Six Sigma is a quality management strategy introduced by Motorola in 1981 and popularized in the mid-1990s after American entrepreneur Jack Welch implemented it as a key strategy in General Electric (in which the company was CEO from 1981 to 2001).
For several years, in an attempt to seek new achievements and successes, companies have been applying a new and different methodology, which has emerged as the undisputed market leader.
Faced with pressure from all sides – customers, suppliers, investors, companies can not play their role as efficiently as possible, which is unthinkable in a world of hyper-competition. Large and small enterprises are faced with the task of finding ways to improve, not only at the level of production but also on the overall production process.
Not one or two large companies in the world have managed to reduce costs and optimize their work, but today they are competitive, vibrant, and in shape. It’s not about a miracle cure or the diet of the month. They owe this to a specific process methodology called Six Sigma. Six Sigma is a structured method based on statistical tools and techniques to improve the process, applied in the principles of project management, aiming at both customer satisfaction and achieving ambitious strategic goals. The 6σ model is a statistical method for improving the quality of processes from the consumer’s point of view. It determines service levels and measures deviations from them.
This new method is “customer-oriented”. It is based on the eternal rule, which is confirmed by the dark Middle Ages or even since man trades – “to satisfy customers, you must produce quality products.”
The five phases of the projects
The projects go through five phases: identification, measurement, analysis, improvement, and control. The Design for Six Sigma method refers to the principles of creating defect-free products and services. It helps organizations focus on quality in every aspect of their business. The term “sigma” refers to the deviation from the ideal level of operation, as each level of sigma, starting from 1, allows the admission of fewer and fewer defects. Sigma Six is a management strategy that allows the company to become more active and efficient. When the desired results are achieved, customer satisfaction increases, and employees, feel more complete, less tense, and stressed, which in turn has a better impact on the work process. Sigma 6 requires the achievement of only 3.4 defective goods per million manufactured or 999,999.6 serviceable products. If you work in the field of IT, this means fewer servers, faster response to reported errors, and better project execution.
The methodology of the Six Sigma
The Six Sigma methodology was created by Motorola’s manufacturing division in the 1980s. It was subsequently adopted by other major manufacturers such as General Electric and Honeywell International. Reference: “What is Lean Six Sigma (6 sigma explained)”, https://bvop.org/journal/six-sigma/
Today, CIOs from a variety of industries are beginning to implement it because it requires continuous process improvement based on facts and quantitative indicators, as well as its ability to quickly and successfully eradicate shortcomings in the company’s work and processes.
Companies in the financial sector also effectively apply Six Sigma and prove that this methodology works successfully not only in the manufacturing sector. The report cost reductions and quality improvements of the order of 20-50%. Customers themselves are well acquainted with Six Sigma and appreciate the efforts of partners who implement them and have focused their efforts on improving business processes.
On the one hand, the Six Sigma methodology sets a clear goal for IT managers and gives them quantitative dimensions to justify investments in new technologies and equipment. On the other hand, 6σ provides an opportunity to compare IT and other projects in the organization.
IT often falls between a rock and a hard place – huge expectations and unfulfilled returns. Six sigma solves this problem by enabling an accurate representation of the true value of technology and helping to improve the way it is implemented, said Deputy. Chase Financial Services President and CTO Charles Costa, where they apply the methodology to IT projects worth more than $ 1 million
Some IT managers are fast becoming supporters of Six Sigma because the methodology introduces quality as the main criteria for evaluating the company’s performance. At the same time, they have invested heavily in new technologies in recent years, and not all quality problems have been resolved. Applying the methodology not only to individual projects but to the organization as a whole helps them resolve conflicts.
6σ supporters strongly argue that the methodology is effective for all types of companies and processes, but acknowledge that there are times when it is inapplicable – when the organization’s resources are already limited to a point that is far below the minimum. And not because the company doesn’t need the Six Sigma at the moment (it probably needs them more than ever), but because tired and stressed executives are unlikely to be able to appreciate their merits and apply them properly.
Last but not least, the IT managers who implemented the methodology noted that it should be applied from top to bottom in the organization. Six Sigma is a transformational tool aimed at senior management, and if it does not want to personally commit to implementing this strategy, it will no doubt fail. Management needs to be clear about its role in the process – selecting teams, deciding which metrics to consider, establishing an accountability and transparency procedure, and setting up a mechanism to identify and monitor results.
Six Sigma / 6 Sigma Method
We live in a time when information spreads so fast that when an event happens somewhere in the world, it becomes common knowledge within hours or even minutes. Organizations must defend their reputations as manufacturers and suppliers of quality and safe products and services. Only one incident related to the quality and safety of the product can lead to irreparable damage to organizations. Although many quality control systems are used today, a methodology has gained immense popularity in gaining consumer confidence in organizations and their products.
The founding elements of 6 Sigma can be traced back to the 19th century. In the 1920s, Walter Shevert, a well-known statistician, sometimes called the “father of statistical quality control,” demonstrated that when process variation reached three-sigma averages, the process required correction. Bill Smith, an engineer working for Motorola, later coined the term Six Sigma. Bill Smith, along with Bob Galvin, the CEO of Motorola, developed a new quality management system (QMS) that highlighted the link between product performance and the need for adjustments during production. More on the topic: “Quality control and quality assurance in Project Management and Agile practices”, https://scrumtime.org/quality-control-and-quality-assurance-project-management-agile-practices/
Their four-phase system has become the foundation on which the current Six Sigma methodology is built. The four phases are Measurement, Analysis, Improvement, and Control.
What is Six Sigma?
Six Sigma is a system of statistical tools and techniques aimed at eliminating defects and reducing process variations. The Six Sigma method includes measurement, improvement, and validation activities. Six Sigma refers to the relationship between the number of defects per million capabilities and the number of standard deviations detected in the process. The maturity of the production process in this concept is described as a σ-rating of the deviations, or by the percentage of defect-free output. Thus, the quality management process 6σ at the output gives 99.99966% produced units without defects or no more than 3.4 defective units per 1 million operations.
Lean Six Sigma
6 sigma is most often associated with the number 3.4 defects per million possibilities. For most people, 6 sigma is another statistical tool for quality control analysis. 6 sigma is a methodology that aims to provide a basis for significant improvements and improve quality by eliminating deviations and defects throughout the business cycle of an enterprise.
The leading force behind every 6 sigma project comes to the main focus of the methodology – “to be the basis for significant improvements in a systematic approach, through the management of deviations and defects.” This makes us ask questions together, raise the bar high, make people think outside the box and be innovative. The goal is to load our minds, not physically. For this purpose, we can use the following scenarios.
The first scenario is an existing process that works “reasonably” well; the second scenario is a lack of process. A bad process is better than no process at all.
1. The first scenario draws our attention to significant improvements in pre-processes and requires the use of DMAIC – Determination – Measurement – Analysis – Improvements – Management
2. Defining the objectives of the process in terms of key critical parameters (eg Critical for quality or critical for production) against the background of customer requirements or “Customer Voice”
3. Measuring the performance of the current process in the context of the set goals
4. Analyze the current scenario for deviations and defects
5. Improving the process by systematically reducing deviations and eliminating defects
6. Control of the future performance of the process
The second scenario draws attention to the use of (DFSS) methodology – Design for 6 sigma. In general, DFSS requires ODOV – Identification – Design – Optimization – Verification
1. Defining process objectives in terms of critical parameters, industry & competitors, customer’s voice
2. The design includes a list of potential solutions and the selection of the best ones
3. Optimizing performance through the use of advanced statistical methods, simulations, and design
4. Validation of the developed design following the objectives of the process
It is very important to understand 6 Sigma correctly – this methodology is not just about product quality, where only 3 defects per million are the basis of the system. But at the same time, it is what is important for the client, whether it is an internal or external problem. It is focused entirely on creating added value – both for the customer and the market. For example, Polaroid had sales of over US $ 2 billion in 1988 and operated very well on the stock exchange. It started with the introduction of 6 sigma and sometime around 1997, it became a 6 sigma company. In late 2001, they filed for bankruptcy. The reason for this was the fact that Polaroid focused only on the quality of the products, without making a full assessment of the needs of customers and the market.