Six Sigma in Organisations

Shivaraj Chabungbam and Tanul Sharma, PGDM 2014-16, IMI, Bhubaneswar

What Is Six Sigma?

Six Sigma at many organizations simply means a measure of quality that strives for near
perfection. Six Sigma is a disciplined, data-driven approach and methodology for eliminating
defects (driving toward six standard deviations between the mean and the nearest
specification limit) in any process from manufacturing to transactional and from product to
service.
To achieve Six Sigma, a process must not produce more than 3.4 defects per million
opportunities. A Six Sigma defect is defined as anything outside of customer specifications. A
Six Sigma opportunity is then the total quantity of chances for a defect. The fundamental
objective of the Six Sigma methodology is the implementation of a measurement-based
strategy that focuses on process improvement and variation reduction through the application
of Six Sigma improvement projects. This is accomplished through the use of two Six Sigma
sub-methodologies: DMAIC and DMADV. The Six Sigma DMAIC process (define, measure,
analyze, improve, control) is an improvement system for existing processes falling below
specification and looking for incremental improvement. The Six Sigma DMADV process
(define, measure, analyze, design, verify) is an improvement system used to develop new
processes or products at Six Sigma quality levels. It can also be employed if a current process
requires more than just incremental improvement. Both Six Sigma processes are executed by
Six Sigma Green Belts and Six Sigma Black Belts, and are overseen by Six Sigma Master
Black Belts.

Sigma Sigma in business operations

Application of Six sigma can be seen across different industries- aerospace and defense,
healthcare, automotive, chemicals, business services. In any plant, when production increases
above planned-for levels whether due to sudden increased demand or unexpected
constraints in the system contract labor may be brought in as a quick fix. While this
provides some flexibility in operations, increased labor costs is a problem. Six Sigma can be
used to optimize these changing labor costs and the accompanying productivity concerns.
Cost accounting principles are also applied to these productivity improvements.
The Lean techniques that Boeing Commercial Airplanes has been deploying in its Everett,
Wash., USA, plant over the last several years have allowed the airplane manufacturer to
expand production of its most popular models in 2011 in response to renewed post-recession
demand from airlines.
Six Sigma can be applied to software implementation projects as well as software
development. A leading environmental services company used DMAIC to improve the

availability of an internal software system. The goal was to reduce system downtime and
reduce defect resolution time, thereby increasing return on investment and user satisfaction.
Numerous businesses have had successful experiences implementing Lean Six Sigma in
sales. The success stories offer proof that the methodology works, as well as providing some
best practice guidelines for implementing Lean Six Sigma in sales.

Learnings from the implementation of Six Sigma

Six Sigma emphasizes this set of values:

Achieving quality improvement requires participation across the organization.

The process characteristics must be measured, analyzed, improved, and controlled.

To achieve high quality, a company must focus on continuous improvement.

At the heart of the practice of Six Sigma lies the core business strategy to generate a
sustainable advantage in cost, quality, speed and customer service to achieve world-class
performance.