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This article: Introduction Six Sigma
Source: Business-improvement.eu
Lean Six Sigma: Value adding, perfect organization

For more articles about (Lean) Six Sigma, use the drop down menu in the top left corner. This is the introductory article about Six Sigma, another article introduces Lean Six Sigma

Introduction Six Sigma
Six Sigma is a process improvement method, developed from the standpoint of quality. Six Sigma reduces variation in production and business processes. The goal is to maximize the likelihood that products or services will meet customer expectations. The term Six Sigma literally refers to a probability of error of only 0.00034%. Six Sigma originated within Motorola in the US. Soon after its launch in the 80s, General Electrics became one of the strongest advocates of this quality improvement method. Typical for Six Sigma projects is that the results are financially measurable, and that these results can be estimated beforehand.

The perfect organization
In its early days, Six Sigma was primarily used when quality requirements were high or when product losses occurred frequently. Its starting point was – and is – that aspects of quality must be (made) measureable. Originally Six Sigma was often applied to products for which the quality specifications had to lie between certain boundaries. These type of products are commonly found in the processing industry, and in the high tech sector.

As with many other process improvement methods, Six Sigma has grown into a general process management technique that can be applied in many situations, also beyond production. Six Sigma is for example applied within banks and insurance companies, because the quality of their administrative processes is very important. Six Sigma is especially suitable to solve complex problems, for which there is no obvious solution. In that case, Six Sigma is applied to find the factors that influence the result - in terms as quality perceived by the customer - the most. After that, those factors are brought under control, so that the quality becomes constant.

Six Sigma’s is well-known for its statistical tools. However its project management method, DMAIC – “Define, Measure, Analyze, Improve, Control” – has an even wider applicability. DMAIC can be used in virtually any organization. In addition, Lean-projects can also be carried out via the steps of DMAIC, see Lean Six Sigma.



Six Sigma
(introductory article)
Reducing variation improves quality
By Dr Jaap van Ede, business-journalist, editor-in-chief business-improvement.eu
The first version of this article was published in the Dutch specialist journal PT Industrial Management. Since then, the article has been regularly updated.


Six Sigma has a white-collar image, because statistics play a very important role in it. Its hierarchical management style, which has its roots in the US, contributes to this impression. But is this image correct? No. Applying Six Sigma is not as hard as it seems. Even small and medium-sized businesses can successfully use this method.

Who invented Six Sigma? The mathematician Carl Frederick Gauss (1777-1855)? Gauss introduced the concept of a normal or standard distribution. He expressed the average spread around a target or median value as the standard deviation sigma (σ).

This kind of maths, particularly the theory of probability, is crucial to Six Sigma. After all, its goal is to reduce variation in the outcome of business processes and, consequently, to maximize the chance that products or services will meet customer expectations.

Gauss laid the solid statistical base that made it possible to measure variation in processes. Credit for the introduction of Six Sigma as an ongoing improvement tool however goes to an American engineer at Motorola, Bill Smith. Later on, Six Sigma grew to maturity within General Electrics, led at the time by Jack Welsh. He achieved huge savings using Six Sigma.

Measurable
Six Sigma is not about the reduction of variation in general. It is clearly focused on the aspects that customers find important, attractive or distinctive. Market research can for example determine what these critical to quality (CTQ) aspects are.

Six Sigma starts off from the viewpoint that quality should be made measurable first. Once you’ve got that, you can constantly improve your processes, striving for perfection. What the customer regards as CTQ should always come first. The chance that a given business process will meet customer expectations should be increased to 99.9997% at least, which means that there are less defects than 3,4 in a million#.

In mathematical terms, this means that the results of a particular process are still good if these fall within a range of six times the standard deviation (Six Sigma  or 6σ). Once this extreme level of quality is achieved, customer satisfaction will increase and, as a result, so will the operating profit.

The level of 6σ was chosen rather arbitrary. The goal of Six Sigma is not to achieve a variation of less than 6σ, but to improve quality. The name Six Sigma was chosen among others because it sounds so good. In addition, it emphasizes that this method strives for perfection in the eyes of the customer. However, sometimes processes need an even higher quality level, and in other cases the level of 6σ remains a holy grail forever. In general, it is mainly important that each Six Sigma project raises the qualilty.

Project management
Not only products can meet customer specifications, but also things like delivery times, service levels, or even a maximum allowed number of incidents.

This means that Six Sigma can be used to improve almost any activity, with as only boundary condition that you can measure the quality of the process involved! Theoretically, this makes this method suitable for any company and any business process, from production to invoicing!

The first Six Sigma project took place in the 80s, supervised by Mikel Harry, chief designer at Motorola. Before that, Six Sigma was only a mathematical method to make quality measurable. Harry linked that idea to an existing project management method called DMAIC, which stands for the steps Define, Measure, Analyze, Improve and Control.

Mikel Harry used Six Sigma and this DMAIC project cycle to set up a production line for pagers. At the time, these were new products, that had to meet high quality standards. Thanks to Six Sigma, Harry not only met those requirements, he was also able to deliver the pagers in only two days.
 
Judo
After this breakthrough Six Sigma spread rapidly to multinationals such as Honeywell and General Electrics (GE). Together with Motorola, GE was responsible for the introduction of judo terms like Green Belt and Black Belt, which identify the level of knowledge and experience of a Six Sigma project leader.

Strictly speaking, Black Belts are people who work fulltime on improvement projects. This suggests that Six Sigma is only suitable for large companies, because smaller ones often can’t afford to free staff to work solely on improvement projects.

There is however no consensus on what level of knowledge Black Belts should have, or what tasks they should carry out. At Philips, for example, a Black Belt is not the same as a Black Belt at GE or Shell. I addition, it would be a pity if small businesses are put off by the American-flavored Six Sigma jargon. Terms like Green Belt and Black Belt just mean that project managers should at least know the basics of Six Sigma. They don’t have to spend all their time working on DMAIC projects, so it is possible that they carry out those projecls in medium or small businesses.
 
Start small
Novices are advised to start with a small DMAIC project, since that is the best way to acquire the essential knowledge needed to apply Six Sigma. 'When you are a consultant like me, you begin to evaluate all potential improvement projects, together with the management', says Wim Hoogbergen. 'You investigate if and how the projects connect with the corporate mission, and if they offer enough return on investment. In addition, there should be sufficient human resources available to execute the projects.'
 
Following the selection of a suitable start-up project (Define), phase two of the DMIAC cycle begins: Measuring what the customer perceives as lacking in quality. 'That’s not easy. For instance, it makes a big difference how you measure and who does this. Let me give an example. For a welding spot, we determined that a diameter of less than 3 mm was critical to quality (CTQ). Then we found out that the night shift was rejecting far more welds than the day shift. It turned out that they were including a light-colored edge around the welding spot in their measurement.'
 
Not everything that might lead to customer complaints is measured. To be selective, a Pareto analysis is a very useful tool. Pareto refers to the principle that 80% of the problems are commonly related to only a few quality aspects. 'You should focus on improving those key aspects.'

Analyze
After the Measure phase of the DMAIC cycle comes the Analyze phase, see also the box Six Sigma Jargon.  'The goal at this stage is to identify the root causes of the variation. This is the hardest part, which usually takes up a lot of time.'

The aim is to track down why a quality aspect sometimes falls short of expectations. 'Often people on the shop floor know the answer themselves. In that case, it’s enough to bring this knowledge to the surface.'

If that isn’t enough, you can use one of the many Six Sigma analyzing tools. Sometimes a technique called Design of Experiments (DOE) is used. 'We use DOE to gain insight into the sensitivity of quality aspects to process parameters, such as temperatures. As a test, we conduct experiments to approach – within safe limits – the boundaries of a process. Sometimes we’ll deliberately make faulty products, to observe when a deviation happens. The goal is to find a robust set of parameter values, for which the process becomes insensitive to environmental change.'
 
Once the process improvements are implemented (Improve), you mustn’t forget to ensure that a return to the old situation becomes impossible, this is the Control-phase. 'Otherwise, you risk dropping back to the old quality level'.
 
Senior management
A key factor for the success of a Six Sigma project is the presence of a "champion”, someone from senior management who supports the project. 'In addition, a cost-benefit analysis is crucial. Time and again the question should be asked: Will improving a certain quality aspect yield enough profit? I’m a strong believer in financial validation, which should be handed over to a financial controller. It’s also a good idea to attract a lot of attention with the first projects, by putting photos and graphs on notice boards, for example. That is a good way of spreading enthusiasm for Six Sigma throughout your organization.'

Ronald Does is not only professor at the University of Amsterdam, but also director of a (Lean) Six Sigma consultancy firm. He stresses the importance of having a well-run business organization, before you start with Six Sigma. 'Applying Six Sigma means making changes', says Does. 'People on the shop floor must want to make improvements. Only tolerating Six Sigma, for example, to give underperformers a second chance by leading DMAIC projects, will certainly lead to failure. People who can successfully run Six Sigma projects are often high potentials. They often have other important tasks, so it is important to free them from these.’

Process Control
Professor Does established his consultancy firm in 1994. Initially this firm was specialized in statistical process control. He recalls: ‘I was contacted by General Electrics in 1996. They were looking for someone with statistical knowledge. Being a professor in industrial statistics, I accepted their request with pleasure.'
 
'I became impressed by Six Sigma', continues Does.  'Therefore we began to initiate Six Sigma projects ourselves at companies such as Sara Lee and DAF Trucks. Today, we carry out an increasing number of projects in the service industry, the Dutch university hospital UMCG is a good example.'
 
Usually, a Black Belt training is a mixture of theoretical study and practical exercises, and takes up several months of time. 'Candidates should bring along a real-life Six Sigma project. That way, it becomes clear imediately if they have understood what they have learned. We assess the candidate’s theoretical knowledge, and the management of the company assesses their practical results. Optionally, the training course can be rounded off with a theory exam.'
 
Black Belts are usually fulltime process-improvers. However, there are also Six Sigma Green Belt courses, for part-time process improvers. These courses are for example appropriate for people who work in small or medium-sized companies.
 
Conclusion
Six Sigma was initially applied in companies who wanted to distinguish themselves in the market by superior product quality. Nowadays the application of Six Sigma, and especially of DMAIC, has broadened to a wide spectrum of organizations, ranging from the chemical industry to banks and hospitals.

Six Sigma is very well suited to find unknown causes of quality variation, by way of thorough statistical analysis. Attention should however be paid to the risk of mistakes in the form of mathematical errors. In addition to much focus on the statistical tools can reduce the room for creativity. Sometimes it is simply needed to think put of the box to find solutions.

Relatively new is the growing interest in Lean Six Sigma, a mix of Six Sigma and Lean manufacturing. Lean is then applied to reduce waste in time and materials, while Six Sigma adds ways to achieve a good and constant product quality. The result is a production or business process which is more efficient ánd better.

For an example of a company that applies Six Sigma, see the case Draka Comteq below.

#) In calculating the number of defects per million (3,4 for a quality level of 6σ), it is assumed that the average result of a process shifts with 1,5σ after a certain amount of time (away from the ideal result). Next, the number of results per million is calculated which exceeds the nearest quality specification limit. Due to this somewhat peculair calculation method, a process with a quality level of 1σ delivers more defect (69%) than good products!
 

Six Sigma jargon

Critical to Quality (CTQ)
A CTQ parameter is a measurable characteristic of a process or product, which should be above, below or between certain limits. It should at the least meet customer expectations. New products, which should be distinguishable on the market, should even exceed expectations. If customer expectations are not fulfilled, this is called a ‘defect”.

Defect
A defect is a characteristic of a business process or a product, which lies outside the parameters specified by a CTQ factor.

Sigma (σ)
Sigma or σ is the symbol for standard deviation, the mean spread around a target value, which is CTQ.

Six Sigma (6σ)
The term Six Sigma, or actually 6σ, refers literally to a very small spread of a process outcome around a target value, when this process is repeated many times.
The six in 6σ indicates that the process should be so well-optimized that even if a deviation of six times the mean deviation occurs, the outcome is still within customer expectations. The chance of getting a defect is then less than 3.4 in a million (because an aberrancy from the mean outcome of six times the mean deviation is needed to result in a defect)

DMAIC stands for the project cycle Define, Measure, Analyze, Improve and Control. This project management tool is used to improve quality aspects (CTQs) of products or business processes, theoretically to a 6σ degree of perfection. Achieving a quality improvement of 90% per cycle is however in practise already quite a challenge!

  1. During the Definition phase of the DMAIC cycle, the company’s mission is evaluated. Who are the customers,  what do they want, and how will their expectations be met? (market research).
  2. In the Measure phase it is determined how each critical quality aspect or CTQ will be measured. CTQs are identified and their corresponding upper and lower limits are set.
  3. The third stage of the cycle is the Analyze-phase. Frequently occurring ‘defects’ and their root causes are identified. In addition, possible improvement solutions are suggested.
  4. In the Improve phase, the process owner selects the best improvement solutions, and these are implemented.
  5. During the Control phase protective measures are introduced to prevent a return to the former (worse) state. A control measure could e.g. be a management dashboard with operational Key Performance Indicators.

Some organisations apply an extra step before a DMIAC-cycle begins. This is the so-called Recognize-phase, in which the most important Six Sigma projects are selected.

Like Lean manufacturing, Six Sigma puts a finger on the sore spots in business processes. Another parallel is that Six Sigma doesn’t offer a standard method to eliminate those spots. Black Belts have about a hundred statistical tools at their disposal which they can use to find root causes of “defective” processes. Design of Experiments (DOE; see below) is one of those tools. Suggestions for improvement do not only come from statistical exercises. On the contrary, these just serve to put ideas into the heads of the people on the shop floor, who often have knowledge to solve problems themselves. It is the task of the Black Belt to open up that knowledge, by presenting historical data on the ups and downs of a process in an orderly fashion.

DMADV
This is a variant of DMAIC used to improve the outcome of design processes. DMADV stands for the cycle Define, Measure, Analyze, Design and Verify.

Design of Experiments (DOE)
DOE is one of many Six Sigma tools used to identify root causes of fluctuations in quality. Experiments determine the relation between environmental factors and the outcome of a process (of course within the safety limits of that process). DOE resembles a well-known engineering method, called sensitivity analysis, which can in part be executed theoretically. The goal of DOE is to search for process parameters which make a production or administrative process relatively robust. Using these robust setpoints will minimize the likelihood of an aberrant result (that is: an outcome below the quality standards).

Champion
A champion is a business manager convinced of the benefits of Six Sigma, who has the authority to allocate staff the time and resources necessary to execute Six Sigma projects. This champion sometimes is also the process owner – think of the head of a department undertaking a Six Sigma project. Process owners commission a Black or Green Belt, to investigate how “their” processes could be improved.

Master Black Belt
A Master Black Belt coordinates the work of multiple Black Belts, see below.

Black Belt
A Black Belt is a Six Sigma team leader, who leads DMAIC projects. Black Belts are trained to base their work on evidence, using statistics and data analysis. In bigger companies the Black Belt position usually is a fulltime job.

Green Belt
A Green Belt is someone with sufficient knowledge of Six Sigma to participate in a DMAIC project, led by a Black Belt. A Green Belt may also be the leader of a small DMIAC project. Green Belts usually work parttime on improvement projects, alongside their regular jobs.

Six Sigma Consultancy
A list of consultancy firms that are sponsor/advertiser of our site-section (Lean) Six Sigma can be found here.


Case Draka Comteq
Fewer rejects in glass fiber production

Roland van Laere is head process support at Draka Comteq. This is a Dutch medium-sized firm, located in Eindhoven, that produces fiberglass cables. Van Laere says, 'Our high quality standards bring along that we have fairly high levels of product losses, due to quality issues. This makes Six Sigma extremely suitable for us. It’s an ideal method for the processing industry, where product specifications have to lie between certain limits.'

The Six Sigma team at Draka Comteq      
A Six Sigma projectteam at Draka Comteq


Lining

The production process of Draka begins by lining the inside of a hollow glass tube with about a thousand very thin layers of glass. The refraction index of each deposited layer is just that tiny bit different. To achieve this, the composition of the syngas is varied, which is a mixture of silicon tetrachloride, germanium tetrachloride and oxygen.

When this plasma-activated chemical vapor deposition process is completed, the glass tube is heated until it collapses and becomes a solid glass rod. A preform analyzer is used to verify that the rod meets all the specifications. If the rod passes control, it is shipped to a sister company in France where it is coated with an outer layer of glass.  Back in the Netherlands the glass rod, now about 8 cm thick, is oven-heated until the glass fiber can be drawn. Van Laere explains, 'First you wait until a glass droplet forms. Then you start to pull increasingly harder, until the spinning rate of the glass fiber is about 750 meters per minute.’

The end product is a glass fiber of 125 micrometers thick, with a core between 8 and 62.5 micrometers. During the pulling process, an extra coating is applied around it, for protection.

Structured way
Draka Comteq was already using statistical methods to master product quality. 'But,' Van Laere adds, 'We missed something, namely a structured way to do that. You could say that we were on the way to invent Six Sigma ourselves', he smiles. 'I’d heard of the term but didn’t quite know what it meant.'

At the same time, Ralph van Lankveld, a senior process engineer at Draka, heard about Six Sigma from a friend at Philips. Subsequently he decided to follow a training course. Meanwhile Van Laere attended a lecture given by General Electrics and became convinced of the usefulness of Six Sigma.

Van Laere says, 'Then things went really fast. Ralph started his first DMAIC project while he was still in training. That’s the recommended way to go, because it gives you the opportunity to ask the course instructors targeted questions.'

From January to June 2004 Van Lankveld was working fulltime on optimizing a production line for the multimode glass fiber “MaxCap”. This type of glass fiber is used in local area networks, which need a very large bandwidth. Van Lankveld points out, 'We chose MaxCap as our first Six Sigma project, because we were suffering fairly high levels of product losses due to inferior quality. So, we had much to gain with process optimization.'

Black Belt
During the MaxCap project, the DMAIC system bore fruit. 'During the Analyze phase it is emphasized that you should eliminate potential impact of the measuring equipment. We found that the preform analyzer measurements varied along the length of the glass tube. Therefore we saw deviations that actually were not present.'
 
The solution was to carry out the preform analysis at two set positions, and average those measurements. 'We use this mean number to adjust the glass fiber production process,' adds Van Lankveld, 'but only if needed. Now that our measurements have become more precise, we don’t make so many adjustments these days. This is an important improvement because it takes time to adjust things and you run the risk of over steering production. All in all we’ve reduced product rejects by 8%.'
 
The mean deviation of the production process still exceeds 6σ. 'It remains questionable if we can reach that target, but that isn’t our goal. We just want quality improvement.'

Blindly devoted
Because of the success of the pilot project, Draka Compaq implements Six Sigma as the standard improvement method throughout production and in the R&D department. 'Theoretically,' says Van Lankveld, 'we could also apply Six Sigma in procurement and sales, but that’s not our top priority. We don’t want to be blindly devoted to Six Sigma, because then you risk running into a dead end. It’s important to keep using common sense, besides all the statistical analyses.'

Considering the amount of Six Sigma knowledge he has gained, project leader Van Lankveld would be entitled to call himself a Black Belt. However, he prefers not to use this title.


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