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Six sigma is a matter of measurement. The Six Sigma method was born a few years ago in Motorola USA factories. But what is Six Sigma (6σ)?
The Greek letter ‘σ’ or “Sigma” symbolizes statistical variability (or dispersion). A high figure, 6 in this case, characterizes a limited dispersion (3.4 defects per million units produced) and therefore products out of process in line with the customer’s expectations.
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Concept of Six Sigma
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The Six Sigma concept is a normative, statistical-based, data-driven approach, as well as a continuous improvement approach to eliminate defects in the products, processes, or services provided by the company.
It was developed by Motorola based on a quality management foundation in the early to mid-1980s and then became a popular management method for General Electric in the early 1990s. Hundreds of companies and organizations around the world use Six Sigma as an effective way to do business.
The method owes its name to the statistically acceptable level of variation of 3.4 defects per million units produced. Reaching the six sigma threshold is, therefore, a goal, and the eponymous approach offers tools and methods to access it.
Sigma represents the method of population standard deviation, which is a measure of the changes in the data sets collected about the work process. If defects are distinguished by any type of specification limit, then the benefits are separated from the undesirable results of the work process, and the process average of the Six Sigma process is the average of six standard deviations from the closest specification limit. This provides sufficient buffering between the natural change process and the specification limit.
The Six Sigma concept can also be seen as a measure and method of process performance, and Six Sigma is the primary goal, based on one in a million defects. Once the current performance of the process is measured, the next goal is to continuously improve the Sigma level towards 6 Sigma in an effective manner. Even if the improvements do not reach 6 Sigma, improvements from 3 Sigma to 4 Sigma to 5 Sigma will be the best way to reduce costs and improve customer satisfaction. Six Sigma is a method that focuses primarily on eliminating deficiencies in a company’s business processes.
Sigma statistically refers to “standard deviation”, 6 sigma means “6 times standard deviation”, in terms of quality means that the rate of non-performing products per million products (PPM) is less than 3.4, but 6sigma management is not only about product quality, but a whole set of systems of business management theory and practice methods. Throughout the enterprise process, 6sigma refers to how many defects or errors are per million opportunities, including the product itself and the process of production, packaging, transportation, delivery, system failure etc.
6 sigma management requires an enterprise to have less than 3.4 defect rates per million opportunities in the entire process, which is a high goal for the enterprise.
Motorola was the first company to introduce the Six Sigma concept approach in its manufacturing process. The company uses these principles to reduce defect rates on its production lines and throughout the process. After Motorola’s implementation, these Six Sigma methods were adopted by other companies. When GE received a huge $300 million in funding for implementing the Six Sigma principle in the manufacturing process, Six Sigma’s principles caught the attention of companies around the world.
The Six Sigma concept is an organizational structure that focuses on the continuous improvement of the manufacturing process. The main objective of this approach is to achieve the goals and objectives set by the organization in an effective manner, so that management keeps cost and defect rates to a minimum possible.
The core idea of 6sigma management is not really just a quality standard, it represents a new management philosophy, which is to change the “I’ve always done this and done well” mentality, because although I’ve done well in the past, it’s still a long way from the goal of 6sigma management.
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6 Sigma. What is the principle?
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Principle six sigma – If we can measure, we can correct
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Fundamental premise:
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A process, whether industrial or not, necessarily has a more or less important, more or less constant variability.
This variability necessarily has an origin, a cause, which must be identified in order to correct it. However, it is necessary to know and be able to measure effectively and precisely in order to target, mobilize and engage in the appropriate corrective actions.
The approach proposes method and tools to drastically improve the capacity of processes while reducing defects
The Six Sigma method offers techniques and tools to drastically improve process capacity while reducing defects. Originally oriented production process, the method seeks absolute regularity. Variability is indeed a source of customer dissatisfaction.
If we can measure we can also improve
The customer expects a product with a certain quality, according to a specific standard. Not being able to guarantee the entire production by meeting this standard is particularly costly for the company.
In fact, the variability of the final quality is essentially the consequence of the instability of the components involved in the manufacture of the product, the vagueness of the working procedures and more generally the complexity of the processes.
6 sigma requires staying within limits by applying the principle
If we can measure we can not only correct but also improve so as to get as close as possible to zero defects
Ultimately, 6 Sigma does not allow more than 3.4 defects per million for each product or service.
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Five steps to the Six Sigma concept:
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True believers and practitioners of the Six Sigma method follow a method called DMAIC, which represents definition, measurement, analysis, improvement and control.
This is a statistically driven approach that users use through Six Sigma certification or company implementation as a psychological framework for improving business processes.
The main ideology behind DMAIC is that companies can solve any seemingly unsolvable problem.
The first step, a team of people, led by six Sigma champions, determines the failure of its upper concentration in the process, through the company’s purpose, goals and requirements, analysis of the decision.
In the second step, the team measures the initial performance of the workflow. These statistical metrics form a list of potential inputs that can cause problems or bottlenecks and help teams better understand the baseline performance of the process. The definition outlines the issues, objectives and deliverables of the required projects.
In the third step, the team analyzes the process by isolating each input or potential cause of failure in the process and testing it as the root cause of the problem.
The fourth step, through a complex level of analysis, determines the cause of the process error. Since then, the team has to work to improve overall system performance.
Finally, the team adds control to the process to ensure that it does not degrade and fail again.
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The implementation benefits of 6 sigma management
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Any management model, no matter how much innovation and theoretical value it has, in theory, would be meaningless if it did not bring real benefits to the business. Six sigma management is a management model that can bring real benefits to enterprises in many ways.
6 sigma management is an integrated management system and development strategy that maintains the success of the enterprise in its operation and maximizes its business performance, which enables the enterprise to achieve rapid growth and considerable returns.
In general, the improvement of business performance includes the following:
increased market share, increase in customer satisfaction rate, lower operating costs, reduction of product and capital turnaround time, reduction of defect rate, accelerated product development, change sourcing of corporate culture, and so on.
According to a survey, the vast majority of the industry’s leading large manufacturers are currently operating at a level of 3-4 sigma, which means that 6210-66,800 defects have been generated per million opportunities, which will require producers to spend 15-30% of their sales to make up for them.
According to McKinsey’s research, if a 3 sigma enterprise organizes all its resources improvement process, it can increase the level of one sigma per year, i.e. the following annual income: a 20% increase in profit margin, a 12-18% increase in production capacity, a 12% reduction in employees, a 10-30% reduction in capital investment, and until the increase to 4.8 sigma enterprises do not require significant capital investment, when the 4.8 sigma enterprises are increased to 6 Sigma needs to increase investment, but at this time the competitiveness of the product has been greatly increased, the market share is very high, to the enterprise will bring much more profit than the current investment.
GE, Motorola, DuPont, Ford, American Express, United Trust and other companies to implement 6 sigma management success is the best proof of the success.
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The responsibilities and roles of the key participants in the 6-Sigma project are as follows:
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Top management is responsible for selecting consultants, coordinating high-level management workshops, approving the first black belts, demonstrating Six Sigma measurement systems, identifying key improvement priorities, improving project progress, and establishing incentive promotion systems.
Project leaders are responsible for coordinating the training of managers, selecting black belt personnel, selecting implementation projects, organizing audits, and implementing reward sand promotion systems.
Black belt personnel and Green Belt personnel coordinate the identification and implementation of projects, report project progress and obstacles to project leaders, coordinate the training of department managers and staff.
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How 6 sigma management is implemented
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At present, the industry on the implementation of 6 sigma management methods do not have a unified standard. The Seven-Step Method, proposed and successful by Motorola, can be used broadly. The “seven-step law” reads as follows:
1, look for questions (Select a problem and describe it clearly)
To identify the problems to be improved, when the target is targeted, the relevant staff will be called in to become the main force for improvement, and the chief sits, as the person responsible for the improvement, and then set a timetable to follow up.
2. Study the current production methods (Study the Present System)
Collect data on existing production methods and organize them.
3. Find out why (Identify Main Causes)
Gather experienced employees to identify the cause of each possible problem using the Brain Storming, Control chart, and fishbone charts.
4, plan and develop solutions (Plan and implement a solution)
Reuse experienced staff and technical personnel, through a variety of testing methods, to find solutions, when the method design is completed, will be implemented immediately.
5, check the effect (Evaluate effects)
Data collection, analysis, and checking the effectiveness and effectiveness of its workarounds.
6. Put the effective method system method (Code any effective solutions)
Once the methodology has been proven to be effective, it has been developed as a code of practice that employees must follow.
7. Review results and develop new goals (Reflect on the process and develop future plans)
When the above problems are resolved, summarize their effectiveness and develop solutions to other problems.
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What are the gains with a successful Six Sigma method implementation?
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The first is the most direct gains, the reduction of non-quality such as scraps, repeats, retouching.
From quality to customer-centric management
Reducing costs- The most direct gains are obviously related to the reduction in manufacturing costs. Reducing the negative consequences of the non-quality of products designed and/or manufactured translates into immediate financial gain.
Waste, retouching and retouching, not to mention the high cost of customer returns that impact both in terms of direct cost and branding, are a much larger shortfall than one can imagine. Anyone who has worked on the issue of eliminating non-quality will be able to testify to this.
The impacts of non-quality at the organisational level – Moreover, non-quality has consequences both upstream with customers and downstream at the level of the overall organization of the company. Non-quality is thus directly or indirectly depending on the case causing multiple inherent problems. Examples include time-wasting due to scheduling errors, re-scheduling, assignment changes and under-employment of available skills. Communication problems at process and activity interfaces are more difficult to identify. They are also leading causes of blockages that penalize the entire process.
Use of resources – There is a much better use of resources (process optimization, optimal use of machines and other equipment, improved cycle times: reduced operating costs combined with better operation.
Improved incomes – Better customer satisfaction, increased retention, improved revenue per customer, increased market share.
Dynamics of continuous progress – Better layout to launch large-scale projects: new products or processes.
Introducing a culture of piloting by measuring.
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In the next coming articles, read about SIX SIGMA, the tools of the DMAIC method.
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