Six Sigma: The Advantage

SIX SIGMA: THE ADVANTAGE

I. INTRODUCTION

In a capitalist market, businesses are always competing against each other to gain more market share and profits. Obtaining the competitive edge in the market place is the aspiration for great companies and extremely necessary for the company's survival. In most companies, upper management usually creates a strategy, such as a low cost strategy or a differentiation strategy, to maximize its profit in the market place. Through the implementation of these different strategies, various methods of quality control have been developed. Six Sigma is the newest of these quality control mechanisms.

Six Sigma's main objective is to develop a "measurement-based strategy that focuses on process improvement and variation reduction" (Antony, 2004: 2) in producing a product or service. In fact, when using Six Sigma, the target goal for high quality is near 100% perfection. To understand Six Sigma, it is important to know what it is, the keys of implementation, and the advantages it brings to the company.

II. WHAT IS SIX SIGMA?

Tadikamalla (1994) describes Six Sigma as a quality program based on using normal distribution and statistics to emphasize the measuring of product defects, product yield, reliability, and inventory schedule. He states that "six-sigma is a quality improvement program with a goal to reduce the number of defects to as low as 3.4 parts per million" (83). The term "Six Sigma" uses the Greek letter Sigma which represents the standard deviation in statistics (Kihn, 2005). Six Sigma was originally developed by Motorola in the 1980s and has since been implemented by many companies to obtain operational success.

Proponents of Six Sigma believe that the quality created through the process is extremely close to perfection. Lucier and Seshadri (2001) state that "achieving a Six Sigma level of quality equates to nearly error-free performance--where a given process produces only 3.4 defects out of a million opportunities" (136). It is believed that when the Six Simga process is implemented by companies, the high level of performance provides a very favorable outcome.

III. THEORY AND PRINCIPLES OF SIX SIGMA

An important aspect of implementing Six Sigma is first understanding the methodology behind the process--called DMAIC. Voelkel (2005) calls this methodology "a data driven approach known as DMAIC (define, measure, analyze, improve, control)"(66). Each letter of the acronym represents a part of a process that must take place to achieve Six Sigma.

The first step of implementing DMAIC is to Define. Antony and Bhaiji indicate that the define phase involves determining who the customers are and what they need and expect. This can be done by gathering data such as costumer surveys and benchmark dating. Defining the customer and identifying how their needs can be met is critical. The critical quality factors held by the customer need to be identified so that they can be correlated to the business procedures that ultimately create the product.

The Define process also involves developing a project team including team goals, key deliverables, and cost issues. Most importantly though is to ask "What is the process?" It is important to understand different process mapping techniques to appropriately identify where short falls are creating difficulty and to map out core processes.

Voelkel (2005) reported that when the defining process is not followed, problems occur. For example, one company he researched started a project and later found they had never agreed to define the problem or the boundaries under which their product would work. Frustration and dissention were a result of not adequately following the Define step, leaving the project unable to function.

The second phase of DMAIC is to Measure. This phase includes determining how the process will be measured and if adequate measuring systems are in place (Antony and Bhaiji, 2003). The goal of measurement is to create a measuring system that is based off of customer expectations and will show how well the company is performing. It is important that employees are training in measuring methods because they will need to choose the most appropriate methods and techniques for their situations. Methods such as probability and statistics, statistical analysis software and measurement analysis are often utilized. It control for user errors in implementing measurement, it is recommended that the measuring process be as automated as possible and the users should be highly trained to ensure they are implementing the measuring system correctly.

The next step is to Analyze. In this phase of the DMAIC process, the company analyzing the data they gathered from the Measure phase. The point of this analyze phase is to help identify the main causes of defects and failures. This analysis is done through statistical procedures such as multivariate analysis, test for normality, ANOVA, correlation and regression (Lucier and Seshadri, 2001). Antony and Bhaiji recommend that in this phase the company select a "vital few" of the causes of defects rather than trivializing over the many, many causes. By focusing on the most important factors, companies can fully utilize the fourth step--Improve.

The Improve Phase involves identifying the key variables which caused problems and determining how the causes of defects or failures can be removed (Antony and Bhaiji, 2003). It is important for the company to identify the key variables which cause the problem, document the solution, test the solution, and measure the results (Antony and Bhaiji, 2003). This allows for continuous improvement.

The last step of DMAIC is Control. This phase involves determining how improvements can be maintained or sustained. In order to keep changes, controls should be in place to safeguard the participants from returning to the old processes. This is usually done through control charting techniques to meet the new expectations. Henderson & Evans (as found in Antony and Bhaiji) describe the three major sets of tools/techniques that are required within the six sigma model to monitor and maintain changes. They include 1) Team Tools such as responsibility grid, threat versus opportunity matrix, action workouts, etc. 2) Process Improvement tools/techniques such as brainstorming, cause and effect analysis, process mapping, etc. 3) Statistical Tools such as Hypothesis test, ANVOA, scatter plots, regression analysis, etc. This last step of control is a main differentiator between Six Sigma and other quality control programs.

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