Six Sigma Methodology Processes

Working toward process improvement calls for managing and assessing essential process requirements throughout the production phase of products/services and this can be only achieved through applying some common and innovative six sigma methodologies with perfection rate of 3.4 parts per million.

Sigma is the sign of variation which is often referred to as Standard Deviation in statistical language. True to its symbolic meaning, it measures how much data deviates from a specified set of values in a data-oriented system. But if we implement one of its fundamental applications in a business process, we get introduced to a brand new theology of Six Sigma, purely based on statistical standard normal distribution. Through a series of methodologies, it helps in measuring quality of inventories incorporated in a system and minimizing variations to synchronize the business development with strategic business goals.

Why Six Sigma Methodology is Important?

Some common processes involving Six Sigma methodology are processing of customers/clients bills and invoices,human resource management, common budgeting and financial operations and evaluation of business performance in each and every segment of business transactions. This can be judged effectively by measuring variance rather than just relying on working on mean for all the business-centric processes. And, in true sense, this is the point where the importance/need of Six Sigma Methodology arises. Six Sigma Methodology processes provide empirical support to justify all the attributes associated with business development process and give the true meaning to any business transactions by minimizing variance and enhancing process capability.

Some Six Sigma Methodology Processes:

There is no denying the fact that Six Sigma has just one main goal Increase process efficiency by reducing variation and deliver best quality products in all the critical domains of business development system. In simple words this is called business process improvement. But implementing this, however, is not so simple and it calls for comprehensiveplanning and systematic implementation. This is done through a number of six sigma methodologies and sub-methodologies divided into projects and subprojects. Some common project-oriented methodologies are: DMAIC Method This is an exclusive enterprise management method comprising four fundamentals of business-oriented tasks that define process improvement parameters Process Definition, Process Analysis and measurement, Process Improvement and Process Control. At first stage, Process goals are defined in a data-oriented system. It is then followed by some simple data related operations including planning and estimation. The project team is then assigned a task of comparing process improvements with the customer demands and strategic project goals through a thorough analysis. A detailed project report is prepared for reviewing this whole six sigma methodology and thus ensuring that sufficient improvements have been brought to the process by analyzing various techniques like Design of Experiments. But remember, DMAIC Method is all about core method of planning and implementation with a tint of technical analysis of process and project design. DMADV Complete Design Method: Again, based on five fundamentals (definition, measurement, analysis, design and verification), DMADV method is used for core design activities for producing new deliverables with non-defect performances. (Note: The words defect and defective differ significantly in statistical process of control; so the word defective cannot be used here.). Once again the method starts with defining goals, measuring product capabilities, and evaluating risk parameters. But these initial steps in this method are not similar to those in DMAIC Method. In DMAIC Method, emphasis is given on the essential factors of human dimensions apart from measurement and evaluation of process quality. But in DMADV method, the system is more technical and purely related to process specifications involving developing high level designs with great design alternatives. This is a complete design method which involves setting and selecting designs, working on all the details of designs selected, analyzing the techniques of design optimization and dealing with verification process of designs. IDOV Method

One of the most commonly used methodologies in Six Sigma is IDOV method. It is an acronym used for Identify, Design, Optimize and Validate in a statistical process control. This may sound similar to DMADV method, but it is different in its implementation and system engineering. This is a sophisticated method used for testing and validating business process design. And yes, it undergoes four different phases true to its name Identification phase, Designing Phase, Optimization Phase and Validation phase and meets customers specific requirements with the value assessment of process performance and business

models. Apart from these three methods there are a number of sub-methods applied in the business improvement process. And to be true, its not definite the accurate definition of any six sigma methodology; it totally depends on process requirements and business initiatives. However, fundamental methodologies like In DMAIC Method, In DMAIC Method and IDOV Method cannot be discarded in any process management system.

DMADV Steps

In Six Sigma and Lean Six Sigma there are many step processes you can implement depending upon your project. Some of these steps include DMAIC, DMEDI, and finally DMADV steps. The DMADV Methodology works a little different and is more customer driven.

What Is DMADV?

DMADV steps or define, measure, analyze, design and verify works in Six Sigmaessentially because of the last two stepsdesign and verify. Unlike DMAIC (define, measure, analyze, improve, and control) where the last steps are improve and control, in DMADV, the design and verify stages are utilized to enhance client and stakeholder satisfaction. The best way to describe the DMADV Methodology is to use a project scenario. Lets say an auto manufacturer receives consumer complaints on how their seatbelts fit the driver. Maybe they scratch their neck or are too bulky. Whatever the reason, the auto manufacturer knows the seatbelt is safe but customers dont like them, hence the design and verify stage. Another example could be the design of a dog bowl that offers inserts to ensure the dog doesnt eat food too quickly. While the inserts do slow down the dogs eating, if the bowl constantly tips over, then somethings wrong.

Using DMADV in Six Sigma

Six Sigma is a quality improvement process that, if used correctly, helps to ensure the end product is correct as delivered. The most popular choice in Six Sigma these days is the DMAIC process (define, measure, analyze, improve, and control). Much like the fairly new DMEDI, (define, measure, explore, develop, and implement), DMADV is a quality process that is based on customers wants and needs or complaints, once they are discovered. In DMADV, customers are involved much as they are in the Agile Management Methodology, especially if you consider the design and verify phasesthey are much likeAgile user stories. If we take the example of our seatbelt unacceptability, through using the DMADV process, the phases of DMADV might look like this:

Define Much like DMAIC, the define stage is where the end product or seatbelt is designed based on clients wants or desires. Measure Measuring is how you will process the seatbelt as defined. Analyze Through analyzing the process that will result in the end product, areas of improvement and changes are discovered through simulations, not users, so the actual driver never gets to test the seatbelt. Design Here is when DMADV differs from DMAIC. Its clear to the automaker that although the seatbelt will do what its supposed to do, the customer doesnt like it. By revisiting the design based on end-user suggestions and input, the design can be restructured to please.

Verify Verification of the new design must be determined by the end-users. If complaints on the uncomfortable seatbelt cease, then the DMADV process has worked.

As Six Sigmas popularity grows, so will its enhancements, phases, and choice of which quality improvement process will work best based on the project at hand. The decision on which is best DMADV or DMAIC may be best determined on the project or task set in front of you. Ultimately, project managers must make the decision on which process to take using Six Sigma and it should be per project based and well thought out.

DMADV Case Study: Performance Management System Redesign

Dushyant Thatte January 23, 20124 To facilitate the development of its employees and better respond to the changing business environment, one department of a large financial-services company decided to revamp its existing performance management system through a Six Sigma project. A pre-project analysis revealed that a complete redesign of the system was required. As incremental improvement in the existing system was not possible, the project team followed the Design for Six Sigma (DFSS) DMADV (Define, Measure, Analyze, Design, Verify) roadmap, incorporating best practices from Six Sigma, project management and information technology (IT) service management. This

case study covers a few major aspects of the project, which could readily be applied in similar situations across various industries and business environments.
Define Phase

In the Define phase, the team created a goal statement: To implement a comprehensive, wellaligned and consistent performance management system for Department A. The team looked at the existing performance management system. It had the following prominent attributes:

The system supported all product lines of Department A, covering more than 200 employees. The implementation and usage of the system was limited to individual departments. The company had functional silos, and employee goals were determined within the department. Unit managers (there were multiple units within each line of business) were responsible for setting performance targets for their units. Individual performance was compared against the set target.

Measure Phase

As part of the Measure phase of the project, the team analyzed the existing performance management system. Then by interviewing key stakeholders, team members identified what the company wanted from such a system. In particular, the improvement team focused on the identification of:

Most useful features of the current system Not-so-useful features Missing features (i.e., needed improvements)

When interviewing managers, team members asked the following questions:

How can this system help you in coaching, performance appraisal and decision making? What information do you want to receive in order to develop and maintain employee and service performance?

The team further had to consider these factors for the performance management system:

Frequency: How often should metrics be updated? Availability: At what time should the performance management system should be available? Security: Who should be able to see what information? Continuity: Is it a business-critical application? What needs to happen during/after a disaster? Capacity: How many users need to be supported? How much data needs to be stored?

Analyze Phase

Based on the information gathered during the Measure phase, the team identified the vital problems of the existing system and derived key requirements for the new system as an output of the Analyze phase (table below). Deriving the Key Requirements of a New Performance Management System
Problem with Existing System Managers were able to influence the targets heavily and were setting up lenient targets. Thus, a lot of employees were rated high performers while the business was not benefitting equally. Key Requirement for New System Head of department to set productline targets. These targets should be used to compare roll-up level metric values to determine each units performance. Current achieved performance levels at unit and department level should be used to derive the future performance targets. Standardize performance management process, metrics and ratings to enable quick understanding of process, roll-up of metrics and comparison of employees across product lines.

Performance metrics and ratings across product lines were not standardized, thus making it very difficult to translate and roll up metrics from individual employee to department level.

Performance metrics were available System should be refreshed daily to only at the end of the month, making provide up-to-date information. it difficult for managers and individual associates to take corrective action proactively. Productivity was weighted much higher than quality. The focus on productivity came at the expense of quality. Equal importance to be given to productivity and quality. Department head should also have a mechanism to change relative importance according to business need. Set up peer groups to enable fair

Individuals within each product line

were compared against each other, even if performing different tasks. This comparison was not standardized, making entire system biased toward some types of tasks. Individual employees did not have access to their own performance metrics, thus hindering self-directed performance improvements.

comparison. Together with standardized performance metrics and ratings, this should enable comparison across the board.

Each employee should have access to their own performance metrics and should have a way to compare it against the baseline and against the peer group. Month-over-month metrics values and trends should be automatically generated. Also, provide a facility to select the reporting period.

Month-over-month metric trends were not available. Creating such a trend report required a lot of manual effort. Design Phase

With its functional silos, the business environment was not conducive to a solution that incorporated a balanced scorecard approach. The functional silos made it difficult to cascade organizational-level targets to departmental-level targets and further to individual-level targets. Due to these reasons, a balanced scorecard approach was eliminated from the scope of the project. Because a key requirement of the new performance management system was to move from using a fixed-target system to a dynamic-target system, two alternatives for measuring baseline performance were thoroughly explored: 1) the best known performer, also referred to as kperformer, and 2) the average performer. Ultimately the department decided to go with average performance as the baseline. Before the decision was made to move from a fixed-target-based system to one based on a dynamic target, there was much deliberation on that question. Some of the prominent points that came out of those discussions would be of interest to all practitioners:

A fixed-target system provides visible targets to employees. Typically, it does not require complex calculations and makes it easy for individual employees to determine their own rating solely based on their own performance. On the other hand, the dynamic-target determination system (either best performer as baseline, or average performer as baseline) makes it difficult to determine the target and leaves employees with some guess work until the final performance targets are derived and announced. A fixed-target system is susceptible to violations. Targets could be set so that they are either too strict or too lenient. A dynamic-target determination system fills this gap. It is also self-

corrective in nature, and adapts itself according to business and employee performance. For example, in a fixed-target system if there is not enough work to achieve productivity targets, employees would not have enough opportunity to meet the targets and would be rated below target. The dynamic target determination system would accommodate such fluctuations and is thus a more robust system. Setting the k-performer as a baseline would make the entire populations performance ranking highly vulnerable to the performance of one individual. This is similar to the impact that an outlier can have on a set of data. Setting the average performance as a baseline reduces this vulnerability, making the system more robust.

Equipped with input from stakeholders and the derived requirements for a new performance management system, the team moved forward with a solution following these five steps:
1. 2. 3. 4. 5. Identification of alternatives Comparison of alternatives Selection of the most feasible alternative Creation of an implementation plan Implementation of the solution

Those steps were considered from both a functional and an IT perspective.

Verify Phase

As part of process control, a technique for automated data validation and verification was employed. This technique helps indicate any out-of-order data point to line managers and the department director. These out-of-order data points and any other significant events are recorded in an event log. An incident log has been established to capture various incidents that take place with respect to the performance management system. The event log and the incident log play a pivotal role in the identification of improvement opportunities. About 12 months after implementation, the system has been performing to expectations. An evaluation to either maintain the status quo or to improve the system further would be made as part of the strategic planning session for the following year.