Should your business invest in Six Sigma?

Introduction to Six Sigma

Six Sigma was designed in 1986 by Motorola as a set of tools and techniques to improve the efficiency of their manufacturing processes. This concept was implemented by Jack Welch in 1995 and was a central point of GE’s (General Electric) business strategy. Since the implementation of Six Sigma tools, around half of Fortune 500 companies now execute GE’s strategic decision at the end of the twentieth century.

In this methodology, an organisation should follow a defined set of steps in order to quantify the targeted value of a project. The use of Six Sigma in manufacturing can help an organisation reduce pollution, reduce time cycle of processes, and reduce costs therefore increasing profits and customer satisfaction levels.

How Six Sigma works

Motorola recognised a trend through the implementation of Six Sigma tools and identified a correlation between a decrease in production costs and an increase in overall product quality.

According to the fundamentals of the Six Sigma, the success of a company crucially depends on constant efforts for achieving a stable process. Certain processes must be constantly measured so they can be improved through statistically analysing the results.

Organisations that implement Six Sigma establish their business processes to include measurable factors throughout the end to end supply chain. This approach is used to determine the projects that best fit a businesses goals. Once a project or goal is defined, the business can follow the Six Sigma process that is defined by five phases:

1)     Define – Define the system, the voice of the customer and their requirements, and specifically the project goals.

2)     Measure - In this step, the organisation measures existing systems and processes to learn what can be considered a benchmark, among other things.

3)     Analyse - This step focuses on analysing the system to identify ways to eliminate inefficiencies. This can be done in a variety of ways such as statistical analysis.

4)     Improve - During this step, an organisation seeks optimal solutions, then develop and test the plan of action for improving a process or goal.

5)     Control - The control step can be continuous after the introduction of the previous four steps. An organisation may modify the process on an ongoing basis to help streamline, and further business improvements. This step can also be known as Kaizen, the art of continuous improvement which is heavily used within Japanese businesses such as Toyota.  

Six Sigma Features and Goals

The main features of Six Sigma in the manufacturing industry surround a focus on quantifying and measuring the financial returns of projects. These steps allow an organization to clearly define the responsibilities and roles every individual should adopt within a team for improving processes and efficiencies.

The prime goal of Six Sigma production is to ensure the manufacturing process has minimum defects. Most manufacturing companies who implement this concept achieve improved efficiency while maintaining quality products.

Six Sigma Certification

Availability of various levels of training and certification is another hallmark of Six Sigma. Certificate holders are organized into different “belt” levels.

Professionals with any Six Sigma certification—even a Six Sigma Green Belt—are highly valued because they can provide knowledge of the sigma steps. Although Six Sigma originated as a manufacturing methodology, its spread across multiple industries.

Proof Six Sigma works

Figures recorded in 2005 identified Motorola had an estimated saving of $17 billion over the 18 year period Six Sigma tools were implemented. Other examples of success are; Johnson and Johnson, with $600 million of reported savings, Texas Instruments, which saved over $500 million as well as Telefónica de Espana, which reported €30 million in savings in the first 10 months.

Conclusion

In large organisations where clear communication channels and effective management infrastructure are utilised, Six Sigma has proven to provide effective results. Most of the companies which have adopted this quality control system for improving their products and services, are now amongst the most successful in world.

But before adopting this system for your company it is highly recommended that you spend some time learning about Six Sigma, its uses, and how it would work within your company.