CXO

Six Sigma: The smart person's guide

Six Sigma is a data-driven approach to improving business processes that's often used by project managers. This Six Sigma guide covers its benefits, uses, methodologies, belt levels, and more.

sixsigmaistock-475929404-ileezhun.jpg
Image: iStock/ileezhun

Companies should always be looking for ways to create a more sustainable competitive advantage through mechanisms like process improvements. While the concept of process improvements may seem like a buzz phrase, it's a necessary endeavor for companies that want to remain viable.

Six Sigma is a data-driven approach that uses proven tools and techniques to help organizations of all sizes identify, plan for, and realistically implement process improvements. This approach can potentially reduce defects, waste, and time, while lowering costs and enhancing customer satisfaction.

This Six Sigma resource guide is intended to be useful for project managers, business leaders, project and product teams, stakeholders, engineers, consultants, and students. We'll update this primer when new information is available about Six Sigma.

SEE: All of TechRepublic's smart person's guides

Executive summary

  • What is Six Sigma? Six Sigma is a data-driven approach to process improvements that uses specific tools and techniques.
  • Why does Six Sigma matter? It has been proven to drastically reduce defects, waste, and time, and even lower costs.
  • Who does Six Sigma affect? Business leaders, project managers, project/product teams, engineers, consultants, stakeholders, end users, the business as a whole, and customers.
  • When is Six Sigma happening? Six Sigma was first coined in 1986, and it has since become a widely used approach to business improvement initiatives in companies of all sizes around the globe.
  • How do I use Six Sigma? It can be used to maximize and stabilize business processes through using one of three well-known methodologies: DMAIC, DMADV, and DFSS. Education and training to obtain a Six Sigma "belt" can be found through various professional institutions.

What is Six Sigma?

More for CXOs

Report: 2018 IT budgets are up slightly; spending focus is on security, hardware, and cloud

In a recent Tech Pro Research survey, 39% of respondents said their 2018 budget would increase slightly. This report and infographic has more information about how that money will be spent.

Six Sigma is a data-driven approach to process improvements. The approach is aimed at creating process and product excellence by significantly reducing defects, waste, and time, while lowering costs.

Six Sigma was first introduced in 1986 by Bill Smith, an engineer at Motorola, and then registered as a Motorola trademark on December 28, 1993. The term Six Sigma means that 99.99966% of all output is expected to be defect free.

This approach has been adopted by numerous organizations including Honeywell and General Electric. GE's former CEO Jack Welch referred to Six Sigma as "a quality program that, when all is said and done, improves your customer's experience, lowers your costs, and builds better leaders."

Lean Six Sigma combines the power of Six Sigma and the Lean process improvement methodology, which is aimed at reducing waste, and creates opportunities for businesses to maximize collaboration and cut operational costs.

Additional resources:

Why Six Sigma matters

If change is the only constant, then finding ways to not only keep up with change but also get ahead of the impact of change, should also be a constant. Six Sigma's approach, tools, and techniques can allow companies of any size, product, service, or industry to do just that. Improving processes and quality and reducing costs should be an ongoing focus of all businesses. This constant need for companies to improve what they do, and how they do it, establishes Six Sigma is necessary for continued success.

In addition, Six Sigma has a proven record of drastically reducing defects, waste, and time, and lowering costs; for example, since implementing Six Sigma, Motorola was able to achieve $16 billion in savings. Here's how companies, regardless of size, industry, or location, have used Six Sigma to create operational excellence.

  • Along with business strategy, Six Sigma has helped companies expediently focus on problem areas that require improvements.
  • Six Sigma has helped companies successfully streamline processes.
  • Six Sigma has created opportunities to get a product to market faster.
  • Six Sigma has increased productivity and output.
  • Operating costs have been reduced as a result of improved efficiencies.
  • Customer satisfaction levels have been improved through higher-quality deliverables.
  • Employee job satisfaction and retention has increased through rework reduction.

Additional resources:

Who Six Sigma affects

When companies use Six Sigma, everyone benefits, from executives to front-line staff and vendors, to project teams and ultimately customers. Efficiencies, improvements, or lowered costs are always a welcome benefit to customers and results in higher degrees of satisfaction when properly planned and implemented.

Global business environmental factors like regulatory/legal hurdles and elevated customer expectations, among many other things, complicate how companies conduct their operations, report earnings, and manage employee and customer expectations. Further, going forward, companies will continue to be under pressure to demonstrate operational excellence as a whole.

Additional resources:

When Six Sigma is happening

Since 1986, Six Sigma has been used improve to business initiatives in companies around the world. Regardless of how impressive a company's performance is, the fast pace of change makes Six Sigma necessary for companies to remain viable and be seen as an industry leader. Company executives who adopt Six Sigma gain opportunities to develop competitive advantages.

Additional resources:

How to use Six Sigma

Six Sigma uses three methodologies—DMAIC, DMADV, and DFSS—to identify issues and opportunities for improvement, implement improvements, measure success, and effectively monitor and manage change. These methodologies are used to maximize and stabilize business processes.

DMAIC is used for existing processes. It maximizes and stabilizes business processes and designs.

  • Define identifies problems or objectives that need attention.
  • Measure provides a measure of the problem or process.
  • Analyze identifies the root causes of any deficiencies and opportunities.
  • Improve finds solutions to address problems.
  • Control implements and maintains improvements for sustainability.

DMADV is used for new processes, products, or services.

  • Define identifies problems or goals that need attention.
  • Measure provides a measure of customers' needs.
  • Analyze identifies the process that meets customers' expectations.
  • Design develops a process to meet those customers' needs.
  • Verify confirms the ability to meet customers' requirements.

DFSS (Design For Six Sigma) is used for developing/redesigning a new product or service.

  • Define determines what customers need and don't need.
  • Identify identifies specifics about the customer and project.
  • Design develops processes to meet customers' expectations.
  • Optimize identifies the ability to maximize and deliver on design elements.
  • Verify tests and validates.

Six Sigma trained professionals are categorized into "belts" or levels based on their capabilities, roles, and contributions. These trained expert resources are key to the attainment of operational excellence.

Six Sigma belt levels

  • Master Black Belts tend to be more at the program level and provide coaching for Black Belts and Green Belts. They are also responsible for determining strategy and developing KPIs.
  • Six Sigma Black Belts are charged with leading projects that solve high-level problems and also provide coaching to team members.
  • Green Belts help collect information/data and provide any necessary analysis. They also provide leadership for Green Belt project teams.
  • Yellow Belts are typically project members who assist with process improvements and provide project support.
  • White Belts provide team level problem-solving support but aren't directly part of the Six Sigma project team.

Additional resources:

About Moira Alexander

Moira Alexander is the author of "LEAD or LAG: Linking Strategic Project Management & Thought Leadership" and Founder & President of Lead-Her-Ship Group. She's also a project management and IT freelance columnist for various publications, and a contr...

Editor's Picks

Free Newsletters, In your Inbox