Six Sigma has been defined as a rigorous methodology that uses data and statistical analysis to measure and improve the operational performance of a company through better practices and systems. It is said to identify and prevent defects in manufacturing and services to strive for near perfection. (Definition: 2006). Others consider Six Sigma as a philosophy which improves processes which produce less than four unsatisfactory customer experiences in one million opportunities. (Eckes: 2003).
Six Sigma is also described as a measure of quality which strives for near perfection through a disciplined, data driven approach and methodology by systematically eliminating defects by attaining six standard deviations between the mean and the nearest specification limit. (Six Sigma: 2006). The superiority of the process of Six Sigma lies in its ability to demonstrate statistically the level of quality achieved and the number of defects in a product. Thus to achieve Six Sigma a process should not produce more than 3.4 defects per million opportunities, wherein Six Sigma opportunity is the total quantity of chances for a defect and a Six Sigma defect will be outside the customer specifications. The rigor of statistical representation of defects and customer focus establishes the credibility. (Six Sigma: 2006). The enterprise wide impact of Six Sigma entails that technical tools are supplemented by management level changes, total involvement of the top management in selection and definition of the problem and use of cross functional teams. (Nachtsheim.Jones:2003). Thus the overall objective of Six Sigma is to implement a strategy based on rigorous measurement with a focus on process improvement and reduction of variations in the delivery of products to the customers. The benefits attributed to Six Sigma have been widespread and include examples of companies as GE which has saved $ 10 billion during first five years of implementation. (Six Sigma: 2006).
The first step in the Six Sigma management process is to identify the key processes which impact on meeting of objectives by the company and then adopt the processes to impact the same. (Eckes: 2003). Thereafter the two principle methodologies of DMAIC and DMADV are applied.
The DMAIC process comprises of five phases to include the following:-
(a) Defining the goals of process improvement which need to be consistent with the customer demands and the strategy of the firm.
(b) Measure entails defining the measurements in accord with the present and future comparison. Techniques such as sampling are employed
(c) Analysis involves a verification of relationship with the causality of factors.
(d) Improvement optimizes the process based on the analysis of techniques such as the DOE or Design of Experiments.
(e) Control involves setting up the pilot runs to ensure that the variances are corrected before defects come about. (Software Technology RoadMap.nd). These measures can be statistical as well as non statistical.
The DMADV methodology involves the following:-
(a) Defining the goals of the design activity in conformity with the customer
demands and strategy of the enterprise.
(b) Measure the product and production process capabilities including risk
(c) Analyze the alternatives and evaluate the designs to select the best.
(d) Design development and optimization including planning for verification is
included in this phase.
(e) Verification of the design, pilot runs and implementation of the production process before these are undertaken by those responsible to run the process. (Pyzdek: 2003).
Lean Manufacturing on the other hand entails defining value that the customer wants so that the product is aligned to his needs. It envisages creating a value stream to deliver the product to the customer and sequence the flow of the value stream in such a way so that the part of the process which does not add worth is eliminated. Pull and perfection are the other two parts of this process, pull entails produce only that is needed, avoid superfluous products and services and perfection is the continuous pursuance of ideal means to produce value and avoid waste. Lean Manufacturing is used to undertake radical changes in an organization essentially by senior managers rather than supervisors. It is designed to completely change the work process as well as effectiveness of personnel. (Comparison: 2002).
Six Sigma and Lean Manufacturing – Compare and Contrast
Six Sigma attends to quality by eliminating variation in the product. Statistical methods have a very important role and pre determined adjustments to the process of manufacturing can be carried out in Six Sigma. It has greater applicability in the case of industries such as electronics, where a large number of products with nil variation are essential in areas such as circuit boards. (Baudin: 2002). It is totally focused on quality improvement and the processes are designed towards this sole aim. It is an approach which is project centric. Cost balance is achieved by ensuring quality. Thus Six Sigma is said to directly contribute to profitability of companies.
Lean manufacturing on the other hand adds value through the process of removal of waste by developing smooth work flow. (Comparison: 2002). It encompasses the entire process of business to include production, quality, human resources, maintenance, engineering and other issues related to manufacturing particularly in assembly lines such as the automobile industry.(Baudin : 2002). Lean manufacturing is said to affect both technology as well as management.
Many firms have attempted to use both Six Sigma and Lean Manufacturing simultaneously. Thus initially Six Sigma is used to establish process capability. There after Lean Manufacturing tools such as one-piece flow, go/nogo, gauges, inspections, and mistake-proofing are put into place to resolve discrete-event problems and human error thereby taking the process of quality to the next level. (Baudin: 2002).
Lean manufacturing is also said to be focused on manufacturing, wherein material is being transformed into products. The attempts to apply it to other businesses have not shown encouraging results. Similarly Six Sigma’s applicability to other areas is not fully consistent with the results achieved. (Baudin: 2002). Statistical interpretation is the key strength of Six Sigma, while holistic, systemic transformation is the biggest appeal of Lean Manufacturing.
TQM – Correlation
Total Quality Management addresses all processes of management in varied field including services. The emphasis is on long term success by focusing on customer satisfaction. It entails participation of all members of an organization to improve the processes, products, services as well as the culture. TQM is a concept which was introduced in the 1950’s in America, followed up by the Japanese denoting a total approach to quality. (Feigenbaum: 1953). The basic principles of TQM are to satisfy the customer, satisfy the supplier and continuously improve the business processes. (Kurtus: 2001). Satisfaction of the customer is the first and major issue in TQM. The customer is one who is said to be paying for the product or one who is the actual user. The aim is to ensure total delivery of quality to the customer, rather than focus on a perfect product as in lean manufacturing or Six Sigma which are essentially product oriented processes. (Kurtus: 2001). The concept also envisages satisfying the internal customer and the chain of customers thereby improving the ultimate quality which is delivered to the user of the product. (Kurtus: 2001).
Satisfying the supplier, the person and organization from whom the customer purchases the goods or services is the next goal to be achieved in TQM. (Kurtus: 2001). The company has to satisfy internal as well as external suppliers to ensure that they provide quality goods or services. The role of supervisors in getting the best out of the workers is emphasized along with empowering workers. (Kurtus: 2001). Continuous improvement is the final component of TQM. This is achieved by working smarter and not harder. Workers suggestions are an important facet in achieving continuous improvement. The Japanese have been using methods such as kaizen or small upgrades every day as one of the techniques of continuous improvement. Methods such as just in time production and reduction of variability are also used to improve processes. (Kurtus: 2001).
However it is said that TQM involves quality improvement merely for the sake of value enhancement rather than contributing to the bottom line as is the aim of Six Sigma. It envisages improvements within the departments and business functions and not among them. It introduces entire organizations to quality improvements and results in changing mind sets. As it is not linked with profitability it has not received greater recognition. The emphasis of TQM is thus on quality enhancement as opposed to Lean Manufacturing, which envisages systemic improvements contributing to reduction of costs and improving efficiencies. The process of Total Quality Management is more related to creation of a culture of quality and not just statistically measurable improvements as envisaged in Six Sigma.
Business Process Reengineering
Business process reengineering is the analysis and design of workflow and processes within and between organizations. (Davenport. Short. 1990). It is based on the principles of customer friendly processes, effectiveness of the product or service to the customer and efficient management of the processes of the company to minimize costs. Business process reengineering or BPR is defined as the analysis and redesigning of the flow of work both within and between enterprises. (Hammer, Champy: ). It denotes the necessity of radical redesigning and reorganizing an enterprise to lower costs and increase quality of service. It overcomes the normal process of organizing work in corporations based on technology, people or goals. The process of BPR needs sustained management commitment and leadership for success. There are essentially seven goals which are set to be achieved in the process of reengineering as follows:-
(a) Organizing around outcomes and results.
(b) Organize according to prioritization and redesigning of processes.
(c) Integration of information processes with work processes.
(d) Treat geographically dispersed resources as centralized resources.
(e) The point of decision should be where work is being performed and then the processes should be built around it.
(f) Information capture should be carried out only once at the source.
(g) Parallel activities in the workflow should be linked instead of merely integrating results. (searchcio.techtarget.com)
Business Process Reengineering is thus a holistic management process which goes beyond reduction of variation in manufacturing as envisaged in Six Sigma, effective and efficient management through lean manufacturing or building a culture of quality as envisaged in TQM. While TQM is incremental improvement in work processes and outputs, BPR aims for initiatives which redesign work totally to attain substantial change within a given time frame. (Malhotra, 1998). A common feature of all these is the commitment of the entire organization led by the top management and followed through to the lowest level and continuity in implementation for sustained success.