I have written a research paper on Six Sigma. The paper needs to be in APA format, and has to be written in third person. Can you please check and advise if any changes have to be made.
This paper discusses what Six Sigma is, how it started and why Six Sigma is so important. It shall also briefly discuss the different methodologies used in Six Sigma. Finally the paper talks about the advantages, disadvantages and evolution of Six Sigma over the years.
What is Six Sigma?
One can find many definitions for Six Sigma. The Financial Times defines Six Sigma initiative as a "program aimed at the near elimination of defects from every product, process and transaction." It is basically a proven set of methods that help people in running their business or organization more efficiently and profitably (Brue, 2005). Six Sigma is a management philosophy developed by Motorola which emphasizes on setting extremely high objectives, collecting data, and analyzing results to a fine degree as a way to reduce defects in products and services. Six Sigma is not a business fad that is tied to a single method or a strategy, but rather a flexible system for improved business leadership and performance (Pande, 2000).
Six Sigma is a method that many companies these days use to strive for perfection. The Greek letter sigma () is a term that is used in statistics which measures standard deviation. Standard variation is a statistical way to describe how much variation exists in a set of data. The idea behind Six Sigma is that by measuring the defects that are there in a process, one can find out how to eliminate them systematically and get as close as possible to perfection. For a company to achieve Six Sigma, it cannot produce more than 3.4 defects per million opportunities. In other words, the company should operate at 99.997% precision (Stevenson & Mergen, 2006).
History of Six Sigma
Six Sigma was first started in Motorola. Motorola realized that they were losing a large portion of their business and productivity through the cost of non-quality. Motorola was having 2,600 parts per million losses in manufacturing and also were losing business due to defective parts and support of systems in the field that were not reliable. Bill Smith who was an engineer at Motorola found that the quality level associated with the measure of Six Sigma corresponds to a failure rate of two parts per billion and adopted that as a standard. The program that was designed to achieve this goal was developed at Motorola and the name given to that program is called Six Sigma (Raisinghani, Ette, Pierce, Cannon, & Daripaly, 2005).
Why is Six Sigma so important?
According to Eckes (2003), Six Sigma is a technical measure of the number of customers who are unhappy per million opportunities.
Consider an example to find the importance of Six Sigma. Imagine a company that sells computers. And on a particular day, the company has sold a million computers. If on that day the company had 233 customers who were unhappy because the computers they purchased were not working, then the company is working at a Five Sigma quality level. If the same company had 66,807 customers who are not happy as they got the computer with incorrect specification, then the company is working at a Three Sigma quality. Finally if there were 690,000 customers who are unhappy then the company is performing at One Sigma quality level.
According to a research done, if the customers are unhappy with the service or the product provided they do not just keep quiet and do nothing about it. Mentioned here are a few facts about the effects of low sigma performance.
A customer who is not happy with the product or the service provided will tell nine to ten people about the experience he had. He might tell even more people if the problem is not that serious. But if the problem was handled satisfactorily then the same customer instead of telling nine to ten people would only tell five people about it. The evidence suggest that thirty-one percent of customers who have problem with the service would not register any complaints as it is too much trouble or they feel that nobody cares about their problem. And of that 31 percent only nine percent might do the business again with the company (Pande, 2001).
Basically, defects lead to the customer who would never do business again with the company. When these customers share their experiences with others, many more customers wouldn't even consider doing business with the company. Therefore, the company would not stay in business for a long time, if the company has a low sigma level (Pande, 2001).
In United States, on average most companies operate at Four Sigma which is equal to 6,210 errors per million opportunities for error. (Mikel J Harry, 2004). In other words those companies are working at 99 percent quality level. Consider the following facts which show that performing at 99% quality level is not good enough.
If an airline industry performs at 99 percent quality, it means that at major airports they would be two planes that would be landed unsafely in a day.
16,000 pieces of mails would be lost every one hour if the postal service department is working at 99 percent quality level.
If the credit card companies in UK perform at 99 percent quality level, it will result in 80 million transactions that are incorrect (Raisinghani, Ette, Pierce, Cannon, & Daripaly, 2005).
The above examples show that it is very important for a company to run a business efficiently with very few defects so that it can stay in business for a long period and it does not lose its customers.
Six Sigma Methodologies.
There are two different methods that are generally used in Six Sigma. They are
DMAIC Methodology: This method is used when a process or product already exists in a company but is not performing efficiently. This process has five stages that include Define, Measure, Analyze, Improve and Control. In the first stage, i.e. the design stage, a company leader with the input from others defines the problem or an opportunity within a particular process. The process owner or the sponsor is identified. The project goals are also set in this stage. Finally the teams or formed and the project timelines are developed.
In the Measure stage, teams try to determine all the variables that impact a particular process. These variables are called inputs (X's). Once teams find all the variables that are affecting a process, they identify the variables that impact the process the most. Teams then try to evaluate the capability of the measurement systems that already exist to precisely account for these variables and if required they would design new measurement systems to track and monitor process performance. They also study the outputs of these processes. With the help from the findings, they determine the stability, process capability, reproducibility and repeatability.
In the Analyze stage, Six Sigma practitioners with the help of various statistical tools try to find the relationship between the various variables that constitute the inputs and outputs of a process. They establish the hypothesis or the questions describing the problem. Also decide on the suitable techniques to prove the hypothesis. Finally they analyze the results and reach conclusions and then validate the process.
In the Improve stage, teams brainstorm to come up with the solutions to remove the root causes of the service or the product. Teams might have many solutions, so they select the best solution by using various criteria such as the cost effectiveness, safety, capability, controllability etc.
In the last stage that is the Control stage, teams focus on the developing the procedures to maintain the gains that were realized in the previous stage. They also identify the opportunities to reproduce the gains (Sharma, 2003).
DMADV Methodology: This method is used when a company is trying to develop a new product or a process or this method can also be used when an existing product or process that is already existing has been optimized (using DMAIC or any other method) and still doesn't meet the level of customer specification or six sigma level.
The first three steps are the same as those in the DMAIC methodology. The last two stages are Design and Verify. In the design stage, companies design details, optimize the final design and plan for design verification. And in the last stage, the companies verify the design, which may involve setting up pilot runs before turning over to production.
Roles and Responsibilities.
• Six Sigma projects are run by "black belts" employees who have been trained in the philosophy and its application. Their entire work effort is focused on finding defects, wherever they might be, and eliminating them from the business processes. He or she helps the team getting started, helps the team in building their confidence and keeps the project moving to achieve great results. They move from department to department, heading Six Sigma projects. A black belt can do four projects a year.
• Black belts are backed up by "champions" .They are usually senior management-level employees who have been trained in Six Sigma concepts and usually who sponsors a Six Sigma project through the business. Champions help the project members overcome any obstacles.
• In most companies, Master Black Belt is referred to the people who mentor or coach the black belts who work on a variety of projects. The major responsibility of a Master Black belt is to make sure that the Black Belt and his/her team complete their work, see to that the team stay on track. MBB indicates the highest level of skill and training, and sometimes designates an outside consultant who specializes in Six Sigma process improvements.
• Green Belt is a title for someone who is involved with a Six Sigma project "part-time". That is, they have a job with normal duties and serves as team member or a part time Six Sigma team leader (Pande & Holpp, 2001).
Advantages of Six Sigma
If implemented properly, Six Sigma reports many benefits. Using Six Sigma companies can reduce defects, improve cycle times, companies can also lower costs, higher customer focus, increase customer satisfaction. Six Sigma also sets a performance goal for everyone (Sagey, 2007).
Disadvantages of Six Sigma
While there are many advantages, there also a few disadvantages that needs to be considered. The cost of implementing Six Sigma is very expensive. To implement Six Sigma successfully it needs 100% commitment from the employees who are a part of the project. And they have to spend a lot of time on the project, apart from concentrating on their day to day activities.
Changes in Six Sigma over the years
Six Sigma has changed a lot over the years. They are three generations of Six Sigma. The first generation was during the period 1987 to 1994. The first generation lasted for eight years. And it primarily focused on reducing the defects from a process. During the first generation, Six sigma was used in large scale industrial organizations. Motorola is a great example of a successful first generation company. The second generation lasted for six years and was during the period 1994 to 2000. And second generation focused on reducing the cost. It was used in large scale and commercial business. Examples of second generation companies are General Electric, Honeywell and DuPont. And finally the third generation focuses on creating value to customers and the enterprise itself. During the third generation, Six Sigma was used in small, medium, and large-scale industrial and commercial business. One of the major changes in Six Sigma third generation professional designations is that , it makes the program more affordable for smaller business. A new belt called "White Belt" was created in the third generation. A white belt professional has a much narrower focus than a black belt professional. Posco, Samsung are examples of third generation companies (Harry & Crawford, 2004).
Six Sigma initially was used only in the manufacturing companies with a focus on reducing costs and improving the productivity of a process. As Six Sigma gained popularity, it is used in various industries. These days Six Sigma is used in the service oriented business which includes telecommunication, health care, education, information technology, etc. Many companies have saved a lot of money by implementing Six Sigma. Few of the savings by various companies is mentioned below
"General Electric has reported more than $12 billion in savings due to Six Sigma.
Motorola reported a saving of $15 million in over 11 years (Foster, 2007)"
Dairy Crest, which is a UK's largest, broadly based chilled dairy foods company saved 85,000 pounds per year by implementing Six Sigma at its Crudgington Spreads Business Unit in Shropshire (Lee-Mortimer, 2006). Dow Chemical estimates that the application of Six Sigma to environmental, health and safety services has saved the company $130 million in the past two years (Biolos, 2002).
Six Sigma is a method that is used to reduce defects in a process. All companies big or small can benefit from Six Sigma if it is implemented properly. But one thing companies need to keep in mind is that they cannot expect the profits to flow immediately. It takes time for the companies to get the money. Some projects might go on for a year. As with any process, Six Sigma also has few disadvantages but the advantages outweigh the disadvantages
(the paper is written by divya mitta)(can you please help(if required) if my lecturer wants to know if i wrote this paper or not.)