Concept of Six Sigma - Knowledge Management, Contemporary Management | Contemporary Management - B Com PDF Download

Six Sigma is a disciplined, statistical-based, data-driven approach and continuous improvement methodology for eliminating defects in a product, process or service. It was developed by Motorola in early to middle 1980’s based on quality management fundamentals, then became a popular management approach at General Electric (GE) in the early 1990’s. Hundreds of companies around the world have adopted Six Sigma as a way of doing business.

Sigma represents the population standard deviation, which is a measure of the variation in a data set collected about the process. If a defect is defined by specification limits separating good from bad outcomes of a process, then a six sigma process has a process mean (average) that is six standard deviations from the nearest specification limit. This provides enough buffer between the process natural variation and the specification limits.

For example, if a product must have a thickness between 10.32 and 10.38 inches to meet customer requirements, then the process mean should be around 10.35, with a standard deviation less than 0.005 (10.38 would be 6 standard deviations away from 10.35).

Six Sigma can also be thought of as a measure of process performance, with Six Sigma being the goal, based on the defects per million. Once the current performance of the process is measured, the goal is to continually improve the sigma level striving towards 6 sigma. Even if the improvements do not reach 6 sigma, the improvements made from 3 sigma to 4 sigma to 5 sigma will still reduce costs and increase customer satisfaction.