ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel
  • »
  • Business and Employment»
  • Business Management & Leadership

Definition, history and strength of six sigma business strategy - advantage of Six sigma

Updated on January 13, 2012

What is Six sigma?

Six sigma is an effective Business management strategy where the main objective is to improve the quality of process outputs by removing/decreasing defects. Six sigma also minimizes the variability in manufacturing and business process. The main objective of six sigma is to remove production errors with the end goal of near perfection. Six Sigma refers to the process that has only 3.4 defects in a million output units. Many manufacturing companies prefer six sigma strategies to improve the quality by reducing defects. Besides minimizing the defects Six sigma strategy can also minimize the cost of the productions. It involves trained certified professionals who are ranked by belts. Different colors of the belt indicate different roles and responsibility. As a result it becomes easier for the worker to master in specific field to maintain high quality and near zero defects.

Six sigma business strategy
Six sigma business strategy | Source

History of Six Sigma

Motorola first introduced the concept in 1970. During this period, the quality of Motorola was very poor. Art Sundry the senior executive of Motorola criticized about the bad quality of Motorola and forced the company to improve the quality. After the criticism from Art Sundry, the Company realized that it is possible to increase quality and decrease the cost of production. In this way the six sigma concept was introduced by Motorola.

In past people used to think that increasing the quality also increases the cost. But with the concept of Six Sigma it was discovered that, total cost can be reduced by dividing down the cost of repair control. That means the more defect fee the product is the less money is wasted to repair it. Moreover higher quality increases the popularity of the product in the market.

In 1986 the Six Sigma methodology was officially formulated by Bill Smith (Engineer of Motorola Corporation). After that six Sigma has become one of the most successful methodology to reduce defects and cost both at the same time.

Motorola has got huge success by using Six Sigma methodology. As of 2006 Motorola saved 17 billion US$. Besides Motorola there is many other well known companies got success by using Six Sigma methodology. General Electric and HoneyWell are the two successful corporations which are using Six Sigma methodology. This is how Six Sigma gradually got popular.

The advantages of six sigma

  • The main strength of Six Sigma is, it seeks to identify and remove defects and errors in production. Besides it removes the cost of production as well. As a result Six sigma could increase the quality and reduce cost of productions at the same time.

  • One of the objective of Six sigma is to create strong leaders in specific field of work to achieve the goal of the organization more efficiently. In Six sigma philosophy, trained certified professionals are ranked according to the color of belt. It helps them to master in specific fields of work to maintain high quality. In these way Six sigma methodology helps an organization to create strong passionate employees.

  • Six sigma divides the responsibility levels into different categories like, Sponsors, Leaders, Champions, Master Black Belts, Experts, Black Belts, Green Belts, and White Belts. Each person of this categories are liable in different aspects. As a result it becomes easier to complete achieve the goal of the organization wit near perfection.

  • Six sigma is very effective in satisfying the customer needs. The basic philosophy of Six sigma is to reduce defects which increases the customer satisfaction.

  • Six sigma relies on facts and data in decision making instead of random opinions. Quantifiable measurements is compulsory for any kind of decision making. This increases the accuracy of the results.

  • Six sigma places a clear measurable goal to the company. This makes sure that the goal of the company is achieved exactly the way it should be.

Six sigma success stories:

There are many companies which has got success by using Six Sigma strategy. Motorola and General Electric (GE) are two notable companies which got huge success by using six sigma strategies.

Motorola was the first company to apply six sigma strategies. Motorola improved their products quality and saved 17 US dollars as of 2006.

General Electric (GE) adopted six sigma as their core leadership and improvement strategy in 1996. Chairman Jack Welch first introduced six sigma in GE. After adopting Six Sigma strategy GE achieved success by eliminating the defects, satisfying customer needs, increasing the growth, reducing cost etc. After the Six sigma adoption GE documented billions of dollars in new savings and revenue, targeting operations, sales and financial management.

I hope this Hub will help the students who are studying production and operation management. Thanks for reading and don't forget to rate this Hub.

© M.D Mahmudul Hasan (Tnvrstar)


    0 of 8192 characters used
    Post Comment

    • tnvrstar profile image

      tnvrstar 5 years ago from doha, qatar

      @Glen Stok It's my pleasure to have comments from you. This Hub is new and might need few months to get good ranking from search engine. I hope this Hub will get traffic soon. Thanks for your comment.

    • Glenn Stok profile image

      Glenn Stok 5 years ago from Long Island, NY

      I'm surprised you didn't get any traffic to this Hub yet. I know about Six Sigma. You wrote a very clear and detailed description of it.