Lean Learning – Six Sigma

Welcome to the Lean Learning Series on Six Sigma

The Lean Learning Series is a series of sampled notes from my course content on a learning journey to a University of Limerick Masters in Quality Management (Lean Innovation)

Six Sigma

Six Sigma has been reported as one of the most powerful management tools ever devised. It builds upon many of the successful elements of previous quality improvement methodologies and incorporates attributes of its own. Compared to other quality management and improvement systems, Six Sigma stands out as a methodology for identifying the causes of specific quality problems and solving those problems. The emergence of Six Sigma has revolutionised thinking in Quality Science.

A Definition:

“Six Sigma is an organised and systematic method for strategic process improvement and new product and service development that relies on statistical methods and the scientific method to make dramatic reductions in customer defined defect rates, with a constant focus on the bottom line.” (Linderman et al., 2003)

‘Including also a set of quality management techniques, principles and practices’ (Dean and Bown, 1994)

‘With a business focus on the bottom line’ (Montgomery, Lawson, Molnau, and Elias, 2001)

The Emergence:

The emergence of an organised set of existing process improvement tools into what would become Six Sigma first began in the US by General Electric and Motorola in competitive response to Japanese growing quality dominance in the world markets.

The Aims:

Improve and maintain the bottom line profits by reducing the hidden costs of poor quality

The Benefits:

Operational cost reduction

Productivity improvements

Growth in market share

Customer retention

Cycle time reduction

Defect reduction

The Quality Principles:

Six Sigma quality principles are organised into a problem solving algorithm called DMAIC …

Define

Measure

Analyse

Improve

Control

The Focus:

The initial focus of Six Sigma is Quality by reducing process variability.

Six Sigma v Lean:

Traditional lean efforts will help reduce flow time and waste, leading to improvements that will boost overall quality. Six Sigma, with its focus on statistics, will help deliver a more consistent product.

The Possible Results:

Products produced at a Six Sigma level of quality operate virtually “defect free” by definition with only 3.4 defects per million output.

Defects are defined differently depending on the process involved. For example, a human resources department might set a goal of filling all vacancies in a given timeframe. If it fails to do just once, that failure counts as a defect.

Application Context:

Businesses are confronted with rapid technological changes, often compounded by equally rapid knowledge obsolescence, resulting in the need to create new skillsets among employees. Continual learning is often overlooked or underestimated as a factor in employee development and the issues of workforce diversity never seem to go away. Unless the cost of components can be managed and reduced, price erosion will eat into profits, thereby reducing the organisations long-term survivability.

Some Success Factors Include:

Selection and Measurement of the correct metrics
A Process-oriented data-based driver of change
Benefit identification and maintenance of financial results

Coronado and Anthony (2002) define the critical success factors for Six Sigma projects as follows:

DPMO
Net cost savings
Cost of poor quality (COPQ)
Capacity
Cycle time
Customer satisfaction
Internal performance

Six Sigma project selection consideration factors:

- Impact on customers and organizational effectiveness
- Probability of success
- Impact on employees
- Fit to strategy and competitive advantage
- Financial return, as measured by costs associated with quality and
- process performance
- Impact on revenue and market share

If you would like to read more in the Lean Learning Series please read …