Unit 2

Six Sigma Basics

What is Six Sigma? Understanding Six Sigma and Its Methodology

Six Sigma is a powerful process improvement methodology that helps businesses improve quality
and efficiency. In this introduction to Six Sigma, we will explore how the Six Sigma process transforms
business operations by reducing defects and enhancing overall performance.

Six Sigma is a business methodology focused on quality improvement by measuring the number of
defects in a current process and systematically eliminating them.

What does Six Sigma mean? The term “Six Sigma” represents a statistical measure indicating how
much a process deviates from perfection. Operating at six sigma means the process has a failure rate
of just 0.00034%, resulting in almost no defects.

In summary, the Six Sigma methodology aims to reduce defects and improve quality. The Six Sigma
process involves several key principles that help organizations achieve near-perfect quality.

Understanding Six Sigma: The History

Several decades ago, Motorola Corporation expressed concern that traditional methods of quality
assurance were not enough to assure quality. Under this guidance, Motorola developed the
methodology and cultural changes necessary to deploy a Six Sigma program that would change the
way modern organizations deliver and manage quality control. The program was so successful that
Motorola documented more than $16 Billion in savings from this new approach.

Since then, countless companies from manufacturing to health care have adopted Six Sigma. The
most notable spokesperson for this discipline has been Jack Welch who implemented this program at
General Electric in 1995.

What is the Six Sigma Process?

The Six Sigma process involves several key principles designed to help organizations achieve near-
perfect quality. By utilizing Six Sigma tools and techniques, businesses can systematically identify and
eliminate sources of variation.

This is accomplished through a structured approach known as DMAIC (Define, Measure, Analyze,
Improve, Control).
DMAIC focuses on identifying and eliminating sources of variation to improve processes. As
described in more detail below, DMAIC, which stands for Define, Measure, Analyze, Improve and
Control, serves as the backbone to implementing Six Sigma.

The framework of the DMAIC process, is essential for understanding how Six Sigma works.

The Statistical Foundation of Six Sigma

The term “Six Sigma” is derived from the Greek letter “σ” (sigma), which represents a statistical
measure of standard deviation. In statistical terms, Six Sigma quality signifies a process that produces
fewer than 3.4 defects per million opportunities, indicating an extremely high level of performance.

The normal distribution graph below highlights the statistical foundations of the Six Sigma model.

A higher standard deviation indicates a broader spread of values. Therefore, processes where the
mean is at least 6σ away from the nearest specification limit are targeted for Six Sigma quality.

In essence, Six Sigma provides a robust framework for organizations to systematically improve
processes, reduce defects, and enhance overall performance, thereby delivering significant benefits
in terms of quality, efficiency, and customer satisfaction.

Lean Six Sigma: Combining Efficiency and Quality

For those trying to understand how six sigma works, a common misconception is the difference
between Six Sigma and Lean Six Sigma.

Lean Six Sigma serves as a hybrid approach that combines the best of Six Sigma (quality and
consistency) with the best of Lean (efficiency) to help organizations deliver customer value through
efficient operations and quality standards, which results in creating higher quality products and
services.

Because Lean Six Sigma tackles both issues, quality and efficiency, Lean Six Sigma has become the go
to methodology for all industries aiming to streamline processes, reduce waste, enhance quality,
and ultimately deliver increased customer value.

From healthcare and non-profits to government agencies and higher education, Lean Six Sigma can
be applied to almost any industry and any job function.

Six Sigma Explained: Key Principles of Six Sigma

Six Sigma is based on 5 key principles that form the backbone of its methodology, ensuring its
success in enhancing processes and minimizing defects. These principles offer a systematic approach
to attaining superior quality and operational efficiency.

These key principles help to understand the benefits of implementing Six Sigma.

1. Customer Focus

At the heart of Six Sigma is the commitment to meeting and exceeding customer expectations.
Understanding customer needs and requirements is crucial for defining quality standards. By
focusing on the customer’s perspective, Six Sigma aims to deliver products and services that not only
meet specifications but also enhance customer satisfaction.

2. Data-Driven Decision Making

Six Sigma relies heavily on data and statistical analysis to drive decisions. Rather than relying on
assumptions or intuition, Six Sigma practitioners use accurate data to identify root causes of
problems, measure performance, and track improvements. This ensures that decisions are based on
solid evidence, leading to more effective and sustainable solutions.

3. Process Improvement

Continuous improvement is a core principle of Six Sigma. By systematically identifying and

eliminating sources of variation and inefficiencies, Six Sigma seeks to enhance processes on an
ongoing basis. This involves not only addressing existing issues but also proactively identifying
opportunities for improvement to achieve optimal performance.

4. Proactive Management

Six Sigma promotes a proactive approach to management. This means anticipating potential
problems and implementing preventive measures to avoid them. By focusing on prevention rather
than reaction, Six Sigma helps organizations maintain consistent quality and avoid costly errors and
defects.
5. Collaboration and Involvement

Successful Six Sigma implementation requires the involvement and collaboration of all levels of the
organization. From top management to frontline employees, everyone plays a vital role in the
process improvement journey. By fostering a culture of teamwork and open communication, Six
Sigma ensures that all stakeholders are aligned and committed to achieving quality goals.

Six Sigma Methodologies: DMAIC and DMADV

Now that we understand what Six Sigma is, there are two main process improvement methodologies
that make up Six Sigma: DMAIC and DMADV.

Each Six Sigma methodology (DMAIC and DMADV) has its own unique set of steps that can be used
to implement business transformation.

DMAIC

DMAIC (Pronounced dee-may-uck), is an acronym for Define, Measure, Analyze, Improve and
Control. It is important because it guides us through an organized process for solving process
challenges. The stages are as showed below.

1. Define: Focuses on identifying and summarizing the problem or opportunity that needs to be
addressed. It should be written from a business perspective and identify the benefits and
costs associated with undertaking the project.

2. Measure: Concrete and measurable milestones and goals are established. Vague goals such
as “improve satisfaction” or “reduce delays” are avoided while concrete goals such as
“improve satisfaction by 20 percent” or “reduce shipping delays by 2 hours” are used
instead.

3. Analyze: Alternative solutions are identified and compared.

4. Improve: Focuses on implementing the outcome of the Analyze stage. Here is where new
equipment is purchased and installed, new procedures are put into action, and people
trained.
 5. Control: Addresses the need to establish control systems to ensure that the process
maintains its standards over time. In most situations this involves the use of control charts
covered later in this guide.

DMADV

DMADV stands for Define, Measure, Analyze, Design, and Verify. This technique is used for
developing new processes or products at Six Sigma quality levels.

The initial three stages are the same as those in DMAIC. Due to the similarity between these
acronyms, some organizations use DFSS (Design for Six Sigma) instead of DMADV.

1. Define: Establish the project scope and identify all customer deliverables.

2. Measure: Assess current performance metrics.

3. Analyze: Identify the root causes of any defects.

4. Design: Develop a process that aligns with customer needs and expectations.

5. Verify: Confirm that the designed process meets customer requirements and performs
effectively.

When deciding on which Six Sigma methodology should be implemented, DMAIC or DMADV, it is
quite simple.

DMAIC is ideal for improving an existing product or service that is not meeting customer
expectations or performing optimally.

Alternativley, the DMADV methodology is suited for developing a new product or service, or for
situations where using DMAIC on an existing project or process does not yield the desired results.

How Does Six Sigma Work? A Detailed Explanation of DMAIC

The DMAIC method is the cornerstone of Six Sigma, providing a structured framework for process
improvement and implementing Six Sigma.
Each phase in DMAIC has several steps:

1. Define

Objective: Clearly articulate the problem, project goals, and customer requirements.

 Identify the project scope and key stakeholders.

 Define the problem statement and project objectives.

 Establish the project timeline and resources.

 Gather customer feedback and define their needs and expectations.

2. Measure

Objective: Collect and analyze data to understand the current process performance.

 Develop a data collection plan.

 Identify key metrics and collect relevant data.

 Establish baseline performance measures.

 Validate the data for accuracy and completeness.

3. Analyze

Objective: Identify the root causes of defects or inefficiencies.

 Conduct root cause analysis to pinpoint issues.

 Use statistical tools to analyze the data.

 Identify trends, patterns, and relationships within the data.

 Validate the root causes through testing and verification.

4. Improve

Objective: Develop and implement solutions to address the root causes and enhance process
performance.

 Brainstorm potential solutions and select the most feasible ones.

 Develop a detailed implementation plan.

 Test solutions on a small scale to assess effectiveness.

 Implement the chosen solutions across the process.

5. Control

Objective: Monitor the improved process to ensure sustained performance and continuous
improvement.

 Develop a control plan to maintain process improvements.

 Implement monitoring systems to track performance.

 Establish standard operating procedures (SOPs) and training materials.

 Conduct regular audits and reviews to ensure ongoing compliance.

By following the DMAIC method, organizations can systematically improve their processes, reduce
defects, and achieve higher levels of customer satisfaction and operational efficiency. This structured
approach ensures that improvements are data-driven, sustainable, and aligned with business
objectives.

Overview of Six Sigma Techniques

Six Sigma employs a variety of techniques to analyze and improve business processes. These Six
Sigma techniques are fundamental to identifying inefficiencies, reducing defects, and achieving
operational excellence.
Here are some of the key Six Sigma techniques:

DMAIC Methodology

DMAIC stands for Define, Measure, Analyze, Improve, and Control. It is a structured problem-solving
process used to improve existing processes:

 Define: Identify the problem and project goals.

 Measure: Collect data to understand the current process performance.

 Analyze: Identify root causes of defects and issues.

 Improve: Develop and implement solutions to address root causes.

 Control: Monitor the improved process to ensure sustainability.

DMADV Methodology

DMADV stands for Define, Measure, Analyze, Design, and Verify. This technique is used for
developing new processes or products at Six Sigma quality levels:

 Define: Establish project goals and customer deliverables.

 Measure: Determine customer needs and specifications.

 Analyze: Develop design alternatives and select the best option.

 Design: Create detailed process designs.

 Verify: Test and validate the design to ensure it meets customer requirements.

5S Technique

5S is a workplace organization method that improves efficiency and effectiveness by organizing and
standardizing the workplace:

 Sort: Remove unnecessary items.

 Set in Order: Organize items for easy access.

 Shine: Clean the work area.

 Standardize: Establish standards for organization and cleanliness.

 Sustain: Maintain and review the standards.

Kaizen

Kaizen focuses on continuous, incremental improvements. It involves all employees working together
to identify and implement small changes that improve processes and reduce waste. This technique
fosters a culture of ongoing improvement and teamwork.

Kanban

Kanban is a visual management tool that helps manage workflow and improve efficiency. It uses
visual signals, such as cards or boards, to represent work items and their progress through different
stages of a process. This technique helps teams visualize their work, limit work in progress, and
identify bottlenecks.
Poka-Yoke (Error Proofing)

Poka-Yoke involves designing processes and systems to prevent errors or make them immediately
detectable. This technique helps reduce defects by eliminating opportunities for mistakes before
they occur. Examples include color-coding, checklists, and automatic alerts.

Value Stream Mapping (VSM)

VSM is a visual tool used to analyze and design the flow of materials and information required to
bring a product or service to a customer. It helps identify value-added and non-value-added
activities, enabling organizations to streamline processes and reduce waste.

Lean Six Sigma

Lean Six Sigma combines Lean manufacturing principles with Six Sigma techniques to enhance
efficiency and quality. Lean focuses on eliminating waste and improving flow, while Six Sigma
emphasizes reducing variability and defects. Together, they provide a powerful approach to process
improvement.

Root Cause Analysis (RCA)

RCA is a problem-solving technique used to identify the underlying causes of defects or issues.
Methods such as the 5 Whys and Fishbone Diagrams help teams systematically analyze problems and
implement effective solutions.

By applying these Six Sigma techniques, organizations can achieve significant improvements in
quality, efficiency, and customer satisfaction. These techniques provide a structured approach to
problem-solving and continuous improvement, driving long-term success and competitive advantage.

Overview of Six Sigma Tools

Six Sigma utilizes a variety of tools to analyze and improve processes, ensuring quality and efficiency.
These tools are integral to the DMAIC (Define, Measure, Analyze, Improve, Control) methodology
and help practitioners systematically identify issues, implement solutions, and maintain
improvements.

Here are some of the most commonly used Six Sigma tools:

Process Mapping

Process mapping involves creating visual representations of a process, showing each step from start
to finish. This helps identify areas of inefficiency, bottlenecks, and opportunities for improvement.
Common process mapping tools include:

 Flowcharts: Visual diagrams that map out the sequence of steps in a process.

 SIPOC Diagrams: High-level maps that outline Suppliers, Inputs, Process, Outputs, and
Customers.

Statistical Process Control (SPC)

SPC involves using statistical methods to monitor and control a process. By collecting and analyzing
data from the process, practitioners can identify variations and take corrective actions before defects
occur. Key SPC tools include:

 Control Charts: Graphs that display process data over time and signal when a process is out
of control.

 Run Charts: Similar to control charts but without control limits, used to identify trends or
patterns in data.

Cause and Effect Analysis

Also known as Fishbone or Ishikawa diagrams, this tool helps identify the root causes of a problem. It
categorizes potential causes into major categories such as People, Methods, Machines, Materials,
Measurements, and Environment, making it easier to pinpoint the source of issues.

Failure Modes and Effects Analysis (FMEA)

FMEA is a systematic approach to identifying potential failure modes in a process, product, or

system, and their effects. It prioritizes risks based on their severity, occurrence, and detection,
helping teams focus on the most critical issues.

Pareto Analysis

Based on the Pareto Principle (80/20 rule), this tool helps identify the most significant factors in a
dataset. By focusing on the top 20% of causes that contribute to 80% of the problems, teams can
effectively prioritize their improvement efforts.

Root Cause Analysis (RCA)

RCA is used to identify the underlying causes of a problem. Techniques such as the 5 Whys (asking
“why” five times to drill down to the root cause) and Cause and Effect diagrams are commonly used
in RCA.
Hypothesis Testing

Hypothesis testing involves using statistical tests to determine whether there is a significant effect or
difference in process data. This helps validate assumptions and guide decision-making. Common
tests include t-tests, chi-square tests, and ANOVA.

Regression Analysis

Regression analysis is a statistical tool used to understand the relationship between variables. It helps
predict the impact of changes in one variable on another, allowing teams to make data-driven
decisions about process improvements.

Design of Experiments (DOE)

DOE is a structured method for determining the relationship between factors affecting a process and
the output of that process. It helps identify optimal conditions for process performance and improve
quality and efficiency.

By leveraging these Six Sigma tools, organizations can systematically analyze their processes, identify
root causes of defects, and implement effective solutions to achieve continuous improvement and
operational excellence.

Six Sigma Levels

The Six Sigma training levels are structured into different Six Sigma Certification Belts, representing
varying degrees of expertise, responsibility, and mastery of Six Sigma principles and tools.

Here’s an overview of the Six Sigma levels:

White Belt

 Role: Entry-level understanding of Six Sigma concepts.

  Responsibilities: Basic participation in project teams and supporting local problem-solving
efforts.

 Training: Introduction to Six Sigma principles and methodologies, including basic terminology
and concepts.

*Note: Most White Belts can be earned within an hour or two of study time. Because of this, many
companies require a minimum of Yellow Belt certification for recognition purposes.

Yellow Belt

 Role: Fundamental knowledge of Six Sigma.

 Responsibilities: Participation as a team member on Six Sigma projects, assisting with

process improvements and data collection.

 Training: Covers basic aspects of Six Sigma, such as process mapping, data collection, and
simple analysis tools.

Green Belt

 Role: Intermediate level of Six Sigma expertise.

 Responsibilities: Lead small-scale projects or serve as team members on larger projects,

applying Six Sigma tools and techniques to drive improvements.

 Training: In-depth training in DMAIC methodology, statistical analysis, project management,

and process improvement techniques.

Black Belt

 Role: Advanced level of Six Sigma proficiency.

 Responsibilities: Lead and manage complex Six Sigma projects, mentor Green Belts and
other team members, and drive strategic process improvements across the organization.

 Training: Comprehensive training in advanced statistical analysis, Six Sigma tools, leadership
skills, and change management. Black Belts are expected to complete projects that deliver
significant financial and operational benefits.

Master Black Belt

 Role: Expert level of Six Sigma, providing leadership and strategic direction.

 Responsibilities: Oversee the implementation of Six Sigma across the organization, mentor
Black Belts, develop training programs, and align Six Sigma initiatives with business goals.

 Training: Extensive training in advanced Six Sigma methodologies, leadership, strategic

planning, and coaching. Master Black Belts focus on ensuring the overall success and
sustainability of Six Sigma programs within the organization.