Hi, welcome to this lesson where we will be looking at Six Sigma.
What content is covered in this lesson?
We’ll talk about in the next few minutes:
- the history of the development of this method,
- the dimensioning of the projects,
- the DMAIC core process,
- we go very superficially into the many tools for implementation,
- deal with the interesting role system,
- the Six Sigma levels for the certification of individual processes,
- we consider SPICE as a modification for software development,
- the benefits that Six Sigma brings us,
- and the most common reasons why Six Sigma projects fail.
But now to the content of this lesson:
What is Six Sigma?
Six Sigma is a quality management methodology that provides both a comprehensive set of tools and a guide to implementation. One of the reasons Six Sigma is so interesting is that 2/3 of all large companies in the manufacturing and service industries worldwide use this method. For us in software development, this method is also interesting, because with SPICE there is a process management modification that has been specially adapted for our area, and the interaction with large company structures thus runs into each other without interfaces.
Where did Six Sigma originate?
The precursors of Six Sigma come from the Japanese shipbuilding industry and were further developed by Motorola in 1987 into the Six Sigma method we know today. The method’s worldwide triumph was initiated by Jack Welch of General Electric after he introduced Six Sigma at GE in 1996 and subsequently achieved great success for the company. Numerous other companies have subsequently followed suit.
Attached to this lesson you will find a PDF in A3 format with the Six Sigma overview shown here. Feel free to print this out and hang it on the wall in your project room as a discussion and explanation tool for the team.
What does a Six Sigma improvement process or DMAIC core process look like?
A Six Sigma improvement process is always implemented as part of a project. Projects should not exceed 3-6 months. The average optimization potential for large companies should be €250,000 and, due to its expense, should not fall below €50,000. The core process here includes
- the recognition and description of a problem,
- often using standardized analysis methods,
- special flowcharts to visualize the process,
- a tree structure to describe measurable critical parameters that determine quality,
- customer complaints
- and a clear delimitation of which aspects should be part of the project and which should not,
- the definition of a desired target state,
- a first guess for the deviation to the target state,
- the project definition with the necessary roles and resources
- as well as a schedule (see here under DEFINE).
- Under MEASURE follows the description and calculation of the effects
- with an investigation of the extent to which the current process meets existing requirements,
- a process capability study for each relevant quality characteristic,
- visualization of the existing process with the help of a flowchart,
- as well as substantiating the need for improvement with statistical figures or a trial design to improve the current situation.
- On this basis follows under ANALYZE the investigation of the causes of the problem
- often on the basis of value-added, material flow or value stream analyses
- and using the process and test data provided in the previous phase, which are evaluated using statistical methods,
- in order to identify the main sources of control and the underlying causes of the problem.
- With today’s technological capabilities, more and more Deep Learning methods are being applied at this stage.
- Once the root cause has been identified, the IMPROVE phase involves the development of solutions that eliminate the problem by
- brainstorming and other creative techniques to find solutions,
- the improvement is planned,
- tested and finally
- is introduced.
- Part of this phase is also a cost-benefit analysis, which decides whether to continue the project or maintain the current state,
- a graphical target representation
- and an FMEA analysis that also identifies risks for the solution, consistently minimizes them or provides procedural instructions when a risk occurs.
- The optimization of a process is followed in the CONTROL phase by the continuous measurement of the improvement in practice.
How does Six Sigma fit with the Scaled Agile Framework (SAFe)?
In the SAFe framework, the Six Sigma approach is implemented in the portfolio and full scaling with the item “Measure & Grow”.
These include
- a process documentation,
- a process management and response plan,
- a pre-control via suitable measurement parameters that indicate a deviation from the target in good time
- and a project success calculation.
Due to the English initial letters, this most commonly used core process is also called DMAIC core process.
Where is the DMAIC core process applied?
The Six Sigma core process is typically used for sustainable improvement of existing company and project processes. However, it should also be said that the complete use of the core process is only profitable when, due to the considerable effort involved, the increase in profitability resulting from the improvement at least 50,000 € / $. This is precisely why the cost-benefit analysis is built into the IMPROVE phase. In relatively advanced status due to late availability of baseline data, but still early enough to use funds and resources economically. This economic containment then also means that not every small potential for improvement has to go through the Six Sigma process. Often the improvement is then easier and faster implemented under the hand.
What tools does Six Sigma provide?
A full 49 official tools are available for implementing Six Sigma, covering the areas of
- customer tools
- project tools
- lean tools
- management tools
- design tools
- graphic tools and
- statistics tools
. To go into detail about each of these tools here would go beyond the time frame and purpose of teaching the basics. However, the tools include e.g.
- Requirements structuring
- Customer interviews
- Customer questionnaires
- Project and team description
- Tree diagrams
- Cost-benefit analyses
- Standardization
- Value stream analyses
- Flowcharts
- Decision trees
- Relationship diagrams
- FMEA
- Histograms
- and many many more
What are the roles in Six Sigma?
Where Six Sigma gets really interesting is when it comes to roles. The roles are distributed from corporate management to operational implementation and also include advisory functions. The role designations are very reminiscent of the master degrees of Japanese martial arts and are strictly hierarchical.
At the top of the hierarchy are the champions, who are distributed among the following roles:
- The head of Strategic Management is the entrepreneur, who ideally has many years of experience and passes on his knowledge to universities. This role carries the initial belt and exists only once in the company.
- The delivery champion is also a member of the executive team, and he is the operational driver and advocate for Six Sigma within the company. He thus has more strategic and disciplinary tasks. It has little to do with implementation. His belt is based on the subsequent grouping according to experience and expertise – and this role also only exists once.
- The Project Champion is typically a member of middle management and the client for each Six Sigma project. Project champions are often the process owners for the company’s operations and thus responsible for their improvement as well as subsequent control. The fewer project champions there are, the better the company’s operations can be coordinated. However, the larger the company, the more project champions are needed. So the number is a matter of a manager’s maximum capability.
And now for the belt colors, which are delineated by experience and expertise:
- The Black Master Belt is reserved for employees who are full-time experts in improving company operations. They usually act as coaches, trainers or instructors, ensuring that the wealth of experience is disseminated and adhered to within the company.
- The Black Belt is reserved for those employees who are experienced Six Sigma employees and assume the role of project manager for Six Sigma improvement projects on a full-time basis. The black belt holder must accompany at least 8 improvement projects per year, successfully complete 4 of them and achieve a saving of at least €/$ 200,000. Failure to achieve will result in demotion to the belt whose performance is associated with it.
- The green belt is also definitely still in management. This role mostly involves department heads, group leaders, planners or foremen who work in project teams or even lead sub-projects. Green belts report to black belts.
- In addition, each company can incorporate further hierarchies below the green belt as required, which are then structured according to the belt colors white, yellow and blue and each have self-defined prerequisites.
How should the Six Sigma roles be distributed in the company?
According to the Six Sigma guideline, there should be one black belt active in a company for every 100 employees (this is the 1% rule). A black master belt shall supervise up to 20 black belts. This also clarifies the direction of project numbers by company size and the minimum savings Six Sigma envisions for each company size. And then the designations according to Japanese martial arts are no longer a surprise: the achievement of the goals is a struggle. Failure to achieve a failure with consequence. And the whole thing with a strict hierarchy. If you are now in doubt because this seems incompatible with agility and lean management, you are absolutely right. That’s just the way it is. You will definitely encounter and have to deal with this success-oriented Six Sigma thinking in large companies. The project manager or process owner will constantly scrutinize your work and project processes. He is always conflicted between the cost-benefit equation and his Six Sigma goals. With this foundation, you will be able to understand the needs of project managers – and thus work together better.
How do companies get certified for Six Sigma?
And now it goes one step further: the company earns a grade per process chain depending on the error rate, which is measured in 7 levels. The level reached is certified by recognized experts. Today, this certification is a frequently requested prerequisite or evaluated advantage when deciding on a supplier and is therefore worth hard cash.
And if you are now wondering which level is normal and which is very good, this distribution curve might give you a nice overview. All large companies reach level 0 for their process chains, as no Six Sigma has been implemented yet. 70% have implemented Six Sigma for process chains, making Level 1 virtually certain. Level 2 is achieved by only about 25% of Six Sigma companies. Level 3, well, even less so. The further levels remain only goals for almost all companies. Incidentally, the values in the DPMO column indicate the errors in relation to 1 million units.
What is SPICE?
We have been looking at the DMAIC core process all along. As already indicated, however, there is an adaptation for the area of software development called SPICE, the implementation of which largely corresponds to DMAIC, but the levels of which are structured as follows:
Why are there so many companies practicing Six Sigma?
When I spoke earlier about cash coin for reaching a level, that applies especially to the Automotive SPICE level. If you want to supply safety-critical software and electronics to automotive manufacturers today, then you simply have to be SPICE Level 5 certified – otherwise you have no chance of a direct and thus high-margin order. This means that you have implemented Six Sigma cleanly from front to back. The situation is similar in the aviation sector, of course, and to some extent also in subsectors of medical technology.
But that’s just one reason to adopt Six Sigma. Other reasons are
- the annual cost savings,
- the reduction of the process error frequency and thus also the quality improvement,
- the increase of customer satisfaction
- and the lasting effect of this process management method.
Why can Six Sigma improvement projects fail?
Incidentally, the most frequent cause for the failure of Six Sigma projects is the wrong selection of projects, if, for example, the potential for improvement is too low, the project duration too long or the cost-benefit ratio negative.
Now let’s summarize what we have covered in this lesson:
- we have learned about the history of the origins of Six Sigma,
- how projects should be sized,
- we have dealt extensively with the DMAIC core process,
- are only very superficial about the many tools for implementation,
- have learned about the interesting role system,
- now know that individual processes are certified in addition to employees,
- we got to know SPICE as a modification for software development,
- we have recognized the benefits that the use of Six Sigma or SPICE brings us,
- and now also know what causes most Six Sigma projects to fail.
In the lesson after next, let’s deal with a small digression on certifications, because the background of certifications is perceived by many only as a nuisance and thus the background is not recognized.
But before that, we have another little surprise for you: The following lesson contains a short quiz in which you can check for yourself which content from this lesson has stuck with you. I wish you a lot of fun with it, see you again in the lesson after next!
