What is Six Sigma?
Although much has been written about Six Sigma, many misperceptions still exist. “Simply put, Six Sigma is a finely honed set of management tools for solving big problems using rigorously applied data gathering and statistical analysis to identify and eliminate defects,” according to Robert Edinboro, Account Manager for Europe at Six Sigma Qualtec, a worldwide consulting firm that has helped hundreds of companies deploy Six Sigma programmes.

Six Sigma is a statistical term that refers to 3.4 defects per million opportunities to make a mistake or 99.99966% accuracy. Sigma is a Greek word for variation. A defect can be anything from a faulty coating on a product to an incorrect invoice. Research shows that most companies, even those with a reputation for high quality products, services and customer relations, usually operate at a level of approximately Three Sigma, producing 67,000 defects for every million operations or customer transactions. For missioncritical processes, some quality-driven companies are able to achieve a Four or Five Sigma level.

Six Sigma evaluates business process performance against critical customer requirements to identify areas that need improvement, ensuring that business outputs match customers’ desires. Because all processes are not of equal importance, it would be inefficient and unnecessary for an organisation to achieve Six Sigma performance levels for every business process. For example, ordering coffee for internal meetings is not as critical as guaranteeing on-time shipments to customers.

Part of what makes Six Sigma so successful is its ability to focus on problem areas that will have the greatest positive impact on meeting customer expectations. According to Edinboro: “Companies need to ask themselves, what is really important for customers?” These mission-critical processes are called “critical-to-quality” requirements or CTQs. Basically, Six Sigma translates a customer’s requirements into an organisation’s operational terms and identifies the critical processes and tasks that must be done well to satisfy those requirements.

History of Six Sigma
Six Sigma originated at Motorola in the 1980s, after company engineers determined that new products often failed to meet customer expectations. The engineers were convinced that manufacturing products that were defect free from the start was better than trying to fix problems after they surfaced. This focus on the root cause of problems, as well as measuring customer requirements and product performance during production rather than after the manufacture of a finished-product was quite a radical idea at the time.

Although Six Sigma began in the manufacturing sector and has saved these companies billions of dollars, the programme is gaining popularity in the service sector, including government, corrections/law enforcement, healthcare, retail, finance, law, hospitality, insurance, engineering, marketing, software development and other fields. Six Sigma has evolved into a full-fledged management discipline.

Benefits of Six Sigma
Typically, a company that deploys Six Sigma achieves the following benefits:
• Enhanced cost savings and profitability
• Increased efficiency
• Improved quality and customer satisfaction
• Faster and more robust product or service development
• Elimination of organisational silos and outdated operational procedures
• Fewer rejects and recalls
• Shortened cycle times
• Reduced guesswork in problem-solving

Financially, the first set of projects usually justifies the entire cost of Six Sigma training. The return-on-investment (ROI) typically ranges from 10:1 to more than 100:1. In short, Six Sigma helps the bottom-line.

What makes Six Sigma different?
Unlike traditional quality programmes that focus on incremental improvements, a properly deployed Six Sigma programme generates breakthrough results, including performance improvements of 50% or more. In most companies, the cost of poor quality represents 20% to 30% of total revenues The proven Six Sigma methodology carves out these costs while achieving world-class quality levels.

At a Six Sigma company, management is by fact, not assumption. All proposed solutions must be tested and measured. Only those that prove statistically valid will be widely introduced. Most companies make the mistake of trying to make improvements before measuring what really works because they assume they have found the answer or, at least, an answer.

At its core, Six Sigma follows a five-phase, scientific, systematic, fact-based methodology for analysing and improving business processes called DMAIC:

• Define (What problems need to be solved?)
• Measure (What is the capability of the process?)
• Analyze (When and where do defects occur?)
• Improve (How can process capability achieve Six Sigma? What are the vital factors?)
• Control (What control can be put in place to sustain the gain?)

Companies involved in traditional quality programmes, such as total quality management (TQM), best practices and business re-engineering, often compile reams of data, but the data do not necessarily yield useful information. Edinboro explains: “Historically, quality programmes tended to be a set of separate, unconnected initiatives performed mainly by mid-level managers within their own departments. The impact of these efforts was less effective because they didn’t evaluate performance gaps company-wide and weren’t always actively supported by top management.”

Six Sigma translates data into beneficial knowledge by using metrics (measurements) customised to each situation, such as the cost of poor quality (COPQ), which provide insights into where and how to focus improvement efforts. Useful metrics define and measure performance on an existing process to discover its causes and to develop efficient operational means to control and reduce the variation. A successful Six Sigma programme doesn’t just focus on the defects, it also concentrates on identifying and correcting the processes that cause the defects.

Six Sigma Deployment
Six Sigma is not for the faint of heart. To achieve transformational change that results in savings from hundreds of thousands of dollars/pounds to millions and even billions of dollars/pounds requires a total commitment from top management, including the chief executive officer. It’s not enough for a CEO to mention Six Sigma in a few speeches and in the company’s annual report. He or she must not only be willing to devote the necessary human and financial resources, but must also become a highly visible cheerleader – some might even say an evangelist - for the programme. Think of Jack Welch at General Electric, who credits Six Sigma with saving the company hundreds of millions of dollars. He stated: “Six Sigma has changed the DNA of GE – it is now the way we work – in everything we do and in every product we design.”

Companies that implement a comprehensive Six Sigma programme rely on intensively trained, committed individuals who are essential for the success of the programme. They include the following individuals/groups:

Leadership Team (Composed of executive management):
Accountable for setting the organisation’s Six Sigma goals and objectives and for achieving business results.
Six Sigma Steering Group: Accountable for defining business improvement strategy and for its implementation throughout the entire organisation.
Financial Controller: Accountable for tracking and reporting savings generated by Six Sigma projects.
Champions (Composed of middle and senior managers): Accountable for defining the Six Sigma roadmap and for the development and performance of the Six Sigma teams.
Process Owner (Generally functional managers): Accountable for implementing process improvements and monitoring performance.
Stakeholder: Accountable for supporting projects and the implementation of improvements.
Black Belts (A highly motivated group of intensively-trained and experienced individuals who devote their time to leading Six Sigma projects and solving business problems) – Accountable for achieving assigned Six Sigma project objectives.
Green Belts: Accountable for achieving smaller project results and objectives and for assisting black belts.
Team Members: Typically accountable for contributions within their own functional areas of responsibility.
Yellow Belts: Accountable for process mapping and data collection, knowledge and experience that is relevant to their work areas. Also operate as specialist team resources.

Six Sigma successes
Although Six Sigma began in the United States, its reach is global. Many of the companies that have implemented Six Sigma programmes – Motorola, General Electric, 3M, Johnson & Johnson, Samsung Electronics, Honeywell, Weyerhauser, Bombardier, JP Morgan Chase & Co, Polaroid, Black & Decker, major auto makers, Eaton Corporation – are multi-national companies with offices throughout the world. They have implemented Six Sigma throughout the company, not just in their home country.

“European companies have tended to be more cautious than their American counterparts. They like to see successes before adopting a new management approach,” Edinboro states. “Six Sigma began making in-roads in Scandinavia about two to three years ago, particularly in the telecom industry and is now becoming more widely accepted in the rest of Europe. For example, Pilkington Group, Porvair and Yell (BT Yellow Pages) have all deployed Six Sigma programmes, as have American companies with large European divisions such as GlaxoSmithKline.


How do I get started with Six Sigma?
Six Sigma has transformed many companies, saving them significant sums of money while helping them in their efforts to develop near-perfect products and services. “However, Six Sigma isn’t a panacea or a quick fix,” cautions Edinboro from Six Sigma Qualtec.

He recommends that companies considering the implementation of a Six Sigma programme me should only move forward if top management is committed to the programme and they understand the organisation-wide commitment of time, money and personnel resources that are required for a successful deployment.

The first step for starting a Six Sigma programme is to identify resources that can guide your organisation through the inevitable challenges it will encounter. Six Sigma Qualtec, Inc (SSQI), a pioneer in Six Sigma training and consulting can help an organisation determine if Six Sigma is right for them.

SSQI has worked with hundreds of the world’s foremost companies, such as Acadia, Bechtel, Brazeway, Yell (BT Yellow Pages), Comdata, Emerson, Fannie Mae, Flowserve, General Electric, Heller Financial, Honeywell, Hyundia, IDEX, Jacksonville Electric Authority, Liberty Insurance Services, Lockheed Martin, McLeod USA, Mead, Medtronic, Navistar, Nokia, Northern Ireland Electricity, Owens Corning, Pennsylvania Power & Light, Pilkington Group, Public Service Electric & Gas, RR Donnelley, Samsung, Sanyo Energy, State Street Bank, Sumitomo, The Wall Street Journal and Williams Energy Services.

The SSQI approach for implementing Six Sigma is a carefully planned deployment of training and tools for achieving breakthrough performance, including dramatically reduced cycle times, defects and costs; significantly improved productivity, efficiency and customer satisfaction; and measurable business results.

Contact Six Sigma Qualtec at www.ssqi.com to view case studies and to learn more about SSQI’s products and services.

Additionally, developing a network of Six Sigma professionals who are willing to serve as sounding boards and idea generators can be extremely helpful.

The International Society of Six Sigma Professionals (ISSSP), the only membership society dedicated to the advancement of education, research and implementation of Six Sigma methodology, is an excellent resource and forum for connecting with many well-respected Six Sigma experts.

ISSSP’s 4th Annual Six Sigma Leadership Conference, June 11-13, 2003, in Scottsdale, Arizona, will offer excellent opportunities to network with the industry’s leading Six Sigma professionals and to attend presentations about successful Six Sigma deployments by internationally-recognised business leaders such as Dan Burnham, CEO of Raytheon. Information about ISSSP and the Leadership Conference are available at www.isssp.com

ISSSP’s corporate sponsors include Armstrong World Industries, Bank of America, Dial Corporation, GlaxoSmithKline, Goodrich Corporation, Johnson & Johnson, Kohler, Lockheed Martin, Mazda USA, McKesson, Merck, Raytheon, Roche Diagnostics, Standard Register and Takata Seat Belts.