Imagine big businesses such as GE (General Electric) that actually puts the customer first and foremost and makes a profit. In fact, GE takes customer service to a new level by keeping their promise of on-time delivery, great competitive prices, and putting out a great product based on what the customer wants or requires.

Key Core Concepts of Six Sigma

• Critical to Quality: Focuses on the attributes that are most important to the customer. 
• Defect: Failing to deliver what the customer wants.
• Process Capability: What your process can deliver.
• Variation: What the customer sees and feels.

All of the core concepts are very important, but the ones we are highlighting are ones that could be misunderstood, such as Critical to Quality (CTQ) and Variation. Let’s face it, if your customer isn’t getting what is important to him or her in your product or service, why would your customer continue doing business at your establishment? Getting what is important in the product is what your customer sees as quality. 

Variation in the product is never good; consistency is extremely important. Business processes should yield consistent products that are reliable. When Coca-Cola changed their flavor to the New Coke, there was an uproar. The consistent flavor of Coca-Cola that we all love is the reason we buy their product.

In a nutshell, if have adopted Six Sigma as your company culture, then everything that you do within your business should embrace Six Sigma’s customer-focused, data-driven philosophy. Otherwise, you won’t yield the results at its fullest.

For more information on our Six Sigma training courses and services, please visit 6sigma.com. 

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Plan to Succeed

All you need do is browse the internet to find inspiration for your time-saving, cost-reducing process improvement plan. Using Six Sigma techniques like DMAIC and root cause analysis, you can identify problems on which to act. Similarly, Six Sigma also prompts you to devise solutions driven by data, with the potential for massive savings. For some businesses, it’s even possible to save up to 100 thousand dollars per year. Not only will this radically improve your cash flow, but you can then redirect that money to areas that need it, which could potentially drive greater savings. That’s like winning a scratch card, only to then win the lottery.

San Diego Six Sigma

Let’s look at some real-life examples of time and cost-savings. Only this year, San Diego enrolled city staff on a sixteen-week Lean Six Sigma course at UC San Diego Extension. The aim of this was to find ways of improving customer satisfaction and process efficiency. They certainly succeeded. Not only did they manage to reduce 911 call waiting times and speed up street light maintenance to minimize disruption, but also to improve customer service in local libraries. This shows that businesses big and small aren’t the only ones Six Sigma can benefit.

Almis Udrys, San Diego’s director of the Performance and Analytics Department, has a lot to say on the matter. For Udrys, Six Sigma represents a huge opportunity to reinvigorate city staff problem-solving skills. Skills that enable you to locate problems at the source and eliminate them to save time and increase cost-savings. Lean wastes like overprocessing, overproduction and human error are the usual causes of concern. Correcting these harmful issues will stand your business in good stead down the line.

The Secret to Saving Time and Money with Six Sigma

Six Sigma training doesn’t just revitalize your practical process improvement abilities. It helps you to look at problems from new perspectives. Naturally, you’ll want your employees to come complete with a wide array of skills that will benefit your organization. The business world is changing at a rapid pace, and Six Sigma can help you keep up by saving time and costs. The key to successful process improvement is for employees to open their minds to innovation, embrace data-driven decision-making, and commit to continuous improvement.

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Six Sigma and Best Practices

The Exxon Mobil Corporation has around 80,000 employees working in multiple countries around the world. Headquartered in Texas, they’re also no strangers to the benefits of Six Sigma in the workplace. Their 2013 Annual Report made the following statement: “Operational Excellence begins with exceptional employees.” This is above all, on the most intrinsic level, a Six Sigma statement. Its meaning is pretty clear.

Just as in Six Sigma, Exxon Mobil demands the best of the best. Without talented, change-driven individuals to conduct their work, neither Six Sigma nor Exxon Mobil would be able to function. This Six Sigma consciousness filters through every level of operation. When a new employee begins working for Exxon Mobil, the company provides them with extensive best practice procedures training. This ensures their new staff stay within guidelines, but it also helps to promote efficiency and productivity. Key agents in Six Sigma work. By reinforcing the need for best practices, employees are also less likely to cut corners or become wasteful.

Moreover, best practice procedures like standardization can also help reduce variation which leads to defective products, as well as to streamline processes. All these things mirror Six Sigma perfectly. In fact, they are in many ways the same, because Six Sigma is all about encouraging process improvement culture in the workplace.

Positive Results

Six Sigma practices have benefited Exxon Mobil to the point that it achieved a 17% return on capital employed in 2013 alone. Moreover, they were also able to reduce refinery cast operating costs thanks to energy-efficiency improvements. These results have only improved over time. Once you have completed your Six Sigma implementation, there’s no going back. These ideas and practices stay with employees, burrowing down to the deepest levels of your company’s infrastructure. Just as with Exxon Mobil, who, alongside Amazon and Apple, have cited “operational excellence” as the driving force behind their positive change.

Exxon Mobil has managed to save billions of dollars in operating expenses thanks to its implementation of Six Sigma principles. Six Sigma is a science all its own, and Exxon Mobil takes its use of Six Sigma a step further than the rest. Utilizing a detail-oriented, science-based approach to performance improvement, they employ measurement, data collection, and analysis, as well as risk management. These practices allow them to gain new insights into process issues and create improvements to correct them. Six Sigma’s influence is clear here, and we can trace it across every facet of Exxon Mobil’s operations. If you want your business to achieve a similar level of success, take a close look at how they run theirs.

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Six Sigma

Six Sigma is the world’s most trusted process improvement methodology. But what does it entail? Six Sigma’s primary aim is to reduce variation, to create greater quality and efficiency in the workplace. Like any science, Six Sigma uses statistics to validate hypotheses, with practitioners using data to justify their decisions and predict future problems. Furthermore, your mastery of Six Sigma depends on belt color, as different belts require different levels of training. Yellow Belts, for instance, have a basic understanding of Six Sigma and can conduct simple data analysis. Master Black Belts, on the other hand, are just that – masters of Six Sigma knowledge and technique. They utilize tools like DMAIC, hypothesis testing, statistical process control, root cause analysis, and Pareto charts. With these key skills, practitioners make lasting process and quality improvements in industries like manufacturing.

Lean

Lean shares many similarities with both Six Sigma, each complementing the other, giving rise to a hybrid methodology: Lean Six Sigma. LSS combines the best qualities of both improvement approaches to create even greater efficiency. But Lean alone takes a different approach. In Lean terms, anything that does not add value is a threat to production. Utilizing in-depth analytical techniques to identify waste, Lean allows you to eliminate it at the source. Below are the eight types of waste (Muda) that occur in the workplace.

1. Transport. Movement of people, products or information to different locations.
2. Inventory. Unnecessary storage of parts, pieces or documentation.
3. Motion. Any extraneous human motion or action. E.g. bending down, turning around, reaching, lifting, or walking.
4. Waiting. Needless waiting for parts, instructions, information or equipment.
5. Overproduction. Producing more product than your current demand due to human error. g. producing fifty batches of mobile phones when the customer only wanted ten.
6. Over-processing. Maintaining overly strict procedures or excessively high-grade materials than you need.
7. Defect. Variation, defective products, reworking, repeating tasks, incorrect documentation.
8. Skills. Failure to utilize talented employees appropriately. Delegating tasks to those unqualified to perform them.

Kaizen

Kaizen is a Japanese word, also known as continuous improvement, though its literal meaning is “good change.” As such, any positive change to a business’s production processes, quality, efficiency or productivity is Kaizen. There is some overlap with both Lean and Six Sigma, but, the difference between them is that Kaizen is not a practice. Kaizen is a culture, an attitude towards work, that you must cultivate to see positive change. You can use Lean and Six Sigma to build a continuous improvement culture at work. Moreover, the key is in the word “continuous,” in that there is no end. Therefore, Kaizen is not a single practice but a way of thinking. The aim of which is to create a sustained and continuous effort to maximize your business’s productivity and efficiency.

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What Makes a Green Belt Project?

Many people ask us what goes into a great Green Belt project, and it’s important to know the answer. Before selecting your next Six Sigma project, Green Belts should know what makes their work unique. So how do we recognize a great Green Belt project? Well, first of all, ensure your project is feasible for at least three months. It’s no good starting a project only for it to fall apart soon after. By targeting the issues that are just right, i.e. not too complex, nor too minor, your project has the best chance of success. Your project needs to be able to sustain you for a do-able period. Otherwise, productivity will start to lag. Below are some of our top Green Belt project ideas.

Learn more about our Six Sigma Green Belt training

Process Improvement Projects

Green Belts often deal with data to predict customer demand and identify process issues. Process improvement or problem-solving projects allow Green Belts to flex their analytical skills. Imagine you have an inefficient production system that you want to improve, but can’t find the root cause. A Green Belt project could target this issue to identify the underlying problem. By analyzing the process to see how it works, Green Belts can quickly identify causes of concern, such as redundant process stages.

Quality Improvement Projects

Quality is everything in Six Sigma. By reducing variation, Green Belt projects can make dramatic changes to your business success. Six Sigma’s aim is to achieve only 3.4 defects per million, which equates to a higher than 99% quality. You could find yourself with a substandard batch of phones fresh off the manufacturing floor. One batch could soon turn into several without proper attention. Green Belt project teams use techniques like root cause analysis and affinity diagrams to trace one issue to the next. This allows them to determine the root cause of the issue so you can act on it. You can then either change suppliers or source better quality parts, which means greater overall product quality. Greater quality leads to positive customer satisfaction which also ensures continued loyalty and profit.

Innovation Projects

Leveraging data to predict customer demand forms one of many Green Belt responsibilities. You can direct your Green Belt projects toward changing existing products to suit customer needs or starting from scratch. Green Belts regularly incorporate Lean principles into their work, allowing them to monitor and manipulate supply chains. This allows you to predict future demand and satisfy customer needs before the customer even knows what those needs are. You could base your Green Belt project around the creation of innovative new products that will extend your market reach. Using Six Sigma and Lean techniques, Green Belts can help your company attract customers who were previously out of reach.

Read More on Six Sigma Green Belt:

Career Opportunities for Six Sigma Green Belts

The Six Sigma Green Belt Makes You Rich in Knowledge

The Most Complete Six Sigma Green Belt Virtual Training Ever Taught

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Make Order Fulfillment Times More Efficient

Don’t forget that DMAIC can help you define, measure, analyze, improve, and control problems in your order fulfillment process. Similarly, you can use DMADV to devise completely new processes that build on your Six Sigma improvements. Moreover, Six Sigma is an excellent tool with which to revise your order fulfillment system. Doing so allows you to assist project teams in detecting issues like variation or waste. You can then correct these inadequacies by reducing none-value-adding processes like excessive paperwork, plus time- and travel-based waste. Six Sigma aims to garner the best results by improving quality and efficiency. Furthermore, you can implement automated processes such as shipment planning and verification to improve your organization.

Reducing Error to Zero = Optimum Supply Chain

If you want to increase efficiency for your supply chain, you must first minimize error. Various stages in the supply chain can benefit from particular Six Sigma-compatible techniques. Poka-Yoke, for example, reinforces your processes against mistakes. It prevents human error by allowing no possible margin for error, forcing workers to complete the task per pre-established specifications. Similarly, the 5S strategy can also help you minimize errors by targeting waste and variation as they appear. 5S allows you to Sort, Set, Shine, Standardize, and Sustain your processes to create a streamlined, efficient environment for work.

Improving Order Fulfillment Processes

When a customer makes an order, they expect you to deliver on that order promptly. You should fill orders so that they arrive on time, with complete, accurate documentation, and absolutely no delivery-based damage. Six Sigma will help you optimize your order fulfillment by recognizing system problems like insufficient planning processes or poor execution.

Combine Lean with Six Sigma to Minimize Waste

Use Lean Six Sigma to drive gross market share and maximize your revenue. You can identify and eliminate none-value-adding activities like waste. Lean principles will increase functionality and efficiency of your supply chains to make them more responsive.

There are various types of waste Lean Six Sigma can treat. Firstly, over-processing, where you spend too long processing an item. This also leads to excess costs and wasted time. To solve this issue, you should increase your inventory only per customer demand. Speculative forecasting can lead to significant losses as your predictions don’t always pan out.

Moreover, unnecessary process stages add zero value to a product or service. If the customer wouldn’t pay for it, then get rid of it. Inadequate layout of your production facility will inevitably lead to losses down the line. By simplifying and streamlining your processes with Lean Six Sigma, your supply chain efficiency will reach optimum levels.

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The Start of Six Sigma

Back in the seventies, Motorola invested their time primarily in manufacturing Quasar television sets. This was long before the advent of mobile phones, modern computers, the internet, and many of the technologies associated with Motorola. A Japanese company took over control of Motorola’s Quasar factory at the time and began implementing unheard of changes. They set about revamping and restructuring the way factory operations, rebuilding it from the ground up.

Soon, while under new management, Motorola’s Quasar factory began to produce TV sets with one-twentieth the number of defects than before. Simply put, there was something Japanese management brought to the factory that Motorola didn’t. The factory even maintained the same workforce, machinery, and design work. It soon became clear that Motorola management was the problem.
It was in the next decade that Motorola knuckled down and started treating quality with the seriousness it deserves. Their then CEO, Bob Galvin, redirected Motorola towards on the quality achieving Six Sigma levels of quality. It was this decision that made Motorola a top quality and profit leader in the business world. Six Sigma was the secret to their success. And it’s just as popular and effective today as it was then!

How Does Motorola Use Six Sigma Today?

For Six Sigma, quality is about helping an organization increase profit. In Six Sigma, quality is a value contributed by a productive enterprise or activity. Motorola uses Six Sigma to maintain high efficiency by eliminating waste and defect as they discover them. This may be on a production line or even in administration.

Six Sigma aims to improve quality by minimizing variation and (overlapping with Lean) reducing waste. This helped Motorola improved its products and services, producing them faster and for less. In basic terms, Six Sigma’s goals are preventing defect, reducing cycle time, and minimizing costs. Six Sigma’s effectiveness comes from its ability to identify and eliminate waste costs, i.e. those that provide no value for customers.

Unlike Motorola, companies that eschew or dismiss Six Sigma ideas tend to have extremely costly operating processes. For those operating at low sigma, the cost of (poor) quality tends to be high, often spending 25%-40% of their revenues addressing issues. Companies operating at Six Sigma, however, typically expend less than 5% to fix problems. The dollar cost of this gap is often considerably large. This has cost companies like General Electric between $8 billion and $12 billion annually. Motorola, however, has enjoyed and still enjoys the benefits of Six Sigma. As one of its leading pioneers, they have perfected it over the years. Their success is not surprising.

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What Does Your Operating Profit Margin Do?

Your operating profit margin provides a measurement of your initial sales margin prior to deducting your operating expenses like administration, financing, taxes, distribution, and selling. If you’re fortunate to have a higher operating margin, this can be an added incentive for investors. Larger operating margins mean you have a higher revenue stream to spend on fixed costs or expansion. The contrary means most of your profits, if any, will be spent on developing the products sold to distributors.

Calculating Your Operating Profit Margin

• First of all, you should total your business’s operating income for a specific period of time. You can work this out with little effort. This is because your operating income equals your total profit before you deduct taxes, interest payments, and so on.

• Secondly, you must determine the total for your business’s net sales for the same period as above. Your net sales will be equal to the total sales you make after accounting for losses like returns, concessions, and damaged goods.

• Next, take your operating income from step one and divide it by your net sales from step two.

• Finally, take the result and divide it by 100. This will then give you a figure a percentage, and there you have your operating margin.

Maximizing Your Operating Profit Margin

As we all know, Six Sigma is a strong set of statistical tools you can use to divulge hidden problems such as variation and to identify the root causes behind them. This then allows you to implement improvements and eliminate variability from process execution. Six Sigma also enables continuous improvement for all your manufacturing, administrative, and business operations. There are various ways to improve your operating profit margin using Six Sigma ideas. Read on to find out what they are and how to use them.

• Increase Productivity

Six Sigma empowers your staff to make precise measurements of the time they spend on direct and indirect activities. Making the most of everyone on your staff can be tricky, more so for larger businesses. But Six Sigma helps apply a methodical approach across departments to address these issues effectively.

• Minimize Costs

Using the DMAIC methodology, you can define, measure, analyze, improve, and control your processes. This allows you to identify problems, such as variation, reducing these issues to fewer than 3.4 occurrences per million. Eliminating non-value-adding process stages can transform your business, increasing operating revenue by reducing costs. It also has a host of other benefits such as increased productivity and efficiency.

• Reduce Waste

Six Sigma is highly compatible with Lean philosophy, whose aim is to reduce waste (Muda). Common wastes such as over-processing from non-value-adding processes, unnecessary transfer of information, staff, and products are all common waste causes. Additionally, untapped employee potential is also extremely wasteful.

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Six Sigma aims for a state in which variation appears only 3.4 times per every million opportunities. Instead of being satisfied with 95% success, 99.99966% is the ideal goal. This is what we might refer to as the Six Sigma state. Like Kaizen (continuous improvement), Six Sigma is a state of being that one must achieve. While Six Sigma math and Six Sigma programs come from industrial process design, you can apply both concepts to any industry. But how do you calculate your Six Sigma level? Read on to find out.

How to Calculate Your Six Sigma Level

Firstly, you must decide what constitutes opportunity versus what constitutes defect. You should standardize your measuring systems if this is to work. As an example, you may have a hospital that considers a single administration of a drug an opportunity. Similarly, if you deliver the wrong medication or the wrong dose, they may consider this a defect. Opportunities and defects like these are black and white, yes or no, good or bad. Success or failure. Once you establish this understanding, you can then make precise quantifications for your opportunities and defects.

Next, you should calculate your yield by subtracting the number of defects from the total opportunities and dividing by the number of opportunities. This will give you a decimal figure which you should express as a percentage. As another example, a hospital that administered 145,250 correct doses last month may have messed up around 250 of them. Your yield here would be 145,500 minus 250, divided by 145,500. Don’t round up the figure, as precision is important here. In this example, the hospital would get 99.828 percent. Now, you should judge your yield against the standard baseline (99.99966%) for Six Sigma success. If your figure equals or succeeds this threshold, you have achieved Six Sigma.

Useful Information

Six Sigma may sound glamorous, but it’s just a useful way to indicate standard deviations. When a process operates at optimum, i.e. Six Sigma, levels, it yields results which equal the Six Sigma benchmark. These results also tend to fall outside the six standard deviations of the mean for a data set. While it is possible to calculate and check the yield of any process against the 99.99966% threshold, you may also wish to model your performance in other ways. For example, you could calculate the standard deviation of your data to identify your current sigma level. Six Sigma is incredibly wide-reaching, appearing in just about every sector, especially manufacturing industries. However, Six Sigma ideas don’t necessarily translate as well to service-based industries, which lack the same large-scale processes.

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What Does Lean Focus On?

Lean focuses on reducing the eight types of waste (Muda).  Defects, overproduction, waiting, non-utilized talent, waste from transportation, inventory waste, waste from motion, unnecessary processing. Additionally, Lean principles aim to reduce waste by identifying and eliminating it. Lean also improves production by maximizing flow and identifying non-value-adding steps you should remove. Anything that does not add value for the customer is a potential threat to production. As such, Lean uses a holistic approach that aims to build a culture of continuous improvement and in-depth analysis.

Lean Principles, Tools, and Techniques

• PDCA. Standing for Plan, Do, Check, Act, PDCA is a rapid cycle-based strategy used to drive process improvement.

• 5S is a 5-step method for creating and maintaining an intuitive and efficient workplace. The 5 Ss stand for Sort, Set In Order, Shine, Standardize, Sustain.

• 8 Types of Waste. Lean aims to eliminate the eight waste types: defects, overproduction, waiting, non-utilized talent, waste from transportation, inventory waste, waste from motion, and unnecessary

• Value Stream Maps. VSMs are a visual method for displaying the key process steps in production.

• Flow is the unhindered movement of a process.

• Pull describes how customer demand is used to dictate process flow, i.e. what the customer wants, or might want, determines what a company produces.

What does Six Sigma Focus On?

Six Sigma and Lean share many similarities. As such, they complement each other very well. However, Six Sigma focuses primarily on reducing variation, just one of the seven types of waste Lean tackles. Six Sigma is used to complete improvement projects, aimed at solving process issues. It is also highly data-oriented, involving validation of hypotheses using statistics. Six Sigma knowledge is classified using a belt-based hierarchy styled on martial arts (Yellow, Green, Black, and Master Black Belt). The higher the belt, the more adept you are at using Six Sigma. Furthermore, one of Six Sigma’s primary tools is a 5-step method with which to complete improvement projects.

Six Sigma Ideas, Tools, and Techniques

• DMAIC. This 5-step method uses the following steps, Define, Measure, Analyze, Improve, and Control to improve production processes. Furthermore, DMAIC also allows you to identify the problem and develop creative solutions through deep analysis.

• Project Charter. Six Sigma uses a single-page document to outline the process issue, project goal, scope, and a timeline. Moreover, the charter forms an essential framework for the trajectory of an improvement project.

• Pareto Chart. Pareto Charts display information about potential causes of process issues in a cascading bar chart format. Additionally, you should also organize problems from largest to smallest.

• Hypothesis Testing. Hypothesis Testing is a way of providing statistical precision to root causes of process problems, so you can make the best decisions.

• Design of Experiments. Methods of controlled testing, with which to assess how efficient processes are. DoE also allows you to select the best conditions, materials, and methods for each.

• Statistical Process Control. SPC enables you to monitor your processes, ensuring they consistently satisfy customer demand.

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This doesn’t just apply to food. Many of us park in the same spot at work if it is available; we wear a certain style of clothing for most of our lives (given a slight change to keep up with the times), and even the songs we like are the same ones we liked as a child.

With that said, all of us humans have a core Six Sigma quality built into us — the desire to reduce variation. It seems to have been built into our DNA so that we didn’t even notice. In the Six Sigma methodology, variation is undesirable because it creates ambivalence and does not allow for consistent results or outcomes.

Routines and Habits 

We spend a lifetime creating those routines and habits because they work for us. It makes us more efficient because we remember what we have to do next. For people who keep misplacing their keys, one of the first solutions that the experts tell you is to always keep your keys in the same place. That way you know where your keys are.

Routine keeps us efficient so everything gets done at the same time, in the best way possible. If mac & cheese is a favorite food and it makes you happy, then by all means it would be a good practice to make sure you have it. Your inner child will thank you.

What this indicates is having a routine makes us efficient. Being a creature of habit seems to make us happy on some level, otherwise we wouldn’t keep doing it, and being happy improves the quality of our life.

Reducing variation and constantly improving quality — Six Sigma is in our DNA! Who knew.

Interested in learning more about Six Sigma for your organization or business? Learn more about our Six Sigma courses and services today.

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At the bottom of the page, you can grab a series of Control Chart Excel Templates that you can download for FREE!

First off: entire books and PhD dissertations are written about Control Charts – this short post won’t do it justice. So, please learn on your own what I will most likely not cover in this article.

Every process varies. There is an inherent variation, but it varies between predictable limits. There are two types of variation: “common cause” and “special cause”. If you are cutting diamonds, and someone bumps your elbow, the special cause can be expensive. But, in diamond cutting and no elbow was bumped, the process itself will inherently have variation – that is called common cause.

For many processes, it is important to notice special causes of variation as soon as they occur and appropriately respond.

All control charts have three basic components:

• A centerline, usually the mathematical average of all the samples plotted.
• Upper and lower statistical control limits that define the constraints of common cause variations.
• Performance data plotted over time.

Here is an example of a control chart:

Here are some popular control charts (included in the download below):

• Variable Data
  • Individuals and Moving Range (X and MR or I and MR)
  • Average and Range or Average and Standard Deviation (X-bar and R or X-bar and S)
  • Estimated Weighted Moving Average (EWMA)
  • Cumulative Sum (CUSUM)
• Attribute Data
  • Proportions (P and NP)
  • Defect Count (C and U)

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