In the 80s, Bill Smith and Mikel Harry, two engineers at Motorola, started the six sigma initiative to improve the quality of production output by minimizing variability in production processes and identifying and eliminating causes of defects in outputs. An initiative that started off as an in-house program to improve processes and output value had by the late 90s been adopted by almost two-thirds of fortune five hundred companies, including Bank of America, Intel, and General Electric, among others. Over the years, the realization that improved customer experience is directly related to a business’s operational cost and profitability is slowly setting in. Hence, Agile, Six Sigma, and Lean Six Sigma training, skills, and approaches have become core to business operations.
These initiatives are widely adopted to:
- Reduce operation and production costs
- Improve output quality
- Increase profitability and enhance cost savings
- Improve customer experience
The six Sigma approach has proved useful in manufacturing. It has since been combined with Lean manufacturing, which originated from Toyota’s Just in Time (JIT) system to create the more effective Lean Six Sigma.
Both Six Sigma and Lean Manufacturing have their background in the manufacturing industries and are implemented to improve processes, reduce waste and cut costs. Let’s look at the Six Sigma methodology in the manufacturing industry.
Why six sigma is important in manufacturing
Defects and uncontrolled process variations that ultimately affect output quality have been associated with manufacturing over the years. Process variation refers to the characteristic of a process or system to take different values from a specified or expected pattern. Process variation is a major cause of quality-related issues such as poor quality, inefficiency, and slow cycle times in production, which ultimately lead to variations in customer experience. Defects, on the other hand, refer to anything that does not meet the customers’ expectations. Defects can be caused by defective raw materials or human error.
Implementing six sigma in manufacturing helps businesses to reduce variation in processes and manufacturing defects. The goal of the Six Sigma approach is to reduce defects to no more than 3.4 defects in every million opportunities (DPMO). This is to mean the higher the Six Sigma level a manufacturing business achieves, the lower the defects in production and the higher the quality of output. This boils down to consistent quality and improved customer experience, which translates to increased revenue.
Ways in which the Six Sigma approach helps manufacturing businesses
Six Sigma has been around for close to three and a half decades, and during this time, it has been adopted widely by not only the manufacturing industry but also other industries for quality management. As we have seen, the overall goal of the Six Sigma methodology is process improvement with a focus on waste and defect identification and elimination.
Here are ways in which Six Sigma has been beneficial in manufacturing.
- Focus on the customer
The ultimate goal of process improvement and elimination of production defects is to deliver products that meet (and exceed) customer expectations. For this reason, it makes sense to start by defining value/quality from the perspective of the customer and thereafter optimizing it. Part of this process involves evaluating the production process to determine and eliminate all activities that do not contribute value to the customer.
- Identify and eliminate variation, waste, and defects
Eliminating waste and defects is to optimize value and process efficiency. A Six Sigma rating is determined by the number of defects in a million opportunities. Thus a rating of 3.4 defects or less in a million production opportunities is recommended. To achieve fewer defects in production processes, a business ought to check its processes to identify and eliminate causes of waste and defects.
By ‘checking’ we mean monitoring production processes and understanding how these processes actually work through a data-driven approach. This is done by using statistical tools such as workflow charts and process maps in a data-driven approach that provides insight into the efficiency of the actual production process. This also enables the identification of the root cause(s) of variation and streamlining of processes which in turn eliminates waste and defects.
Eliminating waste also involves identifying and eliminating process steps that do not add value to the customer.
- Increase efficiency in production
Inefficiencies in manufacturing processes and systems are addressed partly by eliminating variations and defects and partly through teamwork. The Six Sigma framework is also organized into a structure with various roles at different levels, including yellow, green, and black belts. Having qualified professionals in Six Sigma teams is a plus as they collaborate on identifying and eliminating variation in processes to increase production efficiency. A manufacturing team would, for instance, comprise professionals from operations, engineers, project management, and others who are involved partly or wholly in production.
- Improve the quality of production output
The entire Six Sigma approach is a quality approach that is centered on defining quality from the perspective of the customer. Process improvement in Six Sigma is data-driven and continuous. The Six Sigma approach creates a framework that brings together process improvement and quality management techniques and professional teams to implement process designs that minimize waste and variation, increase efficiency, manage risks accordingly, and employ innovations.
Statistical analysis tools like regression, Pareto charts, FMEA (Failure Models and Effects Analysis), cause and effect analysis, RACI Matrix, and more drive data-driven decision-making in the manufacturing industry.
Six Sigma steps in manufacturing
For the successful implementation of Six Sigma, all stakeholders involved in the production should buy into the approach and be trained on the same. While implementing Six Sigma in manufacturing will involve a hefty initial investment, the returns thereof will be worthwhile if this approach is implemented and executed properly.
Six Sigma uses the DMAIC steps in identifying, solving, and improving production processes. DMAC is an acronym that stands for:
- Define the problem. Here a problem is identified and defined in terms of goals and deliverables. The process is mapped, and the most impactful opportunities for improving the process are then selected.
- Measure the current process. This involves gathering data and assessing the current actual performance of a given process. Here, the FMEA technique can be used to outline the failure modes and carry out effects analysis.
- Analyze the root cause of variations, waste, and defects. It is essential to analyze the root cause of issues in processes.
- Improve process. This phase involves finding solutions to the root cause of the identified process issues, testing, implementing these solutions, and measuring process performance as time goes by.
- Control. The control phase involves refining the new process and monitoring it to ensure that it is achieving its goals after project completion and delivery.
Ultimately, the Six Sigma approach focuses on eliminating the root cause of variations, defects, and waste to improve efficiency and enhance customer experience. However, it starts by defining quality/value from the perspective of the customer using data-driven techniques. Process improvement in Six Sigma is not a one-off event but a continuous process. Process improvement does not only impact customer expectations but also has financial implications in the business in cost reduction and increased revenue.