Six Sigma image

Six Sigma

What is Six Sigma?

Before we talk about strategy, it is worth spending a few moments describing what Six Sigma actually means. Firstly what is ‘sigma’? It’s simply the Greek letter for ‘s’.

Mathematicians and engineers use Greek letters in equations. Sigma is commonly used to signify Standard Deviation which, put simply, is the average amount that a sample set varies from the average (or mean).

Standard Deviation (SD) is a measure of variability, the nemesis of any business. The smaller the SD, the less the variability.

Let’s consider a fictitious manufacturing company making holes for donuts. The customer, who fits the holes to the donuts, requires the holes to be 45mm +/- 5mm. Therefore the upper specification limit (USL) is 50mm and the lower specification limit (LSL) is 40mm.

The donut hole-making machine has inherent variability (like anything if you measure it precisely enough). Its average is 45mm but some holes are more, some are less.

These limits for a process are called the Upper Control Limit (UCL) and the Lower Control Limit (LCL). It is worth noting that you will need many more than 16 samples to establish the control limits properly along with some other precautions that we will not cover here.

Remember, our donut hole customer requires the holes to be in the range of 40 to 50 mm (specification range). Our process is producing an average of 45mm and its control range is 45 +/- 3 x 1.633mm (SD), which is 40.1mm (LCL) and 49.9mm (UCL). Excellent! So we have a Six Sigma process then? Well no. Although there are 6 standard deviations between the specification limits, this is NOT a Six Sigma process.

To be a true Six Sigma process there must be 6 standard deviations between the mean and the closest specification limit. In this case the process is well-centred (the mean is in the middle of the specification range), so there needs to be 12 standard deviations between the specification limits. In other words, this process would need to exhibit half the amount of variability. As it stands now, around 0.28% of samples would be waste (i.e. outside of the specification range). At Six Sigma this would drop to 0.0000002%.

This journey of reducing variability to this target is often called ‘Six Sigma’.

Is it all a myth?

The Six Sigma process is all about reducing variability. There is nothing wrong with that, in fact it is a great improvement principle and cannot be claimed as unique to Six Sigma. Improvement will require change in all areas of the business. To improve, you must induce behaviour change. This change will be tough and will require the eventual buy-in and commitment of everyone. The problem with Six Sigma is the enormous complexity of the maths involved. Just to describe what it means involves maths beyond many, and when entering into a full-blown programme the maths becomes quite complex. In fact, only a small minority will have the time and mathematical aptitude to comprehend it all. That is not to say that the vast majority of your team have inferior intellect, it is just that they have different skills and aptitudes. To instil true change, true improvement and true sustainability, your programme must be accessible. If you present something that cannot be understood, a primitive fight or flight reaction will occur; people will want to run and hide or destroy it. This is not a good foundation for improvement and culture change.

Six Sigma is in some ways a bit of a myth. It is generally accepted that even a stable process may ‘drift’ by 1.5 standard deviations. This is why the Six Sigma failure rate claim is 3.4 parts per million rather than 2 parts per billion! So Six Sigma isn’t really Six Sigma, it is actually Four-and-a-Half Sigma (doesn’t quite roll off the tongue does it?). Not easy to explain.

A target of Six Sigma or failure rate of 0.00034% is fairly arbitrary. In many instances it may not be commercially viable to achieve Six Sigma. The resources necessary to achieve this level of performance may far outweigh the benefit.

Six Sigma can be enormously expensive to implement. An absence of improvement could be even more expensive. Six Sigma is not the only way so before you commit, consider the following:

  • What do you want to achieve? Any business will want to improve quality, reduce costs and perfect customer satisfaction. You will also need a sub-set of measures to ensure relevance in all areas of the business.
  • Where do you want to be and what is it worth? If your measures are installed correctly you should be able to conduct a gap analysis, i.e. understand the difference between where you are today and ‘optimum’ performance. Once you have this you can set a target – say 33% of the gap.
  • What are your biggest improvement opportunities? With good performance gap analysis, the project focus quite becomes quite obvious. It is important to make the improvement opportunities obvious, as this will unite your project teams. The last thing you want or need is a great debate regarding what should be done first.

OK, so you now know what you need to improve at a business level. This process is simply repeated at the next level to get further detail and so on. No rocket science so far and no real money spent either.

If not Six Sigma, what?

Well this depends entirely upon the nature of your biggest problems. There are hundreds of tools you can use to fix the problems, only some of which fall under the Six Sigma umbrella. So why constrain yourselves to using it? The method worked very well for Motorola in the 1980s and 1990s, but you have a very different service and/or product offer.

This is not to say Six Sigma is wrong. There are some excellent techniques within it that are well-proven and robust. Many of them have been around for years – like statistics which is not new and was certainly not invented by Motorola. They deployed statistics and other tools that suited their needs. They called it ‘Six Sigma’. You are different, so why constrain the tools you use to the Six Sigma umbrella? Use the ones you need to solve each problem you encounter on the path to excellence.

Do not let fashionable systems drive your improvement programme.
That should be a function of the NEEDS of your business.

Why is Six Sigma such a big thing?

Someone has done a great marketing job haven’t they? Some SPC, problem-solving and measurement bundled up into courses and qualifications – fantastic. It is comforting to buy a package. You get the same when you buy drill bits. You have all the screw drivers you need but most drill bit sets come with a range of screw driver attachments – parts you may never use. Then you find there is no 7mm masonry drill, the size you need for the wall-plugs you have. Packages are convenient but do not necessarily deliver what you need.

Testimonials

We’ve had the best of our best, which are better than most, working on this for years and they have not achieved these results. This has clearly been a significant breakthrough. The results show this.

Senior Supply Chain VP from International Beverage Business

Before Lauras came we were facing the looming recession as a premium supplier with huge pressures on our margins from the trade. By improving our efficiencies we have been able to maintain our bottom line over the current ‘crisis’. I would recommend Lauras International to any Food or Pharma business that wants to achieve rapid and sustainable productivity improvement.

Andrew Shaw, Supply Chain Director, Seven Seas