Getting Started in Six Sigma

Overview

The basics behind the Six Sigma quality control technique
Six Sigma is designed to achieve excellence in customer service and measure deviation from the ideal. It provides a process for placing value on the intangible nature of quality control. The underlying theories of Six Sigma are highly technical and complex. This book is a basic guide to those who are new to the concept, and though this is a complex subject, the concepts involved are not too complex for readers to grasp. ...

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Overview

The basics behind the Six Sigma quality control technique
Six Sigma is designed to achieve excellence in customer service and measure deviation from the ideal. It provides a process for placing value on the intangible nature of quality control. The underlying theories of Six Sigma are highly technical and complex. This book is a basic guide to those who are new to the concept, and though this is a complex subject, the concepts involved are not too complex for readers to grasp. Getting Started in Six Sigma demonstrates how an employee or supervisor can implement Six Sigma successfully without having to become technically familiar with process-oriented models or statistical modeling.
Michael C. Thomsett (Pt. Townsend, WA) is a financial writer who has written more than 50 books on investing, real estate, business, and management topics. He is the author of several Wiley books including the successful Getting Started in Options (0-471-44493-6). Prior to his writing career, Thomsett was a professional accountant and systems consultant.

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Product Details

  • ISBN-13: 9780471668114
  • Publisher: Wiley
  • Publication date: 11/28/2004
  • Series: Getting Started In..... Series , #111
  • Edition number: 1
  • Pages: 224
  • Product dimensions: 6.18 (w) x 9.15 (h) x 0.55 (d)

Meet the Author

MICHAEL C. THOMSETT is a financial writer who has written more than sixty books on investing, real estate, business, and management topics. He is the author of several Wiley books including the successful Getting Started in Options, now in its sixth edition. Thomsett has written extensively on quality control and quality assurance topics, and has had over 500 articles published in business, trade, and professional journals. Prior to his writing career, Thomsett was a professional accountant and systems consultant.

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Table of Contents

Introduction: Striving for Perfection in an Imperfect World.

Chapter 1: The Meaning of Six Sigma.

Chapter 2: The Customer’ s Point iew.

Chapter 3: Outside-In Thinking.

Chapter 4: The Nature of Quality.

Chapter 5: Product and Service Defects.

Chapter 6: Improving Process Systems.

Chapter 7: Striving for Consistency.

Chapter 8: Exceptions and Rules.

Glossary.

Notes. Index.

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First Chapter

Getting Started in Six Sigma


By Michael C. Thomsett

John Wiley & Sons

ISBN: 0-471-66811-7


Chapter One

The Meaning of Six Sigma

Many years ago at Fisherman's Wharf in San Francisco, I saw a fisherman sewing up holes in his net. The net was quite large and he had lain it out over a wide expanse of the dock. I watched him for quite some time, noticing that he paid careful attention to even the smallest tear, methodically repairing each one in turn. When he took a break I walked over to him. "Why do you have to fix all the tears, even the little ones?" I asked him. He explained, "It only takes one small tear for all of the fish to escape."

Perfection-impossible to achieve completely and all of the time-is a goal worth keeping in mind. If we set our sights any lower, we deserve what we get. If we settle for 80 percent or 70 percent, we can never expect to reach 95 percent or 98 percent. As the old fisherman explained, even the smallest imperfection affects the entire effort. A small tear in the net becomes a bigger tear and the fish escape as the net is pulled in. The corporate world works in the same way. What might seem a minor imperfection or a flaw in a remote department affects you and your product or service. The solution: We have to find all the tears and repair them, methodically and completely. Yes, new tears will appear in the net, but we cannot shrug and explain, "We found most of them." We also cannot just shrug and say, "It's not my job." Perfection is nota requirement, but it is a goal worth setting. We can then compare our outcomes to the goal, seeing improvement and measuring it against that goal.

THE ORIGINS OF SIX SIGMA

Sigma is the letter in the Greek alphabet used to denote standard deviation, a statistical measurement of variation, the exceptions to expected outcomes. Standard deviation can be thought of as a comparison between expected results or outcomes in a group of operations, versus those that fail.

The measurement of standard deviation shows us that rates of defects, or exceptions, are measurable. Six Sigma is the definition of outcomes as close as possible to perfection. With six standard deviations, we arrive at 3.4 defects per million opportunities, or 99.9997 percent. This would mean that at Six Sigma, an airline would lose only three pieces of luggage for every one million that it handles; or that the phone company would have only three unhappy customers out of every one million who use the phone that day. The purpose in evaluating defects is not to eliminate them entirely, but to strive for improvement to the highest possible level that we can achieve.

Key Point We evaluate defects to improve overall performance, knowing that eliminating them completely is unrealistic.

We know that trying to achieve Six Sigma would be impractical on a consistent basis; so while it is a desirable goal, it presents a model against which we can measure our performance. So rather than setting the unrealistic goal of achieving perfection, we can observe (1) our current Sigma level and (2) improvement in that level as changes are made.

Table 1.1 presents an abbreviated summary of Sigma level, defects per million, and yield, or success rate of the outcomes.

You can identify your level of Sigma performance and then compare it to the chart. This is where the benefits of Six Sigma are realized. By comparing your outcomes to the ideal outcome of Six Sigma, you can quantify quality itself.

Example: Your department performed 535 specific operations last month. Of these, 43 were defective (they fell outside the acceptable range of outcomes). This means that 492 of the operations were successful. The yield was:

492 ÷ 535 = 91.9%

Referring to Table 1.1, we discover that this outcome represents Sigma somewhere between 2.5 and 3. If you were able to reduce the number of defects by half, ending up with 21, your acceptable outcomes would then grow to 514 out of 535 operations, and your yield would increase as well:

514 ÷ 535 = 96.1%

Now the Sigma is between 3 and 4, a significant improvement. Of course, if you cut defects in half, you are going to know your outcomes have improved, so what purpose does Six Sigma provide beyond the obvious scorekeeping? As the preceding example demonstrates, improvement in quality can be specifically measured. In practice, you may be dealing with a much greater volume of outcomes, and the incremental rate of success is likely to be smaller than that shown in the example; and Six Sigma is far more than a measuring system. It is a way of doing things, a change in cultural attitude that is designed to create a company-wide team in practical terms. As far as the scorekeeping aspects of Six Sigma go, if you begin with an assumption that a change in procedures will produce an expected change in outcomes, you can then compare actual to projected results to judge the success of your work.

Key Point What makes Six Sigma different from most other quality control programs? It is more than just a way to improve performance; it is a method for changing the corporate culture, from top to bottom.

An "operation" can be any function you perform-delivery of goods, telephone contact, balancing accounts, or executing a repair, for example. Any operation is measurable in Sigma terms. The desired outcome represents satisfaction of the customer's expectation, and any time that expectation is not met, the outcome is defective.

While measuring results is a crucial part of the process, you will be more concerned with how Six Sigma is applied and what role you and other employees will perform within that process. So the idea of Six Sigma is much more than the latest approach to quality control; it represents a change in philosophy that affects everyone. It is designed to bring everyone into a single team with the same overall goals. So many corporate employees-especially in large organizations-have a sense of isolation or view their relatively small department as a realm unto itself. Six Sigma encompasses the entire corporation as a single team and is aimed at removing that sense of isolation.

The concept of Six Sigma began at Motorola in the 1980s. An engineer named Mikel Harry began analyzing variation in outcomes in the company's internal procedures, and realized that by measuring variation it would be possible to improve working systems. However, whereas other quality systems were designed at only measuring performance, the Six Sigma approach that grew from Harry's original ideas was different. The procedures were aimed at taking action to change procedures so that overall performance could be improved permanently-and at every level within the company.

Within a few years, the same idea had taken root at General Electric and AlliedSignal. GE decided in 1995 to implement Six Sigma throughout the entire organization. CEO Jack Welch led the company through this implementation, and many divisions of GE experienced impressive improvements in quality during those years. Estimates are that cost savings from Six Sigma application exceeded $320 million within the first two years, and more than $1 billion by 1999.

Key Point Cost savings are an important aspect of quality control, but they are only one aspect; a permanent, effective, and rewarding quality program requires more work.

So many quality programs have been devised, named, and put into effect over many years. Most fail after a while because employees lose faith in those programs. It becomes obvious to employees that "quality control" really represents management's attempt to cut costs and expenses and get more work from its labor force. In other words, the program applies to the worker but there is no change in management itself. If the final result of a quality program is to achieve increased efficiency, and that results in layoffs, who benefits? With Six Sigma, everyone is involved and everyone is expected to change (for the better) as part of one overall team. The purpose is not assigned to the rank and file, but is shared from top to bottom.

BUSINESS PROCESS MANAGEMENT (BPM) AS A STARTING POINT

Like all other specialized processes, Six Sigma involves the use of a series of specialized terms. They have specific meaning and are important in distinguishing the roles that people play in executing the successful Six Sigma procedure.

The concept of Six Sigma begins with a process model and its implementation is called Business Process Management (BPM). Using the BPM model allows us to understand how work evolves and to move through the organization from input to output.

To visualize how BPM helps us to (1) design, (2) communicate, and (3) improve systems, we use a flowchart. Those who grew up in the computer age are accustomed to seeing flowcharts that move from top to bottom. We have come to think of work flow in similar terms; but in practice, we can better express the workings of a procedure when we express work flow from left to right. This is not merely the mincing of words or the moving of a vertical flowchart to a horizontal one. In fact, the horizontal BMP model is a powerful tool for identifying likely problem areas within processes and then for taking steps to decrease defects.

The design of the basic model horizontal flowchart is shown in Figure 1.1.

Note that there appear to be three horizontal levels in the process area of this illustration. These represent departments, individuals, or other sub-teams that perform specific functions. Because the exact mix of responsibility is likely to vary from one process to another, these may be described as areas of responsibility.

A timeline can be added along the bottom, if desired, to indicate how timing comes into play in the process. Additionally, any reports or other generated work documents can be identified with drop-down boxes. This ties the interim output to the area of responsibility, point in the process, and timing of the task.

Key Point The horizontal flowchart is not just a passive work flow summary; it is a working document used for identifying the steps in a process and, most significantly, for highlighting the likely places where variances, or defects, are most likely to occur.

In determining how to best improve quality, we have to first ensure that work flow is logical and complete. The horizontal flowchart used for BPM enables us to examine each step along the way to make sure we understand time requirements, steps and sequence, and specific responsibility. These include determining what has to be received in order to execute a step, and what has to be passed on for the next step. This is a methodical and precise method, both for defining work flow and finding likely variables-where defects or failures are likely to occur. Figure 1.2 highlights these points in the process.

In the figure, we have identified exact steps in the process where we believe variances are most likely to occur, or where defects are likely to be generated. These points are identified as black rectangles. The assumption in a process involving multiple areas of responsibility is that the likely variance points are strongest when processes move from one area to another. As long as a process is confined to a single area of responsibility, its steps can be managed by a limited number of supervisors or managers. When more than one area of responsibility comes into play, we can place emphasis on the points where a step is completed and the process then moves elsewhere. This is where problems are most likely to arise. These include a failure to act in a timely manner, processing with incomplete data, interpretations containing errors, and similar, common variances.

We further expand the horizontal flowchart to identify both a timeline and interim documents generated throughout the process. This is shown in Figure 1.3.

In this expanded version of the horizontal flowchart, we have a complete picture: Areas of responsibility, process flow from one step to another (including changes between areas of responsibility), likely variance and defect points, a timeline, and interim and final reports.

Understanding the essential importance of BPM is a starting point in Six Sigma. For example, if you have a process riddled with defects, the best way to identify the problem-as a starting point-is to prepare the horizontal flowchart. By methodically speaking with each person, department, or team involved in the process, we can put together a complete picture of how it works and how it should work. This highlights variance points leading to identification of likely defect points so that appropriate changes can be made. This is how the Sigma level is effectively raised-by focusing on variance points and enforcing procedures where those occur.

The flowchart approach to defining processes can be used effectively for improving existing procedures, making process changes, merging two or more procedures, or developing new procedures. The flowchart also serves as an excellent training tool. It provides new employees with a view in the context of their roles in a larger procedure, as well as providing steps in sequence. The flowchart identifies each element within the process from beginning to end so that everyone involved can view not only their role, but the roles of others as well. When accompanied with the more traditional procedural documentation, this visualized form of process flow is a powerful internal quality control and training tool. A more detailed example of the horizontal flowchart and its practical application-both as a Six Sigma tool and an internal document-is provided in Chapter 6.

THE THREE PRIMARY ELEMENTS: CUSTOMERS, PROCESSES, EMPLOYEES

With Six Sigma, the purpose of the whole exercise is to locate defects, identify ways to prevent them, and make improvements permanent. A defect is any outcome that does not satisfy the needs of the "customer."

Key Point In defining a customer, many people are surprised to realize that everyone is in the customer service business-even the clerk who never gets out of the windowless basement office.

You may notice that we have placed quotations around the word "customer." This was done for a good reason: We want to expand the definition of this word. In the widely understood sense, a customer is someone who buys our goods or services. It is usually someone outside the company-a consumer, another company, or the government, for example. In Six Sigma, you may serve a different customer. Those in nonmarketing environments are often described as people who "never see a customer," but this is not an accurate assumption. We all have customers. As a basic definition of a job, we provide something of value to someone else.

Continues...


Excerpted from Getting Started in Six Sigma by Michael C. Thomsett Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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  • Anonymous

    Posted February 17, 2006

    Everything you always wanted to know about starting in Six Sigma

    Books on Six Sigma often read like ancient testaments from which you must blow the dust before you crack them open. Full of half-explained jargon and abstruse terms, they tend to shed more confusion than illumination. Eventually, you throw up your hands and decide you¿ll just have to hire a consultant if you are ever to understand this stuff, even though most of those books are - surprise! - written by consultants. This offering by Michael C. Thomsett is a welcome exception. A champion financial writer, Thomsett ventures into heady consultant territory and emerges with an unnervingly comprehensible book about launching a straightforward Six Sigma quality control program. We advise you not to let this book¿s brevity fool you. It will tell you everything you always wanted to know about starting in Six Sigma, but were afraid to ask a consultant. Comprehensive as well as comprehensible, it lives up to the description on its cover: 'A Practical Working Guide.'

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