Six Sigma has been sweeping the business world with remarkable results to the bottom-line of many organizations since its adoption in the late Eighties, driving breakthrough improvements in product and service quality. Today Six Sigma as a business strategy has been proved to be successful in reducing costs of poor quality, improving cycle times of various processes, eliminating errors or defects from processes, enhancing customer satisfaction and so on. So what is Six Sigma?Six Sigma is a strategic approach to business improvement. It integrates strategic thinking with technology, tools and techniques and people. Six Sigma is widely known as a philosophy of management that focuses on eliminating defect through practices that emphasize understanding, measuring and improving process. Six Sigma is a measurement of process quality. Its main goal is to achieve near perfection as possible in practice.
Six Sigma uses statistical concepts that measure those processes in terms of defects. Sigma (?) is a term in statistics that measure standard deviation from normal distribution. In business use, it indicates defects of outputs of a process and helps us to understand how far the process deviates from perfection.
A defect is a measurable characteristic of a process or output that does not conform to specifications or requirements. As we can see different sigma represents different number of defects. For example one sigma level represents 691,462.5 defects on million possibilities. Actually this means 30.9% of non defective output. If for example process performed at 3 sigma level it will perform 66,807 errors per million outputs or 93.
3% of not defective outputs. Table below represents number of defective outputs per 1 million outputs at different sigma levels of quality.Now we can see what it means for example if health care organization would have defection level of 2 ? or if aircraft engines producer would operate at 3 ? level. Depending of the industry and type of production different processes have different requirements. According to researches most US companies are operating at 3 to 4 sigma level.
Of course we can not compare defects of outputs of the hospital and the manufacturer that produces screws or bolts, but defects in either industry leave customers unsatisfied and require additional expenses and time to fix defects (if possible). This is why the central idea of Six Sigma system is that if we can measure the defects in a process, we can systematically figure out ways to eliminate them, to improve process to the minimum possible number of defects.The history of Six SigmaThe roots of Six Sigma as a measurement standard can be traced back to Carl Frederick Gauss (1777-1855) who introduced the concept of the normal curve. Six Sigma as a measurement standard in product variation can be traced back to the 1920’s when Walter Shewhart showed that three sigma from the mean is the point where a process requires correction. Many measurement standards (Cpk, Zero Defects, etc.) later came on the scene but credit for coining the term “Six Sigma” goes to a Motorola engineer named Bill Smith. (Incidentally, “Six Sigma” is a federally registered trademark of Motorola).In the early and mid-1980s with Chairman Bob Galvin at the helm, Motorola engineers decided that the traditional quality levels — measuring defects in thousands of opportunities — didn’t provide enough granularities.
Instead, they wanted to measure the defects per million opportunities. Motorola developed this new standard and created the methodology and needed cultural change associated with it. Six Sigma helped Motorola realize powerful bottom-line results in their organization – in fact, they documented more than $16 Billion in savings as a result of our Six Sigma efforts.Since then, hundreds of companies around the world have adopted Six Sigma as a way of doing business. This is a direct result of many of America’s leaders openly praising the benefits of Six Sigma.
Leaders such as Larry Bossidy of Allied Signal (now Honeywell), and Jack Welch of General Electric Company. Rumor has it that Larry and Jack were playing golf one day and Jack bet Larry that he could implement Six Sigma faster and with greater results at GE than Larry did at Allied Signal. The results speak for themselves.Six Sigma has evolved over time. It’s more than just a quality system like TQM or ISO. It’s a way of doing business. As Geoff Tennant describes in his book Six Sigma: SPC and TQM in Manufacturing and Services: “Six Sigma is many things, and it would perhaps be easier to list all the things that Six Sigma quality is not. Six Sigma can be seen as: a vision; a philosophy; a symbol; a metric; a goal; a methodology.”