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Six Sigma

 

Six Sigma is a data driven problem solving approach with the objective of increasing profits by reducing the defects (improving effectiveness) in a process. Defect reduction happens in two ways - first, reducing the variation in the process, second, by moving the actual mean closer to the target mean. 
Six Sigma is all of the following
Metric: 3.4 defects per million opportunities
Methodology: DMAIC / DMADV frameworks
Management System: all business units are aligned to key improvement efforts
Philosophy: encompasses all of the above and a state where it becomes a way of life.

 

Applause for all the respondents- Prashanth Datta, Sarita Shonkhala, Hari Shyam Gupta, R Rajesh, Manjeet Sachdeva, Shivkumar Samant, Devanand, Prabhakaran Sundaramurthy, Mohiuddin G M, Rajesh Chakrabarty

Question

Q. 140  There have been different ways to look at Six Sigma. Six Sigma has evolved a lot in the last 32 years. It all started with a metric. 

 

Six Sigma Metric - Sigma level and Sigma shift (Z scores and Z shift). 
Lean Six Sigma Methodologies -
DMAIC, DMADV, IDOV, DFSS, TLC etc.
Lean Six Sigma Management Systems -Competence building, Curricula, Certification, Projects, Business cases, Business value generation, Strategic linkages, MBB becoming a requirement for leadership roles etc. 
Lean Six Sigma Philosophy -
Zero defect thinking, Preventive approaches, Process thinking, Design for Six Sigma, Robust Design, Quality by Design, Predictive Analytics, Prescriptive Analytics, Zero waste thinking etc. 

 

We have been recommending the use of the above in the order of increasing importance.  

 

We emphasize that the performance assessment with Z score is not a priority, and that Six Sigma has evolved a lot in each of the 3 areas - Methodologies (they got integrated with others), Management Systems (People have various competencies to learn), and Philosophy (Six Sigma works wonderfully today with Analytics and RPA). 

 

You will still see some individuals talking about Six Sigma from the short-sighted metric viewpoint of 1987. 

 

The Question is - Do you agree that just focusing on the Sigma Level metric is the wrong way of looking at "Lean Six Sigma" which is highly successful as a Methodology, Management System and a Philosophy?

  

Note for website visitors - Two questions are asked every week on this platform. One on Tuesday and the other on Friday.

 

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Benchmark Six Sigma Expert View by Venugopal R

 

How it started and how long has it taken? Tracing the roots of 'Lean Six Sigma' depends on where we take the start point. I believe that parts of “Lean Six Sigma” have been conceived even before it came to be known by the metric name.

  1. Let me take a starting point somewhere in 1920’s when Walter Shewhart invented Control charts.
  2. In the 1940’s Deming popularized the philosophy of PDCA.
  3. Later in 1950’s Deming and Juran, two American Gurus of Quality started helping the Japanese, who were very deft in picking up the techniques and put them into practical use in their own ways.
  4. The JUSE (Japanese Union of Scientists & Engineers) was formed and provided courses in Quality techniques.
  5. Before 1980’s, Quality management became a science and was being taught in US, Japan, India and other countries.
  6. Practical application of statistical methods in Quality management became very prominent.
  7. Professional bodies like American Society for Quality (ASQ) and many others emerged.
  8. Then came a concept of ‘zero defect’ largely associated with Philip Crosby.
  9. The first international standard for Quality systems was introduced in late 1980’s.
  10. This was followed by many industry specific standards like QS9000, AS9145, TL9000, SEI-CMM, COPC, eSCM and more.
  11. ‘Business Excellence’ models such as Baldridge award, EFQM, Deming prize evolved.
  12. Then there was another skill in the name of ‘Project Management capability’ that became sought after.

May be there are more such happenings of relevance, but I am limiting them here and relating to the topic of our discussion.

 

Most of us know that the term ‘Six Sigma’ that literally represents a statistical metric, has been developed to encompass many of the above-mentioned practices to be applied in an orderly and logical manner to result in a powerful package of a management methodology.

 

This methodology helps in resolving most of the business problems and helps in unearthing opportunities to continuously improve effectiveness and efficiencies. The ‘Six Sigma’ package by itself does not bring any new tool, but it is the intelligent knitting of several proven practices, including project management directives, that makes it a pragmatic approach.

 

This packaging has happened due to efforts of several organizations, few of the prominent ones being Motorola, GE and Allied Signal.

 

Lean methodologies evolved from the compulsion to reduce waste, which in effect relates to efficiency improvement i.e. get more outputs with lesser inputs (or resources). Thus, the techniques used in lean methodology would seamlessly fit into the overall frame work of Six Sigma management, and hence being referred to as ‘Lean Six Sigma’.

 

The beauty of ‘Lean Six Sigma’ is that any organization at any stage can find a way of using this methodology. ‘Lean Six Sigma’ may be used as a tool box for problem solving. Or it could be used as an approach to improve efficiency and growth. Or it could be a management philosophy for transforming an organization.

 

Thus, there is no need for any organization to believe that they are not ready for adopting ‘Lean Six Sigma’. Further, its methods and tools are so versatile that they may be applied to any industry, business or organization.

 

Modern technology has given us many ways of easily computing complex statistical calculations that has made ‘Lean Six Sigma’ even more adoptable. With ever increasing abilities in computing and storage of data, we have been able to move from ‘sampling’ thought process to application of ‘Big Data’ analytics for which many of the six sigma tools are relevant.

 

If one looks ‘Lean Six Sigma’ with a holistic view, it has a strategic Goal setting and deployment component, a tactical component with tools and techniques for problem solving, a behavioral component that deals with human aspects relating to change management.

 

On the whole, this management methodology, if understood comprehensively has the power of being a single umbrella that envelopes continual positive transformation of the organization.

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What keeps your business engine running amidst tough competition in today's environment?


I strongly believe in 4 things that acts as a differentiator


a. Customer Centric Approach - Have customer in focus in whatever you do. Historical studies have always shown it costs more to acquire new customer and effective management of existing customer assures you of continuous business which in turn benefits to invest in better ways to gain new customers.
b. Productivity and Efficiency - Key mantra is to do more with less within committed timelines with the focus on better OpEx management. 
c. Drive a balanced scorecard - A successful organisation always drive a balanced scorecard, when it comes to cost, quality, productivity and customer satisfaction. It is not one at the cost of another.
d. Motivated work force - who make a difference in driving the results for your organisation

 

Organisations today adopt multiple buzz words (mapping to the mood in the market) to drive their organization business charter which some times can befuddle the very purpose of its existence and pull your objectives in different directions rather than supporting it. 

 

You need to have a "Pivotal Program" in your organisation which can give clarity to your business charter and help position all other programs around it.

 

I see Lean Six Sigma as this pivotal program. 

 

Every organization today broadly categorizes its work into two parts - Run the Business and Change the Business.

 

While Run the Business focuses on delivering day to day operational commitment, Change the Business acts as an enabler to support its customer and work force.

 

For companies today to stay competitive, they need to be profitable. They need to ensure their Run the Business operates within the KPIs as demanded by the customers and the Strategic Initiatives of Change the Business should focus on addressing the root cause that is impacting my KPIs. 

 

A simple example is, giving better experience to your customer once he calls your customer care team (run the business focus) vs. enabling simple self help to resolve his query in few steps (change the business initiative). 

 

While it is rather easy said than done, an organization may have multiple programs, tools or professionals but if it is not structured,  packaged and adequately blended, we will conveniently loose out on the core objective and digress from the goal which can lead to not only financial losses but also losing their valuable customers. 

 

Even a decision not to invest in any changes, still needs to go through a methodical approach to establish the fact on why not to make an investment. 

 

Lean Six Sigma - the pivotal program, not only fulfills all objectives as a metric, method, management and philosophy but also the 4 points I mentioned above.

 

The outcome of a methodological Six Sigma effort can help reduce cost, improve profits, drive focus keeping customer requirements, create a knowledgeable workforce and above all use a data-driven scientific approach to arrive and sustain your results.

 

I strongly see that other programs can be positioned around Lean Six Sigma as it opens up avenues like using a Project Management approach to implement a solution, Robotics to simplify tasks, Data science for advanced analytics etc., What is key to note is that these programs need to have a trigger and Lean Six Sigma is the trigger.

 

Finally on my concluding note, for folks who are in a denial mode to accept the benefits of Lean Six Sigma, forget organizations, I personally see the existence of Lean Six Sigma concepts in our daily life. Be it to better time management, health management or wealth management, the concepts of Lean Sigma has its contribution.  

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Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects/errors/wastes in any process. Importance : 1. Help Your Organization Eliminate Errors.

                         2. Reduce the cost that incurs due to rework.

                         3.Help identifying the waste and non value added steps in a process and removing them.

                         4.Adding value added steps.

                          5. Cost reduction

                          6.It leads to revenue growth and productivity improvements

. Helps Organizations Improve Business Processes by eliminating non value added steps.

 

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In this age when things change significantly every day, businesses and leaders have to be agile and adaptable. We've to always focus on improvement and develop new things before our competition overtakes us.

Six Sigma provides us a combination of tools, techniques & methodologies that gives us quantifiable results out of the "sample" which can later to used to improve the "population".

 

In process industries, where we want to minimise defects and streamline our processes, DMAIC methodology provides us with tools to make that happen.

 

When we have to develop a new process entirely, we can use DMADV methodology.

 

In this VUCA world, this importance of 6 sigma is more than it was earlier.

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Let us start with the need for Six Sigma. Six Sigma primarily focused on variation reduction.There were several methodologies such as DMAIC, DMADV, DMADOV, etc.,. Each had a slightly different flavour from one another in some phases of the six sigma project. Later the lean part also became prominent and together it became Lean Six Sigma and the focus was now modified to waste elimination and variation reduction. This was a super combo and had great telling effect for an organisation which was doing lean six sigma projects. Let me go highlight (to the best of my knowledge) the importance, relevance and business value  that a Lean Six Sigma approach can bring to an organisation that makes use of it, in modern-day context.

 

A Lean Six Sigma approach,

1. Can provide a roadmap as when(time-bound) to arrive at the outcome (organisational goal) for business strategy(ies)/objective(s)

2. Helps in providing a Systematic way of driving or realizing business objectives into tangible goals, and will have a dedicated team to achieve those goals

3. Helps in Agile SAFe. As Organisations across the world is moving towards Agile, many large organisations are moving into Enterprise Agile where hundreds and thousands of teams work on multiple products and those organisations employ a popular framework called SAFe (Scaled Agile Framework for enterprise) which uses Lean product development (applying lean principles). This helps in providing often a defect-free product as we focus on

eliminating defects(wastes) and therefore productivity increases and we are able to seamlessly deliver our  goods(can be any product or software application) on time. Sometimes this helps in ensuring deliverables are released on the fly(on demand) using DevOps and/or Continuous Integration and Continuous Deployment processes , especially in IT sector.  So this is an example of the Lean Six Sigma philosophy that is mentioned in the question.

4. Can help in RPA and Analytics. Before working on the automation , value stream mapping can be done and after improving the existing process, automation can be done.

5. Can provide a sort of knowledge on statistics and regression are needed for you to have an effective understanding of the algorithms, for Deep Learning.


To the Six Sigma Ignorant people or Detractors:

Six sigma does not come for free - it requires bit of time and money and energy (effort spent by few human resources). The question is whether it is good enough to sustain or do that in an organisation. Invariably the answer across organisations is a firm yes -because more often than not,the benefits outweigh these aforementioned factors. Why ?  Thumb rule : Six Sigma is time intensive process. So it is carefully designed such that you take it only on certain parameters. Does your problem happening for quite some time and has given your customer a considerable amount of pain - monetarily or reputation-wise; is the problem happening for quite a while now; is there no immediate solution for this and that you don't know the solution as yet and also do not know the root cause for the problem; is the customer willing to wait for you to do a Six sigma - which will provide a systematic and scientific data gathering and analysis and then come up with a solution based on that? If you have the relevant answers for these questions only, then Six Sigma comes into picture. Also it can ask you whether your problem is aligned to your business goal additionally. What all these questions means that unless we have these answers applied, Six Sigma cannot be started or not ideal. That's why Six Sigma when done properly can yield expected results.

   


Conclusion:

In today's fast paced Agile world, every organisation wants to expand their business in an exponential way. We are in a digital era where we talk about Robotics, Artificial Intelligence, Cloud Computing, Analytics (especially Big data). Every organisation wants to make use all of these to enhance its business. However be, an organisation is superior in any one of these aspects, if the processes within the organisation is not streamlined, still the organisation cannot achieve maximum capability. This is where lean six sigma in 3 different facets - as methodology , as  philosophy, as Management systems come to play, as we saw above with some pointers.  Imagine IT companies, saying 'First Time Right' , 'Zero Defect' in 'Integration Testing' Phase, 'System Testing' phase. How many times we would have heard this. This is applicable across other industries as well. Lean Six Sigma is not about executing six sigma projects. It teaches about the best practices for providing right tools and techniques for Problem Solving, Process Diagrams, Data Analysis, Quality Control, SPC,.... With the help of these tools and techniques, we can take the right ones for the right area. For instance, Value Stream Mapping and COPIS diagram can help in doing waste elimination. Some of the most productive tools can help in day-to-day life of an organisation bringing robust design. Imagine you do Root Cause Analysis (RCA) using Fishbone Diagram and did a paretto chart finding top 5 causes for the instability of a release of the most important product(of my customer). You did a brainstorming and with a Pugh Matrix, you choose one best option from several ones.  Now you addressed the 5 causes immediately and within next Agile iteration(2 weeks) you fixed those issues and released the product. Everything is resolved. Customer is extremely happy and within a week he gives your organisation a new business similar to this existing one. Has this happened to you or not ? Or Will not this happen ? It will . With the advent of Lean Six Sigma, thinking pattern of people(approach to a problem) also gets changed to the better (personal experience and also i have seen many). Tendency is to view things laterally (outside-in perspective) and that helps in addressing the problems effectively. Therefore i personally, very strongly believe that Lean Six Sigma provides a significant contribution to an organisation, in terms of business value.
 

   

 

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Six sigma will get the process capabilities defined, UCL and LCL set for the process. 

However Lean will focus on how to move smartly with less baggage in these lanes.

 

For me anything outside the limits of process is rejection

And anything other than he desired value is a waste.

 

Only the combination of 6Sigma and Lean will make the band small thereby improving process capability and reducing the wastages

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The "Sigma Level Metric" is not the end in itself. That can't be the goal because: (i) There will always be room for improvement. (ii) Every operating environment is continually undergoing change. Hence, even a successful method needs to be adapted to changed circumstances; and this will necessitate an approach to look for opportunities to cut the NVA's all the time. (iii) A dimension overlooked until now may come to light - and this is possible only if the process of questioning the obvious is instilled; e.g. why are we doing this?

Unless "Six Sigma" is accepted as a philosophy, such process review will not happen; and people may keep measuring and reporting the same kind of metric without looking into whether the metric is really relevant in changed business scenario.  

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I totally agree, I have seen the transformation journey in the last 7 years and how the lean six sigma had moved away from operational metrics to a effective culture building and solutioning framework. 

whatever be the solution or advanced tool that might be proposed as a solution for transformation still Lean six sigma is and will be the underlying framework helping us identify issues or opportunities that needs to be addressed. 

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 Lean and sigma are not mutually exclusive. In fact, they complement each other. The Six Sigma metric, based on data, aims to reduce defects/faults. Lean on the other hand, based on demand, aims to reduce waste and operations cost. Hence, focusing on the Sigma level metric would be an incomplete way of looking at the issue rather than being branded as inappropriate way of looking at things.  The Lean Six Sigma methodology is a comprehensive approach to the issue.

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Yes i agree that focussing on the sigma level alone is not the best way of looking at "lean six sigma" 

The improvement in sigma level is a long process and hence me lead to anxiety and impatience amongst the stakeholders.... 

The better way is to keep the shift sigma level as the long term goal and relish and encourage the small improvements in efficiency and effectiveness in the process brought in through the lean practices. 

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