Quality Engineering

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THE EVOLUTION OF SIX SIGMA

Gerald J. Hahn , Necip Doganaksoy & Roger Hoerl

To cite this article: Gerald J. Hahn , Necip Doganaksoy & Roger Hoerl (2000) THE EVOLUTION
OF SIX SIGMA, Quality Engineering, 12:3, 317-326, DOI: 10.1080/08982110008962595
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 Quality Engineering, 12(3), 3 17-326 (2000)

THE EVOLUTION OF SIX SIGMA

Gerald J. Hahn and Necip Doganaksoy
GE Corporate Research and Development
1 Research Circle
Niskayuna, New York 12309

Roger Hoerl
GE Corporate Audit Staff
3 135 Eastern Turnpike
Fairfield, Connecticut 06431

Key Words
Customer focus; Design improvement; Process improve-
ment; Statistical tools.
Six Sigma Review
Basic Concept and Initial Implementation
Six Sigma is a disciplined and highly quantitative ap-
proach to improving product or process quality. The original
goal, implied in the Six Sigma definition, is the reduction of
defects to no more than 3.4 per million opportunities. This
may, initially, divert us to questions, such as: What is a de-
fect? What is an opportunity? Is the implied 1.5 standard
deviation average shift realistic? Are all products and pro-
cesses created equal? However, we have found that, in prac-
tice, the answers to these questions, as well as the basic qual-
ity improvement goal, are generally clear. Almost invariably,
this calls for significant improvement over current levels of
quality.
Six Sigma was introduced at Motorola (see Ref. 1) with
the major goal of reducing defects of manufactured electron-
ics products. It has since been adopted and generalized by
a number of companies, such as Allied Signal and General
Electric (GE). Some of the features that characterize Six
Sigma are as follows:
It is a top-down, rather than a bottom-up, approach that
is led enthusiastically and unwaveringly by such con>-
pany CEOs as Larry Bossidy (Allied Signal) and Jack
Welch (GE). Champions are appointed from the ranks
of the leaders in each business. They are responsible for
ensuring the successful implementation of Six Sigma
in their own areas of influence.
Both at the business and project level, Six Sigma lead-
ership is, traditionally, the responsibility of Master
Black Belts (MBBs) and Black Belts (BBs). These are
full-time responsibilities and include the setting of qual-
ity objectives for the business and monitoring progress
toward these objectives, selection of Six Sigma projects,
and mentoring and training project teams. Implementa-
tion is the responsibility of the project team members
(i.e., engineers, scientists, financial analysts, informa-
tion systems specialists, and so forth). They receive
Green Belt (GB) level training from the MBBs and BBs.
It is a highly disciplined approach that typically in-
volves the four stages: Measure, Analyze, Improve,
and Control, with an up-front stage (Define) sometimes
added (DMAIC). In brief, these steps are. as follows:

Copyright 0 2000 by Marcel Dekker, Inc.


Define (D): Define the problem to be solved, includ-
. ing customer impact and potential benefits.
Measure (M): Identify the critical-to-quality char-
acteristics (CTQs) of the product or service. Verify
measurement capability. Baseline the current defect
rate and set goals for improvement.
Analyze (A): Understand 'root causes of why de-
fects occur; identify key process variables that cause
defects.
Improve (I): Quantify influences of key process vari-
ables on the CTQs, identify acceptable limits of these
variables, and modify the process to stay within these
limits, thereby reducing defect levels in the CTQs.
Control (C): Ensure that the modified process now
keeps the key process variables within acceptable
limits, in order to maintain the gains long term.
It is a highly data-oriented approach, as evidenced by
such slogans as "We don't know what we don't know"
and "ln God we trust-all else bring data." As a con-
, sequence, implementation of the DMAIC concepts is
heavily based on statistical tools and the statistical de-
sign of experiments (DOES).
It involves training everyone in the company in
DMAIC, or modified concepts and tools-typically
in a bweek program, spread out over 3 months. It is
heavily hands-on project and bottom-line-oriented. In
fact, one reason for the 3-month training period is to
allow students to apply the concepts and tools to impor-
tant projects. Upon completion, it is necessary to quan-
tify and document the resulting dollar savings. Success-
ful completion of Six Sigma projects is a requirement
for Six Sigma certification. The requirement for MBBs
is typically successful mentoring of 20 projects, and for
GBs, it is completion of two projects.
For further details, see Ref. 2, the other articles in this
issue of Quality Engineering, and various other papers in the
literature, such as Refs. 1, 3, and 4.
The Results
The payoff from Six Sigma has been carefully scruti-
nized by Company. accountants and auditors and has been
impressive. This has included the following:
Motorola-Almost a billion dollars savings in 3 years,
and a Malcolm Baldrige Award
Allied Signal-Over 2 billion dollars cumulative sav-
ings since it began Six Sigma
GE- Over a billion dollars savings in 1998, and 2 bil-
lion anticipated for 1999
HAHN, DOGANAKSOY, AND HOERL
As the old saying goes, "A billion here and a billion there,
and pretty soon you're talking some real money."
See Ref. 3 for other specific examples. These results have
helped company leaders to maintain their fervor. For ex-
ample, in announcing a new company initiative in electronic
commerce, GE CEO Jack Welch emphasized in a memo to
all employees that Six Sigma is absolutely critical to ensure
the success of the new initiative.
Why Now?
We have seen various initiatives similar to Six Sigma
come and go. Although moderately successful, none have
had the all-pervasive impact ,of Six Sigma. So why is Six
Sigma working? One key factor has been the uncompromis-,
ing commitment of top management. Little would have been
accomplished without this. However, that support could only
be maintained as long as Six Sigma could demonstrate suc-
cess. This success has hinged heavily on technologies that
have emerged only recently. These include the following:
Automatic monitoring, accessibility to large (some-
times immense) databases
Ready availability to practitioners of powerful statisti-
cal tools (sometimes referred to as the "democratiza-
tion of statistics")
Greatly improved communicationscapabilities that pro-
vide speedy transfer of information-including video-
conferencing, e-mail, and, most recently, the Internet.
A highly disciplined, data-oriented approach, centered
around the slogan "Show me the data-and do so by no
later than tomorrow morning-so I can factor them into my
decision" has always made eminent sense. However, it was
not very realistic until recent technology made it so. The
omnipresence of these technologies-together with con-
stantly increasing customer expectations and alternatives-
is also why we feel that an approach that at least resembles
Six Sigma (although it may bear a different name in the fu-
ture) is inevitable for all organizations, including service en-
terprises such as banks, hospitals, schools, and even local
and national governments.
Most Six Sigma tools are not new'and, in fact, have been
around for many years. In our experience, however, the im-
pact of industrial training programs on specialized topics
such as DOE, statistical process control (SPC), regression,
and analysis of variance dissipate quickly once the employ-
ees leave the classroom and return to work. Six Sigma has
been phenomenally successful in getting employees at all
levels of the organization to use such tools broadly long afier
completion of their formal training. In this regard, one key
THE EVOLUnON OF SIX SIGMA
to the success of the Six Sigma program is that there is an
overall step-by-step road map (DMAIC) that relates the tools
into an overall approach to improvement.
Finally, Six Sigma ties project benefit directly to bottom
line results. Financial considerations play an important role,
starting with the early identification of project opportunities.
The demonstrated success of Six Sigma in impacting profit-
ability gives it significant advantage over other, less direct,
approaches.
The Evolution of Six Sigma
Nothing in this world remains constant-even the best of
things-and so it is with Six Sigma. As Six Sigma moved
from Motorola to other companies, and even as it has pro-
gressed within companies such as our own, the emphasis
changed frequently. In this section, we describe various ways
in which Six Sigma has evolved. Although our comments
here and elsewhere are based on our experience within GE,
we believe they describe general trends among companies
that have embraced Six Sigma.
Focus on Customer Satisfaction
The original motivation for Six Sigma at Motorola was
centered around manufacturing improvement, and this was
also how Six Sigma was originally introduced in GE. There
are various reasons for this. First, much of the statistical
methodologies of traditional quality control, in general, and
SPC, in particular, have emphasized manufacturing pro-
cesses; thus, many of the tools for Six Sigma were readily
known. In addition, payoffs, resulting, say, from reduction in
scrap and rework of a. manufacturing process, can often be
quantified easily and, most importantly, speedily. Such crisp
and definitive cost reductions-preferably documented
within 3 months of the start of a project-were essential for
building initial credibility for Six Sigma.
However, important as manufacturing cost reductions
may be, they often do not readily translate into improve-
ments that are transparent to the customer. GE management
came to realize this. In GE's 1998 Annual Report, Jack
Welch stated candidly
. . . as w e celebrate our progress and count our financial gain, we
need to focus on the most powerful piece o f learning we have been
given in 1998, summarized perfectly in the form o f what most of our
customers must be thinking, which is 'When do I get the benefits of
Six Sigma? When does my company get to experience the GE I read
about in the GE Annual Report? . . . What's the big event; and what
did we miss?'
As a result, the central theme of Six Sigma in GE has rapidly
broadened from focusing principally on the manufacturing
arena to encompassing all business operations, and espe-
cially those that impact the customer. In fact, a key stated
goal is to generate a "wow" from the customer. We will am-
plify further shortly.
Concentrate on Reducing Variability
~radition'all~, Six Sigma quality could be achieved by
some combination of improving mean performance and re-
ducing variability. Often, however, it turned out that the for-
mer was easier to achieve than the latter and the major focus
was, thus, on improving the mean. However, it soon became
apparent that in many contexts, ranging from inolding pellets
into plastic parts to sending out bills for credit card payment,
what really impacted our customers was variability. Again
quoting from GE's 1998 Annual Report:
The problem is, as has been said. "the mean never happens," and
the customer . . . i s still seeing variances in when (for example) de-
liveries actually occur-a heroic Cday delivery time on one order
with an awful 20-delay on another, and no real consistency. The
customers feel nothing . . . Their life hasn't changed; their profitabil-
ity hasn't increased one b i t . . . Our challenge as we move toward
2000 is to turn our Company vision "outside in," to measure the
parameters of the customers' needs and processes and work toward
zero variability in serving them. Variation is evil in any cusromer-
rouching process.
With such a stirring call to action from top management,
the focus of many Six Sigma projects in GE has rapidly
shifted to reducing variability. This has resulted in a whole
range of concepts and tools, referred to as "Variance Based
Thinking."
Design for Six Sigma
Deming told us long ago that the preponderance of product
variability is in the system, rather than in the process. This
means that applying standard SPC approaches to a rnanufac-
lured product is likely to lead to only a fraction of the possible
improvement. Instead, we need, initially, to build quality into
the design of our products and processes. This can have sig-
nificant payoff, both in direct cost reduction and customer
satisfaction because problems discovered in design, though
often difficult to identify, are usually easy to fix. In contrast,
problems found after the design has been frozen, and espe-
cially after significant amounts of product have been built,
although easy to identify, are often expensive to fix.
The DMAIC process outlined earlier, is aimed mainly at
reducing defect rates in existing products, services, and pro-
cesses. However, the basic nature of designing something
new requires a significantly different approach than that re-
quired for "fixing" something that already exists. The need

to adapt Six Sigma for design projects at GE gave rise to
Design for Six Sigma (DFSS). The objective of DFSS is to
design products, services, and processes that are Six Sigma
capable. A major goal is to minimize the occurrence of un-
pleasant last minute surprises and hiccups that are tradition-
ally associated with introduction of new products, services,
and processes. The basic principles of DFSS are as follows:
Customer requirements: CTQs and other requirements
for the new product, service, or process are defined at
the customer level. This is achieved by disciplined use
of customer research, tools such as Quality Function
Deployment.
Requirements flow-down: The customer requirements
are gradually "flowed down" to requirements for func-
tional design, detailed design, and process control vari-
ables. This discipline ensures that a holistic systems
view is maintained throughout the design process and
helps fight the urge to jump to finalize the design pre-
maturely.
Capability flow-up: As requirements are flowed down,
capability to meet these requirements is continually
assessed in light of relevant existing or new data.
This permits early consideration of potential trade-offs
as well as avoidance of otherwise predictable future
surprises.
Modeling: Both requirements flow-down and capabil-
ity flow-up evolve from the knowledge of relation-
ships between customer requirements (Y's) and design
elements (X's). The models can be based on physical
fundamentals (e.g., kinetic models for a chemical reac-
tion), simulation (e.g., discrete-event simulation model
for a call center), empirical methods (e.g., response sur-
face f t to data from a DOE), or their mix.
The methodology used to implement DFSS is called
DMADV and involves the following five steps:
Define (D): Identify the new product, service, or pro-
cess to be designed (or redesigned). Develop and define
a team charter, including scope, business case, mile-
stones, resources, and project plan. For example, con-
sider a team charged with designing a new thermo-
plastic resin for use in molding exterior body panels
of a car. The activities in the define phase are based on
common sense and constitute a major portion of any
training program on project management. However, the
consequences of skipping or downplaying this phase
can be quite severe. For instance, insufficient definition
of the project's scope (e.g., "Does our project only in-
volve coloring of the resin on lab-scale equipment or
translation to manufacturing as well?") or its resource
HAHN, DOGANAKSOY, AND HOERL
requirements from the rest of the organization (e.g.,
molding equipment and test technicians, information
systems specialists) could seriously derail the whole
project effort.
Measure (M): Plan and conduct the necessary research
to understand the customer needs and associated re-
quirements. Translate these needs and requirements
into measurable characteristics (CTQs). In our exam-
ple, the 'molded parts. need to be capable of attaining
tight specifications on color matching between adjacent
car parts (e.g., doors and the fenders). Customer re-
quirements on degree of agreement among color of car
parts are thoroughly explored and quantified. This
might involve a designed experiment whereby a panel
of customers is asked to judge the difference among car
parts. The resulting observed color differences are then
. expressed quantitatively based on well-established
spectraphotometric measurements such as L (light-
dark), a (red-green), and b (yellow-blue). In addition to
color, there are also other requirements on chemical
properties and physical performance characteristics of
the resin.
Analyze (A): Develop alternative concepts. Select the
best-fit concept for development into a high-level de-
sign and predict the capability of the design to meet
requirements. In the example, the key determinants of
color are the types and relative amounts.of pigments,
their addition to the product, and processing. At this ,
phase, the various design options are considered and
evaluated systematically. This might involve the com-
bined use of statistical experimentation and physical
laws governing behavior of pigments in thermoplastics
in order to explore the relationships between the color
of the resin (as measured by L, a, and b) and coloring
agents.
Design (D): Develop the detailed design. Evaluate the
capability of the proposed design and develop plans to
pilot test the new or redesigned product or service. In
the example, the effect of variability in the pigment
amounts will be linked to capability of controlling the
feeders on the manufacturing line. This is an example
of flowing down customer requirements (i.e., color
match between adjacent car parts) to manufacturing
controls (i.e., tolerances on pigment feeders). If capa-
bility flow-up suggests that the existing feeders cannot
meet the requirements, their capability is addressed via
a DMAIC project. Likewise, the key properties of each
pigment are translated into specifications to pigment
suppliers. In addition, a supplier DMAIC program is
initiated in those areas that need to be improved.
THE EVOLUTION OF SIX SIGMA
Verify (V): Build and pilot a full-function, limited-
scale version of the new or redesigned product/service.
In the example, the full-scale production process is
developed, start-up and validation activities are per-
formed, and the new or redesigned product/service are
transitioned to the process owners.
GE is now focusing on DFSS in its training either as an
add-on module for those previously trained or as an alterna-
tive area of emphasis for new employees embarking on Six
Sigma training.
Emphasize Design for Reliability
Reliability has been defined as "quality over the life" of
a product or process. Again, initial implementations of Six
Sigma did not give much emphasis to reliability irnprove-
ment. However, with the new emphasis on Six Sigma im-
provements that can be felt directly by customers, this has
become increasingly more important. Reliability, after all,
is frequently the element of quality that our customers ex-
perience. Thus, reliability has become a key CTQ for many
products. Another element is the evolution of long-term
service agreements under which the company takes on all
maintenance and product servicing responsibilities over the
anticipated life of the product. These provide a great impetus
to improving long-term product reliability.
Just like quality, reliability has traditionally been con-
sidered, principally, after a product has been manufactured
and, frequently, as a consequence of field failures. However,
such a "ship and fix" approach, in addition to being too ex-
pensive, is just not acceptable to our customers in today's
highly competitive environment. Thus, similar to the need
for DFSS, and intimately related to it, is the goal of Design
for Reliability (DFR).
Design for Reliability requires a different toolset from,
say, end-of-line quality improvement. This is due to several
unique aspects of reliability:
4 One frequently needs to be concerned with accelerated
testing (to ensure speedy responses).
The available data often include data on unfailed units
(known as censored data).
The Normal distribution is usually not an appropriate
model for analyzing time to failure data.
One is frequently most concerned with extreme distri-
bution percentiles, such as the age by which 1% of the
product has failed (rather than, say, the mean or vari-
ability) or with estimating the probability of survival to
a specified age.
See Ref. 5 for further discussion. These topics and appropri-
ate software are stressed in current Six Sigma training for
many engineering audiences.
. Application to the Entire Business
Although most of the initial emphasis of Six Sigma was
on quality improvement in manufacturing, it is now being
applied in key areas throughout the business and beyond
what would traditionally be considered "quality." Thus, a
major focus of GE's current Six Sigma efforts is to ensure
that Six sigma is being applied to all business activities.
Special emphasis is given to commercial transactions and to
product servicing-both areas of great strategic importance
to the company.
Commercial transactions encompass GE's nonmanufac-
turing businesses, such as NBC, GE Information Services,
and, especially, GE Capital, as well as business transactions
in GE's more traditional manufacturing businesses. Because
GE Capital provides nearly 45% of GE's profitability, a tre-
mendous opportunity would be missed if the focus remained
on only manufacturing.
At first glance, one may wonder how Six Sigma can
apply to selling or insuring mortgages, bidding on municipal
bonds, writing insurance, or providing consumer credit. The
key is an understanding of the fact that all work occurs in
interconnected processes. These processes have outputs,
which are our primary concern, such as cycle time, profita-
bility, accuracy, and so on. However, these outputs are a
function of process inputs and what happens at key process-
ing steps. For example, success in bidding for municipal
bonds is highly dependent on information inputs. These'in-
clude knowledge of the financial risks and understanding of
competition, as well as the effectiveness of processing steps,
such as estimation of default probabilities, and preparation
of the bid itself. If one is able to view both a manufacturing
line and credit card collections as processes with key inputs
and processing steps to be improved, in order to improve out-
puts, the leap from manufacturing to business applications
becomes second nature. Similar considerations apply in con-
sidering the time to fill an order and the correctness of a bill-
ing process-just two examples of commercial transactions
in a traditional manufacturing business.
For illustration, a nonmanufacturing Six Sigma project.
which involved collecting from delinquent c,redit card cus-
tomers is described here. In the consumer credit card busi-
ness, losses from delinquent customers is a huge expense
and one reason why credit card interest rates tend to be sig-
nificantly higher than other interest rates. In this case, the
322
business had several branch offices trying to track down de-
linquent customers for whom the phone number or address
on file are not correct. When trying to trace such customers,
collectors have several options. One is to search other data-
bases that might have a correcl address. The collector might
also contact a credit bureau, which will provide addresses
and phone numbers of delinquent customers, for a price.
There are also agencies that specialize in tracking delinquent
customers. Another option is to view a scarined image of the
customer's original credit application, in hopes that perhaps
the number was transcribed incorrectly.
Of course, each of these methods has a cost associated
with it, either a direct payment to an outside agency or at
least the time for the collector doing the searching. An ob-
vious question to ask from a Six Sigma viewpoint is: Which
of these melhods is "best," on an absolute basis, as well as
on a "value" basis, considering the associated costs? Also,
one might wonder whether some of these techniques should
be used together, or whether there is so much overlap that
once we have "struck out" with one method, we might
as well give up and write off the debt. In other words, at
what point is it no longer financially prudent to continue
searching?
At the beginning of this Six Sigma project, every collec-
tor tended to have his or her own "method"; that is, some
people would start with external databases; others would
start with internal ones. Some collectors would only search
using one method; others would search with every method
available before they gave up. These differences among the
collectors introduced extra variation in the process. Clearly,
everybody could not be "right"! Common sense would sug-
gest that there must be an "oplimal" method. But how could
such a method be found?
Historical data were interesting, but had some important
deficiencies. For example, typically, people used the "cheap-
est" methods first, and only used expensive methods after
these had failed. Therefore, the historic "hit rates" of the
expensive methods were not particularly high, as they were
only used on "difficult" accounts. It was realized that these
data had too much bias to determine accurately the optimal
approach. I n such cases in manufacturing, one often utilizes
DOES. However, this is a financial service, and we all know
that DOE does not apply to financial services, right?
In fact, a designed experiment was conducted, where
each independent variable was one of the potential tools
or databases used by collectors. Each tool was either used
(+ 1 level) or not used (- 1 level). The dependent variables
(Y's) were !'hit rate" (the percent of the time that a person
was found), cost, and cycle time. A modified full 2' ap-
proach was used, with 100 accounts being searched for each
HAHN, DOGANAKSOY, A N D HOERL
combination of tools. A fractional design could have been
used, but with the large number of collections, 128 combi-
nations was not considered unreasonable. It did not matter
how many times a delinquent customer was found for a given
combination, the customer was only considered "found" cx
"not found."
The analysis of the resulting data shed a great deal of light
on how to locate persons. First, it turned out that the least
expensive tool was nearly as effective as the most expensive
ones. Second, there was less overlap among the tools than
originally thought. Thus, those people that could not' be
found with two or three tools could still often be located by
yet another tool. Statistically, this showed up in the analysis
as a lack of interactions. The collectors had expected there
to be significant overlap between tools, which would have
shown up as an antagonistic (negative) interaction for the
hit rate.
The experimental data led to an "optimal" search method,
using several tools in sequence. If a person still could not be
located, the search was dropped, and the debt written oE,
as it would cost more money to search than we could expect
to collect. This procedure was taught to all collectors at all
branches. The first-year financial benefits from collecting
additional cash, and avoiding writing off bad debt, were just
under $3 million dollars-gains that will continue to be
enjoyed annually. Another benefit from this data-based ap-
proach was that it provided a rational basis for deciding how
many collectors were needed to maximize collections. In this
case, additional collectors were justified by the additional
collections they could produce. The cost of these additional
positions was factored into the calculation of benefits.
In addition to its Six Sigma initiative, GE has a service
business initiative, targeted at such traditional manufacturing
businesses as GE Medical Systems, GE Aircraft Engines,
GE Power Systems, and GE Transportation Systems. This
is in recognition of the growing strategic importance and
potential profitability of product service versus manufactur-
ing, and the competitive advantage that high-tech servicing,
facility management, remote diagnostics, and so on can pro-
vide. Also, improvement of service processes is much more
difficult to "reverse engineer" by competition. This is be-
cause a motor or appliance can be purchased and studied in
excruciating detail. However, a remote diagnostics process,
which is not physically located in one place and occurs
through cooperation between diverse business functions, is
much more difficult for competition to copy. Six Sigma ap-
plied to product service has some of the same elements as
Six Sigma applied to manufactured products and to cornrner-
cia1 transactions-if, again, we consider the service opera-
tion as an interconnected process, with important outputs
THE EVOLUTION OF SIX SIGMA
that are impacted by specific inputs that we need to under-
stand and control appropriately.
New Roles for Master Black Belts and Black Belts
As indicated, the MBBs and BBs provide the overall
leadership to Six Sigma. Thus, an important criterion for Six
Sigma success is to select "top of the class" contenders as
MBBs and BBs. But top of what class? Originally, a prime
consideration was technical knowledge and understanding.
However, as the training has developed and all have be-
come more knowledgeable, the role of the technical expert
is being taken over by specialists, such as professional statis-
ticians (perhaps, consultants from a local university). In-
stead, MRBs and BBs are being selected to a larger degree
today based on their management and organizational skills.
In fact, in GE, they have been identified as a prime source-
perhaps even the prime source-for identifying and testing
future top company leaders. As a consequence, MBBs and
BBs are often expected to spend only a limited time in that
role; hopefully, moving up in the organizational ladder.
Getting Sir Sigma into the Fabric
of the Organization
The initial stages of a Six Sigma program generally in-
volve top-level attention to the program as well as fairly
major shifting of resources within the organization to create
the infrastructure to support it (e.g., identification of top tal-
ent for the MBB and BB roles, training of project teams,
initial round of projects, etc.). During this phase, the Six
Sigma program becomes the main focus of project reviews,
internal staff meetings, companywide contests and celebra-
tions, and external presentations. However, in today's fast-
paced business environment, no program can remain as
something special for more than a few years. A successful
Six Sigma program becomes part of the fabric of doing
things in the organization. In GE, this ingraining process is
referred to as making "Six Sigma the way we work."
There are important issues that need be addressed to en-
sure lasting success. These include continued setting and
monitoring of quality objectives, careful selection of proj-
ects, guidance to project teams, adaptation of advanced tools,
setting and monitoring of quality objectives, refinement of
Six Sigma to meet the needs of the ever-changing business
environment, and targeted training. Therefore, companies
that have initiated Six Sigma programs will need to deter-
mine how to manage and maintain Six Sigma after the pro-
gram reaches maturity. Although this topic has not yet at-
tracted much discussion due to the relatively small number
of companies that have adapted Six Sigma more than a few
years ago, we expect that it will become a highly debated
issue as many more companies begin to adapt Six Sigma
programs.
Some Lessons Learned
We now consider some lessons learned in implementing
Six Sigma. Because it is always easier to identify areas for
improvement than it is to do something about them, some of
these are still works in progress. However, they provide clues
as to the directions in which we expect Six Sigma to move
in the future and suggest potential issues and opportunities.
Factor in and Quantify Long-Term Puyoffs
As previously indicated, in order to establish the credi-
bility of Six Sigma, some immediate significant and readily
quantifiable payoffs were needed, &us leading to major em-
phasis on such things as scrap and rework reduction. Thus,
initial Six Sigma projects were rightfully selected principally
on the basis of anticipated "safe" short-term payoffs. The
emphasis on customer satisfaction and DFSS have changed
that and projects with payoffs in the more distant future-
and with riskier, but still potentially substantial, payoffs-
are becoming more prominent. However, the Six Sigma ini-
tiative is still highly'bottom-line-oriented-as it should be.
As a consequence, in order to continue to encourage such
important long-term projects, we need to develop convincing
measures of their anticipated payoffs.
This is of particular concern in dealing with ensuring cus-
tomer satisfaction and in DFSS, especially for reliability. For
example, how do we quantify customer satisfaction that is
characterized by long-term repeat purchases of new models
of the current product (e.g., a washing machine) and, for that
matter, other products from the same manufacturer (e.g., a
refrigerator or a light bulb)? In considering DFSS, how do
we quantify the gains realized from averted problems, espe-
cially if these are in product reliability and might not come
about until some time in the future (by when current man-
agement, if successful in the short term, will, likely, have
been promoted)?
Consider Multiple CTQs
Closely related to the preceding concept is that of ad-
dressing multiple CTQs. Traditionally, an objective of a Six
Sigma project has been that of improving one or a small
number of CTQs. Often, however, all of the important CTQs,
and especially those that can be observed and quantified at

some future time such as product reliability are not taken into
consideration. These can add to or detract from the total sav-
ings resulting from a Six Sigma project. For example, in a
program directed at reducing end-of-line scrap, we are likely,
at the same time, to enhance reliability if we focus on iden-
tifying and eliminating the root causes for scrap. On the
other hand, if our "remedial action" was merely that of lib-
eralizing our specification limits, we might be succeeding at
reducing scrap, but at the cost of worsening reliability.
Clearly, in order to get a true measure of the true total
impact of a Six Sigma project, we need to consider and quan-
tify the impact on the project of all of the important CTQs.
Engage Suppliers
Many Six Sigma projects have found raw material or
part vendors as creating the root cause of quality problems.
Therefore, to be successful, we need to involve suppliers in
the Six Sigma effort. This becomes increasingly important as
we rely more heavily upon suppliers throughout the world.
Moreover, accomplishing this can be especially difficult
when we have limited leverage, as may be the case when
we provide only a small part of a supplier's total business. In
any case, we need to communicate our needs clearly, how
we aim to measure conformance, what information we re-
quire from the vendor (including information on process
changes), and who will be responsible for what in demon-
strating that quality and reliability goals are being met.
Eliminate DiJferentiution Between Six Sigma
and Non-Sir-Sigma Projects
At the outset of the Six Sigma initiative, some important
projects were clearly identified as Six Sigma projects and
received special attention. At the same time, there was a ten-
dency to give less attention and resources to other important
projects which were not designated as Six Sigma (perhaps,
because the payoffs were not immediately quantifiable or
were more uncertain, not necessarily because they were less
critical). As Six Sigma becomes ingrained in the organiza-
tion, this dichotomy tends to disappear. In fact, Green Belt-
trained employees are expected to utilize the Six Sigma ap-
proach and methodology in their day-to-day assignments.
Beware of Dogmatism
The Six Sigma toolset contains some powerful methods
that have broad applicability. However, that does'not mean
that each tool has applicability to each problem. For ex-
ample, DOE is an extremely useful approach to getting
HAHN, DOGANAKSOY, AND HOERL
meaningful information. However, in many applications.
particularly in marketing and commercial quality, involving
direct interface with customers, it may not be possible or pru-
dent to run a designed experiment.
Effective MBBs have become aware of the need of fitting
the tools to the needs of their specific audience. Thus, in
training and in qualifying BB and GB projects for certifica-
tion, they have learned not to insist dogmatically on the use
of a specific tool, but to use or adapt the available tools to
best meet the problem at hand. In addition, training programs
are becoming more and more tailored to specific audiences,
as evidenced by special training for DFSS, DFR, and com-
mercial applications, as well as various other areas that we
have not discussed, such as Six Sigma for Software Quality.
Utilize Broader Toolset
Standard Six Sigma training involves numerous tools as
part of the process; see Ref. 3 for a typical BB and GB cur-
riculum. Reference 2 and numerous books on statistics pro-
vide extensive details. Most of these methods [e.g., process
mapping, failure mode and effects analyses (FMEA), pro-
cess capability studies, measurement systems analyses, sta-
tistical thinking, DOE, multiple regression] have demon-
strated their value over time. A few, such as hypothesis
testing and analysis of variance (except as a tool for quanti-
fying different sources of variability), would not suffer from
a reduction in emphasis.
At the same time, other powerful tools have proven their
worth and warrant increased emphasis in future training.
These will become increasingly more important as we move
beyond the simplest situations (picking the proverbial "low-
lying fruit") to more complex ones.
We have already indicated the importance of reliability as
a CTQ for many customer-oriented Six Sigma applications
and the need for greater focus on reducing variability-and
the fact that these require the use of some specialized meth-
ods. In this section, we elaborate on some further tools that
warrant greater emphasis in Six Sigma training.
Simulation Analyses
Simulation allows one to build a model of a process or
system on a computer and to use computer evaluations to
assess the impact of alternative strategies. Thus, simulation
has traditionally been used to model the building of a prod-
uct in a factory and to assess the impact on the time to manu-
facture of adding further equipment or perspnnel. Similarly,
simulation can be used to assess business processes, such
as the impact on customer waiting time of adding people
THE EVOLUTION OF SIX SIGMA
to staff a product telephone "hot line." Also, simulation
provides an attractive alternative to more formal statistical
analyses in, for example, assessing how large a sample is
required to achieve a specified level of precision in a market
survey or in a product life test.
Non-Normal Distriblltions
Many Six Sigma tools, at least implicitly, assume that the
underlying processes are normally distributed. For example,
the concept of a Six Sigma process resulting in 3.4 defects
per million opportunities implies (in addition to a long-term
shift of 1.5 standard deviations in the mean) that the random
variability in the process follows a Normal distribution.
Many processes are, indeed, normally distributed. In fact,
there is a theoretical justification for normality based on
the statistical "central limit theorem," which shows that a
process that is the sum of many small sources of variability
results in normality. However, others may be subject to only
one or two important single factors and, thus, cannot be rep-
resented as the sum of many small sources of variation. In
that case, there is no reason for one to expect the process to
be normally distributed. In addition, many processes are not
symmetrically distributed or cannot take on negative values.
As previously indicated, product life is an example. Incor-
rectly assuming normality can lead to false conclusions,
especially when one is concerned with the "tails" of a distri-
bution, which is precisely what one is dealing with in seek-
ing no more than 3.4 defects per million opportunities. For-
tunately, there are a wealth of alternative statistical models
and tools that can be used when the assumption of normality
does not hold.
Advanced Modeling
Modeling of the relationships between the X's and the
Y's in a process play a very important role in successful
design projects. Some' examples are kinetic models for a
chemical reaction based on physical fundamentals, discrete-
event sinlulation of a service shop's operations, and the fit-
ting of a response surface to data from a DOE. Modeling
dictates close partnering of diverse groups within the orga-
nization. For example, design and manufacturing engineers
often work hand in hand in the construction of the models,
their validation, and.obtaining relevant data to assess the im-
pact of a new design.
In addition, other advanced analytical tools that deal with
relationships are often useful. For example, a method known
as Classification and Regression Trees (CART) can help seg-
ment populations. This is frequently useful in commercial
applications, especially when there is a large database. A
typical example arises in .identifying those individuals in a
large population to solicit about a product in marketing. In
this case, CART would use data on a past sample of purchas-
ers and nonpurchasers to establish subgroups in the popula-
tion with varying "marketing success probabilities" based
on known characteristics such as marital status, geography,
and past purchases.
Advanced DOE Concepts
Standard Six Sigma training has focused on factorial,
fractional factorial, and, sometimes, response surface de-
signs. DOE is often assumed to be a "one-shot" investjga-
tion. In practice, however, experimentation is a sequential
process involving a series of trials as the learning process
evolves, especially when one is searching for an optimum.
Thus, sequential experimentation (see Refs: 6 and 7) merits
consideration. So do "nested" experiments in which one
variable is nested within another. A typical example arises
when one is assessing the impact of machines and operators
on process variability and each operator is using a different
machine (see, e.g., Ref. 8).
Survey Sampling Tools
Survey sampling deals with sampling from existing, fre-
quently human, populations. This is especially relevant in
obtaining customer feedback. In sampling human popula-
tions, we are especially concerned with ensuring a random,
or, at least, representative, sample. Key questions often re-
volve around the required sample size and how to minimize
(and handle) nonrespondents so as to minimally bias the
results. For human and other existing populations (e.g., in-
voices), survey sampling approaches complement DOE for
processes or products.
Added Graphical Tools
Standard Six Sigma training, rightfully, emphasizes the
use of graphical tools, such as boxplots, to allow one to ex-
tract information from data without becoming involved in
relatively unfamiliar statistical analyses and 10supplement
such analyses. We advocate even greater reliance on graphi-
cal tools; for example, in analyzing the results of a DOE
and in plotting data (or residuals from a regression analysis)
over time.
We do not wish to suggest by the preceding discussion
that Six Sigma training be turned into a course in advanced
statistics. However, we feel that various "nonstandard" tools

that are proving their worth in Six Sigma applications will
have increased relevance in future applications, especially as
these applications become more complex. Thus, technically
oriented MBBs and BBs should be knowledgeable in them
and their applicability, and others should have some mini-
mum level of awareness.
Concluding Remarks
Six Sigma continues to thrive, as evidenced by the suc-
cess of those companies that have embraced it with fervor
and the many other organizations that are expressing inter-
est. In our opinion, the key elements of success are the com-
bination of a highly disciplined approach with one that is
intensely data driven, the ready accessibility of appropriate
technical tools to leverage the concepts, and the continuing
uncompromising commitment from top management.
Six Sigma is a highly dynamic approach. We have tried
lo describe its evolution. A significant element is the broad-
ening of the general approach. This has resulted in greater
crnphasis on customer satisfaction and reducing variability
in performance. It has led to extending the use of Six Sigma
tools from mainly short-term manufacturing situations to
longer-range product design and commercial applications. In
turn, this has resulted in a change in the role of those that
lead Six Sigma, the need for added tools, and various other
developments discussed in this article. This evolution will
continue and, perhaps, even accelerate over time. However,
we are confident that, irrespective of the specifics, future de-
velopments will build on the solid foundation that the Six
Sigma approach has already provided.
HAHN, DOGANAKSOY, AND HOERL
References
1. Harry, M., The Vision of Sir Sigma, Roadmap for a Breok-
rhrough, Sigma Publishing Company, Phoenix, AZ. 1994.
2. Breyfogle, F. W., Implementing Six Sigma: Smarter Solutions
using Sforistical Methods, John Wiley & Sons, New York.
1999.
3. Hahn, G. J., Hill, W. J., Hoerl, R. W., and Zinkgraf, S. A., The
Impact of Six Sigma Improvement: A Glimpse into the Future
of Statistics,Am. Statistician, 53(3). 208-215 (1999).
4. Hoerl, R. W., Six Sigma and the Future of the Quality Profes-
sion, Qual. Prog., 35-42 (June 1998).
5 . Hahn, G. I., Doganaksoy. N..and Meeker. W. Q., Reliability
Improvement: Issues and Tools, Qunl. Prog., 133-1 39 (May
1999).
6. Box, G. E. P., Hunter. W. G., and Hunter, J. S., Statistics for
Experimenters, John Wiley & Sons, New York, 1978.
7. Box, G . E. P.,Quality Quandaries: The Invention of the Com-
posite Design, Qual. Eng.. 12, 119-122 (1999).
8. Box, G. E. P., Quality Quandaries: Multiple Sources of Vari-
ation: Variance Components, Qual. Eng., l I, 17 1 - 174 ( 1998).
About the Authors: Gerald J. Hahn is Manager, Applied Sta-
tistics Program, GE Corporate Research and Development.
He is a Fellow of the American Statistical Association and
of the American Society for Quality, and a GE Coolidge
Fellow.
Necip Doganaksoy is a Quality Program Manager at GE
Corporate Research and Development. He is a Fellow of the
American Statistical Association.
Roger Hoerl is the Quality Leader of the GE Corporate
Audit Staff. He is a Fellow of the American Society for Qual-
ity and the American Statistical Association.