What is Six Sigma? Make Businesses More Efficient and Effective

Last Updated April 12, 2022

Six Sigma is a methodology that allows organizations to make operations more efficient by reducing variation and eliminating defects in processes. While the process improvement method originated at Motorola in the 1980s for use on the factory floor, organizations have since applied Six Sigma to various operations in every type of industry.

The tools and techniques of Six Sigma offer business leaders a data-driven approach to solving entrenched challenges that have proven difficult to address in the past. The key to Six Sigma is applying the correct tool to meet the challenge, finding the underlying causes for product and service problems, then developing and testing the proper solutions.

What is Six Sigma?

Many people ask about the goals of Six Sigma and how it fits into other areas of business. Six Sigma provides proven, data-driven process improvement techniques that healthcare professionals, project managers, HR professionals and more can use to achieve strategic goals.

As for goals, Six Sigma seeks to:

• Find and eliminate causes of defects and errors
• Reduce cycle times and cost of operations
• Improve productivity
• Better meet customer expectations
• Achieve higher asset utilization
• Provided an improved return on investment

Six Sigma also relates to sustainability because, without data, decisions are made on a trial and error basis. Sustainable environments require data to back up decisions, resulting in methods that improve future generations.

The Six Sigma Standard

The standard for a Six Sigma organization is to create processes that result in no more than 3.4 defects per million opportunities (DPMO). That translates into 99.99966% of all opportunities being free of any defect. Organizational leaders achieve this by applying continuous process improvement to their operations, identifying areas where there is variation in a process, and finding ways to eliminate that variation. While it’s a straightforward goal, achieving a 3.4 DPMO becomes harder in complex operations.

Six Sigma Means Different Things to Different People

For business leaders, Six Sigma could represent a strategy to run the organization, increase competitive advantage, make products and services better, or develop a common language across the organization. Others may perceive Six Sigma as a quality metric to strive for or a method that can lead to better workplace morale and more efficient methods to accomplish tasks.

For some people, Six Sigma is a philosophy, according to ASQ, in that it views all work as processes that people can define, measure, analyze, improve and control. If you control the inputs to a process, you control the outputs. At its core, Six Sigma is a system that provides tools to reduce errors and the metrics by which to measure progress.

Six Sigma’s Practical Application

Six Sigma started on the manufacturing floor at Motorola, where engineer Bill Smith, now known as the Father of Six Sigma, created the system in 1986. Jack Welch later made Six Sigma a central part of operations at General Electric. But the principles of Six Sigma and the tools used to attain 3.4 DPMO apply to any process in any industry and have been used by public agencies and nonprofits. The Armed Forces also have adopted it in many different areas to improve military efficiency.

Innovations in big data have also improved application of Six Sigma, providing practitioners better quality data that helps them better understand where the challenges lie in a process.

Six Sigma requires measuring every aspect of an operation, applying a continuous effort to making improvements, and a commitment from every person in the operation (especially top management). Six Sigma also focuses on producing measurable results (such as improved revenue).

Six Sigma DMAIC and Six Sigma DMADV

DMAIC is a methodology used in Six Sigma and applies to existing systems that need improvement. It’s an acronym that stands for define, measure, analyze, improve and control. Using the Six Sigma DMAIC model, you would:

• Define the problems and project goals
• Measure data relating to the current process
• Analyze your findings to identify problem root causes through cause-and-effect relationships
• Improve existing processes based on data analysis
• Control the process to avoid variation in the process going forward

DMADV is used when creating a new system. It’s an acronym for define, measure, analyze, design and verify. Using DMADV, you would:

• Defining design goals for the new process
• Measure the required quality characteristics, product or production process capabilities, and associated risks
• Analyze your findings to develop an appropriate solution
• Design the new product or process
• Verify that that the new process works as intended

Levels of Six Sigma Expertise

Six Sigma offers a straightforward way to accumulate knowledge in the system and demonstrate expertise – a belt ranking system based on the system used in karate. The designations include Yellow Belt (Villanova calls the course Essentials of Lean Six Sigma) (for beginners), Green Belt (work on projects at the direction of Black Belts), Black Belt (project leaders) and Master Black Belt (oversee all Six Sigma projects for an organization).