Key Points

• Six Sigma is a methodology and a philosophy that seeks to eliminate defects, bolster quality, and increase customer satisfaction.
• Decision-making is handled through data and statistical analysis, delivering better outcomes and consistent results.
• Reducing variation leads to better quality in your outputs, as you’re delivering consistent and predictable outcomes.

If you’re new to the business world, you might see the term Six Sigma bandied about. You’ll see certifications, job postings, and even articles espousing the methodology and ways to make improvements to workflows. That said, if you’re fresh to the concept, it can seem somewhat daunting at first glance.

Six Sigma itself is more than just a business methodology, but rather a comprehensive means of revamping your organization for the better. It isn’t just about improving the outputs of your processes, but also about making your organization into a more efficient, quality workplace. So, with that in mind, we’re getting down to the basics today and going over what exactly Six Sigma is.

What Is Six Sigma?

Six Sigma is many things, but in business, we predominantly view it as a philosophy and a methodology. Philosophically, it addresses the need for organizations to have quality outputs, regardless of their industry, with near-perfection being the goal. The name itself is derived from statistics, with sigma representing standard deviation.

As a methodology, Six Sigma makes use of structured tools and detailed statistical analysis. For whatever scenario you can imagine, there’s likely a tool or procedure to help navigate it. Decisions are made with empirical data backing them. You’re not going off hunches or gut feelings, but rather measurable evidence with statistical analysis backing them.

What makes Six Sigma such a compelling methodology is what it does for any business. You’re looking to eliminate defects and inefficiencies, which greatly affect your bottom line. Additionally, it serves to increase customer satisfaction, thanks to the increase in quality. Above all else, it helps an organization to stay competitive and relevant in global markets.

The Core Principles

We’ve touched a bit on what Six Sigma is and the core tenets that make it such an effective approach. However, a little more depth is needed to give some perspective on why you might want to adopt the methodology for yourself.

Focus on the Customer

Before anything gets started, it helps to understand the wants and needs of your customers. Customer values greatly inform future decisions and help to guide the work that needs to be done when considering any sort of decision-making under Six Sigma. Customers come first, after all, especially if you’re marketing any sort of services or goods to the general public.

As such, quality isn’t defined by internal metrics or KPIs. Instead, it is defined by the expectations of your customers. They know what works and what doesn’t for their needs and use cases. It is your task as a business-owner to rise to the challenge and exceed those goals. This creates a feedback loop where you’re constantly checking on customer satisfaction, surveys, and other sources of data to guide improvement projects.

Measure What Matters

Decisions under Six Sigma aren’t based on hunches, gut feelings, or even what you think might work in the moment. Instead, you’re gathering data, which any business should be generating an exhaustive amount of. Processes are measured carefully to identify where errors, inefficiencies, and defects might be arising.

The use of data for any sort of decision-making only has net benefits. You can see if your improvement efforts are taking hold, alongside seeing where things will need future work. The use of any form of statistical process control is also going to greatly inform production goals, as you’re giving hard definitions about the upper and lower control limits, and can see where things are going out of spec.

Reduce Variation

You can’t produce consistency with variation. That’s just a simple fact of life. To this end, Six Sigma looks to standardize and control processes. By doing so, you’re getting a handle on your production workflow to deliver consistency. By reducing variation, you’re setting things so that you deliver reliable, predictable results.

By reducing variation, you’re also reducing the chances of the items in our next talking point.

Eliminate Waste and Defects

Waste and defects don’t add value to anything. In the best-case scenario, it leads to rework, which costs time and resources. In the worst-case scenario, you’re damaging customer trust in your brand. When utilizing Six Sigma, the elimination of waste and defects becomes a top priority. The hint is in the name: six standard deviations away from the norm, or a Sigma Level of 6, means you’re only seeing 3.4 defects across a million opportunities.

Now, how you accomplish this is all subject to how you approach continuous improvement. Under Six Sigma, this is done primarily through a structured, systematic approach to process improvement.

Structured Improvement

Solving problems under Six Sigma typically relies on the use of the DMAIC framework. This is a simple five-step program that goes through the problem-solving process. DMAIC stands for:

• Define the problems and goals
• Measure your current performance
• Analyze root causes
• Improve the process
• Control to sustain the gains

By taking a structured approach to problem-solving, you’re acting with the aforementioned data that we brought up earlier. Further, you’re utilizing said data to see where problems lie in your production workflow. It isn’t a matter of simply guessing where things are, but acting upon a provable, actionable set of metrics. When done properly, you’re not only revising and controlling a process, but also providing a foundation for that process to perform well in the future.

Engagement

Six Sigma isn’t intended solely for engineers, analysts, or front-line employees. Like any good methodology and philosophy, it requires a complete commitment from everyone in the business. This requires an involved leadership commitment, trained personnel (certified Green Belts, Black Belts, and so forth), and building a culture centered around continuous improvement.

Why Is Six Sigma Important for Businesses?

We’ve touched on the foundation and method behind the madness, but why is Six Sigma such a vital methodology and philosophy for any business? For starters, by upping the quality, you’re lowering your costs. Mistakes result in rework, costing time, money, and manhours to accomplish. By upping your quality, you aren’t just helping your bottom line, but you’re also helping to bolster your customer satisfaction.

Decisions aren’t made solely based on gut feelings or hunches, but instead are made using actionable, provable data. By utilizing data, you’re getting better outcomes, which benefits any business when you get right down to it. This leads to increased customer loyalty, which fosters an environment where you’re only strengthening your brand’s reputation.

Most importantly, it empowers your employees and leaders alike. They’re getting a foundational knowledge of vital problem-solving skills, accountability, and ownership of process improvements. As such, your managers will spend less time micro-managing, freeing them up to handle more complex and pressing issues as they arise.

Who Uses Six Sigma?

It always helps to see some sort of real-world usage of any methodology, tool, or approach to get inspiration and see the fruits of its successful implementation. Notably, Motorola is a famous adherent of Six Sigma and is the point of origin for the methodology in the first place. Its implementation in the 1980s helped to save billions of dollars by brainstorming the methodology when applied to its production workflows in manufacturing.

General Electric is also a notable adherent. CEO Jack Welch introduced the methodology, streamlining production, eliminating waste, and saving quite a bundle when looking at GE’s bottom line over his 20-year tenure at the American conglomerate.

Finally, several healthcare providers like the Cleveland Clinic, Yale New Haven Medical Center, and Mount Sinai Medical Center have made the switch to Six Sigma. By reducing errors in patient care, shortening wait times, and improving safety, there has been a noted shift in how healthcare is delivered.

Other Useful Tools and Concepts

Ready to keep going? You might want to take a look at how you can build a culture centered around continuous improvement. Kaizen is a concept often touted by Lean, but making use of some of the common tools and practices under it can build a robust corporate culture that puts continuous improvement in every aspect of your operations.

Additionally, the use of Lean in manufacturing is a given. However, some companies are starting to integrate the use of Agile principles into their manufacturing workflows. Take a closer look at the two methodologies to see which performs best for manufacturing. Who knows, a hybrid approach might be what is needed to make the most of your manufacturing workflows.

Finally, you might want to see how the Theory of Constraints and Lean can complement one another. Both of these approaches have similar goals, namely the elimination of bottlenecks, but how they go about this is a difference of scope and intent. Our article covering this takes a closer look at how you can apply these methodologies to create a synergistic approach to eliminating bottlenecks and pain points in your workflows.

Conclusion

Hopefully, you’ve come away with a greater understanding of why Six Sigma is such a force to be reckoned with across the business landscape. Remember, it isn’t just about eliminating defects at the production level, but about building a culture that reduces waste, inefficiencies, and puts the customer first above all else.