Literature Review of Six Sigma Quality
INTRODUCTION:
Owing to increasing globalization and technological advancements, organizations are looking for different methods and techniques to improve overall productivity and performance. With the passage of time different techniques and strategies have been implemented in this regard. The most recent and discussed techniques in today’s corporate world are of Total Quality Management and Six Sigma. Organizations are implementing the approaches of Total Quality Management and Six Sigma in order to improve the overall quality delivered to the customers. Six Sigma is generally used by the organizations to reduce the wastages associated with different processes and hence reduce the overall cost.
Understanding the weight of each input (independent variable) and identifying the relationship of input that has greatest impact on output (dependent variable)
Developing control over those inputs to extend that keep the outputs within a particular upper and/or lower boundary or limit.
Design for Six Sigma (DFSS) is defined for two processes; first, process for which problem is unknown or unclear refers to DMAIC (Breyfogle, Cupello, and Meadows, 2001), it has five levels or phases of defining, measuring, analyzing, improving, and controlling; second, DMADV is the process applied for new products and processes, it also has five levels of phases of defining, measuring, analyzing, improving and verifying (Treichler et al., 2002) to arrive at the desired result, as illustrated in figure one below:
Figure 1 (Mehrjerdi, 2011)
Some large corporations that used Six Sigma and achieved high benefits are mentioned in figure two below:
Figure 2 (Mehrjerdi, 2011)
SIX SIGMA – BENEFICIAL FOR ORGANIZATION:
Introduction of Six Sigma has brought dramatic improvement in the quality and cost of organizations. This benefit is arrived by achieving following benefits (Harry and Schroeder, 2000; Tennant, 2002):
Efficient use of resource;
Reaching very high yields capability;
Is not dependent on the complexity and volume;
Strong resistance to process variability; and
Highly tied to customer needs and demands.
SIX SIGMA IN MANUFACTURING INDUSTRY:
Six Sigma was adopted initially for quality improvement and control and cost saving by manufacturing concerns only. It was adopted in order to easily determine the relation between input and output and to easily define the specifications for acceptable variability due to repetitive nature of production and tangible status of industry product. Motorola was facing serious issues and was losing profitability as well as market share in communication and radio equipments because of the high cost. The company implemented six sigma and drove the overall cost as well as defect rate down from 62000 per million (Raisinghani et al., 2005). Benefits of Six Sigma implementation in defect, quality and cost per sales are presented in figure 3 below:
Figure 3 (Raisinghani et al., 2005)
Similarly, Allied Signals, technology and manufacturing company, also implemented Six Sigma in its processes and gained benefits by reducing the overall process of redesign and certification of aircraft engines from 44 to 33 months (Raisinghani et al., 2005). These are two examples to mention, Six Sigma has been adopted by large number of companies, either big or small, to gain the overall benefit than just cost reduction.
SIX SIGMA IN SERVICE INDUSTRY:
Six Sigma program implementation was predominantly been considered for manufacturing concerns but times have found that benefits exploited by service industry including banks, hospitals, financial services, the airline industry, and utility services are exponentially higher. Six Sigma in service industry identifies defects in processes and facilitate in the process of improving these processes by eliminating unwanted sets / steps of processes that ultimately enhances customer satisfaction and its success has been due to the fact that the methodology used by this approach is customer oriented (Taghaboni-Dutta and Moreland, 2004). Six sigma is disciplined mechanism use by the service organizations in order to facilitate the process of enhancing service effectiveness (i.e. fulfilling the desired characteristics of a service) and service efficiency (i.e. the service is provided timely and at low cost) (Antony et al., 2007). For instance, service of hospitals that are crucial to the lives of patients with improvement in process ensures reduction in the chances of patients’ death with effectiveness improvement such as cleanliness and efficiency in attending patient. Yilmaz and Chatterjee (2000) mentioned that six sigma has been successful in service industry as different service organizations are performing at less than a 3.5 sigma quality level i.e. a defect rate of over 23,000 ppm or 97.7 percent yield. These improvements are also translated in bottom results in financial, reputational and satisfied customer as well as employees. Tools that are most commonly and frequently used in UK for application of Six Sigma in service industry are given in figure four below:
Figure 4 (Antony et al., 2007)
SIX SIGMA IN SOFTWARE INDUSTRY:
With constantly increasing benefits Sig Sigma has brought to manufacturing as well as service industry, software industry also started to explore benefits it can gain from implementing this program (Hong and Goh, 2003). They pointed that though large number of software companies have benefitted from it many have been using it for the purpose of marketing tool.
Reason behind this mixed opinion about Six Sigma’s usability in software industry is mainly due to ‘distinctive” characteristic of software. Other factors include: non repetitiveness, input versus output, degree of cognition, visualization in form of documenting the process, and other external factors such as raw material, human interaction all has variability to great extend in every software designed (Hong and Goh, 2003).
The benefits Six Sigma brought to software industry are as follows (Hong and Goh, 2003):
Legal responsibility: software also has legal responsibility if any disaster arises and hence, Six Sigma variability will be beneficial in order avoid any disaster or issue based on variability.
Mission Critical Systems: Six Sigma usage in software industry get more critical when software is designed for specific missions. Chances of variability allowed in Six Sigma ensure reduced variability in processes that are critical to success of these missions. Assume NASA satellite mission, cannot be sent in space with greater expected variability in event.
Complex System: Six sigma benefits are considered higher in complex systems as probability to get defect free is zero and for larger complex projects it is possible to get 99.6 percent improved chances of success by using the approach of Six Sigma.
It follows same DMAIC steps and level with some variations in steps to make it adaptable to industry need. Its application in software industry has been beneficial; however, decision to go for Six Sigma application on a specific project shall rest on its suitability (Hong and Goh, 2003).
SIX SIGMA BENEFITS MORE THAN JUST COST REDUCTION:
The benefits and advantages of Six Sigma for organizations are more than just operational efficiency and cost reduction. Most prominent in this regard is the financial benefit; that is bottom line of every business. Foster (2007) studied effect of Six Sigma on various financial measures and found that if a firm wants to take advantage of cash, earning, and productivity of assets than Six Sigma is of great benefit. Foster (2007) mentioned that Six Sigma did not appear to have impact on Return on Investment (ROI) and Return on Assets (ROA) because there are large numbers of variables affecting these measures.
Sutton (2006) pointed that to get more benefits from Six Sigma, nine factors must be considered. These nine factors are: training employees to understand the concept, usage of common standard and methodologies for six sigma, concentration on key product attributes, understating the crucial relationship between input and processes which deliver output of key characteristics, standardization of manufacturing process, usage of effective tools in problem resolution, problem solving training, and involvement of right people in the performance system and alignment of overall performance system. Focusing on these factors, Sutton (2006) concludes that while in process large numbers of corrections are made in due process, during this program implementation. It ensures extensive training in respect of program itself as well as other areas such as problem resolution etc. Hence, alongside investment in human capital is conducted.
It involves entire team effort that has communication bond in them. Baron (2006) has discussed that the mechanism of Six Sigma must be communicated to get most of it with given below pictorial representation (figure 5) of the communication perspective of this program:
Figure 5 (Barron, 2006)
For successful implementation it needs to have wide consideration and should included different objectives and factors other than just better operational and financial results. Some of the critical considerations regarding the proper selection of project for six sigma application are; defining the acceptable range of variation, defining defect, developing related statistical concepts etc. All these ensure that all perspectives of business are well understood than just implementation of quality program (Gijo, 2011).
Biggest benefit of Six Sigma is the increased level of customer orientation. One of the directors of Allied Signals on implementation of six sigma states: “Six Sigma has changed the overall thinking and communication in the company. They have started to give preference to the process and the customer in their conversations and decisions, which was not there in the past” (Raisinghani et al, 2005). The variability accepted by customer has been the deciding factor and hence, true customer orientation is ingrained in business conduct.
Hence, overall Six Sigma is program that involves both; human and process aspects of improvement (figure 6). Its bottom line focus for improvement also links improvement tools with overall approach. This in turn facilitates in the process of developing new skills and knowledge with focus to improve the business and thus makes it better plan to incorporate (Snee, 1999).
Figure 6 (Snee, 1999)
CRITICISM ON SIX SIGMA:
Six Sigma is considered to be the best program or technique for reducing the chances of error almost to zero. However, program also has some criticism. These criticisms are actually myths and if explored they can be solved in order to add further benefits to the approach of Six Sigma. Some of them are mentioned below:
Cost Concern:
Implementation of Six Sigma itself has high cost associated with it such as direct, indirect, training, consulting, improvement implementation and software cost (Karbasian and Aghadaee, 2006). This cost is direct criticism for Six Sigma, however, this cost conducted in initial stage has later to be translated in reduced cost in terms of low wastages hence resulting in increasing the overall profitability in long term.
Requirement to Address Large Number of Areas:
In order to make sure that there Six Sigma has been properly implemented and is beneficial for the organization, the management has to take care of several factors which in turn make it a difficult process or technique. Gijo (2011) mentioned 11 difference ways or factors which can result in failure of the Six Sigma implementation. Though this homework for implementation of Six sigma benefits the firm but if any areas is left un-thought then loss would be considerable in terms of finance, reputation and biggest of employee morale.
Extensive Statistical Considerations:
Six Sigma involves many statistical considerations that need to be understood well and ability to develop insight from same is main focus. For instance, Bell shaped curve has so many details and is not easy to comprehend. Difficulty in application of statistical models can run the cost up in contrast to take it down. It, thus, also stresses statisticians to develop user friendly models in order to make sure that application is adopted at broader scale (Snee, 1999).
Service Industry Concern:
Specific to service industry that has all humans working, process improvement program such as Six Sigma are less adopted. This is backed by the belief that Six Sigma has been designed as defect detector program for tangible world and human oriented industry cannot adopt it. Another myth that makes it less adoptive to this sector is usage for difficult statistical tools and finally the cost associated with six sigma makes it less attractive to service industry (Antony et al., 2007).Though all these are myths related to service sector and it is has been implemented by several serviced organizations who are enjoying benefits of this technique.
Software Industry Concern:
Since most of the statistical measures and controls in Six Sigma are greatly influenced by manufacturing concerns and do not align with the needs of software industry, hence, application of Six Sigma in software is then account for misuse of six sigma rule. Such as, designed tolerance is strictly specified in manufacturing concern and largely varies in software because of the extensive control in hands of software developer for every other software in contrast to true essence of Six Sigma. Similarly, non-repetitive nature in every other software has also instability on processes that is also against the basics of Six Sigma and results in misuse of the program (Hong and Goh, 2003).
Reduction in Number of Employees:
Six sigma due to its higher level of specification that control variation has been criticized that this and other quality management program are responsible for reduction number of employees (Foster, 2007). This can be related to the ethical concern related to the program which refers high automation results in reduction in employment.
MYTHS ABOUT SIX SIGMA:
Apart from mentioned criticisms, Kumar et al. (2008) have collected some myths that account for criticism for Six Sigma. They have also responded to these criticisms and demystified Six Sigma. Kumar et al. (2008) mentioned that many of the critics of Six Sigma call it fad- a fashion that is followed with all running in excitement to adopt it and last for less than a year. Senapati (2004) stated Six Sigma is the flavor of the month and perceived Six Sigma as old concept in new dress. Kumar et al. (2008) also discussed other criticism such as Six Sigma is all about statistics, Six Sigma is a quality improvement program only for manufacturing companies, Six Sigma works only in large organizations, Six Sigma is same as total quality management (TQM), Six Sigma requires strong infrastructure and massive training, Six Sigma is not cost-effective. Though all these have been proven criticism for the sake of criticizing but the fact also lies that this criticism pointed out some flaws in the basis of Six Sigma. For instance, though benefit received from implementation of Six Sigma outweighs cost incurred but it is also a fact that considerable cost has to be incurred with extensive training both about the process and also about the statistics.
CONCLUSION:
Six Sigma, since its birth 20 years ago in Motorola (Kumar et al., 2008) has been able to successfully take-up firm from high defective rate that reduces profit and increases cost to the defect rate of near to zero. This technique has inculcated many benefits in businesses in small or large both, and in manufacturing, service as well as software industry, though in journey it has countered large number of criticisms’. Kumar et al. (2008) mentioned that achievements Six Sigma has had in these 20 years journey makes it sustainable in future years with reason it has already demystified in discussion in paper. They also mentioned two more aspects that add to its sustainability in future; and these are; first, Six Sigma provides bottom line benefits and it is more customers oriented than any other such program, secondly, another factor that makes this program is expected to sustain for longer term. Six Sigma matches well to knowledge-based information society through its DMAIC cycle- Define – fact finding, Measure – data gathering, Analyze – information creation and capturing, Improve – knowledge sharing and utilization, and Control – knowledge maintaining and evaluation.
References
Antony, J., and Antony, F., Kumar, M., and Cho, B. (2007). ‘Six Sigma in service organizations: benefits, challenges and difficulties, common myths, empirical observations, and success factors.’ International Journal of Quality and Reliability Management, 24(3), 294-311.
Baron, D. (2006). ‘A communicator’s primer on Six Sigma.’ Strategic Communication Management, 10(4), 8-9.
Breyfogle, F., Cupello, J. and Meadows, B. (2001). Managing Six-Sigma. New York: Wiley.
Foster, T. (2007). ‘Does Six Sigma improves performance?’ The Quality Management Journal, 14(4), 7-20.
Gijo, E. (2011). ’11 ways to sink your Six Sigma Project.’ ASQ Six Sigma Forum Magazine, 11(1), 27-29.
Harry, M. and Schroeder, R. (2000). Six-Sigma: The Breakthrough Management Strategy Revolutionalizing the World’s Top Corporations. New York: Currency/Doubleday.
Hong, G., and Goh, T. (2003). ‘Six Sigma in software quality.’ The TQM Magazine, 15(6), 364-373.
Karbasian, M. and Aghadaee, A. (2006). Six-Sigma and Quality Control Costs. Tehran: Arkan Danesh.
Kumar, M., Antony, J., Madu, C., Montogomery, D., and Park, S. (2008). ‘Common myths of Six Sigma demystified.’ International Journal of Quality and Reliability Management, 25(8), 878-895.
Mehrjerdi, Y. (2011). ‘Six-Sigma: methodology, tools and its future.’ Assembly Automation, 31(1), 79-88.
Raisinghai, M., Ette, H., Pierce, R., Cannon, R., and Daripaly, P. (2005). ‘Six Sigma: concepts, tools, and applications.’ Industrial Management + Data Systems, 105(3/4), 491-505.
Senapati, N.R. (2004). ‘Six Sigma: myths and realities.’ International Journal of Quality & Reliability Management, 21(6), 683-90.
Snee, R. (1999). ‘Why should statisticians pay attention to Six Sigma?’ Quality Progress, 32(9), 100-103.
Sutton, C. (2006). ‘Get the most out of Six Sigma.’ Quality, 45(3), 46-48.
Taghaboni-Dutta, F. and Moreland, K. (2004). ‘Using six sigma to improve loan portfolio performance.’ The Journal of American Academy of Business, 5(1/2), 15-20.
Tennant, G. (2002). Design for Six-Sigma. Burlington, VT: Gower.
Treichler, D., Carmichael, R., Kusmanoff, A., Lewis, J. and Berthies, G. (2002). ‘Design for Six-Sigma: 15 lessons learned.’ Quality Progress, 35, 33-42.
Yilmaz, M.R. and Chatterjee, S. (2000). ‘Six sigma beyond manufacturing – a concept for robust management.’ IEEE Engineering Management Review, 28(4), 73-80.
