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What is Six Sigma? Methodology, Origin & Goals

What is Six Sigma? Dive into the goals of Six Sigma methodology and learn the history and practicality of this powerful data-driven business approach.

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Six Sigma Methodology Explained

Six Sigma is a way of thinking and working that’s predicated on quality control. By measuring specific aspects of a process – and solving the problems therein – Six Sigma practitioners can significantly increase the consistency and efficiency of their work.

The methodology was created nearly 40 years ago at Motorola – which was, at the time, one of the world’s most complex telecommunications companies. They used it to improve the operational effectiveness of their factories, and since then, their success in the 1980s has inspired thousands of companies all over the world. Today, Six Sigma has been adapted to almost every industry and applied in organizations of all sizes. Even industry leaders like Amazon have used it to revolutionize their businesses.

Fundamentally, Six Sigma provides a data-driven system for improving processes. It gives practitioners a toolset to overcome a variety of challenges in their day-to-day work – like finding the root cause of a problem, developing practical solutions to problems, minimizing variation, and more.

How Does Six Sigma Make Businesses More Efficient and Effective? 

Six Sigma can help improve business processes by pursuing a handful of foundational goals.

  • Detecting and eliminating the problems that lead to defects and errors: A dysfunctional product or service represents more than a frustrated customer; it’s a complete waste of the time and effort that went into its creation.
  • Reducing rework: Nothing is worse for efficiency than employees moving backward through processes (to rectify errors or double-check their assumptions).
  • Maximizing asset utilization: When employees aren’t constantly second-guessing their work, they’re able to work proactively and solve the problems on the horizon (which, in turn, leads to future efficiency).
  • Focusing on the customer: The customer is the most critical aspect of any capitalist endeavor, and Six Sigma reinforces the idea that employees aren’t just making products or offering services – they’re doing it to satisfy the needs and expectations of other human beings.

In a Six Sigma system, these goals are supported by strong data. When they’re achieved, they can lead to improved productivity, higher customer satisfaction, better return on investment, and several other important benefits. Most importantly, these goals are industry agnostic, so they can be effectively applied to a single-employee consulting business or a one million-employee multinational technology company.

Why Is It Called ‘Six Sigma?’ 

Over the last decade, Six Sigma has become so popular that the words ‘six’ and ‘sigma’ have come to represent the methodology itself. But this wasn’t always the case. When Motorola first pioneered the methodology, the phrase ‘six sigma’ described the goal – not the process.

The term was originally used in data sets. Every data set uses standard deviations to measure variations in the data. Each of these standard deviations is called a ‘sigma.’ The more deviations in the data, the more likely the data would include errors.

To get the best results from the process, the discipline sets a benchmark: no more than ‘six sigma,’ or six standard deviations from the mean, is allowed to occur. Only six deviations means that just 0.00034% of products will be defective. To say it another way, 99.99966% of all opportunities should meet customer satisfaction, allowing only 3.4 defects (errors) per one million opportunities.

How Are Companies Using Six Sigma? 

Six Sigma can be applied to virtually any process in any industry. It’s been successfully used by enterprises both big and small, ranging from local Mom & Pop businesses to the United States Armed Forces. It doesn’t matter the size or scope of a process – Six Sigma (when applied correctly) can make it more efficient and effective.

How? It measures every aspect of a process and highlights opportunities to continuously improve those aspects. It’s almost universally applicable. Use it to filter email. Use it to reinvent onboarding processes. Use it to streamline international supply chains.

Of course, if processes involve other people (and many of them do), those people must buy into the Six Sigma methodology if it’s expected to work. Gaining this buy-in can sometimes be difficult – especially from executive leaders in large companies. But many of them can be convinced when they see the measurable results that Six Sigma can create: improved revenue, larger profit margins, a happier workforce, and much, much more.

How Can Six Sigma Be Applied? 

There are two techniques for applying Six Sigma to a process, and it depends on whether that process is new or existing.

When Creating a New Process

When optimizing a new process, Six Sigma practitioners use an approach called DMADV. It stands for define, measure, analyze, design, and verify. After a process has been initially designed, practitioners should follow these five steps:

  • Define the process’s goals
  • Measure the process’s quality characteristics, production capabilities, and risks
  • Analyze the measurements to determine ways to improve each of them
  • Design the process again (with the improvements factored in)
  • Verify that the improvements work as intended

When Optimizing an Existing Process

Existing processes are best improved with an approach called DMAIC. It stands for define, measure, analyze, improve, and control. When optimizing an existing process, follow these five steps:

  • Define the process’s existing problems and goals
  • Measure data related to those problems and goals
  • Analyze the measurements to look for the problems’ root causes and cause-and-effect relationships
  • Improve the process based on these findings
  • Control the process to prevent future deviation and reoccurrence of the problem(s)

Want to Learn More About Six Sigma? 

Six Sigma expertise is divided into a ranking system which is represented by belts (similar to a martial arts dojo). A Yellow Belt is designed for beginners, providing all the basic and fundamental insight required to start using Six Sigma on simple, everyday processes. A Green Belt is more tactical, focusing on data gathering and analysis. Those with a Black Belt are capable of leading large Six Sigma projects. Master Black Belts oversee the entirety of an organization’s Six Sigma efforts.

SMU CAPE offers a suite of online Six Sigma programs in Yellow Belt, Green Belt and Black Belt, which are designed to help provide students with a foundation of process improvement knowledge that will help them identify, lead and/or support Six Sigma-related projects that create efficiency and increase a company’s competitive advantage.

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