Global Companies’ Management Secret is Greek, SIX SIGMA!

The fast paced economy, constant demand for change, consumers demand for more superior product, and much more has challenged a lot of different companies for years, different management philosophy have been developed in order to cope up with those challenges. And one of these is SIX SIGMA. It was developed by Motorola in 1986 and has been regarded as the most popular management philosophy in history. Currently, Six Sigma is in itself a colossal brand name in the corporate world. Previously Six Sigma has only been used by big industrial companies however; nowadays government offices, armed forces, hospitals and even prison management have incorporated Six Sigma in their management schemes. Six Sigma can be defined as a holistic management program focusing on the alleviation of defects on products and services by producing high objective, collating data and analyzing the data thoroughly.

Motorola, Inc. and GE have both through the years developed their own definition of SIX SIGMA. In this article, Motorola’s SIX SIGMA will be discussed.
Six Sigma
Motorala’s Six Sigma

Motorola Inc. defines SIX SIGMA at three different levels:

1. Metric – the terms Sigma is a Greek letter that is often used as a scale for goodness or quality of a product. In this scale, SIX SIGMA means that 3.4 defects per one million opportunities (DPMO). SIX SIGMA was actually initiated in an effort to reduce defects and was then used in different business processes for the same purpose.

2. Methodology – where in Six Sigma is represented by the acronym DMAIC which means;
a. Defining Opportunity 
b. Measuring Performance
c. Analyzing Opportunity 
d. Improving Performance
e. Controlling Performance
The acronym is the heart on how SIX SIGMA works in order to understand consumer demand and manage the company’s production to produce highly valuable products and services.

3. Management – after years and years of practicing the SIX SIGMA philosophy, Motorola has learned that in order to be successful, process metrics and a well defined methodology should be applied using improvement opportunities together with the organization’s strategy.

Additional information, SIX SIGMA actually uses statistics and data analysis to realize the situation and find out the root cause of the problem and how to improve it.

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    The Cycle of Improvement: DMAIC

    DMAIC means
    Define
    Measure
    Analyze
    Improve
    Control

    It is an improvement cycle that is data-driven utilized for optimizing, improving and stabilizing the business design and process. This cycle of improvement is a tool to drive the Six Sigma projects. The DMAIC process is not only limited to Six Sigma. It can also be used for other improvement projects too.

    The DMAIC steps need to be done in the proper order, and each step should be accomplished first before proceeding to the next.

    Define
    This step involves listing down what you know, seeking to clarify the facts, setting objectives and forming the team for the project.
    The following are needed to be defined:
    The statement of the problem
    The clients or customers
    The CTQs or Critical to Quality and critical process outputsDMAIC
    The process to be targeted and other business processes that may be related to it
    The Project’s targets
    The boundaries of the project
    The project charter – agreed and created during this step

    Measure
    This step is where data collection happens. The team determines what to measure and how to measure it. A data collection plan is created on this step. Investing a lot of time and effort in assessing the suitability of the measurement system proposed is quite usual.
    The following are needed for this step:
    The process critical inputs (X) and outputs (Y)
    The plan of measurement
    Testing of the system of measurement
    Collection of the data
    A gauge study or Measurement System Analysis

    Analyze
    During this step, all the data collected in the previous step is analyzed to detect the main causes of the defects. Basic and complex analysis tools are used during this step.

    Improve
    The improvement step involves formulating creative solutions and minimizing process problems. Brain storming techniques such as Random Word and Six Thinking Hats could be used in this phase. Others prefer to use the more complex analysis tools such as the Design of Experiments (DOE).

    Control
    This final step includes the monitoring of the improvements to ensure the continuity of success, creating a plan of control and updating all records and documents as required.

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      6 Sigma – What Are Its Advantages and Disadvantages?

      Many companies launch 6 Sigma programs because this has become a very important management buzzword. However, this concept is not entirely understood and this leads to many problems in its implementation. It is very important for you to understand the advantages and disadvantages of 6 Sigma before pushing this program through in your organization.

      There are many important advantages of using 6 Sigma in an organization:

      1. This concept is customer driven and it leads companies to devise different and innovative ways of achieving customer satisfaction. The benefits of using this management tool can very clearly be seen in terms of profitability since it results in dramatically increased sales and reduced costs.
      2. It can be used in any business across industries without any problem. It can also be used to deal with problems in any department in the company with a great deal of ease.
      3. It is able to provide excellent results because its emphasis is on the prevention of problems that result in poor quality. It does not focus on fixing the symptoms of problems because this generally just results in a cosmetic solution.

      The disadvantages of using 6 Sigma include:

      1. Many companies get carried away with the idea of improving quality and they spend 6 Sigmaa lot of time to improve areas that don’t have much bearing on the company’s profitability.
      2. A company that follows this management program sometimes becomes very rigid in the way that various work processes are followed. This can actually kill creativity at the workplace which is contrary to what the company expects.
      3. A company needs to invest a great deal of money in training in order to ensure that this concept works well. It will only be effective if people across different levels in the organization understand what is expected of them and work together to make it happen.
      4. There are many concepts that are very good in theory but do not translate very well into action. However, a company can generally deal with this problem by removing the barriers to successful implementation.

      As you can see, the journey to 6 Sigma is not necessarily an easy one. A company that wishes to use this management tool has to get expert guidance or else it will get bogged down by the many disadvantages that are mentioned above. If done correctly the company will be able to do very well in an increasingly competitive environment.

      Bottom Line: Read about the advantages and disadvantages of 6 Sigma. It is necessary to have complete knowledge of this management tool in order to get the best results.

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