Back in the 1980s, engineers at Motorola faced a quality problem; too many of their products were breaking. This prompted a drive to reduce errors and defects across the board. The result? A new approach to production: Six Sigma.
Motorola has adopted Six Sigma for decades and, as of 2005, is responsible for over $17 billion’s worth of savings.
Fast forward to today, and Six Sigma’s methodology has successfully been used by many organizations, including General Electric, Boeing, DuPont, Toshiba, Seagate, and more.
So what is this mysterious Six Sigma method, and does it really work?
As a former Projects and Events Manager, I have a few thoughts on that question. So in this article, I’ll divulge all you need to know about Six Sigma project management and whether I think it’s worth it.
There’s lots to cover, so let’s dive in!
My Bottom Line Up Front
In short, Six Sigma is a methodology designed to improve any (yes, any!) process within an organization to achieve a high-quality outcome with minimal errors.
The core method involves:
- Selecting a project
- Identifying your goals
- Following the DMAIC process: Define, Measure, Analyze, Improve, and Control (more on this below).
Generally, I think Six Sigma is a very effective project management method but is largely inaccessible to many. Projects need to be valued at least $100,000 to be considered a genuine Six Sigma project. Furthermore, training for senior Six Sigma staff can take a month (or more) which needs to be renewed every three years.
If you like the idea of Six Sigma, give it a go, as you’ll definitely see results, but don’t worry if you think it’s too much for your business. You can still take inspiration from the process to improve your own processes, from report writing to accounting to production!
What is Six Sigma?
As I’ve already said in the intro, Six Sigma is a methodology initially designed to improve manufacturing processes.
However, since its conception, it’s evolved to help businesses improve all manner of processes, including project management workflows.
The crux of Six Sigma is gaining a better understanding of your customer’s requirements to streamline your procedures and reduce waste. As a result, Six Sigma takes a holistic approach, aiming to improve your organization’s products, services, and internal processes rather than focusing on just one area.
Today the Six Sigma methodology has wide-reaching applications and benefits from significant standardization. In fact, there’s even an ISO standard that sets the international standard for implementing the Six Sigma method.
The idea behind Six Sigma is rooted in statistics. Unsurprisingly, the word statistics can make some of us feel a bit ill, so I promise to explain this as painlessly as possible. However, to understand the basis behind Six Sigma, you must first understand three terms:
- Sigma Level
- Normal Distribution
- Specification Limits
Below, I describe each in turn:
Sigma is the Greek letter ‘Σ,’ and in statistics, Sigma represents standard deviation. Standard deviation is used to calculate how varied a set of data is. For example:
Data Set 1: 1, 2, 88, 72, 2389064, 90, 5
As you can see, there’s lots of variation here! So the standard deviation is high – over 800,000.
Data Set 2: 1, 2, 2, 2, 2, 1, 2, 2, 2
Conversely, there’s not much variation here at all. So the standard deviation is low, around 0.4.
In terms of business processes, typically, you want a low standard deviation.
Imagine two companies making car parts. They’re both producing 6mm screws for a particular car. You visit both companies and sample five of each of their screws.
The five screws made by Company A measure: 2mm, 1mm, 13mm, 12mm, and 2mm
The five screws made by Company B measure: 6mm, 6.01mm, 6mm, 6mm, and 5.99mm
Which Company Would You Prefer to Purchase Your Screws From?
The curious thing about these two companies is that both sets of screws have a mean average length of 6mm. However, they have very different standard deviations.
Company A produces screws with a standard deviation of 5.9mm, whereas Company B’s screws have a standard deviation of 0.007mm.
As you can imagine, no one will think much of company A’s screws. This shows how a lower standard deviation is better for production.
But back to Six Sigma, in this instance, standard deviations are often called “Sigma Levels.”
A dataset might be of ‘normal distribution’ if most data points are clustered close to its mean average, with data points tapering off symmetrically in a well-defined pattern. As a result, in a normal distribution, 99.7% of the data points sit within three standard deviations (three sigma levels) above or below the mean data point.
We often see normal distribution arising naturally in our world, for example, with height:
- The global mean height is around 5ft 7in.
- Most people (68%) are between 5ft 2in and 6 ft 1in
- Many people (27%) are between 4ft 11in and 5ft 2in or between 6ft 1 in and 6ft 4in
- Only a few people (5%) are outside this range.
If you’re wondering how this pertains to project management, stick with me, it will become clear in a minute.
Customers have specific requirements or expectations, which can be formulated as follows:
- A ‘Target Value’ (the exact thing they want)
- An ‘Upper Specifications Limit’ (the upper end of what they’ll accept)
- A Lower Specifications Limit (the lower end of what they’ll accept).
What Does This Have to Do With Six Sigma?
The golden rule: The Six Sigma Level (six standard deviations from the mean) must not exceed either the upper or lower specifications limits.
Let’s illustrate this with our car manufacturing example from earlier:
Again, imagine a company producing 6mm screws for a particular car. This company produces screws with a mean of 6mm and a standard deviation of 0.01mm.
So, in this instance:
The Six Sigma level (six standard deviations from the mean) is ±0.06mm (5.94mm-6.06mm).
Now imagine customers are happy with screws as small as 5.90mm and as big as 6.10mm. These are our lower and upper specification limits.
So, in this example, Six Sigma is achieved, as the Six Sigma level is within the upper and lower specification limits. This means the screws very rarely dissatisfy the needs of the customer.
In any process where Six Sigma is achieved, there’s a maximum of 3.4 errors per million attempts at that process.
How Do You Adopt Six Sigma?
Six Sigma is more than just a goal; it’s also the framework for achieving that goal, and the very first step of that framework is choosing a project.
Step 1: Choose Your Project
Only projects that meet specific criteria can be considered Six Sigma projects. For example, the project must:
- Focus on improving processes
- Have a duration of three to six months.
- Expect a financial impact of $100,000 to $500,000 with a target of $175,000.
If a project exceeds these targets, it should be broken down into smaller chunks to fit these criteria.
Step 2: Set Some Objectives
Once you’ve identified your project, it’s time to set some objectives (on top of ensuring the Six Sigma level doesn’t exceed upper or lower specification limits). Typically, there are four other general objectives you need to establish
- Scope: Each project must focus on a specific scope of work.
- Time: Each project must be completed within a given time frame or deadline. Six Sigma-style time management leads to better scheduling, immovable deadlines, careful progress monitoring, risk management, and better resource management.
- Cost: Each project must be completed within a given budget (which can be calculated in monetary or effort terms).
- Quality: Each project needs to satisfy specified quality specifications.
However, it’s worth noting that striving to achieve the above objectives can cause adverse outcomes.
- Scope: Six Sigma-style scope management demands clear requirements upfront and thorough change management. This can inhibit innovation and creativity.
- Time: Six Sigma can result in projects taking longer than needed due to excessive buffers (i.e., you would add extra ‘buffer time’ to a project timeline to allow for unforeseen circumstances).
- Cost: Six Sigma-style cost management leads to absolute budgets, careful cost controls, and effective forecasting. However, this can lead to additional budget padding and increased reserves, slowing down investment.
- Quality: Six Sigma-style quality management results in unyielding quality targets. However, with such a results-orientated model, some people may feel pressure to blame others when things don’t go as planned.
Step 3: Project Deployment
Each Six Sigma project moves through the same cycle of deployment stages. These stages are somewhat debated. However, the most widely used has been abbreviated to DMAIC:
Some suggest an additional initial phase, ‘Recognize.’ During which the appropriate opportunities and problems are pinpointed.
Elsewhere in design-based projects, the DMADV methodology is used. Here, the second D stands for design, and the V for verify.
To quote Paul Keller and Tom Pyzdek, authors of ‘Six Sigma, demystified,’ “Apparently everyone agrees on what essentially will be done; they just don’t agree on what to call it!”
For the purposes of this article, I’ll stick to the DMAIC convention, which seems to be the most widely used:
Step 4: Define
Yes, you guessed it, this ‘define stage’ is dedicated to defining the problem. This goes further than setting objectives.
More specifically, you’ll:
- Outline the project’s scope, goals, sponsors, schedule, and deliverables.
- Identify the project’s stakeholders, inputs, and outputs
- Assemble a competent team and ensure they have a shared understanding of the project’s plan.
Forming a Team
There are several key roles within Six Sigma’s project management structure, all of which need to work seamlessly together.
Here’s a breakdown of them:
- Black Belt: This is the Six Sigma project leader. Black Belts work on Six Sigma projects full-time and may lead four to six projects annually. Black Belts are carefully selected and receive extensive training in Six Sigma methodology, usually at least a month-long training program.
- Green Belt: These are specialized team members that work on Six Sigma projects part-time. Typically, Green Belts receive training in Six Sigma methodology, which is usually a week-long course.
- Master Black Belt: Master Black Belts are experienced Black Belts and act as technical resources to Black Belts, Green Belts, and other team members.
- Project Sponsor: The project sponsor (a more senior member of the organization) works with the Black Belt to define the scope, objective, and project deliverables. A sponsor should be able to influence resources and harness support from upper management as needed.
- Champions: Six Sigma champions consist of executives and managers with the power to make decisions. They work to align the Six Sigma program with their overarching business objectives. Unlike ‘Black Belts,’ Champions have the authority and resources required for project success. That’s why it’s integral that committed champions are on board to support the team. They’re similar project sponsors, but there are two key differences:
- There’s typically only one sponsor, but there may be many champions.
- The sponsor is directly and heavily involved in the project’s planning. In contrast, the champions don’t usually have much involvement with the project. Still, they can be called upon when needed for extra support.
Step 5: Measure
During this stage, you measure the extent of the problem you’re trying to improve by:
- Providing a detailed definition of the process you’re looking to optimize (including every step where someone needs to make a decision).
- Identifying a reliable metric for measuring the process. For example, if you’re trying to improve the speed at which you produce a product, you could measure the time taken using a tool like Toggl Track.
- Estimating the baseline metric so you know the starting point of the project. For example, at the project’s start, producing your product might take an average of ten hours.
- Conducting a measurement system analysis. This should quantify the errors associated with the metric. You can use several statistical methods for this, and one such example is an R& R study. This type of statistical analysis lets you see how reproducible and repeatable your metric is.
Step 6: Analyze
Now, it’s time to analyze the variations within your process. This requires you to collect data to find the root cause(s) of the problem.
More specifically, you must:
- Analyze the value stream (the steps that produce value for customers.) For example, let’s say you’re producing car parts. In this instance, there are several points where staff need to make a decision (identified in the measure stage). Now, you need to look at these decision points and decide how much each decision impacts the product’s value for the customer. Does a given decision make a huge difference (e.g., ensuring the product actually works)? Or a small difference (e.g., making a product 0.0001% more durable).
- Analyze the sources of variation. For example, which steps in your process do you think, “Well, it depends on xyz as to what decision I make…”. If many factors influence a decision, there will be more variation. If fewer factors exist, then a given step will have low variation.
- Determine which steps will be important to your stakeholders, i.e., which boosts your output.
For the ‘Analysis stage,’ the statistical software package Minitab is often recommended as a valuable tool. However, more universal tools like Microsoft Excel can also help. Both software has a bunch of statistical tools built in, such as R&R analysis (as mentioned back at the measuring stage), which can help you better understand your processes.
Step 7: Improve
Now you’ve pinpointed the problem and its cause; it’s time to improve the process. This could include:
- Determining new operating conditions. For example, if you’re trying to speed up your production process, perhaps you’ve identified during the analysis stage that spending time improving your product’s durability by 0.0001% is not worthwhile. In such an instance, you might eliminate this step in your process.
- Estimating the benefits of the proposed solution
- Investigating any potential failures of the new process
- Implementing and verifying the new process
Step 8: Control
Finally, you need to ensure the new process is evaluated and maintained to contribute to the company’s overall improvement by:
- Standardizing the new methods
- Verifying the predicted impact of the improvements – especially the financial return.
- Document any lessons learned.
Six Sigma’s Pros and Cons
We’ve spent lots of time in this article exploring what Six Sigma is and how it works, but perhaps the more important question is…
Is Six Sigma actually good?
Let’s look at the pros and cons of this methodology, and then you can decide if it’s worth it.
The pros of this method really shine in the results. Following this methodology can contribute to improvements in your business in several areas, including:
- A better understanding of your customer needs
- Reduced waste
- Reduced costs
- Optimized workflows
- Adhering to a continued cycle of improvement
- Not original. Critics of the method claim Six Sigma is just a repackaging of traditional principles, like basic time management, and project management methods like the PDSA method (Plan, Do, Study, Act).
- It’s inaccessible: While many of Six Sigma’s methods can be applied to any project, there’s a level of inaccessibility that comes with the methodology. Projects need to be valued at least $100,000 to be considered a genuine Six Sigma project. Training can take a month or more for Black Belts, and certificates need to be renewed every three years. To top it all off, language like ‘Black Belts’ and ‘Green Belts’ inherently creates an in-crowd, making it less accessible to ‘outsiders.’
Before I sign off, let’s round things off with a quick question-and-answer section. Here I’ll attempt to answer some of the most frequently asked questions concerning Six Sigma methodology:
Answer: Absolutely! Aside from many organizations tweaking the methodology to suit their own needs, two newer methods have also evolved:
– Lean Six Sigma: This combines Six Sigma and lean manufacturing. The latter is a production method aimed at reducing production times, suppliers’ response times, and customer response times.
– Design for Six Sigma (DFSS): As I mentioned earlier, this alternative to traditional Six Sigma focuses on design processes. The critical difference is that it swaps the final two stages of the DMAIC method with “Design” and “Verify.”
Answer: As mentioned in the intro, Six Sigma originated with Motorola and has since been successfully used by many other organizations, including General Electric, Boeing, DuPont, Toshiba, Seagate, and many others.
The finance sector has used it for risk management, balance sheet management, and investment portfolio optimization.
Elsewhere, in the healthcare sector, Six Sigma projects include improving quality and efficiency in processes such as medical records.
Six Sigma has also been successfully applied in IT project management to reduce costs and increase efficiency.
Answer: One example could be a project manager (PM) working at a tech company where the PM’s team usually develops apps.
The PM was recently trained as a Black Belt in Six Sigma, so they used Six Sigma to improve their turnaround times.
In this scenario, they might take the following steps:
Step 1: Selecting a project.
The project is improving the time taken to produce a banking app for a high-profile bank.
The project requires $100,000 in resources and will turn a profit of $50,000 for the company. It will take about four months.
Step 2: Identifying your goals
The PM works with the project sponsor to define the goals of the project, which are:
Scope: The project will improve the production time for banking app development
Time: The project will be completed within four months.
Cost: The project will cost the company no more than $100,000.
Quality: The project will hasten app production without reducing product quality.
Step 3: Following the DMAIC process
The PM then delivers the project using the DMAIC process.
Define: The PM and the project sponsor work to define the project in more detail and assemble a team.
Measure: The PM identifies an effective method of measuring success. I.e., measuring the time taken to develop an app. This could involve using a time-tracking app like TogglTrack.
Analyze: The PM analyzes their production process to find weaknesses. They identify that the team spends 10% of their time polishing the visual design of their apps, even though customer standards are met when they spend just 5% of their time on visual design.
Improve: The PM implements a new process so that only 5% of the time is spent on visual design.
Control: The PM organizes monthly quick training sessions to remind staff about their new process.
Six Sigma Project Management: My Final Thoughts
All in all, I think that although inaccessible to many, Six Sigma project management is undoubtedly a highly effective methodology for achieving high-quality end results with minimal error. That said, I don’t think Six Sigma is unique in its effectiveness. Personally, I’d draw upon Six Sigma for a quick dose of Project Management inspiration and then settle with a little less intense method. I.e., I like to adopt Project Management without a side of Green Belt.
So, if you’re interested in Six Sigma, try it and see the results yourself. Even if you decide it’s too complex for your business, you can still take inspiration from the process to improve your current workflows.
That’s enough from me, over to you. What do you think of Six Sigma? Let me know in the comments box below!
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Rosie Greaves is a dedicated professional passionate about business tools, marketing principles, and project management and writes extensively about these topics. Featured in publications such as Reader’s Digest, G2, E-commerce Platforms, The Digital Merchant, among others, Rosie has tested and used many digital tools for project management and is here helping Project Pivot readers navigate these topics.