Six Sigma is a powerful methodology that can be applied to improve business processes. It is a structured approach to reduce variations from any process be it manufacturing, sales, marketing, IT, BPO, accounting or purchasing. Variation in any process happens to be the root cause which eventually leads to defects and customer dissatisfaction. Implementation of Six Sigma helps to remove these variations from the process thereby improving the costs, quality and eventual customer satisfaction.
There are two primary methodologies in Six Sigma: DMAIC and DFSS.
While DMAIC is used for making improvements in existing processes, DFSS is used for new products and services or when the improvements that can be made with DMAIC is not sufficient. DMAIC can be considered to be reactive in nature, in the sense that a process already exists and is making defects. DMAIC approach is used to identify the root cause of the problems and then fix it. The acronym DMAIC stands for Define-Measure-Analyze-Improve-Control. This is a phase by phase approach to solving a problem. DEFINE phase talks about the step one which is identification of the problem statement, goals and benefits. As Six Sigma is a data driven approach MEASURE phase ensures collection of data. Six Sigma is about making decisions based on facts & data. If the data is inaccurate, we would end up making the wrong decisions. Hence, the measure phase ensures good data. The next phase is A NALYZE where we make hypothesis and use data to prove or disprove the hypothesis. This involves establishing the real root causes of what is causing the problem. The fourth phase IMPROVE, focuses on getting the best possible solution to solve the root cause of the problem. The solution is optimized and any potential failure modes are resolved before the solution is deployed in the real world. The last phase, Control, is all about ensuring that the solution is sustainable in the long run. Any financial benefits obtained from the project are also quantified. Finally, the improved process is transitioned over to the process owner.
Following are some of the salient features of Six Sigma methodology:
- Six Sigma is a data driven approach - Six Sigma provides us with information on which and what type of data should be collected, how it should be collected and how it should be analyzed.
- Six Sigma is a process focused methodology- Everything that is done at the workplace has a process behind it. For bringing improvements it is always good to study the underlying process along with the results, especially if we are looking for a long lasting improvement and not a temporary quick-fix solution
- Six Sigma provides a structured step by step roadmap - If a business problem is being resolved by a cross functional team over a period of time, it pays to utilize a structured methodology (like Define-Measure-Analyze-Improve-Control) with review stages.
- Six Sigma uses non common-sense approaches - Example - To improve customer satisfaction index by 25% in 4 months time, you would need not one but a series of non-common sense approaches which Six Sigma provides.
- Six Sigma integrates the best of tried and tested management methodologies over the years - Six Sigma has weaved various time tested management techniques in one roadmap. Also, Six Sigma is not rigid. It is an evolving methodology. New tools are being added to the Six Sigma toolkit by innovative practitioners.
- Six Sigma improvement projects are mostly validated by financial benefits or by impact on a KPI (Key Performance Indicator)
- Six Sigma works on improvements on a project by project basis by people trained as improvement experts (called Green Belts and Black Belts) - Improvements can be brought on a project by project basis and by no other way. Unless improvement areas are converted into projects, with assigned responsibilities and authorities to correctly trained people, the problems remain what they are.