Six Sigma action occurs on two levels: the managerial and the technical. At the managerial level, a Six Sigma initiative includes many units, people, technologies, projects, schedules, and details to be managed and coordinated. It also involves developing many plans, taking many actions, and completing a lot of specialized work.
For all these factors to work in concert, and for the technical elements of Six Sigma to be effective, you have to set the proper management orientation.
Science and leadership
From a management standpoint, you use Six Sigma to achieve predictability and control of performance in a business or a business process by applying the methods of science to the domain of leadership.
The achievements of machinery, technique, process, and specialization of labor have collectively enabled the explosion of mass production and the consumer society. Science dictates how all the parts, materials, machines, and people on the assembly line interact to turn out many “widgets” at the highest possible speed and the lowest possible cost.
Radical corporate success
Six Sigma helps organizations achieve breakthrough improvement, not incremental improvement. In short, Six Sigma is a path to dramatic improvement in value for your customers and your company. Companies engaged in Six Sigma have realized staggering business success.
General Electric profited between $7 to $10 billion from Six Sigma in about five years.
Dupont added $1 billion to its bottom line within two years of initiating its Six Sigma program, and that number increased to about $2.4 billion within four years.
Bank of America saved hundreds of millions of dollars within three years of launching Six Sigma, cut cycle times by more than half, and reduced the number of processing errors by an order of magnitude.
Honeywell achieved record operating margins and savings of more than $2 billion in direct costs.
Motorola, the place where Six Sigma began, saved $2.2 billion in a four-year time frame.
And Six Sigma isn’t just for large organizations; small and medium businesses use Six Sigma to add to both revenues and profits.
Managerially speaking, the goal of Six Sigma is to inject control, predictability, and consistency of results into the production of a successful organization, such that the widgets are produced with great consistency and minimal variation.
Early in the 20th century, Henry Ford applied the principles of science to the production of cars. By following set processes and by optimizing repeatable processes, Ford and others made goods that displayed little variation in their final states and could be mass-produced without requiring extensive education and years of finely honed skills among the assembly-line staff.
Countless times every day in the United States, people open a water faucet and experience the flow of clean, clear water, which is possible because reliable purification systems treat the water and pressure systems ensure the water is there. This kind of dependability is what Six Sigma provides: It treats the processes in a business so that they deliver their intended results reliably and consistently.
The methodology of Six Sigma was first applied in a manufacturing company, but it also works in service and transactional companies (such as banks and hospitals), where it has been implemented many times with great success. Six Sigma dramatically improves the way any process works — whether that process is in the chemical industry, the oil industry, the service industry, the entertainment industry, or any other field.