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Six Sigma

What is Six Sigma?

Six Sigma as a management philosophy is a well organized and disciplined approach to business operations. Six Sigma supports the overall business strategy and create significant benefits by creating business processes without room for error which deliver high quality products and services for the customers, generate operational excellence and improve overall productivity, and create cost savings for the business. Six Sigma is an ongoing process of looking for new ways to exceed customer expectations.

The word Six Sigma is a statistical term with the idea of creating near perfect processes by creating quality systems for measuring and improving critical processes. By continuously measuring process performances such as number of defects in the process organizations can find ways to improve their performances. Statistically Six Sigma quality means processes with no more than 3.4 defects per million opportunities / chances for nonconformance. Defect means nonconformance or not meeting the requirements. Six Sigma quality process is almost perfect / error free process. Effective Six Sigma approach focuses on the most important drivers of customer satisfaction and the critical for success processes. Six Sigma methodology can save companies millions of dollars. General Electric has estimated cost savings in billions as a result of Six Sigma. Today thousands of companies around the world have implemented the Six Sigma methodology in order to improve their competitiveness.

Six Sigma improvements can improve processes dramatically often by 70% or more. Deploying Six Sigma throughout an organization and creating Six Sigma culture is critical for overall success. Six Sigma deployment is roll out of the Six Sigma methodology across different organizational functions and assigning roles, practices, tools, and procedures for managing the Six Sigma initiative.

Six Sigma benefits

Six Sigma benefits for organizations:

cost savings

higher customer satisfaction

lower cycle time

minimizing errors

revenue growth

increased productivity

increased capacity

simplifying processes

market share growth

higher customer retention

proactive and data driven culture

brand recognition

The Six Sigma benefit for General Electric was $10B in five years and Motorola saved more than $2B in four years by using Six Sigma methodology.

Customer Focus

Six Sigma drives business performances towards achieving overall business strategy. The starting point of any initiative is identifying customers and their requirements/expectations. The goal of Six Sigma is satisfying or exceeding customer requirements. Any event which does not satisfy customer requirements/needs/expectations/specifications is error or defect. This can be product defect or service error. There are internal and external customers so customers in general are those who receive the output of a process.

Six Sigma Metrics

Six Sigma is data driven approach which focuses on customer specifications and business goals and targets. Using the right tools and setting goals and targets is essential for Six Sigma. Unlike simple or local quality management initiatives, Six Sigma measures not only technical/process performances but also financial costs and benefits of any initiative.

Six Sigma Tools

Tools used in Six Sigma organizations are quality management tools for designing, managing, and improving critical for success processes, tools for data collection, analysis, and measurement, as well as tools for training and managing organizational Six Sigma knowledge and talents.

Six Sigma Measurement

Statistically Six Sigma measures the percent of defects or errors and the higher the sigma the better the quality:

Sigma	Percent Defective	Defects per Million Opportunities
1	69%	691,462
2	31%	308,538
3	6.7%	66,807
4	0.62%	6,210
5	0.023%	233
6	0.00034%	3.4
7	0.0000019%	0.019

Six Sigma is a set of best practices, know how, tools, procedures, and systems which drives business performances towards achieving organizational breakthrough results. It is a multi functional approach and can be applied to different business activities such as strategy development, production, service operations, product delivery, customer service, product development, sales and marketing, etc.

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