Before we start talking about the benefits of Six Sigma, let’s start with the basics and spend a minute talking about what exactly Six Sigma is.
Six Sigma actually has several different facets to its meaning. First, if we look simply at the term Six Sigma, sigma represents standard deviation, which a universally accepted metric that allows us to calculate how much variability there is within a process. We then can use this information to determine if that process is able to stay within the established quality limits that have been set by our customer. Organizations use Six Sigma as a way to then measure the quality and performance of their processes. The sigma scale measures defects per million opportunities, or DPMO, and Six Sigma equates to 3.4 defects per million opportunities. Which is an extremely high level of quality.
In addition to being a metric, Six Sigma is also a five phase continuous improvement methodology. The methodology follows the Define, Measure, Analyze, Improve and Control or it’s called by its acronym the DMAIC methodology. This methodology focuses on identifying improvement opportunities, analyzing current processes. And then finding different improvement solutions, implementing them, and then maintaining control of those improvements.
Finally, Six Sigma is also an organizational system that’s used at a strategic level. Six Sigma is more than a set of metric based problem solving and process improvement methodologies. It’s a continuous business improvement process that focuses on four key areas. Those are, understanding customer driven improvements, analyzing those current processes and services, aligning those processes to achieve those customers’ requirements. And then finally, ensuring stability and sustainability of quality in the processes.
It’s important to also understand why as an organization you should invest in the Six Sigma methodology. And so there are several different reasons. First, as a methodology, Six Sigma aims to reduce mistakes and defects that occur within your processes. Six Sigma also has a proven track record. It has been globally accepted as a profitable and winning business strategy. More and more companies globally are embracing Six Sigma when they need to become more competitive or if the markets are sluggish. It helps to improve operational efficiency and quality, often at the same time. In fact, you will learn that without improving quality, it is often impossible to be more efficient.
Six Sigma was first formalized by Motorola, a giant electronics corporation. While Six Sigma started in the electronics industry and gained momentum in the automobile industry, Six Sigma is a methodology that can be applicable to any organization, small or large. Because it’s a business initiative that can help all organizations to become better than they currently are. Since the development of Six Sigma, it has been deployed in banking and financial services, information technology, healthcare, customer service, government, hotels, in the hospitality industry, and virtually all other business sectors.
As a methodology, Six Sigma focuses more than just on error and variation reduction. Six Sigma is a business initiative that must be taken on by all employees throughout the organization. And for Six Sigma to be truly successful, all employees within the organization need to adopt the Six Sigma principles. And while Six Sigma can be used as a measure of quality, it’s not strictly a quality initiative. A large part of Six Sigma initiatives focus on how to improve a process. And as you do this, defects are reduced and quality is improved. The organization realizes many other benefits. One of the main benefits for applying Six Sigma is that it creates an environment of sustained success. Six Sigma is not just a one time fix, it’s a methodology that needs to be implemented. During implementation, it should become permanently adopted by the organization. It changes the structure of the organization for the better. Six Sigma also provides realistic performance goals that are common across all processes and systems. The goal of reaching 3.4 defects per million opportunities is critical.
Another key benefit of Six Sigma is that, as the quality of products and services are improved, those services and products have enhanced value to the customers. This enhanced value helps to capture larger sections of the market and increases revenue for the organization. In addition, Six Sigma helps to facilitate rapid change and improvement within the organization, rather than just doing continuous improvement with gradual incremental change. What this means is that the rate of improvement is enormously increased in organizations that are applying Six Sigma. With this environment of rapid change, the Six Sigma practitioners are working together with the cross-functional teams. Which helps to promote learning new skills from the Six Sigma methodology. It also helps to cross pollinate these improvements between different areas of the organization, and strengthens all of the departments and processes that are involved.
Finally, by applying Six Sigma, it helps the organization execute strategic change within the organization, which helps to move the company forward. When management decides that a change is needed within the organization, Six Sigma is a way of bringing about the necessary changes to both the actual processes and the strategic direction of the organization. This is where Six Sigma really helps an organization place themselves in a position where they’re poised to succeed on a new strategic path forward.