What is Six Sigma?
Six Sigma is many things depending upon your perspective or view point. From a management point of view it is a management philosophy and strategy to run a business by using statistical tools and stakeholder led employee driven project work to create breakthrough profitability and quantum gains in quality. Looking at a high level perspective there are basically only two ways to take away from a business's bottom line, one is easy to see, it is to not have the capital means to accomplish the objective. This may be any number of resources such as: people, buildings, knowledge, tools, equipment, etc. The second is much harder to see and probably accounts for most of the waste in any business or organization, it is variation.
Six sigma is also a process improvement methodology to eliminate variation in a system. A system is comprised of processes which when integrated together serve to meet a common goal which may be to produce a product or provide a service. For example, suppose we think of an office process where we have two dedicated and skilled employees who answer calls, file information and generally do all things to keep the office running smoothly. Now suppose that each of the employees file things differently and keep their own records differently; no big deal if the office runs smoothly, right? Wrong! This is in itself a source of variation. If one person is away others who may be forced to look up or find something would not know where to find the information in a timely manner thus adding waste by spending extra time to attain what they need. Anyone who has worked in such an environment can surely think of many more examples of how this could lead to even more types of variation.
Sigma, in statistical terms, is a metric which is also known as the standard deviation of a process about its mean or average. It is a measure of how far a particular value is away from the average value of the population. The picture below graphically shows what we mean:
The line in the middle of the bell shaped curve is the mean (µ), each consecutive line either to the right or left is one standard deviation or sigma distance from the mean. Therefore, we could say that 68.26% of all the values fall within one sigma to the right and one to the left of the mean. If we move one more sigma value to the right and left of the mean this total area would cover 95.46% of the expected values furthermore another sigma in either direction would comprise 99.73% of all expected values. Now this seems pretty good when we look at it, but let's examine this closer.
In sigma terms this would me that out of a million opportunities, which could be products, or services, we would have 66,810 failed occurrences; not so good if we think of this in sigma terms.
The table illustrates how many failures per million opportunities we could expect at the various sigma levels our internal processes are operating at.
Based on the table, which level of sigma would you want your business or organization operating at?
Changing your culture to think in terms of performing to a six sigma level would lead to a significant improvement in profits and product or service quality.
