Six Sigma is a business management strategy, originally developed by Motorola that today enjoys wide-spread application in many sectors of industry.
Six Sigma seeks to identify and remove the causes of defects and errors in Manufacturing and/or service delivery and business processes. It uses a set Of management methods, including statistical methods, and creates a dedicated infrastructure of people within the organization who are experts in these methods. Six Sigma aims to deliver “Breakthrough Performance Improvement” from current levels) in business and customer relevant operational and performance measures.
Business or operational measures are elements like:
• Customer Satisfaction Rating Score
• Time taken to respond to customer queries or complaints
• % Defect rate in Manufacturing
• Cost of executing a business process transaction
• Yield (Productivity) of service operations or production
• Inventory turns (or) Days of Inventory carried
• Billing and Cash Collection lead time
• Equipment Efficiency (Downtime, time taken to fix etc.)
• Accident / Incident rate
• Time taken to recruit personnel and so on…
Six Sigma – Historical background
Six was originally developed as a set of practices designed to improve manufacturing processes and eliminate defects, but its application was subsequently extended to many other types of business processes as well. In Six Sigma, a defect is defined as anything that could lead to customer dissatisfaction and / or does not meet business set specifications. The elements of the methodology were first formulated by Bill Smith at Motorola in 1986. Six Sigma was heavily inspired by six preceding decades of quality improvement methodologies such as quality control, TQM, and ZeroDefects, based on the work of pioneers such as Shewhart, Deming, Juran,Ishikawa, Taguchi and others.The term “Six Sigma” is derived from a field of statistics known as process capability study. It refers to the ability of processes to produce a very high proportion of output within specification. Processes that operate with “Six sigma quality” over the short term are assumed to produce (long-term) defect levels below 3.4 defects per million opportunities (DPMO).Six Sigma’s implicit goal is to improve all processes to that level of quality or better.
Six Sigma Benefits
Leading companies have implemented Six Sigma and realized gainful results. Motorola has reported over US billion in savings from Six Sigma as of 2006. Other early adopters of Six Sigma who achieved well-publicized success include Honeywell International and General Electric (introduced by Jack Welch). By the late 1990s, about two-thirds of the Fortune 500 organizations had begun Six Sigma initiatives with the aim of reducing costs and improving quality.
Topic: breakthrough performance, customer dissatisfaction, customer queries, improvement methodologies, incident rate, many other types, operational measures, process capability study, six sigma, types of business processes