In its purest form, Six Sigma is about leveraging the principles and tools of science to abate risk in business. With this in mind, we can view Six Sigma on three levels. First, it is a strategic vision that epitomizes business success. Second, it is a tactical system of management that optimizes the control function of a commercial or industrial enterprise. Third, it is a scientific approach for minimizing the forms of risk commonly associated with the lifecycle of a product or service.
To understand the relative scope and depth of Six Sigma, we can decompose it into three different yet highly related modes of practice. The first is design for Six Sigma (DFSS), the second is processing for Six Sigma (PFSS) and the third is managing for Six Sigma (MFSS). When we consider the formation of these modes, we see that they have been developed and exploited at different times by different people and companies, beginning in 1985 with the late Motorola engineer Bill Smith.
Six Sigma in a Nutshell
We do not intend here to provide a complete history of Six Sigma or a detailed description of how it has moved from a statistical measure to a management system. We would like to point out, however, that it has generally progressed from PFSS to DFSS, as unified by MFSS. At the same time, Six Sigma has evolved in terms of scope and depth as it has been implemented in manufacturing-, engineering-, service- and transaction-based businesses.
Along the way, new modes have been explored and formed by key people and companies, the Lewis and Clarks of Six Sigma, if you will. These are the expedition teams, the early explorers and pioneers who forsook the past to seize the future. They were the ones whose vision pushed them into uncharted land, whose spirit could not be contained by convention. Bob Galvin and Motorola, Larry Bossidy and AlliedSignal, Jack Welch and General Electric – these are among the first and foremost to take the risks and reap the rewards associated with carving out a new business landscape.
We can say that the Six Sigma has reached maturity in the sense that all the major modes have been fully developed, tested and evolved to the point where those who realize their aims can expect the same positive fate of success as those who went before – without adopting the same level of risk. There is now a new generation of Six Sigma settlers and citizens – such as DuPont -who have the benefit of history behind them. They have access to a living library of mistakes, successes and lessons learned. They have the luxury of following the detailed deployment roadmap that has been drawn up by the Six Sigma pioneers and cartographers.
This section is for those who wish to understand the verities of Six Sigma as practiced by the companies that have proven it is immeasurably more powerful than a simple statistical construct. It is for those who wish to grasp the magnitude of each mode of Six Sigma practice and learn more about successful corporate-wide Six Sigma deployment.
The crux of this learning is to understand that a corporation manages and abates risk in three key ways throughout all its business units, facilities, departments, teams and processes. The first is through its capability for creating high-quality designs with a high potential for avoiding or tolerating potential risk. (While the general idea of risk is well understood, there is a wide range of risk categories that can be used to pragmatically focus a Six Sigma initiative. Each individual company must consider the nature of its business, customers, systems, processes, technology and other factors as it recognizes and defines pertinent categories of risk.) We call this capability DFSS.
The second way a corporation manages and abates risk is through its capability for creating high-quality processes that have a high potential for avoiding kinetic risk and, thereby, for realizing value. We call this capability PFSS. The third way a corporation manages and abates risk is through its capability for deploying and implementing the ideas, knowledge, practices and methods required to unify the aims of DFSS and PFSS in an integrated and synergistic manner. We call this capability MFSS.
All three modes of Six Sigma are supported by the Breakthrough Strategy, which is ultimately personified by identification, characterization, optimization and validation (ICOV) -the four stages of improvement. In turn, the Breakthrough Strategy is supported by a host of enabling technologies, embedded within which are the Six Sigma application tools, methods, techniques and procedures. Having outlined the general relationship between DFSS, PFSS and MFSS, let’s peel another layer back to reveal the essence and underlying principles of each.
Design for Six Sigma (DFSS)
DFSS is focused on abating the various forms of risk attributable to the design of a product, service, system, process, transaction, activity or event -regardless of its nature (industrial or commercial). Looking deeper into DFSS, we discover that it is concerned with two equally important and often interrelated aims. First, it is concerned with reducing the relative number of risk opportunities and consequential exposures inherent to the functional performance and physical attributes of a design (customer satisfaction issues). The risk consequence of a design that is subjected to marginal overstress, or the risk of a design feature not having been assigned an adequate performance specification, are examples of such risk.
Second, DFSS is concerned with reducing the relative number of risk opportunities and consequential exposures associated with the “processing viability” of a design (provider satisfaction issues). The risk of assigning overly conservative tolerances that ultimately result in the need for expensive, higher-grade production processes is an example of such risk.
It must be understood that a design is constituted by any type of configuration or plan. In this sense, the idea of design can be applied to a wide array of such rationally conceivable “deliverables” as proposals, books, products, services, software and so on. For example, a five-year strategic plan, the configuration of an office building, an annual meeting or conference – all these must be designed before they are realized in time and space.
Inversely, DFSS is employed to maximize the confidence that a product, service, system, process, transaction, activity or event design will perform to its entitlement level of expectation — and be robust or otherwise impervious to uncertainties that cannot be feasibly managed. For example, consider an automobile design that is highly reliable in a wide range of climates. The goal of DFSS is simple: exercise the Breakthrough Strategy within the total design life cycle to such an extent that each critical value opportunity associated with the functional and physical properties of a design, as well as its inherent “process-ability” is limited to no more than 3.4 risk exposures per million value opportunities (i.e., CTQs).
Processing for Six Sigma (PFSS)
The next Six Sigma mode, PFSS, is concerned with abating the value-related risk associated with the ongoing operation of systems, processes and supporting activities – irregardless of their basic nature (industrial or commercial). More specifically, PFSS is concerned with reducing the extent of consequence associated with a risk exposure. In this context, every risk exposure generated by a design has some probability of becoming manifest in the form of a defect, loss, error or quality-related problem during the process of value creation. From this perspective, it’s easy to see why PFSS is frequently employed for the improvement of process capability, even though it is also employed to improve such other important metrics as cycle time, labor cost, inventory and material cost.
Unfortunately, many corporations focus PFSS almost solely on customer satisfaction issues, which inevitably translate into defect reduction initiatives. Such a biased and narrow implementation is what gives some people the idea that Six Sigma is no different than TQM.
In general, PFSS is employed to maximize the confidence that a system, process or activity will realize its entitlement capability and capacity in the short term and sustain that capability and capacity in the long term. The goal of PFSS is simple: exercise the Breakthrough Strategy to the extent that each value opportunity related to the operation of a system or process experiences no more than 3.4 risk consequences per million value opportunities.
It is interesting to note that this goal is often expressed in the language of classic quality management – no more than 3.4 defects per million opportunities (DPMO). Although DPMO is frequently used as a measure of risk, it is quite restrictive in that not all forms of risk become manifested in the form of defects. For example, certain forms of economic risk are not related to the creation of defects.
Managing for Six Sigma (MFSS)
The third territory of Six Sigma, MFSS, is the underlying foundation of leadership for a Six Sigma initiative regardless of its nature. It is concerned with the creation, installation, initialization and utilization of the deployment plans, reporting systems and implementation processes that support DFSS and PFSS. The ultimate goal of MFSS is simple: attain best-in-class business performance by improving the operational capability and capacity of an organization at an annualized rate of approximately 78 percent (Six Sigma learning curve).
We can also view MFSS as the unifying leadership component of Six Sigma that overlaps the aims of DFSS and PFSS for the purpose of synergistically realizing value entitlement for the customer and provider in every aspect of the business relationship. Even as MFSS empowers already strong leaders, it is the primary agent for effectively and efficiently planning, organizing, initializing, executing and sustaining breakthrough improvement for a corporation, business unit or facility.
When we think in terms of providing value – and the risk associated with not providing value – we realize that critical-to-value characteristics (value opportunities) provide an excellent focal point from which to formulate business improvement plans. So when we talk about Six Sigma in its purest form, we talk about the points in the customer/provider relationship where value is at risk. These points run the full spectrum of the business cycle from issues in design, problems in manufacturing, in workmanship, in paperwork, in transactions, etc.
The way we manage these risk points, and move toward Six Sigma, is to identify, characterize, optimize and validate them using the big ideas of Six Sigma (ideas, needs, value, design, determinism, measurement, leverage, opportunity, transformation, error, probability and power), the Breakthrough Strategy” and various Six Sigma technologies. The net result is that we abate business risk and increase business confidence.
Having said this, we must remember that this value and risk orientation represents next-generation Six Sigma thinking and practice, particularly in the DFSS and MFSS territories. For the sake of convention, and in the spirit of effective communication, we have from day one diligently tried to couch Six Sigma in the language of quality management and practice. A time will come, however, when convention will give way to renewal.
There will be a critical mass of companies that truly achieve value entitlement between the customer and provider in every key aspect of the business relationship. When this happens, there will be a much stronger linkage between minimizing business risk and maximizing customer satisfaction, and Six Sigma will have played its role in making this connection.
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Business Email: Mikel.Harry@SS-MI.com
Copyright 2013 Dr. Mikel J. Harry, Ltd.