Six Sigma was introduced by Motorola in 1980s as a business process improvement technique that works on performance improvements via lowering or eliminating defects & variations.
By definition, a Six Sigma process implies 3.4 or lower defects per million opportunities or efficiency gains of 70% or higher.
If you can’t measure it mathematically, it’s not a Six Sigma process
Six Sigma = Saving Costs; Six Sigma ≠ Avoiding Costs
Also, if you don't save over 70% of cost or reduce over 70% of defects it is not a Six Sigma improvement.
Six Sigma has a financial impact to EBIT (Earnings before income tax) or NPBIT (Net profit before income tax) or a significant strategic value.
When a business problem is selected to become a potential Six Sigma project, it goes through a critical metamorphosis- first from a practical business problem into a statistical problem, then into a statistical solution and finally into a practical solution. When a business problem is stated in statistics language, one ensures use of data to solve the problem.
When a business problem is selected to become a potential Six Sigma project, it goes through a critical metamorphosis- first from a practical business problem into a statistical problem, then into a statistical solution and finally into a practical solution. When a business problem is stated in statistics language, one ensures use of data to solve the problem.
* Balanced Score Card may be used to conduct Impact Analysis
Which organizations benefit from Six Sigma implementation?
Six Sigma is best suited for organizations that are totally committed to Continuous Improvement.
Although Six Sigma was designed for manufacturing-based companies, it is equally effective and efficient to service industries. A classic example of Six Sigma in service sector is Six Sigma application to airline business.
Six Sigma is best suited for organizations that are totally committed to Continuous Improvement.
Although Six Sigma was designed for manufacturing-based companies, it is equally effective and efficient to service industries. A classic example of Six Sigma in service sector is Six Sigma application to airline business.
In the next part of this article series, I shall discuss another important Business Process Improvement methodology; Agile! Part 3 of this article series will touch upon Agile in Nutshell for Improving Sales & Marketing of Products and Services.
Related reading:
- Business Turnaround and Continuous Improvement Tips and Tricks Part 1 of 6
- Business Turnaround and Continuous Improvement Tips & Tricks Part 3 of 6- Agile in Nutshell for Improving Sales & Marketing of Products and Services
- Business Turnaround and Continuous Improvement Tips & Tricks Part 4 of 6- Lean Manifesto
- Business Turnaround and Continuous Improvement Tips & Tricks Part 5 of 6: TQM in a Nutshell
- Business Turnaround and Continuous Improvement Tips & Tricks Part 6 of 6 : Balanced Score Card
- How to develop a culture of ‘Continuous Improvement’ in an organization?
- 8 Steps to becoming a Customer- centric organization
- Transforming Businesses From Good to Great via Continuous Improvement- Article by Dr. Shruti Bhat published in Express Pharma
