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What is Six Sigma?

It’s okay if you don’t know what Six Sigma is at all, or don’t understand every aspect of it. That’s because Six Sigma — once a precise, narrowly-defined term — has grown over time to represent a number of concepts:

  • Six Sigma is a problem-solving methodology. In fact, it’s the most effective problem-solving methodology available for improving business and organizational performance.

  • Six Sigma performance is the statistical term for a process that produces fewer than 3.4 defects (or errors) per million opportunities for defects.

  • A Six 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.

  • The Six Sigma toolset is the collection of methods and tools, including statistics and analytics, that Six Sigma practitioners use to consistently achieve breakthrough levels of improvement.

  • The Six Sigma methodology is often combined in practice with Lean methods in a hybrid practice known as Lean Six Sigma or Lean Sigma.

Six Sigma is a methodology for minimizing mistakes and maximizing value. Every mistake an organization or 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 25 to 40 percent of their revenue! That’s a shocking number. Imagine throwing 25 to 40 percent of your money away in the garbage every time 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 situation 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 customer asks later for a “redo” — a new product or a more satisfactory service.

Sometimes, flaws and defects aren’t the problem, but a product or service simply takes too long to produce and deliver. Think about the problems a mortgage company would have if it processed home loans perfectly but did so five times more slowly than the competition. That’s a perfect disaster.

Six Sigma was once a quality-improvement methodology, but now it’s a general-purpose approach to minimizing mistakes and maximizing value: How many products can you produce, how many services can you deliver, or how many transactions can you complete to an expected level of quality in the shortest possible amount of time at the lowest possible cost?

Six Sigma takes effort and discipline and requires you to go through the discomfort of change. But soon the pain is transformed into improved performance, lower costs, more success, and happier customers.

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