Process Improvement and Six Sigma - Summary of Key Points and Terminology

Managing for Quality and Performance Excellence, 11th Edition
Summary of Key Points and Terminology
Chapter 9 – Process Improvement and Six Sigma
Breakthrough is the accomplishment of any improvement that
takes an organization to unprecedented levels of performance.
Breakthrough attacks common causes of variation. Six Sigma
projects often focus on breakthrough improvements that add
value to the organization and its customers through systematic
approaches to problem solving.
Structured improvement methodologies typically consist of four
steps: redefining and analyzing a problem, generating ideas,
evaluating and selecting ideas, and implementing ideas. Common
approaches are the Deming cycle, creative problem solving, Six
Sigma DMAIC, TRIZ, custom improvement methodologies, and
many others.
The Deming cycle, or PDSA cycle, consists of four steps: Plan, Do,
Study, Act. Many organizations use the Deming cycle as the basis
for their organizational performance improvement activities.
Solving quality problems often involves a high amount of
creativity. Creativity is seeing things in new or novel ways. The
creative problem solving process consists of understanding the
“mess,” finding facts, identifying specific problems, generating
ideas, developing solutions, and implementing solutions
The principal problem solving methodology used by Six Sigma is
DMAIC—define, measure, analyze, improve, and control. The
Define stage identifies the problem. The Measure stage includes
collecting good data, observation, and careful listening. The
Analyze phase of DMAIC focuses on why defects, errors, or
excessive variation occur, and focuses on root cause. The Improve

stage focuses on idea generation, evaluation, and selection.
Finally, the Control stage focuses on how to maintain the
improvements.
Six Sigma can be described as a business improvement approach
that seeks to find and eliminate causes of defects and errors in
manufacturing and service processes by focusing on outputs that
are critical to customers and a clear financial return for the
organization. The term six sigma is based on a statistical measure
that equates to 3.4 or fewer errors or defects per million
opportunities.
Some of the contrasting features between TQM and Six Sigma
include: TQM is based largely on worker empowerment and teams;
Six Sigma is owned by business leader champions. TQM activities
generally occur within a function, process, or individual workplace;
Six Sigma projects are truly cross-functional. TQM training is
generally limited to simple improvement tools and concepts; Six
Sigma focuses on a more rigorous and advanced set of statistical
methods and DMAIC methodology. TQM is focused on
improvement with little financial accountability; Six Sigma requires
a verifiable return on investment and focus on the bottom line.
A six sigma quality level corresponds to a process variation
equal to half of the design tolerance while allowing the mean to
shift as much as 1.5 standard deviations from the target. A k-
sigma quality level satisfies the equation: k × process standard
deviation = tolerance range/2.
The following Excel formula can be used to calculate dpmo
corresponding to the sigma level: = (1 – NORM.DIST(sigma level,
1.5, 1, TRUE))*1000000 The sigma level can be calculated on a
spreadsheet using the Excel formula =NORM.S.INV(1 -
dpmo/1,000,000) + 1.5.

A problem is a deviation between what should be happening and
what actually is happening that is important enough to make
someone think the deviation ought to be corrected. Quality
related problems often fall into five categories: conformance
problems, unstructured performance problems, efficiency
problems, product design problems, and process design problems.
Projects are the vehicles that are used to organize team efforts
and to implement the DMAIC process. Being able to manage a
large portfolio of projects, as would be found in Six Sigma
environments, is vital to organizational success.
Project teams are a vital part of Six Sigma efforts and are
comprised of champions, master black belts, black belts, green
belts, other team members, who each provide different levels of
knowledge and expertise in solving problems.
Factors that should be considered when selecting Six Sigma
projects are: financial return, as measured by costs associated
with quality and process performance, and impacts on revenues
and market share, impacts on customers and organizational
effectiveness, probability of success, impact on employees, and fit
to strategy and competitive advantage.
Most of the tools used in DMAIC have been around for a long time.
They include elementary statistical tools, advanced statistical
tools, product design and reliability, measurement, process
control, process improvement, and implementation and teamwork.
The Seven QC Tools for quality improvement are flowcharts, run
charts and control charts, check sheets, histograms, Pareto
diagrams, cause-and-effect diagrams, and scatter diagrams. These
tools support quality improvement processes and problem-solving
efforts.
Toyota created a unique tool, called the A3 Report, to succinctly
consolidate and visualize information for identifying and solving