This methodology is based on reducing variability in order to eliminate failures in the delivery of a product or service offered by the company. To achieve this, it takes into account that the index DPMO (defects per million opportunities) shouldn´t be greater than 3.4. According to several studies, this reduction in defects saves almost 40% of revenues.
For this reason, it is recognized Six Sigma to be a useful tool for the company to grow without making large investments but by improving their processes. Although this methodology was born in the 80s, with time has been improved and is still widely used in different companies. It was thanks to Bill Smith, an engineer at Motorola, which emerged this new way of reducing variability.
To develop Six Sigma in a company, Bill Smith proposed that must be applied Deming’s circle also called PDCA. The abbreviations refer to Plan, Do, Check, Act. The first one refers to define the problems and design a strategy to solve them, then analyze and incorporate it into the process; the results are reviewed and finally start. Keep in mind that being a circle, constant commitment of the company is required as always must be repeating the same steps to achieve significant efficacy.
In addition to this, it must apply six principles that are part of Six Sigma. In the first one the company should focus on the costumer, it is thanks to him and for him that the organization exists. In the second principle, the strategy that will be created must have a measurable and verifiable base. This means that there must be a collection of data that will be measured under specific rules.
The third principle talks about mentalizing the entire company, including senior officers, that there are processes is needed to be in constant action. This does not mean act randomly, but beyond that, every decision must be made based on a preliminary analysis.
In the beginning, four leaders are involved. They must give the pattern and global measures which processes are measured. Their actions should not be individual but must take into account the other staff. The top five expands this topic referring to the collaboration among all. Finally, principle six is the pursuit of perfection.
Here are some companies that have implemented Six Sigma:
It was the first one to apply this methodology in 1986. Jeff Summers, director of Quality refers to Six Sigma as a comprehensive process which takes into account not only who is within the company, but also the context and how both changes according to what the company does. It is estimated that Motorola has saved more than 18 million since applying Six Sigma. Besides this, it is also recognized its constant improvement in the products offered to the customer.
This is another of the major companies since appeared Six Sigma took him into their processes. Since 1995 they restructured the company to work under the premise of this methodology and managed to position the company in the market for a value of 280 million dollars in 1998.
Jack Welch, the ex-president of GE, was constantly in this process until his retirement. He claims that much of the success is due to the commitment of all staff, as General Electric asks its employees to take a training program several weeks to properly implement Six Sigma. This also required that Jack acted as leader, and guide the company, that´s why he used to spend up to 50% of his time in their employees. With this, he also knew more the people he worked with and their strengths.
Toshiba not only implemented Six Sigma but managed to create an organizational culture that focuses on increasing the satisfaction of the customer and employees. From there, it was based on customer perceptions to exploit new business opportunities according to the needs of the environment. In addition, Toshiba took the initiative to work with professors from Stanford and MIT in order to seek further improvements to this methodology.
This space exploration company implements Six Sigma methodology giving special value to the phase of planning and analysis before applying it. So they delved looking for a committed leadership supported education and institutionalization of Six Sigma. Besides that, they also integrated with Adrian Technologies to adapt the basis of this methodology for the specific needs of the company. Since then, they have succeeded in more than 200 projects.
This company managed to recover in just one year after having a great economic loss. With Six Sigma they went out of the problem successfully. In addition, they reposition in the market as a reliable and preferred company. Nissan decided to implement tighter training through coaching and monitoring sessions and working groups accompanied by the Spanish Quality Association.
Nissan also shares their experience with their clients with the program called Renault-Nissan Consulting. This training is accredited by the British Quality Foundation and has the purpose to teach a complete and updated way to implement Six Sigma.