Understanding Six Sigma: Can You Explain It with a Real-Life Example?

Dear seniors,

Please explain the Six Sigma theory with an example.

Thanks.

I have a summary of the basic concept that you have to expand this theory depends on your knowledge depth and interpretation as well as understanding of the business model of your organization.

This requires a lot of experience and working knowledge of different processes to achieve a perfection level and a zero-defect system.

Six Sigma

Six Sigma is a statistical concept that measures a process in terms of defects. Achieving Six Sigma means your process is delivering only 3.4 defects per million opportunities. Sigma, the Greek letter, is a term in statistics that measures something called standard deviation. In its business use, it indicates defects in the output of a process and helps to understand how far the process deviates from perfection.

Key Terms

Process - Any repetitive action, be it in a transactional, manufacturing, or services environment. The Six Sigma methodology collects data on variations in outputs associated with each process so that it can be improved and those variations reduced.

Sigma - A term used in statistics to represent standard deviation, an indicator of the degree of variation in a set of measurements or a process.

Six Sigma - A statistical concept that measures a process in terms of defects. At the Six Sigma level, there are only 3.4 defects per million opportunities. Six Sigma is also a philosophy of managing that focuses on eliminating defects through practices that emphasize understanding, measuring, and improving processes.

Defects - A measurable characteristic of the process or its output that is not within the acceptable customer limit, i.e., not conforming to specification.

In short, Six Sigma is several things:

- A statistical basis of measurement: 3.4 defects per million opportunities.
- A philosophy and goal: as perfect as practically possible.
- A methodology.
- A symbol of quality.

Sigma Level Defects per Million (Process Capabilities) Opportunities
2 308537
3 66807
4 6210
5 233
6 3.4

Probability of defects of different Sigma levels.

Champion - A senior-level manager who promotes the Six Sigma methodology throughout the company and especially in specific functional groups. The champion understands the discipline and tools of Six Sigma, selects projects, establishes measurable objectives, serves as a coach and mentor, removes barriers, and dedicates resources in support of black belts. A champion "Own" the process by monitoring projects and measuring the savings realized.

Green Belt - Green belts assist black belts in their functional areas. They work on projects part-time, usually in a limited specific area.

Black Belt - A full-time change agent trained in the methodology to solve product and process defects project by project with financially beneficial results. A black belt does Six Sigma analyses and works with others (often teams) to put improvements in place.

Breakthrough Goals - A dramatic, near-immediate, and significant improvement, in measurement terms, reaching a breakthrough goal represents an improvement of 60% to 80%.

Meeting Stretch Targets - This is the concept of looking beyond meeting basic requirements and exceeding your expectations. When you understand that your defined goals are within reach, you need to shift your mindset to go further, to reach the highest, to stretch your capabilities.

Critical to Quality (CTQ) - An element of the process that significantly affects the output of that process. Identifying these elements is vital to figuring out how to make improvements that can dramatically reduce costs and enhance quality.

Six Sigma five-phase sequence of DMAIC {Define, Measure, Analyze, Improve, and Control}

Benchmarking - A method for comparing a process using standard or best practices as a basis and then identifying ways to improve the process.

Business Metric - A unit of measurement that provides a way to objectively quantify a process. Any measurement that helps management understand its operations might be a business metric, like the number of products completed per hour, percent of defects from a process, hours required to deliver a certain number of outputs, and so on. Business metrics provide data that Six Sigma managers can use to better understand their processes and identify target areas for improvement.

Means - Average (more specifically called the arithmetic mean), the sum of a series of values divided by the number of values.

Median - The mid-point in a series of values.

Mode - The value that occurs most often in a series of values.

Range - The difference between the highest value and the lowest value in a series, the spread between the maximum and minimum.

Standard Deviation - The average difference between any value in a series of values and the mean of all the values in that series.

I have sumnmary of the basic concep you have to expand this theory depends on your knowledge depth and interpretation as well as understanding of the business model of your organization.

This requires lot of experience and working knowledge of different processes to achieve perfection level and zero defect system.

SIX SIGMA

Six Sigma is a statistical concept that measures a process in terms of defects. Achieving Six Sigma means your process is delivering only 3.4 defects per million opportunities.
Sigma [the Greek letter ] is a term in statistics that measures something called standard deviation. In its business use, it indicates defects in the out put of a process and helps to understand how for the process deviates form perfection.

KEY TERMS-

PROCESS - Any repetitive action- be it in a transactional, manufacturing or services environment. The six sigma methodology collects data on variations in
out puts associated with each process. So that it can be improved and
those variations reduced.

SIGMA - A term used in statistics to represent standard deviation, an indicator of
the degree of variation in a set of measurements or a process.

SIX SIGMA - A statistical concept that measures a process in terms of defects- at the six sigma level, there are only 3.4 defects per million opportunities. Six
Sigma is also a philosophy of managing that focuses on eliminating defects through practices that emphasize understanding, measuring and improving process.

DEFECTS - A measurable characteristics of the process or its output that is not
within the acceptable customer limit i.e. not conforming to specification.


So in short, six sigma is several things:

• A statistical basis of measurement: 3.4 defects per million opportunities.
• A philosophy and goal: as perfect as practically possible.
• A methodology.
• A symbol of quality.

Sigma Level Defects per Million(Process Capabilities) Opportunities
2 308537
3 66807
4 6210
5 233
6 3.4

Probability of defects of different Sigma levels.

CHAMPION - A senior level manager who promotes the six sigma methodology
throughout the company and especially in specific functional groups. The champion understands the discipline and tools of six sigma, selects projects, establishes measurable objectives, serves as coach and mentor, removes barriers and dedicates resources in support of black belts. A champion “Own” the process-monitoring projects and measuring the savings realized.

GREEN BELT - Green belt assist black belts in their functional areas. They work on project part time, usually in a limited specific area.

BLACK BELT - A full time change agent trained in the methodology to solve product and process defects project by project with financially beneficial results. A black belt does Six Sigma analyses and work with others (Often teams) to put improvement in place.

BREAKTHROUGH GOALS- A dramatic, near immediate and significant
improvement, in measurement terms, reaching a breakthrough goal represents an improvement of 60% to 80%.

MEETING STREACH TARGETS- is concept of looking beyond meeting basic requirements and exceeding your own expectation, when you understand that your defined goals are within reach, you need to shift your mind set to go further, to reach highest, to stretch your capabilities.

CRITICAL TO QUALITY-[CTQ] Element of process that significantly affects the out put of that process. Identifying these elements is vital to figuring out how to make the improvements that can dramatically reduce costsand enhance quality.
Six Sigma five phase sequence of DMAIC {Define, Measure, Analyze,
Improve and Control}

BENCHMARKING- A method for comparing a process, using standard or best
practices as a basis, and then identifying ways to improve the process.

BUSINESS METRIC- A unit of measurement that provides a ways to objectively quantify a process. Any measurement that helps management
understand its operations might be a business metric:
- Number of products completed per hour.
- Percent of defects from a process.
- Hours required to deliver a certain number of out puts or provide a service, and so on.
Business metrics provides data that Six Sigma managers can use to better understand their processes and identify target areas for improvement.
Means- Average[ More specifically called the arithmetic mean] the sum of series ofvalues divided by the number of values.
Median- Mid point in a series of values.
Mode- Value that occurs most often in a series of values.
Range-Difference between the highest value and the lowest value in a series, the
spread between maximum and minimum.

STANDARD DAVIATION- Average difference between any value in a series of values and the means of all the values in that series.

Badlu

Just to add to this -

Six Sigma has two methodologies:

1. DMAIC (Define, Measure, Analyze, Improve, and Control) - most of the time used - it is used when a product or process is in existence at the company but is not meeting customer specifications or is not performing adequately.

2. DFSS (Design for Six Sigma) - used to design or redesign a product or process for service from the ground up - an approach used to design a new product.

Regards, Nikita

I would just add a little to SIX SIGMA.

This term is used in process industries' instrumentation, where failure may cause a huge loss or even a catastrophe. Thus, in the process industry, redundancy is maintained. Now, the manufacturers produce instruments which they call "SIX SIGMA INSTRUMENTS" to measure the process variables like level, pressure, temperature, flow, etc., and control the required value or the set points and manage them... :confused:

Regards -:icon1:-.

Can you please explain how Six Sigma and HR are related? Isn't it a term widely used in operations/production?

Dear Sjijit,

Six Sigma is an improvement process that can be applied to any process that requires enhancement, whether it be in production or transactions. Many IT companies, insurance, and banking sectors utilize the DMAIC methodology to improve their results. Various HR processes such as payroll, cost reductions, appraisal systems, and employee retention processes have been enhanced with Six Sigma. In short, wherever there is a process, you can apply Six Sigma.

Regards, Jayaram.

Six Sigma can be applied to HR as well. Let me give you an example - one of the Six Sigma projects could be to reduce the lead time of recruitment, improve the quality of shortlistings, etc. These are just a few examples. It can very well be applied to performance management, competencies, etc. as well.

Regards, Nikita

Dear All,

It was a nice input by Nikita and Badlu on Six Sigma. I have also heard that Six Sigma is a certificate course. So, in which sector should guys pursue the same? Secondly, it is project-oriented as well. Can you guys provide examples of Six Sigma implementations for a clearer picture?

Thanks & regards,
Shruti
CMS HR

Six Sigma is not limited to any sector. Individuals belonging to any sector - IT, Engineering, Production, etc. - can implement Six Sigma to improve their processes. It is a certificate course involving examinations and project work.

I know of one organization that provides training in Six Sigma - BMG International. You can check their website: [Lean Six Sigma and Innovation for Performance Excellence by Breakthrough Management Group International](http://www.bmgi.com).

Regards,
Nikita

Hi Shruti,

Please find attached a tiny document on Six Sigma.

Regards,
Vipin

Hi,

Firstly, thanks to Nikita & Vipin. Can you provide an example of Six Sigma implementation, or can anyone currently working on a project offer assistance?

Secondly, is there a way to access a list of all companies that are currently implementing Six Sigma?

Thanks & regards,
Shruti
CMS HR

I have completed a project in Six Sigma titled "Reducing the lead time in recruitment." This project was a part of our Six Sigma Green Belt certification course.