How Six Sigma Addresses Process-Related Variances

Every company confronts the ever-present challenge of defects within their business processes. These flaws can have a substantial effect on an organization's ability to meet their customers' needs. By eliminating them, managers can reduce their cycle time, lower their operating costs, and deliver a higher-quality product more quickly to their end customers. These factors ultimately drive higher profitability.

Within every business process, variances exist. The Six Sigma team is tasked with finding and eliminating them. In doing so, they can further lower costs and raise profitability while injecting a new level of stability and predictability into an organization's results.

Below, we'll take a closer look at how the Six Sigma team identifies variances and creates solutions. I'll explain the collection and analysis of data, how targets are prioritized, and how solutions are implemented. First, let's review the end goal.

The End Goal

In manufacturing, process efficiency is rated according to "defects per million opportunities" (or, DPMO). To be rated at "Six Sigma quality," a given process must produce 3.4 or fewer DPMO. The goal for senior management is to get as close to that number with as little variance as possible.

In other sectors, such as government, service industries, and business, Six Sigma is deployed for the same purpose. While the methodology is less focused on DPMO, the objective for managers is still the elimination of defects, a reduction in variances, and a continual improvement in process efficiency.

Collecting Metrics And Identifying Problems

Every project begins by prioritizing an organization's existing problems. The impact of each process is considered given the company's objectives. Once the target processes have been chosen for analysis, Six Sigma Black Belts will design a map showing inputs and outputs. Then, they'll begin collecting data in order to establish a reliable baseline.

By using one or more statistical analysis models, the Black Belts (and to a lesser extent, the Green Belts) can identify problem areas that are producing defects and variances. There will usually be several areas that need improvement. The collected metrics help the Black Belts determine the difference between a process's current yield (or performance) and its target yield. They also help in identifying which factors are responsible for the variances.

Choosing Targets

Once the Six Sigma team has collected each process's metrics, analyzed the inputs, and identified areas for improvement, they'll need to choose their targets. They will seldom have the resources that are necessary to address all of the causes of variance that exist. Instead, the team will conduct an analysis that helps them identify which causes have the greatest impact. They'll choose their targets based upon which will yield the most benefit at the lowest cost, if resolved.

Designing And Implementing Solutions

With the target areas chosen, the Six Sigma team will begin designing solutions. This stage will involve deeper analysis, brainstorming, and simulation studies. The solutions must be consistent with the organization's long-term goals because they will become a part of the company's ongoing process.

After the project team has created solutions to eliminate variances, the solutions are implemented. The metrics of the new process are collected and analyzed to determine their effect. The Black Belts will try to determine whether their solutions have produced the desired results. If they have, a plan is developed to hand off the responsibilities of managing and tracking the process to a new owner.

You'll note that the Six Sigma team uses a rigorous, formulaic approach in order to identify and eliminate variances. This helps to ensure that their analysis is consistent and valid. It helps to ensure the collected metrics are reliable. And it significantly increases the likelihood that their solutions, once implemented, will be effective.