What's a Sigma?
"Six Sigma" refers to a statistical measurement - standard deviations from the norm. Six-sigma looks for accuracy 99.9997% of the time (three to four defects per million).
They mention the impact of small deviations can have when applied to a large number of people. If a credit company ships ten million orders each month, 99% accuracy means 100,000 shipping errors. That's not acceptable at all.
EN: I recall a discussion on this in my Ops Management class - any company can claim to run with SS efficiency if it defines "defect" properly. The US Postal Service defines failure as the loss of a letter, and runs at SS precision (virtually all letters go through). On the other hand, American Airlines claims to run at SS precision, but one wonders what they measure (possibly "passengers not killed").
Each process can have problems - the same company above also takes ten million orders, packs ten million orders, ships ten million orders, sends ten million bills, and processes ten million payments, so if there's a 1% error rate on each of these processes, that adds up to a lot of angry customers - each month. Most of them won't complain - but they'll stop doing business with you. Also, a dissatisfied customer tells an average of ten other people if they received bad service - only five if the company rectifies the situation - which makes it harder to attract customers.
The critical elements of SS are distilled into six themes:
- Customer Focus - Define "improvement" by its ultimate impact on the customer
- Management by Fact - Using data, rather than opinion and assumption - to drive business decisions
- Process Focus - Defining the processes that create competitive advantage
- Proactive Management - Acting in advance of events rather than in reaction to them
- Collaboration Without Boundaries - Cooperation across an organization, rather than competition among business units
- Tolerate Failure - Understand that striving for success includes the potential for failure, and that a company that fears fail will not make progress
The final note is that SS can be done on any level, but the scale on which it is implemented matches the scale of the results it will achieve.