What is Six Sigma? Explore Its Importance and Benefits

What is Six Sigma?

Six Sigma is a set of methodologies and tools used to improve business processes by reducing defects and errors, minimizing variation, and increasing quality and efficiency. The goal of Six Sigma is to achieve a level of quality that is nearly perfect, with only 3.4 defects per million opportunities. This is achieved by using a structured approach called DMAIC (Define, Measure, Analyze, Improve, Control) to identify and eliminate causes of variation and improve processes.

Six Sigma is a disciplined and data-driven approach widely used in project management to achieve process improvement and minimize defects. It provides a systematic framework to identify and eliminate variations that can impact project performance.

The etymology is based on the Greek symbol "sigma" or "σ," a statistical term for measuring process deviation from the process mean or target. "Six Sigma" comes from the bell curve used in statistics, where one Sigma symbolizes a single standard deviation from the mean. If the process has six Sigmas, three above and three below the mean, the defect rate is classified as "extremely low." 

The graph of the normal distribution below underscores the statistical assumptions of the Six Sigma model. The higher the standard deviation, the higher is the spread of values encountered. So, processes, where the mean is minimum 6σ away from the closest specification limit, are aimed at Six Sigma.

Credit: Cmglee, via Wiki Creative Commons CC BY-SA 3.0

What Is Lean Six Sigma?

Lean Six Sigma is a methodology that combines two powerful process improvement techniques: Lean and Six Sigma.

Lean focuses on minimizing waste and maximizing efficiency by identifying and eliminating non-value-adding activities. This involves streamlining processes, reducing defects, improving quality, and optimizing resources to deliver more value with less effort.

On the other hand, Six Sigma is a statistical approach to process improvement that aims to reduce variation and defects by using data-driven decision making. It involves defining, measuring, analyzing, improving, and controlling processes to achieve consistent and predictable results.

By combining the strengths of these two methodologies, Lean Six Sigma provides a comprehensive approach to process improvement that can be applied to any industry or sector. It is widely used in manufacturing, healthcare, finance, and service industries to improve efficiency, reduce costs, and enhance customer satisfaction.

The 5 Key Principles of Six Sigma

The concept of Six Sigma has a simple goal – delivering near-perfect goods and services for business transformation for optimal customer satisfaction (CX).

Goals are achieved through a two-pronged approach:

Six Sigma has its foundations in five key principles:

1. Focus on the Customer

   This is based on the popular belief that the "customer is the king." The primary goal is to bring maximum benefit to the customer. For this, a business needs to understand its customers, their needs, and what drives sales or loyalty. This requires establishing the standard of quality as defined by what the customer or market demands.

2. Measure the Value Stream and Find Your Problem

   Map the steps in a given process to determine areas of waste. Gather data to discover the specific problem area that is to be addressed or transformed. Have clearly defined goals for data collection, including defining the data to be collected, the reason for the data gathering, insights expected, ensuring the accuracy of measurements, and establishing a standardized data collection system. Ascertain if the data is helping to achieve the goals, whether or not the data needs to be refined, or additional information collected. Identify the problem. Ask questions and find the root cause.

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3. Get Rid of the Junk

   Once the problem is identified, make changes to the process to eliminate variation, thus removing defects. Remove the activities in the process that do not add to the customer value. If the value stream doesn't reveal where the problem lies, tools are used to help discover the outliers and problem areas. Streamline functions to achieve quality control and efficiency. In the end, by taking out the above-mentioned junk, bottlenecks in the process are removed.

4. Keep the Ball Rolling

   Involve all stakeholders. Adopt a structured process where your team contributes and collaborates their varied expertise for problem-solving.
   
   Six Sigma processes can have a great impact on an organization, so the team has to be proficient in the principles and methodologies used. Hence, specialized training and knowledge are required to reduce the risk of project or re-design failures and ensure that the process performs optimally.

5. Ensure a Flexible and Responsive Ecosystem

   The essence of Six Sigma is business transformation and change. When a faulty or inefficient process is removed, it calls for a change in the work practice and employee approach. A robust culture of flexibility and responsiveness to changes in procedures can ensure streamlined project implementation. The people and departments involved should be able to adapt to change with ease, so to facilitate this, processes should be designed for quick and seamless adoption. Ultimately, the company that has an eye fixed on the data examines the bottom line periodically and adjusts its processes where necessary, can gain a competitive edge.

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The Six Sigma Methodology

The two main Six Sigma methodologies are DMAIC and DMADV. Each has its own set of recommended procedures to be implemented for business transformation.

DMAIC is a data-driven method used to improve existing products or services for better customer satisfaction. It is the acronym for the five phases: D – Define, M – Measure, A – Analyse, I – Improve, C – Control. DMAIC is applied in the manufacturing of a product or delivery of a service.

DMADV is a part of the Design for Six Sigma (DFSS) process used to design or re-design different processes of product manufacturing or service delivery. The five phases of DMADV are: D – Define, M – Measure, A – Analyse, D – Design, V – Validate. DMADV is employed when existing processes do not meet customer conditions, even after optimization, or when it is required to develop new methods. It is executed by Six Sigma Green Belts and Six Sigma Black Belts and under the supervision of Six Sigma Master Black Belts. We'll get to the belts later.

The two methodologies are used in different business settings, and professionals seeking to master these methods and application scenarios would do well to take an online certificate program taught by industry experts.

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The Six Sigma Process of Business Transformation

Although what is Six Sigma uses various methods to discover deviations and solve problems, the DMAIC is the standard methodology used by Six Sigma practitioners. Six Sigma uses a data-driven management process used for optimizing and improving business processes. The underlying framework is a strong customer focus and robust use of data and statistics to conclude.  

The Six Sigma Process of the DMAIC method has five phases:

Each of the above phases of business transformation has several steps:

1. DEFINE

   The Six Sigma process begins with a customer-centric approach.
   
   Step 1: The business problem is defined from the customer perspective.
   Step 2: Goals are set. What do you want to achieve? What are the resources you will use to achieve the goals?
   Step 3: Map the process. Verify with the stakeholders that you are on the right track.

2. MEASURE 

   The second phase is focused on the metrics of the project and the tools used in the measurement. How can you improve? How can you quantify this?
   
   Step 1: Measure your problem in numbers or with supporting data.
   Step 2: Define performance yardstick. Fix the limits for "Y."
   Step 3: Evaluate the measurement system to be used. Can it help you achieve your outcome?

3. ANALYZE 

   The third phase analyzes the process to discover the influencing variables.
   
   Step 1: Determine if your process is efficient and effective. Does the process help achieve what you need?
   Step 2: Quantify your goals in numbers.  For instance, reduce defective goods by 20%.
   Step 3: Identify variations using historical data.

4. IMPROVE 

   This process investigates how the changes in "X" impact "Y." This phase is where you identify how you can improve the process implementation.
   
   Step 1:  Identify possible reasons. Test to identify which of the "X" variables identified in Process III influence "Y."
   Step 2: Discover relationships between the variables.
   Step 3: Establish process tolerance, defined as the precise values that certain variables can have, and still fall within acceptable boundaries, for instance, the quality of any given product. Which boundaries need X to hold Y within specifications? What operating conditions can impact the outcome? Process tolerances can be achieved by using tools like robust optimization and validation set.

5. CONTROL 

   In this final phase, you determine that the performance objective identified in the previous phase is well implemented and that the designed improvements are sustainable.
   
   Step 1: Validate the measurement system to be used.
   Step 2: Establish process capability. Is the goal being met? For instance, will the goal of reducing defective goods by 20 percent be achieved?
   Step 3: Once the previous step is satisfied, implement the process.

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Six Sigma Techniques

The Six Sigma methodology also uses a mix of statistical and data analysis tools such as process mapping and design and proven qualitative and quantitative techniques, to achieve the desired outcome.

Fig: Key Six Sigma Techniques in use

Brainstorming

Brainstorming is the key process of any problem-solving method and is often utilized in the "improve" phase of the DMAIC methodology. It is a necessary process before anyone starts using any tools. Brainstorming involves bouncing ideas and generating creative ways to approach a problem through intensive freewheeling group discussions. A facilitator, who is typically the lead Black Belt or Green Belt, moderates the open session among a group of participants.

Root Cause Analysis/The 5 Whys

This technique helps to get to the root cause of the problems under consideration and is used in the "analyze" phase of the DMAIC cycle.

In the 5 Whys technique, the question "why" is asked, again and again, finally leading up to the core issue. Although "five" is a rule of thumb, the actual number of questions can be greater or fewer, whatever it takes to gain clarity.

Voice of the Customer

This is the process used to capture the "voice of the customer" or customer feedback by either internal or external means. The technique is aimed at giving the customer the best products and services. It captures the changing needs of the customer through direct and indirect methods. The voice of the customer technique is used in the "define' phase of the DMAIC method, usually to further define the problem to be addressed.

The 5S System

This technique has its roots in the Japanese principle of workplace energies. The 5S System is aimed at removing waste and eliminating bottlenecks from inefficient tools, equipment, or resources in the workplace. The five steps used are Seiri (Sort), Seiton (Set In Order), Seiso (Shine), Seiketsu (Standardize), and Shitsuke (Sustain).

Kaizen (Continuous Improvement)

The Kaizen technique is a powerful strategy that powers a continuous engine for business improvement. It is the practice continuously monitoring, identifying, and executing improvements. This is a particularly useful practice for the manufacturing sector. Collective and ongoing improvements ensure a reduction in waste, as well as immediate change whenever the smallest inefficiency is observed.

Benchmarking

Benchmarking is the technique that employs a set standard of measurement. It involves making comparisons with other businesses to gain an independent appraisal of the given situation. Benchmarking may involve comparing important processes or departments within a business (internal benchmarking), comparing similar work areas or functions with industry leaders (functional benchmarking), or comparing similar products and services with that of competitors (competitive benchmarking).

Poka-yoke (Mistake Proofing)

This technique's name comes from the Japanese phrase meaning "to avoid errors," and entails preventing the chance of mistakes from occurring. In the poka-yoke technique, employees spot and remove inefficiencies and human errors during the manufacturing process.

Value Stream Mapping

The value stream mapping technique charts the current flow of materials and information to design a future project. The objective is to remove waste and inefficiencies in the value stream and create leaner operations. It identifies seven different types of waste and three types of waste removal operations.

The Six Sigma Tools

1. Cause and Effect Analysis
2. Flow Chart
3. Pareto Chart
4. Histogram
5. Check Sheet
6. Scatter Plot
7. Control Chart

Six Sigma Levels

The Six Sigma training levels conform to specified training requirements, education criteria, job standards, and eligibility.

White Belt

This is the simplest stage, where:

• Any newcomer can join.
• People work with teams on problem-solving projects.
• The participant is required to understand the basic Six Sigma concepts.

Yellow Belt

Here, the participant:

• Takes part as a project team member.
• Reviews process improvements.
• Gains understanding of the various methodologies, and DMAIC.

Green level

This level of expertise requires the following criteria:

• Minimum of three years of full-time employment.
• Understand the tools and methodologies used for problem-solving.
• Hands-on experience on projects involving some level of business transformation.
• Guidance for Black Belt projects in data collection and analysis.
• Lead Green Belt projects or teams.

Black Level

This level includes the following:

• Minimum of three years of full-time employment
• Work experience in a core knowledge area
• Proof of completion of a minimum  of two Six Sigma projects
• Demonstration of expertise at applying multivariate metrics to diverse business change settings
• Leading diverse teams in problem-solving projects.
• Training and coaching project teams.

Master Black Belt

To reach this level, a candidate must:

• Be in possession of a Black Belt certification
• Have a minimum of five years of full-time employment, or Proof of completion of a minimum of 10 Six Sigma projects
• A proven work portfolio, with individual specific requirements, as given here, for instance.
• Have coached and trained Green Belts and Black Belts.
• Develop key metrics and strategies.
• Have worked as an organization's Six Sigma technologist and internal business transformation advisor.

Fig: The five-tiered levels of Six Sigma Certification

What are the Six Sigma Career Choices and Salary Prospects?

Six Sigma is widely adopted by many industries such as manufacturing, healthcare, finance, and retail, and offers a range of career opportunities with attractive salary prospects. Here are some career choices and salary prospects in Six Sigma:

1. Six Sigma Consultant: A Six Sigma consultant advises organizations on process improvements, identifies areas for cost savings, and develops strategies for implementation. The average salary for a Six Sigma consultant is around $96,000 per year.
2. Six Sigma Project Manager: A Six Sigma project manager oversees Six Sigma projects, manages project teams, and ensures successful implementation of process improvements. The average salary for a Six Sigma project manager is around $107,000 per year.
3. Six Sigma Black Belt: A Six Sigma Black Belt is responsible for leading Six Sigma projects, training team members, and ensuring sustained process improvements. The average salary is around $110,000 per year.
4. Six Sigma Master Black Belt: It is the highest level of Six Sigma certification and is responsible for leading organizational Six Sigma initiatives, coaching and mentoring Six Sigma Black Belts and Green Belts, and driving business transformation. The average salary for a Six Sigma Master Black Belt is around $140,000 per year.
5. Quality Manager: A Quality Manager ensures that an organization's products or services meet customer expectations, industry standards, and regulatory requirements. Six Sigma certification can be valuable for this role, and the average salary for a Quality Manager is around $91,000 per year.

Overall, Six Sigma offers various career opportunities with competitive salary prospects. Individuals with Six Sigma certification can expect higher salaries and better job prospects than those without certification.

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Six Sigma Learning Resources

So whether you are a graduate in any stream, an engineer, or an MBA professional, if you want to enhance your career prospects and salary gains, then make sure to get certified in Six Sigma courses. Begin with a Green Belt and climb your way up to Master Black belt to command your salary. As a fresher, you can start learning Six Sigma principles by enrolling into Simplilearn's Green Belt certificate program, and then avail the higher certificate levels as you gain work and project experience.

FAQs

1. How Can You Get Six Sigma Certification?

Understanding the Management Philosophy of Your Organization, selecting between Six Sigma and Lean Six Sigma, determining which Level Suits You, learning about the Tests Associated with it, Enrolling in a Training Course, and obtaining Your Certification are the steps to obtaining Six Sigma Certification.

2. What Does Six Sigma Mean?

Six Sigma is a quality improvement methodology for businesses that counts the number of flaws in a process and aims to systematically fix them. Businesses utilize it to get rid of flaws and enhance any of their procedures in an effort to increase earnings.

3. What Is the Difference Between Six Sigma and Lean Six Sigma?

Lean and Six Sigma vary primarily in that Lean frequently affects all aspects of an organization rather than being solely focused on production. These two strategies are combined by Lean Six Sigma to produce a potent toolkit for dealing with waste reduction.

4. What Are the Steps of Six Sigma?

Six Sigma's five steps adhere to a methodology known to business insiders as DMAIC. The words "define, measure, analyze, enhance, and control" are all spelled out in this acronym.

5. What is Lean Six Sigma?

Lean Six Sigma is a method for improving performance by systematically removing waste and reducing variation that relies on a collaborative team effort. Increased performance and decreased process variation contribute to defect reduction and improvements in profits, employee morale, and product or service quality.

6. What is continuous improvement?

Continuous improvement (also known as "rapid improvement") is a Lean improvement technique that aids in workflow optimization. The Lean method of working allows for efficient workflows that save time and money, allowing you to cut down on wasted time and effort.

7. What is Lean Six Sigma Yellow Belt?

A Certified Lean Six Sigma Yellow Belt from the Council for Six Sigma Certification (CSSC) is someone who has a basic understanding of Six Sigma but does not lead projects on their own. They are frequently in charge of creating process maps to support Six Sigma projects.

8. What is Lean Six Sigma Green Belt?

Six Sigma Green Belt is a certification course that provides you with hands-on experience with over 100 tools and techniques. These techniques are required for participation in DMAIC improvement projects. DMAIC is an acronym that stands for Define, Measure, Analyze, Improve, and Control.

9. What is Lean Six Sigma Black Belt?

A Lean Six Sigma Black Belt has a thorough understanding of all aspects of the Lean Six Sigma Method, including a high level of competence in the Define, Measure, Analyze, Improve, and Control (DMAIC) phases as defined by the IASSC.

10. What are the Five Key Six Sigma Principles?

The success of Six Sigma relies on five fundamental principles:Customer Focus, Data-Driven Analysis, Proactive Improvement, Cross-Functional Collaboration, and Thoroughness and Flexibility.

11. What are Six Sigma steps?

The Six Sigma Methodology consists of five stages driven by data — Define, Measure, Analyze, Improve, and Control (DMAIC).

12. What is Six Sigma with an example?

Six Sigma is a data-driven methodology used to improve processes by minimizing defects and variations. For example, a manufacturing company may use Six Sigma to reduce the number of defective products produced by optimizing their production process.

13. What are Six Sigma tools?

• Cause and Effect Analysis
• Flow Chart
• Pareto Chart
• Histogram
• Check Sheet
• Scatter Plot
• Control Chart

14. What is the Six Sigma formula?

Utilizing the equation Y = f(x) aids in identifying cause and effect relationships within a project, enabling performance measurement and the discovery of areas for enhancement.