Six Sigma Fundamentals: A Complete Introduction to the System, Methods, and Tools

Overview

There is no one right way to implement six sigma successfully in an organization. Due to the variation of organizational cultures, each organization is quite unique, so there can be no guaranteed recipe for success across the board. The implementation strategy proposed here is a synthesis of approaches used successfully by organizations across all industries. It is offered only as a guide in developing strategies and associated plans to carry out these strategies. The intent of this approach is to demonstrate a flexible method that an organization can use to mobilize its strong points and capitalize all available energy, so that it is focused on key improvement opportunities.

Step 1. Recognize straight away that your organization is unique. As a consequence, do not borrow someone else's experience and try to fit into it. It would not work, even though the organization that you borrowed the plan from had great success with it.

Step 2. Conduct a needs assessment. Unless you know where you currently are, there is no way that you can measure your progress, or for that matter, develop improvement plans. The needs assessment will serve as the springboard for your organization to develop a strategy for improvement by identifying those vital processes to be targeted for change and it will provide a baseline measurement for judging progress.

Step 3. Start small. The best plans are those that result in action— action that improves the processes of the organization and results in better services and products for the customer. A simple plan that generates action and gets results is better than an elaborate plan that collects dust. Some initial six sigma actions might consist of specific projects designed to address systemwide problems that have the potential for expanding to other processes of the organization; or they might be efforts to implement six sigma in one or more organizational components. Examples of such efforts might include:

• Conducting customer identification efforts and customer survey and feedback efforts to be reflected in quality and timeliness indicators.

• Designating quality teams to address specific operating problems.

• Conducting organizational assessment, leadership development and group dynamics efforts.

• Getting some line personnel (i.e., non-managers) involved in implementing some form of quality improvement effort reflected in the overall strategic plan.

Step 4. Identify your customers, their requirements and review areas or quality indicators, or both, where six sigma methodology will be appropriate and applicable.

Step 5. Make a plan. The more specific your plans are, the more likely your organization will be successful.

A synthesized implementation process based on these five steps is the following:

• Gain top management commitment.

• Determine an organization's readiness.

• Create a vision and guiding principles.

• Establish the top management quality council.

• If applicable, communicate vision of six sigma with union representatives.

A successful six sigma implementation in any organization presupposes several key ingredients on the part of the leaders in the particular entity. Some of the strengths that the leaders must possess are:

• Vision. Six sigma is a visionary methodology that demands long-term vision. Without this long-term vision, the leaders may lose track of what the objective is.

• Market focus. Six sigma is centered around the needs, wants and expectations of the customer. It is imperative that the customer must be the center of everything that is being done in the organization. Customer satisfaction and loyalty are the driving forces of the methodology. As a consequence, leaders must be very sensitive to customer demands—both spoken and unspoken.

• Strategic thinking. By definition the six sigma methodology demands out of the box thinking and, as such, the leaders must be thinking towards long-term profitability.

• Alignment skills. Six sigma demands that the ROI and overall benefits, as a result of the implementation, be in congruence with the organizational goal. It is up to the leaders to make sure that that happens.

• Expertise in deploying human capital. Work is done through others. Unless leaders develop future leaders through the allocation of appropriate and applicable resources, any initiative in the continual improvement process will be stifled.

• Superiority in communicating their vision. Communication is the heart of the six sigma methodology. If done properly (horizontal as well as vertical) success will follow. If not, expect a hot fad to be replaced by something else.

In addition to the characteristics that the organization's leaders possess, it is also imperative to understand the process of how and why this implementation can be successful. We believe that there are six fundamental steps for this implementation. All of them are part of the internal make-up of the organization and its goals. They are:

1. Decide how to create the future. No implementation process can be successful without probing the future. In fact, this probing has to be quite bold. Six sigma proposes such action in their push from five sigma to six sigma. How is this done? By:

   • Discovering new ways of thinking and acting to help you handle complexity and ambiguity.

   • Examining best practices for leading transitions and building trust while implementing change.

   • Modeling and rehearsing the future using the latest simulation techniques.

2. Determine how to lead your organization. The pressures of both the competition and the financial quarterly earnings take a toll on any executive. However, it is imperative that the executive, just like a captain in the turbulent sea, must show his or her strengths under extreme pressure. How is an executive supposed to lead the organization? By:

   • Assessing his or her own leadership style.

   • Leading the organization toward value creating performance.

   • Fostering and developing leadership at every level of the organization.

   • Creating greater shareholder value.

3. Learn tips and techniques for formulating strategy. You must know where you are before you find out where you can go. Executives in a given organization must be able to understand that hunches and intuition will only serve artificial means. For real breakthrough improvements, they must depend on data. Therefore, depending on the data available, the techniques and strategy will follow. Some of the basic issues dealing with the techniques and the strategy are accomplished by being able to:

   • Identify the organization's core competencies.

   • Make better strategic decisions and identify priorities and "actionable" tasks or projects.

   • Formulate proactive strategies that anticipate market demand.

4. Develop human capital for outstanding performance. Organizations are a reflection of the people who work in them. Over time, organizations develop their own cultures and performance standards for excellence. For the executive, however, it is imperative to cultivate the human relations with a steady hand, yet compassion and understanding. A balance must be in the organization at all times between the demands of the employees, the customers and the financial world. To do that, the executive must:

   • Recruit and retain multifaceted and diverse talent.

   • Develop staff competencies that align with the organization's goals.

   • Create a climate of trust and respect for greater efficiency, productivity and profit.

5. Manage the culture. Culture is a dynamic entity—it changes over time. The executives of the organization must be able to control the change by making sure that the strategy that they choose is complementary to the culture. It is imperative that these strategies must be communicated constantly throughout the organization, and they must be realistic and attainable within the constraints of the organization. This may be done with:

   • Aligning the organization's culture and strategy.

   • Harnessing the power of shared values to meet corporate goals.

   • Understanding how corporate cultures drive decision-making.

6. Identify the drivers of peak organizational performance. Everything that we do has key parameters. That means that some things are more important than others. In organizational cultures there is no difference—the Pareto principle applies. How does the executive go about identifying and knowing some of the peak organizational performance? By:

   • Allocating resources to maximize competencies and capabilities.

   • Designing appropriate performance measurements and systems.

   • Using innovation as a strategic tool to enhance profitability.

   Now that we have identified some of the key issues in any organization for improvement, as well as the responsibility of management in this improvement effort, let us attempt to formalize the implementation process for the six sigma methodology. The process identified here is the same for manufacturing and non-manufacturing. It is defined in the following steps:

   1. Recognize the need for improvement.

   2. State goals and objectives.

   3. Gain management commitment to those goals and objectives.

   4. Select consultants.

   5. Select champions.

   6. Select candidates for black belts.

   7. Authorize training to create a critical mass for a change.

   8. Select green belts.

   9. Provide generic training.

   10. Provide additional training on an as-needed basis.

   11. Provide guidelines for appropriateness in the project selection.

   12. Allow for review and follow up.