Exploring Six Sigma
Training Management 3340
April 29, 2012
This paper explores Six Sigma, the business initiative that was developed by Motorola in the early 1990s. This program has had very good success with some very large corporations such as Allied Signal and General Electric. This paper will explore the methodology of each of the five phases in the Six Sigma model. The five phases are Define, Measure, Analyze, Improve and Control (DMAIC) Phases. The Six Sigma model will then be evaluated based on the researched information. Further, a recommendation will be made concerning whether an organization should implement Six Sigma based on the evaluation.
Establishing a Six Sigma Program
In a world class business environment, employees will be stimulated to strive toward a goal of total quality and continuous process improvement. The benefit of achieving this goal is to become more competitive in the marketplace by reaching business excellence in meeting and exceeding the demands of the customers. The improvements in productivity and the reductions in cost will make stretching towards this goal a feasible business mission (Constanza, 1996, p. 251-252).
Operations managers are key players in participating in the organizations efforts to become world class. They are the leaders in developing a work culture that will embrace continuous improvement and process excellence. It is their commitment and vision that will be the endorsement for the never-ending quest in striving to reach the zero-defects goal (Heizer & Render, 2001, p. 174).
Total Quality Management And Business Process Reengineering An Integrated Model OUTLINE Introduction Statement of Objective Literature Review A. TQM B. BPR I. Common Grounds A. Quality improvement and Process Focus B. Top Management Support C.Human Resource: Empowerment, Teamwork, Training, ... D. Metrics and Measurement II. Strategy Differences A. Level of Change: Radical vs.Incremental B. ...
There are several terms that define quality and continuous improvement programs. Total Quality Management (TQM) and Six Sigma are two that many companies have used within the last two decades (Heizer & Render, 2001, p. 174).
This paper will specifically explore the steps a company must take to establish a Six Sigma program within its organization. In addition, the Six Sigma programs history and definition will be described.
Defining Six Sigma:
A sigma level describes the level of quality within an organization. The quality level is measured by the quantity of defects that occur per a million opportunities for a defect. For instance, if a widget manufacturing company produces a million widgets a year then it is also producing a million opportunities for defective widgets. The quality level will be determined by how many of the widgets are actually defective out of the million widgets produced. This is a very top-level example about the base-line definition of a quality level although it is much more detailed in an actual application. The point of the example was to illustrate that the Six Sigma program is about measuring and improving variability in an organizations operation. That variability level is measured by the amount of defects per million opportunities (Breyfogle III, 1999, p. 3).
Sigma is a Greek alphabet letter that is used to describe variability. The classical measurement unit is to measure the amount of defects per unit. As previously stated, the Six Sigma measurement program measures defects per million opportunities. This is a different and much more accurate approach then the classical defect per unit. For example, a process that consists of drilling multiple holes in a widget may be measured on a quality measurement of how many non-conforming parts are there to conforming parts. The Six Sigma approach looks at each hole, in each operation of drilling as an opportunity for a defect. The classical approach may look at one hundred pieces that are inputted into the multiple drilling process. Ninety-eight pieces are outputted as conforming parts for a ninety-eight percent quality rating. The Six Sigma approach measures each operation and each hole being drilled as an opportunity. If there are three operations that each drill three holes, then for a hundred pieces there are a nine hundred opportunities for defects for each of the nine hundred holes that will be drilled. In the previous example, we did not count that when a drill bit dulled from overuse, it produced twenty parts (sixty holes) in one operation that were undersized and needed to be reworked.
The history of Six-Sigma The roots of Six Sigma as a measurement standard go back to Carl Frederick Gauss (1777-1885) who introduced the concept of normal curve. Six Sigma as a measurement standard in product variation can be traced back to the 1920's when Walter Shewhart showed that three sigma, from the mean is the point where a process requires correction. As history would seem to have it, the ...
In another operation, a drill bit broke. The result was that two pieces (six holes) had to be scrapped and three pieces (nine holes) needed rework. Using this approach, the result is that there are seventy-five defects per nine hundred opportunities. The classical approach indicated that the quality level was at ninety-eight percent and the Six Sigma approach indicates that the process quality level is more accurately at ninety-two percent. The Six Sigma approach highlights the fact that the process has much more variability and room for improvement than was previously indicated by the classical measurement method. Through the Six Sigma methodology which uses the Six Sigma model for improvement you should see things around your work better, be safer, and satisfy your customer more (Munro, 2002, p. 12).
A sigma quality level offers an indicator of how often defects are likely to occur, where a higher sigma quality level indicates a process that is less likely to create defects (Breyfogle III, 1999, p. 3).
Therefore, processes and organizations can be measured by calculating their sigma level. A sigma level of one means that the organization can expect its processes to produce six hundred ninety thousand defects per one million opportunities. That means that sixty-nine percent of the organizations efforts are producing defects! The goal of the Six Sigma program is obviously to reach the sigma level of six and beyond in a continuous effort. This is a very lofty goal because at the six sigma level there are only three point four defects per million! At this level the organization and its processes are almost perfect. The Six Sigma level program strives for perfection and continually works toward improving the organization to reach that goal (Munro, 2002, p. 148).
Why is a systems development process needed? The process is needed to address business needs and opportunities in a systematic and methodical manner that maximizes potential benefits while mitigating risks. It is a methodology that takes into account all aspects of existing processes, identifying its weaknesses and bringing opportunities light. At a fairly early stage, the feasibility of the ...
History of Six Sigma:
Motorola decided in the 1990s to become a world leader in quality. John Galvin, president of Motorola challenged the company’s leadership team to focus on quality. The Six Sigma program was one of the quality initiatives to be developed to help Motorola achieve its goal. In a span of five years, Motorola was able to improve its quality from a sigma level of four to a sigma level of six. This improvement in quality resulted in Motorola saving over seven hundred million dollars in manufacturing costs during that time (Heizer & Render, 2001, p. 168-169).
The General Electric Company under CEO Jack Welch also achieved impressive gains using the Six Sigma initiative. In 1997, the General Electric annual report stated that Six Sigma added more than three hundred million dollars to the company’s operating income. The company expects that the savings will double for 1998 and continue to accumulate in the future. These reductions in cost will have an immediate, positive impact on General Electric’s bottom line and shareholder wealth (Breyfogle III, 1999, p. 5-6).
After General Electric’s phenomenal success, many other companies have initiated Six Sigma programs. Some familiar names that have Six Sigma programs are Allied Signal, Lockheed Martin, DuPont and Dow Chemical. The Six Sigma program is expected to deliver not only bottom-line improvements to these businesses but to also create a different work culture. In these companies, each employee will be trained in Six Sigma philosophy while as many as one in five employees will be actively participating on projects. The commitment to the program is huge, but then so are the payoffs (Challener, 2002).
Introduction In undertaking any change project in an organization it is imperative that business executive understand that properly tailored coordinates and strategically sound routes are paramount to the success of the project from its planning phase to its execution phase. Linda Ackerman Anderson and Dean Anderson have formulated the nine-phase change model that when implemented properly is a ...
Not every company has been successful at implementing a Six Sigma program. There must be a high level of commitment by the top management of the company to change the culture of the organization. The successful implementation of this type of program must be a top-down process. Six Sigma is not a quick fix, but a logical approach using statistical tools that will instill a culture that continuously strives for improvement (Munro, 2002, p. 7).
The Six Sigma methodology uses a five phase model for the implementation of its tools. Each project selected for Six Sigma will be processed through the five phases are called Define, Measure, Analyze, Improve and Control (DMAIC).
A key factor to each of these phases is management’s commitment to allocate the time and resources to the Six Sigma personnel facilitating each phase. Another key factor that will successfully drive the Six Sigma DMAIC model is the involvement of everyone in the company. The information group needs to provide the necessary data. The financial group needs to provide the necessary cost-of-quality data analysis. Lastly, Operators and supervisors, as well as the rest of the shop operation, will be asked to get involved with the Six Sigma model and look for continual improvement opportunities in work areas (Munro, 2002, p. 24).
In the Define phase, a project will be selected for the Six Sigma process. The project will be selected because it is an issue that causing decreased satisfaction for the internal or external customer. The customer is defined as the entity that is next affected by the product flow. A decrease in satisfaction could range from the customer wanting quicker delivery to a higher quality product or a reduced price. The selected issue will be a source of pain for the organization that can be relieved through the use of the Six Sigma DMAIC model (Munro, 2002, p. 24).
Once a project has been selected, then a team will be created of personnel that are affected by the issue. The team’s job in this phase will be to thoroughly define the parameters of the project. The team will develop a range of metrics to measure the current status of the issue and the expected goals that will bring the organization relief. It is important at this stage of the project to define the scope and goals of the project so that when success is achieved, it can be celebrated (Breyfogle III, 1999, p. 38-39).
Here is an example diagram of a project life cycle. The project starts with the initiation, this is where you need to define what your project is so you have a clear specification of what you want to achieve at the end. The next stage is planning, when planning it is important to make a clear and simple action plan. With this it will be easier for you to not only follow the plan, but also to check ...
The tools used in Six Sigma are nothing new or cutting-edge. They are similar to other programs but Six Sigma gives the whole process a logical flow. In this phase, the team will flowchart the process to fully define all the variables connected to the project. The team will define the relationships between the inputs and the outputs of the various processes by using an Input/output Matrix. In some cases a Cause-and-effect diagram will used to define the relationships between variables. These and other tools will be used to define the process, its scope, and all the variables. This is an important step because each phase will build upon the previous stage until a successful conclusion is reached (Munro, 2002, p. 25).
The Define phase gave the project team the boundaries to work within plus how to keep score. Now in this phase, the team will use the Six Sigma tools to measure the amount of variation within the variables. The team identified the variables and now it is time to quantify the amount and frequency of those variables. The team will measure the amount of variation of an input that is put into the process as well as measuring the amount of variation from the output. Before the team can measure this variation in the inputs and outputs, they must first determine if the measurement system has an acceptable level of variation within it. The team will conduct of an analysis of the measurement system with the use of a Gage Repeatability and Reproducibility procedure. The measurement system used in the process should have the least amount of variation possible if we are to use it for measuring variation in other variables. There is well-documented system for analyzing measurement systems that has been approved by many large corporations. Since all of our solutions would be based on data from the process it was important to believe in the data we collected (Wheat, Mills, & Carnell, 2001, p. 78-79).
... and Research Centre. The six sigma process of Define, Measure, Analyze, Implement and Control (DMAIC) is a data driven process and its main objective ... Thus along with the quality control team various checklists were prepared which were used as data collection tools to monitor these departments. But ... out of the upper control limit set. In the analyze phase of the study the KIVs were selected and a ...
Now that the team has assured that the measuring system is obtaining accurate results, it is time to move on to measuring and charting the variables of the project. The team will utilize Pareto charts, histograms, Statistical Process Control charts, Check sheets, and other traditional methods of gathering data. The team then will be able to take this raw data into the next step, the Analyze Phase (Wheat, Mills, & Carnell, 2001, p. 80).
The Analyze Phase is a critical part of the Six Sigma model because now it is time to put the data to work. The goal of the team in this phase to determine if the processes being studied are capable of obtaining their goals. The team will conduct various capability studies to search for causes of why some processes are failing to obtain desired results. There are a number of software programs such as Minitab or Microsoft Excel that will assist the team in turning the raw data into an understandable form during these capability studies. Knowledge gained from these tests can give us insight to what should be done differently in the process, key process input variable needs, and Design of Experiment opportunities (Breyfogle III, 1999, p. 277).
The Six Sigma tools that will be used during this phase to analyze the data are trend analysis, regression analysis, Failure Effects and Modes Analysis, Hypothesis Testing, Correlation Analysis, and other traditional tools depending on the data. The tool selection will be determined by the normality of data after the data is analyzed to determine if any special circumstances exist that are causing the data to vary abnormally. Information from this analysis can give insight to the sources of variability and unsatisfactory performance, which can be useful to improve processes (Breyfogle III, 1999, p. 275).
It is now time for the project team to put all the information that they have learned to work. The Define Phase defined the problem. The Measure Phase defined the measurement system and tools that would be used to measure the project data. The Analyze Phase analyzed the data gathered from Measurement Phase to determine the sources that create the most variability. In the Improve Phase, the project team will implement ways to reduce the identified variances to produce a process that will be capable of hitting its targets consistently and accurately (Wheat, Mills, & Carnell, 2001, p. 80-82).
The Improve Phase can consist of simple solutions such as merely creating standard work rules. It may have been determined in the Analyze Phase that different operators performed the same task in different ways. Standardizing operating procedure so that all operators perform the task the same way is one way to reduce variation in that particular task. It may have been determined that using measurement tools to measure parts was subject to the skill level of the operator. Implementing the use of Poka-Yoke tools such as Go-No-go gages or other fail safe solutions can again reduce variation in the process. The sources and quantity of variation will determine what types of improvements are best for the project (Heizer & Render, 2001, p. 185-186).
In other situations it will necessary to conduct a Design of Experiment (DOE).
This occurs when it is unfeasible to make improvements to the whole process because of cost, time, resources or other factors. The project team will design an experiment according to statistical guidelines for these types of experiments to minimize cost and disruption. The purpose will be to identify the adjustments of key variables to optimize the process and determine the best areas for change opportunities. DOE techniques are useful when a practitioner needs to kick a process so it can give us insight to how we can improve it (Breyfogle III, 1999, p. 407-409).
The project team will determine what improvements are making the best impact by continuing to monitor the process through the use of the measurement tools. The team will continue to chart the variation in the process and document the significance of the improvements. It is always good practice to document the results of an experimental work and present the benefits in monetary terms so that others (including all levels of management) can appreciate the results (Breyfogle III, 1999, p. 463).
The project teams concern in this phase is to preserve the progress made thus far and to continuously build on it. A Control Plan will be created by the team that outlines definitive guidelines for the process operators so that they produce a quality product that will meet or exceed customer requirements. The Control Plan will offer a flowchart or standard operating procedures containing the previously determined improvements. The plan will also contain the name of the people who own the process and are responsible for seeing that it is kept on track. The plan will have action items and those responsible for following through on the items for future improvements. The correct measuring system and gages will be identified. The frequency of testing and sample sizes will be included. In other words, all significant characteristics and people of the process will be identified and the actions that need to be taken to assure that the work of the project team are continuously improved upon. A control plan should outline the steps to be followed during each phase of the process receiving, in-process, out-process as well periodic requirements to ensure that all process outputs will be in a state of control (Munro, 2002, p. 71-73).
Evaluation of Six Sigma:
The Six Sigma methodology is not a whole new process using new statistical and analytical tools but rather a program that is able to link the (traditional) tools together in a logical flow (Wheat, Mills, & Carnell, 2001, p. 43).
The logical flow consists of using the tools through the five phases of the DMAIC model. The problem solving and process improvement occurs as variation is identified and reduced. The whole basis for the program is the data that is collected and used during the duration of the project. The solutions and cost savings are real because the methodology is based on factual data instead of supposition. Data is moved from one tool to another so that there is a synergy between the tools. It is that synergy that increases the probability of a problem resolution (Wheat, Mills, & Carnell, 2001, p. 43).
The Six Sigma methodology is about changing the culture of the organization to one that embraces continuous improvement and maximum customer satisfaction. Traditional programs have utilized control over processes. Change was sought by changing the controls of the process. On the other hand, Six Sigma is a change program, a breakthrough to a new business strategy that encourages out-of-the-box thinking to achieve aggressive stretch goals. The scope of Six Sigma is that it must include everyone in the company to be successful. Therefore, Six Sigma will need to be adopted and accepted at the high levels of management to be effective and successful. Leadership in absentia doesn’t work when you expect serious change. Clearly defining and communicating the company’s expectation only belongs to the highest level of leadership in the company (Wheat, Mills, & Carnell, 2001, p. 37).
The overall Six Sigma business strategy uses specifically designed processes that achieve measured goals for increased efficiency and productivity, reduced waste, increased customer satisfaction, continuous improvement, and enhanced products and processes. The implementation of Six Sigma by major companies has produced significant improvements in the bottom-line figures. However, Six Sigma does require commitment that in turn will require the allocation of necessary resources. In most companies this allocation of resources has been rewarded with more than justifiable benefits (Challener, 2002).
When an organization is considering implementing Six Sigma as a program, it should consider three various options. One, the organization could do nothing and continue to do business as normal. The organization that considers this option should compare the cost of nothing to the cost of doing something. The decision should be based on reliable information. The second option would be to implement Six Sigma as a quality initiative. Unfortunately, quality initiatives come and go much like the fads of fashion wear. There are few benefits to this type of shallow implementation and the programs are usually quickly abandoned. The third choice is the most viable choice and that is to implement Six Sigma as a business strategy. When executed wisely with management commitment and executive ownership, the benefits with this type of implementation can make an enormous impact on the success of the business. The third choice is the recommended course of action for the organization that intends to attain world class status and to be competitive in the global marketplace (Breyfogle III, 1999, p. 4-5).
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