Since its introduction, Six Sigma has literally revolutionized management processes and way business is done. Over years, major corporations world-wide—from Motorola to General Electric—have adopted and implemented its methodology as keystone of their management philosophy.
As such, Six Sigma practitioners are in high demand by top companies looking to streamline their processes and increase their profit margins through this powerful management tool.
This article will provide a basic overview of concepts and methodology that is redefining management strategies of major corporations—and managers they hire.
What is Six Sigma?
At its heart, Six Sigma is a business tool used to increase profit by optimizing performance. In order to understand how Six Sigma achieves this, one must first learn to look at business as a series of processes.
Any business can basically be viewed as a machine comprised of many moving parts, called processes. This idea can be applied to any department, across board—from Human Resources to Research and Development, from a hiring process to a manufacturing process, from marketing to distribution. All main parts of whole must be synchronized for optimum performance in order for a company to be successful. The same applies to processes that make up individual departments. In this way, everything is interlocked and interdependent. And by extension—as saying goes—you are only as strong as your weakest link.
With this in mind, Six Sigma sets out a disciplined data-driven methodology to measure and analyze processes that a company ultimately runs on. Its ultimate goal is optimization of performance by identifying and eliminating “defects” in process, resulting in higher customer satisfaction, and thus profit.
The Underlying Principles
Six Sigma is a powerful management tool used to optimize performance by eliminating defects in corporate processes. A defect in process can be seen as an obstacle to customer satisfaction, which is lifeblood to any company's profitability. Therefore, while Six Sigma analyzes and improves internal processes of a company, it's ultimate aim is to increase degree of customer satisfaction.
The term “Six Sigma” itself offers clues to ideas at heart of its methodology. The word “sigma” is a statistical term for measuring deviation from perfection. The “six” refers to six standard deviations. Taken together, term translates into a methodology that, when applied to processes, seeks to produce no more than six standard deviations from defined point of perfection. In Six Sigma methodology, this has been defined as no more than 3.4 defects per million opportunities. While statistical terminology might sound intimidating, idea of making only 3 mistakes for every million attempts is easy enough to grasp and shows power of methods at work.