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THE“SIX SIGMAPHENOMENA”- OLD OR NEWPERCEPTION OF QUALITY ?OverviewEven if using Total Quality Management (TQM) as the main quality program represents a prevalent fact in nowadays industry, many companies are extending this kind of initiatives to incorporate strategic and financialissues .Among these initiatives, one such methodology is known as SIX Sigma, which originated from the Motorola Corporation .The concept was created by Motorola Inc .in the 1980s and was initiated by the engineers'conclusion , which stated that new products , often failing to meet customer expectations , could be produced error-free from the very beginning .When it was presented , this represented a radical idea during the activities of manufacturing in the organization : measuring customer requirements and performance against these targets during production , rather than after a product's completion .According to Tom McCarty , director of SIX Sigma business improvements at Motorola University in Schaumburg Ⅲ., SIX Sigma differs substantially from quality initiatives that were prominent in the’70s and’80s , such as continuous improvement and total quality management .The new approach involves controlling , measuring and improving the capability of proce sses in order to“build”products or services free of any kind of defects .Although technically SIX Sigma means a product defect rate of3 .4parts per million ( Sigma is a Greek term for variation) , the introduction ofa SIX Sigma quality program means much more than just measuring failure rates .The implementation of SIX Sigma includes introducing and incorporating a wide range of tools and methodologies into an organization in order to improve performance and, as an ultimate purpose , significantly improve profits . In the last years, the successes attributed to SIX Sigma were facilitated by the recent and increasing availability of electronic technologies such as automatic process monitoring, accessibility to large databases and rapid transfer of information .IntroductionFor many years , the Greek letter Sigma (Σ) has been the universally accepted symbol for standard deviation ( ISO3534 ( 1977 ) , BS5532 ( 1978 ) ) .Standard deviation is a measure of dispersion , variation or spread . But , leaving the mathematical field , to employees of Motorola, General Electric , Honeywell, Bombardier , Black and Decker , ABB , Polaroid and many other companies , SIX Sigma is a company-wide transformation that has helped them and brought them, for a few years already , the success .The companies listed above can be referred to as“the SIX Sigma companies”.Many other organizations have adopted a SIX Sigma approach, but these particular companies have publicized their success and have publicly emphasized the part played by SIX Sigma in the achievement of this success . None more so than General Electric, as its Annual Report for 1998 states very clearly:“. . .we plunged into SIX Sigma with a company-consuming vengeance just over three years ago .We have invested more than a billion dollars in the effort, and the financial returns have now entered the exponential phase-more than three quarters of a billion dollars saving beyond our investment in 1998 ,with a billion and a half in sight for 1999 .”General Electric is perhaps best known for its manufacturing divisions , but SIX Sigma has been very successfully applied in General Electric Capital, which yielded a substantial proportion of General Electric profit in 1998 . Concluding , it can be mentioned that SIX Sigma can be implemented in a non-manufacturing environment .Furthermore, it can be successful in many countries .Several of the SIX Sigma companies are truly global .They have implemented SIX Sigma throughout the company, not just in their home country, as Black and Decker clarify in their Annual Report for 1999 :“Having begun , in late 1998 , to coordinate SIX Sigma strategies and measurements on a worldwide basis , our experience clearly shows that the potential benefits are enormous in terms of productivity improvement, product quality, customer satisfaction , more efficient capital spending, and overall corporate profitability . . .Savings attributable to SIX Sigma were more than ＄30 million in 1999, and we expect to generate twice that amount in 2000 as we intensify our efforts .”SIX Sigma is reputed to have originated in Motorola in 1987 and been taken up by Allied Signal in 1991 .The merger of Allied Signal and Honeywell was described in the New York Times (8 June 1999) as“A merger made in heaven”, for it brought together the SIX Sigma approach of the former and the Baldridge winning approach of the latter . The Honeywell Annual Report for1999 states:“We're blending the best of each company's total quality approach by adding elements of the Malcolm Baldridge assessment process to our proven SIX Sigma tool kit .This refreshed approach to total quality is called SIX Sigma Plus .We're exited about the potential for expanding the SIX Sigma Plus tools in the sales , marketing and service processes .Our experience shows that the average savings for a service project is about double that of a manufacturing project .”It can be concluded that SIX Sigma has delivered , in a small number of large companies , benefits that present high interest to managers and toshare-holders .Thus , anybody should not be surprised to find that many other companies are showing interest in this approach .They wish to know“what is SIX Sig-ma ?”“What is a SIX Sigma black Belt ?”“What is SIX Sigmaculture ?”and“Why is SIX Sigma so successful ?”What is SIX Sigma?“SIX Sigma is an information-driven methodology for reducing waste,in-creasing customer satisfaction and improving processes , with a focus on financially measurable results .”This definition of SIX Sigma is taken from a sales brochure published by Minitab Inc, who produces and distributes the well known statistical analysis software that is used by many of the companies listed above.An alternative definition , which was used in Motorola , offers a rather different perspective :“SIX Sigma is a business philosophy of driving behavior by making an organization's values explicit in its compensation system and a business strategy of cutting costs and boosting customer satisfaction .”One of the founders of SIX Sigma , within Motorola ,was Mikel Harry .His opinions are widely sought .Also , the“SIX Sigma Breakthrough Strategy”isde-fined as:“. . .a disciplined meth od of using extremely rigorous data gathering and statistical analysis to pinpoint sources of errors and ways of eliminating them .”Each of the three definitions focuses on important aspects of SIX Sigma, but none of them is complete. Perhaps it is not possible to define SIX Sigma in one simple sentence and it would be easier to define SIX Sigma by describing thecharacteristics that are shared by the companies in which it has succeeded .One of these common characteristics is a widespread focus on processes and the existence of a company-wide language for describing the capability of processes.SIX Sigma is an important structured program for improving business processes and, as many voices pretend, it represents the latest“incarnation”of the qualit y movement .The program, grounded in efforts to improve manufacturing quality during the 1980s , brings the methods and analytic tools of engineers to bear on the questions , what is really important for customers ? And where will changes to work processes must improve these points?The basic idea behind the SIX Sigma philosophy is to continuously reduce product and process variation.Therefore an important part of SIX Sigma work is to define and measure variation with the intent of discovering its causes and to develop efficient operational means to control and reduce the variation .The expected outcomes of SIX Sigma efforts are:·faster and more robust product development ,·more efficient and capable manufacturing processes ,·more confident overall business performance .In order to reduce the variation to a very low level, the first step is to“design for productibility”.This means that designers configure a product in such a manner that its performance is“shielded” against variation .By doing this , the organization can be sure that its products will consistently perform to the specified levels as so all of the product will be on target with minimum differences between units of product .The next step is to find out, control and eventually eliminate all main causes of variation in the manufacturing processes involved in both the supplied parts and the final assembly. This is done using statistical process control and other tools including1 . computer simulation;2 . short cycle manufacturing ;3 . part standardization and supplier qualification ;4 . supplier statistical process control ;5 . participative management practices;6 . design of experiments , measurement system analysis;7 . failure mode and effect analysis .With this basement already built, it can be considered that SIX Sigma methodology breaks down into 12 steps:Measure1 . Select the characteristic Critical-To-Quality( CTQ)2 . Define performance standards3 . Validate measurement systemAnalyze4 . Establish product capability5 . Define performance objectives6 . Identify variation sourcesImprove7 . Screen potential causes8 . Discover variable relationship9 . Establish operating tolerancesControl10 . Validate measurement system11 . Determine process capability12 . Implement process controlsThe SIX Sigma companies are concerned with the reduction of variation and with the reduction of defective products and services .However , they often focus on“defects per million opportunities”or DPMO as metric , and their performance standards are:1 . A 3 Sigma process produces less than 66 810 DPMO .2 . A 4 Sigma process produces less than 6 210 DPMO .3 . A 5 Sigma process produces less than 233 DPMO .4 . A 6 Sigma process produces less than 3 .4 DPMO .But, as a Polaroid executive pointed out , SIX Sigma practitioners do not simply focus on defects , they concentrate on improvement of the processes that produce the defects .This focus demonstrates the amount of change required and the kind of improvement in quality that has to be achieved by firms .SIX SIGMA implementation strategiesThere are three general strategies of SIX Sigma deployment:1 .SIX Sigma organization ;2 .SIX Sigma engineering organization ;3 .Strategically selected projects and individuals .In Table 8-1 the main aspects of each of these strategies are outlined , and comparisons are made in the areas of the kind of personnel trained , typical course content as well as strengths and weaknesses of each strategy .The first strategy ,“SIX Sigma organization”uses a methodology of training all individuals , in all areas , in the fundamental concepts and tools involved in the application of SIX Sigma .Using this method , a high level of awareness can be created throughout an organization , and a common language and problem-solving approach adopted . The“SIX Sigma engineering organization”strategy focuses on training and development within the design and manufacturing engineering departments of the firm .In this case, resources are more focused and there is an emphasis on project applications .The third category ,“Strategic selection”, refers to the development of strategically-selected employees .“These individuals are assign ed complex projects identified by needs and objectives critical to the site or organization”.Here there is a great amount of flexibility in training in comparison to the previous two approaches .Training is provided as required by the very strong project focus .As with other quality programs such as TQM, defining SIX Sigma varies between organizations .For some firms , implementing SIX Sigma means solely using the specific problem-solving stages involved ; others use one or more of the strategies out-lined in Table 8-1 , while other companies may have different ways of deploying SIX Sigma concepts and tools .Following the examination of how different companies approach SIX Sigma implementation it will attempt to categorize the companies in one or other of the above categories .In order to set the discussions of the companies in context it will be first examined what is meant in general by “SIX Sigma Black Belt”Black Belts (Master Black Belts and Green Belts)Perhaps the most striking feature of the SIX Sigma companies is that they have among their employees a high profile group known as Black Belts(Most of the companies also have Master Black Belts and Green Belts ) .The term SIX Sigma Black Belt was first introduced by the Motorola Corporation to describe employees who are trained and experienced in applying statistical techniques to business processes and procedures so that they can make major positive contributions to the bottom line .A Black Belt devotes much , if not all, of his her time to the important task of leading process improvement projects .Black Belts are high potential employees who have received extensive training in statistics , interpersonal skills , problem solving, project management, etc .Black Belt trained employees are used to assist in measuring how well their present business strategies are meeting company objectives , as well as developing strategies to reduce costs , cycle times and defects while increasing profitability and competitive advantage .Typically , the Black Belt training has duration of four weeks: it may consist of 2 two-week courses , or 4 one-week courses , or a succession of shorter courses .In many cases , the Black Belt does not become qualified until he she has completed the training and also led one or two projects to a successful conclusion .Training to become a Black Belt includes a rigorous learning schedule of different statistical techniques , as well as the practice of applying these tools in real-life business situations .Allied to these criteria , before being awarded Black Belt status , the per-son must demonstrate problem-solving, project management and team leadership skills .The systematic training approach followed typically involves thefive( sometimes only the last four are mentioned) problem-solving steps of: define, measure, analyze , improve and control .Black Belts use the five-step approach to instigate cost-saving projects as follows:1 .definition of problem .2 .measurement of characteristics that are critical-to-quality ( CTQ ) .3 .analysis using benchmarking and gap studies .4 .improvement .5 .control .As with the introduction of TQM and other projects involving major change, the way in which SIX Sigma Black Belts are trained and utilized has important repercussions for the success or otherwise of the initiative .Black Belt projects often last for four to eight months , with each Black Belt having two or more projects running in parallel . Many Black Belts appear to enjoy high job satisfaction and high status within their company . But it does not last forever . It may well be company policy that a certified Black Belt should move on after two years . A small number would become Master Black Belts , but many would return to line management with enhanced prospects of promotion .Consequently , the most noticeable features of the SIX Sigma companies are the company-wide discussion of process capability and the existence of Black Belts who are charged with the responsibility for improving the processes .If these were the only characteristics shared by these successful companies , anybody would wonder if SIX Sigma was the root cause of this success . However, a closer examination of the less visible features reveals , in every case , a company culture that strongly supports the work of the Black Belts and their MANAGEMENT ENGLISH149 project team members .The SIX Sigma cultureAn important feature of the SIX Sigma culture is the existence of what could best be described as management by fact . This is clearly apparent in the way that Black Belt projects are managed and progress is reported .Typically, the performance of the process at the start of the project is recorded in a run chart or a control chart . Additional lines on this chart show the target for the project and a world class benchmark . As the project progresses , further points are plotted . At the completion of the project , the improvement is clear . The charts are prominently displayed alongside other diagrams and a clear explanation of what is being measured and how the chosen improvement actions were arrived at .Managers have been trained to expect, indeed demand, this style of reporting .Furthermore, managers themselves are expected to present data as charts .There is evidence of a readily accepted self-discipline in this style of communication , a discipline that often surprises visitors and alarms suppliers .Consequently, in some of the SIX Sigma companies , the performance appraisal system is designed to encourage the commitment of middle management to the success of Black Belt projects .However , the company will benefit from this only if the objectives of middle management are aligned with the vision , values andobjectives of the company .It is not surprising to find , therefore, that the senior management team have established a clear sense of direction through-out the company, by publishing a meaningful vision and values , then deploying these to create objectives at all levels that are specific, meaningful , agreed, realistic and time based .To conclude , SIX Sigma is best described by listing the characteristics that are common to the companies that have attributed their success , at least in part , to having adopted a SIX Sigma management strategy .These essential elements are :·A focus on processes and , therefore, a focus on customers .·An interest in process performance , at all levels , and a company-wide measure of process capability ( in many cases DPMO ) .·Black Belts , Master Black Belts and Green Belts .·Black Belt projects that focus on the reduction of defects and or the reduction of variation .·Management by fact .·Black Belt projects are related to business objectives .·Senior management has clear vision , values and objectives .·Senior management objectives are deployed right down to the customer contact levels .Why is SIX Sigma successful ?There can be no doubt that SIX Sigma has helped several companies to achieve higher levels of business performance . Jack Welch , the CEO of General Electric, speaking of SIX Sigma, said ,“This is the most important initiative this company has ever undertaken .It will fundamentally change our company forever .”It can be considered that SIX Sigma is the most important opportunity that has ever been presented to statisticians , particularly those who work in business and industry . Clearly, statisticians can play an important role as SIX Sigma spreads to other companies . However, statisticians must realize that statistics alone will not guarantee success . Indeed , it can be predicted that many companies now embarking on SIX Sigma will not enjoy the benefits claimed by the companies listed in the beginning of the article . There is a danger that they will focus on the statistical training of Black Belts , because this is clearly visible , while neglecting to develop the supporting culture .The success of SIX Sigma is more remarkable, considering that many of the essential elements of SIX Sigma are to be found in organizations that would not claim to have adopted a SIX Sigma approach .Consequently , there is little that is new in the list of, what it was called , the essential elements of SIX Sigma . The term Black Belt, which originated in the martial arts , is surely new in the business context . Of course , there have always been people who were motivated to improve processes , but few achieved the level of success reported in the introduction . Black Belts within the SIX Sigma companies have motivation of course, but they also have opportunity and ability . Ability is assured by selecting high potential employees and giving them extensive training in statistics , problem solving and interpersonalskills .Opportunity is assured by the company culture , which offers Black Belts the unwavering support of management .So, the success of SIX Sigma cannot be attributed to its novelty, as much of the approach is not new . Perhaps its strength lies in the combination of all the elements and the way they support each other . Hopefully , those companies considering embarking on the SIX Sigma journey will realize that success depends on every element, but it also depends on their interaction .。