Six Sigma - What is Six Sigma?

Six Sigma at many organizations simply means a measure of quality that strives for near
perfection. Six Sigma is a disciplined, data-driven approach and methodology for eliminating
defects (driving towards six standard deviations between the mean and the nearest
specification limit) in any process -- from manufacturing to transactional and from product to
service.

The statistical representation of Six Sigma describes quantitatively how a process is performing.
To achieve Six Sigma, a process must not produce more than 3.4 defects per million
opportunities. A Six Sigma defect is defined as anything outside of customer specifications. A
Six Sigma opportunity is then the total quantity of chances for a defect. Process sigma can
easily be calculated using a Six Sigma calculator.

The fundamental objective of the Six Sigma methodology is the implementation of a

measurement-based strategy that focuses on process improvement and variation reduction
through the application of Six Sigma improvement projects. This is accomplished through the
use of two Six Sigma sub-methodologies: DMAIC and DMADV. The Six Sigma DMAIC process
(define, measure, analyze, improve, control) is an improvement system for existing processes
falling below specification and looking for incremental improvement. The Six Sigma DMADV
process (define, measure, analyze, design, verify) is an improvement system used to develop
new processes or products at Six Sigma quality levels. It can also be employed if a current
process requires more than just incremental improvement. Both Six Sigma processes are
executed by Six Sigma Green Belts and Six Sigma Black Belts, and are overseen by Six Sigma
Master Black Belts.

According to the Six Sigma Academy, Black Belts save companies approximately $230,000 per
project and can complete four to 6 projects per year. General Electric, one of the most
successful companies implementing Six Sigma, has estimated benefits on the order of $10
billion during the first five years of implementation. GE first began Six Sigma in 1995 after
Motorola and Allied Signal blazed the Six Sigma trail. Since then, thousands of companies
around the world have discovered the far reaching benefits of Six Sigma.

Calculating the Cost and Savings of Six Sigma

Quality
By Charles Waxer

One of the most distinct differences between Six Sigma and other quality management systems
is the link to business finances. Financial benefits of potential process improvement projects are
quantified and used to help select and prioritize process improvement projects. Financial
benefits are re-evaluated during the analyze phase to ensure that the cost of improvements
suggested will be supported by the benefit of the project. And finally, the financial benefits are
verified once the project enters the control (for DMAIC) and verify (for DMADV) phases.

The rigor associated with linking Six Sigma projects to business financials helps connect
everyone within the business -- not just the quality department and related personnel. The entire
organization, including the CEO, CFO, line managers, employees, and shareholders, looks to
Six Sigma to increase cost savings, productivity, and incremental revenue. It also helps
differentiate substantial process improvements from insignificant 'fluff' projects that have little
long-term benefit for the business.

Below are a few posts from fellow quality professionals discussing how best to link quality to
finances. If you have a question or would like to make an additional comment, just press the
'Post A Reply' button.
"During the Define and Measure phase, we highlight what the project is supposed to do and
how it is supposed to do it. Most of the time, maybe due to human natural tendencies, the
improve phase is already running at the back of everyone's minds.
"To forecast financial savings, we try to follow suit that
Tangible benefits - cost of project implementation = Financial benefits.

"Under each category like tangible benefits, we try to break it further down to cost of sales, tax
savings and all the financial jargon along with it. The cost of project implementation will be
labour cost and all other liabilities that arises from doing the project. And with that, we try to give
the most accurate forecast as we can during the D and M phase.

"As the project goes along, there may be some changes and we update this forecast to be even
more accurate and revise the financial plan for approval."

DMAIC Versus DMADV

By Kerri Simon

We know that everything in business is a process, right? Sales people have a list of companies
and contacts that they work in a certain fashion to produce a sale, production receives an order
and schedules the manufacturing, the product is built, packaged, shipped and invoiced. When
the packing department has a problem with their process, though, should they fix it with a
DMAIC or DMADV (also referred to as DFSS) type project?

The Similarities of DMAIC and DMADV

Let's first look at the DMAIC and DMADV methodologies and talk about how they're alike.
DMAIC and DMADV are both:

• Six Sigma methodologies used to drive defects to less than 3.4 per million
opportunities.
• Data intensive solution approaches. Intuition has no place in Six Sigma -- only cold,
hard facts.
• Implemented by Green Belts, Black Belts and Master Black Belts.
• Ways to help meet the business/financial bottom-line numbers.
• Implemented with the support of a champion and process owner.

The Differences of DMAIC and DMADV

DMAIC and DMADV sound very similar, don't they? The acronyms even share the first three
letters. But that's about where the similarities stop.

DMAIC Define • Define the project goals and customer (internal and
Measure external) deliverables
Analyze • Measure the process to determine current performance
Improve • Analyze and determine the root cause(s) of the defects
Control • Improve the process by eliminating defects
• Control future process performance

When To Use DMAIC

The DMAIC methodology, instead of the DMADV methodology, should be used when a product
or process is in existence at your company but is not meeting customer specification or is not
performing adequately.

DMADV Define • Define the project goals and customer (internal and
Measure external) deliverables
Analyze • Measure and determine customer needs and
Design specifications
Verify • Analyze the process options to meet the customer needs
• Design (detailed) the process to meet the customer needs
• Verify the design performance and ability to meet
customer needs

When To Use DMADV

The DMADV methodology, instead of the DMAIC methodology, should be used when:

• A product or process is not in existence at your company and one needs to be

developed
• The existing product or process exists and has been optimized (using either DMAIC or
not) and still doesn't meet the level of customer specification or six sigma level

"I Thought it was a DMAIC, But it Turned Out to be a DMADV!"

Occasionally a project is scoped as a DMAIC for incremental process improvement when it
really required a DMADV methodology improvement. And it was a month into the project that
you realized this! Don't be discouraged about the work you put into the DMAIC because 1) it's
happened to more businesses than just yours, 2) you understand the process at a much greater
detail than you did initially, and 3) you were able to practice not just DMAIC skills but also
DMADV!

Pick yourself up, dust yourself off and re-craft your define piece of the project so you can begin
with a fresh look at the project and solutions. You never know what insights you'll have now that
you may not have been aware of before.