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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 discover the brand new concept 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.
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Why It's Important
Some common processes involving Six Sigma methodology include the processing of clients' 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 a mean for all the business-centric processes. And, in a true sense, this is the point where the importance of Six Sigma methodology arises. The processes provide empirical support to justify all the attributes associated with business development and give true meaning to business transactions by minimizing variance and enhancing process capability.
It's interesting to note that the concept of Six Sigma methodology was launched by Motorola in the 1980s to reduce failures in production.
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Three Important Processes
There is no denying the fact that Six Sigma has just one main goal: To ‘increase process efficiency by reducing variation and delivering the best quality products in all the critical domains of business development systems.’ In simple words this is called business process improvement. But implementing this, however, is not so simple and it calls for comprehensive planning and systematic implementation. This is done through a number of Six Sigma methodologies and sub-methodologies divided into projects and sub-projects. Some common project-oriented methodologies are:
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 the first stage, process goals are defined in a data-oriented system. The PM must conduct some simple data-related operations including planning and estimation. The project team is then assigned the task of comparing process improvements with the customer's demands and formulate 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 is all about a 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. In the implementation of DMAIC, emphasis is given to the essential factors of human dimensions apart from the measurement and evaluation of process quality. But in the 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.
One of the most commonly used methodologies in Six Sigma is the 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 within 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 – the Identification Phase, Designing Phase, Optimization Phase and Validation Phase – and meets customers’ specific requirements with the value assessment of process performance and business models.
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There's More to Learn
Apart from these three methods there are a number of sub-methods applied in the business improvement process. And to be true, definitives are difficult to pin down: The accurate definition of any Six Sigma methodology totally depends on process requirements and business initiatives. However, fundamental methodologies such as DMAIC, DMADV and IDOV cannot be discarded in any process management system.