Six Sigma

Six sigma claims that focusing in reduction of variation will solve process and business problems. The methodology is probably most well known from Motorola or General Electric. Six sigma is the mathematical symbol for standard deviation. Initially it was a manufacturing quality measurement but is nowadays also used in services industries. Six sigma is a measurement for the maximum number of defects that is allowed in a system. At the six sigma level, 99.999998% of all products must be good (have to fall within the tolerance limits). This implies that no more than 3.4 defects are produced in 1 million opportunities. This level can be achieved by reducing the variation of the process and controlling it. To reach this quality level, the process must be improved. However, process and quality improvements are not the ultimate goal – financial improvement is the goal.

Six sigma includes five steps: define, measure, analyze, improve and control:

1. Define: first of all, a selection of the process that must be improved has to take place, and the goals for the improvement should be defined.

2. Measure: after the definition phase, data are collected to evaluate the performance of the current process for future comparison.

3. Analyze: the difference between the current state and the desired state is determined in this phase.

4. Improve: the process is subsequently optimized on the analysis.

5. Control: the new improved process should be controlled and formalized.

Source: Marcel van Assen, Gerben van den Berg, Paul Pietersma, Key Management Models 2nd Edition, 2009, Harlow (link to latest edition)