Six Sigma is a well defined, customer focused management system that strives for the delivery of near-perfect products or services. Six Sigma's goals are to reduce defects and variation so that processes are more consistent and predictable. It was developed by
Motorola in 1986,
[1][2] coinciding with the
Japanese asset price bubble which is reflected in its terminology. Originated by Motorola in the 1980s, Six Sigma translates into 99.9997 percent quality or yield. To achieve Six Sigma quality (99.9997%), a process must produce no more than 3.4 defects per million opportunities. Sigma became famous when
Jack Welch made it central to his successful business strategy at
General Electric in 1995.
[3] Today, it is used in many industrial sectors. There are two Six Sigma processes: Six Sigma DMAIC and Six Sigma DMADV, each term derived from the major steps in the process. Six Sigma DMAIC is a process that defines, measures, analyzes, improves, and controls existing processes that fall below the Six Sigma specification. Six Sigma DMADV defines, measures, analyzes, designs, and verifies new processes or products that are trying to achieve Six Sigma quality.
Those who know Six Sigma are knowledgeable in dozens of different methods to reduce costs, increase revenue, streamline business processes and improve employee buy-in, all of which leads to a better bottom line.
Lean focuses on value through the relentless elimination of waste and acceleration in the velocity of processes. Its origins can be traced to Henry Ford of Ford Motor Company and Taiichi Ohno of Toyota. Value is defined in terms of what is important to the customer. Value-add work is something your customer is willing to pay for. For example, does the task add a desired function or feature to the product or service? Or does the task enable a competitive advantage (faster delivery, fewer defects, lower price)? Non-value work, or waste, includes activities the customer is not willing to pay for.
There are eight commonly known forms of waste that can be remembered using the acronym DOWNTIME: Defects, Overproduction, Waiting, Non-Utilized Talent, Transportation, Inventory (too much or too little), Motion, and Excess Processing. Increasing the velocity of processes is not about working faster, but speeding up the entire end-to-end process or lead time.
Human behavior can be pushed to Sigma levels above 4 through simple checklists, mistake-proofing or poka-yoke techniques, visual management, and standardized work.
