What is Six Sigma? 5 Steps of Six Sigma

Six Sigma is an internationally-recognised set of methodologies and tools to continuously improve business processes. It is highly data-driven and focused on terminating defects and improving the quality of products and services. Six Sigma focuses on understanding customer needs and creating a high-quality, efficient, and effective culture. Its five steps, Define, Measure, Analyse, Improve, and Control (DMAIC), compose a proven model for successfully implementing process improvement initiatives. 

This comprehensive guide will explain what is Six Sigma and the five steps of Six Sigma, including how to define the project, measure and analyse performance, develop improvement plans, and control the process to ensure long-term success.

What is Six Sigma?

Six Sigma is a quality management program that uses data to drive product and service improvement decisions. It is based on the premise that nearly all businesses have some level of waste in their manufacturing process, which can be reduced through careful analysis and implementation of corrective action. The Six Sigma methodology seeks to drive these reductions to less than 3.4 defects per million opportunities, a level of quality that government organisations can easily audit as meeting the standard for a controlled manufacturing/service environment. 

Companies can increase their profits and decrease costs by continually monitoring and improving processes to reduce defects by minimising rework, minimising corrective actions, and improving customer satisfaction. Six Sigma quality is often confused with other techniques such as TQM and ISO 9001. While the methodology has some similarities, the Six Sigma quality process is much more rigorous and uses various tools and methods. The Six Sigma model is a crucial part of the leadership, and management course curriculum, which makes it essential to understand and improve business processes. 

Importance of Six Sigma

Six sigma claims its strategic benefits. It helps in cost reduction, cycle time improvement, a clear understanding of the customer requirements, increased customer satisfaction and more reliable products. 

What are the fundamental principles of Six Sigma?

The fundamental principles of Six Sigma are-

1. Customer focus
2. Use of data
3. Continuous improvement
4. Involve people
5. Staying thorough

Benefits of Six Sigma

Some clear-cut benefits of following the Six Sigma methodology include: 

– Reduce risk – Reducing process variation makes organisations more resilient to disruption. 

– Improve product quality – By reducing defects and improving quality, organisations can increase customer satisfaction and reduce warranty claims. 

– Reduce costs – Organisations can reduce costs by eliminating waste from their operations and improving their productivity. 

– Improve customer satisfaction – By improving product quality, organisations can increase customer satisfaction and retention. 

– Gain organisational agility – Organisations can respond more quickly to changing market conditions and customer needs by eliminating waste. 

– Improve employee engagement – By improving quality and reducing defects, organisations can increase employee engagement and productivity. 

– Create competitive advantage – Organisations can differentiate themselves from competitors by being the gold standard for quality and customer service.

Overview of the Five Steps of Six Sigma

Broadly, Six Sigma comprises the following five steps, which create a model called DMAIC. Let’s look at what is DMAIC and how it contributes to process improvement. 

• Define – Define the project, the current state, and the desired outcome
• Measure – Quantify and document the current state
• Analyse – Explore how the current state affects the project goals
• Improve – Develop improvement plans and identify potential barriers
• Control – Confirm the improvement plans are working

Now, let’s dive into each of these steps and understand what is DMAIC in depth and what it entails.

Below is a breakdown of Six Sigma DMADV. 

1. Define – Identification of project scope. 
2. Measure – Understanding of current scope.
3. Analyse – Identify the root cause of defects.
4. Design – Develop a process to meet customer needs and expectations.
5. Verify – Ensure the designed process meets the customer’s needs

Step 1: Establishing project goals and objectives

The first step in the Six Sigma process is to establish project goals and objectives. Project goals are the results that stakeholders want to achieve, while project objectives are the specific ways project goals can be achieved. For example, a project goal might be to improve customer satisfaction or to reduce the time it takes to ship products to customers. Project goals are the higher-level outcomes, which are only possible through setting objectives. 

Step 2: Gathering and analysing data

The second step in the Six Sigma process is to quantify and document the current state. This includes collecting and analysing data and conducting a ‘Five Whys’ analysis to identify root causes of defects or issues. Data can be collected through various methods, such as surveys, focus groups, and interviews. A ‘Five Whys’ analysis begins with the question “Why?” five times to discover the source of the problem. For example, if a product shipment arrives late, a team member might ask: Why is the shipment late? Why is it behind schedule? Why was the shipment not completed on time? Why was the shipment not completed? Why does the shipment not meet expectations? 

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Step 3: Identifying root causes of defects or issues

The third step in the Six Sigma process is to explore how the current state affects the project goals. This includes discovering and documenting the root causes of defects or issues and identifying the problems or opportunities within the process. To identify root causes of defects or issues, conduct a fishbone analysis, which helps brainstorm potential problems and create a process map to document the current state of the process. 

Step 4: Develop improvement plans

The fourth step in the Six Sigma process is to develop improvement plans. This includes selecting an appropriate solution, creating alternative solutions, and selecting the best solution. To choose a suitable solution, create a decision tree to identify potential solutions and create a risk-return matrix to evaluate the possible solutions. A decision tree is used to identify potential solutions, and a risk-return matrix is used to assess the potential solutions.

Step 5: Establishing process controls

The fifth and final step in the Six Sigma quality process is to confirm the improvement plans are working. This includes creating action plans, establishing metrics (such as control charts), and tracking the results. To develop action plans, use an Ishikawa diagram to capture the root causes of defects or issues and create a Pareto diagram to identify the most significant root causes. An Ishikawa diagram is used to capture the causing defects, while a Pareto chart is used to determine the most critical root causes.

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What is Six Sigma Certification?

There are several Six Sigma certifications, including the Six Sigma Green Belt, Black Belt, Master Black Belt, and Champion designation. 

The Six Sigma Green Belt is the entry-level certification and is often used as a stepping stone to the Black Belt certification. The Black Belt certification is the most common and is required for many Six Sigma project leadership roles. The Champion designation is for experienced Six Sigma practitioners who provide mentoring and coaching within organisations. All of these certifications help aspirants be on track to becoming six sigma experts. 

Master Black Belt: The responsibilities comprise statistical analysis, strategic planning, and mentoring of Black Belts.

Black Belt: The responsibilities comprise overseeing Six Sigma methodologies at the company level and mentoring Green and Yellow Belts.

Green Belt: The responsibilities include the implementation of Six Sigma methodologies at the level of the project.

Yellow Belt: The responsibilities comprise observing and verifying the project details.

Six Sigma Tools and Techniques

Many companies use Six Sigma as a foundation to create their unique methodologies and tools. Here are a few of the most common tools and techniques used in Six Sigma projects.

 – Cause and Effect Diagram – A visual diagram to explore a problem in its current state and identify possible solutions, effects of root causes, and related problems. 

– Fishbone Analysis – A brainstorming technique to explore issues and identify potential root causes. 

– Histogram – A visual representation of data to explore the current state and visualise potential issues. 

– Pareto Analysis – A technique to identify the most significant root causes. 

– Process Map – A visual representation of the current state to explore potential issues and identify root causes. 

– Trend Analysis – A visual representation of data to explore the current state and visualise potential issues. 

– Control Chart – A chart used to monitor the outcome of an action.

What is Lean Six Sigma?

Lean Six Sigma aims to improve the performance of the employee and the company. It achieves this by eliminating the waste of resources and processes. It seeks to combine the process improvement methods of Six Sigma and the lean enterprise.

Techniques of Lean Six Sigma

• Kanban: Determines workflow management practices, such as visualising work in progress and promoting continuous improvement.
• Kaizen: Engages employees and promotes a work environment emphasizing self-development and ongoing improvement.
• Value Stream Mapping: Analyse the places to eliminate waste and optimise the process steps.
• 5S tool: Acts to ensure the workplace stays efficient, productive, safe, and successful.

Lean Six Sigma vs Six Sigma

They are two strategies that are related to one another that aims to solve business problems. Both of them aims to make significant improvements in quality, efficiency, and use of time analysing the way the process function. Also, both of them use the DMAIC method.

Six Sigma seeks to reduce defects and process variability to improve the process output and quality. Whereas, Six Sigma aims to reduce the wasteful of resources and defects to improve the workflow.

Conclusion

Six Sigma is a proven methodology for improving business processes and creating a culture of quality. It uses data to drive decisions and is focused on continuous improvement. Six Sigma is an excellent choice for businesses seeking to improve their processes through increased efficiency and reduced waste.

As a result, organisations are always on the lookout for hiring people who are well-versed in the Six Sigma methodology. At upGrad, we understand the importance of practical knowledge and skills when it comes to finding well-paying, meaningful jobs. Our Master of Business Administration course, offered in collaboration with Golden Gate University, is a 15-month program designed to get you well accustomed to the different domains and areas in business administration. The course begins on 31st December, so get yourself enrolled soon!