customer experience. The significant upfront investment in training and consulting, often from firms like the Six Sigma Academy or BMGI, may not yield a positive return on investment for all organizations. Furthermore, some quality management thought leaders, such as W. Edwards Deming, have argued that a focus on reducing variation is less important than fundamental changes to system design.

Category:Business terms Category:Quality management Category:Management Category:Industrial engineering