This chapter is from the book
This chapter is from the book
This chapter is from the book
The Essence of Six Sigma
This section provides a brief overview of Six Sigma for those with minimal background in the initiative. Table 1.1 summarizes the key elements of Six Sigma. Further detail on each of these elements is provided in Chapter 4. The approach can be broken into three key aspects: deployment of a management initiative, improvement projects, and a set of methods and tools. See Snee and Hoerl (2003) for more detail on deployment aspects of Six Sigma, and Breyfogle (2003) for more detail on the methods and tools.
Table 1.1 Key Aspects of Six Sigma
|
Deployment |
Projects |
Methods and Tools |
|
Improvement |
Right projects (linked to business goals) |
Process thinking |
|
Breakthrough |
Project management (project reviews) |
Process variation |
|
Systematic, focused approach |
Sustain the gains (new projects) |
Facts, figures, data |
|
Right people (selected and trained) |
Results (process and financial) |
Define, measure, analyze, improve, control |
|
Communication Recognition and reward |
Project tracking and reporting |
8 key tools (sequenced and linked) |
|
Six Sigma initiative |
|
Statistical tools |
|
reviews |
|
Statistical software |
|
|
|
Critical few variables |
Deployment Aspects
Breakthrough Improvement. Six Sigma is about business improvement; it is not about culture change per se, although it will radically change culture. The strategy is to get the improvements, and then create the infrastructure and systems (culture) that will grow and maintain the gains. Six Sigma is not about quality—at least not in the traditional sense of the word—although it results in improved quality. It is not about training, although training is used to build the skills needed to deploy it. Viewing Six Sigma as a massive training initiative is a low-yield strategy. Six Sigma is about breakthrough business improvement, not incremental improvement. Six Sigma projects are defined to produce major improvements (30% to 60% and more) in process performance in 4 to 6 months with a significant bottom-line impact. Such changes greatly affect how business is conducted day to day. As the Six Sigma mindset permeates the organization, individuals become aware of non–value-added work, ineffective processes, and poor performance and take action to make the needed improvements.
A Systematic and Focused Approach. Not all executives are used to the discipline that such an approach requires. There are road maps and step-by-step procedures for the managerial and technical aspects of Six Sigma. These processes and systems enable the key players in the initiative, such as Champions, BBs, and GBs to move up the learning curve more quickly and keep the organization focused on rapid improvement. (These and other titles are defined in the "Roles of Six Sigma Leaders" section later in this chapter.) Six Sigma is not an art, although experience, good judgment, and creativity are certainly required.
Right People. Six Sigma is about selecting and training the right people to fill the key roles. Successful organizations select their most talented people to fill the key Six Sigma positions (Champions, MBBs, BBs, and GBs). Most companies consider these people to be their future leaders. After those selected complete their Six Sigma assignments, they move into leadership positions and utilize their Six Sigma experience to guide others in improving the organization using the same approach. In this way, the cycle of continuous improvement is ingrained into the culture of the organization, and the company is assured of having "enlightened" leaders in the future.
Communication. It is important that a communication plan be developed to support the Six Sigma initiative. In the early stages of deployment, people will be asking a number of questions: What is Six Sigma? Why is our organization using this approach? Why are we doing this now? What will the benefits be? What progress are we making? Answers to these questions and other related messages must be communicated in a clear, concise, and consistent way. The message must be repeated several times, using a variety of media to make sure that everyone is exposed to understandable information. Clear understanding of the what, why, and how of the initiative will help generate the support in the organization needed to ensure that the BB and GB projects and the Six Sigma initiative as a whole succeed.
Recognition and Reward Plan. A recognition and reward program must be created to support the Six Sigma initiative. People want to know "what's in it for me." This helps them decide whether to get involved and at what level of intensity. We know of no organization that has successfully implemented Six Sigma without a recognition and rewards program to recognize and reinforce the desired behavior. Such a program typically includes both financial and psychological rewards.
Management Reviews of the Six Sigma Initiative. It is widely recognized that regular review of initiatives is needed to ensure the success of the initiative. Accordingly, regular reviews of the Six Sigma initiative (preferably quarterly) are required to monitor progress, to ensure the initiative milestones are being met, and to identify when adjustments and major changes to the deployment plan are needed. It is unlikely that a Six Sigma initiative will succeed without regular reviews by the senior management team who is accountable for the success of the program.
Improvement Projects
Right Projects. Six Sigma is about working on the right projects: those that support the business strategy. Six Sigma projects are linked to the goals of the business and to key problems that must be solved if the organization is to be successful (for example, critical customer complaints, process downtime producing stock-outs, major accounts receivables issues). As you will see in later chapters, project selection is often where the battle is won or lost. Even top talent cannot salvage a poorly selected project. BBs and GBs work on important projects during as well as after the training. The specific roles of the BBs and GBs, who lead the improvement projects and are the primary "doers" in Six Sigma, are outlined later in this chapter and discussed more fully in Chapter 4.
Working on the right projects obviously requires careful business planning and coordination. Having BBs and GBs pick their own projects is not a good strategy in our experience. It is important, however, that the goals of the BB and GB projects are realistic and achievable so that the projects will be successful and the BBs and GBs—and organization as a whole—will build confidence that Six Sigma will work "here."
Project Management and Reviews. Six Sigma is about effective project management, including project selection, planning, and management reviews. Proper planning is important to ensure success. Such planning helps to avoid "scope creep" (project size and definition slowly growing beyond what is reasonable to accomplish considering the allotted time and resources), misalignment with management, lack of resources, projects that move at glacial speed, and other common project pitfalls. Management reviews are critical to success. Projects should be reviewed weekly by Project Champions and monthly by business leaders. As noted previously, the overall Six Sigma system should be reviewed quarterly and annually. Management reviews are critical to success. The lack of management reviews significantly reduces the impact of the Six Sigma effort. The reviews keep the BBs and managers focused on the project and emphasize the long-term commitment of management to improve the performance of the organization, ensuring it will be a long-term source of products, services, and employment.
Sustaining the Gains. As previously noted, a methodology for sustaining the gains is an integral part of the Six Sigma approach. This methodology is usually called the control plan and is one of the unique aspects of Six Sigma. The control plan can be viewed at both a tactical and strategic level. At the tactical level, it sustains the gains of individual projects; at the strategic level, it sustains and broadens the gains of the Six Sigma initiative overall. A key element of the strategic control plan is a system for the continual identification of new projects and the placing of those projects in the project hopper. As the BBs complete their projects, they are assigned new projects that have been taken from the hopper. It is helpful to think of the project hopper as a "project portfolio," the contents of which blend together to drive the improvement needs of the organization (Snee and Rodebaugh 2002).
Right Results. Six Sigma is about getting the right results—improvements in process performance that are linked to the bottom line. The team estimates what a project is worth, typically with the help of the finance organization, before work is initiated. After the project has been completed, the team calculates the bottom-line savings. Many organizations, such as GE, require a sign-off from the finance organization verifying the financial impact and identifying where in the income statement it will show up. In this way you will know exactly what the bottom-line impact of the project has been. Surprisingly, many previous improvement initiatives discouraged focus on the financials when identifying or evaluating projects.
Project Tracking and Reporting. To monitor the progress of the initiative, check on the achievement of milestones, and provide a corporate memory, a project tracking and reporting system is needed. The tracking system is typically a software system that contains the bottom-line financial results and the improvements to process performance metrics for each project. Such systems typically have the capability to generate management reports on financial and process performance improvements for any process, business, function, organizational level, and so forth.
Six Sigma Methods and Tools
Process Thinking. The first key method is process thinking—taking the view that all work is a process that can be studied and improved. All work in all parts of the organization, whether it is in manufacturing, new product development, finance, logistics, or procurement, is accomplished by a series of interconnected steps. When you view problems from the framework of a process with inputs, processing steps, and outputs, a common approach to improving processes and solving problems can be applied. Because Six Sigma had its roots in electronics manufacturing, there is a common misunderstanding that Six Sigma can only help in this one activity. This mistake is analogous to assuming that the Internet can only be useful in the defense industry (where it originated).
Figure 1.4 shows a schematic of a customer order process. Process variables are divided into four groups: process inputs, controlled variables, uncontrolled variables, and process outputs. Examples of these variables for the customer order process are shown in Figure 1.4. The process inputs include those things used to produce the process outputs. The controlled variables are those that run the process and, as the name implies, can be controlled ("knobs" on the process). The uncontrolled variables are those that affect the output of the process but over which there is limited control. Obviously, the inputs come from suppliers, which could be the person down the hall or another process or raw material supplier; and the outputs go to customers, either internal or external to the organization. Viewing processes this way produces the SIPOC model (suppliers, inputs, process, outputs, customers). In the SIPOC model, all processes, no matter the source, begin to look similar in nature, enabling common improvement strategies to be used.
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Figure
1.4 Schematic of a customer order process and its variables.
Process Variation. Variation is present in all processes and every aspect of work. Unintended variation reduces process performance, decreases customer satisfaction, and negatively impacts the bottom line. Customers want a consistent product or service, one that they can count on to provide the same value all the time. Products need to work as anticipated and be delivered and serviced on time, just as financial transactions need to proceed smoothly with minimal disruptions and just as patients need to be able to count on health-care providers for consistent and quality care.
Six Sigma is focused on reducing the negative effects of process variation in two major ways: (1) It shifts the process average to the desired target level, and (2) it reduces the variation around the process average. This results in a process performing at the right average level with minimal variation from product to product or transaction to transaction. The need to address variation is the primary reason for including so many statistical tools in the Six Sigma toolkit. Statistics is the only science focused on identifying, measuring, and understanding variation, and therefore is a tool you can use to reduce variation.
Facts, Figures, and Data. Six Sigma is about facts, figures, and data—in other words, data-based decision making versus reliance on gut feeling and intuition. The approach requires data on all key process and input variables (see Figure 1.4). The project doesn't proceed until adequate data are available. The focus on the use of data, along with process thinking and variation, helps integrate the scientific method into the Six Sigma methodology. The integration of process thinking, understanding of variation, and data-based decision making is often referred to as statistical thinking (Hoerl and Snee 2002).
DMAIC Improvement Methodology. The primary improvement methodology of Six Sigma has five key phases: define, measure, analyze, improve, and control (DMAIC). All improvement projects touch on these phases in one way or another. (New design projects use a different process called design for Six Sigma.) The tools of Six Sigma are integrated into these phases. This is a strength and uniqueness of Six Sigma. All projects utilize the same improvement process, although the individual applications may be quite different. In contrast to most statistics training that throws a lot of tools on the table and lets practitioners fend for themselves, the DMAIC framework shows practitioners how to integrate and sequence the tools into an overall improvement strategy. This enables practitioners to attack virtually any problem in a systematic manner.
DMAIC is by far the most widely used road map in Six Sigma deployment. Other road maps are possible, but none are as useful in our judgment because of the effectiveness and elegant simplicity of DMAIC. We note that in the case of design for Six Sigma, DMADV or some other road map should be used. The key elements of deployment, projects, and methods and tools are still applicable.
Eight Key Tools. Six Sigma utilizes many individual tools, but the following eight tend to be most frequently applied:
Process mapping
Cause-and-effect matrix
Measurement system analysis
Capability study
Failure modes and effects analysis (FMEA)
Multi-vari study
Design of experiments
Control plans
These eight key tools are linked and sequenced in the DMAIC framework to ensure proper integration. This relatively small number of improvement tools helps the BBs and GBs move up the learning curve more quickly. They learn the order in which to use the tools and how the output of the use of one tool becomes the input for another tool. You will learn more about application of the tools beyond the factory floor in Chapter 7.
Statistical Tools. Some, but not all, of these tools are statistical tools. As noted earlier, statistical tools are required so that process variation can be dealt with effectively. Six Sigma has effectively integrated statistical tools with those from other disciplines, such as industrial engineering, quality management, operations research, mechanical and electrical design, and reliability. The result is a toolkit much broader and more powerful than available within any one discipline. Because the toolkit is diverse and flexible, and because the focus is on a limited set of core tools, BBs and GBs do not need to become professional statisticians to be successful. They are trained to use key statistical thinking and methods and data to improve processes.
User-Friendly Statistical Software. Another reason Six Sigma has been effective is the general availability of user-friendly statistical software that enables effective and broad utilization of the statistical tools. The statistical software package most widely used in Six Sigma is Minitab. JMP and other statistical software systems are also used in some Six Sigma deployments. Prior to the availability of such user-friendly software, statistical methods were often the domain of professional statisticians, who had access to, and specialized training in, proprietary statistical software. Specialists in statistical methods have an important role to play in Six Sigma, but practitioners who are not professional statisticians do the vast majority of statistical applications.
Critical Few Variables. The final key methodology of Six Sigma is its focus on the identification of the critical few input and process variables. Most processes, from performing surgery to closing the books for a global conglomerate, involve a large number of potentially important input and process variables. Studying each in-depth, and then managing them on an ongoing basis, would be time-consuming and prohibitively expensive. Fortunately, often just three to six critical process input variables drive the process output variables. Identification of these variables can lead to effective ways to optimize and control the process in a parsimonious and cost-effective way. Six Sigma finds, and then focuses attention on, these few key variables. This principle of focusing attention on a few key things is consistent with general principles of good management. The ultimate goal is to move from measuring outputs and making process adjustments (reactive) as the primary method of process control to measuring and then adjusting process inputs (proactive) to control the process and achieve the desired process performance.