You hear about black belts, green belts, reductions in variations and references to mysterious statistics. But despite some of the odd terms, it's really not all that complicated. When upper management fully endorses the concept and it is implemented correctly, it can greatly increase the profitability of a company.
"It's a management process for running a company," says Dale Flowers, co-director of the Institute for Management and Engineering at Case Western Reserve University. "Some of the key aspects to it are that it intends to create a fact-based decision-making culture from every employee from the top on down. The other thing that is important is the concept of reducing variation in the process to the absolute minimum."
If you do a task 1 million times, there should only be 3.4 mistakes out of the 1 million if you want to call yourself a Six Sigma company.
"For all practical purposes, if you are a Six Sigma company, you are delivering very good consistency," Flowers says. "But consistency alone is not enough. You could consistently be delivering a bad hamburger. You also have to meet or exceed customer requirements."
Six Sigma originated at Motorola and was soon picked up by others. Flowers, who has been following quality disciplines since the '70s, says Six Sigma is really a combination of an old concept called statistical quality control and Total Quality Management.
Six Sigma principles focus on delivering better efficiency and effectiveness by measuring anything that could affect the overall production process. Armed with this data, teams of employees can pinpoint where problems are and which problems are costing the most money, and can concentrate efforts on fixing the biggest money losers.
"Project teams will take a process and look at it with the goal of making it more effective in terms of better meeting customer needs, as well as making it as efficient as it is humanly possible to make it," says Flowers. "Efficiency and freedom from defects are viewed as equivalents. If you are making Big Macs and you mess up and have to make a new one, that creates a lot of waste, which costs you more than doing it right the first time."
Flowers says that historically, product inspectors would hand out pink slips to products that failed quality inspection, but there was no leap to figure out why products were failing inspection. Six Sigma and other quality initiatives look to address that gap.
"It's about measuring all important dimensions and reducing variations in the process," says Flowers. "If you form a part correctly, it will fit perfectly and function perfectly. The way to do that is to be obsessed with variance reduction."
If you are having trouble meeting customer specifications, then try a demonstration project using Six Sigma principles.
"Six Sigma can help you learn how to get everything possible out of the equipment," says Flowers.
A lot of problems may be solved by a simple analysis using Pareto's rule of 80-20 - 80 percent of the problem can be solved by identifying the correct 20 percent of the issues. By focusing on and correcting the 20 percent, you may be able to eliminate 80 percent of your defects.
Other projects may require complex designed experiments that can rule out every possible cause until only one remains.
For Six Sigma to work, managers and employees have to be educated on how it works because it requires a cultural change.
"With global competition and even local competition in everything we do, you cannot afford to have assets as valuable as brains and not use them," says Flowers. "The quality initiatives are getting profound results. But there is a management revolution that has to go on. People that grew up in the hierarchical era have to make the transition to being more of a coach and a mentor. A corporate culture has been found to be a source of long-term sustainable competitive advantage."
How to reach: Case Western Reserve University, http://weatherhead.case.edu