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Six Sigma 101: Is it Right for Your Business?

Feb12
Six Sigma principles have been used by companies around the world to enhance operating efficiencies, customer satisfaction and product quality. You may have heard the term back in business school or at boardroom meetings, but what you may not know is that the concept is almost three decades old.

Motorola developed Six Sigma in 1986 as a set of tools and techniques for process improvement in manufacturing. Over the last three decades, the reach of Six Sigma has expanded, and today, companies like GE have made this framework a central part of their business strategy.

The Big Picture

At the heart of Six Sigma is a fierce commitment to perfection.

“Today’s competitive environment leaves no room for error,” explains GE’s company website. “We must (…) relentlessly look for new ways to exceed (customer) expectations.”

Six Sigma is not a buzzword, nor is it a source of empty thought leadership. It is a clearly-defined method that can help organizations streamline their operations and eliminate defects.

What’s most important is that the end result is measurable – and profitable. In 2005, Motorola attributed $17 billion in savings to the company’s adoption of Six Sigma.

Foundations in Data

The word “sigma” is a statistical term that quantifies how far an analytic tool deviates from the “ideal.” With every process comes some room for error, which can be controlled.

That’s where Sig Sigma comes in: to develop a framework for quality control.

The standards for Six Sigma quality are extremely high. A process must produce no more than 3.4 defects per million opportunities – a 99.9997 percent rate. To achieve this goal, businesses need to focus on the following:

  • Providing quality attributes that customers value
  • Avoiding failure and defects with an eye on meeting customer expectations
  • Process capabilities and potential
  • How the customer perspectives vary from the brand’s
  • Predictable and stable operations that welcome improvement
  • Designs that align processes with company needs

Six Sigma principles are open to interpretation and customizable for any type of business. They should be defined, however, to capture a very specific set of analytical processes.

Is Your Business a Fit?

There is no one-size-fits-all approach to Six Sigma. Although the framework originated within the manufacturing industry, the term has evolved to encompass any business that delivers a product or service to customers and relies on a standardized set of processes.

Six Sigma can apply to any process-driven services or product-focused business. While implementations are different based on the industry, the end result should be to provide a more holistic view of the business, with clearly-defined goals, a standardized and robust process and a minimum of defects resulting from the process.

Getting started is easy. Start with a goal and reverse engineer the process – test, iterate, and evolve. Apply the lessons learned to refine and optimize. This process of constant learning and quick-to-action application can help take a business’s operations to perfection.