Six Sigma & Organizational Goal- Six Sigma is defined as a methodology that aims at a quasi-perfect production process. In the design phase of any process, the customers’ needs and expectations are identified and translated into Critical-To-Quality (CTQ) characteristics. These characteristics are put into the products’ design so as to manufacture or deliver it consistently and economically.
Continuous Improvement
Continuous improvement involves constantly identifying and eliminating the causes that prevent a system or process from functioning at its optimum level. The concept of continuous improvement originated in Japan in the 1970s. It was adopted in many countries, including the U.S.A., in the early 1980s. Continuous improvement—and consequent customer satisfaction—is the principle on which the concept of Lean manufacturing is developed.
Six Sigma History
The history of six sigma encompassed various events that shaped its formation and spread. Six Sigma has evolved over time. It’s more than just a quality system like TQM or ISO. The events for six sigma evolution areas:
- Carl Frederick Gauss (1777-1855) introduced the concept of the normal curve.
- Walter Shewhart in 1920s showed that three sigmas from the mean is the point where a process requires correction.
- Following the defeat of Japan in World War II, America sent leading experts including Dr. W. Edwards Deming to encourage the nation to rebuild. Leveraging his experience in reducing waste in U.S. war manufacture, he offered his advice to struggling emerging industries.
- By the mid-1950s, he was a regular visitor to Japan. He taught Japanese businesses to concentrate their attention on processes rather than results; concentrate the efforts of everyone in the organization on continually improving imperfection at every stage of the process. By the 1970s many Japanese organizations had embraced Deming’s advice. Most notable is Toyota which spawned several improvement practices including JIT and TQM.
- Western firms showed little interest until the late 1970s and early 1980s. By then the success of Japanese companies caused other firms to begin to re-examine their own approaches and Kaizen began to emerge in the U.S.
- Many measurement standards (Zero Defects, etc.) later came on the scene but credit for coining the term “Six Sigma” goes to a Motorola engineer named Bill Smith. (“Six Sigma” is also a registered trademark of Motorola). Bill Smith, along with Mikel Harry from Motorola, had written and codified a research report on the new quality management system that emphasized the interdependence between a product’s performance in the market and the adjustments required at the manufacturing point.
Various models and tools emerged which are:
- Kaizen – It refers to any improvement, one-time or continuous, large or small
- TQM – It is Total Quality Management with Organization management of quality consisting of 14 principles
- PDCA Cycle – Edward Deming’s Plan Do Check Act cycle
- Six Sigma – It is designed to improve processes and eliminate defects; includes the DMAIC and DMADV models inspired by PDCA
Value of Six Sigma
Six sigma is not about quality for the sake of quality; it is about providing better value to customers, investors and employees.
Mathematical Six Sigma
The term ‘Six Sigma’ is drawn from the statistical discipline ‘process capability studies’. Sigma, represented by the Greek alphabet ‘σ’, stands for standard deviation from the ‘mean’. ‘Six Sigma’ represents six standard deviations from the ‘mean.’
Business processes
A business process or a process is a group of tasks that result in a specific service or product for customers. It can be visualized with a flowchart or a process matrix. Business processes are fundamental to every company’s performance and implement a business strategy. Understanding and optimizing the business process is the crux of six sigma.
Business System
A business system is a group of business processes that combine to form a single and identifiable unit of business as a whole. It is composed of processes, which in turn are composed of sub-processes and which are further composed of individual tasks.
Process Control
Feedback received from the process is used for process control thus, focusing on the input and output of the process for data collection. Every sub-process or task act as an input to the next task or as output for the previous one.
Six Sigma Green Belt’s Responsibilities
A Six Sigma Green Belt has nearly identical responsibilities as a Black Belt when it comes to projects but they work on less complex challenges or problems than the Black Belt professionals. There are no dedicated Green Belt practitioners in any organization as, most Green Belts retain the positions they had prior to being trained in Six Sigma and use the new skills to improve their working environment and performance.
DMAIC
DMAIC (an abbreviation for Define, Measure, Analyze, Improve and Control) refers to a data-driven improvement cycle used for improving, optimizing and stabilizing business processes and designs. The DMAIC improvement cycle is the core tool used to drive Six Sigma projects. However, DMAIC is not exclusive to Six Sigma and can be used as the framework for other improvement applications.
Define – The purpose of this step is to clearly articulate the business problem, goal, potential resources, project scope and high-level project timeline. This information is typically captured within project charter document. Write down what you currently know. Seek to clarify facts, set objectives and form the project team. Define the following:
- A problem
- The customer(s)
- Voice of the customer (VOC) and Critical to Quality (CTQs) — what are the critical process outputs?
- The target process subject to DMAIC and other related business processes
- Project targets or goal
- Project boundaries or scope
- A project charter is often created and agreed upon during the Define step.
Measure – The purpose of this step is to objectively establish current baselines as the basis for improvement. This is a data collection step, the purpose of which is to establish process performance baselines. The performance metric baseline(s) from the Measure phase will be compared to the performance metric at the conclusion of the project to determine objectively whether significant improvement has been made. The team decides on what should be measured and how to measure it. It is usual for teams to invest a lot of effort into assessing the suitability of the proposed measurement systems. Good data is at the heart of the DMAIC process:
- Identify the gap between current and required performance.
- Collect data to create a process performance capability baseline for the project metric, that is, the process Y(s) (there may be more than one output).
- Assess the measurement system (for example, a gauge study) for adequate accuracy and precision.
- Establish a high level process flow baseline. Additional detail can be filled in later.
Analyze – The purpose of this step is to identify, validate and select root cause for elimination. A large number of potential root causes (process inputs, X) of the project problem are identified via root cause analysis (for example a fishbone diagram). The top 3-4 potential root causes are selected using multi-voting or other consensus tool for further validation. A data collection plan is created and data are collected to establish the relative contribution of each root causes to the project metric, Y. This process is repeated until “valid” root causes can be identified. Within Six Sigma, often complex analysis tools are used. However, it is acceptable to use basic tools if these are appropriate. Of the “validated” root causes, all or some can be
- List and prioritize potential causes of the problem
- Prioritize the root causes (key process inputs) to pursue in the Improve step
- Identify how the process inputs (Xs) affect the process outputs (Ys). Data is analyzed to understand the magnitude of contribution of each root cause, X, to the project metric, Y. Statistical tests using p-values accompanied by Histograms, Pareto charts, and line plots are often used to do this.
- Detailed process maps can be created to help pin-point where in the process the root causes reside, and what might be contributing to the occurrence.
Improve – The purpose of this step is to identify, test and implement a solution to the problem; in part or in whole. Identify creative solutions to eliminate the key root causes in order to fix and prevent process problems. Use brainstorming or techniques like Six Thinking Hats and Random Word. Some projects can utilize complex analysis tools like DOE (Design of Experiments), but try to focus on obvious solutions if these are apparent.
- Create innovative solutions
- Focus on the simplest and easiest solutions
- Test solutions using Plan-Do-Check-Act (PDCA) cycle
- Based on PDCA results, attempt to anticipate any avoidable risks associated with the “improvement” using FMEA
- Create a detailed implementation plan
- Deploy improvements
Control – The purpose of this step is to sustain the gains. Monitor the improvements to ensure continued and sustainable success. Create a control plan. Update documents, business process and training records as required.
A Control chart can be useful during the Control stage to assess the stability of the improvements over time by serving as 1. a guide to continue monitoring the process and 2. provide a response plan for each of the measures being monitored in case the process becomes unstable.
Cost of Quality (COQ)
In process improvement efforts, quality costs or cost of quality is a means to quantify the total cost of quality-related efforts and deficiencies. It was first described by Armand V. Feigenbaum in a 1956 Harvard Business Review article.
Prior to its introduction, the general perception was that higher quality requires higher costs, either by buying better materials or machines or by hiring more labor. Furthermore, while cost accounting had evolved to categorize financial transactions into revenues, expenses, and changes in shareholder equity, it had not attempted to categorize costs relevant to quality, which is especially important given that most people involved in manufacturing never set hands on the product. By classifying quality-related entries from a company’s general ledger, management and quality practitioners can evaluate investments in quality based on cost improvement and profit enhancement
Feigenbaum defined the following quality cost areas
| Cost area | Description | Examples | |
|---|---|---|---|
| Costs of control (Costs of conformance) | Prevention costs | Arise from efforts to keep defects from occurring at all |
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| Appraisal costs | Arise from detecting defects via inspection, test, audit |
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| Costs of failure of control (Costs of non-conformance) | Internal failure costs | Arise from defects caught internally and dealt with by discarding or repairing the defective items |
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| External failure costs | Arise from defects that actually reach customers |
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Organizational Driver and Metric
Organizational drivers are the highest level of measure in a business process and are strongly linked to the strategic goals of an organization. If the key drivers of an organization are achieved, the organization can be considered to have achieved its overall goal set for that period. Organizational goals are usually defined for a three to five year time frame. Organizational drivers are usually business level metrics, such as financial and performance measures. They can be customer, market, product, and/or supplier related, and form the backbone of any business effort to improve customer, operational, and financial performance.
A metric is that which determines an organization’s behavior and performance. Performance metrics measure an organization’s activities and performance. It should support a range of stakeholder needs from customers, shareholders to employees. While traditionally many metrics are finance based, inwardly focusing on the performance of the organization, metrics may also focus on the performance against customer requirements and value. In project management, performance metrics are used to assess the health of the project and consist of the measuring of seven criteria: safety, time, cost, resources, scope, quality, and actions. In call centres, performance metrics help capture internal performance and can include productivity measurements and the quality of service provided by the customer service advisor. These metrics can include: Calls Answered, Calls Abandoned, Average Handle Time and Average Wait Time.
A balanced scorecard (BSC) is a strategic performance management framework for measuring the impact of strategic decisions across all organizational drivers of an organization.
Voice of the customer (VOC) is a term used in business and Information Technology (through ITIL, for example) to describe the in-depth process of capturing a customer’s expectations, preferences and aversions. Specifically, the Voice of the Customer is a market research technique that produces a detailed set of customer wants and needs, organized into a hierarchical structure, and then prioritized in terms of relative importance and satisfaction with current alternatives. Voice of the Customer studies typically consist of both qualitative and quantitative research steps. They are generally conducted at the start of any new product, process, or service design initiative in order to better understand the customer’s wants and needs, and as the key input for new product definition, Quality Function Deployment (QFD), and the setting of detailed design specifications.
Organizational Goals
Organization goals are those ends that an organization seeks to achieve by its existence and operation. Goals are predetermined and describe future results toward which present efforts are directed.
It is the overall objectives, purpose and mission of a business that have been established by its management and communicated to its employees. The organizational goals of a company typically focus on its long range intentions for operating and its overall business philosophy that can provide useful guidance for employees seeking to please their managers.
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