Six Sigma is a strategic process improvement approach. Is very focused and follows a five step model:
The term defect rate designates the portion of defective elements in relation to all items produced. The rate is deduced by dividing the number of defective elements by the number of non-defective elements. This number is a measure of quality of the production.
Six Sigma is a quality management methodology used to help businesses improve current processes, products or services by discovering and eliminating defects. The goal is to streamline quality control in manufacturing or business processes so there is little to no variance throughout.
Six Sigma is a relatively new concept as compared to Total Quality Management (TQM). However, when it was conceptualized, it was not intended to be a replacement for TQM. Both Six Sigma and TQM have many similarities and are compatible in varied business environments, including manufacturing and service industries. While TQM has helped many companies in improving the quality of manufactured goods or services rendered, Six Sigma has the potential of delivering even sharper results.
Total Quality Management
Total Quality Management is often associated with the development, deployment, and maintenance of organizational systems that are required for various business processes. It is based on a strategic approach that focuses on maintaining existing quality standards as well as making incremental quality improvements. It can also be described as a cultural initiative as the focus is on establishing a culture of collaboration among various functional departments within an organization for improving overall quality.
Comparison To Six Sigma
In comparison, Six Sigma is more than just a process improvement program as it is based on concepts that focus on continuous quality improvements for achieving near perfection by restricting the number of possible defects to less than 3.4 defects per million. It is complementary to Statistical Process Control (SPC), which uses statistical methods for monitoring and controlling business processes. Although both SPC and TQM help in improving quality, they often reach a stage after which no further quality improvements can be made. Six Sigma, on the other hand, is different as it focuses on taking quality improvement processes to the next level. The basic difference between Six Sigma and TQM is the approach. While TQM views quality as conformance to internal requirements, Six Sigma focuses on improving quality by reducing the number of defects. The end result may be the same in both the concepts (i.e. producing better quality products). Six Sigma helps organizations in reducing operational costs by focusing on defect reduction, cycle time reduction, and cost savings. It is different from conventional cost cutting measures that may reduce value and quality. It focuses on identifying and eliminating costs that provide no value to customers such as costs incurred due to waste. TQM initiatives focus on improving individual operations within unrelated business processes whereas Six Sigma programs focus on improving all the operations within a single business process. Six Sigma projects require the skills of professionals that are certified as ‘black belts’ whereas TQM initiatives are usually a part-time activity that can be managed by non-dedicated managers.
Applications Where Six Sigma Is Better
Six Sigma initiatives are based on a preplanned project charter that outlines the scale of a project, financial targets, anticipated benefits and milestones. In comparison, organizations that have implemented TQM, work without fully knowing what the financial gains might be. Six Sigma is based on DMAIC (Define-Measure-Analyze-Improve-Control) that helps in making precise measurements, identifying exact problems, and providing solutions that can be measured.
Six sigma is also different from TQM in that it is fact based and data driven, result oriented, providing quantifiable and measurable bottom-line results, linked to strategy and related to customer requirements. It is applicable to all common business processes such as administration, sales, marketing and R & D. Although many tools and techniques used in Six Sigma may appear similar to TQM, they are often distinct as in Six Sigma, the focus is on the strategic and systematic application of the tools on targeted projects at the appropriate time. It is predicted that Six Sigma will outlast TQM as it has the potential of achieving more than TQM.
Total Quality tends to focus on culture change, empowering workers and teams and much of the improvement takes place within the departments or functions. Six Sigma focuses on high level cross-functional processes, with involvement from upper management and relies on experts to implement. Total Quality generally uses simple tools for process improvement, but these simple tools can be very powerful. You do not need complex statistical methods for everything. It is important to use the approach that fits the situation. Six Sigma uses a five step model called DMAIC, to shape improvement projects and focuses on outcomes in terms of benefits for the company. Six Sigma focuses on reducing variation, measuring defects and improving quality of products, processes and services.
Deming's 14-Point Philosophy : A Recipe for Total Quality
We know now that quality needs to be built into every level of a company, and become part of everything the organization does. From answering the phone to assembling products and serving the end customer, quality is key to organizational success. Now, quality is often thought to start and end with the customer, and all points leading to and from the customer must aim for high-quality service and interaction. So the business world developed a new appreciation for the effect of quality on production and price. Although Deming didn't create the name Total Quality Management, he's credited with starting the movement. He didn't receive much recognition for his work until 1982, when he wrote the book now titled "Out of the Crisis." This book summarized his famous 14-point management philosophy. There's much to learn from these 14 points. Study after study of highly successful companies shows that following the philosophy leads to significant improvements. That's why these 14 points have become a standard reference for quality transformation.
The 14 Points
Create a constant purpose toward improvement.
Plan for quality in the long term. Resist reacting with short-term solutions. Don't just do the same things better – find better things to do. Predict and prepare for future challenges, and always have the goal of getting better.
Adopt the new philosophy.
Embrace quality throughout the organization. Put your customers' needs first, rather than react to competitive pressure – and design products and services to meet those needs. Be prepared for a major change in the way business is done. It's about leading, not simply managing. Create your quality vision, and implement it.
Stop depending on inspections.
Inspections are costly and unreliable – and they don't improve quality, they merely find a lack of quality. Build quality into the process from start to finish. Don't just find what you did wrong – eliminate the "wrongs" altogether. Use statistical control methods – not physical inspections alone – to prove that the process is working.
Use a single supplier for any one item.
Quality relies on consistency – the less variation you have in the input, the less variation you'll have in the output. Look at suppliers as your partners in quality. Encourage them to spend time improving their own quality – they shouldn't compete for your business based on price alone. Analyze the total cost to you, not just the initial cost of the product. Use quality statistics to ensure that suppliers meet your quality standards.
Improve constantly and forever.
Continuously improve your systems and processes. Deming promoted the Plan-Do-Check-Act approach to process analysis and improvement. Emphasize training and education so everyone can do their jobs better. Use kaizen as a model to reduce waste and to improve productivity, effectiveness, and safety.
Use training on the job.
Train for consistency to help reduce variation. Build a foundation of common knowledge. Allow workers to understand their roles in the "big picture." Encourage staff to learn from one another, and provide a culture and environment for effective teamwork.
Implement leadership.
Expect your supervisors and managers to understand their workers and the processes they use. Don't simply supervise – provide support and resources so that each staff member can do his or her best. Be a coach instead of a policeman. Figure out what each person actually needs to do his or her best. Emphasize the importance of participative management and transformational leadership. Find ways to reach full potential, and don't just focus on meeting targets and quotas.
Eliminate fear.
Allow people to perform at their best by ensuring that they're not afraid to express ideas or concerns. Let everyone know that the goal is to achieve high quality by doing more things right – and that you're not interested in blaming people when mistakes happen. Make workers feel valued, and encourage them to look for better ways to do things. Ensure that your leaders are approachable and that they work with teams to act in the company's best interests. Use open and honest communication to remove fear from the organization.
Break down barriers between departments.
Build the "internal customer" concept – recognize that each department or function serves other departments that use their output. Build a shared vision. Use cross-functional teamwork to build understanding and reduce adversarial relationships. Focus on collaboration and consensus instead of compromise.
Get rid of unclear slogans.
Let people know exactly what you want – don't make them guess. "Excellence in service" is short and memorable, but what does it mean? How is it achieved? The message is clearer in a slogan like "You can do better if you try." Don't let words and nice-sounding phrases replace effective leadership. Outline your expectations, and then praise people face-to-face for doing good work.
Eliminate management by objectives.
Look at how the process is carried out, not just numerical targets. Deming said that production targets encourage high output and low quality. Provide support and resources so that production levels and quality are high and achievable. Measure the process rather than the people behind the process.
(There are situations in which approaches like Management By Objectives are appropriate, for example, in motivating sales-people. As Deming points out, however, there are many situations where a focus on objectives can lead people to cut corners with quality. You'll need to decide for yourself whether or not to use these approaches. If you do, make sure that you think through the behaviors that your objectives will motivate.)
Remove barriers to pride of workmanship.
Allow everyone to take pride in their work without being rated or compared. Treat workers the same, and don't make them compete with other workers for monetary or other rewards. Over time, the quality system will naturally raise the level of everyone's work to an equally high level.
Implement education and self-improvement.
Improve the current skills of workers. Encourage people to learn new skills to prepare for future changes and challenges. Build skills to make your workforce more adaptable to change, and better able to find and achieve improvements.
Make "transformation" everyone's job.
Improve your overall organization by having each person take a step toward quality. Analyze each small step, and understand how it fits into the larger picture. Use effective change management principles to introduce the new philosophy and ideas in Deming's 14 points.
(From Deming, W. Edwards, Out of the Crisis, 14 Points, pages 23-24, © 2000 Massachusetts Institute of Technology, by permission of The MIT Press.)
Smith and Harry worked together to come up with a four-stage problem-solving approach: measure, analyze, improve, control (MAIC), which became a cornerstone for the Six Sigma process.
A typical process has been proven to have a shift in its average performance of up to +/- 1.5 sigma over the long term. A long term Six Sigma process that is rated at 4.5 sigma is considered to have a short term sigma score of 6 sigma. The difference between the Sigma Levels of a process over the short and long terms is called the Sigma Shift. Historically, people have assumed that the Sigma Shift is 1.5 and have therefore calculated long term capability by collecting only short term data, and subtracting 1.5 from the short term Sigma Level.
If, it's 230 defect in million then your company is at 5 Sigma level. Same goes for 4 Sigma as 6200 defect in million, 3 Sigma as 67,000 defect in million, 2 sigma as 310,000 defect in million & 1 Sigma as 700,000 defect in Million.
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