Definition – What is Six Sigma?

Six Sigma is a framework that was designed to eliminate waste and improve the customer experience. It was introduced to our mainstream business culture in the 1980’s when Bill Smith, an engineer for Motorola, first introduced the concept.

The smart guy will outsmart himself. The lucky guy will run out of luck. The money guy will never have the desire. But hard work will take you anywhere you want to go.Bill Smith

Today, according to many business development experts, Six Sigma is the most popular quality improvement methodology in history. It is used worldwide across a diverse range of organizations including nonprofits, prisons, hospitals, banks, and corporations. The article will look more closely at what Six Sigma is, what the benefits are of using it, and how businesses can successfully implement it.

What is Six Sigma?

six sigma photo

So what does it mean to be a Six Sigma organization?  If you are running a Six Sigma organization, then for every million opportunities there are no more than 3.4 inefficiencies. In other words, it demands results that are close to perfection.

If this sounds extreme or unrealistic to you then consider the alternatives. If a business was operating at a Three Sigma level, this would mean that for every million opportunities there would be 66,807 defects.

Or to put it another way, if a pharmacy operated at a Three Sigma level this would mean that there would be 54,000 incorrect drug prescriptions every year. At a Six Sigma level, that same pharmacy would have three incorrect drug prescriptions each year.

The ultimate goal is to improve the experience for the customer by eliminating variation. Variation is simply deviating from what the customer expects and it can cause your customers to quickly lose faith in your company. Variation tells your customers that you are inconsistent and don’t deliver predictable results.

DMAIC

Six Sigma is usually accomplished by implementing the basic methodology DMAIC. DMAIC stands for define, measurement, analysis, improvement, and control and it has helped many businesses get rid of waste.

  • Design: During this phase, your team will clearly outline what the problem is. You will also decide on a goal and evaluate all the tools and resources available to you.
  • Measurement: Next your team will look more closely at the process that is already in place and measure its performance. By evaluating how the process is performing you will have a better idea of what improvement is needed.
  • Analysis: When your team analyzes the problem, you will try to discover the root cause of that problem.
  • Improvement: Once the problem has been identified, your team is ready to brainstorm possible solutions and put a plan in place.
  • Control: This is the final step and it involves creating systems to control the process performance. This is important because, without it, you may just end up dealing with the exact same issue in another six months.

Benefits of Implementing Six Sigma

Organizations from nearly every industry have benefitted from Six Sigma, including companies like Motorola, General Electric, and Honeywell. It can benefit the customer, individual employees, and the company as a whole. Listed below are the five biggest advantages many businesses see as a result of implementing Six Sigma:

Increased revenue

When your company improves the quality of its services and products you can see incredible long-term revenue increases. After its first year of using Six Sigma principles, General Electric saw $300 million in increased revenue.

Better quality

By operating a Six Sigma business, companies have to minimize defects and improve quality to the point that few customers will ever experience a problem. And this does not just apply to manufactured products; at Akron’s Children’s Hospital, the quality of their services increased tremendously by implementing Six Sigma. The wait times for MRI scans were cut down by 90 percent and the emergency room minimized the amount of time it took to locate supplies by 63 percent.

Reduced costs

Successful Six Sigma implementation can result in massive savings, which will allow your company to use that money elsewhere. In 2007, the United States Army implemented Six Sigma and saved over $2 billion that year by streamlining task management, cutting costs, and recycling fuel.

Improves the customer experience

When you improve the quality of your products and services and reduce variation, your customers will reap the benefits. And when customers receive a consistently positive experience, they are more likely to become loyal long-term customers.

Increased productivity

Often businesses think they are overstaffed when the real problem in insufficient training. Implementing Six Sigma can give your business clarity on the root cause of low productivity and help you effectively address it.

Belt Levels

When your company decides to implement Six Sigma, you will most likely work closely with a professional who will help you implement these changes. These professionals are given various “belt levels” based on their experience, past contributions, and capabilities. Working with a Six Sigma professional is an important component in achieving the success you are hoping for. Here is a list of the belt levels and what each one means:

  • Master Black Belts: Master Black Belts are responsible for strategizing and finding ways to apply Six Sigma principles across business structures. They also will usually provide training to other team members.
  • Black Belts: Black Belts will also lead projects for businesses that provide solutions to high-level problems. They are also responsible for providing training for team members.
  • Green Belts: Green Belts will collect data and provide analysis.
  • Yellow Belts: Yellow Belts usually assist the team with process improvements.
  • White Belts: White Belts will usually help with solving problems but they are not necessarily a part of the team.

Implementing Six Sigma

Strategies for implementation can vary quite a bit depending on the organization and the specific business goals. However, once a company has decided to implement Six Sigma there are usually two ways to go about this. They can either implement a case-by-case initiative or create a Six Sigma infrastructure.

A case-by-case initiative involves certain employees being taught specific tools that they can apply to jobs as needed. Other employees can consult with that person if they need help on a certain project. This method can result in success but rarely does this strategy result in major changes to the organization.

By creating a Six Sigma infrastructure, you will use it through projects rather than just individual tools. This is often a more focused and productive way to implement Six Sigma tools. It can also lead to a more detailed understanding of important business processes.

Conclusion

Six Sigma can help your business eliminate waste, reduce variation, and improve the customer experience.  It isn’t a fad and it isn’t going away anytime soon; it is a proven business method for improving a company’s operations.

But in spite of its many successes, over 60 percent of Six Sigma projects do not achieve the desired results. There are many reasons why this happens, but more often than not, the reason is not being able to enforce the changes you’ve made to the processes.

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