Six Sigma

Six Sigma is a proactive process which is focused on reducing defects per million.

By itself the Greek letter sigma (Σ), in statistics, is a measure of variation. When applied to a business process it is a measure of how many defects (or failures) occur in every million opportunities. In a Six Sigma organization the manager proactively uses metrics and statistics to continually measure the performance of the process regardless of whether any defects were detected in the first place. In this manner, every single related process is continually improved in an effort to anticipate problem areas before they occur.

The term "Six Sigma" is a performance target that is derived with the help of statistics, mathematics, and measurement. Yet, at the same time, Six Sigma is more than just a performance target; it is a process with defined steps that takes several years to achieve.

There are officially eight fundamental steps or phases in applying Six Sigma. They include Recognize, Define, Measure, Analyze, Improve, Control, Standardize, and Integrate. Depending on the nature of the business some phases may or may not be included.

Six Sigma makes an improvement by using strict measurement to benchmark those factors which a company values most. Its driving force originates from financial gains rather than quality improvement. Six Sigma forces executives and managers to reinvent the manner in which processes and products are constructed such that errors are not encountered in the first place. It is not a trial and error system that makes minor modifications on existing systems from time to time, but a large-scale reengineering effort.

One of the most important change instruments that today's management chooses, which can lead to substantial cost reductions, is the creation of Shared Service Centres. The second alternative is Business Process Outsourcing.

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