Six Sigma

According to the authors, “Six Sigma is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services” (Chase, 2006). However, according to the American Production and Inventory Control Society’s (APICS) Dictionary, “six-sigma is a methodology that furnishes tools for the improvement of business processes. The intent is to decrease process variation and improve product quality” (Blackstone, 2005). The 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 the credit for coining the term "Six Sigma" goes to a Motorola engineer named Bill Smith. Additionally, "Six Sigma" is a federally registered trademark of Motorola (iSixSigma, 2006).

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 granularity. Instead, they wanted to measure the defects per million opportunities. Motorola developed this new standard, created the methodology, and needed cultural change associated with it. Six Sigma helped Motorola realize powerful bottom-line results in their organization and, in fact, they have documented more than $16 Billion in savings as a result of their 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, 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 (iSixSigma, 2006).

In relation to customer’s specification limits and quality, Six Sigma reflects the goal of having the specification limits of the items produced by a process be twice the normal variation (3) (Chase, 2006). In other words, the process variation should be half the specification limits to produce near-perfect products and services. Regarding Six-Sigma quality, according to the author, Six-Sigma refers to the philosophy and methods companies such as General Motors and Motorola use to eliminate defects in their products and processes. The APICS Dictionary puts this in another way that I like, “Six Sigma quality refers to the Six Sigma approach as a set of concepts and practices that key on reducing variability in processes and reducing deficiencies in the product. Important elements are (1) Producing only 3.4 defects for every one million opportunities or operations; (2) Process improvement initiatives striving for Six Sigma-level performance. Six Sigma is a business process that permits organizations to improve bottom-line performance, creating and monitoring business activities to reduce waste and resource requirements while increasing customer satisfaction” (Blackstone, 2005).

In a nutshell, businesses have traditionally described their products and services in terms of averages such as average cost, average time to deliver a product, and so on. However, averages can hide many problems. For example, with the way most processes operate today, if you were to promise customers to deliver packages within two working days of getting their order and your average delivery time is two days, many packages will be delivered in more than two days. With some packages having an average of two days, this means that some packages take longer and some take less than two days. What this means to someone practicing the Six Sigma philosophy is that there is a need to dramatically eliminate problems and variations in the process. Additionally, there will always be some variation in a process, but the core issue is whether that variation means your services and products fall within or beyond customer requirements. Therefore, if your goal is to produce Six-Sigma quality, then the problem is that your process produces defects, and in this example, late or early arrival of packages, so you should set about improving your process (Pande, 2002).

Six-Sigma thinking allows managers to readily describe the performance of a process in terms of its variability and to compare different processes using a common metric. For Six-Sigma the common metric is defects per million opportunities (DPMO). DPMO is the number of defects, which is the event that doesn’t meet the