Improving on the six sigma paradigm

T.N. Goh and M. Xie

Introduction
Sigma is a Greek letter denoting the standard deviation of a random variable. Traditionally, six sigma is used to represent the range of values of a population with a normal distribution as mathematically, 99.73 percent of all values can be expected to fall within a range that extends from three sigma lower than to three sigma higher than the population mean. In the past 15 years, six sigma has been known as a framework for quality improvement and more broadly, business excellence (Harry, 1998). In this paper, an overview is taken of the six sigma approach as it is known today, leading to a discussion on how it can be taken one step further to enhance the competitiveness of an organization.

The authors
T.N. Goh is a Professor and M. Xie is an Associate Professor, both in the Industrial and Systems Engineering Department, National University of Singapore, Singapore, Republic of Singapore.

The six sigma rationale

Six sigma arises from the need to improve quality. The main cause of quality problems is variation. To improve quality, variation must be measured, reduced, and prevented. Thus in a process where the output y, say the time it takes to process a customer order for shipment, is desired to be not more than a specication limit of L (in some appropriate unit of measurement), the best way to ensure that there is no out-of-specication performance, i.e. exceedingly long time taken, is to make sure that there is a sufcient buffer between process mean and L. To do this, the variation or sigma of y must be reduced. If there can be a gap of six standard deviations between process mean and L, the process is said to be of six sigma. Owing to gradual deterioration of process performance resulting from external and internal stresses as well as wear and tear of physical or organizational elements, drifts will occur over time so that the buffer between process mean and specication limit L could eventually be reduced to as low as 4.5 sigma. With this worst-case scenario, the out-of-specication or defective rate is 3.4 parts per million (ppm) values of y. Thus six sigma level quality is commonly understood to correspond to 3.4 ppm; other levels of undesirable performance can be correspondingly represented by a sigma gure, e.g.. 233 ppm for a 5 sigma process, 6,210 ppm for a 4 sigma process, and so on. The sigma level then becomes a means of calibrating process performance. When the concept is applied to physical items, level of performance is often cited as defective parts per million pieces. When applied to nonphysical items, it is presented in terms of defects per million opportunities, or dpmo. This means that the performance of either a physical

Keywords
Quality programmes, Quality management, Quality improvement

Abstract
Since its inception more than a decade ago, six sigma as a quality improvement framework has been gaining increasing attention and acceptance in industry. Thus performance in both manufacturing and service operations can now be calibrated in terms of sigma level, and companies eager to impress customers have begun to label themselves six sigma organizations. In this paper, a realistic view is taken of the six sigma framework, with an examination of the basis of six sigma and its long-term potential. It is argued that in the dynamic business environment of the twenty-rst century, a forwardlooking organization should aim beyond the six sigma benchmark; thus additional requirements are recommended to fortify the common six sigma approach, leading to an eight-S paradigm for sustained excellence in performance.

Electronic access
The Emerald Research Register for this journal is available at www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at www.emeraldinsight.com/0954-478X.htm

The TQM Magazine Volume 16 Number 4 2004 pp. 235-240 q Emerald Group Publishing Limited ISSN 0954-478X DOI 10.1108/09544780410541882

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manufacturing process or a transaction process can be gauged by some sigma level. The more consistent a manufacturing or transaction process, the smaller is the value of standard deviation or sigma value, and hence the higher the sigma level. Figure 1 depicts the direct conversion between dpmo and sigma level. The six sigma methodology thus develops from this point on, specically in the format developed by Mikel Harry and his colleagues since the 1980s (Hahn et al., 2000).

Six sigma methodology

Six sigma makes use of a collection of quality management and statistical tools to construct a framework for process improvement. The objective is to enhance the sigma level of performance measures that reect the needs of the customer. Such measures are generally referred to as critical to quality or CTQ. CTQ is improved via a systematic approach of dene-measureanalyze-improve-control, or DMAIC, taken on a project-by-project basis. The broad sequence of a six sigma study is as follows (Harry and Schroeder, 2000). In the dene phase, the problem is captured, and customer impact and potential benets of the project are assessed. In the measure phase, CTQs of the product or service are identied, measurement capability is assured, and current performance levels as well as improvement goals are determined. In the analyze phase, root causes of defects are uncovered, and key process variables that may be linked to defects are identied. In the improve phase, the inuences of key process variables on the CTQs are quantied, acceptable
Figure 1 Conversion between dpmo and sigma level

limits of these variables are identied, and the process modied to reduce CTQ defect levels. Finally, in the control phase, actions are taken to sustain the improved level of performance and ensure long-term gains. Six sigma entails quality management and statistical methodologies such as quality function deployment, failure mode and effects analysis, design of experiments, robust design, mistakeproong and statistical process control. Although these are not novel in concept and application, their integration into a DMAIC framework has greatly facilitated their understanding, learning and deployment by practitioners. Top management of organizations would also nd it much easier to appreciate the role of analytical tools in efforts for performance improvement. The impact of six sigma stems largely from customer focus as well as measurable improvements of CTQ. The effectiveness of six sigma is rooted in its judicious application of statistical techniques for information gathering, analysis and interpretation. Six sigma translates an operational problem into a statistical problem, makes use of proven mathematical tools to solve it, and translates the results back to practical actions. In particular, techniques of statistical design of experiments or DOE provide the needed knowledge linking process parameters to CTQs, thus making optimization of key process parameters possible even for complex processes (Goh, 2002). Such a data-dependent and often data-intensive approach is distinct from many of the behaviourial or organizational reform methodologies in the past based upon a framework of operational problem to operational solutions. The statistical nature of six sigma is reected in this statement by Harry and Schroeder (2000), describing it as a disciplined method of using extremely rigorous data gathering and statistical analysis to pinpoint sources of errors and ways of eliminating them. MINITAB, a popular software package, dened six sigma as an informationdriven methodology for reducing waste, increasing customer satisfaction and improving processes, with a focus on nancially measurable results. It may be noted that while software packages make efcient statistical analysis possible by nonstatisticians, they cannot replace sound understanding of the underlying principles: thus statistical training in six sigma cannot be equated to statistical education see Goh (2000) for example and wielding a proverbial statistical hammer could be the beginning of pointless hitting of everything viewed as a nail: more on this in a later section of this paper.

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Six sigma applications

Six sigma in an organization is a top-down initiative carried out by a hierarchy of trained personnel designated as champions, master black belts, black belts, green belts and so on, each designation reecting a level of competence with respect to the extent of DMAIC knowledge and practice. The logical sequence and purposeful integration of various quality improvement tools can lead to results far exceeding what is possible with isolated use of single tools. Six sigma is deployed in terms of projects, each with clear objectives, time frame and results, with the gains expressed nancially where possible. With improved processes and products, organizations using six sigma are expected to bring value to customers thus contributing to their competitive edge. For further details see, for example, Harry (1992) and Snee (2000). The prevalence of statistical thinking in six sigma leads to decision making based on facts rather than arbitrary opinions or preferences. Consequently, as a rule, six sigma brings about improvements based on actual data, hard techniques, and purposeful changes. It does not rely on mundane quality management practices such as slogans, pep talks, will power, accreditation, audit, certication or awards. Six sigma may thus be characterized by the common 5W+1H, summarized via six Ss: (1) WHY six sigma? Satisfaction of customers. (2) WHO does it? Structured top-down hierarchy of trained personnel. (3) WHAT is it? Statistical thinking using data to combat process variation. (4) WHERE is it? Standardized framework of DMAIC. (5) HOW is it done? Software packages for information analysis. (6) WHEN is it done? Sustained effort via projects.

pictures and longer-term concerns of their respective organizations. It should be pointed out that the success of an isolated project may not necessarily be benecial to an organization because of the possibility of sub-optimization, when the project is seen from a larger perspective. At other times it may serve no purpose to improve a process that actually should have been phased out instead. Such situations frequently take place owing to factors such as uncertain economic conditions, changing lifestyles, product substitution and evolving technologies six sigma efforts in the improvement of the Polaroid instant camera in the face of digital photography is a case in point. To avoid wasted effort or to make an effort really worthwhile, a wider systems perspective in project selection, execution and evaluation in the context of an organizations overall goals and mission is essential. A six sigma project, as is commonly known, needs a well-dened measure of performance as its CTQ before it can proceed. Applied in a linear manner, DMAIC is primarily aimed at error or defect avoidance. Thus the scheme is effective when the outcomes are: . wanted, i.e. they will generate returns consistent with customer requirements; . known, i.e. in a specied format and content; . dened, therefore can be clearly judged, e.g. defective, acceptable, etc.; and . repetitive, so that the dpmo metric is meaningful. It is also implicitly assumed that all defects or errors are equal, at least in the computation of dpmo which is not true in reality, otherwise failure mode and effects analysis or FMEA (Stamatis, 1995) for example would be unnecessary in quality management. A defective service, such as delayed delivery by a courier, could be anywhere from one day to one week, and the consequence could range anywhere from a belated birthday gift to a missed major business opportunity. It is also taken for granted that all non-defects or non-errors are equal, which again is not true: otherwise, for home television for example, all a person needs is just one technically faultless TV station for his evening viewing, hardly a way to heighten CTQ in the TV broadcasting industry. The need for realizing and sustaining progressive improvements, rather than demanding quantum changes and using judgmental black-and-white classications, has been delineated before; see for example Goh and Xie (1994). It can be argued, in fact, that from the customers perspective a six sigma organization could well become boxed in, i.e. obsessed with the defects and non-defects of its internal

Applicability of DMAIC and dpmo

As sigma level is commonly used to judge process performance, there is a tendency to use it as a predominant, if not the only, basis for expressing project objectives and quantifying achievements. This could lead to a reliance on simple measures of performance and an inward-looking mentality among six sigma practitioners. Furthermore, it is a common tenet that those selected for six sigma deployment such as black belts are to be explicitly recognized and rewarded. It would not be surprising therefore to nd black belts conditioned to focus on my project, my performance, and wheres the next project? rather than larger

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processes, rather than be thinking out of the box. In terms of the Kano model for customer satisfaction (Kano et al., 1984), six sigma projects would tend to be heavy on must-be qualities rather than unexpected attractive qualities that delight the customer. The strong emphasis on quality function deployment (Day, 1993) in DMAIC could mean, in most cases, that items the customers do not think of (the so-called delighters) will not appear and ow down the improvement process. Indeed the prevalence of the DMAIC mindset, in which measure of improvement hinges on a recognized dpmo, could result in a phenomenon well observed elsewhere (Galbraith, 1978): To many it will always seem better to have measurable progress toward the wrong goals than unmeasurable progress toward the right ones.

Improving on six sigma: eight Ss

Most six sigma applications are underpinned by the need to improve the consistency of CTQ-linked performance, with a premium placed on the maintenance of the attained consistency. With such an emphasis, the avoidance of variation, error or underperformance could take precedence over breakthrough and alternative formats of performance: it would be a grave mistake, however, to perceive this as what customer satisfaction is always all about. For illustration: creative and intellectual pursuits such as literature and art, even industrial design, would nd it difcult to t activities into a DMAIC framework. Thus it would be totally meaningless to attempt to place a sigma level on, say, Tchaikovskys 1812 Overture, or the performance of the work by a particular symphony orchestra even with every note of the composition played faultlessly. Another foolhardy idea would be to compare, for instance, Da Vincis The Last Supper with Van Goghs Sunowers via their respective sigma levels. For that matter, can sigma levels be used to differentiate a Boeing passenger aircraft from a European Airbus? Or Cambridge from Oxford? In the eld of business, projects involving a new product line or a novel marketing idea can hardly be the outcome of an DMAIC effort although it is possible, for presentation purposes, to reverse engineer the emergence of known outcomes via a DMAIC framework and the entailing steps. Generally, in the rapidly changing world today, new products and services are needed constantly to retain existing customers and attract new ones in other words, an organization could hardly operate from a monopolistic situation for long.

Beating the competition takes creativity and enterprise, not avoidance of errors. Even when an organization is enjoying a clear market advantage, customization with increased variety and attractiveness has become important in the global marketplace; what this means is that increasingly, multiple CTQs need to be recognized, addressed and balanced. To address these concerns, business excellence calls for appropriate system boundaries to be drawn and performance indices carefully thought out in every improvement project, including the formal use of six sigma methodologies. Furthermore, inasmuch as customer needs are apt to change with time, it should be realized that a CTQ taken for granted today is not necessarily a meaningful one for tomorrow. Indeed the changing social, cultural, economic and political environments would make it imperative that except for specic, short-term and localized projects, all six sigma CTQs dened within an organization be critically reviewed from time to time. To make six sigma relevant and useful in the long term, business leaders could well incorporate two additional Ss in the six sigma paradigm. The rst is the Systems Perspective, which helps drawing appropriate boundaries for CTQ determination and improvement, combining potentially conicting CTQs for an integrated approach, avoiding local sub-optimization, as well as providing macro-level assessments and reviews. Thus, for example, a systems analysis may reveal the need to simultaneously revamp the standard operational procedures (SOP) of several types of counter service, before a six sigma project is embarked upon for non-defective and customerpleasing efforts in one particular existing counter operation i.e. the potential benets of an alternative system of operation to the bank, and indeed its customers as well, could turn out to be much more substantial and lasting than what is achievable with a narrowly-focused DMAIC effort. The second is Strategic Analysis, with a substantial component of scenario planning aimed at anticipating changes, managing dynamic market demands, predicting novel lifestyles, seizing technological innovations, even promoting creativity and entrepreneurship. Details of managerial and analytical tools for these two important dimensions of organizational excellence can be found in works such as Blanchard and Fabrycky (1997), Boardman (1990), Lacy (1992) and Senge (1990); their integration with DMAIC tools would greatly facilitate the handling of complex and changing situations, as well as optimize multiple decisions under operational or resource constraints.

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The thrust of the improved or augmented six sigma framework is to consciously break out of possible organizational stagnation and complacency. Indeed remaining at 3.4 dpmo is pointless if all the supposedly non-defective products and transactions are not what it takes to make an organization competitive or prepared for changes. In this sense, the two additional Ss are not meant to further reduce the dpmo value or increase the sigma level, but to equip an organization with additional capabilities for performance enhancement and business excellence: NEEDED: Systems perspective DESIRED: Strategic analysis

Extending the advantages of six sigma

The advance from a six Ss Paradigm to one of Eight Ss is summarized in Table I, where contrasts are made between the two in terms of the
Table I Six Ss vs eight Ss Methodology Six sigma Reactive Defect elimination Statistical Performance Stability Downstream Static Local Projects Specic problem Operating point Present Rule-based Tangible Could be identied Conformance Capability Contained Short-term Unlikely Acceptance Individual teams Procedural Technical Diligence Understanding Skills Champions Eight Ss Proactive Defect anticipation Systems Behavior Breakthrough Upstream Dynamic Global Scenarios Dened system Operating space Future-related Knowledge-based Could be intangible Could be unknown Optimality Effectiveness Pre-empted Long-term Approachable Delight Grouping of teams Exploratory Organizational Mind-set Culture Insights CEO

A. Background 1. Approach 2. Purpose 3. Orientation 4. Desired 5. Objective B. Application 6. Needed 7. Nature 8. Location 9. Format 10. Focus 11. Exploration 12. Information 13. Execution 14. Results 15. Key parameters C. Outcome 16. Criterion 17. Measure 18. Problems 19. Improvement 20. Best in class D. Implementation 21. Customer reaction 22. Users 23. Core skills 24. Emphasis 25. Success factor 26. Obstacles 27. Value creator 28. Leaders

background mindset, the circumstances for applications, the likely nature of outcomes, and practical implementation issues. With respect to six sigma, it can be seen in Section A that, very broadly, the six sigma framework, as it is popularly known today, is largely conservative and defensive; the obsession with dpmo counts or reduction thereof is a disincentive for proactive thinking and moves. It is often said that to have zero defect is simply to do nothing a valid mathematical statement in fact! This sentiment then leads to the descriptions of modes of application in Section B, followed by the inevitable results in Section C. Section D highlights the features of common six sigma applications in industry, with disciplined problem solving as the over-arching concern. All these add up to efforts that tend to be conned to immediate, noticeable and tangible issues; the conscious introduction of eight Ss could help break out of this constricting time-space continuum in ways reected by the entries on the right column of the table. The difference between six Ss and eight Ss may be illustrated by an oft-cited parable. Once upon a time at a busy construction site, a hardworking laborer was asked what he was doing. He replied proudly, I am laying bricks, Sir, can you see how well theyre lining up? Another responded, when asked the same question, I am building our Cathedral, Sir, and I am sure its grandeur will please the Lord. Well, both can be said to be doing a good job, except that one is six sigma at best, while the other is on a much higher plane. Coming back to reality: since black belts are meant to be more than ordinary employees, should they remain roaming problem-busting robots forever, or should they be developed for an inner sense of mission, vision, and passion for newer and greater things to come?

Conclusions
As six sigma has taken the business world by storm in the past 15 years, many organizations have focused on acquiring and implementing the DMAIC methodology with performance benchmarks dened by sigma levels. However, after perhaps proclaiming the six sigma organization label for the company, it is important for the business leaders to look beyond immediate concerns, i.e. those issues embodied in black belt projects, and adopt holistic and forwardlooking perspectives in seriously advancing organizational interests. Owing to the very nature of the six sigma philosophy, individuals and organizations content with meeting the commonly understood six sigma benchmark risk being rigid

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and stagnant, albeit focused in solving immediate problems, and tend to be saddled with an error avoidance mentality rather than a breakthrough outlook. In an increasingly competitive and globalized environment, the concept behind Figure 1 could be outright irrelevant since in many situations sigma levels cannot measure, for example, the level of customization, synergy or entrepreneurship. A thriving, growing and winning organization cannot be operating on the basis of error avoidance aspects such as imagination, vision, leadership, passion and creativity are irrelevant to, let alone brought about by, the DMAIC straightjacket. If six sigma is to remain a convenient label for endeavours for organizational excellence, then two additional Ss can be added to the existing six Ss that represent the prevailing features of six sigma. Figure 2 depicts how, with systems perspective and strategic analysis, the usefulness of six sigma can be extended from micro to macro management, and from incremental improvements to long-term excellence. The eight Ss executed in an integrated
Figure 2 Extending the usefulness of six sigma applications

manner could thus help put an organization on a better footing to be viable in a changing and complex world, contributing to a paradigm that is suited to the vitality of alert, far-sighted, agile and successful organizations.

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