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.
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.
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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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.
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.
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!
What are the five steps of the Six Sigma method?
Six sigma includes five steps: define, measure, analyse, improve, and control. The steps are collectively known as the DMAIC model. By utilising these steps, business processes can be significantly improved.
Where does the term ‘Six Sigma’ come from?
This term comes from the normal statistical curve. In that, ‘sigma’ refers to standard deviation. Six sigma means three standard deviations below and three standard deviations above the mean. So, if any process has six sigmas, its defect rate can be shallow.
Is ISO the same as Six Sigma?
No, ISO and Six Sigma are entirely different. ISO relies on combining several processes to analyse and improve business performance. On the other hand, the Six Sigma process improvement method focuses on improving a single operation using its five-step model.
