Six Sigma is the way to running an organization with maximum efficiency and minimum cost. The goal of Six Sigma is to minimize costs and reduce defects to a statistical zero.
Copyright (c) 2009 Stellar Force
Six Sigma is the gold standard for organizations that want to minimize costs and maximize efficiency. A severe recession is an excellent time to do these things.
The name Six Sigma comes form the concept of a normal distribution or a bell curve. A sigma is one standard deviation from the mean. The goal of Six Sigma is to eliminate all errors or defects within six sigmas or standard deviations from the mean. The errors represent only the absolute extremes of the bell curve. This translates to only 3 defects per million.
Waste Not
The biggest efficiency problem in any company is from waste. Six Sigma can eliminate defective products, which are a waste of workers and materials. With only 3 defects per million this waste is cut to an absolute minimum.
This kind of astronomical quality level is almost beyond belief. This is about as close as you can statistically come to zero defects. Diminishing returns prohibits additional reductions to say seven sigma.
More Profits
Profits in any commercial venture are about finding ways to deliver quality products at a minimum cost. This tends to be a balancing act. If you lean too far towards cutting costs, then quality suffers. If you lean too far towards quality then the costs are too high and profits falter. Six Sigma cuts out all of the fat and defines were the balance should be. When this process is established (not finished because it is a continuos process) then the maximum possible profits based on internal efforts are acheived.
The Minuses
The negative side of this picture is that it takes real effort to implement Six Sigma. Don't expect to get something for nothing. It requires commitment from management on all levels. In order to prepare employees to work within the Six Sigma process a significant amount of training is required. People with specific analytical skill sets must be employed. The effort can not be a flash in the pan. Continous effort over 3-5 years is required to obtain the full benefit from these initiatives.
Is Six Sigma worth it? After all there is a heavy commitment of time and resources. The answer is simple. The Six Sigma toolkit can make an organization more efficient than any other method. Companies such as General Electric that have implemented Six Sigma are admired examples of productivity and efficiency. It is an approach that can save a company from disaster in these hard economic times.
