Six Sigma

Normally denoted as 6 σ, the term consists of two parts—6 as a number and σ, a Greek letter used as a measure of variation within a specific set of measured data. For a robust process, variation with respect to customer requirements should be as low as possible. A stated Sigma level, in this case 6 Sigma, indicates how much the process varies in meeting customer requirements. The greater the Sigma level, the more the performance of the process coincides with the requirements of the customer. With a greater Sigma level, there are fewer chances of defects within a process, which will ultimately lead to improvements in an organization's bottom line and profitability. As Six Sigma has evolved, the term has acquired various other meanings as well, and refers to a range of issues that can bring benefits to a business. For example, Six Sigma:

• Is a problem-solving methodology.

• Is a statistical term to denote a process that generates less than 3.4 defects per million opportunities. This corresponds to a process performing at a quality level of 99.99967 percent.

• Indicates dramatic improvement levels, typically of more than 50 percent.

• Involves a distinct organizational infrastructure with a defined skill set, roles, and procedures.

• Is strongly linked to the bottom-line and the profitability of an organization.

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The history of Six Sigma

The Six Sigma methodology originated at Motorola in mid 1980s. The story goes that during one of the reviews Bob Galvin, the then CEO, remarked "Our quality stinks." This led Motorola to embark on the quality path known as Six Sigma. The existing basic principles and statistical methods employed in TQM and various quality engineering circles were combined with business and leadership principles to create a holistic management system. This resulted in staggering improvements in the quality level within a few years. Motorola won the inaugural Malcolm Baldridge National Quality Award in 1988. It was then that the world came to know about the secret of their success and thus was born the Six Sigma revolution. By the 1990s, leading corporations such as Texas instruments, Asea Brown Boveri, Allied Signal, Sony Corporation, and General Electric also embraced the methodology and reaped astonishing results. Since then, the legion of the Six Sigma embracing organizations has only grown and includes almost every corporation that one can put a finger on. By 2012, Google returned more than 31,000,000 results related to Six Sigma.

The key concepts of Six Sigma

There are certain key concepts that you need to understand in order to have a good grasp of Six Sigma. This section covers these key concepts.

Accuracy and precision

Accuracy refers to performance with respect to a defined value or target. The closer a value is to its target, the greater its accuracy will be.

Precision refers to the closeness or proximity between various data-points and their relationship to each other. In other words, precision is a measure of variation in measured data. The closer the data points are to each other, the greater the precision and the less the variation.

The following figure elucidates the difference further:

The accuracy of a measured set of data is indicated by measuring central tendency metrics such as the mean, mode, or the median. Variation is the voice of the process and is indicated by measures of dispersion such as Standard Deviation.

Y=f(x)

This equation is at the heart of Six Sigma. This simply indicates that Y or the outcome or effect of a process is a function of or dependent on various factors or causes, referred to as Xs. In other words, certain sets of inputs called X are transformed by a function, f, into an output called Y. The following table explains the relationship between Y and X.

Y	X
Dependent variable Output/result Effect Symptom Monitor	Independent variable Input/process Cause Problem Control

Instead of focusing on effects that would be akin to tackling symptoms rather than the root cause, the methodology stresses the identification and manipulation of underlying causes or Xs for these effects, Ys. The Y still needs to be monitored but Xs need to be controlled. This focus results in a sustained improvement with long terms benefits instead of superficial, flash-in-the-pan improvement with a risk of recurrence of the problem.

Focus on defects and variation

As mentioned earlier, Six Sigma is customer-centric. The term defect is used to denote instances or events that fail to deliver as per the requirements that are most critical to the customer, called critical to quality (CTQ). Every defect in the process has an adverse impact not only on the quality but also on the time the process takes to be both carried out and reworked. This results in an additional cost, which often goes unnoticed but impacts overall profitability. Any measurable event that may result in a defect is called an opportunity. A Six Sigma process technically implies 3.4 defects per million opportunities (DPMO) in that process.

The Six Sigma methodology also focuses on reducing variation in a given process. As seen in the following figure, the variation in the process reduces dramatically with the increase in Sigma level. A particular Sigma level indicates the distance between the target and the customer specification for the process, so the higher the Sigma level, the closer this will be. The target of a process is the value on which it is supposed to be centered.

A Six Sigma process implies that the process has been designed to be twice as good as the customer specification. Technically, it implies that the customer specifications are six standard deviations away from the process target. In other words, the variation is so low that six such processes can be accommodated within this gap between the process target and the specification limits. If we define defects as the outputs that fall out of the specification limits, we can see that as the sigma levels go up, there would be fewer chances of such defects being generated.

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Variation is inherent in all processes. It cannot be eliminated. We can only ensure that these variations are within our control. Six Sigma focuses on reducing variation to be within acceptable limits.

Here we can see the way the Sigma level and variation in a process relate to one another—as the Sigma level increases, the degree of variation decreases.

Exponential improvement

Six Sigma as a methodology can lead to exponential improvement (as we see in the previous image). As the Sigma level goes up, the scale of improvement goes up dramatically. The following two graphics also demonstrate how improvement dramatically increases along with the Sigma level:

Three Dimensions

Six Sigma has three dimensions to address all the requirements of a specific process—design, improvement, and management. It addresses all these dimensions with specific methodologies such as Design for Six Sigma (DFSS), DMAIC, and Process Management.

The DFSS approach is used when a defined process is not in place or no further significant improvement is possible in the process. In this case, we need to design a robust process afresh. The DMAIC approach is used to help an existing and defined process to perform at its optimal level and to meet customer requirements. Process management refers to the routine approach to ensure that the existing process operates at the current and sustainable levels. This book deals with the more popular DMAIC approach.

Advantages of Six Sigma

Six Sigma brings certain unique advantages such as:

• An emphasis on the identification of opportunities and elimination of defects according to the customer's requirements

• A focus on reducing process variation

• Addressing accuracy and consistency in a process

• Employing data and statistics to drive decisions

• Incorporating a comprehensive set of quality tools under a powerful framework

• Prescribing a company-wide cultural transformation to achieve sustained improvements