What is Six Sigma ?

Six Sigma is a problem solving methodology that uses your company's human assets, data, measurements, and statistics to identify the vital few factors that can decrease waste and defects while increasing customer satisfaction, profit and shareholder value.

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

A sigma represents 691,462.5 defects per million opportunities (DPMO), which translates to a percentage of nondefective outputs of only 30.854%.

Six Sigma represents 3.4 DPMO, which translates to a percentage of nondefective outputs of 99.9997%--close to perfection.

The Six Sigma methodology uses statistical tools to identify the vital few factors that matter most for improving the quality of process and generating bottom-line results. It consists of four or five phases:

Define the projects, the goals, and the deliverables to customers (internal and external).

Measure the current performance of the process.

Analyze and determine the root cause(s) of the defects.

Improve the process to eliminate defects.

Control the performance of the process.

Probability of Defects at Different Sigma Levels

What is a Variation

A variation is any quantifiable difference between a specified measurement or standard and the deviation from such measurement or standard in the output of a process. Variation in outputs can result from many causes in the functioning and management of processes. An important goal of process improvement is to reduce variation outputs.

What are the Vital Few Factors

The "Vital Few Factors" are factors that directly explain the cause-and-effect relationship of the process output being measured in relation to the inputs that drive the process. Typically, data shows that there are six or fewer factors for any process that most affect the quality of outputs in any process, even if there are hundreds of steps in which a defect could occur--the "vital few". When you isolate these factors, you know what basic adjustments you need to make to most effectively and reliably improve the outputs of the process.

What is Process Capability

Process capability is a statistical measure of inherent variation for a given event in a stable process. It's usually defined as the process width (normal variation) divided by six sigma and quantified using capability index (Cp). More generally, it's the ability of the process to achieve certain results, based on performance testing. Process capability answers the question, What can your process deliver?

What is a Six Sigma Champion

A six sigma champion is 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 "owns" the process--monitoring projects and measuring the savings realized.

What is a Six Sigma Black Belt

A six sigma black belt is 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.

What is Critical to Quality CTQ

Critical-to-quality (CTQ) are elements of a process that significantly affect 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.

What is a Cycle Time

"Cycle Time" is the time it takes to complete a process from beginning to end, consisting of work time and wait time. It is the case that, for many processes, wait time is longer than work time.

What is Cost of Poor Quality COPQ

Cost of Poor Quality (COPQ) is the total labor, materials, and overhead costs attributed to imperfections in the processes that deliver products or services that don't meet specifications or expectations. These costs would include inspection, rework, duplicate work, scrapping rejects, replacements and refunds, complaints, loss of customers, and damage to reputation.

These are costs that would disappear if there were no quality problems. An important goal of Six Sigma management is to reduce or even eliminate the COPQ, which for traditionally managed organizations has been estimated at between 20% and 40% of budget.

What is Benchmarking

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

Some Statistical Terms used in Six Sigma

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

Median: Midpoint 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 the maximum and the minimum.

Standard Deviation: Average difference between any value in a series of values and the mean of all the values in that series. This statistic is a measure of the variation in a distribution of values.

What is a Specification Limit

A specification limit is one of two values (lower and upper) that indicate the boundaries of acceptable or tolerated values for a process.

What is a Control Limit

A control limit is one of two values (lower and upper) that indicate the inherent limits of a process.

What is a Process Width

A process width is the spread of values +/-3 sigma from the mean--process width, also know as normal variation.

What is Process Mapping

Process mapping means creating flowcharts of the steps in a process--operations, decision points, delays, movements, handoffs, rework loops, and controls or inspections. A process map is an illustrated description of how a process works.

Dollar Types

Hard dollars: Savings that are tangible--exact, quantifiable cost savings, such as reduced hours, reduced inventory levels, etc.

Soft dollars: Savings that are intangible--expenses that you avoid, such as not increasing hours, inventory, or physical workspace.

What is a Baseline

A baseline is a standard for comparisons, a reference for measuring progress in improving a process, usually to differentiate between a current state and a future state.

What is Gap Analysis

Gap analysis is a technique used to compare a current state and a target future state.

What is an Implementation Partner

An implementation partner is an outside expert engaged in introducing, training, and supporting your six sigma initiative.

Six Sigma SIPOC Meeting #1

OK let me deviate from the regular technical tips and instead talk about our new Six Sigma Project, the goal of which is to reduce the number of billing errors and thus minimize potential write-offs. Today marked our first team meeting. Our objective was to map out the SIPOC (Supplier Input Process Output Customer). Basically this means that we mapped out our current billing process as is. Then we flagged Processes that have a validation procedure associated to them. Then for each of the Processes we flagged, we went back and identified the respective Supplier, the Input, and the Customer. As an example, let’s consider the process of “creating an EDI billing file”. The supplier for this process turns out to be PeopleSoft, the Input turned out to be a Query in PeopleSoft and the Customer turned out to be our Systems Group. The supplier is where we get the Input for the Process, the Input is the Query that is run in PeopleSoft, which produces the data that is funneled into the process called “creating an EDI billing file” and our Customer, is the Systems Group because we send the file to them and they take care of delivering the file to the “real customer”—the one that is really going to pay the bills.

Six Sigma FMEA Meeting #2

We had our second Six Sigma meeting today and focused on FMEA (Failure Mode and Effects Analysis). This meeting directly built on our SIPOC diagram, more specifically on the parts of the diagram where we already have a verification process in place. So basically what we did was to quantify the severity and the occurrence of failure in each of our existing verification processes. Each of these failure modes was graded from 1 to 10, 1 being the lowest and 10 the highest. For example, a severity mode of 1 meant that when the problem occurred, it did not highly affect the billing process. To grade the occurrence of the problem we had a chart with categories, such as category 1, a category 1 meant that the problem occurred anywhere from 1 to 20 times within every 20,000 invoices billed, a category of 2 meant that the problem occurred anywhere from 20 to 100 times every 20,000 to 50,000 invoices billed, and so on until the highest category of 10. We also measured a third component, the ability to detect when a problem occurred. The ability to detect when each of our existing verification processes failed was also graded on a scale of 1 to 10. Where a grade of 1 meant that when the problem occurred, it would be immediately known. A grade of 10 meant that if the problem occurred, we would never know about it. Ok that’s all; stay tuned for meeting #3.

Six Sigma The 5 Whys Meeting #3

Today we isolated processes where failures where likely to occur and asked ourselves why the problems occurred—5 times.

There is no magic in the number five, it’s really just about identifying root causes of problems, of getting past the superficially causes.

For example, let’s say that there is a problem with the amount of time a customer has to wait to get through a telephone representative at a company during lunch hours. Let’s ask ourselves WHY?

1) WHY? Because most telephone representatives are out to lunch and the call-center is understaffed at this particular time of day.

2) WHY? The call-center is understaffed at this particular time of day because the Shift Supervisor has not created a flexible schedule.

3) WHY? The Shift Supervisor has not created a flexible schedule because upper management has not asked him to.

4) WHY? Managers have not told to create a flexible schedule to accommodate for lunch-hours because the company has not trained them to ask this of their Shift Supervisors.

The root cause of this problem is that upper management has not received the proper training. Of course you could take it a step further and say that it is not in the company’s culture of doing things.

Six Sigma Inter-relational Diagrams Meeting #4

Now that we have identified our root causes of failures in our processes, we are going to see if these root causes are related to each other. We did this by using a Visio diagram, where each of the root causes was represented by a box. For simplicity’s sake, let’s say there were 3 root causes: Root Cause #1, #2 and #3.

We asked ourselves is root cause #1 related to #2, if yes, draw an arrow from Root Cause #1 to #2, else do nothing. Then we asked is root cause #1 related to root cause #3, if yes, draw an arrow, else do nothing.

Then we ask the same but from the perspective of root cause #2. We ask is root cause #2 related to #1 and #3, if so, draw appropriate arrows, otherwise do nothing.

The purpose of this exercise was to identify which root cause is related to the others the most.

We were left with a very convoluted Visio diagram. In hindsight, maybe we should have used an Excel Matrix or used Layers in Visio. Hopefully though, I’ll be able to write a macro for Visio that will count the number of outgoing arrow connectors.

Six Sigma Five Whys Meeting #5

After defining the inter-relational diagrams we knew which root causes related most to each other.

As a side note, it turns out that we would have been better served by plotting the root cause relationships in an Excel matrix instead of using Visio.

We then proceeded to asking ourselves Why the Root Causes occurred. We asked ourselves “Why” five times to try to arrive at the essence of the problem.