What Is The Six Sigma Strategy?

In 1986, the telecommunications company Motorola developed and implemented a highly controversial business management strategy that is known as Six Sigma. The goal of this strategy is not unusual and sounds quite mundane. A Six Sigma plan seeks to improve production by reducing the causes of variability and defects in the output process. This has been a standard goal in businesses since the industrial age began centuries ago.

However, the controversy about this strategy does not arise from its goal but rather from its implementation. Though the strategy has become rather widespread among Fortune 500 companies, critics point out many erroneous applications of the driving philosophy behind this business strategy. A well-known statistician has publicly characterized the primary tenets of the Six Sigma doctrine as goofy.

History and Methods of Six Sigma

After suffering criticism regarding the quality of their products in the 1970′s, managers at Motorola began to review their basic, underlying beliefs about production, development and quality in their business and in businesses in general. They discovered that they had misunderstood the relationship between quality and production costs. They had always assumed, as had many others, that making higher quality products would cost more money. This was, at the time, a fairly common notion.

Reviewing their processes and their production history, the Motorola management staff realized that products which demonstrated high quality actually cost less to produce in the long run. These lower costs were due to the lower need for repairs and production control as the product went through the manufacturing process. Whereas products that had initial flaws in design cost the company a great deal of money in production stops and quality reviews.

Business managers at Motorola further realized that inherent quality at the start of production entailed lower manufacturing costs and higher sales. The possibilities for profits greatly increased if a product suffered from fewer original defects than other products that the company made. As a staff, they created the Six Sigma doctrine in response to this new understanding.

Six Sigma Doctrine

This new business management strategy declared three truths about business practices. First, it states that a business should make a continuous attempt to reduce variability in production and increase quality. This differed, perhaps, from standard business ideas which might have only stressed periodic efforts at improvement. Six Sigma sought to create an entire department which would tirelessly seek these improvements in production and development.

Second, this strategy declares that the manufacturing process has characteristics which management can analyze and improve. Again, this is not something that was completely new to business philosophies. It may stand out only due to the way in which it was implemented later.

Third, Six Sigma calls for full commitment to these efforts from the entire staff. In particular, it demands full engagement on the part of upper management. This amounts to creating a culture within the workplace. Rather than simply gathering people to work at their assorted tasks for set periods of time, this doctrine tries to focus and unite management and labor in a commitment to improve quality.

There are some features of this initiative which distinguishes this philosophy from other business philosophies. Six Sigma teams, groups of staff members dedicated to this continuous task of improvement, focus on acquiring quantifiable results from their efforts. They also create more passion regarding manufactured products in management than was previously characteristic of upper management in large businesses. Together, everyone agreed to make decisions based on data rather than feelings.

One more feature of this initiative set it apart from other such efforts in the corporate world. It created a special team inside the company that was exclusively devoted to this work and gave them a unique designation. As different companies adopted similar practices over the years, these teams received names such as “Black Belts” or “Green Belts.”

Implementation of Six Sigma

Six Sigma training created teams which focused on two approaches to improving production. One approach focused on analyzing products that were already in production within the company. Another team sought to create new products under the guidance of this new philosophy.

After receiving Six Sigma certification, staff that focused on existing products used five steps in their methodology of improvement. First, they listened to complaints about the product from the public. This defined the problem. Then they analyzed the production process for that particular product and collected data. Analysis of the data followed, with the specific goal of determining cause and effect relationships in the process. Using this information, the teams then sought to improve the process of production for that one item, basing their attempts only on verified data from the analysis. The last step in this process gave a team the responsibility of controlling the process in the future.

The Six Sigma tools that the second team possessed also consisted of five steps. The first step was to define goals for designs that met public demand. The second was to measure possible product qualities and production risks. This was followed by an analysis of various alternatives which sought to determine which would have the highest quality and profit possibility. The fourth step in this plan entailed design and simulation of the product. Finally, the design was to be verified through test runs and other familiar methods before production began.

Criticisms of Six Sigma

While many businesses now adhere strictly to these same policies, there is no shortage of criticism from experts about the Six Sigma strategy. Lack of originality is one persistent criticism. Business experts can point to countless examples of similar initiatives over the centuries that resemble the Six Sigma process. Using verifiable data, a Fortune magazine article pointed out that most of the companies which have adopted this strategy actually trail in rankings when compared to other Fortune 500 companies.

Other experts have stated that the goals set by the Six Sigma approach are based on arbitrary standards. Furthermore, they suggest that this strategy has been often misused by companies which do not produce technological tools and, hence, should have different standards for their products than Motorola.

Six Sigma – What Is It? Video Explanation

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