The Evolution and Relevance of Six Sigma: A Modern Perspective

Six Sigma is a data-driven approach to driving quality improvements in business processes. For years, organizations in all kinds of industries, from healthcare to banking and manufacturing, have used this methodology to reduce defects in their products or services. But a lot has changed since Six Sigma first emerged from the factory floors of Motorola. Digital technologies have driven unprecedented change to just about every business process imaginable.

With innovation moving at breakneck speed, some worry that the methodical, precise nature of Six Sigma means it has no place in the contemporary business world. If you’re asking, “Is Six Sigma still relevant,” the answer is: absolutely! Many of the most cutting-edge companies, such as Microsoft and Pfizer, still use Six Sigma and Lean Six Sigma to enhance their processes, reduce errors, and optimize performance.

On this page:

• Brief Historical Overview of Six Sigma
• The Core Principles and Techniques of Six Sigma
• Case Studies: Six Sigma’s Impact on Quality Management
• Adaptation in a Changing Business Environment
• Relevance of Six Sigma in Contemporary Practices
• Prospective Developments and Innovations in Six Sigma
• Conclusion

Brief Historical Overview of Six Sigma

The Six Sigma method was initially developed in 1986 by American engineer Bill Smith while working at Motorola as a system for boosting the company’s profits. Smith designed Six Sigma as a management technique for increasing productivity while eliminating mistakes. The process lends itself particularly well to industrial entities, including manufacturing and pharmaceutical companies.

Within the first 20 years of its adoption, Motorola saved $17 billion thanks to Smith’s data-driven approach to quality control. In the years since, plenty of Fortune 500 companies, such as General Electric and Honeywell, have adopted Six Sigma and reported significant cost savings.

Over time, the Six Sigma industry found that Six Sigma could be greatly enhanced if it incorporated some Lean concepts, which led to the creation of “Lean Six Sigma.” It has also allowed Six Sigma to adapt to the digital age by embracing data analytics and technology. Today, any Six Sigma program worth its salt has incorporated “Lean” principles.

The Core Principles and Techniques of Six Sigma

Six Sigma is a scientific method that uses verifiable data and statistics to make decisions that can help businesses achieve measurable profit gains. By generating tangible improvements to the quality of products and services, you can increase customer satisfaction and reduce costs at the same time. At the core of Six Sigma are several assertions, including:

• Reducing process variation is essential to business success.
• Manufacturing and business processes have characteristics that can be defined, measured, analyzed, improved, and controlled.
• Sustained quality improvement can only be achieved when an entire company, starting with the executive team, is committed to realizing it.

The disciplined Six Sigma methodology is designed to eliminate defects in any business or organizational process. A Six Sigma process must not exceed 3.4 defects per million (99.99966%) opportunities. Being Six Sigma allows organizations to achieve quantifiable and measurable financial returns from any business process following this methodology. Successful adherence diminishes variation that impacts quality, resulting in a better product or service, improving customer satisfaction, and reducing costs caused by errors.

Six Sigma projects follow two project methodologies: DMAIC and DMADV. There are specific activities and deliverables teams must complete in a given DMAIC project. While the complexity of projects varies, most are finished within four months.

A DMAIC project consists of the following phases:

1. Define: Identify the problem, the improvement opportunity, the project goals, and the customer requirements (internal and external). Once the team understands the situation, create a map illustrating how to fix it.
2. Measure: Collect data and quantify the problem so the project team can measure performance and evaluate improvement.
3. Analyze: Use the data to investigate and verify the variables impacting the problem. Identify the relationships between the variables so you can understand cause and effect and determine what is driving the defect at the center of the project.
4. Improve: Run experiments to learn how to implement the desired improvements and eliminate the underlying cause of the defect.
5. Control: Measure performance to ensure the newly improved process is successful. If there are any deviations from the previously targeted improvements, they should be corrected to ensure they do not result in defects.

DMADV is used for projects creating a new product or process or dramatically overhauling an existing one. The five phases of DMADV include:

1. Define: Clarify the purpose of the project, including identifying goals that align with the organization’s strategy and customer requirements.
2. Measure: Identify Critical To Quality (CTQ) characteristics and the metrics critical to stakeholder success.
3. Analyze: Develop design alternatives and use them to test the process, product, or design. These tests allow the team to select the best components and create the best design.
4. Design: Create detailed and high-level designs for the new process or product. This phase allows the team to identify unforeseen errors and make additional modifications as necessary.
5. Verify: Review the new implementation with stakeholders to verify it will be effective once deployed.

Case Studies: Six Sigma’s Impact on Quality Management

Real-world examples are the best way to understand how Six Sigma projects can deliver tangible results. Fortunately, Six Sigma has been used by some of the world’s largest corporations, including:

Boeing Airlines

Once upon a time, the aerospace giant was battling issues with their engine’s air fans but could not identify the exact problem. After determining the problem stemmed from foreign object damage, Boeing used Six Sigma to trace the problem to a more fundamental manufacturing issue causing electrical issues.

Microsoft

The software company has long used Six Sigma tools like value stream mapping. Notably, Microsoft used VSM to analyze customer demand and realize they needed to develop an operating system compatible with networking, non-computer devices, televisions, and personal digital assistants. This led to them creating Windows CE, one of their most successful products to date.

Adaptation in a Changing Business Environment

Obviously, the worlds of business and manufacturing were very different back when Six Sigma first came on the scene. Over the years, Six Sigma has been adapted to address the unique challenges and requirements of different sectors, including healthcare, finance, and information technology. The spread of the method to new industries has coincided with another significant change: digital transformation.

As McKinsey writes, DX is a strategy that provides businesses with a “competitive advantage by continuously deploying tech at scale to improve customer experience and lower costs.” Sound familiar? Because digital transformation is a long-term effort to continuously improve how a company operates, it has meshed perfectly with Six Sigma, which has incorporated tools and techniques that leverage data analytics and automation.

Some will argue that Six Sigma is too rigid to be of much use in the digital age of business. This notion couldn’t be further from the truth. In recent years, Six Sigma has evolved to meet the changing needs and demands of industries and organizations, including by integrating Lean principles with Six Sigma (aka Lean Six Sigma). This combination focuses not only on reducing defects but also on eliminating waste and improving overall process efficiency.

Take a look at software development and project management: these disciplines use agile principles because they can accommodate today’s fast-paced and rapidly changing business environment. Agile methods promote flexibility, collaboration, and faster delivery of results, which, as it turns out, align well with the continuous improvement aspect of Six Sigma. Even as DX has altered industry demands, Six Sigma has proven it can complement agile and digital strategies by offering a structured approach to process improvement and quality management.

Relevance of Six Sigma in Contemporary Practices

If you’re questioning whether or not Six Sigma is relevant to your organization, just consider your pain points. Do you need to enhance quality? Are processes too complex? Is there too much variability in your product or service?  If the answer is yes, then Six Sigma’s methodologies can help.

Here are a few current business priorities that benefit from Six Sigma principles:

Customer Experience: Whether you are talking about improving patient care in a hospital or reducing customer service wait times in call centers, modern Six Sigma implementations emphasize a customer-centric approach. Understanding and meeting customer expectations is a key aspect of process improvement, and organizations of all kinds are now using techniques like Voice of Customer (VOC) analysis and customer journey mapping to gain insights and drive improvements that directly impact the customer experience.

Supply Chain Visibility: Following significant supply chain disruptions in 2022, Six Sigma tools like process mapping have been critical for finding pain points and gaining a deeper understanding of supply chain operations. Supply chain managers can use Six Sigma to identify process variations, potential risks, and inefficiencies before they become a problem.

Just-in-Time Manufacturing (JIT): JIT manufacturing is an operations strategy aimed at producing the exact amount of goods at the exact time they are needed. Together with the Six Sigma method, JIT creates a synergy that allows manufacturers to better meet customer demands, respond to market changes swiftly, and maintain a competitive edge.

Prospective Developments and Innovations in Six Sigma

Data is king in the digital age, and that’s not going to change. Businesses want to measure and optimize every process, no matter how small. As a data-driven process, Six Sigma has already proven it’s adaptable to emerging business practices, which suggests it will be instrumental in addressing future challenges. Expect greater integration of tools and analytics, as well as AI and machine learning.

Here are a few common challenges Six Sigma will help organizations overcome:

• Globalization: As businesses continue to operate in a globalized context with complex supply chains, Six Sigma will play a role in optimizing and managing these intricate networks.
• Sustainability: Just about every business is feeling the pressure to develop greener practices. Sustainability will become a more central focus, and Six Sigma can help reduce environmental impact by enhancing resource efficiency, minimizing waste, and ensuring processes align with sustainability goals.
• Industry 4.0: IoT, robotics, 3D printing, and artificial intelligence (AI) are all coming to manufacturing in an effort to increase product quality. Six Sigma will be front and center as these companies look to optimize the role of this new technology.

Conclusion

Six Sigma has remained relevant by staying adaptable and incorporating emerging practices and trends into its framework. Many of the world’s largest businesses rely on Six Sigma’s statistical quality management methods to improve processes, products, and services. For four decades, it has made enterprises better and more profitable while increasing customer satisfaction. With the integration of agile principles, big data analysis, and change management, Six Sigma principles continue to provide a robust, powerful problem-solving system that is as relevant today as ever, no matter what your industry is.