Six Sigma is a set of techniques and tools for process improvement. It was developed by Motorola in 1986, coinciding with the Japanese asset price bubble which is reflected in its terminology. Six Sigma became famous when Jack Welch made it central to his successful business strategy at General Electric in 1995. Today, it is used in many industrial sectors.
Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization ("Champions", "Black Belts", "Green Belts", "Yellow Belts", etc.) who are experts in the methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified value targets, for example: reduce process cycle time, reduce pollution, reduce costs, increase customer satisfaction, and increase profits. These are also core to principles of Total Quality Management (TQM) as described by Peter Drucker and Tom Peters (particularly in his book "The Pursuit of Excellence" in which he refers the Motorola six sigma principles).
The term Six Sigma originated from terminology associated with manufacturing, specifically terms associated with statistical modeling of manufacturing processes. The maturity of a manufacturing process can be described by a sigma rating indicating its yield or the percentage of defect-free products it creates. A six sigma process is one in which 99.99966% of the products manufactured are statistically expected to be free of defects (3.4 defective parts/million), although, as discussed below, this defect level corresponds to only a 4.5 sigma level. Motorola set a goal of "six sigma" for all of its manufacturing operations, and this goal became a by-word for the management and engineering practices used to achieve it. Six Sigma doctrine asserts that:
Continuous efforts to achieve stable and predictable process results (i.e., reduce process variation) are of vital importance to business success. Manufacturing and business processes have characteristics that can be measured, analyzed, controlled and improved. Achieving sustained quality improvement requires commitment from the entire organization, particularly from top-level management.
Features that set Six Sigma apart from previous quality improvement initiatives include: A clear focus on achieving measurable and quantifiable financial returns from any Six Sigma project. An increased emphasis on strong and passionate management leadership and support. A clear commitment to making decisions on the basis of verifiable data and statistical methods, rather than assumptions and guesswork.
The term "six sigma" comes from statistics and is used in statistical quality control, which evaluates process capability. Originally, it referred to the ability of manufacturing 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, but not to the 3.4 DPMO level necessarily. Organizations need to determine an appropriate sigma level for each of their most important processes and strive to achieve these. As a result of this goal, it is incumbent on management of the organisation to prioritize areas of improvement.
"Six Sigma" was registered June 11, 1991 as U.S. Service Mark 74,026,418. In 2005 Motorola attributed over US$17 billion in savings to Six Sigma. Other early adopters of Six Sigma who achieved well-publicized success include Honeywell (previously known as AlliedSignal) and General Electric, where Jack Welch introduced the method. By the late 1990s, about two-thirds of the Fortune 500...
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