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What Is Six Sigma? Larry Holpp and Pete Pande © 2002 McGraw-Hill 98 pages [@]

 

Rating 9 Applicability 8 Innovation

10 Style9  

Focus Leadership & Management

Strategy

Sales & Marketing

Finance

Human Resources

IT, Production & Logistics

Career & Self-Development

Small Business

Economics & Politics

Industries

Global Business

Concepts & Trends

Take-Aways • Six Sigma is a way to improve the operations of your whole business or individual

departments by focusing on customer expectations and requirements.

• With Six Sigma, you improve customer satisfaction and reduce cycle times and defects.

• The Six Sigma approach entails meeting customer expectations and requirements 99.9997% of the time.

• The basic Six Sigma problem-solving process is DMAIC: Define, Measure, Analyze, Improve and Control.

• The involvement of top management is critical to success.

• You will also need the commitment of your front-line employees.

• There are three approaches to a Six Sigma program: 1) A total business transformation; 2) The strategic improvement of selected areas, and 3) More limited problem solving.

• The Six Sigma Black Belt works full-time to lead the change effort.

• The Master Black Belt acts as a coach, mentor, or consultant.

• Other team members include the Green Belt, Champion and Implementation Leader.

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Book: getab.li/2089

What Is Six Sigma?                                                                                                                                                                   getAbstract © 2014 2 of 5

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Relevance getabstract

getabstract What You Will Learn In this summary, you will learn:r1) The definition of Six Sigma, as well as its goals, dangers and possible benefits; 2) The tools and techniques encompassed within the Six Sigma philosophy, and 3) How to implement a Six Sigma program in your own company.

getabstract Review At last! A short, easy-to-read and effortlessly understandable explanation of Six Sigma. In keeping with the brevity and conciseness of this book, we’ll keep this review short: If you want to know what Six Sigma is, what it can accomplish, why it matters to you and how to implement a program of your own, getAbstract strongly recommends that you start with this book.

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Summary getabstract

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“Six Sigma puts the customer first and uses facts and data to drive better solutions.”

“Six Sigma is a total management commitment and philosophy of excellence, customer focus, process improvement and the rule of measurement rather than gut feel.”

What Is Six Sigma? Six Sigma is a way to better manage your business or department by putting the customer first and using facts and data to achieve better solutions. Six Sigma improves customer satisfaction, compresses cycle times and reduces defects. The goal is complete perfection in these areas 99.9997% of the time, based on the normal bell curve.

In order to achieve this high level of performance, you commit yourself and your company to a philosophy of excellence. You must focus on your customer and process improvement, and you must look to facts rather than intuition or gut feelings. The ultimate goal is to make every area of your organization better able to meet the changing needs of your customers, while adapting to shifting markets and technologies.

Total Quality Management (TQM) was a popular improvement-focused program in the 1980s that has died out in many companies. Six Sigma is different. It is customer focused, produces major returns on investments and changes how management operates.

It doesn’t just create improvement projects, it requires senior executives and leaders to learn new approaches to thinking, planning and executing. It involves working smarter, not harder, to achieve results by combining organizational teamwork with reliable systems.

Six Sigma Measurement The Six Sigma approach is based on the statistical measure of the performance of a process or product. It provides both a goal - near perfection - and the management system through which to achieve this goal.

To be a Six Sigma company, you must perform at the Six Sigma level, which means 99.9997% perfection. This begs the question: What is perfection. The answer - whatever your customers say it is. The first step in the Six Sigma process is determining exactly what your customer expects. In Six Sigma terms, these expectations are "critical to quality," or CTQs. The task, then, is to identify these CTQs, create a method by which to measure them and compare the effectiveness of various processes for meeting them.

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What Is Six Sigma?                                                                                                                                                                   getAbstract © 2014 3 of 5

“Six Sigma efforts target three main areas: improving customer satisfaction, reducing cycle time and reducing defects.”

“The goal of Six Sigma is to help people and processes aim high in aspiring to deliver defect-free products and services.”

“The first step in calculating sigma or in understanding its significance is to grasp what your customers expect.”

You are searching for the correct set of processes that will result in a defect rate of just .0003%. In other words, your product and service will completely meet your customers’ expectations 99.9997% of the time. Defects generate complaints and costs. The more defects you have, the more expensive it is to correct them and the greater your risk of losing customers.

Operating at a sigma level lower than six will produce dissatisfied customers that breed into more dissatisfied customers as they tell others about their bad experiences with your firm. The typical unhappy customer tells 9 to 10 people about their experience, so defects also threaten tomorrow’s customers.

Six Sigma Management Critical to the success of a Six Sigma program is the involvement of top management. It’s not enough to train you staff. You must make management accountable for results that are measured through ongoing monitoring and reviews. When Starwood Hotels, which operates the Westin and Sheraton chains, implemented its Six Sigma plan, it set up systems to hold managers at all levels accountable for customer satisfaction, profit-and-loss statements, employee attitudes and key process performance measures.

But top-down management is only half of the equation. For Six Sigma to succeed, you must combine management commitment with the grass-roots enthusiasm of your front- line employees. getabstract They are a key source of ideas, solutions, process discoveries and improvements.

Six Sigma Themes The most important elements of a Six Sigma program can be summarized by six critical themes or principles:

1. Genuine focus on the customer - Always seek customer satisfaction and value. 2. Data - and fact-driven management - Clarify key measures for gauging business

performance, gather the necessary data and analyze it using key variables. 3. A focus on mastering processes - Build in competitive advantage in delivering value

to customers. 4. Proactive management - Set goals, review them frequently, establish clear priorities

and focus on problem prevention rather than resolutions after the fact. 5. Boundaryless collaboration - Break down organizational barriers to improve

teamwork throughout the organization. 6. A drive for perfection, combined with a tolerance for failure - You must be willing

to try new ideas and approaches that have some risk of failure in order to make changes leading to perfection.

Six Sigma Approaches You can choose from several basic roads to Six Sigma, which you might think of as three possible on-ramps or routes. The three general approaches to Six Sigma are:

Approach 1: The business transformation For this approach, you launch a full-scale change initiative. This may lead to a new company culture based on dramatic changes. Generally, you will ask teams to look at key process areas and make recommendations for change in areas like distribution, sales, product development and customer service.

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What Is Six Sigma?                                                                                                                                                                   getAbstract © 2014 4 of 5

“In short, defects can lead to lost customers, and turned- off customers tell others about their experiences, making it that much more difficult to recover from defects.”

“Training alone is not a management system. A management system involves accountability for results and ongoing reviews to ensure results.”

“The ideas, solutions, process discoveries and improvements that arise from Six Sigma take place at the front lines of the organization.”

Approach 2: Strategic improvement This approach offers the most options, since you can limit your program to one or two critical business needs or business units. In either case, your teams and training will focus on major opportunities and weaknesses. In some cases, this approach can lead to a full- scale corporate change initiative.

Approach 3: Problem solving This is the most low-key approach, in which you focus on continuing programs. Typically, only a few people will be involved in the effort, and it is a good way to apply a limited Six Sigma approach without producing major change through your organization.

Six Sigma Roles Launching a Six Sigma effort will require a group of business leaders, team leaders and facilitators. Some of these are martial art names, since they were coined by a Motorola improvement expert who liked karate. These key roles are:

• Black Belt - The full-time person in charge of leading the change effort. He or she is primarily responsible for launching the team, inspiring them, building confidence, observing and helping with training, managing team dynamics and keeping the project moving forward.

• Master Black Belt - The coach, mentor, or consultant who works closely with the Black Belt and is usually an expert in Six Sigma tools.

• Green Belt - A person who is well trained in Six Sigma skills, but is a team member or part-time team leader. His or her role is to introduce the concepts and tools into the day- to-day activities of the business.

• Champion and/or Sponsor - Usually an executive or key manager who initiates and supports the Black Belt or team project. This person helps to make sure projects stay aligned with overall business goals and keeps other leadership team members informed about the progress of Six Sigma projects in the organization.

• Implementation Leader - The person who is in charge of implementing the entire Six Sigma effort. Often he or she is at the corporate VP level, reporting directly to the CEO or other top executives. This person is involved in promoting Six Sigma thinking, tools and habits throughout the organization.

Six Sigma Problem Solving Typically, Six Sigma teams are diverse, since the team members come from a wide variety of departments, job levels, backgrounds, skills and levels of seniority. However, all members need to share a common process or model in order to work together effectively as a team.

The most common shared problem-solving methodology is the DMAIC process which stands for:

• Define. • Measure. • Analyze. • Improve. • Control.

We’ll talk more about the various components that make up the DMAIC press in a moment, but first, let’s look at steps that a Six Sigma team follows in tackling a business problem. They are:

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What Is Six Sigma?                                                                                                                                                                   getAbstract © 2014 5 of 5

“One of the most remarkable breakthroughs in Six Sigma efforts to date has been convincing leaders and managers - particularly in service-based functions and industries - that mastering processes is a way to build competitive advantage in delivering value to customers.”

“The ultimate success of the Six Sigma project rests with those who do the work in the area the project was focused on.”

1. Identifying the project - Management decides which project a team will tackle. 2. Forming the team - Management selects team members, who should have a good

knowledge of the situation, but not be so involved that they are part of the problem. 3. Developing the charter - Management produces a document that includes the reason

for the project, the goal, a basic project plan, the scope of the project and the role and responsibilities of team members.

4. Training the team - Six Sigma leaders teach team members the DMAIC process, generally over a one- to four-week period.

5. Doing DMAIC and Implementing Solutions - The team develops plans and procedures, implements its solutions and measures and monitors the results.

6. Handing off the solution - The team disbands, usually with a formal and fun ceremony to mark this occasion.

The DMAIC process itself consists of these five steps:

1. Define the problem - The team identifies the problem and its own goals. It also drafts the DMAIC Charter, which typically includes a business case for choosing this particular problem, a goal statement, a discussion of constraints and assumptions, a description of the scope of the project, a listing of the players and their roles and a preliminary plan.

2. Measure - The team gathers data to validate and quantify the problem or opportunity. It also starts the process of seeking facts and numbers that help to reveal the cause of the problem. The three areas of measurement include outcomes, process and input, or things coming into the process to produce change.

3. Analyze - The team looks at the details to understand the process and problem and to identify the root cause. The team should look at many possible causes, including methods, machines, materials, measures, environmental factors and people.

4. Improve - The team develops a solution and puts it into action. It is especially important to critically assess proposed potential solutions in light of several criteria, including costs and likely benefits. The team should select the most promising and practical solutions and gain the approval of the Champion and the leadership team before implementing any changes.

5. Control - The team develops a monitoring process to keep track of planned changes and a response plan to deal with any problems that come up later. The team must help to focus management’s attention and keep it informed about the outcomes of the project. Among other things, the team needs to sell the project through presentations and demonstrations, turn over project responsibilities to those doing the regular work, and keep the support of management to meet the project’s long-term goals.

As the Six Sigma process proceeds, you need to be able to cope with the changes that this process brings. As an employee, be prepared for the challenges ahead, should you be asked to join a Six Sigma team, participate in a Six Sigma training or become a team member.

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About the Authors getabstract

getabstract Peter S. Pande is president of Pivotal Resources, Inc., a leading organizational improvement consulting and training firm. He has helped to guide Six Sigma initiatives at major corporations and is the co-author of the bestselling, The Six Sigma Way, plus, The Six Sigma Way Team Fieldbook. Larry Holpp is a consultant with Pivotal Resources and an author of books on teams and quality.

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