What is Six Sigma?

Six Sigma is a business management strategy. Six Sigma seeks to identify and remove the causes of defects and errors in business processes. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization ("Black Belts" etc.) who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified financial targets (cost reduction or profit increase).In Six Sigma, a defect is defined as anything that could lead to customer dissatisfaction.

The main principles of Six Sigma are:

• Continuous efforts to achieve stable and predictable process results (i.e. reduce process variationare of vital importance to business success.
• Business processes have characteristics that can be measured, analyzed, improved and controlled.
• Achieving sustained quality improvement requires commitment from the entire organization, particularly from top-level management.

Specific to Six Sigma is:

• A clear focus on achieving measurable and quantifiable financial returns from any Six Sigma project.
• An increased emphasis on strong and passionate management leadership and support.
• A special infrastructure of "Champions," "Master Black Belts," "Black Belts," etc. to lead and implement the Six Sigma approach.
• A clear commitment to making decisions on the basis of verifiable data, rather than assumptions and guesswork.

The term "Six Sigma" is derived from a field of statistics known as process capability studies. Originally, it referred to the ability of manufacturing processes to produce a very high proportion of output within specification. Processes that operate with "six sigma quality" over the short term are assumed to produce long-term defect levels below 3.4 defects per million opportunities (DPMO).Six Sigma's implicit goal is to improve all processes to that level of quality or better.

By the late 1990s, about two-thirds of the Fortune 500 organizations had begun Six Sigma initiatives with the aim of reducing costs and improving quality.

In recent years, Six Sigma has sometimes been combined with LEAN to yield a methodology named Lean Six Sigma or Lean Sigma

Origin and meaning of the term "six sigma process"

The following outlines the statistical background of the term Six Sigma: Sigma (the lower-case Greek letter σ) is used to represent the standard deviation (a measure of variation) of a statistical population. The term "six sigma process" comes from the notion that if one has six standard deviations between the mean of a process and the nearest specification limit, there will be practically no items that fail to meet the specifications. This is based on the calculation method employed in a process capability study.

In a capability study, the number of standard deviations between the process mean and the nearest specification limit is given in sigma units. As process standard deviation goes up, or the mean of the process moves away from the center of the tolerance, fewer standard deviations will fit between the mean and the nearest specification limit, decreasing the sigma number.

The role of the 1.5 sigma shift

Experience has shown that in the long term, processes usually do not perform as well as they do in the short. As a result, the number of sigmas that will fit between the process mean and the nearest specification limit is likely to drop over time, compared to an initial short-term study. To account for this real-life increase in process variation over time, an empirically-based 1.5 sigma shift is introduced into the calculation. According to this idea, a process that fits six sigmas between the process mean and the nearest specification limit in a short-term study will in the long term only fit 4.5 sigmas – either because the process mean will move over time, or because the long-term standard deviation of the process will be greater than that observed in the short term, or both.

Hence the widely accepted definition of a six sigma process is one that produces 3.4 defective parts per million opportunities (DPMO). This is based on the fact that a process that is normally distributed will have 3.4 parts per million beyond a point that is 4.5 standard deviations above or below the mean (one-sided capability study). So the 3.4 DPMO of a "Six Sigma" process in fact corresponds to 4.5 sigmas, namely 6 sigmas minus the 1.5 sigma shift introduced to account for long-term variation. This is designed to prevent underestimation of the defect levels likely to be encountered in real-life operation.

Sigma levels

Taking the 1.5 sigma shift into account, short-term sigma levels correspond to the following long-term DPMO values (one-sided):

• One Sigma = 690,000 DPMO = 31% efficiency
• Two Sigma = 308,000 DPMO = 69.2% efficiency
• Three Sigma = 66,800 DPMO = 93.32% efficiency
• Four Sigma = 6,210 DPMO = 99.379% efficiency
• Five Sigma = 230 DPMO = 99.977% efficiency
• Six Sigma = 3.4 DPMO = 99.9997% efficiency

Methodology

Six Sigma has two key methodologies:DMAIC and DMADV, both inspired by Deming's Plan-Do-Check-Act Cycle. DMAIC is used to improve an existing business process; DMADV is used to create new product or process designs.