Six Sigma : A tool for business improvement - I

23 December 2005

Six Sigma is a quality management programme that everyone has heard about, but know very little about. In this article, part of a three-part article, Sanjay Matai explains the nuts and bolts of this operational performance improvement tool.

The topic of discussion on a typical day in any company's top management would invariably revolve around two topics — costs and the customer. The business exists for the customer, and it is the company's business to meet the customers' needs to their satisfaction. Second, the more efficiently a company can manage its costs, the more competitive and profitable its business becomes.

It is in these two critical components of any business that Six Sigma has proven to be a successful process improvement and management tool. A quality management programme, Six Sigma is essentially a rigorous and disciplined approach that utilises data and statistical analysis tools to improve the operational efficiencies of critical processes, practices and systems aimed at reducing variations and eliminating defects in the company's processes and products.

It is based on a 'statistical thinking' paradigm: that everything is a process, that all processes have an inherent variability and that data can be used to understand and reduce variability through process improvement.

On the face of it, Six Sigma is all about achieving — consistently — a quality level where the defects are less than the statistical number of '6 sigma'. As the company moves towards achieving these quality levels, there is a profound impact on the 'customer' and the 'cost'.

The statistical number
Sigma is a Greek alphabet ( ? ) used by statisticians to measure the variability in any number about a mean. Say the mean was a desired customer specification. Then a process with +/- 3 tolerance would result in 67,000 defects per million; a +/- 4 tolerance would result in 6,200 defects per million. Traditionally companies have been following a standard of 3-4 sigma performance levels.