What is Six Sigma

Understand the Concept of Six Sigma and What it Really Means

Six Sigma is a business improvement methodology whose prime concern and goal is to reduce defects, costs of production, and improve the overall performance of the company.
BusinessZeal Staff
Last Updated: Apr 9, 2018
The person credited for coining the term 'Six Sigma' is Bill Smith, an engineer at Motorola in the 1980s. This concept was introduced to the company as a measure to calculate the number of defects and a means as to how to improve overall quality.

Six Sigma is a registered trademark owned by Motorola. It enabled Motorola to save more than 17 billion dollars since its commencement till 2006. Several other leading companies like Allied Signal (now Honeywell) and General Electric Company followed Motorola's footsteps and implemented Six Sigma in their business models as well.

Six Sigma

The Greek letter or symbol 'sigma' is used to represent a deviation from the standard. Six Sigma is a type of business improvement technique, whose prime objective is to deliver high performance, value, and reliability by eliminating defects and inefficiencies in a systematic way. It is widely known across the globe as an efficient and effective tool of Total Quality Management. According to Six Sigma methodology, the number of defects can be reduced to a level of 3.4 defects per million opportunities (DPMO).

The basic idea or objective is to eliminate all kinds of waste from the organizational processes, thereby resulting in an increase in overall performance. Six Sigma is not just a 'quality initiative' but a 'business initiative'. It is a smart and intelligent way of managing a business as it targets three main areas―improving customer satisfaction, reducing cycle time, and reducing defects.

There isn't just one answer as to what is Six Sigma. Instead it can be viewed from three different angles such as:

Six Sigma is a Management Philosophy

Under this aspect, Six Sigma has a customer-oriented approach, wherein minimization of defects is focused upon. The lower the number of defects, the lesser is the cost of replacement, thus, lesser is the cost of production. Low cost of production and high value product is the combination that the customer seeks. Besides, the fewer the defects found in the product, the greater is the customer satisfaction. High customer satisfaction results in customer loyalty, thereby resulting in better profits and eventual business growth.

Six Sigma is a Statistic

The business processes that follow the Six Sigma model will produce defects that are less than 3.4 defects per million opportunities. Most of the processes fail to achieve this 3.4 DPMO, which indicates that companies still have a long way to go in terms of reducing the number of defects. Thus, it proves to be a benchmark for companies by which they can carry out self-evaluation and also strive for better performance.

Six Sigma is a Process

To achieve the above mentioned aspects of Six Sigma, that is as a management philosophy and statistic, a particular Six Sigma process has to be involved. There are two types of Six Sigma processes:

Six Sigma DMAIC:
This process involves five basic steps which are define, measure, analyze, improve, and control (DMAIC). Wherein 'Define' stands for defining specific goals to improve the overall processes between the company's strategies and consumer's demands. 'Measure' stands for measuring the current processes in the company and collecting relevant data from the current processes and using them for future comparisons. 'Analyze' stands for analyzing the relationship of the company with the processes. By analyzing, one can determine the factors that can help improve the relationship between the company's strategy and consumer demands. 'Improve' stands for constantly optimizing the processes by using various tools and techniques. 'Control' is the last parameter, which deals with maintaining a control on the processes. That is ensuring minimum defects and loss of quality.

Six Sigma DMADV:
This process involves five basic steps which are define, measure, analyze, design, and verify (DMADV). Wherein, 'Define' stands for defining goals and strategies that are in line with the business strategy and consumer demand. 'Measure' stands for calculating critical qualities such as involving production process, capabilities in producing products, the capability of the product, and assessments of risks. 'Analyze' involves the evaluation of different processes and choosing the best one to achieve optimum results. 'Design' stands for designing the optimized design for the product, which will require one to develop many designs out of which the best one is chosen. 'Verify' stands for verifying whether the designed process is the optimum one.

Six Sigma has overall been very beneficial to companies in reducing the number of defects, cost of production, and improving overall performance. However, what must be taken into consideration before implementing this model is ensuring consent from employees at all levels within the organization. If any of the employees, middle level, or top level executives show resistance to the model, it would be a failure. Therefore, the effectiveness is directly proportional to the attitude of the employees in the organization.