Research article

Six-Sigma: methodology, tools and its future

Yahia Zare Mehrjerdi
Department of Industrial Engineering, Yazd University, Yazd, Iran

Abstract
Purpose – This paper aims to introduce some of the most important and fundamental points about Six-Sigma and the main points that researchers,
implementers and users should keep in mind in addressing Six-Sigma to large and small companies as well as system development and/or planning for
such applications. In addition to that this author proposes an algorithm for calculating the overall sigma level of a multistage system. Example problems
are provided and the weighting technique is discussed.
Design/methodology/approach – The paper provides a general review of the Six-Sigma and some of its extensions. The topic is followed by the
introduction of a new algorithm that can be used for calculating the overall sigma level of a multistage system.
Findings – In a journey to business excellence, an organization is successful if specific goals for critical processes of the organization are identified.
The quality management programs implemented can modernize and simplify activities towards the ultimate goal of the business. Regarding that, the
author discusses key issues as such as leadership commitment, what Six-Sigma would bring to the organization, how it works, Six-Sigma business
strategies, Six-Sigma methodologies, mathematical formulation of Six-Sigma, the use of simulation with Six-Sigma, new Six-Sigma, benefits of
Six-Sigma, costs of Six-Sigma, critical success factors and the future of Six-Sigma.
Practical implications – Six-Sigma has the potential to change the quality program of an organization. When the selected quality program is
Six-Sigma, the organizational goal is to reach a sigma level of 6, or the objective of 3.4 defects per million opportunities.
Originality/value – In this paper, the author reviews the fundamental concept of Six-Sigma and elaborates why it is important for small and large
organizations to employ Six-Sigma concepts into their working methodology for quality improvement. The DMAIC steps to be taken, tools to be used
and the deliverables are completely discussed. The author also discusses a Six-Sigma weighted average methodology for calculating the overall
Six-Sigma level for an organization with many working stages or processes.

Keywords Six sigma, Quality management, Simulation, Critical success factors

Paper type General review

Introduction
Recently, both service and production organizations are
committed to use Six-Sigma to improve all aspects of the
company’s products and services. The Six-Sigma program is
credited to Dr Mike Harry, a statistician who is the main
founder of Six-Sigma Academy in Scottsdale, Arizona.
Motorola, a huge US Company, is an early corporate adopter
of the Six-Sigma program in the world. Other US firms such as
General Electric, Texas Instruments and Allied Signal are also
the big beneficiaries of this technology.
The Greek alphabet letter s is used for sigma to identify the
variability. A sigma quality level indicates how often defects are
likely to occur. Higher sigma quality level is a sign that process
would produce lesser defects. One way of reading and speaking
the language of Six-Sigma is through determining the number of
defects per millions opportunities. We say the Six-Sigma quality
level is equal to 3.4 defects per million opportunities (DPMO)
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0144-5154.htm
and can be shown as 3.4 DPMO (the normality assumption of the
process must hold and a shift of up to ^1:5s for the mean of the
process is allowed). An “opportunity” is defined as any chance for
nonconformance or not meeting the required specifications.
With Six-Sigma program implemented in an organization,
management can expect impressive savings in cost reduction and
waste elimination. It is believed that most organizations operate
at Three-Sigma, which translates to 66,000 errors per million.
In statistical terms, Six-Sigma quality means that for any given
product or process quality measurement, there will be not more
than 3.4 defects produced per 1,000,000 opportunities.
By comparison, typical quality levels for manufactured
products today achieve about Four-Sigma, which translates to
about 6,000 defects per 1,000,000 opportunities. Crompton
Corporation (n.d.), relates sigma levels to the defects per
millions. An airline safety rate at Six-Sigma level is equivalent to
3.4 unsafe trips per million.
Originally, it was understood that Six-Sigma can benefit large
manufacturing companies because of dealing with repetitive
processes and easy to track the flow of goods along the line.

The author gives his sincere thanks to Professor J. Ravichandran of the

Department of Mathematics, Amrita Vishwa Vidyapeetham, Tamil Nadu,
Assembly Automation
31/1 (2011) 79– 88 India for his personal recommendation of using the materials presented in
q Emerald Group Publishing Limited [ISSN 0144-5154] the section “Six-Sigma and weighted average”, for better presentation of
[DOI 10.1108/01445151111104209] his work as it is now.

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 Six-Sigma: methodology, tools and its future
Yahia Zare Mehrjerdi
General Electric, Motorola and Honeywell, all manufacturing
goods, were the first organizations implemented Six-Sigma.
The big news of the savings generated by Six-Sigma for these
companies other organization in both fields of service and
manufacturing raced to get into this quality technology. In this
way, other lines of business such as chemical, financial,
healthcare and retails recognized that implementing Six-Sigma
can improve their businesses.
The latest developments was made is the integration of Six-
Sigma into new product development. This is because such
integration during the new product or service design has the
potential of generating considerable amount of money savings
for the company in the long run. In this regard, Lean Sigma
Technologies, LLC, an international consultancy claims that
“70-80 per cent of all quality problems are design related and
not manufacturing caused”. By addressing such quality issues
during design process, there is a big potential for an organization
to eliminate costly quality issues once the product is released.
The central theme of Six-Sigma is that product and process
quality can be improved dramatically by understanding the
relationships between the inputs to a product or process and
the metrics that define the quality level of the product or
process. Critical to these relationships is the concept of “voice
of the customer”. In other words, quality can only be defined
by the customer who will ultimately receive the outputs or
benefits of a product or process.
In mathematical terms, Six-Sigma defines a transfer
function, y ¼ f ðx1 ; x2 ; . . . ; xn Þ; between the quality metrics
of a product or process (e.g. the life expectancy of a product,
or the per cent on-time delivery for a fulfillment process), and
the inputs that define and control the product or process
(e.g. tolerance of a physical dimension or the number of
resources available to service customers).
Six-Sigma focuses on two things as are listed below:
.
understand which inputs (x’s) have the greatest effect on
the output metrics (y’s); and
.
control those inputs so that the outputs remain within a
specified upper and/or lower specification limit.
Most people have this understanding that Six-Sigma is used in
the manufacturing for reducing defects. The reality is that
Six-Sigma can be used in both manufacturing and businesses
to reduce process defects and variability. For instance, we can
use that to:
.
improve on time delivery;
.
reduce cycle time for hiring and training new employees;
.
improve logistics;
.
improve sales forecasting ability; and
.
improve quality of customer service.
The purpose of this paper is to introduce some of the most
important and fundamental points about Six-Sigma and the
main points that researchers, implementers and users should
keep in mind in addressing Six-Sigma to large and small
companies as well as system development and/or planning for
such applications. This paper is structured as follows: the
section that follows discusses how Six-Sigma works. Design
for Six-Sigma (DFSS), and Six-Sigma strategies are discussed
next. After that leadership commitment is discussed. Other
sections of this paper are devoted to: what does Six-Sigma
bring to the organization, total quality management versus
Six-Sigma, successful implementation of Six-Sigma program,
mathematical formulation of Six-Sigma, simulation and
Six-Sigma, new Six-Sigma and the costs of Six-Sigma,
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critical success factors, the future of the Six-Sigma and finally,
Six-Sigma and the weighted average. Author’s discussion and
conclusion is given in the last section.
How does Six-Sigma work?
The first question is from where the power of Six-Sigma is
coming? Obvious enough, its huge power lies in its “empirical”,
data-driven approach and the fact that it focuses on using
quantitative measures of how the system is performing in
achieving the goal of the process improvement and variation
reduction. Collaboration is an important and critical issue to the
Six-Sigma process and will help management in obtaining
employee’s constructive input. Usually, a project team is
comprised of those who own the project. That means people
such as customers, administrative associates and suppliers that
should be identified and directed to focus on a problem area.
The team members should let the Six-Sigma project guides
direct them to the area where focus is needed.
Six-Sigma is comprised of five steps as are discussed in the
following figure. Depending on the focus for improvement,
Six-Sigma has two branches, as listed below:
1 DMAIC: for existing products and processes, the DMAIC
methodology applies. DMAIC Six-Sigma methodology is
recommended when the cause of the problem is unknown or
unclear, the potential of significant savings exists and the
project can be done in 4-6 months (Breyfogle et al., 2001).
There are five steps to be considered for this case. The steps
are define, measure, analyze, improve and control.
2 DMADV: for new products and processes, the DMADV
methodology applies. This case has five steps as well
define, measure, analyze, design and verify.
The first three steps of define, measure and analyze in both
cases are the same. For DMAIC, the last two steps focus on
improving and controlling existing product or process inputs.
For DMADV, the final two steps focus on designing and
verifying the future product or process inputs.
Some researchers have used DMAIC approach as the
reference framework. In this regard, we can recall the work of
Ehie and Sheu (2005), Yeh et al. (2007) and Edgeman et al.
(2005). Ehie and Sheu (2005) were able to integrate the
theory of constraints with the DMAIC concept for achieving
continuous quality improvement. Yeh et al. (2007) have
integrated DMAIC with a model called fuzzy linguistic
computing model to evaluate the performance of supply chain
management. Edgeman et al. (2005) put their emphasis on
the need for having the “voice of customer” as a part of
DMAIC model. These are all the indication that DMAIC is
accepted well among the researchers as a framework and it is
able to facilitate the strategic change for achieving higher
degree of customer satisfaction. However, although the logic
of DMAIC is given in Figure 1 its steps along with the tools to
be used for each steps and deliverables are listed in Table I.
Design for Six-Sigma
The DFSS is a methodology either for the design of new
processes/products, or for the redesign of existing processes/
products, whose objective is the attainment of requisite of
performance, reliability and costs, typical of the Six-Sigma
methodology. The elements of DFSS as they are summarized
by De Feo and Bar-El (2002) are given below:
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Figure 1 DMAIC descriptions of the phases meet customer expectation and can be produced at Six-Sigma
quality levels”. DFSS has two main goals of:
Start 1 Minimizing defect rates for reaching to the Six-Sigma
level.
2 Maximizing positive impact during the developed stage of
the products.
The define phase is concerned with the definition of the
Define project goals and boundaries and the identification of the Six-Sigma “takes an organization to an improved level of
issues needed to be addressed sigma capability through the rigorous application of statistical
tools and techniques (Tennant, 2002)”. Some of the main
strategies of Six-Sigma along with tools and techniques are
summarized in Table II.
The goal of a measure phase of six sigma strategy is to
gather information about the current situations, to obtain
Measure
baseline data on current process performance and to Leadership commitment
identify problems area Although people are creating results managements are
necessary to run the business and implement a new technology.
With regard to the Six-Sigma, management’s commitment is a
necessity. Management must support the ideas for implementing
The goal of the analyze phase of six sigma quality
following key points all over the organization:
Analyze effort is to identify the root cause of the quality
problems and to conform those causes using
.
Let every employees to know that quality is apart of their
appropriate data analysis tools responsibility. They must have willing to train, to learn
and to apply.
.
Quality is not the talk. It is nothing but a real action.
.
Motivate all your employees to get knowledgeable on the
subject.
The goal of the improved phase is to implement .
All employees should be trained on using statistical tools
Improve solutions that address the problems identified during and techniques of Six-Sigma quality.
the analysis phase .
Train employees through courses offered all around the
company.
.
Let key employees participate in quality overview seminars
to get basic ideas on the subject.
The goal of the control phase is to evaluate and . Make team training on the subject.
Control monitor the results of the previous phase .
Allow participation in Master Black Belt, Black Belt and
(improve)
Green Black Belt training.
.
DFSS training.
.
drives the customer-oriented design process with
Besides, that researchers (Gitlow and Levine, 2005; Snee and
Six-Sigma capability;
Hoerl, 2003) have pointed that some vice presidents even
.
predicts design quality at the outset;
.
matches top-down requirements flow down with perform some of the functions for Six-Sigma projects,
capability flow up; including facilitating project selection, defining project
.
integrates cross-functional design involvement; charters, selecting Black Belts and other project resources,
.
drives quality measurement and predictability removing barriers to project completion, and conducting
improvement in early design phases; progress reviews.
.
uses process capabilities in making final decisions; and
.
monitors process variances to verify that customer What does Six-Sigma bring to the organization?
requirements are met. The elimination all non-value-adding activities within the
manufacturing process is the long-term philosophy of the
Generally, DFSS methodologies, such as DMADV, intend to
Six-Sigma. This is a journey with continuous improvement
create designs that are (Harry and Schroeder, 2000; Tennant,
along its path and need heavy focusing meantime that its
2002):
implementation does not overwhelm the organization.
.
resource efficient;
Six-Sigma makes significant contributions in major areas of
.
capable of reaching very high yields;
an organization. Here, are some of the key areas to have
.
independent of complexity and volume;
influences in the short and long runs on:
.
“robust” to process variability; and .
process design;
. highly linked to customer demands. .
variable investigation;
Six-Sigma strategies
.
analysis and reasoning;
.
focus and process improvement;
Six-Sigma is a data-driven approach uses define, measure, .
broad participation in problem solving;
analyze, improve and control and utilizes DFSS (Treichler .
knowledge sharing;
et al., 2002). According to Mader (2002), “DFSS is a .
goal setting;
methodology that utilizes tools, training and measurements to .
suppliers; and
enable the organization to design products and processes that .
data base decision making.

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Table I DMAIC steps to be taken, tools to be used and the deliverables

DMAIC
steps Steps to be taken Tools to be used Deliverable
Define Define customers and requirements (CTQs) Project charter Fully trained team is formed, supported and committed
Develop problem statement, goals and benefits Process flowchart to work on improvement project
Identify champion, process owner and team SIPOC diagram Customers identified and high impact
Define resources Stakeholder analysis Characteristics (CTQs) defined, team charter
Evaluate key organizational support DMAIC work breakdown structure developed, business process mapped
Develop project plan and milestones CTQ definitions
Develop high level process map VOC
Measure Define defect, opportunity, unit and metrics Process flowchart Key measures identified, data collection planned and
Detailed process map of appropriate areas Data-collection-plan/example executed, process variation displayed and
Develop data collection plan Benchmarking communicated, performance base lined, sigma level
Validate the measurement system Measurement-system analysis calculated
Collect the data VOC
Begin developing Y ¼ f(x) relationship Process sigma calculation
Determine process capability and sigma baseline
Analyze Define performance objectives Histogram Data and process analysis, root cause analysis,
Identify value/non-value-added process steps Pareto chart quantifying the gap/opportunity
Identify sources of variation Time series/run chart
Determine root cause(s) Scatter plot
Determine vital few x’s, Y ¼ f(x) relationship Regression analysis
Cause and effect diagram
Whys
Statistical analysis
Non-normal data analysis
Improve Perform design of experiments Brainstorming Generate (and test) possible solutions, select the best
Develop potential solutions Mistake proofing solutions, design implementation plan
Define operating tolerances of potential system Design of experiments
Assess failure modes of potential solutions Pugh matrix
Validate potential improvement by pilot studies House of quality
Correct/re-evaluate potential solution FMEA
Simulation software
Control Define and validate monitoring and control system Process sigma calculation Documented and implemented monitoring plan,
Develop standards and procedures Control charts (variable and attribute)standardized process, documented procedures,
Implement statistical process control Cost savings calculation response plan established and deployed, transfer of
Determine process capability ownership
Develop transfer plan, handoff to process owner
Verify benefits, cost savings/avoidance, profit growth
Close project, finalize documentation
Communicate to business, celebrate

Table II Six-Sigma business strategies and principles and tools and techniques
Six-Sigma business strategies and principles Six-Sigma tools and techniques
Project management Statistical process control
Data base decision making Process capability analysis
Knowledge discovery Measurement system analysis
Process control planning Design of experiments
Data collection tools and techniques Robust design
Variability reduction QFD
DMAIC process FMEA
Master, black and green and yellow belt Regression analysis
Change management tools Analysis of mean and variances
Hypothesis testing
Process mapping

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The cost savings and benefits obtained by large companies in .

management commitment;
some cases are so huge that attracted the attention of those .
understanding the Six-Sigma methodology, tools and
managers that ignored to utilize that. GE Capital had benefited techniques;
over $2 billions in year 1999, and in their 2001 annual report .
linking Six-Sigma to business strategy;
discussed the completion of over 6,000 Six-Sigma projects . project selection, reviews and tracking;
probably yielding over $3 billion in savings by conservative .
cultural changes;
estimates. Motorola saved more than $15 billions over 11 years of . project management skills;
applying that. GE competitors such as Iomega and Seagate .
linking Six-Sigma to suppliers;
started to take the notice what GE was doing. So they started to . training; and
use DFSS in their company as well. Other organizations that have .
linking Six-Sigma to human resources.
adopted Six-Sigma have experienced far lesser amounts of
Johnson and Swisher (2003) provided useful tips for
financial success. A large number of them have Six-Sigma savings
implementing Six-Sigma successfully. These tips are listed
ranging from 0.5 to 1.0 per cent of sales. In some cases, company
below:
had to scrape the entire Six-Sigma program after spending .
sustained and visible management commitment;
significant amount of money. . continuing training of managers and participants;
Six-Sigma has brought large cost savings and benefits to very .
determining clear expectations;
small companies as well. There is not too much information .
careful selection of leadership; and
available on this group of companies. Some large companies .
picking and selecting right projects meeting our strategies.
benefited from these methodologies are listed in Table III.
Mathematical formulation of Six-Sigma
Total quality management versus Six-Sigma There are two key elements involved with the Six-Sigma
Total quality management (TQM) focuses on organizational namely COPQ and CTQ. The COPQ stands for the cost of
results rather than on business results. On the other hand, poor quality while CTQ stands for the critical to quality. The
Six-Sigma is a methodology that provides businesses with the purpose of COPQ includes costs due to all activities at
tools to improve the capability of the business processes. different management levels, as well as the visible cost. COPQ
An increase in performance and decrease in process variation is calculated from identifying all the costs during the
can lead to reducing defects and make big contributions in management activities in the quantitative manner and
profits improvements. As a result, employee’s morale will setting up a plan to save them.
be enhanced and the quality of the product increased. The second key element is CTQ that stands for critical to
TQM evolved during the mid-1980s into the first generation quality. COPQ shows the total cost that includes both the
of Six-Sigma at Motorola. visible and the hidden costs. In order to make saving we
Anbari (2002) pointed out that Six-Sigma is more need to identify CTQ variables. The CTQ variables are the
comprehensive than prior quality initiatives such as TQM key factors that affect the quality of the target for the
and continuous process improvement. He summarized the system.
Six-Sigma management method as follows: We know that the goal of Six-Sigma is to minimize the
Six – Sigma ¼ TQM ðor CQIÞ þ Stronger customer focus COPQ using the CTQ variables. To understand the basic
concept of Six-Sigma clearly, one needs to formulate the
þ Additional data analysis tools Six-Sigma as a mathematical programming model shown
below:
þ Financial results þ Project management ð1Þ
Minimize COPQ
Successful implementation of Six-Sigma program S:t:
A number of authors had taken initiatives to introduce effective ð2Þ
f ðCTQ1 ; CTQ2 ; . . . ; CTQn Þ ¼ 0
ingredients for implementing Six-Sigma in the
UK manufacturing. The ingredients as discussed by Antony gðCTQ1 ; . . . ; CTQn ; X1 ; X2 ; . . .Xn Þ # 0
and Banuelas (2002) and Banuelas and Antony (2002) are listed
below:

Table III Large companies benefits and savings through Six-Sigma program
Company name Benefits/savings
Motorola (1992) 150 times reduction
Allied Signal (Honeywell)/plant in South Carolina 50 percent down
General Electric (2004) $2 billion
Motorola (1999) (www.motorala.com) 15 billions in 11 years
Dow Chemical/Rail Delivery Project (The Dow Chemical Company (n.d.)) 2.45 millions in capital expenditures
Du Pont/Yerkes Plant in New York (2000) More than 25 Millions savings
Telefonica de espana (2001) e30 millions in the first ten months
Texas Instruments $600 millions
Johnson and Johnson $500 millions
Honeywell 1.2 billions

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 Six-Sigma: methodology, tools and its future
Yahia Zare Mehrjerdi
Simulation and Six-Sigma
One of the many tools used in a Six-Sigma initiative is the
Six-Sigma simulation. Within the analyze and improve stages
of a DMAIC project, or the analyze and design stages of
a DMADV project, random Monte Carlo simulation is
a powerful tool because of the following value and benefits it
provides:
.
simulation takes into account process variances,
uncertainties and interdependencies;
.
simulation can test many alternative solutions quickly and
easily;
.
models can be developed with little risk and no disruption
to existing processes;
.
simulation takes the subjectivity and emotion out of
decision making;
.
animation features make simulation a good tool to help
“sell” others on the best solutions;
.
reusable models encourage continuous improvement;
and
. impact on upstream or downstream customers/operations/
processes can be considered.
Simulation is a tool that can be used in multiple stages of a
Six-Sigma project. However, it is typically applied in the
analyze and improve or analyze and design stages. A simulation
model becomes a transfer function that relates the critical X’s
(inputs) to the Y’s (outputs). Experimentations with the Xs lead
to a better understanding of the process capability.
One of the phases of DFSS is known as tolerance analysis
(TA) which includes the study of the output variability of a
process as a function of the inputs of the same process. Owing
to the fact that the final purpose of the TA is to identify what
inputs have the greatest impact on the output the quantitative
techniques of the most appropriate and suitable one are:
.
root sum of squares (RSS); and
.
Monte Carlo simulation.
Therefore, there are places in the Six-Sigma study process
that Monte Carlo simulation can play its role and act greatly.
New Six-Sigma
Motorola has made some changes to the Six-Sigma
technology and introduced a new umbrella called new Six-
Sigma. Modern Six-Sigma practitioners such as Motorola’s
Matt Barney aim to integrate key disciplines from finance,
engineering, strategy, statistics, tangible and intangible asset
management, IT and industrial organizational psychology.
The focus of the new Six-Sigma method is away from simply
reducing defects and towards reducing variation around
accomplishing business goals. At Motorola, Six-Sigma has
evolved from a metric process to a culture (www.motorala.
com/faqs.shtml).
A new wave of sigma known as Fit Sigma (Basu, 2001) has
three aspects to that:
1 What is required for a specific organization to be fit?
2 What has to be done to get fit?
3 Once fit how to stay fit.
Basu and Wright (2003) have shown that is not necessary for
every operation to achieve the perfection level of 3.4 errors
per million opportunities. Not all organizations need the
intensive and expensive “all or nothing” investment required
by Six-Sigma. The Fit Sigma philosophy is the adaptation of
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the Six-Sigma approach to “fit” an organization’s needs so as
to maintain performance and organizational fitness.
Costs of Six-Sigma
With regard to what we had discussed so far, Six-Sigma can
bring tremendous saving and benefits for the company. Saying
that, to set up Six-Sigma in a company, one should know that
there are some costs associated with that that can be listed as
below (Karbasian et al., 2006):
. direct costs;
.
indirect costs;
.
training costs;
.
consulting costs;
.
improvement implementation costs; and
.
software costs.
Critical success factors
We can classify critical success factors into three categories as
(Banuelas and Antony, 2002):
1 critical success factor-executive engagement;
2 critical success factor-communications; and
3 critical success factor-projects.
Critical success factor-executive engagement:
.
management must be visible and show consistent support;
.
be active in communication process and providing rewards;
.
link Six-Sigma to company’s strategies; and
. mandate the use of facts and data in support of all
decisions to be made.
Critical success factor-communications:
.
generating a regularly written communications about Six-
Sigma;
.
asking managers at different level to be supportive and the
advocate of Six-Sigma; and
.
provide news of Six-Sigma’s success to the company and
how it benefits the companies’ bottom line and employees.
Critical success factor-projects:
.
prepare a list of one-year Six-Sigma projects and refresh
them regularly;
. link Six-Sigma projects to customer’s needs; and
.
specify those projects which bring significant saving for the
company.
The documentation of these critical success factors and their
sub-factors is merely a first step in the process of assuring
their implementation and making them a permanent part of a
company’s culture and operating system.
The future of Six-Sigma
It is predicted that Six-Sigma will remain as one of the key
initiatives for improving the process for many years into the
future. Management should primarily concentrate on
improving the process rather than just thinking to count the
defects. The pattern of research indicates that researchers are
trying to integrate Six-Sigma with other quality management
tools to make the methodology even more attractive to other
organizations.
In a survey conducted by DynCorp following results are
obtained (Mekong Capital Ltd, 2004):
.
about 22 per cent of the US companies surveyed have Six-
Sigma program in placed;
.
about 38.2 per cent companies with Six-Sigma programs
were service companies;
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.
about 49.3 per cent companies with Six-Sigma programs When the quality improvement program is Six-Sigma, the goal
enforced were manufacturing company and 12.5 per cent for the organization is obvious – to reach a sigma level of 6,
were other type; and or the well-known objective of 3.4 DPMO. An organization
.
Six-Sigma were rated highly than other quality operating at that level is described by Six-Sigma proponents
management systems and process improvement tools in as being “world class”.
terms of achieving the greatest results (Table IV). An approach is available to obtain the overall sigma level of an
organization based upon weighting each of the critical processes.
Why Six-Sigma should be implemented in supply chain
If a unit produced by a higher weighted critical process is found
process? defective, then obviously such a defective unit costs more for the
Old business models cannot function any more. We are in the
operation than a defect from a lower weighted process. This
era of globalization and need instant access to information in
method develops a link between each critical process and the
making prompt decisions on key issues of the organization.
DPMO and determines an overall weight-based sigma level.
The challenges that competition had brought to the world of
To proceed let us assume that Xi ði ¼ 1; 2; . . . ; nÞ are n processes
business had left the decision makers no rooms to make an
that are identified by the management in a supply chain
error. The right way is to delight customers and looking
organization. Now, let s1 s2 ; . . . ; sn to be sigma levels for
forward to find new ways to exceed their expectations. For
these reasons, Six-Sigma quality becomes important and a processes X1 ; X2 ; . . . ; Xn , respectively. Also assume that
response to “why we need to implement that into the supply through an extensive study, management has been able to
chain processes”. determine weights W 1 ; W 2 ; . . . ; W n for the critical processes
The question to be asked is how Six-Sigma can be applied such that:
in the SCM processes? We know supply chain is a network of
materials, information and services that coordinates the X
n
aspects of demand, transformation and supply of systems. Wi ¼ 1 ð3Þ
Customers must be the center of our business. They do i¼1
define quality for us. They expect from us having good
performance, being a reliable producer, providing a
This is an indication that management likes to use weight W i
competitive price, delivering on time, giving good service
for each unit produced, that is either a defective or non-
and more. As a business leader, we should know that being
defective item. Now, the overall sigma level of supply chain with
good is not enough but delighting our customers is a
regard to all n critical processes is obtained using information
necessity.
Quality makes it necessity to look at our business from from Table V.
outside in that is our customer’s perspective. This means that The total weighted-DPMO from all the processes put
we should look at our process and transaction life cycle from together is obtained as:
the customers view point to understand what they really need
and how they feel about our products, services and X
n
management styles. This knowledge can be very helpful to W iPi ð4Þ
our business. It can add significant value and bring new i¼1
improvements as needed.
To assign weights to processes, it is necessary to classify
Six-Sigma and weighted average
The most successful organizations are those that have very process types and sigma level types first. Process types can be
specific goals wanted to be achieved. For a supply chain, considered as: equally valued, higher valued and lower valued
management must consider the level of the quality that the processes. On the other hand, sigma level can be classified as
entire organization must finally achieve to be successful. higher sigma level (above five sigma) and lower sigma level
(three to five sigma level). Assuming that n processes should
be weighted where m of them are of higher valued and (n-m)
of them of lower valued then we may employ the following
Table IV Results of the survey (Mekong capital Ltd, 2004)
table to weight theme properly (W i is the weight for the
Techniques/tools % higher valued processes and W j is the weight for the lower
valued processes). The way of assigning weights to equally
Six-Sigma 53.6
valued, higher valued and lower valued processes are given in
Process mapping 35.3
Table VI.
Root-cause-analysis 33.5
Cause and effect analysis 31.3
Lean manufacturing 26.3
Table V Table of weighted average calculations
Benchmarking 25.5
ISO 9001 21.0 Process Weight(W) Sigma level (s ) DPMO W *DPMO
Control charts 19.2
X1 W1 s1 P1 W1 * P1
Design of experiments 17.4 *
Poka Yoke 16.5
X
.. 2 W
.. 2 .s2
.. ..P2 ..W2 ..P2
. . . . .
TQM 10.3
Xn Wn sn Pn Wn *Pn
Decision making 8.9
Setup reduction 6.7 Source: Ravichandran (2006)

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Yahia Zare Mehrjerdi Volume 31 · Number 1 · 2011 · 79 –88

Table VI Process types and their weighting methodology Table VII Data for example 1 and the weighted DPMO
Process type Weight Sigma level Weight The weighted
Process (s) (W) DPMO DPMO 5 W *DPMO
Equally valued Wi ¼ Wj ¼ 1/n
Higher valued Wi to be set greater than Wj AXY 5.52 0.20 29.10 5.82
Lower valued Wi to be set smaller than Wj BXY 5.70 0.20 13.40 2.68
CXY 6 0.20 3.4 0.68
Source: Ravichandran (2006)
DXY 6 0.20 3.4 0.68
EXY 5.94 0.20 4.5 0.90
Total 10.76
Algorithm
This algorithm gives details information for calculating the
overall sigma level for a system with many stations connecting
processes. The overall sigma level is calculated using the data
like a chain together. The steps to be followed are:
provided in Table VII.
Step 1. Identify the Sigma level for each station. The weighted DPMO of 10.76 can be shown equivalently as
Step 2. Classify stations into the higher valued and lower p ¼ 10.76/1,000,000 ¼ 0.00001076. Using a Normal
valued groups and name them H ¼ {1; . . . ; m} and statistical table or the Norminv(.) function from Excel
L ¼ {m þ 1; . . . ; n}, respectively. Worksheet we can find the sigma value as:
Step 3. Assign weights W i ði [ HÞ to the highest valued
groups and weights (W j ð j [ LÞ to the lowest-valued Sigma ¼ 1:5 þ Norminvð1 2 0:00001076Þ
group such that equation (3) holds and W i . W j .
Step 4. Find the corresponding DPMO for the sigma level ¼ 1:5 þ 4:248506921 ¼ 5:748506921
identified.
Step 5. Find the weighted DPMO for the entire system and Owing to the fact that we have applied equal weights in this
find their total value. calculation we can claim that the value of 10.76 is nothing but
Step 6. Convert the total weighted DPMO into its equivalent the average of the values of defects per millions opportunities.
Sigma level using the function of Norminv(.) from the However, it can be seen that 5.7485 is not an average of the
Excel worksheet or using a normal table. This Sigma sigma levels of 5.52, 5.70, 6, 6 and 5.94 used in the
level is the overall Sigma level for the system under calculations. Therefore, we can claim that the organization
study. has achieved an overall sigma level of 5.7485.

Potential application areas Example 2

The assembly process of an automotive body assembly as In this example equal weights are assigned to higher valued
described in details in the works of researchers (Ceglarek et al., processes and non-equal weights are given to lower valued
1994, 2004; Jin and Shi, 1999; Ding et al., 2000) are of typical processes and then the weighted DPMO are calculated for
multistage of concerned here. Ceglarek et al. (2004) presents a the processes (Table VIII).
multistage manufacturing processes with m stages where parts The weighted DPMO of 20,191 can be shown equivalently
get into each station and then after being worked on is sent to the as p ¼ 20,191/1,000,000 ¼ 0.020191. Using a normal
next stage until all m stages are completed. A multistage statistical table we can find the sigma value as:
assembly system is comprised of a series of single stations Sigma ¼ 1:5 þ Norminvð1 2 0:020191Þ ¼ 1:5 þ 2:04982
(Ceglarek et al., 2004). In such cases, once the level of the
quality at stages of these multistage is calculated then the total ¼ 3:54982
quality of the system needs to be determined. One way to do so is
through the use of the methodology proposed in this paper. In this example, equal weights are assigned to higher valued
To simplify calculation process let the system under study processes of AXY and EXY and lower weights are assigned to
to be comprised of five processes named as: AXY, BXY, CXY, lower valued processes of BXY, CXY and DXY. However,
DXY and EXY. Each of these processes are highly critical in it can be seen that 3.55 is not an average of the sigma levels
advancing the organizations journey into its ultimate goal of used in the calculations that are 5.4, 4.5, 5.88, 6 and 3.
Six-Sigma quality to achieve the business excellent by gaining Therefore, we can claim that the organization has achieved an
advances in head of the competitors in industries. overall sigma level of 3.55.
Furthermore, let us assume that processes AXY and EXY
are of higher valued and processes BXY, CXY and DXY are of Table VIII Data for example 2 and the weighted DPMO
lower valued processes in this industry. Using these Sigma level Weight The weighted
assumptions we proceed with the examples given below and
Process (s) (W) DPMO DPMO 5 W *DPMO
their solutions.
AXY 5.4 0.3 48.1 14.43
Example 1 BXY 4.5 0.1 1350 135
To make problem simple, let processes AXY, BXY, CXY, CXY 5.88 0.1 5.9 0.59
DXY and EXY have sigma levels of 5.52, 5.70, 6, 6 and 5.94, DXY 6 0.2 3.4 0.68
respectively. If we assign equal weights to all these processes EXY 3 0.3 66,810 20,043
then Table VII would be on hand for further analyses. We Total 20,191.47
have considered higher (above five) sigma levels for all the five

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 Six-Sigma: methodology, tools and its future
Yahia Zare Mehrjerdi
Discussion and conclusion
In a journey to business excellence, an organization is successful
if specific goals for critical processes of the organization are
identified. The quality management programs implemented
can modernize and simplify activities towards the ultimate goal
of the business. When selected quality program is Six-Sigma,
the organizational goal is to reach a sigma level of 6, or the
objective of 3.4 DPMO. Organizations with such operating
capabilities are called Six-Sigma level companies being a
member of “World Class” ones. In defining defects, Six-Sigma
focuses on developing a very clear understanding of customer
requirements and hence it is fully customer focused.
To implement Six-Sigma in an organization, management
needs to make sufficient planning in providing overview
training for all employees. Besides, that it is necessary to select
one of the associate who is very knowledgeable about the
organization structures and cultures as a Six-Sigma black belt
leader. This person should be trained to take the control of
projects and coaches the teams and get into all analytical tools
and software suitable for data analysis and lead the
organization into the improvement in the long run. The
most important points need to keep in mind as organization
gets ready to implement Six-Sigma are:
.
introducing the case well studied for change;
.
starting with caution and doing it slowly;
.
going after the right team to work with;
.
creating the right foundation to work on;
.
let the team involved in all stages of the work;
.
communicate with the team members; and
.
train in accordance with the strategies undertaken.
Besides, that Six-Sigma projects have to be carefully reviewed,
planned and selected to maximize the benefits of implementation.
The project has to be feasible, organizationally and financially
beneficial and customer oriented (Kwak and Anbari, 2006).
However, projects under study need to get reviewed periodically
in order to evaluate them and get hands on the performance of
Six-Sigma tools and techniques being employed.
Referring to the work of Basu (2001) and Basu and Wright
(2003) and the concept of Fit Sigma this author suggests the
use of multi criterion decision making and Monte Carlo
computer simulation as a sophisticated hybrid approach for
determining the sigma level for an organization that often care
about the environmental constraints of the system, cost
function, level of quality and its customers satisfaction. It is
certainly true that all organizations are not searching for Six-
Sigma level for their entire organization or all of their
subsidiaries. To that end, it is necessary to determine the main
organizational goals and prioritize them and then imply the
proposed methodology to identify the Fit Sigma level in the
presence of the achievement levels of the proposed criterions.
In this paper, author reviewed the fundamental concept of
Six-Sigma and elaborated why it is important for small and
large organizations to employ Six-Sigma concepts into their
working methodology for quality improvement and bottom
line enhancements. Regarding that author discussed key
issues as such as leadership commitment, what Six-Sigma
would bring to the organization, how does Six-Sigma work,
Six-Sigma business strategies, Six-Sigma methodologies,
mathematical formulation of Six-Sigma, the use of
simulation with Six-Sigma, new Six-Sigma, benefits of Six-
Sigma, costs of Six-Sigma, critical success factors and the
future of Six-Sigma. In addition to that DMAIC steps to be
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Volume 31 · Number 1 · 2011 · 79 –88
taken, tools to be used and the deliverables are completely
discussed. At the end, author discussed the Six-Sigma
weighted average methodology for calculating the overall
Six-Sigma level for an organization with many working stages
or processes. To demonstrate the applicability of the Six-
Sigma weighted average two example problems are provided
and solved. For both cases it is shown that how weighted
DPMO can be converted back into their corresponding sigma
level. Generally speaking, as an investor we are looking for
predictability in the business performance hence it is very
important to understand the causes of variability all together
and then try to reduce and eliminate them. The competition
is high all around the globe and management is under
pressure to produce quality products at the right time and
with the lowest possible price. The implementation of Six-
Sigma with all the efforts that it requires and the investments
that it needs is the answer because it would pave the path for
the growth in the future.
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 Six-Sigma: methodology, tools and its future
Yahia Zare Mehrjerdi
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To purchase reprints of this article please e-mail: reprints@emeraldinsight.com
Or visit our web site for further details: www.emeraldinsight.com/reprints
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Tennant, G. (2002), Design for Six-Sigma, Gower,
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Further reading
Antony, J., Escamilla, J.L. and Caine, P. (2003), “Lean
Sigma”, Manufacturing Engineering, Vol. 82, pp. 40-2.
Buss, P. and Ivey, N. (2001), “Dow chemical design for
Six-Sigma rail delivery project”, Proceedings of the 2001,
Winter Simulation Conference, pp. 1248-51.
Ding, Y., Ceglarek, D. and Shi, J. (2002), “Design evaluation
of multi-station manufacturing processes by using state
space approach”, ASME, Journal of Mechanical Design,
Vol. 124 No. 4, pp. 408-18.
Gygi, C., Decarlo, N. and Williams, B. (2005), Six-Sigma for
Dummies, Wiley, Indianapolis, IN.
The Dow Chemical Company (n.d.), Web site: www.
dowpolyolefins.com
Corresponding author
Yahia Zare Mehrjerdi can be contacted at: yazm2000@
yahoo.com