Define Six Sigma - What Is Six Sigma
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Define Six Sigma
Consultants define six sigma as a structured approach to continuous business improvement.
This is because six sigma uses a mathematical process to help resolve business problems. Six sigma formula and six sigma calculations are used to analyse a practical business problem. Then a process improvement solution is developed to resolve the problem.
The underlying concept we use to define six sigma is that it is a method to improve customer satisfaction by reducing the amount of defects of products manufactured
. Or by reducing the variation in the processes used for making products or in providing a service.
The concept being that by achieving six sigma we will increase customer satisfaction, and therefore customer loyalty and profitability. And then the value of the company will increase.
Achieving six sigma means that the processes being measured produce no more than 3.4 defects per million opportunities (DPMO). The higher the sigma level, the fewer the defects per million opportunities.
Keep the term defects per million opportunities (DPMO) in mind. It appears often and is a standard acronym used in six sigma methodology.
What is Six Sigma - '6σ'?
The sigma symbol σ
is the Greek letter (sigma) used as a statistical
representation of a unit of measurement.
In six sigma it represents the standard deviation or measure of variation in data, that we record and measure to analyse a business problem. It represents the extent of how much the recorded and measured information is spread across all the measures.
in six sigma refers to how much of what we are measuring is within a particular range. For example a sigma of 6 is in a range measurement that is different to how much is within the range of a 5 sigma or a 7 sigma..
Six Sigma Definition
In management consulting we define six sigma or provide six sigma definition for clients in two ways. Both of them are equally important to understand.
1. Six Sigma is an Organizational Philosophy.
This organizational philosophy definition says that six sigma is a continuous business improvement and process improvement way of thinking
. It is the philosophy of trying to get an organisation to think about and aim for achieving higher levels of customer satisfaction.
It is the organizational philosophy that recognises there is a direct relationship between customer satisfaction levels and sales and profit
. A direct relationship exists between the number of product defects, waste, repair and re-work and customer loyalty, and so on...
2. Six Sigma is a business Process Improvement Methodology.
DMAIC (Define, Measure Analyse, Identify and Control) is the acronym for the structured and uniform five steps in the six sigma methodology.
The idea is that when we complete these steps analytically and methodically we will achieve a process that is effectively free of defects.
1. Define Opportunities
2. Measure Performance
3. Analyse Opportunities
4. Improve Processes
5. Control Performance
Why not Five Sigma (5σ) or Seven Sigma (7σ)?
Simply because performing your business processes at a five sigma (5σ)
level means your process would have too many defect outputs. These will get through to the customer and you would not achieve customer satisfaction levels. Its basically 1 defect in every 4,347 opportunities.
Conversely seven sigma (7σ)
requires so much more measurement and company effort that it does not produce an equal return in value. It is close to impossible at basically 100% perfect in every opportunity all of the time. It is just not realistic.
Six Sigma (6σ)
is considered achievable and as close to as good as a firm can reasonably expect to achieve. 3.4 defect per million opportunities, or basically 1 in every 295000 opportunities.
The Defects Per Million Opportunities (DPMO)
at each sigma level are approximately:
1σ - 690,000 DPMO
2σ - 308,000 DPMO
3σ - 66,800 DPMO
4σ - 6,210 DPMO
5σ - 230 DPMO
6σ - 3.4 DPMO
Why does Six Sigma Measure Defects?
Defects are the measure we focus on in six sigma because we can count them. The basic idea is that if we can measure it we can manage it.
Defects include obviously a broken product, but they also include variations to the process that is supposed to produce the output product or service. Whether it is a manufacturing process, a customer service issue, problems with suppliers, or an issue with the administration part of the business, defects and variations can be counted, measured and managed.
Another reason why defects and variations are the focus is because individuals in a company can take ownership of the problems creating it. They can take responsibility and can work to improve them.
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Page 1 - Define Six Sigma
. What is six sigma?
Page 2 - Overview of six sigma. Why do firms like it, the requirements for success, when to use it and when not to?
Page 3 - Six sigma history and Motorola six sigma.
Page 4 - The steps in six sigma methodology.
Page 5 - The six sigma process and six sigma basics for process improvement jobs.
Page 6 - What is lean six sigma, lean six sigma training, lean six sigma tools and the lean six sigma methodology.
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