Six Sigma is a method and a set of tools designed to drive improvements in business processes. Six Sigma uses the DMAIC approach (Define, Measure, Analyze, Improve and Control), for its acronym in English, to find out what is causing the defects within a given process and determine what changes are needed to make it work better. But why it is called Six Sigma?
What is Sigma?
In statistics, Sigma is the Greek letter that represents the standard deviation. This measures the amount of variation within a data set. If the data set is “normal” (which means that the values in the data set are divided above and below the average of the data set), the standard deviation will be useful to describe how they are extended the data. For example, a data set containing values ranging from 10 to 100 will have a higher than a data set containing values between 30 and 40 standard deviation.
What “Six” means (six)?
In a normal data set, a variation of one standard deviation above the average include 84.1% of the total population below that value. The expansion of this two standard deviations increases it to 97.7% of the population. Going beyond one standard deviation increase further including the data points to 99.85% of the population. Taking this scenario, with 6 standard deviations above the average, a calculated 99.9999998% or 2 parts per billion value is obtained. In simple terms, this means that a process operating at this level will produce only two defects per billion items produced.
What about the process variation?
Two parts per billion is a noble goal, especially when you know that there is a variation inherent in any process. The “godfather” of Six Sigma, Mikel Harry, understand that it is normal that a process varies by up to 1.5 standard deviations in either direction. For that reason, the upper threshold of defects in a six sigma process is currently regarded as 3.4 parts per million. This is the value associated with the 4.5 standard deviations to the right of the mean.
So where did the concept and the name of Six Sigma originated?
In the 1970s Motorola products suffered serious quality problems. This was highlighted when a Japanese company took over a plant previously executed by Motorola and managed to produce televisions with 1/20, as the number of defects. In 1981 Bob Galvin, Motorola CEO challenged his company to improve the quality and performance by a factor of 10 in five years. Outside this challenge, Mikel Harry developed the DMAIC approach and structured problem-solving approach known as Six Sigma. The name Six Sigma was assigned to that based on the objective of Motorola to reach six standard deviations within its manufacturing approach.
Examples for Six Sigma project
As we learned, Six Sigma is a process improvement methodology companies used to improve quality by identifying and eliminating defects or processing errors. The methodology is based on well-established and well-tested techniques. To start a Six Sigma project, the first step to be taken by project managers is conceptualizing, writing and presenting project charter Six Sigma.
Six Sigma process improvement is a methodology consisting of five well-established phases: Define, Measure, Analyze, Improve and Control (DMAIC). The definition phase establishe the reasons for starting the Six Sigma project and includes the research and writing of the statutes of Six Sigma.
A project charter Six Sigma account the reasons and benefits of a Six Sigma project stakeholders. For example, a Six Sigma project will result in changes in processes, job functions and resource allocation. The benefits of the project must be well defined and sold to key stakeholders and members of the project team.
There is no standard format for a Six Sigma project charter. Communication depends on the style of Six Sigma project manager. But in general, you should include the following information: business model approach to the problem; goal statement; scope statement, cost of poor quality, the required resources and key performance metrics. Each of these areas are of interest to senior management and stakeholders.