I run a website dedicated to exploring Six Sigma. Since there are very few articles covering this subject here I hope I could bring in some value by posting a series of articles further discussing the topic. I'll start with the Lean and Six Sigma combination since it seems a very nice fit to many organizations and businesses.

Six Sigma is a business strategy first introduced by Motorola in 1986 (and arguably most popularized by GE) that aims to increase a company’s profitability by improving its business processes. While many other business philosophies often claim to be doing the exact same thing, Six Sigma distinguished itself with its approach to eliminating variances that bleed away a company’s profitability.

The Six Sigma methodology (DMAIC and DMADV) emphasizes on the fact that a business’s quality and output can be improved by changing the process within the company to such a point that errors or mistakes within the processes are minimized or outright eliminated. The degree of efficiency that Six Sigma requires is that, out of a million outputs (products manufactured, services rendered), only 3.4 will turn out defective. This translates to roughly 99.999966% error free operations (here's a Six Sigma calculator to help you calculate your own Sigma Level!). In case this seems like an impossible goal I'm immediately prepared to give an example with an industry that has achieved an even bigger Sigma rate - Airplane safety.

Then there is Lean. It's a concept of eliminating wastes and is oftentimes called lean manufacturing (or management) which when combined with the Six Sigma approach is called by most Lean Six Sigma, or Six Sigma Lean or more accurately Lean AND Six Sigma - since they are still two distinctively different methodologies, that are simply used in conjucntion. Lean eliminates waste, Six Sigma improves the process.

There are various different Six Sigma tools used to improve the process. One however must first get Six Sigma training and then pass a Six Sigma certification test to become one of the main Six Sigma belt levels:

  • Six Sigma Yellow Belt - the beginner level, which will give you basic skills to use the Six Sigma tools,
  • Six Sigma Green Belt - the next level that would allow you to run your own projects,
  • Six Sigma Black Belt - becoming a superviser for Six Sigma projects and
  • Six Sigma Master Black Belt - the head of the management.

As we all know mistakes within the process do cost a company a hefty sum: companies lose out between 20-30% of profits merely because of an error, a mistake within the organization, a product recall, or an inefficient system or a customer complaint. The goal is to create quality control measure that help businesses create outputs that are high in quality and satisfy customer/client demand beyond reproach.

As mentioned earlier Lean is a management technique that seeks to eliminate wastes within a process or operation in order to increase quality. There are eight “wastes” that a company has to look out for, namely:

  • Overproduction: making more than what the customers demand.

  • Over processing: adding perceived value to a product that doesn’t need it.

  • Waiting: for resources, people, approvals, etc. Loss of time.

  • Transportation: Movement of products during or after production.

  • Defects: Error, non compliance of products.

  • Rework and Scraps: products not meeting specifications that have to be reworked marked down or reprocessed.

  • Motion: usually about people, document searching, etc.

  • Inventory: Buffer stock or other resources, which could include people

  • Unused Creativity: Employee’s knowledge and skills that are untapped by the company.

When a company operates within set parameters and targets, it in turn produces quality. When its output falls below or beyond the target, this could be a considered a defect/waste/mistake and this is what the Lean principle seeks to avoid.

The slant towards manufacturing jargon may be attributed to the origins of Six Sigma. It was originally conceptualized within the Motorola offices, and was a response to the upper-echelon’s critical observation of Motorola’s lackluster bottom line. Thus the Six Sigma was born, and was first implemented back in 1986.

Many companies have seen the virtue of the system set up by Motorola, and have since implemented the Six Sigma within their companies. Some of the earliest adherents to Six Sigma (excluding Motorola, or course) were General Electric and Bank of America. The integration was so successful, that at present, most of the Fortune 500 companies are using the Six Sigma methodology (DMAIC and DMADV) within their companies.

I'll be posting more articles soon, exploring in-depth topics about Six Sigma, the tools it uses, some real-world examples, etc. So stay tuned I guess! :)

Tags: six sigma