Six Sigma, or 6σ, is both a methodology for process improvement and a statistical concept that seeks to define the variation inherent in any process. The overarching premise of Six Sigma is that variation in a process leads to opportunities for error; opportunities for error then lead to risks for product defects. Product defects—whether in a tangible process or a service—lead to poor customer satisfaction. By working to reduce variation and opportunities for error, the Six Sigma method ultimately reduces process costs and increases customer satisfaction.
Six Sigma as a methodology for process improvement involves a vast library of tools and knowledge, which will be covered throughout this book. In this section, we’ll begin to define the statistical concept represented by 6σ.
At the most basic definition,
6σ is a statistical representation for what many experts call a “perfect” process.
Technically, in a Six Sigma process, there are only 3.4 defects per million opportunities. In percentages, that means 99.99966 percent of the products from a Six Sigma process are without defect. At just one sigma level below—5σ, or 99.97 percent accuracy--processes experience 233 errors per million opportunities. In simpler terms, there are going to be many more unsatisfied customers.
Organizations and teams can calculate the sigma level of a product or process using the equation below:
Organizations can impact their sigma level by integrating core principles from the Six Sigma methodology into leadership styles, process management, and improvement endeavors. The principles of Six Sigma, and the tools used to achieve them, are covered in detail in various sections of this book, but some common ideas are introduced below.
A primary principle of the methodology is a focus on the customer. The Voice of the Customer (VoC) and ways for establishing what the customer really wants from a product or process. By combining that knowledge with measurements, statistics, and process improvement methods, organizations increase customer satisfaction, ultimately bolstering profits, customer retention, and loyalty.
A detailed understanding of the customer and customer desires not only lets businesses customize product offerings and services, but it also lets organizations:
- Offer additional features customers want and are willing to pay for
- Prioritize product development to meet current needs
- Develop new ideas based on customer feedback
- Understand changing trends in the market
- Identify areas of concern
- Prioritize work on challenges based on how customers perceive various problems or issues
- Test solutions and ideas before investing time and money in them
The value stream is the sequence of all items, events, and people required to produce an end result. For example, the value stream for serving a hotdog with ketchup to someone would include:
- A hotdog supplier
- A bun supplier
- A ketchup supplier
- A cooking procedure for the hotdog
- A pot
- Someone to do the cooking
- A plate
- Someone to put the hotdog into the bun
- Someone to put the ketchup on the hotdog
- Someone to put the completed hotdog onto a plate
- Someone to serve the hotdog to another
Inherent in the Six Sigma method is continuous process improvement. An organization that completely adopts a Six Sigma methodology never stops improving. It identifies and prioritizes areas of opportunity on a continuous basis. Once one area is improved upon, the organization moves on to improving another area. If a process is improved from 4 Sigma to 4.4 Sigma, the organization considers ways to move the sigma level up further. The goal is to move ever closer to the “perfect” level of 99.99966 accuracies for all processes within an organization while maintaining other goals and requirements, such as financial stability, as quickly as possible.
One of the ways to continuously improve a process is to reduce the variation in the process. Every process contains inherent variation: in a call center with 20 employees, variation will exist in each phone call even if the calls are scripted. Inflection, accents, environmental concerns, and caller moods are just some things that lead to variation in this circumstance. By providing employees with a script or suggested comments for common scenarios, the call center reduces variation to some degree.
Consider another example: A pizzeria. The employees are instructed to use certain amounts of ingredients for each size of pizza. A small gets one cup of cheese; a large gets two cups. The pizzeria owner notes a great deal of variation in how much cheese is on each pizza, and he fears it will lead to inconsistent customer experiences. To reduce variation, he provides employees with two measuring cups: a 1-cup container for small pizzas and a 2-cup container for large pizzas.
The variation is reduced, but it is still present. Some employees pour cheese into the cups and some scoop it. Some fill the cups just to the rim; others let the cheese create a mound above the rim. The owner acts to reduce variation again: he trains all employees to fill the cup over the rim and use a flat spatula to scrape excess cheese off. While variation will still exist due to factors such as air pockets or how cheese settles in the cup, it is greatly reduced, and customers experience more consistent pizzas.
Remember the hotdog example for value streams? We asked the question: do four different people act to place the hotdog in the bun, put the ketchup on the hotdog, plate the hotdog, and serve it? If so, does the process take more time because the product has to be transferred between four people? Would it be faster to have one person perform all those actions? If so, then we’ve identified some waste in the process—in this case, waste of conveyance.
Removing waste—items, actions, or people that are unnecessary to the outcome of a process—reduces processing time, opportunities for errors, and overall costs. While waste is a major concern in the Six Sigma methodology, the concept of waste comes from a methodology known as Lean Process Management.
Implementing improved processes is a temporary measure unless organizations equip their employees working with processes to monitor and maintain improvements. In most organizations, process improvement includes a two-pronged approach. First, a process improvement team comprised of project management, methodology experts, and subject-matter experts define, plan, and implement an improvement. That team then equips the employees who work directly with the process daily to control and manage the process in its improved state.
Often, Six Sigma improvements address processes that are out of control. Out of control processes meet specific statistical requirements. The goal of improvement is to bring a process back within a state of statistical control. Then, after improvements are implemented, measurements, statistics, and other Six Sigma tools are used to ensure the process remains in control. Part of any continuous improvement process is ensuring such controls are put in place and that the employees who are hands-on with the process on a regular basis know how to use the controls.