Six Sigma And The Small Or Home Based Business

Although Six Sigma was originally devised as a quality improvement technique for the manufacturing industry, it is now increasingly being adopted by the services industry as well. The basic Six Sigma concepts and methodologies are more or less the same in the services sector where they are applied to both operational and non-operational processes.

Defining Six Sigma

Motorola was the first company to develop and implement Six Sigma concepts in its business processes. The main aim of the company was to reduce manufacturing defects and to achieve near perfect production processes that would help in production maximization. Six Sigma implementation projects aim at bringing the number of defects to not more than 3.4 per million opportunities that exist for such defects to occur.

This standard is applicable for both manufacturing industries as well as the services sector. Six Sigma implementations start with the assessment of current quality levels, which are termed as 1 sigma, 2 sigma, and so on. The aim is continuous quality improvements until Six Sigma quality levels are achieved.

Six Sigma In Small Businesses

Six Sigma can be effectively employed in small businesses irrespective of whether the business is a manufacturing unit or is servicing a customer base. Even in small businesses, Six Sigma aims at perfecting existing business processes and assessing the real costs of the business such as COPQ (Cost of Poor Quality). At first glance, it may seem that Six Sigma is suitable only for large businesses because of multimillion-dollar savings and huge reduction in the number of defects. However, this not mean that Six Sigma will not be cost-effective in small businesses as standard concepts and methodologies can always be tweaked to suit small scale process requirements and for reducing implementation costs at the same time.

Most small businesses compete with large and well-established businesses and this is why they always need to be on their toes in order to reduce costs and offer quality products and services to customers. Six Sigma helps because it provides a level playing field to small businesses, allowing them to concentrate on increasing the customer base by offering better quality products and services. For ensuring the success of Six Sigma initiatives, small business owners can hire the services of professional Six Sigma professionals such as Black Belts and Master Black Belts. They also have the option of training their existing employees.

The conclusion is that Six Sigma concepts and methodologies can be tailored to suit any business that has a ready customer base. It is also applicable in an online business where it is all the more important to have satisfied customers because news travels faster on the internet, especially when it is something to do with bad quality products or services. By employing Six Sigma, small businesses can ensure the quality of their products or services, which in turn will allow them to garner positive publicity through customer feedbacks and reviews. Such businesses are most likely to witness rapid growth because satisfied customers are the real assets of any business, whether big or small.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solutions - Six Sigma Online ( http://www.sixsigmaonline.org ) offers online six sigma training and certification classes for lean six sigma, black belts, green belts, and yellow belts.

 

Six Sigma Defined - Praises and Criticisms

Consumer outlook has undergone considerable changes due to business globalization and revolutionary information exchange paradigms. Changing business conditions created by the flurry of increasing competition has led to diminishing margins for error. Exceeding the expectation levels of customers assumes the central position in the current and future era of business. It is for this reason that Six Sigma has assumed critical importance in the current business environment.

What is Six Sigma?

Six Sigma is a two-way quality management approach towards achieving zero errors by removing process defects for existing products and by designing verified process flow for new products. From a consumer's point of view, Six Sigma is a highly disciplined process that enables product and service deliveries to a near perfect standard.

The term Six Sigma (also 6 sigma) signifies the statistical benchmark for quality assurance. Sigma is the standard deviation (allowable, standardized figure from the mean acceptance level), and when the measured number of deviations beyond the mean tolerance limit is six, you are barely producing quality products. Simply put, this means that if you found six defects in your products, you are very close to poor quality production.

Implementation Of Methodology

The choice of implementation of Six Sigma methodology depends on whether improvement is required on existing processes (DMAIC) or on new process/product design creation (DMADV).

DMAIC

In Six Sigma, DMAIC methodology involves defining improvement goals, measuring the existing standards at baseline for future reference and analyzing the relationship between defects and their causes. This Six Sigma methodology also entails improving processes to deliver consistent goal achievement in accordance with company strategy and consistent with customer demand. The analysis process of this Six Sigma methodology sets the stage for midway course correction, called improvement.

DMADV

This 6 sigma methodology applies to the creation of new processes for product development. This Six Sigma implementation differs from the DMAIC methodology at the final two stages. Defining and measuring the design and product goals and capabilities are the first two stages. The next stage is analyzing alternatives and evaluating to choose the best product design. The next stage consists of implementing the best design. The final stage entails verifying the design, pilot (or test) runs and testing implementation before the final presentation.

Several organizations such as Motorola, (which is a pioneer of Six Sigma), Microsoft, GE and the United States Navy have successfully implemented Six Sigma and reaped huge dividends. Six Sigma has benefited corporations with multiple products across various business sectors. Healthcare, banking and insurance, telecommunications, software, and construction are just some of the industries successfully implementing Six Sigma.

Six Sigma implementation requires organizations to play five key roles at various levels. At the top is executive leadership which includes the CEO, champions, master black belts, and black belts. Then there are the green belts, which dedicate 100% of their efforts towards the concerted implementation of the program until the end of the project. The difference between the green belts and the rest of the team is that the employees in the green belt level share the additional responsibility for Six Sigma implementation along with their normal work responsibilities.

Criticisms Of Six Sigma

Despite its scientific approach towards quality improvement, there are criticisms against Six Sigma. The most vocal one is the viewpoint that there is nothing new about Six Sigma as it imitates already existing and proven techniques. To a certain extent, this argument has some credibility. But proponents of Six Sigma believe that as long as 6 sigma achieves more predictable results with far lower effort, there is no harm in accepting and implementing it. Criticisms notwithstanding, what Six Sigma does is apply concerted efforts at utilizing existing techniques with new approaches.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solutions - Six Sigma Online offers online six sigma training and certification classes for lean six sigma, black belts, green belts, and yellow belts.

Why Six Sigma Will Work In Healthcare

If ever there were an industry where we want zero defects, it?s healthcare. Patients, medical professionals, and healthcare administrators all want mistakes eliminated and quality and efficiency improved. Although most industries have undergone some type of data-supported, systematic, quality-improvement process, healthcare still has not. Medical and technological advances continue to outpace process and education adjustments. Demand and expectations for medical care are increasing. Inefficiency also leads to(causes, brings about, etc.) overcrowded emergency rooms, customer complaints, and lost revenues.

Six Sigma allows a healthcare organization to break through the status quo and achieve real process improvement. Although Six Sigma has its roots in manufacturing, it works just as effectively in a service industry such as healthcare. Healthcare organizations face unique challenges and it's no secret that they have a harder time applying quality improvement methods. Six Sigma?s comprehensive approach means that its methodology can be successful in healthcare organizations with quick results.

In a healthcare organization, the critical factors in quality and efficiency are flow of information and interaction between people. Transforming the process of this flow yields quality results. Six Sigma achieves documented bottom-line strategic business results by initiating an organization-wide culture shift. Until a process focus?rather than a task focus?is developed, the scope and endurance of improvements will be limited. Analyzing and modifying human performance in these environments is complex, but Six Sigma provides the tools and methodology required to achieve significant long-term improvements.

The Six Sigma process is a large step toward creating a learning organization through its well-defined road maps and management structure. Six Sigma defines a vision for the future of the healthcare organization, and then it identifies specific goals and establishes quantitative measures to turn that vision into reality. A formal plan is established to identify the overall program goals and timeline that outline the move from current performance levels to Six Sigma performance levels, with tangible, short-term goals in between. Specific Six Sigma projects are identified and goals defined and tied to a tangible organizational performance measure. A wealth of possible Six Sigma projects within healthcare includes, for example, information flow, surgical site procedures, patient handling, and patient charge items. Any process in healthcare is a candidate for a Six Sigma project.

To successfully implement a Six Sigma program requires long-term vision, commitment, leadership, management, and training. What makes Six Sigma successful is well-chosen training and a commitment from the top that is communicated to all levels of the organization. Financially, the first set of projects usually justifies the entire cost of Six Sigma training. Focusing the Six Sigma tools on virtually any properly scoped project will drive savings to the bottom line and achieve breakthrough change in the healthcare organization.

Experienced healthcare quality management should learn the language of Six Sigma and help integrate new methods into the Six Sigma process to improve effectiveness. Six Sigma is a proven approach to reduce defects and waste, thus saving money. Six Sigma will help healthcare organizations just as it has industrial, service, retail, and financial organizations.Peter Peterka is the Principal Six Sigma Consultant http://www.6sigma.us/aboutus.php in practice areas of DMAIC and DFSS. Peter has over 15 years experience in including implementation of Six Sigma in Healthcare http://www.6sigma.us/six-sigma-healthcare.php with a variety of organizations. For more please contact Peter Peterka http://www.6sigma.us/

The Six Sigma Method And Design Of Experiments

Six Sigma is becoming a proven approach for businesses and organizations to improve their performance. The spectrum of companies actively engaging in Six Sigma today is wide from industrials like Celanese, Caterpillar, GE, Honeywell, and 3M to service/retail organizations like Starwood Hotels, Sears, and Home Depot. Six Sigma has even started in the financial industry with Bank of America and JPMorgan Chase initiating major deployments in the past two years. Probably the most exciting area is in the public and healthcare sectors with success stories emerging from city government and John Hopkins Medical.

Six Sigma is becoming a proven approach for businesses and organizations to improve their performance. The spectrum of companies actively engaging in Six Sigma today is wide from industrials like Celanese, Caterpillar, GE, Honeywell, and 3M to service/retail organizations like Starwood Hotels, Sears, and Home Depot. Six Sigma has even started in the financial industry with Bank of America and JPMorgan Chase initiating major deployments in the past two years. Probably the most exciting area is in the public and healthcare sectors with success stories emerging from city government and John Hopkins Medical.

So what is all this excitement about? Havent these quality tools been around for years? Is it just the fact that people have strange names like Champion, Green Belt, Black Belt and for the chosen few, Master Black Belt? Okay, if it is not the names then what? Six Sigmas success revolves around the fundamental elements needed for any successful organization. Six Sigma starts with a vision of delivering products and services to customers with no defects from the eyes of the customers. For companies it is vital to deliver these products and services at a profit. Once the organization has created their own vision of Six Sigma, the business leaders need to define their organizations objectives in numerical terms. These high-level metrics, often called big Ys in Six Sigma, are the foundation for identifying project ys that Six Sigma Belts will execute projects on. With big Ys in hand, business leaders called Six Sigma Champions breakdown these organizational level Ys into smaller ys a project leader called a Green Belt or Black Belt can work from.

So whats next, do business leaders take a hands-off management by objectives (MBO) approach of, I dont care how you do it as long as you get results!? For Six Sigma organizations the answer is a loud NO. Champions do care how projects are executed and have appointed highly trained Master Black Belts to assist and mentor project leaders in applying the Six Sigma method to manage their projects. I believe this is the key to Six Sigmas success. In a past life I participated in a high-level meeting with executives from the world leader in the production of a product we all know. The purpose of the meeting and visit was to evaluate a critical new product design. All of the high-tech executives were dressed in dark Italian business suits complemented with gold and diamonds. I listened closely to each question these executives asked. I never once heard how much?, when? or even why? every question was by what method?. Methodology is what Six Sigma is about.

Six Sigma Methods

There have evolved two key methods for carrying out Six Sigma projects. The first method is the most well-defined and works best if you have a problem with an unknown solution in existing products, processes or services. This method is called DMAIC or Define, Measure, Analyze, Improve and Control. The newest method, which is in the developing stages, is called Design for Six Sigma or DFSS. The goal of DFSS is to develop a new product, process or service that is defect-free in the eyes of the customer. A number of consulting companies have invented roadmaps for DFSS like IDOV (Identify, Design, Optimize and Validate) and DMADV (Design, Measure, Analyze, Design and Verify).

Six Sigma and Design of Experiments

Once an organization has decided on the method and the project ys, Belts are marched off to training waves bringing management-approved projects to class. DMAIC Green Belt training is normally two one-week sessions separated by one month. Black Belt training waves are extended by two additional months with two more weeks of training. The emphasis during the extended two weeks of Black Belt training is often on learning more details about advanced tools such as Design of Experiments (DOE).

So where does Design of Experiments fit into Six Sigma? Six Sigma is about understanding and controlling the variation of key process variables known as inputs or xs in order to obtain improved results on project outputs or ys. In Design of Experiment terms these inputs or xs are often referred to as factors and the outputs are referred to as responses. In nearly all Six Sigma projects the relationship of the project ys takes on the form of y=f(x1,x2,...xn). Wait a minute, isnt this what Design of Experiments is all about? Of course, for almost 100 years Design of Experiments has been proven to be one of the best known methods for validating and discovering relationships between responses and factors. In Six Sigma terms it is discovering the relationship between outputs called ys and inputs called xs. Todays Six Sigma Belts are primarily taught to focus their use of Design of Experiments in the Improve phase of DMAIC and the Optimize phase of IDOV. For DMAIC Six Sigma training the most common experimental designs taught are factorial and fractional factorial designs. Some curriculums introduce response surface designs and optimization designs at a high level. DFSS includes the experimental designs taught in all levels of DMAIC training and often expands to include the concept of robust designs. As an alternative to the classical approach, there are also a number of consulting companies teaching Taguchi designs as the
preferred method for robust design.

Final Remarks

Six Sigma looks as though it is here to stay and even in todays slow economy one of the few areas where there still are a number of new positions. The Six Sigma process is a great step toward creating learning organizations with its well-defined roadmaps and management structure. As with most new methodologies Six Sigma will mature and grow as it expands into new areas such as DFSS. As Six Sigma professionals learn more about the power of properly planned experiments, Design of Experiments will be integrated into most phases of the Six Sigma roadmap and not just considered an advanced tool for the improvement and optimization phases. Experienced practitioners of statistical methods like Design of Experiments should learn the language of Six Sigma and help integrate new methods into the Six Sigma process to improve its effectiveness. Peter Peterka is the leading consultant for www.6sigma.us. Peter has eleven years of experience performing as a Master Black Belt, working with numerous companies, including 3M, Dell, Dow, GE, HP, Intel, Motorola, Seagate, and Xerox. You can signup for Peter's Six Sigma Certification at www.6sigma.us.

5 Laws Of Lean Six Sigma

 

Thinking about how Six Sigma and Lean Manufacturing work well together despite being distinct, independent and complete tools? The combined principles gel so well that they compliment each other and progress parallels to each other on a well-defined path. The paths are defined by the 5 Laws of Lean Six Sigma as we know today.

5 Laws of Lean Six Sigma

The 5 laws have been formulated in order that efforts on improving quality and business process aimed at improving customer satisfaction and ROI as primary concerns. The 5 laws have evolved over time and are a collection of key ideas derived both from Lean Manufacturing and Six Sigma.

1. The Zeroth Law: The first law is called so because all other principles are built upon this fundamental one. It States that the Law of the Market - Customer Critical to Quality defines quality and is the highest priority for improvement, followed by ROI (Return on Investment) and Net Present value.

2. The First Law: This is called as The Law of Flexibility. It states that the velocity of any process is proportional to the flexibility of the process. Interpretation: the more the process is receptive and flexible to adopt changes, the better the progress of the project implementation is.

3. The Second Law: The second law is known as The Law of Focus - it is defined as 20% of the activities in a process cause 80% of the delay. This can be interpreted as main causes of delay of activities originating from just 20% of activities thus enables a faster refocus during the reorientation phase.

4. The Third Law: The Law of Velocity as the third law is known is stated as the velocity of any process is inversely proportional to the amount of WIP. This is also called "Little's Law". This explains how the inertia of WIP, Work in Progress, bears heavily on the velocity of project implementation. Higher the number of works in progress (read unfinished tasks) the lower is the speed of progress due to various ground level handicaps

5. The Fourth Law: The Fourth Law, which is the last of the 5 laws of lean Six Sigma, is defined as The complexity of the service or product offering adds more non-value, costs and WIP than either poor quality (low Sigma) or slow speed (un-Lean) process problems. The bulky nature of products is against the foundation of Lean Manufacturing principles. The bulk, complex manufacturing process and product and service specifications contributes to render the offerings redundant. As an illustration to this 4th Law of lean Six Sigma, you can try and reason out why passenger cars are more and more becoming driver friendly despite their complex engineering features and functions.

You can revisit the definitions of Six Sigma and Lean Manufacturing principles which emphasize eliminating process errors and variations. It also concentrates on efforts to invest less human labor, inventory, and time for product development.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solutions Six Sigma Online ( http://www.sixsigmaonline.org ) offers online six sigma training and certification classes for lean six sigma, black belts, green belts, and yellow belts.