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Six Sigma

What is Six Sigma The Evolution of Six Sigma Overview of Six Sigma
Six Sigma Success Factors How Does Six Sigma Work Statistical Meaning of Six Sigma

What is Six Sigma

Six Sigma was developed by CEOs to create an infrastructure of change agents throughout the
organization. These change agents focus on strategic goals to provide tangible benefits to major stake holder groups (customers, shareholders, and employees). Six Sigma emphasizes breakthrough rates of improvement, and focuses on world class performance to achieve organizational success.

The Evolution of Six Sigma

Before, January 15, 1987, Six Sigma was solely a statistical term. Since then, the Six Sigma crusade, which began at Motorola, has spread to other companies who are continually striving for excellence. While it is progressing, it has extended and evolved from a problem-solving technique to a quality strategy and ultimately into a sophisticated quality philosophy. However, this unique philosophy only became well known after GE’s Jack Welch made it a central focus of his business strategy in 1995. Today, Six Sigma is the fastest growing business management system in industry.

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Overview of Six Sigma

Six Sigma is one of the most popular quality methods lately. It is the rating that signifies “best in class”, with only 3.4 defects per million units or operations (DPMO). Its concept works and results in remarkable and tangible quality improvements when implemented wisely. Today, Six Sigma processes are being executed in a vast array of organizations and in a wide variety of functions.

Fueled by its success at large companies such as Motorola, General Electric, Sony, and Allied Signal, the methodology is proving to be much more than just a quality initiative. Why are these large companies embracing Six Sigma? What makes this methodology different from the others?

The goal of Six Sigma is not to achieve six sigma levels of quality, but to improve profitability.  Prior to Six Sigma, improvements brought about by quality programs, such as Total Quality Management (TQM) and ISO 9000, usually had no visible impact on a company's net income. In general, the consequences of immeasurable improvement and invisible impact caused these quality programs gradually to become the fad of the moment.

In 1891, British physicist Lord Kelvin wrote, “When you can measure what you are speaking about, and express it in numbers, you know something about it.” Mikel Harry, a noted Six Sigma authority, extends the thought as, “we don't know what we don’t know; we can’t act on what we don’t know; we won’t know until we search; we won’t search for what we don’t question; we don’t question what we don’t measure.” Both imply that if you failed to quantify the results of what you were doing, in a way, it means that you might not understand what you were really doing.

Hence, organizations that are unable to track the impact of quality improvements on profitability can not know what changes need to be made to improve their profit margins. And most importantly, profitability is the natural concern of management in organizations. If a quality initiative failed to present its quantitative bottom-line value to the management, it will lose the management's commitment to it and, eventually, fade away.

In contrast with other quality initiatives, Six Sigma recognizes that there is a direct correlation between the number of product defects, wasted operating costs, and the level of customer satisfaction. In the short term, Six Sigma is a method to eliminate defects and the opportunity for defects. It utilizes a statistical unit of measurement to measure the capability of the process, then achieve defect free performance, and ultimately increase the bottom-line and customer satisfaction.

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Six Sigma Success Factors

Research into what makes a Six Sigma implementation a success has revealed 10 Critical Success Factors. They are, in order of importance:

  1. Top management leadership & commitment
  2. A well implemented customer management system
  3. A continuous education & training system
  4. A well-organized information & analysis system
  5. A well-implemented process management system
  6. A well-developed strategic planning system
  7. A well-developed supplier management system
  8. Equipping everyone in the organization, from top management to employees, with a working knowledge of the quality tools
  9. A well-developed human resource management system
  10. A well-developed competitive benchmarking system

For More Detailed Information, go to Six Sigma Success Factors

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How Does Six Sigma Work

Six Sigma is a disciplined and quantitative approach involving setting up a system and process for the improvement of defined metrics in manufacturing, service, or financial processes. The approach drives the overall process of selecting the right projects based on an organization's business goals and selecting and training the right people to obtain the results. Improvement projects follow a disciplined process defined by a system of four macro phases: measure, analyze, improve, control (MAIC).

Sometimes a preliminary step, define, is added at the beginning, which relates to the appropriate selection of projects and problem definition. The problem must be chronic and impactful.

The 4 MAIC phases will be described as follows:

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Statistical Meaning of Six Sigma

The term sigma is a Greek alphabet letter (σ) used to describe variability.  In Six Sigma, the common measurement index is DPMO (Defects Per Million Operations) and can include anything from a component, piece of material, or line of code, to an administrative form, time frame or distance. A sigma quality level offers an indicator of how often defects are likely to occur, where a higher sigma quality level indicates a process that is less likely to create defects. Consequently, as sigma level of quality increases, product reliability improves, the need for testing and inspection diminishes, work in progress declines, cycle time goes down, costs go down, and customer satisfaction goes up.
To have a more comprehensive understanding about sigma quality level, it will be explained from two perspectives of process capability: short-term and long-term process capabilities.

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