Six Sigma methodology: breaking down Lean’s key technique

An Overview of Six Sigma

Six Sigma, despite having a fairly technical-sounding name, is essentially a set of techniques and strategies that can help managers and teams better develop and improve processes in their operations. The model itself is highly focused on applying these improvements to operational and manufacturing processes, though some managers have been known to make use of the system in other areas of the business as well. Through these guiding principles, Six Sigma aims to reduce variability and create better efficiencies in the specific process being managed. 

As we touched on briefly, Six Sigma itself is included as a part of an overarching family of different project management systems designed to better improve operational processes. These are known as Lean Thinking Systems or simply Lean Systems. Much of the lean systems currently in use can be traced back to their history of being developed by Toyota in the 1950s, originally known as the Toyota Production System or TPS. With lean systems, managers and teams are tasked with “eliminating waste” to achieve the utmost efficiency possible with any task. Waste elimination here takes the form of quickly identifying any errors or inefficiencies in production that could lead to defects down the line, as well as focusing on refining the same process to only produce what is needed at any given time. 

Six Sigma follows these principles closely through its own process of segmented and individual stages for development. It’s important to note that the original Six Sigma methodology was keenly focused on variation reduction, while the Six Sigma methods being used today often include different aspects of the lean principles baked into its execution. These stages are laid out in 5 separate steps: Define, Measure, Analyze, Improve, and Control. Through this methodology, commonly known by its acronym as DMAIC, managers and teams can arrive at a more standardized and improved business process that has a reduced risk of error.

History of Six Sigma

The concept of Six Sigma came as a natural evolution of the different focuses that industries needed to hone in on as the world began to take on different business improvement processes. Motorola once heralded as a key player in the mobile phone market and general technologies in the late 20th century, and is also known to be the birthplace of the Six Sigma methodology as well. Bill Smith, then a senior engineer and scientist of the company, was tasked with continually managing and improving the systems found within their operations. 

It was here that Smith understood the importance of mitigating the chances of defects occurring through controlled management and standardization of steps. Smith theorized that this new process could have dramatic effects on different aspects of the business, ranging from primary value chain activities such as manufacturing and logistics to support activities such as R&D and technological development. 

Six Sigma was the framework that Smith had developed to address the need for such a new system to be in their company. The term itself borrows heavily from concepts in statistics, which was a key school of thought in understanding the different manufacturing processes in Motorola at the time. The usage of sigma pertains to the statistical concept of a rating normally assigned to a process’ defect-free production rate, while the number six is based on the ideal number of standard deviations between the mean product output and the specified output. 

Despite Six Sigma’s technical approach to business processes, the methodology itself proved incredibly helpful in identifying and further improving upon the standard operating procedures within the firm. In fact, the reason why it’s so closely related to lean frameworks is it does share similar methodologies across its core systems, such as its Just-in-Time concept. Today, Six Sigma is often used (at times erroneously) with Lean Six Sigma, which combines Six Sigma’s focus on operational excellence through reduced variation with Lean’s focus on the elimination of waste for a more productive and streamlined process. With this combination, it’s theorized that Lean Six Sigma can better provide a company with a working model to achieve better business and operational performance.

How Six Sigma Works

Regardless of how you might see Six Sigma fitting within the larger lean system framework, what’s key is the method in which you apply and execute it on a given problem you’re facing. To that intent, let’s take a closer look at the  5 stages of Six Sigma: Define, Measure, Analyze, Improve, and Control. 

Define focuses on the identification of which process the team, led by a Six Sigma champion or lead, will look to improve. Despite being the start of the method, it’s incredibly important to spend time defining what the process is as it will also uncover the overall problems, needed key performance indicators, and its eventual end objective. 

Measure then focuses on the different stages of observation that occur within the identification of the process proper. This means creating statistical measures on the initial performance of any given function, allowing the team to begin their hunt for any weak points or areas of concern. Often these statistical points are defined as rates of success or rates of defects in any particular production line, but can also be measured as per the standard key performance indicator being monitored during normal operational periods. 

With the first two stages completed, the team and the Six Sigma lead can then better Analyze the information and data collected to arrive at potential reasons for failure or variations within the process itself. The same team then works to essentially confirm their analysis through small tests and statistical correlation measurements. 

Lastly, the team is then set to Improve and Control the changes. This means implementing the analysis to improve the process as well as instilling controls that can ensure that the process remains changed and does not refresh to the older ineffective method.

Six Sigma in Action

With Six Sigma sounding both technical and general at the same time, it can be difficult to imagine it being used in practice, especially with many different business units looking for process improvements on a near regular basis. As such, we’ve created a few examples of Six Sigma being utilized in different processes that a standard business is likely to be managing. 

For this, we will use the case example of a cellphone manufacturer, as it can provide insight into how Six Sigma takes into account both internal and external forces in its methodology.

Manufacturing Operations

Starting us off, we will look to see how Six Sigma can be used to better improve processes found in manufacturing operations, something that the model was originally intended for when it was developed in the 1980s in Motorola. Utilizing the DMAIC approach within Six Sigma, you first want to define the exact business problem you are facing.

With our example of the cell phone maker, let’s say their focus is to improve the output of phones produced per day. Now the definition stage shouldn’t just stop here but should include what kind of goals the organization is looking for and what kind of resources will be made available to the teams in charge. 

Once you establish a clear line of sight regarding the definition of the business problem, you start by  measuring the different metrics found in the relevant processes. Our example can utilize the number of phones made to exact specifications, the number of error phones, time to completion, and more. 

The team then collects all this information to analyze and eventually deliver a possible improvement and control plan to execute a particular action that can affect the process as a whole. For example, combining particular processes together to lower the number of individual tasks can help time to product and can greatly affect the manufacturing process entirely.

Product Development

One of the most interesting uses for Six Sigma is also within the product development area. Here, instead of looking towards an internal source for a particular problem to define, businesses will likely be opting for a customer-centric approach to inform them of the problem at hand with their product. 

As the project is focused on external input, we could observe the need for newer features in a particular phone design. The market is saturated with new phone models, so the aforementioned company needs to identify what incremental product design they will develop as their next iteration. 

Measuring in this stage can come in the form of consumer surveys, customer satisfaction scores, and more. Similar to the previous example, the teams in charge of this six sigma approach will then need to analyze what each of these data points means to reach a relevant improvement and control that suits the next product iteration. 

If the planned product iteration is a better camera, the analysis of this insight should include a combination of market trends, customer needs surveys and other relevant data that can better inform the team on why they are taking this particular approach.

Logistics Management

Logistics management can also be better streamlined through the usage of the Six Sigma method. Similar to how we established our problem with a definition in regard to our manufacturing operations example, we will do the same for our logistics problem. If the problem seen by the organization is the time it takes for the product to get to the consumer, then the measurements you will need to take are the actual transportation times throughout the entire process.

The analysis here can come in the form of various normal distribution averages that can paint a better picture of what the standard delivery time is and possible factors that feed into that. From here, the cell phone company can either adjust their marketing approach to better condition consumers on the transportation time, or develop more efficient logistical processes based on the observed factors at play. 

Through the Six Sigma method, you’re likely going to be able to identify key parts of the problem to tackle in order to focus your time (and everyone else’s) appropriately.

Key Things to Remember with Six Sigma

Six Sigma is an incredibly useful framework to follow in developing better processes across different industries. It’s become such an integral part of project management that some quality assurance organizations have released certifications that can better measure someone’s acumen with the tool. 

But it’s also important to remember that Six Sigma is essentially a framework that can be used by anyone regardless of their skill level or official certification. The processes themselves are fairly intuitive to those that have been managing for a while, all Six Sigma does is put it to good use by organizing it in a clear and straightforward manner.