Six Sigma

Six Sigma was first espoused by Motorola in 1985 when the late Bill Smith, a senior engineer and scientist, came up with the idea of inserting hard-nosed statistics into the blurred philosophy of quality. The result was a culture of quality that permeated Motorola and led to a period of unprecedented growth and sales. The crowning achievement was being recognized with the Malcolm Baldrige National

Quality Award in 1988 (Breyfogle et al., 2001). Although invented at Motorola, Six Sigma has been experimented with by Allied Signal and Perfected at General Electric (GE). The successful implementation of Six Sigma by GE, which has obtained huge cost savings, induced the fervor of pursuing Six Sigma around the world since it afterwards. Six Sigma is now also extensively applied to non-manufacturing processes. The savings from transactional, support, service and other non-manufacturing sectors are significant (Reichfield and Sasser, 1990).

Six Sigma is a methodology that provides business with the tools to improve the capability of their business processes. For Six Sigma, a process is the basic unit for improvement. A process could be a product or a service process that a company provides to outside customers, or it could be an internal process within the company, such as billing or production process. In Six Sigma, the purpose of process improvement is to increase performance and decrease performance variation. This increase in performance and decrease in performance variation will lead to defect reduction and improvement in profits, to employee morale and quality of product, and eventually to business excellence (Yang and El-Haik, 2003).

Recently, there are numerous prominent researchers who have expressed their points of view on Six Sigma in literature, and we extracted some of them as follows.

y Six Sigma is a comprehensive and flexible system for achieving, sustaining, and maximizing business success. It is driven by close understanding of customers’

needs and disciplined use of facts, data, and statistical analysis (Pande, Neuman and Cavanach, 2000).

y The Six Sigma breakthrough strategy is a system that provides managerial, statistical, and problem-solving methods that enable a company to achieve step function (breakthrough) improvement capabilities (McAdam and Evans, 2004).

y Six Sigma is a highly disciplined process that helps organizations to focus on developing and delivering near-perfect products and services. It is also a change-acceleration process that focuses on pursuing success and the rapid adoption of change (Smith., 2001).

y Strategically, Six Sigma can be defined as a business strategy used to improve business profitability, to improve the effectiveness and efficiency of all operations to meet customers’ needs and expectations (Harry et al., 2000).

y Six Sigma’s limitations are inherent in its nature as a project-oriented, problem-solving regimen. Six Sigma assumes that the existing process design is fundamentally sound and just needs minor adjustments to be more efficient. That assumption is not the road to dramatic improvement. (Hammer, 2002)

y Daily management is not emphasized and there is no concept of total participation in Six Sigma. Without the cooperation of the existing organization at the implementation stage, achieving high levels of customer satisfaction could be difficult under Six Sigma (Su et al., 2003).

y Six Sigma cannot dramatically improve process speed or reduce invested capital (George, 2003).

y Six Sigma does not consider system interaction because processes are improved independently (Nave, 2001).

Overall, Six Sigma is a top-down approach that is led by the company Chief Executive Officer, and the roles of the Champion, Master Black Belt, Black Belt, and Green Belt usually organize the infrastructure of a Six Sigma project. The Six Sigma methodology that is most widely used is known as DMAIC (Define, Measure, Analyze, Improve and Control). DMAIC offers a structured and disciplined methodology for solving business problems and enables a business to achieve

extremely low non-conformance rates (Harry and Schroeder, 2000). The Six Sigma tool kit includes a variety of techniques, primarily from statistical data analysis and quality improvement. Many tools are familiar from the era of total quality management; others are more recent and sophisticated (Breyfogle, 1999). New tools will continue to be selectively added from other disciplines, for example, the field of operations research (Hoerl, 2004). A depiction of the purpose, deliverables, and key tools of each step in the DMAIC process are shown in Figure 2.1 (Snee, 2004).

IMPROVEMENT OF EXISTING PROCESSES

Specify

Determine Implement

CTQs, Develop

Root Changes to

Evaluate System to

Define project

Estimate Gains

Performance Process

Capability

Define Measure Analyze Improve Control

KEY DELIVERABLES

Management ■ Cap. Studies ■ Pilots

Figure 2.1 The DMAIC methodology and key tools

Six Sigma success stories abound in a variety of industries. In addition to the well-known achievement of Six Sigma programs at General Electric (GE), the following represent additional examples of the successful Six Sigma implementations.

y Six Sigma enabled AlliedSignal to avoid having to build an $85 million plant to fill increasing caperolactan demand, realizing a total savings of $30 to $50

million a year (Harry et al., 2000).

y Lockheed Martin used to spend an average of two hundred work hours fitting a part that covers the landing gear. For years employees had brainstorming sessions that resulted in many seemingly logical solutions. However, none worked. The statistical discipline of Six Sigma discovered a one-thousandth of an inch deviation in the part that caused the problem. Now that it has been corrected, the company saves $14,000 a jet (Devane, 2004).

y Ford Motor’s 2000 annual report: ”In the past year we launched Customer Driven 6-Sigma, a scientific, data-driven process to uncover the root cause of customer concerns and drive defects … saving the company $52 million.”

(Gupta, 2004)