WHAT IS SIX SIGMA

Six Sigma, or 6, is both a methodology for process improvement and a

statistical concept
that seeks to define the variation inherent in any process. The
overarching premise of Six
Sigma is that variation in a process leads to opportunities for error;
opportunities for error
then lead to risks for product defects. Product defects—whether in a
tangible process or a
service—lead to poor customer satisfaction. By working to reduce
variation and
opportunities for error, the Six Sigma method ultimately reduces
process costs and
increases customer satisfaction.
 Development of
Six Sigma
• Motorola launched the Six Sigma program in the
1980s
• General Electric initiated the implementation of Six
Sigma in the mid-1990s
• Organizations in all industries have applied Six Sigma
in recent years
• Six Sigma has replaced TQM and BPR as the key
strategy for quality improvement
PROCESS OF SIX SIGMA
• Everything we can do can be considered a process or part of a process. Every process can be characterized
by:
•  Average performance
•  Variation
• Process is performing optimally when the result of the process is at the expected value (meaning there is
minimal
• variation).
SIX SIGMA METHODOLOGY (DMAIC)
• The Six Sigma DMAIC (Define, Measure, Analyze, Improve, and Control) methodology can be thought of as a
• roadmap for problem solving and product/process improvement. Most companies begin implementing Six Sigma using the
• DMAIC methodology, and later add the DFSS (Design for Six Sigma, also known as DMADV or IDDOV) methodologies
• when the organizational culture and experience level permits.
• While the DMAIC methodology presented below may appear linear and explicitly defined, it should be noted that
• an iterative approach may be necessary – especially for Black Belts and Green Belts that are new to the tools and
techniques
• that make up DMAIC. For instance, you may find that upon analyzing your data (Analyze phase) you did not gather enough
• data to isolate the root cause of the problem. At this point, you may iterate back to the Measure phase. In addition, prior
• knowledge of the tools and techniques is necessary in determining which tools are useful in each phase. Remember, the
• appropriate application of tools becomes more critical for effectiveness than correctness, and you don’t need to use all the
• tools all the time.
• Define
• The Define Phase is the first phase of the Lean Six Sigma improvement
process. In this phase, the leaders of the
• project create a Project Charter, create a high-level view of the
process, and begin to understand the needs of the customers
• of the process. This is a critical phase of Lean Six Sigma in which your
teams define the outline of their efforts for
• themselves and the leadership (executives) of your organization.
• Measurement
• Measurement is critical throughout the life of the project and as the
team focuses on data collection initially they
• have two focuses: determining the start point or baseline of the
process and looking for clues to understand the root cause of
• the process. Since data collection takes time and effort it’s good to
consider both at the start of the project.
Analyze
This phase is often intertwined with the Measure Phase. As data is collected, the
team may consist of different
people who will collect different sets of data or additional data. As the team reviews
the data collected during the Measure
Phase, they may decide to adjust the data collection plan to include additional
information. This continues as the team
analyzes both the data and the process in an effort to narrow down and verify the
root causes of waste and defects.
Improvement
once the project teams are satisfied with their data and determined that
additional analysis will not add to their
understanding of the problem, it’s time to move on to solution
development. The team is most likely collecting improvement
ideas throughout the project, but a structured improvement effort can
lead to innovative and elegant solutions
Control
This phase is a mini version of process management. The team has been building a
form of infrastructure
throughout the life of the project, and during the Control Phase they begin to
document exactly how they want to pass that
structure on to the employees who work within the process.
• SIX SIGMA BELTS
• These belts are based on level of competence in understanding and applying related tools.
•  Green belt
•  Black belt
•  Master Black belt
• Actual definitions and competencies for each belt can vary by organization and institutions
• Green Belt
• This green belt is a basic analytical tools, it will be works on less complex projects
• Black Belt
• In this black belt emphasis on application and analysis, work projects with help from green
belts.
• Master Black Belt
• It is mainly used to understand applications and statistical theory behind applications, trains
other belts, and leads
• project reviews.
 Six-Sigma Metrics –
Measuring Defect Rate
• Defects per unit (DPU) = number of defects discovered 
number of units produced

• Defects per million opportunities (DPMO) = number of

defects discovered  opportunities for error  1,000,000
 Estimating Defect Rate – Process
Capability Index (Cp)
• USL/LSL : Upper & Lower Specification Limit
• Cp = (USL –LSL) / (6s)
• Example : Time to process a student loan application
(Standard = 26 working days)
• Specification Limits : 20 to 32 working days
•s : 2 working days
• Cp = (32 – 20)/ (6*2) = 1.00 (Three Sigma)
Cp Index and DPMO

Cp Index DPMO
1 2,700
1.33 63
1.5 6.8
2 0.002
 Six-Sigma Quality (Cp =2 with
Mean Shifting from the Center)
Ensuring that process variation is half the design
tolerance (Cp = 2.0) while allowing the mean to shift as
much as 1.5 standard deviations.
 k-Sigma Quality Levels
• Six sigma results in at most 3.4 defects per million
opportunities
• Benefits of Six Sigma
• Six Sigma has a proven track record of adding value and ensuring quality to the
output of a business in the form of incremental improvements to a product or
a service. It may also be used to optimize supply chain processes and increase
customer satisfaction. The benefits of Six Sigma go beyond simple problem-
solving and consider the entire production process from the raw materials to
the end product, as opposed to only the end product.

• Six Sigma is a proactive methodology that identifies and provides

recommendations for potential problems before the company incurs any form
of loss. Six Sigma may be implemented in several categories within a business,
directly impacting profitability and reducing costs. It is significant to note that
for B2B customers, the Six Sigma standard for manufacturing products is a
credible endorsement.
• Six Sigma Disadvantages
• Six Sigma inspects the business processes minute-by-minute and generates
large amounts of empirical data, leading to time-consuming and complicated
procedures. Also, because it is a quality improvement process at its root,
adoption of its protocols often leads to an increase in the overall costs.

• Sometimes when a company implements Six Sigma, problems arise as the

company focuses on Six Sigma endorsed policies only and forgets about its
specific mission statement or policies. For small businesses, it may constrain
new ideas favoring creativity and innovation, which require some risk-taking
to implement. Companies have to find certified Six Sigma institutes to train
their employees or conduct in-house training without formal certification. In
either case, the cost of Six Sigma adoption by small businesses is too high to
be feasible. Even large companies must provide a lot of training for employees
to grasp the system.