Six Sigma : Business Analysis Explained

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Six Sigma : Business Analysis Explained

Six Sigma is a highly structured, data-driven methodology for eliminating defects, waste, or any other business problem associated with quality. It is a set of techniques and tools that seeks to improve the quality of process outputs by identifying and removing the causes of errors and minimizing variability in manufacturing and business processes. The term ‘Six Sigma’ comes from statistics and is used in statistical quality control, which evaluates process capability. In particular, it signifies 3.4 defects per million opportunities.

The primary goal of the Six Sigma methodology is to implement a measurement-based strategy that focuses on process improvement and variation reduction through the application of Six Sigma improvement projects. This is achieved through the use of two Six Sigma sub-methodologies: DMAIC and DMADV. DMAIC is used to improve an existing business process, while DMADV is used to create new product or process designs for predictable, defect-free performance.

History of Six Sigma

The Six Sigma methodology was first developed by Motorola in 1986 as a statistical-based approach to reducing defects. This was during a time when Motorola was experiencing significant quality issues and needed a solution to improve their processes. The company aimed to achieve a ‘Six Sigma’ level of quality, which translates to 3.4 defects per million opportunities. The methodology was successful in achieving this goal and has since been adopted by many other companies worldwide.

Jack Welch, the former CEO of General Electric, played a significant role in popularizing Six Sigma. Under his leadership, GE adopted Six Sigma in 1995 and reported benefits of over $300 million during its first year of implementation. Since then, Six Sigma has become a cornerstone of GE’s business model and has been credited with saving the company billions of dollars.

Key Principles of Six Sigma

The Six Sigma methodology is based on several key principles. First, it emphasizes a strong focus on achieving measurable and quantifiable financial returns from any Six Sigma project. Second, it stresses the importance of strong and passionate management leadership and support. Third, it highlights the need for making decisions on the basis of verifiable data and statistical methods, rather than assumptions and guesswork.

Another important principle of Six Sigma is the commitment to continuously striving for reducing process variation and improving process control, as this leads to predictable and high-quality results. Finally, it underscores the importance of a structured methodology in problem-solving, which includes defining, measuring, analyzing, improving, and controlling the process (DMAIC).

Roles and Responsibilities in Six Sigma

In a Six Sigma project, different roles are assigned to the team members, each with its own set of responsibilities. The hierarchy of roles in Six Sigma, often compared to martial arts, includes Champions, Master Black Belts, Black Belts, Green Belts, and Yellow Belts. Champions are usually upper-level managers who ensure the resources are in place for the project and remove any roadblocks. Master Black Belts are experts in Six Sigma and train and mentor Black Belts and Green Belts.

Black Belts are fully trained in Six Sigma and lead projects, while Green Belts assist Black Belts and may lead smaller projects. Yellow Belts have basic training in Six Sigma and support project teams in problem-solving tasks. These roles are critical to the successful implementation of Six Sigma in any organization.


Champions are high-level individuals who understand Six Sigma and are committed to its success. In most cases, Champions are members of the organization’s leadership team who have the power to authorize the necessary resources and overcome resistance to change. Champions are responsible for selecting projects, setting the scope of projects, and ensuring that the necessary resources are available.

Champions also play a crucial role in maintaining the momentum of Six Sigma projects by providing ongoing support and guidance. They ensure that the project stays focused on its objectives and that the team members are motivated and engaged. Champions are often the key drivers of cultural change in an organization, helping to replace old habits and resistance with acceptance and enthusiasm for Six Sigma.

Master Black Belts

Master Black Belts are the highest level of technical and organizational proficiency. They are responsible for the strategic implementation of Six Sigma within the organization. This includes training and mentoring Black Belts and Green Belts, helping Champions select the right projects, and providing technical guidance on statistical tools and techniques.

Master Black Belts also spend a significant amount of their time on ensuring consistent application of Six Sigma across various functions and departments. They serve as the organization’s primary resource for knowledge about the methodology and techniques of Six Sigma. Master Black Belts are typically very experienced and knowledgeable about both Six Sigma and the specific processes of the organization.

Six Sigma Methodologies: DMAIC and DMADV

Six Sigma has two key methodologies – DMAIC and DMADV. DMAIC stands for Define, Measure, Analyze, Improve, and Control. It is used to improve existing business processes. DMADV stands for Define, Measure, Analyze, Design, and Verify. It is used to create new product or process designs.

Both methodologies are composed of five phases. In the Define phase, the problem and the project goals are clearly defined. In the Measure phase, the current process is mapped and its performance is measured. The Analyze phase involves identifying the root causes of defects. In the Improve phase, solutions are developed to remove the causes of defects. Finally, in the Control (DMAIC) or Verify (DMADV) phase, the improved process is implemented and the results are monitored to ensure that the improvements are sustained.


The DMAIC methodology is a data-driven quality strategy used to improve processes. It is an integral part of a Six Sigma initiative, but in reality, it can be used as a standalone quality improvement procedure or as part of other process improvement initiatives such as lean.

DMAIC is a five-step approach that consists of the following phases: Define – Identify the problem and what is required to satisfy your customer. Measure – Map the current process to collect reliable data. Analyze – Use the data collected to find where and what kind of improvements can be made. Improve – Make the improvements. Control – Sustain the improvements.


The DMADV methodology, also known as DFSS (“Design For Six Sigma”), is used to design or redesign a new product or service from scratch. While DMAIC focuses on improving existing processes, DMADV focuses on creating new processes to achieve Six Sigma quality.

DMADV is a five-step approach that consists of the following phases: Define – Identify the project goals and customer deliverables. Measure – Determine customer needs and specifications. Analyze – Develop process options to meet customer needs. Design – Evaluate process options and select the best one. Verify – Test the design and make necessary adjustments.

Benefits of Six Sigma

Implementing Six Sigma can bring numerous benefits to an organization. These benefits can be broadly categorized into customer benefits, employee benefits, and organizational benefits. Customer benefits include improved quality of products or services, increased customer satisfaction, and increased customer loyalty. Employee benefits include improved knowledge and skills, increased job satisfaction, and increased morale.

Organizational benefits include reduced costs due to lower levels of defects, increased profitability, improved productivity, and improved decision making based on data. The benefits of Six Sigma are significant and can give a competitive advantage to any organization that chooses to implement it.

Customer Benefits

Customers are the ultimate beneficiaries of Six Sigma as it aims to make processes as near to perfection as possible. This results in a reduction in defects, improved quality, and more reliable products or services. As a result, customer complaints decrease, and customer satisfaction increases, leading to increased customer loyalty and repeat business.

By meeting or exceeding customer expectations, Six Sigma can help an organization achieve a competitive advantage in the marketplace. This can lead to increased market share and higher profits. Thus, Six Sigma not only benefits the organization but also the customers who receive better products and services.

Employee Benefits

Employees also benefit from Six Sigma through the improved knowledge and skills acquired during training. The problem-solving skills and tools learned can be applied to many other areas of an individual’s work, leading to increased job satisfaction and morale. Employees also benefit from a better understanding of the business processes and a clearer picture of their role in the organization’s success.

Furthermore, Six Sigma can lead to a more collaborative and team-oriented work environment. As employees work together on project teams, they can learn from each other and build stronger relationships. This can lead to a more positive work environment, which can increase employee satisfaction and reduce turnover.

Organizational Benefits

Organizations that implement Six Sigma can expect to see significant improvements in their processes, leading to a reduction in defects and waste. This can result in substantial cost savings and increased profitability. By improving process efficiency, Six Sigma can also lead to increased productivity, allowing the organization to achieve more with the same resources.

Another important benefit of Six Sigma is improved decision-making. Because Six Sigma is a data-driven approach, decisions are made based on data and facts, rather than assumptions or guesswork. This leads to better, more reliable decision-making, which can have a significant impact on the organization’s success.

Challenges and Criticisms of Six Sigma

Despite its many benefits, Six Sigma is not without its challenges and criticisms. One of the main challenges is the level of commitment and resources required to implement Six Sigma. It requires a significant investment in training, infrastructure, and time. Without a strong commitment from top management, a Six Sigma initiative is unlikely to succeed.

Another challenge is the resistance to change that is often encountered in organizations. Change can be difficult and stressful, and it is not uncommon for employees to resist the changes that come with Six Sigma. Overcoming this resistance requires strong leadership and effective change management strategies.

Implementation Challenges

Implementing Six Sigma requires a significant investment in time and resources. This can be a barrier for some organizations, particularly small businesses. In addition, the success of Six Sigma depends on a high level of commitment from top management. Without this commitment, it can be difficult to sustain the effort required to make Six Sigma a part of the organization’s culture.

Another challenge is the complexity of Six Sigma. The methodology involves a wide range of tools and techniques, and understanding and applying these can be difficult. This is particularly true for organizations that do not have a strong background in statistics or quality management.

Criticisms of Six Sigma

Some critics argue that Six Sigma can stifle creativity and innovation. The focus on reducing variation can lead to a culture that is risk-averse and resistant to new ideas. This can be a problem in industries where innovation is critical to success.

Another criticism is that Six Sigma can lead to an overemphasis on quantifiable outcomes, at the expense of less tangible factors such as customer satisfaction or employee morale. While these factors can be difficult to measure, they are critical to the long-term success of any organization.


Six Sigma is a powerful methodology for improving quality and reducing defects in any process. It provides a structured approach to problem-solving that can be applied to any process, in any industry. While it requires a significant investment in training and infrastructure, the benefits can be substantial.

Despite the challenges and criticisms, Six Sigma has been successfully implemented by many organizations worldwide. With strong leadership and a commitment to continuous improvement, Six Sigma can lead to significant improvements in quality, customer satisfaction, and bottom-line results.