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Six Sigma Management Indicates How the Process is PerformingBy Jacquelyn Donner Unless we can measure something, we cannot improve our performance. Sigma is a unit of measure that gives us a way of measuring variation and the capability of our processes to meet customer expectations consistently. We will discuss Sigma in more detail as the course progresses.What is a Sigma? It is a Greek letter that represents a measure of variation. It could be inches, volts, pounds. How do you measure variation, such as product variation? This is where we can use Sigma. In the same way that we describe something as six inches long or weighing 3 pounds, when we say that something is 6 Sigma, we are saying that there is an extremely small amount of variation. The term Sigma is used to designate the distribution or spread about the mean (average) of any process or procedure in manufacturing, engineering, services, or transactions. For a business, engineering or manufacturing process, the sigma value is a metric that indicates how well that process is performing, the higher the Sigma value, the better. Sigma measures the capability of the process to perform defect-free-work. A defect is anything that results in customer dissatisfaction. To calculate Sigma, we will use a common measurement index: Defects Per Million Opportunities (DPMO), where an opportunity can be virtually anything the dimensions of a component, a line of code, a blank line on an administrative form, etc. The Sigma value indicates how often defects are likely to occur. The higher the Sigma value, the less likely a process will produce defects. As Sigma increases, costs go down, cycle time goes down, and customer satisfaction goes up. A fundamental element of Six Sigma philosophy is that unless we are prepared to invest in the measurement of quality, we cannot improve quality, if we don't measure quality, and don't follow-up on these measures, then we are sending a signal that we really don't value quality. This, in turn, affects day-to-day behaviors and activities of all employees. Generating new measures requires new questions. If we continue to ask the same questions, we will continue to ask for and generate the same measures. It is an issue of leadership to ask new questions about the quality or our products and processes, new questions that will lead to new research and new measures. One of the key business metric concepts of Six Sigma is the concept of the Cost of Poor Quality (COPQ). COPQ represents the visible and less visible costs of all the defects that exist in our processes. Essentially, the highest quality producer is the lowest cost producer where cost is represented by the COPQ. Every time we have a defect (which is any result that is not what the customer of a process needs) we consume time and resources to find, fix, and try to prevent these defects. To reduce these costs (such as scrap, rework, inspection, warranty claims, lost customer loyalty) we need to address the root issue, which is defects and process capability. Many view the increasing cost of reducing defects makes reaching Six Sigma quality (which is 3.4 defects per million opportunities for a defect) impractical. However, those companies who are striving for Six Sigma have realized that the net cost to reduce defects actually lowers as one approaches Six Sigma because as we dramatically reduce defects we can also dramatically redirect the resources we currently tie up in looking for and fixing defects. About the author six sigma management Special offer to help you gain six sigma lean certification. http://www.greenbelt6sigma.com Jacquelyn Donner, Master Six Sigma Black Belt |
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