Six Sigma: A Statistical Approach to Process Refinement
For companies looking to improve their processes and profit margin, Six Sigma certification can offer many benefits and result in better results both in process and profitability. Many people know that Six Sigma statistics are effective, but do not understand the process or how it works.
The Six Sigma process is based on the improvement of one or more manufacturing processes. This is accomplished through a statistical approach of reducing errors and improving the efficiency and simplicity of any given process. A refined and waste free method of doing things then leads to better profit margins because the least effort necessary is used in development of products, and the least resources are in turn used to create them.
The basic idea is to reduce the amount of standard deviations in any process, thereby reducing errors. There are six levels of reduction in these standard deviations in the Six Sigma Methodology which translates to less than 3.4 defects per million opportunities (DPMO). A company may start out at any process level, from one or more. If a company starts at a given Sigma level, it can progress through levels slowly by improving processes and reducing errors.
Improvement of processes and an increase in profit margin is not an overnight occurrence. The rule of thumb is that it will take most large corporations a year or less to graduate from one Sigma level to the next for lower levels (one to three) and more for each level as the company moves closer to the minimum amount of deviations in process. The rewards are great as there are significant gains in profit margin for each level achieved in this manner.
For each level achieved through the reduction of errors, the company can expect a return of 20% profit margin annually. Because the graduation through levels is a slow process, this is a long-term approach to increased profits. The benefit is that the profit increases are sustainable once the process of streamlining is in place.
One of the keys to this type of process optimization is in the education of the workforce to make the improvements (i.e. Six Sigma Certification – whether online or on site). Once processes have been identified and analyzed to determine what the best critical path is to making the process as efficient as possible, it is then the responsibility of trained and certified Six Sigma Professionals within the company to ensure that processes are carried out to the letter.
The certification refers to these individuals by belt level. This is a reference to the system of designation in most martial arts disciplines. Green Belt and Black Belt-certified employees monitor the processes and ensure that they are carried out to the full extent of the certification.
The ultimate goal of the Six Sigma process is to have no more than six standard deviations from the process mean and the nearest spec limit. This level of accuracy in process will yield results that are 99.99% error free (or less than 3.4 DPMO). This statistical approach to efficiency streamlining and cost reduction may be time-consuming and involved, but if a company reaches the top echelon of the program, the benefits to both process and cost are well worth the care taken in achieving them.
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