Manufacturing Basics and Best Practices Bulletin

Six Sigma Simplified

Let me start by saying that Six Sigma is not an overly sophisticated and unrealistic method of measuring data variation. It is also not a continuous improvement methodology for only banks, insurance companies and widget manufacturers.  

So if that’s what it’s not, then what is it?  

First, it is a statistical measure of the performance of a process or a product.

Second, it is a goal that reaches near perfection for performance improvement.  

Third, and most important, it is a continuous improvement methodology designed to achieve “top-to-bottom” commitment to world-class performance.               

Six Sigma as a Statistical Measure  

Sigma stands for standard deviation. It is a statistical way to describe how much variation exists in a set of data, a group of items, or a process. If you deliver only about 68% of your shipments to your customers on time, your process is at only a “2 sigma” level. If you deliver 93 percent of your shipments on time, which sounds good, you are operating at only a “3 sigma” level of performance. If you get 99.4 percent of them to your customer on time, you’re operating at “4 sigma.”  

To be a Six Sigma on time supplier, you would have to have a delivery record of 99.9997 percent on time. That’s practically perfect! In fact, for every million of shipments you make, you’d end up with only three or four late deliveries.  

That’s enough to turn almost every manufacturing team off. If we’re struggling to make our goal of 97% on time deliveries, and that’s only 3.4 sigma, there is no way in hell that we’re going to get anywhere near 6-sigma … ever!  

During my early years in manufacturing, I thought that Six Sigma was a program for only banks, drug companies and doughnut factories … not for manufacturers producing a product; let alone make-to-order products. Today, things have changed and Six Sigma has become a continuous improvement methodology employed by many small to medium size manufacturing companies.  

Six Sigma as a Goal  

The goal of Six Sigma is to help people and processes aim high in aspiring to deliver defect-free products and services. The notion of zero defects is not at work here; Six Sigma recognizes that there’s always some potential for defects, even in the best-run processes or best-built products.  

The goal of Six Sigma is especially ambitious when you consider that prior to the start of a Six Sigma effort, many processes in many businesses operate at 1. 2, 3 sigma levels. This means that from 66,000 to as many as 700,000 mistakes per million opportunities are being produced! Indeed, it’s often a shock for people to see how poorly their processes and products perform.  

When taking up the Six Sigma banner, a business is saying, in effect: “We’d like to get as many of our customer-related activities and products performing as close to Six Sigma as we can.” Because 3.4 defects per million is such a challenging goal, the more immediate objective may be to get from, say, 2 to 3 sigma. But that’s not shabby either: It would mean reducing defects from more than 300,000 per million to fewer that 70,000.  

Keeping customers happy is good and profitable for the business. A 5 percent increase in customer retention has been shown to increase profits more that 25 percent. It is estimated that companies lose 15 percent to 20 percent of revenues each year to ineffective, inefficient processes---although some might suggest that it’s even higher. Six Sigma provides a goal that applies to both product and service activities and that sets attainable, short term goals while striving for long-range business objectives.  

Six Sigma as a System of Management  

A significant difference between Six Sigma and other continuous improvement programs is the degree to which management plays a key role in regularly monitoring program results and accomplishments.  

As a management system, though, Six Sigma is not owned by senior leaders (although their role is critical) or driven by middle management (Although their participation is key). The ideas, solutions, process discoveries, and improvements that arise from Six Sigma take place at the front lines of the organization. Six Sigma companies are striving to put more responsibility into the hands of the people who work directly with customers.  

In short, Six Sigma is a system that combines both strong leadership and grassroots energy and involvement. In addition, the benefits of Six Sigma are not just financial. People at all levels of a Six Sigma company find that better understanding of customers, a clearer process, meaningful measures, and powerful improvement tools make their work more effective, less chaotic, and often more rewarding.  

In my experience, I found that like most other change initiatives the success level was always related to how well a company built the foundation for its change initiative success. Their foundation for successful implementation had the mastering of relevant business basics as its core strength. Six Sigma is no different.  

It’s amazing how many companies have great visions yet fail to achieve their full growth and earnings potential. They're a lot like the Green Bay Packer's football team before the arrival of Vince Lombardi ... all the potential in the world but with little focus on executing the basics of their profession.    

Requisites for Six Sigma Success  

For any Six Sigma initiative to be successful, the following three challenges must be conquered: 

1. Companies need to identify which Six Sigma basics that are requisites for increasing speed, improving quality, and boosting profit margins? 

2. Teams need to master these basics to provide a solid foundation for the successful implementation of Six Sigma?  

3. Someone needs to champion a “top-to-bottom,” company commitment to the flawless execution of the Six Sigma Basics? A commitment that will provide the launching pad for individual, team and company achievements beyond all expectations.    

 A SPECIAL OFFER FOR MBBP BULLETIN SUBSCRIBERS  

If you and your company are interested in learning about Six Sigma; or if your seeking ways to optimize your Six Sigma results... a good approach would be to consider our training package, Six Sigma Simplified, including the e-tutorial "The 8-Basics of Lean Six Sigma."  

During this week only, MBBP Subscribers can purchase their training package at a 48% discount from our bookstore price of $767.00; or for $395.00. Now that's a savings of $352.00 from retail and many more hundreds of dollars less than attending a relevant seminar. (And, unlike a seminar, your training materials will always be available for future review.)  

For a detailed review of this tutorial, go to:  

        http://bbasicsllc.com/LSS-ar.htm

  DON'T PROCRASTINATE... DO IT TODAY!  

If you need front office support and/or "go-ahead" approval, I suggest that you provide them with a copy of this week's MBBP Bulletin and ask them for comments and suggestions. Most upper management leaders will be glad you did.

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You are welcomed to print and share this bulletin with your peers, business team members, and upper management... better yet, have them signup for their own copy at:  

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