What is Six Sigma?

Six Sigma originated as a method of improving quality performance from Motorola in the mid 1980’s. This approach was then adopted by other US companies and broadened to include wider aspects of business through the 1990’s. Early adopters of Six Sigma included Honeywell, ABB and, most famously, GE, where CEO Jack Welsh drove the introduction of Six Sigma.

The focus of Six Sigma is on improving processes by reducing variation. To this end Six Sigma deploys a range of qualitative and quantitative analysis tools to enable businesses to analyse their processes, identify problems, develop solutions, implement these solutions and track the results.

The quantitative analysis tools typically involve use of statistical analysis of various levels sophistication. These can include simple tools such as Pareto Charts and Histograms, through various types of run charts that track the performance of a process against key metrics over time. At the more sophisticated end, Six Sigma applies tools such as regression analysis and design of experiments in order to isolate the root causes of variation and test hypotheses.

A central element of Six Sigma is the DMAIC approach to solving problems. DMAIC stands for:

Define – the problem
Measure – the current state
Analyze – the Current State to identify the sources of variation
Implement – improvements to reduce the variation
Control – put in place controls to ensure that the improved performance is sustained.

WHERE DOES SIX SIGMA COME FROM – SIX SIGMA AND TOTAL QUALITY MANAGEMENT

There are a range of people and organisations who claim to have founded Six Sigma, however the roots go back to the Total Quality Management movement in the 1980’s, lead by W. Edwards Deming. The Total Quality Management movement was the first western (and especially US) response to the success of Japanese manufacturers (especially of cars and consumer electronics) in Western markets. Recognising that the success of Japanese products was not the result of low labour costs, Western businesses looked for other factors driving this success. The answer was ironically found in Japan’s enthusiastic adoption of US manufacturing knowhow introduced in the post war period. This American science-based approach to manufacturing was famously enunciated by Frederick Taylor in his Scientific Management theories, put in to practice by Henry Ford, refined through the 1930’s and reached its zenith during the Second World War. During the post war reconstruction period, the US sent manufacturing experts such as W. Edwards Deming and Joseph Duran to Japan to assist the manufacturing sector back on its feet. The Japanese were able to successfully adopt and improve these methods, aided perhaps by the Japanese culture of rigour, perfectionism and self discipline.

Unfortunately in the US, economic success bred complacency and many of the learnings of World War II production were lost. The consequences of this loss of focus were then felt in the 1970’s and 1980’s when Japanese car and electronics manufacturers started taking market share in the US with products which were not only cheap, but of exceptionally high quality.

At the core of the Japanese approach, Total Quality Management and Six Sigma is the idea that quality and cost is not a trade off. That is, by improving quality (and reducing variation) in every step of a process cost is also reduced.

WHAT DOES SIX SIGMA MEAN?

In a normal distribution almost all outcomes will fall within plus or minus six standard deviations (Six Sigma) either side of the mean. It follows therefore that if a process can be controlled so that the range of plus or minus Six Sigma falls within the range of acceptable quality (the specification limits) then defects will almost never occur. In fact “Six Sigma Quality” is usually taken to represent fewer than 3.4 defects per million products. This actually represents a range of plus or minus 4.5 Sigma from the mean. A process producing Six Sigma Quality is therefore considered to be “capable” of achieving the required quality every time. Just that brief explanation will help you understand that an understanding of statistics is a basic prerequisite of understanding Six Sigma.

DOES SIX SIGMA WORK?

The answer is a qualified yes, because many of the originating companies claimed large benefits from its deployment. A better question is whether Six Sigma is the best way to improve your business.

¹There are two key problems with Six Sigma. First, it focuses on variation as the source of waste in processes. Excessive variation is an important source of waste in processes, particularly defects, but it is not the only cause of waste. Often the waste is inherent in the design of the process such as excessive motion, too many steps, excessive batch sizes or long waiting times between processes.

This problem of focusing only on variation as the source of waste is partly addressed by Lean Six Sigma, which aims to incorporate lean tools within a Six Sigma framework. This is not, however to dismiss many of the underlying problem-solving tools. They are very good and we often deploy them as part of lean projects; however they are specialised tools and will not provide the full answer for businesses seeking substantial operational improvements.

The second problem with Six Sigma and Lean Six Sigma, however, is the larger one and that is the method of deployment. Six Sigma is deployed through a structure of specialist process improvers who are trained to different levels of skill in the improvement techniques. The levels of training correspond to belts, like martial arts. Therefore a Green Belt can lead basic problem solving activities and simple projects, a Black Belt can train green belts, lead more complex projects, and carry out more advanced analysis, and a Master Black Belt can train black belts and will generally run the whole Six Sigma program. In my opinion, this is a resource hungry, bureaucratic big company approach. It was designed by large bureaucratic companies (GE and Motorola for example), and I have only seen it work effectively in those companies, and even then, I am sceptical. For most companies the time, training, and resources required to create a Six Sigma or Lean Six Sigma infrastructure of training and belted specialists are unsupportable.

The other big problem with the deployment approach is that it tends to make problem solving and improvement the job of the specialists, rather than every employee’s job. In particular Six Sigma activities often become divorced from key activities and strategic goals of the business and become a burden on line management rather than a support. As one plant manager once told me: “I don’t think my budget can afford any more Six Sigma projects.” When an improvement effort is seen as costing money rather than saving money, then its usefulness is very limited.

WHAT IS THE DIFFERENCE BETWEEN LEAN MANUFACTURING AND SIX SIGMA

SIPOC is an excellent Six Sigma tool for Process Analysis that the TXM Team frequently Use in a Lean Deployment Framework

While Six Sigma and Lean Six Sigma are both means to deploy improvement through a business, Lean is a complete management system (the Toyota Production System). Six Sigma and Lean Six Sigma use a project based deployment approach, where Black Belts and Green Belts are first trained in the improvement tools and then seek out projects to apply those tools on. Lean Practitioners on the other hand look to change the whole organisation from the top down and the bottom up (usually simultaneously) in order to build a business that is inherently less wasteful, more responsive and Leaner. A key element of Lean is the idea of Policy Deployment, where an active two way dialogue about strategy is maintained through every level of the organisation, ensuring that improvement effort is focused on the key strategic issues. So what is the difference between Lean Manufacturing and Six Sigma (and Lean Six Sigma)? Firstly Lean and Six Sigma are both children of the same parent: the post war Japanese manufacturing boom. Both trace their roots back to Japan. In the case of Six Sigma (and Total Quality Management) the link is to a wide range of Japanese companies through the work of US experts such as Deming and Duran, while with Lean the roots go back to one company, Toyota. The term Lean was introduced by US and UK academics who had studied the global automotive industry and coined the term “Lean Manufacturing” to describe the unique approach to business adopted by Toyota that was the foundation of its staggering success. To learn more read our article “What is Lean Manufacturing”.

As mentioned in the previous sector, Six Sigma focuses on variation reduction, whereas Lean Manufacturing focuses on every resource and every activity in the business that does not add value to the customer, defines this as waste and seeks to minimise this waste. Typically Lean Manufacturing describes eight types of waste. Variation is a source of some of this waste, but not the only source, the design of the process is often a much larger source of waste. Often focusing on variation alone will lead to optimisation of a broken process, Lean Manufacturing tool “Value Stream Mapping” enables businesses to identify how the process is broken and the best way to fix it and eliminate the waste. This often leads to large step change improvements in overall business performance.

WHICH IS BETTER, LEAN MANUFACTURING OR SIX SIGMA?

In our experience and in the experience of the overwhelming majority of companies we work with, Lean Manufacturing is a far more effective approach to improving your business. By aligning improvement to strategy and addressing the whole business, Lean Manufacturing is more likely lead to change in underlying culture and leadership practices that will sustain continuous improvement. Lean Manufacturing also makes improvement and solving problems everyone’s business, not just the job of elite problem solvers (Black Belts and Green Belts). By looking beyond variation, Lean Manufacturing enables businesses to completely re-think the way things are done and make big step change improvements. Lean Manufacturing’s focus on creating value for the customer also ensures that resources are focused on improvements that deliver the maximum benefit for the customer and for the business.

Six Sigma has some great tools though. We often use “Six Sigma” problem solving and analysis tools such as SIPOC charts, Fishbone Diagrams and Design of Experiments when solving complex problems. However most problems are not complex to solve and that’s where the simple and effective Lean approach has the edge.