Defining Six Sigma
In This Chapter
Looking at a problem-solving methodology Reviewing the precise statistical term Identifying a formidable business force Recognizing that Six Sigma isn’t just another initiative-du-jour
Six Sigma performance is the statistical term for a process that produces fewer than 3.4 defects (or errors) per million opportunities for defects.
ASix Sigma improvement is when the key outcomes of a business or work process are improved dramatically, often by 70 percent or more. A Six Sigma deployment is the prescriptive rollout of the Six Sigma methodology across an organization, with assigned practices, roles, and procedures according to generally accepted standards. A Six Sigma organization uses Six Sigma methods and tools to improveperformance: Continuously lower costs, grow revenue, improve customer satisfaction, increase capacity and capability, reduce complexity, lower cycle time, and minimize defects and errors.
Six Sigma is a problem-solving methodology. In fact, it’s the most effective problem-solving methodology available for improving business and organizational performance.
It’s okay if you don’tknow what “Six Sigma” is at all, or don’t understand every aspect of it. That’s because Six Sigma — once a precise, narrowlydefined term — has grown over time to represent a number of concepts:
t’s not often that a For Dummies book topic first needs a formal definition. After all, you know in general what gardening, dating, and even marathon training are. But “Six Sigma”? Evenif you remember that sigma is the 18th letter of the Greek alphabet, why six of them? What happened to the first five sigma?
Part I: Six Sigma Basics
No pain, no gain
The Six Sigma approach is not for the faint of heart, nor the unprepared organization. It’s intense and rigorous, and it entails a thorough inspection of the way everything is done. Six Sigma setsambitious business objectives and measures performance in a way that forces accountability. It doesn’t allow a management team to become complacent, but, rather, it exposes waste that otherwise would remain largely invisible. Six Sigma takes a business out of its comfort zone — but for a relatively short time. After the first project gains are made and the money starts flowing to the profitmargin, a cultural change takes hold. The early discomfort of changing business processes gives way to success, problems become opportunities for improvement, and the organization begins to enthusiastically leverage the methods and tools of Six Sigma — more pervasively and with a keen eye on value.
Six Sigma is a methodology for minimizing mistakes and maximizing value. Every mistake an organizationor person makes ultimately has a cost — a lost customer, the need to do a certain task over again, a part that has to be replaced, time or material wasted, efficiency lost, or productivity squandered. In fact, waste and mistakes cost many organizations as much as 20 to 30 percent of their revenue! That’s a shocking number. Imagine throwing 20 to 30 percent of your money away in the garbage everytime you cash a check. It may sound ludicrous, but that’s what many organizations do. All businesses, organizations, and individuals have room to improve. No operation is run so tightly that another ounce of inefficiency and waste can’t be squeezed out. By their nature, organizations tend to become messy as they grow. Processes, technology, systems, and procedures — the ways of doing business —become cluttered with bottlenecks, meaning work piles up in one part of the organization while other parts sit idle with nothing to do. Work is often performed incorrectly, or the outcome is flawed in some way. When this happens, you scrap products and services and have to do the work over again: You consume additional resources to correct a problem before it’s delivered to the customer, or the...