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The Six Sigma methodology is a set of practices designed to improve an organization’s overall performance. It does this through the systematic enhancement of business processes. Companies commonly implement the Six Sigma method to dramatically reduce defects, maintain product quality, and increase efficiency.
Every business process is an opportunity for a deviation to occur. This is especially likely when the process involves human functions. Each deviation has the potential to turn into a defect that, in turn, may result in additional costs to correct it. Six Sigma refers to the statistical level of having only 3.4 Defects Per Million Opportunities (DPMO).
It is easy to see why businesses want to achieve the Six Sigma rating. A 3.4 DPMO would significantly reduce expenses and increase profit. In essence, the Six Sigma methodology is a way for companies to reach a Six Sigma rating. It does this through a systematic implementation of projects that are intended reduce variations and increase efficiency. The DMAIC and DMADV are two methods generally used for Six Sigma projects.
The DMAIC serves as the basis of the Six Sigma methodology. It is a five-step process composed of the following stages: Define, Measure, Analyze, Improve and Control. The first step defines the goals a company wants to achieve. Along with that, the opportunities for quality improvement, such as minimizing defects, streamlining a process, or giving better customer satisfaction, are identified as well.
In the measurement step, the company sets up performance metrics. The metrics are then used to measure and collect data. The data is then analyzed in the next step to determine the probable cause of defects and identify solutions to reduce them.
The "improve" step is when the solutions for business process improvement are finally executed. Once executed, the last step—control—checks the results of the improvement step to ensure they are in line with the company's goals. Improvements that give unfavorable results are modified, while those that comply with the Six Sigma quality process are maintained.
DMADV—Define, Measure, Analyze, Design, and Verify—is a version of DMAIC adapted for creating new products and business processes. The fundamental difference between DMADV and DMAIC is the customer input. Customer satisfaction is integrated in every step of DMADV projects. The two final steps, Design and Validate, deals with acknowledging customer feedback on product design.
Industries that manufacture consumer goods often create new products. The new products typically create new manufacturing processes that normally have to cater to the customer’s needs. As such, DMADV is frequently incorporated into manufacturing process improvement plans. In some cases, the principles of lean manufacturing are integrated with the Six Sigma methodology to further optimize production. This is called Six Sigma lean methodology.
One interesting organization that successfully executed the Six Sigma methodology is the Dabbawalla. The Dabawalla is an Indian food delivery system composed of several thousand personnel who pick up and deliver more than a hundred thousand lunch boxes to and from customers' houses and workplaces every day. Instead of organized documentation, the system employs a color coding scheme to identify the owners of the lunch boxes and where they should be delivered. Meanwhile, delivery is done primarily by using wooden carts and public transport. In spite of this, they are reported to make only one mistake for every six million deliveries.