Define Six Sigma With Example Information Technology Essay

The quality performance is the foundation stone of all types of industries. The growth of an industry depends on its performance quality. So checking out of the performance quality of an industry is something which is inevitable. SIX SIGMA – The statistical representation, is a process of quality measurement, which helps the organization in the improvement of their quality.

Six Sigma is a systematical process of “quality improvement through the disciplined data-analyzing approach, and by improving the organizational process by eliminating the defects or the obstacles which prevents the organizations to reach the perfection”.

Six sigma points out the total number of the defects that has come across in an organizational performance. Any type of defects, apart from the customer specification, is considered as the defect, according to Six Sigma. With the help of the statistical representation of the Six Sigma, it is easy to find out how a process is performing on quantitatively aspects. A Defect according to Six Sigma is nonconformity of the product or the service of an organization.

Since the fundamental aim of the Six Sigma is the application of the improvement on the specified process, through a measurement-based strategy, Six Sigma is considered as a registered service mark or the trade mark. Six Sigma has its own rules and methodologies to be applied. In order to achieve this service mark, the process should not produce defects more than 3.4. These numbers of defects are considered as “the rate of the defects in a process should not exceed beyond the rate 3.4 per million opportunities”. Through the Six Sigma calculation the number of defects can be calculated. For this there is a sigma calculator, which helps in the calculation.

Defination of Six Sigma:

Six Sigma stands for Six Standard Deviations (Sigma is the Greek letter used to represent standard deviation in statistics) from mean. Six Sigma methodology provides the techniques and tools to improve the capability and reduce the defects in any process.

A process with “Six Sigma” capability means having 12 standard deviations of process output between the upper & lower specification limits. Essentially, process variation is reduced so that no more than 3.4 parts per million fall outside of the specifications limits. The higher the sigma number, the better.

The “Six Sigma” term also refers to a philosophy, goal and/or methodology utilized to drive out waste and improve the quality, cost and time performance of any business. Six Sigma implementation is achieved through a series of successful projects. Process improvements and variation reduction are achieved through application of Six Sigma improvement projects, which in turn, are executed following either the DMAIC (Define, Measure, Analyze, Improve, Control) or DMADV (Define, Measure, Analyze, Design, Verify) methodologies. Black Belts & Green Belts are the key players in execution of Six Sigma improvement projects.

History of six Sigma:

Six Sigma originated as a set of practices designed to improve manufacturing processes and eliminate defects, but its application was subsequently extended to other types of business processes as well. In Six Sigma, a defect is defined as any process output that does not meet customer specifications, or that could lead to creating an output that does not meet customer specifications.

Bill Smith first formulated the particulars of the methodology at Motorola in 1986. Six Sigma was heavily inspired by six preceding decades of quality improvement methodologies such as quality control, TQM, and Zero Defects, based on the work of pioneers such as Shewhart, Deming, Juran, Ishikawa, Taguchi and others.

Like its predecessors, Six Sigma doctrine asserts that:

Continuous efforts to achieve stable and predictable process results (i.e., reduce process variation) are of vital importance to business success.

Manufacturing and business processes have characteristics that can be measured, analyzed, improved and controlled.

Achieving sustained quality improvement requires commitment from the entire organization, particularly from top-level management.

Features that set Six Sigma apart from previous quality improvement initiatives include:

A clear focus on achieving measurable and quantifiable financial returns from any Six Sigma project.

An increased emphasis on strong and passionate management leadership and support.

A special infrastructure of “Champions,” “Master Black Belts,” “Black Belts,” “Yellow Belts”, etc. to lead and implement the Six Sigma approach.

A clear commitment to making decisions on the basis of verifiable data, rather than assumptions and guesswork.

The term “Six Sigma” comes from a field of statistics known as process capability studies. Originally, it referred to the ability of manufacturing processes to produce a very high proportion of output within specification. Processes that operate with “six sigma quality” over the short term are assumed to produce long-term defect levels below 3.4 defects per million opportunities (DPMO). Six Sigma’s implicit goal is to improve all processes to that level of quality or better.

Six Sigma is a registered service mark and trademark of Motorola Inc. As of 2006[update] Motorola reported over US$17 billion in savings from Six Sigma.

Other early adopters of Six Sigma who achieved well-publicized success include Honeywell (previously known as AlliedSignal) and General Electric, where Jack Welch introduced the method. By the late 1990s, about two-thirds of the Fortune 500 organizations had begun Six Sigma initiatives with the aim of reducing costs and improving quality.

Six Sigma central concepts

First and simply, Six Sigma is a quality improvement methodology.

Six Sigma has also become a generic ‘brand’ for a set of concepts that many organizations have used, and continue to use, to improve quality, and to provide quality and performance improvement services and training.

In this respect Six Sigma has captured corporate imagination. Six Sigma is an immensely popular vehicle for initiating and supporting the process of organizational change. Six Sigma has become an industry in its own right. See the names of some of the major US organizations that have adopted Six Sigma in recent times.

Six Sigma is a very flexible concept: to an statistical engineer Six Sigma might be a production quality metric; to a customer service employee, or a CEO, Six Sigma can represent a corporate culture.

The expression Six Sigma was first used in the context of quality improvement by American Motorola engineers in the mid 1980’s.

Initially within Motorola Six Sigma was purely a quality metric that was used to reduce defects in the production of electronic components.

Six Sigma is therefore a methodology which requires and encourages team leaders and teams to take responsibility for implementing the Six Sigma processes. Significantly these people need to be trained in Six Sigma’s methods – especially the use of the measurement and improvement tools, and in communications and relationship skills, necessary to involve and serve the needs of the internal and external customers and suppliers that form the critical processes of the organization’s delivery chains.

Training is therefore also an essential element of the Six Sigma methodology, and lots of it. Consistent with the sexy pseudo-Japanese ‘Six Sigma’ name (Sigma is in fact Greek, for the letter ‘s’, and a long-standing symbol for a unit of statistical variation measurement), Six Sigma terminology employs sexy names for other elements within the model, for example ‘Black Belts’ and ‘Green Belts’, which denote people with different levels of expertise (and to an extent qualifications), and different responsibilities, for implementing Six Sigma methods.

Six Sigma teams and notably Six Sigma team leaders (‘Black Belts’) use a vast array of tools at each stage of Six Sigma implementation to define, measure, analyse and control variation in process quality, and to manage people, teams and communications.

When an organization decides to implement Six Sigma, first the executive team has to decide the strategy – which might typically be termed an improvement initiative, and this base strategy should focus on the essential processes necessary to meet customer expectations.

This could amount to twenty or thirty business process. At the top level these are the main processes that enable the organization to add value to goods and services and supply them to customers. Implicit within this is an understanding of what the customers – internal and external – actually want and need.

METHODS:

Six Sigma projects follow two project methodologies inspired by Deming’s Plan-Do-Check-Act Cycle. These methodologies, comprising five phases each, bear the acronyms DMAIC and DMADV.

DMAIC is used for projects aimed at improving an existing business process.

DMADV is used for projects aimed at creating new product or process designs.

DMAIC

The DMAIC project methodology has five phases:

Define the problem, the voice of the customer, and the project goals, specifically.

Measure key aspects of the current process and collect relevant data.

Analyze the data to investigate and verify cause-and-effect relationships. Determine what the relationships are, and attempt to ensure that all factors have been considered. Seek out root cause of the defect under investigation.

Improve or optimize the current process based upon data analysis using techniques such as design of experiments, poka yoke or mistake proofing, and standard work to create a new, future state process. Set up pilot runs to establish process capability.

Control the future state process to ensure that any deviations from target are corrected before they result in defects. Control systems are implemented such as statistical process control, production boards, and visual workplaces and the process is continuously monitored.

DMADV

The DMADV project methodology, also known as DFSS (“Design For Six Sigma”),

features five phases:

Define design goals that are consistent with customer demands and the enterprise strategy.

Measure and identify CTQs (characteristics that are Critical To Quality), product capabilities, production process capability, and risks.

Analyze to develop and design alternatives, create a high-level design and evaluate design capability to select the best design.

Design details, optimize the design, and plan for design verification. This phase may require simulations.

Verify the design, set up pilot runs, implement the production process and hand it over to the process owner(s).

In order to attain the fundamental objectives of Six Sigma, there are Six Sigma methodologies to be implemented. This is done through the application of Six Sigma improvement projects, which is accomplished through the two Six Sigma sub-methodologies. Under the improvement projects came the identification, selection and ranking things according to the importance. The major two sub-divisions of the improvement projects are the Six Sigma DMAIC and the Six Sigma DMADV. These sub-divisions are considered as the processes and the execution of these processes are done through three certifications. The three types of certifications used for the execution of the Six Sigma DMAIC and Six sigma DMADV are:

“Six Sigma Green Belts and Six Sigma Black Belts, which is overseen by Six Sigma Master Black Belts”.

Six Sigma Methodology :

It contains the principles which define Six Sigma as it stands. Understanding these principles can prove to make life very difficult for everyone involved, no matter how serious or trivial the matter may seem at first. If you take the time in your Six Sigma Training to check out practical applications and examples of how Six Sigma has been used or can be used, you’ll likely find many more benefits to the process than if you had gone through the process alone, with only definitions and ideas to rely on. Instead of explaining that Six Sigma offers data analysis and measurement that can lead to better solutions for various industries, you should figure out exactly how that concept could or would work in a specific industry.

For example, in the manufacturing industry, Six Sigma Projects can be created to increase productivity and reduce the number of defects that occur. After all, this is initially what Six Sigma was created to do. However, if you want to take it up a notch, consider Six Sigma Training in relation to customer service. You could use a Six Sigma Process to figure out a better customer flow for your business, as well as a more efficient means of handling customer complaints, or returns if you operate a store.

Six Sigma Training can ultimately be applied to just about any industry out there, as long as the proper rules are set up and the right analysis is done. Obviously you wouldn’t worry about product improvement in an industry that has no product per se, and so on. When it comes to choosing Six Sigma Projects, you shouldn’t just jump right in. You need to determine the problem that you’re trying to solve, and then figure out how that problem affects your company or organization. Once you have done that, you need to determine if a data based factual analysis would help to derive a solution to the aforementioned problem. If it would, then Six Sigma Projects are right for the job. If not, you’ll have to find another problem solving technique to use.

The great thing about the practical application of Six Sigma is that it’s never the same thing twice. Some people only use certain tools or parts of the Six Sigma Process in their process improvement projects, while others will use it by the book on a regular basis to get the most from their process improvement. It does offer a structured answer to process improvement, but it is still flexible enough to be what you need it to be.

Quality management tools and methods used in Six Sigma

Within the individual phases of a DMAIC or DMADV project, Six Sigma utilizes many established quality-management tools that are also used outside of Six Sigma. The following table shows an overview of the main methods used.

5 Whys

Analysis of variance

ANOVA Gauge R&R

Axiomatic design

Business Process Mapping

Catapult exercise on variability

Cause & effects diagram (also known as fishbone or Ishikawa diagram)

Chi-square test of independence and fits

Control chart

Correlation

Cost-benefit analysis

CTQ tree

Quantitative marketing research through use of Enterprise Feedback Management (EFM) systems

Design of experiments

Failure mode and effects analysis (FMEA)

General linear model

Histograms

Homoscedasticity

Quality Function Deployment (QFD)

Pareto chart

Pick chart

Process capability

Regression analysis

Root cause analysis

Run charts

SIPOC analysis (Suppliers, Inputs, Process, Outputs, Customers)

Stratification

Taguchi methods

Taguchi Loss Function

TRIZ

The Six Sigma ensures the quality control, total quality management and zero defects. Through the implementation of the Six Sigma it is made sure that the goals are set on the improvement of all processes to reach the level of better quality. “The Six Sigma” shows the organization’s ability of highly capable processing in producing the outputs within the limited specifications. Therefore it can be said that the processes that operates with the Six Sigma quality, is able to produce a quality products at a low rate of defects.When a process attains the certification of Six Sigma quality, it is clear that the organization has attained the standard deviations form the means of the production till the specific limitations, and so can make sure that there is no room for the items to fail to meet the specifications. Altogether we can consider the Six Sigma as the professionalizing of the quality management functions

Symbol used for six sigma ()

Six Sigma is a business management strategy originally developed by Motorola, USA in 1981 As of 2010[update], it enjoys widespread application in many sectors of industry, although its application is not without controversy.

Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization (“Black Belts”, “Green Belts”, etc.) who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified targets. These targets can be financial (cost reduction or profit increase) or whatever is critical to the customer of that process (cycle time, safety, delivery, etc.).

Sigma levels

A control chart depicting a process that experienced a 1.5 sigma drift in the process mean toward the upper specification limit starting at midnight. Control charts are used to maintain 6 sigma quality by signaling when quality professionals should investigate a process to find and eliminate special-cause variation

To increase your organization’s process-sigma level, you must decrease the amount of variation that occurs. Having less variation gives you the following benefits:

• Greater predictability in the process.

• Less waste and rework, which lowers costs.

• Products and services that perform better and last longer.

• Happier customers who value you as a supplier.

The simple example below illustrates the concept of Six Sigma. Note that the amount of data in this example is limited, but it serves to describe the concept adequately. Two companies deliver pizza to your house. You want to determine which one can better meet your needs.

You always want your pizza delivered at 6 p.m. but are willing to tolerate a delivery anytime between 5:45 p.m. and 6:15 p.m. In this example, the target is 6 p.m. and the customer specifications are 5:45 p.m. on the low sideand 6:15 p.m. on the high side.

There are several areas in which Lean Six Sigma can be applied to manufacturing operations. Some examples are: 

a) Reduce quality defects (scrap/rework) in manufacturing processes.

b) Reduce manufacturing cycle time (time of order to delivery)

c) Improve employee efficiency (productivity)

d) Reduce finished goods inventory levels

e) Improve customer service performance scores

f) Reduce cost of manufacturing & assembly (supplier component costs)

g) Reduce maintenance costs (better processes)

h) Reduce warranty costs for products

i) Improve customer satisfaction scores

j) Reduce the cost of non quality

k) Reduce non-value added activities (manufacturing steps)

l) Improve equipment utilization (improve throughput)

m) Reduce work-in-process inventories between processes

n) Improve inspection procedures (sampling techniques)

o) Reduce time to meet customer requirements

p) Reduce time to develop new products (manufacturing related)

q) Improve workplace organization

r) Improve process stability / control

s) Reduce variation in manufacturing quality

t) Standardize workplace

u) Deploy process flow concepts

v) Improve employee engagement scores

w) Improve product performance by controlling critical features

x) Improve planning & forecasting of demand (supply chain issues)

y) Reduce the amount of obsolete inventory

z) Improve related transactional processes: accounting, human resources, purchasing etc.

Some of these projects are more suited for Six Sigma type projects, others are Lean type projects / processes, and some may require both Lean and Six Sigma toolkits.

To understand the applications of Six Sigma in companies that carry out projects, let us take example of construction industry:

In construction industry, Six Sigma usage can be understood with following points:

Recurring problems exist at each stage of construction. When I say recurring, it means recurring for the company (may not be recurring for individual projects)

If you study a construction project, it comprises of large number of individual processes ranging from soil testing to landscaping to structural designs to foundations, superstructure, interiors and exteriors. There are a whole lot of purchase and logistic processes as well.

A good number of these processes are common to all projects. If processes and their linkages were robust many of the individual problems would not occur at the first place. The remaining can be reduced.

The idea in Six Sigma is about making the processes robust ( so that the results are right the first time, every time)

Not all processes are equally important. Processes that matter are those that relate closely to pain areas (for customers/ management). These processes need improvement.

In each project, individual project managers, site engineers face a whole lot of problems that they solve. These problems do get solved in the project (after they have caused a delay or cost in the specific project). Normally there is no mechanism to aggregate learning from the experiences of these managers and use it for process improvement. Also companies do not have structured mechanism to use tried and tested techniques to eliminate or reduce such issues in future projects.

To be able to study and improve management systems one needs a structured improvement approach provided by Six Sigma

Six Sigma provides tried and tested techniques for a team based approach which converts each problem area into an individual “improvement project”

When processes improve, there is a reduction in problems and defects.

Primary defects in construction industry (and most of the project driven industries) are DELAY, REWORK and COST OVERRUNS and Six Sigma can be used to reduce any of these defects.

Examples of Six Sigma implementation in Finance and Banking

Common Six Sigma projects identified in Finance and Banking are listed below.

Improving customer feedback and response processes

Reducing documentation errors 

Improving the reconciliation processes. 

Reducing response delays.

Reducing or eliminating invoicing errors

Eliminating the possibility of erroneous data entry

Reducing audit non conformities. 

Reducing salary issue turn around time

Control spending over time

Reduce electronic financial transaction costs.

Reducing complaints. 

Enhancing (internal or external) customer satisfaction

Example Lean Six Sigma Projects in IT

 Lean and Six Sigma can be used in IT in several areas:

a) Improve quality (bug-free) of the IT product/service.

b) Reduce the cost of service (minimize non-value added costs)

c) Improve utilization of servers and other hardware resources

d) Reduce the time to deliver products & services (project management)

e) Improve workplace organization (including emails etc)

f) Improve employee productivity

g) Improve customer satisfaction scores

h) Ensure products are robust to customer usage

i) Improve sales & marketing activities

j) Reduce setup times for product features

Six sigma and quality management glossary

Many of these terms are very specifically related to Six Sigma. Others are used in a general ‘quality management’ context and also in Six Sigma. As already explained, Six Sigma tends to embrace many other methodologies. A few of these terms are quite technical since they occur in the statistical, engineering and mathematical aspects of Six Sigma. The more complex mathematical terms and acronyms are included in this glossary not to provide detailed explanations, but instead to enable initial recognition and a basis for further investigation, if you are so inclined. This small glossary is not exhaustive because it would take about ten years to compile an exhaustive Six Sigma and Quality Management glossary. This is just a few highlights, some points of clarification, words of warning, items of mild amusement, and terms of special note. The really obvious STBO terms have not been included. If you need a more detailed listing try the one on the isixsigma website which could keep you occupied for days. If you wish to nominate an item of Six Sigma or Quality Management terminology for inclusion here – especially an amusing or intriguing example – please send to me. Despite being completely fascinating of course, Six Sigma is possibly is one of the driest subjects I’ve ever encountered and so will benefit from as much light relief as you can suggest.

acceptance, and acceptable quality level (ACL) – Acceptance has at least two different meanings in Six Sigma terminology, so be careful to understand which one is being referred to. Firstly, acceptance relating to quality is the quality expectation of the customer, internal or external. Acceptable Quality Level (ACL) means the same basically, in more formal Six Sigma-speak, and which will frequently be expressed in terms of percentage defects. Secondly acceptance refers to the buy-in or agreement of people affected by proposed actions and changes, notably stakeholders. While not strictly part of the Six Sigma battery of supporting tools, I can strongly recommend Sharon Drew Morgen’s facilitative communications concepts for anyone struggling with stakeholder acceptance (and wholesale organisational change as well for that matter.)

ANOVA, ANCOVA, MANOVA, MANCOVA – Despite first impressions these are nothing to do with Russion gymnastics or ice-skating moves. ANOVA is an acronym for analysis of variance, a specialised variation calculation method concerned with comparing means and testing hypotheses, best left to engineers and mathematicians. So are the related methods, ANCOVA (analysis of covariance), MANOVA (multiple analysis of variance), and MANCOVA (multiple analysis of covariance). Unless you are an engineer or a mathematician you will almost certainly have better things to do than get to grips with this level of statistical capability. Terms such as these illustrate why we need to work in multi-disciplined teams.

balanced scorecard – A sophisticated strategic analysis and improvement methodology developed by Kaplan and Norton which in its own right can sit outside Six Sigma, but which can be included within Six Sigma methods, and in any event might be used or referenced in the context of quality and performance improvement. black noise/white noise – Technical terms relating to respectively non-random and random causes of variation.

business improvement campaign – A Motorola Six Sigma buzz-phrase, which represents a leadership initiative to improve the business’s ‘big Y’s’.

business process management – A common generic expression in its own right, but also a Six Sigma term for the initial strategic element of Six Sigma. Six Sigma’s strategic first phase is designed to develop management’s commitment to Six Sigma, and also management’s active participation in the Six Sigma process (which suggests why a powerful brand name for the initiative, ie., Six Sigma, is helpful..).

cause-effect diagram – Also known as the fishbone diagram, this is a generally used tool for mapping and analysing causal factors towards an end output, so that contributing factors (and weaknesses can be more easily identified). Used especially in Six Sigma as a team brainstorming analysis tool. Called a fishbone diagram because the diagram plots contributing factors along parallel diagonal lines which each join a central horizontal time-line (like the back-bone) which culminates at one end with the main issue or question.

CTQ – Critical To Quality – An element within a process that has a major influence on the process quality, and typically the quality of a critical process, or it would be unlikely to be receiving Six Sigma attention.

defect – A vital and generic Six Sigma term for any failure in meeting customer expectation (internal and external customers) – any failure within the delivery process.

DFSS – Commonly used abbreviation in Six Sigma activities and communications, it means Design For Six Sigma, and describes the method of using tools, training, measurements, and verification so that products and processes are designed at the outset to meet Six Sigma requirements. A more specific version is DMADV: Define, Measure, Analyze, Design, and Verify

frequency distribution/frequency distribution analysis or checksheet – Frequency distribution and the checksheets and other frequency distribution measurement tools form an essential aspect of Six Sigma data analysis. Identifying frequency of variation in processes is central to Six Sigma, since customers are particularly sensitive to variation, arguably even more than isolated failures.

green belt – A Six Sigma team member who has received Green Belt training and who works part-time on Six Sigma projects under the guidance of a Black belt team leader.

just in time (JIT) – Just In Time, commonly abbreviated to JIT, describes operational or production methods based on minimising stock levels, the aim of which is to reduce capital employed in stock, which also has knock-on benefits to reducing storage space, decreasing dependence on logistics, easier supply chain management, and better overall quality. Just In Time is actually a capability arising from improvements within a business operation, rather than a cause of improvement itself.

master black belt – A highly qualified Six Sigma practitioner, typically concerned with overseeing Six Sigma activities from an organizational perspective.

materials requirements planning (MRP) – production quality management methodology focusing on planning stock (materials and components of all sorts) levels and availability according to production schedules.

pareto principle, pareto diagram, pareto analysis – The Pareto Principle is otherwise and more commonly known as the 80:20 rule. The Pareto Principle was named after its originator Vilfredo Pareto, (1848-1923) an Italian economist and professor of political economics at Lausanne University, who first discovered the 80:20 ‘rule’ of ‘predictable imbalance’, that (as far as Six Sigma is concerned) provides a basis for focusing on the 20% of activities that generate 80% of results, or the 20% of failures that are responsible for 80% of the waste, etc. Pareto first made his discovery while analysing wealth distribution among the British, in 1897.

CONCLUSION:

Hence the fundamental aim of the Six Sigma is the application of the improvement on the specified process, through a measurement-based strategy, Six Sigma is considered as a registered service mark or the trade mark. . Six Sigma has its own rules and methodologies to be applied. . Also six sigma ,the statistical representation, is a process of quality measurement, which helps the organization in the improvement of their quality.