Six Sigma: How It’s Used to Improve Business Processes

By Dr. J. Richard Horne
Faculty Member, School of Business, American Public University

Six Sigma is a concept and a set of techniques for improving performance by a reduction in process variation for an existing process. It applies to all industries and works well in both for-profit and not-for-profit organizations.

How Six Sigma Works

The underlying concept of Six Sigma is that by reducing variation in a business process, there will be positive benefits such as lowering defects, increasing throughput, increasing customer satisfaction and creating better control of production costs. It has also been said that Six Sigma is a management philosophy at a strategic level and a metric to drive a precise understanding of production efforts at a more tactical level.

The term “Six Sigma” refers to statistical variation in production defects with a goal of reducing defects to minuscule amounts, generally stated as 3.4 defects per million defect opportunities for some critical operations. There is an extensive Six Sigma body of knowledge for techniques needed to implement a Six Sigma process improvement initiative.

Six Sigma and the DMAIC Framework

The heart of all Six Sigma techniques is the “Define, Measure, Analyze, Improve and Control” (DMAIC) framework. The implementation of Six Sigma is based around specific process improvement efforts guided by the DMAIC framework, which focuses effort into a logically sequential project where each step is built on its predecessor. The stages for a DMAIC project include:

1. Define – Defining the boundaries of your project, the scope, objectives, resources, timeline and other elements, which generally culminates into a DMAIC project charter to be signed by an approving official
2. Measure – Establishing baselines metrics for how the process is working at present
3. Analyze – Identifying problems and improvement opportunities based on the baseline metrics and determining the root causes of these problems
4. Improve – Brainstorming alternative approaches to improving the process, selecting the best alternative and then implementing that improvement
5. Control – Performing data collection and analysis after the new, improved process is implemented, comparing that data with baseline metrics, and monitoring future performance

Embedded within each of these stages are Six Sigma techniques used for a presentation at periodic reviews of the project, often called “tollgate reviews” by the project stakeholders. For instance, while a stakeholder analysis may be done in the “Define” stage, statistical data collection and analysis are often used during the “Measure” stage and the “Analysis” stage. A fishbone diagram is often used in the Analysis phase to help identify the root causes of problems.

When Not to Use Six Sigma

Six Sigma and the DMAIC framework are designed for existing processes. A variation of this framework can also be used when an organization designs and develops a new business process.

This type of framework is known as the Define, Measure, Analyze, Design and Verify (DMADV) framework. It is used to ensure that a business process is well designed from the very start and is part of the Design for Six Sigma concept. In this case, all the stages are oriented to addressing these issues in some future process under design, not an existing process.

As useful as these two frameworks are for improving business processes, Six Sigma projects are created for the wrong reasons in some circumstances. The situations where this concept should not be used include:

• Do not use Six Sigma or the DMAIC framework for isolated problems when the cause and solution are already known and limited. That would be overkill.

If you want to build a swimming pool in your backyard, for instance, you do not need Six Sigma. But you’ll need to call swimming pool contractors for their bids. This situation also happens when senior management already has “a solution in mind,” then all the time spent on analysis and discussion of alternatives will not be of use.

• Do not confuse Six Sigma with the systems development life cycle (SDLC), which is similar but focused on information systems development. Six Sigma is designed for any repetitive business process such as building automobiles, selling insurance policies, improving hospitality management and running a hospital emergency room admitting process. For systems design and development, it is better to use SDLC or one of the many variants of Agile development.

Lean Operations

As the body of knowledge and practical experience in Six Sigma expanded in the 1980s and ‘90s, another concept was developing in parallel: lean operations. This concept gained particular notoriety with the publication of the 1990 book “The Machine That Changed the World,” which spoke about Toyota’s experience in developing its own Toyota Production System and is based on lean operations concepts.

Six Sigma’s focus is on minimizing process variation, but lean operations focus on reducing all forms of waste. Both are tools and techniques for attaining performance excellence and cost savings, but the two concepts of Six Sigma and lean operations are often married by business practitioners to form a unified approach: Lean Six Sigma. Nowadays, training on both concepts is often given simultaneously, and the practitioners can use the approach that best fits the situation they face in the workplace.

Six Sigma Certification Levels

As the practice of Six Sigma has an extensive body of knowledge, several levels of expertise and technical knowledge have been commonly used in the Six Sigma world. The levels in Six Sigma certification generally include:

• White Belt – Someone who has taken a brief, usually online course that focuses on the overall concepts and terminology associated with Six Sigma.
• Yellow Belt – The starting level of training recommended for all members of a Six Sigma project. This training extends the White Belt training overview and provides more practical insight into what Six Sigma teams do and how they do it.
• Green Belt – The beginning level of leadership needed to run a Six Sigma project of limited scope, complexity and risk. Typically, Green Belts consult with Black Belts for best results.
• Black Belt – The level of a Six Sigma project lead for managing large and complex projects and can involve extensive statistics. Black Belts often are the in-house trainers for Six Sigma classes within an organization.
• Master Black Belt – Typically, Master Black Belts are technical advisors to senior management and provide support and training to Six Sigma practitioners.

As a result of its association with lean operations, many trainers nowadays provide combined Lean Six Sigma training and certification.

Becoming Certified in Six Sigma and Lean Operations

If you are interested in becoming certified in Six Sigma and lean operations, there are many for-profit organizations, universities and even massive open online courses (MOOC) courses that provide their own training and certification. One not-for-profit organization that’s been providing Six Sigma training and certification for quite some time is the American Society for Quality (ASQ).

Besides providing Six Sigma training, ASQ has an extensive certification process for all the levels of training and recertification every three years. There is perhaps no organization better qualified to teach and certify than ASQ, but they are certainly not the only organization.

With so many organizations providing training nowadays, there is a considerable variation in the quality of instruction. To help narrow the field of potential training providers, consider a third-party credentialing organization that certifies the quality of the course. Two such organizations are:

• The International Association for Six Sigma Certification (IASSC). This organization does not perform training, but ensures the content of those providers that certify through them.
• Another organization is the Council for Six Sigma Certification (CSSC). This organization is similar to the IASSC; it creates a set of standards for training providers to ensure uniformity and quality of training.

About the Author

Dr. J. Richard Horne worked for the Federal government, the Navy and Marine Corps for 35 years, spending most of the time in the logistics arena, including supply, aviation maintenance, and installation management. His specialty was business and program analysis and organizational and process improvement initiatives.

Dr. Horne was in the Army Reserves for 32 years, spending about half the time in military intelligence work and the other half in logistics. He completed one full deployment to Iraq/Kuwait in 2003/2004.

He completed a quantitative dissertation on corporate performance for firms winning national quality recognition. Dr. Horne is published in several academic journals on topics relating to corporate performance measurement and analysis.