Executive Summary
The Six Sigma Way is an overview of Six Sigma concepts, as well as an instructional handbook that can be used to implement the Six Sigma process for continuous improvement in business organizations. The Six Sigma business strategy for sustained competitive advantage and continuous improvement is built upon the core principle of focusing on customer wants and needs. These are the guidelines, specifications, and control limits that are necessary to tailor your business processes successfully to clients.
The authors of The Six Sigma Way have done a great job of providing a useful tool for the intended use of educating and helping organizations implement Six Sigma. Peter S. Pande is the founder and President of Pivotal Resources. Pivotal Resources is a global consulting firm that provides guidance for organizations that want to implement Six Sigma. Robert P. Neuman, Ph.D., is a senior consultant in the Six Sigma field. And Roland Cavanagh, P.E., is a professional engineer, and he has a multititude of experience in manufacturing and service processes.
Six Sigma is a statistical based strategy that strives for a quality goal of 99.9997 percent perfect in relation to the bell curve of normal distribution. The authors’ emphasize the large difference in productivity between 99.9997 percent and 99 percent. When you sit down and do the math, you will be amazed at how much different 1 percent can make.
The Six Sigma Way is organized into three sections: an executive overview, a guide to adapting organizations for Six Sigma implementation, and Six Sigma Implementation. The layout creates a smooth process of learning und understanding Six Sigma to implanting and benefiting from it.
Six Sigma can be a scary concept at first, and the processes, techniques, and material involved are not easy. However, they are not as scary or challenging as you might think. The Six Sigma Way is a perfect book for anyone who is interested in statistics, continuous improvement, and the unexpected applicable life lessons.
The Ten Things Managers Need to Know from The Six Sigma Way
1. Organizations implementing Six Sigma should keep the message to employees straightforward and unambiguous. Be sure not to use a lot of industry language and new vocabulary that might discourage employees from buying-in to new processes.
2. Six Sigma performance strives for a 99.9997 percent level of perfection. The difference in performance results of a 99.9997 percent level versus a goal of 99 percent goal is huge.
3. The central theme guiding the Six Sigma system is genuine focus on the client. The customer wants and needs provide the control limits needed to drive the whole process.
4. Managers should devote their time and attention to short-term results in the beginning. Good results in the beginning will keep customers, as well as keep employees on board.
5. Managers should also focus on long-term development and improvement. Organizations must couple the drive for short-term results with long-term goals as the ultimate vision. The short-term must build the infrastructure for the long-term.
6. The organization should be transparent when it comes to Six Sigma results. Everyone in the organization should be aware of the positive and negative results of Six Sigma.
7. Managers must make an investment in the process and nurture that investment. The initial investment in time, support, and money will be high, but the payoffs will be worth it.
8. Management must build a matrix of customers, processes, data, and innovation. All of these are interrelated and crucial to the success of Six Sigma.
9. Develop a culture of continuous learning. After the initial launch of Six Sigma, organizations must continue to learn and implement new strategies to complement and improve the system.
10. Top managers, executives and leaders must incorporate Six Sigma procedures into their job functions and descriptions. If leaders are not walking the walk, followers will never get on board
Full Summary of The Six Sigma Way
Part I: An Executive Overview of Six Sigma
A Powerful Strategy for Sustained Success:
Six Sigma is not considered to be a business fad. The authors say that Six Sigma is a, “…flexible system for improved business leadership and performance”(Pande. Nueman. Cavanagh., 2000). Six Sigma incorporates a variety of important management ideas and practices from the past century. The authors say that it is not so much about theory, but more about action. Six Sigma helps to build new structures and practices that enable a company to achieve sustained success.
The authors’ purpose for The Six Sigma Way is to help us understand just what exactly Six Sigma is, why it’s most likely the best path to improved business performance in recent years, and how to apply it to individual organizations. The authors tell us that Six Sigma combines customer service and the drive for new ideas with statistics and number crunching. (Pande. Nueman. Cavanagh., 2000)
According to the authors, several benefits can be gained from implementing the Six Sigma way. Six Sigma:
1. Generates sustained success. Six Sigma creates a corporate culture that strives to lead change, and also strives for constant revival.
2. Sets a performance goal for everyone. Six Sigma builds upon one thing that everyone has in common, the successful, “…delivery of products, services, or information to customers” (Pande. Nueman. Cavanagh., 2000). Six Sigma uses this to create an organizational wide performance goal. Six Sigma’s quality control aims form a performance goal of 99.9997 perfect. This percentage relates to the area under the bell curve in normal distribution.
3. Enhances value to customers. The central focus of Six Sigma is the customer. In order to serve customers properly, an organization must discover what value truly means to the customer and figuring out how to provide that value for a profit.
4. Accelerates the rate of improvement. Six Sigma accelerates the rate of improvement by combining tools and ideas from the many different disciplines available to managers and strategists.
5. Promotes learning and “cross-pollination”. Six Sigma seeks to create an atmosphere where new ideas are shared and flow throughout the entire company.
6. Executes strategic change. The Six Sigma Way demands that an organization must truly understand its processes and procedures. A command of this knowledge facilitates the heightened ability to carry out necessary organizational adjustments.
The methods and tools essential to the Six Sigma process are drawn from a variety of disciplines: continuous improvement, process design/redesign, analysis of variance, balanced score cards, voice of the customer, creative thinking, design of experiments, process management, and statistical process control.
The authors close this section of the book by taking a look at Six Sigma’s leadership system. They divide the leadership system in to six themes, otherwise known as the six themes of Six Sigma: genuine focus on the customer, data-and fact-driven management, process focus, management and improvement, proactive management, boundaryless collaboration, and the drive for perfection with tolerance for failure.
Creating a Closed-Loop System:
A closed-loop system is described as a system that utilizes internal and external information to help guide decisions and keep the company on track. The authors compare a closed-loop system to riding a bike. They say that the external and internal information “…tell the rider/manager how to correct course, stay upright, and steer successfully” (Pande. Nueman. Cavanagh., 2000). They also infer that a closed-loop system is helpful even when the company may be involved in a hostile marketplace.
Creating a closed-loop business system that responds quickly and efficiently to correct any problems that may occur in the business process is a core concept of Six Sigma. The system looks to cut down on variation in business processes. “The approaches used to create, monitor, and improve that closed-loop business system we’ll call “process management”, “process improvement”, and “process design/redesign” (Pande. Nueman. Cavanagh., 2000).
System Alignment: Tracking the Xs and Ys:
Six Sigma implements some basic elements of algebra to describe the closed-loop model. In a business process model there are inputs that go into the process, the actual process, and all of the end products of the process. The authors use the variable X to represent inputs and the actual business process. They use the variable Y to represent quantified end products. Do you remember the algebra function, Y=f(X)? This is the mathematical way the authors illustrate the fact that any changes in inputs or the business process affects the end result, profit.
There are two elements that are critical to the closed-loop business system. The first is finding out which X variables have the most influence on the Y variables. Second, a company must use the changes in Y variables to regulate the organization and keep it running right. The authors list strategic goals, customer requirements, and profits as some possible meanings for Y. On the other hand, actions to achieve goals, quality, and different process variables can be used to represent X.
Sigma, Standard Deviation, and Eliminating Variation:
The Y variable is used as sigma measurement in Six Sigma. The Greek alphabet’s lower-case sigma, (σ), is used as a statistical notation, and it represents the standard deviation of a population. Standard deviation is representative of the amount of variation in a sample or process. Variation in end products to be delivered to consumers is not a healthy business practice. Consistency is more the norm we’re striving for here. Inconsistency can ruin relationships with consumers and tarnish an organizations image. Not to mention the fact that variation in critical products can be the basis for huge liability suits.
Monitoring variation helps managers to discover how the business and its processes are really performing. Organizations have been using averages as metrics for performance for a long time. However, the authors point out that averages have a tendency to conceal problems by disguising variation.
For a company to achieve Six Sigma levels of performance, the goal must be to reduce the amount of variation to a level that six Sigma’s can fit within the limits set by the needs and stipulations of the customer. This way, six standard deviation values are not harmful because they are within specified limits of acceptable variation.
Customers, Defects, and Sigma Levels:
According to Bill Smith, the man who developed the Six Sigma system of measurement, the system is actually very easy to utilize. He emphasizes that the system is more mathematical than statistical. He said all you need are some basic math skills and you will be on our way to utilizing the system.
Smith says the first fundamental step to Six Sigma is to, without a doubt, identify exactly what the customer’s needs are, and then establish this as an explicit requirement in the business process. The next step, Smith says, is to run through the process and sum up the number of defects that arise. “A defect is any instance or event in which the product or process fails to meet a customer requirement” (Pande. Nueman. Cavanagh., 2000). The last step in Smith’s system is tofind out what percentage of end products emerged free of defects, and then use a table to find the Sigma level.
Six Sigma Improvement and Management Strategies:
Process improvement, process design/redesign, and process management are listed in this book as being the key strategies of Six Sigma. Process improvement seeks to discover ways to weed out ineffective and hurtful performance issues. Process design/redesign focuses on trying to find a new, better way of doing things, not just fixing the “broken” one. Process management, which the authors label as, “The Infrastructure for Six Sigma Leadership”, focuses on gaining understanding and the proper facilitation of processes rather than the less involved route of managing and directing the functions of the process (Pande. Nueman. Cavanagh., 2000).
Why is Six Sigma Succeeding Where Total Quality Failed?
Even though the authors’ are in full support of Six Sigma, they relate the fact that it is not yet a booming success story that has been implemented in businesses around the world. They attribute this to the fact that many organizations are in the beginning stages of implementing the Six Sigma process. They don’t totally discredit Total Quality Management, but they list some pitfalls of TQM and offer reasons why Six Sigma is the better strategy.
There are many TQM pitfalls and Six Sigma solutions in this chapter. Here are a few that the authors list to think about verbatim:
TQM Pitfall: Lack of Integration
Six Sigma Solution: Links to the Business and Personal “Bottom Line”
TQM Pitfall: A Fuzzy Concept
Six Sigma Solution: A Consistently Repeated, Simple Message
TQM Pitfall: An Unclear Goal
Six Sigma Solution: Setting a No-Nonsense, Ambitious Goal
The authors list more of these scenarios and elaborate on all of them at length. Their goal here is not to bash TQM; it is to point out that TQM is limited in pulling ideas from a variety of resources, whereas Six Sigma pulls the best elements from multiple ideas, theories, and disciplines.
Applying Six Sigma to Service and Manufacturing:
This chapter focuses on enlightening organizations and management teams to the fact that Six Sigma is not inherently a manufacturing based discipline. On the contrary, Six Sigma can be manufacture or service oriented, or both. The authors say that many organizations have the misconception that Six Sigma cannot be applied to service organizations. This is not true; it is just a little harder to apply it to service organizations because there is an overall lack of tangible outputs to keep track of.They go on to list some tips to make implementing Six Sigma into a service organization a little easier, as well as some valid issues that service organizations have along with responses from a Six Sigma standpoint. Last but not least, they offer up some challenges that are unique to manufacturing and some helpful tips and guidelines to overcome them.
The Six Sigma Roadmap:
In this chapter, the authors lay out the ideal process for laying the groundwork from which the Six Sigma system is to be built upon and how to initiate organizational improvements. There are five steps to this process that the authors’ refer to as core competencies for a business that seeks to be successful in this day and age:
Identify core processes and key customers.
Define customer requirements.
Measure current performance.
Prioritize, analyze and implement improvements.
Expand and integrate the Six Sigma system.
(Pande. Nueman. Cavanagh., 2000).
They then go on to talk about the advantages of the roadmap that they are presenting, followed by a detailed walk-through of each of the five steps.
The authors’ executive summary on the Six Sigma system is concluded in this portion of the book as well. The authors now move on to the second section of the book pertaining to ways to make Six Sigma fit individual organizations.
Part II: Gearing Up and Adapting Six Sigma to Your Organization
Is Six Sigma Right for Us Now?
This section of the book looks at assessing a company from the inside, and deciding if the Six Sigma system will be a good fit. Businesses must ask themselves a myriad of questions about current and future outlooks of the business. They must also evaluate recent performance to see if there is even a need to implement Six Sigma. Another huge object of assessment is how well the company is currently suited to deal with change and improvement. The authors also go into detail on topics related to the potential benefits and costs of launching a Six Sigma system.
How and Where Should We Start Our Efforts?
Starting points for Six Sigma listed in the book are objective, scope, and timeframe. A company must decide on its primary reason for Six Sigma implementation. After Six Sigma objectives are clear, a company should then decide upon the scope of the system. In other words, a company must decide how few, or how many, of their business segments would really benefit from Six Sigma. And finally, companies must establish a timeframe for the complete implementation of the system. The Six Sigma system is pretty involved, and it can take a good bit of time to get going. The authors say that a long lead-time for results can sometimes deter organizations, but the more time you take to do it properly, the more of a chance that long-term benefits will be the reward.
The Politics of Six Sigma: Preparing Leaders to Launch and Guide the Effort:
The authors’ state that many successful Six Sigma launches can, and will, ultimately fail. After a successful launch, a company must focus on building a framework of leaders who will lead by example and keep the Six Sigma initiative not only going, but continually improving. Some examples of how to lead the Six Sigma initiative are developing strong rationale, actively participate in implementation, create a vision, demand solid results, and a few others (Pande. Nueman. Cavanagh., 2000). The central theme of guiding the effort is fostering an environment conducive to employee buy-in, and at the same time making sure leaders are actively “walking the talk”.
Preparing Black Belts and Other Key Roles
This section of the book goes into detail about the kind of roles needed to keep the Six Sigma system on the right path. It all starts with a leadership council. Then someone must assume the “sponsor” role. The authors say the sponsor is the senior manager who will be overlooking any Six Sigma projects. There are also implementation leaders, Six Sigma coaches, team leaders, team members, and the “process owner”. The process owner is the person who ultimately uses a Six Sigma process to accurately serve customers. Green Belt, Black Belt, and Master Black Belt are titles and positions given to highly trained and proficient users of the Six Sigma system.
The Key to Successful Improvement: Selecting the Right Six Sigma Projects
There are many key factors that play a key role in selecting the right Six Sigma projects to pursue. Two of the most important are executive training and launching a reasonable number of projects. Other key factors include scoping the project properly, and good focus on efficiency and customer benefits (Pande. Nueman. Cavanagh., 2000). The authors go on to list steps pertaining to selecting the right projects, as well as multiple case scenarios that illustrate these steps.
Part III:
Implementing Six Sigma: The Roadmap and the Tools
Part three of “The Six Sigma Way” is an actual roadmap showing companies how to implement Six Sigma into their organizations; a handbook if you will. There are roadmaps and tools for seven different segments involved in implementing Six Sigma: identifying core processes and key customers, defining customer requirements, measuring current performance, Six Sigma process improvement, Six Sigma process design/redesign, expanding & integrating the Six Sigma system, and advanced Six Sigma tools.
This portion of the book is very useful. It maps out the implementation of the theories and processes talked about in parts one and two of the book. It also lists the authors’ twelve keys to success, and is followed by an appendix full of worksheets you can use to utilize the Six Sigma system.
The Video Lounge
Six Sigma Training:
This video contains detailed accounts and visual aids showing the core processes and concepts of Six Sigma.
http://www.youtube.com/watch?v=neRlT8KCvh4
Six Sigma Interview with Jack Welch:
Jack Welch is interviewed about the Six Sigma concept. He relates his views and experiences with the process and continuous improvement.
http://www.youtube.com/watch?v=aNMULFcLuIM
Personal Insights
I think that the authors of this book are pretty brilliant. I am a management major, and I am taking, and have taken many courses in statistics. I am one of the weird people that actually like statistics. The authors of this book explained an in-depth, statistical, business strategy system in a way that was very easy to follow, and very user friendly. I think it takes a bit of genius to lay out a system like Six Sigma so that non-statisticians can benefit from the material.
If I were the author of the book, I would have done these three things differently:
1. I would not have changed anything pertaining to the content of this book. I thought it was excellent. The only thing I would change is I would offer the book in paperback. It was only offered in hardback, audio CD, Kindle formats.
Reading this book made me think differently about the topic in these ways:
1. Reading this book really unveiled the mystery of Six Sigma for me. I was always a little afraid of it to be honest. Now I see that the process is relatively simple, and the math is really not that hard.
2. Reading this book also made me think differently about organizational improvement processes. So much productivity and money is lost even when things are being run “pretty well”. Near perfection is needed to reap full benefits of the market.
3. This book also made me realize that there is no one perfect way to implement
quality and performance processes. Managers must use a variety of tools from
multiple disciplines to be successful.
I’ll apply what I’ve learned in this book in my career by:
1. I will apply the concepts I have learned to almost every facet of my career.
Quality and performance are what business is all about. I will use the statistical approach to improve operations where I may work in the future.
2. I want to work in the operations management field. Six Sigma tools will help me to distinguish myself from the rest of the pack.
3. As Six Sigma preaches, I will always strive for continuous improvement in whatever I do, whether at work or home. I will never be complacent with “good enough”.
Here is a sampling of what others have said about the book and its author:
“I found the book to be clearly written and even fun in places. It provides a solid and practical overview of the principles of Six Sigma. It explains Six Sigma as a flexible system to help manage processes in companies. It addressed all the questions I had in trying to decide whether Six Sigma is appropriate for my company. It provides much practical and non-dogmatic advice about how to implement. I bought the book to prepare myself to fight against the six sigma way. After reading it, I am very enthusiastic and am planning to propose this approach for my company. I highly recommend the book for anyone needing an overview of the topic from a management perspective.”
“The Six Sigma Way is an easy reading book and a must have for anyone contemplating the deployment or currently deploying Six Sigma. The book not only gives an A-Z detail on why, who, what and how to rolling out Six Sigma, it is also an excellent reference tool. The author’s bring to life the usefulness of Six Sigma through real-life examples from various industries. The Six Sigma Way practices what it preaches- its customer focused and friendly.”
“More power to you if you can get something worthwhile from this book. I bought the book on CD, and it was easily the most forgettable experience I’ve had in a while. The information is presented from a 30,000 mile view. So “big picture” oriented that it’s useless to try and consider the action behind the concepts presented. If you’re looking for a way to appear to have read something complicated and high level about Six Sigma. You found your source. If you want real, usable information, look elsewhere.”
After reading through reviews for this book, I found most of the responses to be very positive. Very few reviews have been negative. This reaffirms my opinion of the book. It’s very user friendly and full of great information. However, the material and concepts are somewhat advanced, so not everybody is going to like, or even understand the material. Hence the negative reviews.
Bibliography
Gates, R. (2009, December 10) Top notch overview of Six Sigma, [Review of the book
The Six Sigma Way]. Amazon. Retrieved from http://www.amazon.com/Six-Sigma-Way-Companies Performance/dp/0071358064/ref=sr _1_1?ie=UTF8&qid=1289227636&sr=8-1
Pande, PS. Nueman, RP. Cavanagh, RR. (2000). The six sigma way: how ge, motorola,
and other top companies are honing their performance . New York, NY: The McGraw-Hill Companies.
Polk, D. (2007, September 12) Horridly boring, [Review of the book The Six Sigma
Way]. Amazon. Retrieved from http://www.amazon.com/review/R1Z71Y9TQT9JA5/ref=cm_cr_pr_viewpnt#R1Z71Y9TQT9JA5
(2000, May 23) The six sigma way book review, [Review of the book The Six Sigma
Way]. Amazon. Retrieved from http://www.amazon.com/Six-Sigma-Way-Companies Performance/dp/0071358064/ref=sr _1_1?ie=UTF8&qid=1289227636&sr=8-1
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Contact Info: To contact the author of this “Summary and Review of The Six Sigma Way,” please email [email protected].
Biography
David C. Wyld ([email protected]) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Business, can be viewed at http://wyld-business.blogspot.com/. He also serves as the Director of the Reverse Auction Research Center (http://reverseauctionresearch.blogspot.com/), a hub of research and news in the expanding world of competitive bidding. Dr. Wyld also maintains compilations of works he has helped his students to turn into editorially-reviewed publications at the following sites:
Management Concepts (http://toptenmanagement.blogspot.com/)
Book Reviews (http://wyld-about-books.blogspot.com/) and
Travel and International Foods (http://wyld-about-food.blogspot.com/).
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Written by David Wyld
Professor of Management, Southeastern Louisiana University
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