Six Sigma
Six Sigma (6σ) refers to a collection of strategies and tools for process improvement. Bill Smith, an American engineer who worked at Motorola in 1986, introduced it. In 1995, Jack Welch made it a key component of his General Electric corporate strategy. A six sigma process is one in which 99.99966% of all production opportunities for some aspect of a component are statistically predicted to be defect-free.
The technique employs a data-driven evaluation to reduce errors or faults in a corporate or commercial process. Six Sigma focuses on improving cycle times while lowering manufacturing faults to 3.4 occurrences per million units or events. In other words, the system allows you to work quicker and make fewer errors.
Six Sigma refers to the mathematical fact that a mistake would need a six-standard deviation from the mean. Events along a bell curve would fall outside of six standard deviations (where sigma stands for “standard deviation”) since only 3.4 out of a million were randomly (and normally) distributed.
Six Sigma techniques aim to enhance the quality of a process’s output by identifying and eliminating the sources of errors while limiting impact variability in manufacturing and business processes. It employs a variety of quality management methodologies, mostly empirical and statistical methods, and establishes a specialized infrastructure of individuals inside the firm who are specialists in these methods.
Each Six Sigma project implemented inside an organization follows a predetermined sequence of phases and has predefined value objectives, such as:
1) Reduce process cycle time. 2) Reduce pollution.
3) Lower costs 4) Improve customer satisfaction
5) Increase profit.
The phrase Six Sigma (capitalized because it was spelled that way when registered as a Motorola trademark on December 28, 1993) is derived from language related to statistical modeling of industrial processes. A manufacturing process’s maturity may be defined by a sigma rating, which indicates its yield or the percentage of defect-free goods it produces, and particularly how many standard deviations of a normal distribution the fraction of defect-free outcomes corresponds to. Motorola established the objective of “six sigma” for all of its production.
The DMAIC project technique has five phases:
Define the system, the customer’s voice and needs, and, more particularly, the project objectives.
Measure essential features of the present process and gather pertinent data. Calculate the ‘as-is’ Process capability.
Analyze the data to identify and validate cause-and-effect correlations. Determine the linkages and try to guarantee that all elements have been examined. Seek for the fundamental source of the fault being investigated.
Improve or enhance the present process utilizing data analysis methods such as design of experiments, poka yoke or error proofing, and standard work to construct a new, future state process. Set up pilot runs to determine process capabilities.
Control the future state process so that any deviations from the goal are addressed before they cause faults. Implement control systems such as statistical process control, production boards, and visual workspaces, and constantly monitor the process. This technique is continued until the required quality is achieved.
DMADV
- The DMADV project approach, often known as DFSS (“Design For Six Sigma”), includes five phases:
- Define design objectives that are in line with client needs and corporate strategy.
- CTQs should be measured and identified, as well as product and manufacturing process capabilities and hazards.
- Analyze, create, and design alternatives.
- Design a better alternative that is best suited to the previous step’s analysis.
- Verify the design, conduct pilot tests, execute the production process, and give it over to the process owners.
Six Sigma defines numerous critical responsibilities for effective deployment.
Executive Leadership consists of the CEO and other members of senior management. They are responsible for developing a vision for Six Sigma deployment. They also provide the other position holders with the flexibility and resources they need to experiment with fresh ideas for breakthrough improvements by breaking down departmental boundaries and overcoming natural reluctance to change.
Champions are responsible for Six Sigma implementation across the company in an integrated way. Executive Leadership recruits them from senior management. Champions often function as mentors for Black Belts.
Champions choose Master Black Belts to serve as in-house mentors for Six Sigma initiatives. They spend all of their attention to Six Sigma. They support Champions and mentor Black Belts and Green Belts. Aside from statistical work, they devote their efforts to ensuring the consistent use of Six Sigma across several functions and departments.
Black Belts work with Master Black Belts to apply Six Sigma technique to particular projects. They also commit 100 percent of their attention to Six Sigma. They generally concentrate on Six Sigma project execution and special leadership with specific duties, while Champions and Master Black Belts identify Six Sigma projects/functions.
Green Belts are workers that adopt Six Sigma alongside their normal job duties, guided by Black Belts.
Finance
Six Sigma has played a significant role in minimizing bank charges, automating payments, enhancing reporting accuracy, eliminating documentation credit flaws, check collection defects, and reducing variance in collector performance. Bank of America and American Express are two of the financial firms that have achieved significant operational gains. By 2004, Bank of America had boosted customer satisfaction by 10.4% and reduced customer complaints by 24% by using Six Sigma methods to simplify processes. Similarly, American Express was able to reduce non-received renewal credit cards and enhance their overall operations by using Six Sigma techniques. Other financial organizations, such as GE Capital Corp., JP Morgan Chase, and SunTrust Bank, are now using this technique with the goal of maximizing client happiness.