‘Six Sigma’ solves problems

The “Six Sigma” system has been around for some time. For those who have been out of the picture or are unaware of what Six Sigma is, I offer the following: it is the use of a rigorous, statistics-based system to solve problems or improve a current process to a level where output, or customer satisfaction, is increased by a statistically significant amount.

“Sigma” refers to a measure of variation that can be used to gauge one’s success at achieving improvement goals.

This method or process is sometimes known by the abbreviation for the steps taken to complete a project successfully. For instance, DMAIC, which stands for Define Measure Analyze Improve and Control, is the map used when walking through an improvement project.

The Six Sigma process has its roots in the early 1900s with the introduction of statistical methods in processes and manufacturing, but its most recent incarnation is often written about in the Wall Street Journal as the key to the success of General Electric and Jack Welch.

Following the DMAIC model, a team lead by a “Black Belt” (one who has been trained in statistical methods and the more-subtle art of team building) maps a process step-by-step, looking for the waste that is inherent in all processes.

The team then selects measures that are monitored and closely linked to financial performance. These measures and potential improvements are further refined for presentation to a “champion” at management level who can support the team with resources when needed.

The team works through the Six Sigma methodology, calculates the return on investment, implements the changes, verifies their effectiveness, and then puts controls in place that will ensure the continuation of the new and improved version of the process.

The process requires the full support of management for success, as it requires effort — and sometimes pain — to uncover the truth and make the changes that ensure justifiable gains in productivity, quality, and cost savings.

The average Sigma implementation results in cost savings of 10 to 15 times the cost of most training and implementation programs.

In the case of heavy-equipment and engine manufacturer Caterpillar, the first wave of training and deployment resulted in more than US$200 million in cost savings — an experience not that unusual if the enterprise is committed to the Six Sigma effort.

A careful evaluation of several implementations will uncover that the methodology is successful at manufacturing, processing, and administrative work at a variety of company types. Banks, automotive manufacturers, chemical processors and electronics companies are just a few of the enterprises that can benefit.

In particular, activity in the mining industry has many similarities to chemical processing and drilling, where there has been success.

I would be remiss if I did not mention the many implementations that have failed or are faltering. These companies experienced a less-than-stellar return, mostly as a consequence of poor implementation. As stated above, proper support from the highest level of management is the key to the success of Six Sigma.

— The author is the chief executive officer of Quality Associates International and is trained in metallurgical engineering and mathematics. Founded in 1987, Quality Associates is a management-consulting and accreditation firm with associates in the U.S., Canada, Australia and The Netherlands. Details are available at www.quality-one.com