Define Six Sigma  Why Companies are Switching over to Six Sigma?

A lot has been said about Six Sigma, however, do they really understand what Six Sigma is? Six Sigma is defined as a highly-disciplined, intensive and greatly effective quality control strategy that enables the delivery of products and services to a near perfect standard. Maintaining a virtually error-free performance of an organization is the primary goal of Six Sigma.

Six Sigma is a registered trademark of Motorola, Inc. Its concept was originally formulated by a man named Bill Smith in 1986 and was introduced in 1987. Application of the Six Sigma principles has resulted to dramatic financial improvements for Motorola. Comparing the results generated in 1988 from 1987, a 23% increase in sales amounting to $8.3 billion was generated. In addition, Motorola Inc. earned a total profit of $445 million, an increase of 44.57 from the previous year. This great improvement was also a result of Motorolas initiative in reducing the cost of defects, estimated at a nearly $2 billion savings. This has even made Motorola as the industry leader in paging systems at that time.

With the successful implementation of Six Sigma for Motorola, Inc., other companies have followed. One of them is Elco Industries Inc. that is based in Rockford, Illinois. The company has seen phenomenal improvements since the introduction of Six Sigma concepts, reducing 57% of manufacturing queue times in just a period of 2 years. Non-conformance cost was also cut off by 52% with an increase in shippable on-time percentage from 85% to 97%. Hewlett Packard came out next and saved an estimated $600 million in warranty upon successful implementation of Six Sigma. Truly, Six Sigma holds on to its promise of increasing company benefits. With its successful implementation on most companies, Six Sigma is definitely here to stay.

 

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