Six Sigma is well known and widely practiced management philosophy. It originated in Motorola in the 1980’s , since then it has gained tremendous popularity and respect and is practiced in wide variety of industries. Here I present the 5 Key principles which make Six Sigma a successful approach for so many years.
The Key Principles of Six Sigma are :
- Manage by facts
- Reduce variation in process
- Involve and equip the people in the process
- Undertake improvement activity in a structured way
- Consider ROI
- Manage by facts
In an organization or in real life, we have to take decisions all the time. The first principle of Six Sigma says that decisions should be based on facts and data and not based on feelings. There has to be factual approach to decision making. Decision to take a particular action should not come out of gut. Business decisions are sometimes very critical, they can make or break a business.
Managing by fact implies looking at data, may be historical, or looking at trends, analyzing data and then taking action.
2. Reduce variation in the process
This is another key principle of Six Sigma. Variation in the process is the enemy. No two things are alike and this is the cause to many problems / issues. Let’s understand what is a process to analyze this further. A process can be defined as series of steps where input is given to get desired output. Six Sigma aims at consistent output all the time. What does this imply? Let’s understand this with two examples.
- Consider the process of getting appointment at hospital, if every time it takes between 5 to 7 minutes to get an appointment, you as a customer are satisfied because you know that it takes around 6 minutes and your work is done in that time-frame. Consider another scenario, where you get appointment anytime between 5 to 20 min. How does it feel? As a customer, you feel anxious as you don’t know how much will it take. You are not a happy customer. Six Sigma aims at reducing the variation. Mind it, this does not happen on it’s own. You have to target out-put at a certain level, but at the background you have to reduce variation in your input and process-steps, so that the target can be achieved.
- Let’s look at example from manufacturing industry. Assume that there is a company who fills soda bottles. Every time a bottle is filled, you would strive to achieve the target volume of say 1 L. And every-time you over-fill, you lose and every-time you fill less, it’s loss to the customer (and your reputation, in the long run). Of course, you will have a target range, say 1±.005 L. Six Sigma aims at reducing the variation in the volume of soda filled every time a bottle is filled. Again, targeting the output is possible only when your input has lesser variation and your process has as low variation as possible.
3. Involve and equip people in the process
People development strongly drives six Sigma approach. People are the key to Six Sigma initiative, like any other initiative. But, the key difference here is that Six Sigma certifies people’s capability and hence we have people who are Yellow Belt, Green Belt, Black Belt and master Black Belt. Organizations following Six Sigma methodology have a Six Sigma Organization. Six Sigma has borrowed this terminology of belts from Karate. Karate is a practicing art, it’s not just theory. Same is with Six Sigma, it’s not just theory, you have to apply principles of Six Sigma in your projects and use the tools to deliver projects.
4. Undertake improvement in a structured way
Yet another core principle of Six Sigma is to undertake improvement in a structured way. Six Sigma has a clear methodology for improvement – DMAIC: Define, Measure, Analyze, Improve and Control. These are the 5 stages that you have to follow when managing a Six Sigma Project and each stage of DMAIC cycle has tools that you can use in your project.
The Purpose of “Define” phase is
- To clarify the issue / opportunity being addressed
- To determine what the customer of the process expects or requires
- To define the scope/boundaries of the project
- Determine who will be involved in the project
- Form the Six Sigma Equation of Y = f(x)
Purpose of the Measure Phase:
- To ensure that an issue actually exists and understand what is happening
- To focus on our efforts and work
- To set a baseline of how the process is performing today, so we can compare against measure later and see if an improvement has been made in the improve phase
Purpose of “Analyze” phase is to
- Brainstorm / Identify Potential Root causes
- Investigate potential Root Causes
- Establish relationship of Root cause(s) to effects
- Focus on “X” in Six Sigma Equation of Y = f(x)
- Not jump to “Solutions”
Purpose of “Improve” phase is
- To develop solutions that address the root causes uncovered in the Analyze phase
- To find ways to streamline the process
- Remove non value adding steps in process
- Reach the “objectives” outlined in the Project Charter
- Confirm the Improvement with data
Purpose of “Control” phase is
- To sustain the improvements made in the process
- To identify a clear plan for maintaining the process
- To transfer ownership of monitoring & sustenance of changes to the process owner
This is yet another important principle of Six Sigma and this is main reason it is so popular and gains management commitment pretty quickly. Six Sigma projects are initiated with a ROI (Return on investment) in mind. An estimate of ROI is made in the beginning of the project (Define phase). When doing Six Sigma Black Belt Projects, the effect should be visible on bottom line or it should improve customer satisfaction to large extent.
Six Sigma Green Belt projects are usually for resolving issues at the organization level. But, they are aimed at chronic issues that require structured problem-solving. These projects help organizations come out of their daily fire-fighting, thus helping improve productivity and efficiency.
In summary, we can say that the five principles of Six Sigma have made it a well-accepted approach, whose influence is increasing day by day. Six Sigma, though originated in the manufacturing sector is now practiced almost everywhere.