Six Sigma and DMAIC: A Plain-English Guide

Six Sigma is a method for reducing defects and variation in a process. It was developed at Motorola in the 1980s and made famous by General Electric in the 1990s. A "six sigma" process produces no more than 3.4 defects per million opportunities.

Big companies run Six Sigma with trained "belts" and statistical software. A small business does not need any of that to use the core of it: a disciplined, five-phase way of solving a recurring problem, called DMAIC.

DMAIC, phase by phase

• Define. Write down the problem, who it affects and what it costs. Agree what counts as a defect, clearly enough that two people would always agree.
• Measure. Count how often the defect happens now. Without a baseline you cannot prove an improvement.
• Analyse. Find the root causes. A Pareto chart shows which causes matter most, and the 5 Whys gets beneath each one.
• Improve. Change the process to remove the main cause. Test the change on a small scale first.
• Control. Make the improvement stick: update the procedure, add a check or a mistake-proofing device, and keep measuring.

DPMO and sigma level

To compare processes of different kinds, Six Sigma counts defects per million opportunities (DPMO):

An opportunity is something that can go wrong on each unit and that the customer would notice. An invoice might have five: customer, items, quantities, prices and VAT.

The sigma level converts DPMO to a scale on which 6 is best. By convention it includes a 1.5 sigma shift, to allow for a process drifting over time. Selected values from the standard conversion table:

The calculator below uses a widely used approximation of this table, which matches it to within about 0.01 sigma across the usual range.

Worked example

An office-supplies firm checks 2,000 orders in a month. Each order has five opportunities for a defect: wrong item, wrong quantity, wrong address, damage and late dispatch. It finds 37 defects:

• DPMO: 37 ÷ (2,000 × 5) × 1,000,000 = 3,700.
• Sigma level: about 4.2.
• Cost: each defect costs about £40 to put right, so 37 × £40 × 12 = £17,760 a year.

A sigma level of 4.2 sounds good, but £17,760 a year is still worth going after. The number of opportunities matters: counting too many makes any process look better than it is.

Calculate your DPMO and sigma level

Do you need a belt?

No. Green belt and black belt training teaches statistical tools that matter in high-volume manufacturing. For most small businesses, DMAIC with simple counting, a Pareto chart and a 5 Whys covers most of the value. If you want training, look for a provider whose course is accredited and includes a real project.