PEP Review 2001-1
Six Sigma In Chemicals: More Than A Fad, But Not For Everyone
Published: November 2003
Six Sigma's aim is to make business reliable. If customer service is to phone back in 5 minutes, they phone back in 5 minutes. If the shipment is to arrive in 4 days, it arrives in 4 days. If throughput is to be 100 tonnes per hour, it is 100 tonnes per hour. Conversely, Six Sigma can be understood as the elimination of unreliability. According to various studies, the typical US business has an error rate of around 4%, i.e. 4 times out of 100, customer service does not phone back in 5 minutes, the shipment does not arrive in 4 days, and so on. Six Sigma aims to cut the error rate from 4 in 100 to 4 in 1 million. This usually generates cost savings, and it also keeps customers more satisfied.
Six Sigma works by two basic methods: using statistics to measure reliability; and using structured problem-solving to find and to eliminate sources of unreliability. If this all sounds simple, that's because it is. In intellectual terms, Six Sigma is neither drastic nor novel. It is common sense, mixed with a bit of jargon and motivational talk, served up in pill that is easy for most employees to swallow. Its real value lies in its utility and simplicity. And in a buzzword-laden business world, that actually is novel. Therefore, the buzzword name itself, Six Sigma, is unfortunate. First, the name hardly suggests what the concept is about. Second, even when explained, it creates a false aura of technical complexity and novelty that alienates many of the same people it is meant to help.
Finally, Six Sigma is powerful. If used well it can generate great results, but if used poorly it can cause a lot of damage. So handle it with care.
This report aims to explain Six Sigma to managers in and around the chemical industry. It traces a brief history of the quality movement, covers the basics of Six Sigma and how it usually is introduced to companies, and it presents some case studies of Six Sigma projects. Finally, it addresses of whether Six Sigma should be introduced to a company, and if so, with what approach.