Six Sigma is a method aimed at optimizing processes and quality management in companies, developed by Motorola in the 1980s. The peculiarity of Six Sigma is its mathematical approach : the performance of the processes are measured with the help of indicators. Then causal relationships are identified to improve processes with various methods and reduce error rates.
Discover the mathematical principles on which the Six Sigma method is based, how it is applied in business practice, what success factors are effective and how it combines with other management methods, such as Lean Management.
- You are Sigma: meaning
- Advantages of Six Sigma for companies
- How is the method applied in business practice?
- Success factors for the introduction of Six Sigma
- Six Sigma vs Lean Management
- History and diffusion of Six Sigma
You are Sigma: meaning
The name Sei Sigma illustrates the principle on which this method is based: in mathematics, the Greek letter sigma denotes the standard deviation of a normal Gaussian distribution , and 6 is a particularly positive value in this context.
In business processes, the desired result is not always achieved, but a variation occurs as in normal Gaussian distribution. This dispersion within a process, given by the number of errors, can be quantified as a sigma level . The lower the dispersion, the better the process performance and the higher the sigma value achieved.
A level 6, that is a Six Sigma, corresponds, with a value close to 0, to the best possible error rate. In this case, the probability that a product is defective is 0.00034 percent. In most companies, the sigma value is between 3 and 4.
Six Sigma: Six Sigma (also 6 Sigma) brings together various methods of approach to process and quality management to help companies improve their products and reduce errors, so as to minimize costs and obtain higher profits.
Advantages of Six Sigma for companies
Six Sigma is focused on reducing the error rate, but there are also other, albeit indirect, benefits that benefit companies that restructure their organization according to the principles of this method. For example, in relation to the Six Sigma project, five main advantages are mentioned:
- Sustainability : methods allow for sustainable success. The processes are clearly structured and form the basis for continuous correction and to keep up with changing market conditions.
- Customer satisfaction : Sei Sigma attaches great importance to the customer’s perspective. Only if companies understand their customers’ wishes can they move towards process results that are synonymous with economic success.
- Added value : the implementation of Six Sigma principles increases the company’s value for the customer. By introducing indicators, customers’ wishes can be more concretely understood and targeted.
- Corporate culture : successful integration of the Six Sigma method into the organization promotes better communication between managers and employees.
- Lifelong learning organization : the dissemination of knowledge within an organization plays an important role in Six Sigma. The idea of lifelong learning is anchored in the method, in line with the requirements that companies must meet today in the face of global competition and digitalization.
How is the method applied in business practice?
The Six Sigma method includes a variety of different management techniques for quality and process optimization, which are often grouped together with the term Six Sigma Toolkit .
The best known and most important tool is the five-phase model , also known as the DMAIC cycle :
|Define (definition)||In the first phase, the process to be improved is identified and the problem and the process itself are documented. Then the target values and the purpose of the project are determined, i.e. what should be included in the analysis and what is not.|
|Measure (measurement)||In the second phase, each quality characteristic relevant to the outcome of the process is examined using different methods to measure current performance.|
|Analyze (Analysis)||In the third phase, the causes and causal links of the problem are elaborated.|
|Improve (improvement)||In the fourth phase, the process is improved with various methods, also applied outside the Six Sigma.|
|Control (Control)||In the fifth and final phase, the modified process is controlled by statistical analyzes to ensure sustainable improvement.|
The five-phase model can also be modified and used for new processes. The “Improve” phase is then replaced by the “Engineer” to develop a new workflow based on the research results.
As part of a Six Sigma improvement project, employees take on different roles. Since one of the central principles of the method is that each participant in the project must know his tasks, hierarchically categorizable roles with different responsibilities have been defined .
Their names are based on the colors of the belts commonly used in Asian martial arts: yellow, green, black, Master black and Champion. Executives and employees can obtain certification for each belt.
Yellow belt: the yellow belt is the lowest level certification and provides an overview of the basics of Six Sigma. Employees with this certification collaborate on projects. In most cases, these are experts in a certain sector or managers who wish to acquire further certifications in the future.
Green belt: those who have completed the green belt certification have a profound methodological knowledge and are able to manage their area of responsibility in a Six Sigma project.
Black belt: black belt owners conduct complex Six Sigma projects and have deep technical experience and high social competence to implement important change processes. They are fundamental for the success of the project and also act as motivators for managers of the lower classes.
Master black belt: who owns this belt is, in coordination with the management, responsible for the process and is responsible for the strategic adjustment of Six Sigma within the organization. This person is responsible for employee qualification and setting Six Sigma standards in the company.
Champion : the Champion, also called Sponsor, comes from intermediate or superior management and is not involved in the daily activities of the projects. This person selects the projects, starts them and controls them and supports the project collaborators at each stage.
Success factors for the introduction of Six Sigma
The success of the introduction of Six Sigma depends on many factors. Antony and Banuelas have collected the most crucial factors for a successful implementation. In descending order they are:
- management integration
- methodological competence
- the connection with the corporate strategy
- the relationship with the customer
- the selection of the project
- the organizational infrastructure
- the change of corporate culture
- experience in the project management of the participants
- the relationship with suppliers
- training of participants in the Six Sigma method project
- the link to staff planning
Six Sigma vs Lean Management
Those who are beginners with Six Sigma will sooner or later wonder how this method differs from Lean Management, if the two methods overlap or if they can be combined. In fact, a Lean Six Sigma has been developed , which enriches Six Sigma with elements of Lean Management.
In their original form, however, the two methods are quite different, although both serve the purpose of optimizing processes. They do not contradict each other and can be combined according to the needs of the company.
|Six Sigma||Lean Management|
|Focus||Error elimination, effectiveness||Avoid waste, efficiency|
|Ambition||Big changes, the best solution||Incremental changes, fast solution|
|Implementation||Project oriented||Event oriented|
|Directives||From management||From the different stakeholders|
|Important performance indicator||Cost savings||Time savings|
|Framework conditions||Various framework conditions defined||Few framework conditions|
|Instruments||Numerous simple and complex tools||Few tools|
Lean Six Sigma combines the attention to speed of Lean Management with the goal of the highest quality of Six Sigma. Since the beginning of the new millennium, this combined approach has been taught in managerial training courses. The processes are divided into five phases according to the Six Sigma approach and in each phase attention is paid to minimizing waste. There is a further integration of Lean techniques which are adapted to individual application cases.
History and diffusion of Six Sigma
Six Sigma was invented by Motorola in the United States in the 1980s to minimize manufacturing errors. Other global players such as Kodak, ABB or IBM have gradually adopted the method, further developing it. True success for Six Sigma came in the 1990s, after Jack Welch introduced the method to General Electrics in 1996.
Sei Sigma was initially used only in the manufacturing industry. Today, however, the approach is also widespread in the service sector.
Around 2000, companies began combining Six Sigma with Lean Management. This strategy is currently described with terms such as “Lean Sigma”, “Six Sigma + Lean” or “Lean Six Sigma”.