Definition of Six Sigma

Six Sigma is not a mere methodology or a quality tool. It is a philosophy i.e. a systematic way of thinking
to solve quality problems. Six sigma involves use of statistics to convert raw data into facts about
how the processes of the organization are being run. The thrust is on creating processes which can
replicate the same results over and over again with near 100% predictability.

Variation: The Root Cause of Dissatisfaction

Experts in the field of quality have been fighting variation for decades. It is this variation that can be
attributed towards creating inconsistent processes. These inconsistent processes lead to different
experiences for different customers. It may even lead to different experiences for the same customer at
different times.

Thus variation has a significant monetary impact on the working of the organization. This is because it is
the root cause of process deficiencies and dissatisfied customers. It is for this reason that top
management of various organizations of the world have systematically tried to remove variation from their
processes.

How Variability Conquers Your Organization ?

Variability is inherent in every process. It a part and parcel of business, however it needs to be managed
with an iron fist. This is because variability in every business process tends to cumulate and the end
result is mediocre performance. Consider the case of a hotel. There are many processes in a hotel like
checking in, ordering room service, housekeeping and check out.

Here is how minor defects in each of these processes are capable of leaving customers thoroughly
dissatisfied and enraged. Let’s assume that each of these processes has a 97% efficiency. Therefore out
of a 100 cases, only 3 defects will be present. Here is what happens:

Total Number of defects for the hotel: 0.97 × 0.97 × 0.97 × 0.97 = 0.8852 = 88.52%

Hence even though each of the processes may be doing pretty well if you look at it from an individual
standpoint, the organization is doing badly. Any business where roughly 12% of the customers will have
bad experiences predictably cannot be expected to survive for long.

The answer to this challenge that variation poses can be found only in Six Sigma. Six Sigma achieves for
99.99966% accuracy meaning 3.4 defects per million.

Six Sigma: A Systematic Tool to Conquer Variability

The Six Sigma philosophy stems from the belief that statistics and numerical facts can be used to control
the quality of manufacturing processes and service organizations.

Six Sigma processes are completely driven from the point of view of the customer. They start by
identifying what is important to the customer i.e the critical to quality metrics. The next step is to identify
the gaps in the process that are the cause of not being able to meet the CTQ’s and as a result causing
immense customer dissatisfaction.

The usage of Six Sigma has grown by leaps and bounds. Today almost every major organization in the
world is following Six Sigma initiatives and making their processes more controlled and more predictable.
Six Sigma is a data-based methodology to improve performance by reducing variability. It requires
thorough understanding of product and process knowledge and is completely driven by customer
expectations.

In other words, it is a methodology to achieve 3.4 defects per million opportunities. It can also be used to
bring breakthrough improvements in the process. It focuses on the bottom-line and is a proven
methodology for problem solving.

Goals of Six Sigma

 To reduce variation
 To reduce defects /rework
 To improve yield /productivity
 To enhance customer satisfaction
 To improve the bottom-line
 To improve top-line
 Shortening cycle-time

Sigma Level Vs Number of Defects

Sigma Level Number of defects per Million

2 Sigma 308537

3 Sigma 66807

4 Sigma 6210

5 Sigma 233

6 Sigma 3.4

Evolution of Six Sigma

The need for process improvements and a continuous improvement methodology like Six Sigma came
into existence only due to

 rising customer expectations in terms of quality, delivery and cost,

 global competition - Japanese and Chinese threats,
 proven technique for quantum jumps in business results.
In the year 1980, Motorola started facing survival problems due fierce competition from Japanese
companies. The CEO of Motorola - Bob Galvin was determined to overcome the competition. He
challenged his organization to achieve a ten-fold improvement in performance over a period of five years.
To achieve the same, strong emphasis was given to training of employees and also performing global
benchmarking.

Bill Smith was a veteran engineer in Motorola and he wrote a research paper on product quality and its
performance after delivery to customer. In his report he discovered that the products with fewer non-
conformities (high quality) were the ones that performed well after delivery to the customer. It was
accepted by everyone but the challenge that came in front of Motorola executives was to develop a
solution to tackle this problem.

Mikel Harry having a doctorate from Arizona University worked with Bill Smith in developing a four-phase
problem solving approach - Measure, Analyze, Improve and Control. A few years later Bob Galvin
launched a long-term quality program called “The Six Sigma Quality Program” in Motorola.

Looking at the success of Motorola, many companies like Texas Instruments, Allied Signal etc started
using Six Sigma methodology to bring organization-wide improvements.

In 1990’s Jack Welch launched Six Sigma in GE in a big way. He implemented Six Sigma in all areas and
ensured that the entire organization participates in the initiative. He changed the performance incentives
and made them based on individual’s ability and enthusiasm to take part in Six Sigma initiatives. He
transformed GE to a state where Six Sigma had become the culture of the organization and not just a
methodology for brining organization-wide improvements.

Six Sigma Methodology - DMAIC &

IDOV
Six Sigma is a process oriented methodology designed to improve business performance by improving
specific areas of strategic business processes. There are 2 different methodologies available for carrying
out improvements in processes or operations.

Improvements can be of two types: improving the existing process or designing a new process altogether.
When we have an existing process and we want to improve the process we deploy the DMAIC
methodology. While designing a new process or completely revamping the existing process the Design
for Six Sigma or IDOV methodology is deployed.
DMAIC v/s DFSS

DMAIC DFSS

Structured and iterative process Rigorous approach to designing processes that

improvement methodology will exceed customer expectations

Focus on defect reduction Focus on defect prevention

DMAIC Methodology
Define Define the problem.
Define the customer(s) and the requirements.
Define the current capability.
Define the key processes that will have the greatest impact on customer.

Measure Identify the statistical measures to monitor the key process.

Set up the data collection plan.
Measure the process

Analyse Determine the analysis tools and methods to be used.

Summarize the data measured.
Run the analysis and determine the root causes, effects, etc.

Improve Improve and Implement.

Focus on developing process/technology to improve the root cause.
Test the method on sample process and validate the improvement.

Control Standardize and document the process and implement the plan.
Monitor the process and feedback the results back to the process for
continuous improvement.
DFSS (IDOV) Methodology

Identify Develop a team.

Create team charter.
Gather VOC.
Perform competitive analysis.
Develop CTQs and formally tie design to VOC.

Design Identify functional requirements.

Develop alternative concepts.
Evaluate alternatives and select a best-fit concept.
Deploy CTQs and predict sigma capability.

Optimize Determine process capability.

Develop detailed design elements.
Predict performance.
Optimize design.

Verify Test and validate the design.

Share feedback with manufacturing and sourcing to improve future
manufacturing and designs.

Important Concepts of Six Sixgma

Types of Variables
In the equation - Y = f(X), Y is the dependent variable and it is dependent on the variable X. In other
words, when there is a change in value of X then value of Y will automatically change. The following are
the characteristics of both types of variables:

Y X

Dependent variable Independent variable

Output of the process Input to the process

Effect Cause

Symptom Problem
 It is monitored It is controlled

It is important to know that the variable or the factor that we want to improve is a Y or an X. If the variable
under control is a Y then we should identify the Xs or the independent variables that affect Y and we
should focus on improving the Xs and thereby improving the Y. There could be more one X that
influences the Y and we should try to brainstorm along with the team to identify as many Xs as possible
and then perform Pareto analysis or other prioritization tools to identify the critical Xs that impact our Y.

Customer
Customer is the person (whether internal or external to the organization) who uses the output that the
organization produces. A customer could be

1. Internal to organization - Employees, other departments

2. Intermediate - person or department who uses the output to perform some operations on the
output
3. External - People outside the organization who actually use the output to satisfy their needs

Customer Requirements
Customer requirements can be defined as the needs of the customer and his expectations from the
output that the organization is producing and delivering. When the organization is able to meet all the
customer requirements then it will lead to Customer Satisfaction. On the contrary, if the organization is
unable to meet the customer requirements then the customers will be dissatisfied and over the period of
time they will turn away from the organization’s product. Customer requirements are also called Voice of
the customer - “VOC”.

Tools for identifying Customer Requirements

1. Customer one to one interview

2. Customer complaints - past history
3. Surveys
4. Focus groups

While performing the above the following questions should be asked:

 What are our customer’s needs?

 What is the Customer’s perception on our Process performance?
 How is Process Performance measured by Customer?
 What performance level of the Process does the Customer expect?
 What can we improve upon?

Critical to Quality (CTQ)

CTQ stands for ‘Critical to Quality’. In other words it represents the critical requirements of the output.
CTQ’s could be derived from Customer requirements, Risks, Economics and Regulations. For eg a CTQ
could be on-time delivery or accuracy etc. It is very critical to identify and define CTQs appropriately
because it depicts the quality parameters that relate to wants and needs of the customer.
VOC to CTQ Conversion
Once we have collected the voice of the customer (VOC) we then will have to arrive at Critical to Quality
(CTQ) elements so that the customer requirements can be incorporated into our process and the output
can be produced as desired by the customer.

Characteristics of Six Sigma

Six Sigma is a well-known management breakthrough. There is a dearth of experts who have
defined the process in their own way and have come up with a long list of characteristics.
However, according to us this performs a task of confusing people rather than actually giving them insight
into the way Six Sigma actually works. The best way to describe six sigma would be to say that it is
process focussed and data driven. At the crux that’s what it is, it is the application of statistical methods to
ensure quality with consistency. The latter part of the article will explain this better.

The Six Sigma Equation

Y=f(x)
The simple looking equation mentioned above can be described as the crux of the Six sigma philosophy.
The component parts of the equation are as follows:

 Y = Outputs also known as Dependant Variables

 X = Inputs also known as independent Variables
 F = Function of

What the equation is actually saying is that the outputs we receive are the function of the inputs that we
give to our process. Hence if we were able to control the inputs with precision, the outputs would also be
controlled in a precise manner

Data Driven
Here is how a typical Six Sigma project works:

1. A thorough understanding is reached about the required state of affairs for outputs i.e. the Y’s are
clearly defined
2. A process map is drawn to understand the process through which X’s (inputs) are transformed
into Y’s (outputs)
3. Statistical methods are used to find out which amongst the inputs has the greatest bearing on the
desired state of outputs. Inputs are never equally important, some of them are more important
than the other and must be controlled in such a manner.
4. A desired state of affairs is decided in terms of the amount of inputs that should be added to get
the desired outputs.
5. A process is created to monitor the inputs being added to the production. Simultaneously outputs
are measured to check whether they confirm to the norms which have been agreed upon

Hence the entire Six Sigma process is dependent upon the use of precise statistical controls. It
uses numbers to define the desired state of outputs, the required inputs and whether the process
is working as expected.
Consistency
Along with being process and data driven, the whole Six Sigma philosophy is about being consistent. It is
about sustained intensity rather than short bursts of power. Six Sigma focuses on developing the
capability to deliver the same results over and over again with zero variance rather than delivering it once.
Data is used to find out how the process should function, then numbers are used to keep a track of
whether the process is functioning the way it was supposed to.

Operational Benefits of Six Sigma

Six Sigma Project initiatives help the organization in a wide variety of ways and at very different
levels. This article describes the immediate operational benefits that an organization derives as
the result of implementing a Six Sigma project.

Makes The Organization Systems Driven

Six-Sigma efficiency is impossible to achieve if the mode of production used by the organization is craft
production. To be efficient enough to run processes that have less than 3.4 defects per million,
organizations need to be systems dependant. Thus Six Sigma mind set helps transform a people driven
organization into a process driven one!

Reduces Personnel Time and Skill Required

Six Sigma results in massive cost savings to the organization involved. These cost savings are
highlighted by the fact that after a Six Sigma project any organization has considerably less requirement
for labour hours. Also the requirement of skilled labourers is also reduced. Hence, both these factors
combined have an effect of drastically reducing the labour bill of the organization.

Reduces Wastage
Six Sigma projects realise a large amount of their financial value from their ability to eliminate or at least
reduce wastage. Since the process is critically analysed for costs and corresponding value addition,
measures are taken to eliminate wastage to a large extent.

Reduces Inventory Needs

An ancillary benefit of Six Sigma projects is that it creates a system which is much more efficient than the
earlier one. Hence the organization can implement systems like Just In Time Inventory practices and cut
still more costs.

Reduces Reworks and Defects

Organizations are plagued with defective processes which result in the manufacturing of defective
products. Each defect has costs attached. The costs include material, time, overheads and loss of
reputation for the firm. Implementing Six Sigma projects often pays for itself in the long run by providing
the financial benefits of near zero defects to the firm that implements it.
Increases Customer Satisfaction
Customers do not like unreliable products or organizations. This can be verified by the fact that many
companies that have implemented Six Sigma have not only found their costs reduced but their market
share increased considerably. Hence, Six Sigma is also capable of positively impacting the marketing of
the firm.

All of the sources mentioned above can be seen as the revenue model of the Six Sigma project. In the
financial evaluation of a project, the revenue (cost reduction) from various sources must be considered
before deciding whether the project is worth the effort or not. The idea is to find scenarios that the firm will
be in with the project and without it.

hough Six Sigma is universally known for over two decades now, it is only in the recent past that Six
Sigma Plus has become popular among the quality professionals.

To put it simply, Six Sigma Plus is more than Six Sigma and the “Plus” is used to denote the
“synergies” that are achieved by integrating people, processes and strategy.

For instance, Six Sigma aims reducing the defects in a million parts to 3.4. Likewise, Six Sigma plus uses
the same metrics for defect prevention. So, one might be tempted to ask, what is it that is so different
about Six Sigma Plus? The answer lies in looking at the scope of a typical Six Sigma Plus implementation
as compared to a Six Sigma implementation.

A Six Sigma Plus initiative aims to “integrate” the three cornerstones of an organization i.e. systems,
processes and people and melding them together with the underlying business strategy.

This means that unlike Six Sigma that concentrates on processes and reducing the defects, Six Sigma
Plus goes beyond the statistics and instead aims at a “holistic” approach that takes into account the
customer focus and customer centric strategy.

Further, Six Sigma Plus is a “proactive” approach that anticipates future trends and acts in the present to
capitalize on them when they become the standard. In this way, Six Sigma Plus hopes to go beyond Six
Sigma in its scope.

Now that we have defined what Six Sigma Plus is, it is useful to look at the areas covered in a typical Six
Sigma Plus implementation. Traditionally Six Sigma implementations covered the production processes
and aimed at defect reduction and defect prevention in those processes.

However, Six Sigma Plus implementations typically cover all the departments including the functional
areas and the product development functions as well. This ensures a comprehensive coverage of all the
processes in an organization and not only the production processes.

Further, Six Sigma Plus implementations are typically customer focused which means that these
implementations anticipate customer trends and act decisively to integrate customer needs and
expectations into the implementations.

Difference between Six Sigma Plus and TQM

As the preceding sections have shown, Six Sigma Plus is a holistic approach when compared with
standard quality management approaches like TQM or Total Quality Management. The “plus” in Six
Sigma is the alignment of quality initiatives with that of the business goals and this is what differentiates
Six Sigma Plus from TQM.
Where TQM takes a narrow approach towards defect prevention and quality control with the ultimate goal
of customer satisfaction, Six Sigma Plus takes the whole notion of quality management to a new level by
starting with the customer and then aligning the business strategy with that of the quality processes.

The point here is that TQM is more of an internally focused measure that aims to reduce defects and
hence satisfy the customer whereas Six Sigma Plus takes the customer as the starting point and works
the quality processes from this perspective.

The other differences between TQM and Six Sigma Plus include the “change” aspect of Six Sigma Plus
where the objective of the latter is to proactively seek measures to improve quality as opposed to that of
the TQM methodology which concentrates on doing the same process to the quality norms prescribed for
the process.

The difference here is one of continuous improvement and change with each iteration as opposed to
merely reducing the incidence of defects. The operative term here is “change” and the practitioners of Six
Sigma Plus tend to call themselves as “change agents” as opposed to calling themselves as “quality
champions” in TQM implementations.

Further, Six Sigma Plus focuses on driving change through the organization by identifying areas in the
processes that can be improved and being customer focused as well as extending the process
improvement to all functional areas. In short, Six Sigma Plus covers the entire organization whereas
standard quality management methodologies like TQM confine themselves to quality control and quality
management of the production processes.

The difference here is that Six Sigma aims to identify process improvements in all functional areas and
build on them proactively whereas TQM usually contends itself to preventing defects in selected
processes and areas in the company.

Differences between Six Sigma Plus and Six Sigma

This section focuses on the differences between Six Sigma Plus and Six Sigma. As mentioned in the
previous sections, Six Sigma Plus goes “beyond” the normal implementation of Six Sigma and has the
added advantage of Customer focus, Process Improvement and Productivity growth as the cornerstones
of its implementation.

Though, the differences between Six Sigma Plus and Six Sigma appear superficial on first glance,
there are indeed significant differences in the way these methodologies are implemented.

The Six Sigma framework posits an acceptance of two defects per billion samples tested. Though this
might seem impossible to attain particularly in the manufacturing sector where quality slippages are
common, it is indeed the case that several companies like GE, Dow Chemical, The TATA group and
banking institutions like JPMC, Citigroup and Bank of America have successfully adopted the Six Sigma
framework.

The adoption of Six Sigma by these companies came about as a result of a focus on quality that was both
top-down and bottom-up and the combined efforts of all the stakeholders ensured that the exercise was a
success.

However, it needs to be mentioned that adoption of the framework is the first step in the process of
attaining quality excellence as the companies need to adhere to the framework in their every day
operations in order to claim that they are indeed Six Sigma compliant.

As many experts have put it, Six Sigma Plus takes the Six Sigma methodology and adds the aspects of
leading change to strategy, coaching leaders to people development, a practical approach to theory,
implementation of customer focused projects to training, enhanced tools through components (as
discussed in the section related to Six Sigma Plus) and using a mix of soft skills and hard skills to make
the company more competitive with regards to its competitors.

Conclusion
This article has discussed the differences between Six Sigma Plus and Six Sigma as well as TQM. The
emphasis in this article has been on finding the added advantage that companies get when they embrace
Six Sigma Plus as opposed to traditional methodologies like TQM. As can be seen from the preceding
discussion, the alignment of people, processes and systems with that of business strategy in a holistic
manner and achieving synergies in the interaction of the components is a hallmark of Six Sigma Plus
implementations.

Further, Six Sigma Plus seeks to drive change and focus on leadership as opposed to merely training
people in the methodology. The key term here is the ability to conceive of a different mindset when it
concerns quality and hence Six Sigma Plus can be thought of a philosophy of quality as opposed to
implementation of statistical measures of quality.

In conclusion, Six Sigma Plus is an emerging model of quality excellence that goes beyond traditional
conceptions of quality and gives an entirely new meaning to the concept of quality control. It remains to
be seen how many companies adopt the Six Sigma Plus methodology and how successful this addition to
the existing pantheon of quality initiatives would be.

companies have accepted Six Sigma (Goh, 2002). Reports have showed that Six Sigma can assist
firms to accomplish significant performance enhancement. The phrase 'Six Sigma' is emerged
from the statistical foundation of the methodology (Das et al., 2008). Some Scholars consider
that Six Sigma is merely a repackaging of the well-known total quality management program. It
measures how far a given process deviates from perfection. It is associated with 'process
capability', a process that operates at six sigma will produce no more than 3.4 defective parts per
million although this will debase over time to around a 99.5% yield. Most companies will
operate at around 1 to 2. Six Sigma is well-organized process that helps to focus on developing
and delivering near-perfect products and services. Six Sigma invented at Motorola in the
beginning of 1980s, in response to achieve 10X decrease in product-failure levels in 5 years
(Barney, 2002). Engineer Bill Smith discovered Six Sigma. The Six Sigma is based on numerous
theories of quality management (Deming's 14 point for management, Juran's 10 steps on
achieving quality). The main scheme behind Six Sigma is that if one can measure how many
"defects" have in a process, then it can systematically figure out how to eliminate them and get
as close to "zero defects" as possible and specially it means a failure rate of 3.4 parts per million
or 99.9997% perfect.
Buy These Notes in PDFFormat

Motorola got the success through implementing Six Sigma. Subsequently, Six Sigma was
promoted to many Fortune 500 companies in the decade of 1990 where it also assisted them to
accomplish desired outcomes. Popular companies such as AlliedSignal, currently known as
Honeywell, GE, and 3M adopted the process of Six Sigma. At the same time, Six Sigma also
went through significant development. Mainly, GE improved Six Sigma through new practices.
Later on, GE asserted that Six Sigma has become a vital part of its business culture and strategy
(Barney, 2002). GE's success further extended Six Sigma to small and medium sized businesses.
After two decades from its evolution, Six Sigma is not only a defect rate measure but it has a
statistics core, a precise improvement method, and an exclusive practices (Breyfogle et al.,
2001). Six Sigma is a wide-ranging system to realize, sustain and maximize business success of
companies (Ranawat et al, 2007). This system facilitates companies to understand customer
needs, to use facts, data and statistical analysis more disciplined, and to manage, improve and
explore business processes (Pande, Neuman, Cavanagh, ,2000).

While Six Sigma has usually been related with manufacturing and product quality but currently,
it has been applied to many other industries and services. Top manufacturers are using it to
improve their Logistics capabilities (Ranawat et al, 2007). Six Sigma has been incorporated into
culture. Logistics companies optimise the processes while decreasing variations and improving
the expansion of supply chain and other development of sectors. Additionally, it has been
recognized that the accurate application and use of Six Sigma can considerably cut out excess
cost by 50%, improve time cycle, and minimize the waste of materials, increase customer
happiness, and cuts millions of miles from delivery routes from their supply chains.

Six Sigma is considered as an improvement approach or an improvement program. According to

Schroeder et al. (2008, p. 540), Six Sigma is an organized, parallel-meso structure to reduce
variation in organizational processes by using improvement specialists, a structured method, and
performance metrics with the aim of achieving strategic objectives. It is a methodology to
develop the products and processes that perform at high standard. It is a quality philosophy and
management technique.

Reflecting its manufacturing background, Six Sigma is often attached with the Lean
Manufacturing methodology, creating amalgam known as Lean Six Sigma. Lean compliments
Six Sigma by adding a focus on process flow and waste elimination. An additional difference is
that of Design for Six Sigma (DFSS). While Six Sigma is used to enhance the performance of
existing processes, DFSS is used to design high performance directly into new processes or
products.

Many business and quality development professional avowed that Six Sigma is the most popular
management methodology in history. Six Sigma is now a huge 'brand' in the arena of corporate
development. Though this methodology began in 1986 as a statistically-based method to
decrease variation in electronic manufacturing processes in Motorola Inc in the USA, presently,
Six Sigma is used as a grand business performance method, around the world, in organizations as
diverse as local government departments, prisons, hospitals, the armed forces, banks, and multi-
nationals corporations. While Six Sigma execution continues rapidly in many of the world's
major corporations, many organizations and suppliers in the consulting and training communities
have also apprehended on the Six Sigma theory, to wrap up and provide all sorts of Six Sigma
'branded' training products and consultancy and services. The original and technically correct
spelling seems to be Six Sigma, rather than 6 Sigma, although in recent years Motorola and GE
have each since developed their own sexy Six Sigma logos using the number six and the Greek
sigma characters.

Key Concepts of Six Sigma

Six Sigma revolves around a few key concepts.

Critical to Quality: Attributes most important to the customer.

Defect: Failing to deliver what the customer wants.

Process Capability: What process can deliver.

Variation: What the customer sees and feels.

Stable Operations: Ensuring consistent, predictable processes to improve what the customer sees
and feels.

Design for Six Sigma: Designing to meet customer needs and process capability.

Features of Six Sigma

Major aim of Six Sigma is to eliminate waste and wastefulness, thus increasing customer
satisfaction by delivering what the customer is expecting.

Six Sigma follows a structured methodology, and has definite roles for the participants.

Six Sigma is a data driven method, and requires precise data collection for the processes being
analysed.

Six Sigma is about putting results on Financial Statements.

Six Sigma is a business-driven, multi-dimensional structured approach for:

o It is an improving Process.
o It is used to lower Defects.
o It reduces process variability
o It also reduces costs
o Application of Six Sigma enhances customer satisfaction
o Its use increases profits
Calculation of Six Sigma

The model of Six Sigma is helpful to eliminate defects/variations in processes with respect to
customer requirement. Achieving a six-sigma level quality means that processes produce only
3.4 defects per million opportunities (DPMO). Six-Sigma in addition to being a methodology for
improving process capability is also viewed as a philosophy that leads to faultlessness on a
continuous basis. The capability index, DPMO and the implied performance at select levels are
mentioned below:

Design for Six Sigma (DFSS) Examine what Design for Six Sigma is and its importance,
Understand why DFSS is important to Six Sigma implementation, Understand robust design and
functional requirements, Develop a robust design using noise strategies and understand the
concepts of tolerance design and statistical tolerance. It calculates tolerances using process
capability data.

Methodology of Six Sigma: There are three methodology of six sigma:

1. Business process management system (BPMS)

2. DMAIC (Six Sigma improvement methodology)
3. DMADOV (Creating new processes which will perform @ Six Sigma)

Six Sigma can also be applied within DMAIC and DMADV models.

DMAIC: It is most popular process improvement methodology which consists of Define,

Measure, Analysis, Improve and Control. DMAIC is recognized as a simple performance
improvement model that is used within an intense use of statistical computer software, and is
acronym for Define-Measure-Analyse-Improve-Control. The DMAIC process can be described
as following:

1. Define the goals of the improvement activity

2. Measure the existing system
3. Analyse the system
 4. Improve the system
5. Control the new system

It is a quality tool with focus on change.

Briefly, DMAIC is used by improving an existing process or service to attain the company's goal
or the project objective. DMADV model is short form for "Define-Measure-Analyse-Design-
Verify" where it focuses in Design and Verify stages.
The six sigma DMAIC model (Source: Gaspersz, 2007)

DMADOV comprises of define, measure, analyse, design, optimise and validate. DMADOV
forces attention on the need to optimise the design (Kubiak,, 2009). This six sigma model is used
to develop new processes and product at high quality level or if a process that is already in the
company needs more than just an incremental improvement (Baird, 2009).

Benefits of Six Sigma

Six Sigma has numerous benefits that attract companies:

It generates sustained success

It sets a performance goal for everyone

It enhances value to customers

It speeds up the rate of improvement

It promotes learning and cross-pollination

It executes strategic change

Disadvantages of Six Sigma: Six Sigma is applied to all aspects of the production and planning
process, it may create inflexibility and bureaucracy that can create delays and stifle creativity. In
addition, its customer focus may be taken to extremes, where internal quality-control measures
that make sense for a company are not taken because of the overlying goal of achieving the Six
Sigma-stipulated level of consumer satisfaction. For example, an inexpensive measure that
carries a risk of a slightly higher defect rate may be rejected in favour of a more expensive
measure that helps to achieve Six Sigma, but adversely affects profitability.

To summarize, Six Sigma has been influential tool for the quality enhancement in today's
competitive business world and gives the potential to improve current approaches to logistics
improvement. It reduces waste, as well as it also offers benefits by delivering reduced variations.
As result, good outcome of Six Sigma implementation will drive the increase in customer
satisfaction, increase in profits, decrease in cycle times and higher flexibility (Ranawat et al,
2007). Six Sigma as an improvement mechanism is developed by Motorola in1985 that covers a
set of strategies and tools acquired in order to improve the current business practice and
methodical processes to fulfil the objectives. It is originally designed to measure faults or defects
in the process so that they can be eliminated systematically as part of improvement to reduce
flaws and enhance quality. Initially Six Sigma was first integrated into manufacturing industries.
This methodology also applies well to logistics companies since the focus is customer-oriented.
Supply chain management is a main strategic factor for increasing organizational efficiency and
for better realization of goals such as enhanced competitiveness, better customer care and
increased profitability (Gunasekaran, Patel, Tirtiroglu, 2001). Consequently, Six Sigma is
considered to be successful method in delivering business benefits through variant reduction.