Vol. 29 No.3
MARCH 2004

Vice-President Files
Chapter Chatter

VICE PRESIDENT'S FILES


Is 6-Sigma a Value Improving Practice?

SAVE International is THE Value Society. As such, is it not our mission to continually improve value? Of course it is. And the practice of the Value Methodology using the Job Plan continues to be our primary means to improve value. But, it is not the ONLY way to do so. Six-Sigma is another value improving methodology that complements (not replaces, supercedes, or competes against) our Value Methodology.

We have been introduced to Six-Sigma at the last couple of annual conferences in both workshops and technical sessions. Based on the feedback received from these sessions, it appears that there is an interest among our members and conference attendees to move forward with a deeper understanding and practice of Six-Sigma.

At the February Board of Directors meeting, we addressed one of SAVE's strategic goals "To embrace new tools and techniques". The board will better define our intentions about this goal by saying "SAVE will actively pursue and develop value improving practices". This is not new to SAVE. In the 1960's (I'm told), SAVE embraced Function Analysis System Technique (FAST) as a new value improving practice to enhance function analysis. I am not suggesting that Six-Sigma is similar to FAST, but it certainly is a proven methodology that improves value by reducing the variation of a desired function.

I and some other interested SAVE members are developing a survey to determine the level of interest you, our members and others interested in improving value, have in actively pursuing this methodology. But, even before the survey, I would be interested to hear from you about your thoughts concerning Six-Sigma and SAVE International, your experiences with Six-Sigma, and most importantly, your interest in actively helping us move forward with Six-Sigma in SAVE, if that is the will of the members. Please feel free to contact me with your feedback.

Drew Algase, CVS
SAVE International - VP, Manufacturing
Master Black Belt, Lean & Six Sigma
Freudenberg-NOK
valuedma@comcast.net

Frequently Asked Questions about Six Sigma
(Excerpted from Freudenberg – NOK)

What is Six Sigma?

Six Sigma is several things. First, it is a metric of "standard deviation" that indicates how well a process is performing. Measuring products and service by sigma allows a company to quantify quality. Six Sigma (six standard deviations) is the new corporate goal, which means processes will experience only 3.4 defects per million opportunities, or 99.99966 percent goodness. The higher the sigma value, the better the process is performing. Sigma measures the capability of a process to perform defect free. Using sigma as a metric allows comparisons to be drawn to similar and dissimilar products, services and processes. The sigma scale of measurement can be applied to anything, regardless of how simple or complex.

Six Sigma is also a business strategy and a philosophy designed to help companies gain a competitive edge. The reason for this is simple, as the sigma rating improves, the product quality improves and the costs go down. Naturally, the customer becomes more satisfied as a result. The goal is to make fewer mistakes in all areas from manufacturing products to filling out a purchase order. Essentially, the philosophy is one of working smarter, not harder.

Six Sigma methodologies allow you to reduce things to a common denominator – defects-per-unit and sigma. In turn, this provides a common language and the ability to benchmark against like products and processes. One of Six Sigma's most compelling aspects is the ability to determine whether or not progress is being made on solving a problem. Progress is not measured anecdotally or subjectively - it is purely quantitative.

What is the Six Sigma Process?

The use of the Six Sigma process is intended to result in "break-through" improvements. That is, achievement of a Six Sigma defect level ≤ 3.4 defects per million opportunities. It consists of a five- step "job plan" often referred to as "DMAIC":

1. Define – project bounding, scope and objectives
2. Measurement – characterize the current state
3. Analysis – identify and analyze critical input variables
4. Improvement – identify, test and implement solutions
5. Control – standardize monitor process; "Hold the gains"