What is Six Sigma?
Six Sigma is a methodology that allows companies to drastically improve their bottom line by designing and monitoring everyday business activities in ways that minimize waste and resources while increasing profits and customer satisfaction. Six Sigma guides companies into making fewer mistakes in everything they do - from filling out a purchase order to manufacturing airplane engines - eliminating lapses in quality at the earliest possible occurrence. Quality-control programs have focused on detecting and correcting commercial, industrial, and design defects. Six Sigma encompasses something broader: it provides specific methods to re-create the process so that defects and errors never arise in the first place.
In order to perform such activities, Six Sigma Belts must be trained on different methodologies and tools which are required to successfully complete improvements projects and to enable companies to invest in a long-term sustainable strategy that will keep them ahead of the competition.
The Origins of Six Sigma
The quest to achieve Six Sigma had its birth at Motorola in 1979 when executive Art Sundry stood up at a management meeting and proclaimed, "The real problem at Motorola is that our quality stinks!". Sundry's proclamation sparked a new era within Motorola and led to the discovery of the crucial correlation between higher quality and lower development cost in manufacturing products of all kinds.
At a time when most American companies believed that quality costs money, Motorola realized that done right, improving quality would actually reduce costs. They believed that high-quality products should cost less to produce, not more. At the time, Motorola was spending 5 to 10 percent of annual revenues, and in some cases as much as 20 percent of revenues, correcting poor quality. That translated into a whopping $800 million to $900 million each year, money that, with higher-quality processes, could be returned directly to the bottom line,
At Motorola, executives began looking for ways to cut waste while Mikel Harry and Bill Smith, two engineers at Motorola, were quietly working behind the scenes studying the correlation between a product's field life and how often that product had been repaired during the manufacturing process. In 1985, they presented a paper that concluded that if a product was found defective and corrected during the production process, other defects were bound to be missed and found later by the customer during early use of the product. However, when the product was manufactured error-free, it rarely failed during early use by the customer.
Although Smith's findings were initially greeted with skepticism, customer dissatisfaction with a product that failed shortly after it had been purchased was very real. As a result, Smith's findings ignited a fierce debate within Motorola. Was the effort to achieve quality really dependent on detecting and fixing defects? Or could quality be achieved by preventing defects in the first place through manufacturing controls and product design? Later data would show that a concerted effort at detecting and fixing defects would lead Motorola only to four sigma - placing it only slightly ahead of the average American company.
As a result, Motorola began its quest to improve quality, and simultaneously reduce production time and costs, by focusing on how the product was designed and made.
It was this link between higher quality and lower cost that led to the development of Six Sigma - and initiative that at first focused on improving quality through the use of exact measurements to anticipate problems areas, not just react to them. In other words, Six Sigma would allow a business leader to be proactive, rather than reactive, to quality issues.
As Motorola saw a reduction in defects and in manufacturing time, the company also began to reap financial rewards from the Six Sigma concept. In other words, the company had higher-quality products and happier customers at a cheaper cost. Within four years, Six Sigma had saved the company $2.2 billion. By 1993, Motorola was operating at nearly six sigma in many of its manufacturing operations, which translates into producing 3.4 defects every million opportunities. Within a short time, Six Sigma began to spread like wildfire to other industries - and beyond manufacturing divisions alone.
HOW IT WORKS
To achieve Six Sigma performance in a process there are five fundamental steps or stages that must be completed. The application of this method is called "Breakthrough Strategy", which enables companies and teams navigate through the complexities of their processes and improve their capability with specific tools and statistical analysis.
Define the problem and the scope of the project.
Establish standards and control methods to sustain the improvements in the long-term.
Collect relevant data to measure the gap between the current and ideal performance
Determine and implement optimum settings for the key process inputs.
Analyze the process to identify cause-effect relationships and vital few root causes.