Six Sigma – What, Why, & How to Use six sigma methodology in process improvement.
All businesses and organisations strive for efficiency and threats to good performance are an unfortunate constant. The unexpected paradigm change that the pandemic brought to many organisations is a drastic example of how teams and individuals are often unprepared to adapt their methodology to eliminate waste and inefficiency in the face of change.
Wouldn’t it be wonderful if you could find a bullet-proof – and change-proof – methodology to eliminate the enemies of efficiency within your business? Would you like to better understand and overcome what stands between you and the optimised results you want for your business and sustain this good practice during the inevitable changes?
Whether you run a big business, a small business, are self-employed or working on a personal project, Six Sigma methodology might be the answer to your questions and the desirable efficiency tool you need for continuous improvement.
What is Six Sigma?
Six Sigma methodology is not a mysterious magic solution but a well-studied and tested set of tools and techniques that aim to solve problems of inefficiency within your business or projects. These techniques consist of spotting and getting rid of all those faults cluttering your processes and stopping them from running as smoothly and effectively as possible.
The concept of Six Sigma dates back to the 19th century and it has been used in business since 1986 when it was first introduced by mobile communications giant Motorola after research and analysis of its benefits. Since then, several well-known companies and organizations operating in different areas have successfully implemented this widely popular tactic such as Amazon, Dell, Ford and the United States Army. Need more reasons for convincing?
Lean manufacturing tools and Six Sigma Tools
Lean Methodology and six sigma tools offer techniques and methodologies to help analyse and improve business processes by eliminating waste, improving productivity, and increasing profits.
- The 5 Whys – Asking “why” five times
- Kanban – Visualise your workflow.
- Process Mapping – Visualisation of business process mapping to understand how it works.
- Root Cause Analysis – Why the problem occurred before implementing a solution.
- DMAIC – Define, Measure, Analyze, Improve and Control
- 5S – Clean, uncluttered, and organised to reduce waste and optimise productivity.
- Value-Stream Mapping (VSM) – Process map, timeline, and information flow.
- Cause-and-Effect Analysis / Fishbone diagram – Identify the different potential causes of a problem or an effect.
- Pareto Chart or Pareto Principle 80/20 rule – Combines a vertical bar graph and a line graph comparing various factors contributing to a problem.
- Project Charter – Describe the project in its entirety.
- SIPOC diagram – Suppliers, Inputs, Process, Outputs, and Customers. Process improvement summarising one or more processes.
- FMEA – Failure Mode and Effects Analysis
- Process Flow Chart – Visualise the steps involved in a certain process.
- Muda – Seven Wastes – Remove waste from processes.
- Kaizen – Continuous small process changes.
- Scatter Diagram – Numerical Data Charts help find the relationship between factors and influences.
- RACI Matrix – Identifying roles and responsibilities.
- Poka Yoke – “mistake-proofing” or “error prevention”.
- Gemba and Gemba Walk – Gain valuable insight into processes by watching and being part of the process.
Six Sigma Software
While some of these methodologies can easily be practised analogically – during planning, meetings and company briefings – there are many different pieces of software in the market that incorporate this methodology.
Before you make the decision to start searching for the best Six Sigma Software for you and your company, learn about the four big groups that they fall into:
Analysis Software is used for statistical analysis.
Data Collection Software feeds information directly into the Analysis Software and reduces time spent gathering data.
DMAIC and Lean online project collaboration tools Software While DMAIC – Define, Measurement, Analysis, Improvement and Control are the building blocks of the Six Sigma, Lean stands for reducing waste. These pieces of software are the most complete and incorporate several components of the methodology.
Program Management Software is used to track and manage an entire corporation’s program.
Benefits of Six Sigma
We know it’s not always easy to justify a change in methodology but there are many proven benefits from using Six Sigma. You can measure and quantify these benefits, especially financial ones.
Improved Efficiency and Timeliness
Just like money, time is an asset. Six Sigma tools can be used, for example, to reduce the number of hours or the number of machines in a manufacturing process.
The methodologies can be targeted towards fully or partially automating a process where manual intervention is not sustainable in terms of time and efficiency.
The terminology will change according to the industry that your company operates in, but the principle remains the same!
Improved Accuracy
DPMO means Defects-Per-Million-Opportunities across the process’s value stream. The value for DPMO is calculated considering the actual defects and the number of probable defects in every chance to commit an error (opportunity). Six Sigma methodology helps accuracy by reducing your business’s DPMO.
Better Customer Service.
Customer satisfaction is one of the pillars of success for your business and your company’s image will be shaped largely by how it interacts with customers. Six Sigma methodologies will help identify the number of variations that your customers are experiencing, what is causing these variations and finally how the number of dissatisfied customers can be reduced. You can use Six Sigma projects to specifically improve customer and vendor satisfaction.
Better Cash Flow
Six Sigma methodology can be used specifically to improve your business’s DSO – Days Sales Outstanding – by reducing its value which comes from the variations within processes.
Reduce variations in several types of processes within your business that can be the root cause of this issue such as invoicing processes or accounts payable processes. The higher the DSO, the lower your company’s ability to convert credit sales into cash, so if you can tackle this variation you can improve your cash flow.
Improved Regulatory Compliance
Six Sigma projects can aim towards improving the three aspects of regulatory compliance within your business: Finance and Audit; Information Technology and Legal. In the case of Finance and Audit, some of the methodologies can be used for example to improve fund allocation processes or reduce the turnaround time in the cost estimation processes.
Under the umbrella of Information Technology, the tools can aim towards improving the service quality of your IT help-desk service and in the area of Legal, you can aim towards improving the compilation process of critical and non-critical legal documents.
Eliminate faults in Workflow
Once you identify and eliminate the faults from your workflow, you will free your staff and/or yourself from fixing defects and move on to focus on working out details that will really make the difference such as customer care or innovative marketing campaigns.
Getting rid of the processes that cause frustration will also improve your team’s morale and allow them to dedicate themselves to more constructive and rewarding work. A happy, motivated workforce equals a healthier and more successful business!
In the end, it can help build an empowered leadership team by blaming poorly designed processes instead of employees. It is a transformation process and a journey so why not start it now?