In its broadest sense Six Sigma is a methodology that firms can use to improve the output quality of a process. Six Sigma has its roots in the repetitive processes of manufacturing; however, the same tools can be used in any business process from hiring new people to effective product design and marketing plans.
The foundation of the Six Sigma program is statistics; sigma stands for standard deviations from the mean of a data set in other words a measure of variation, while Six Sigma stands for six standard deviations from the mean. When a process reaches the six sigma level that process will be running close to perfection, producing a mere 3.4 defects per million. By using statistical and analytical tools firms can reduce the amount of variation in a process by removing the causes of variation therefore increasing the output quality of the process.
Six Sigma should not be viewed as a way to achieve one very successful project. Six Sigma should become a company wide mantra and be implemented as a core part of the companies culture and strategy with training from top to bottom in order to see the fullness of its benefits.
Some examples of companies that have successfully implemented a Six Sigma program are:
GE boasts gains of $2 billion to the bottom line in 1999 and $2.4 billion in 2001 because of Six Sigma.
Motorola saved $15 billion in the first 10 years of Six Sigma implementation
Dupont realized more than $1.6 billion in cost savings the first four years of Six Sigma.
Many other companies and even municipalities have had similar success by implementing Six Sigma.1
How to organize a Six Sigma program:
Jim Collins’ advice to start with the right people is definitely applicable here. Implementing Six Sigma requires having the “right people in the right seats” to be successful.2 Six Sigma is no different. Studying some of the companies listed above will prove that having the right...