Six Sigma

Six Sigma is a data-driven methodology for eliminating defects and reducing variability in business processes. The name comes from statistics: sigma (σ) represents standard deviation, and "six sigma" refers to a process that produces no more than 3.4 defects per million opportunities (P.S. Pande et al. 2000, p.7). That's near-perfection. The approach combines rigorous statistical analysis with structured problem-solving frameworks to achieve measurable improvements in quality, cost, and cycle time.

Developed at Motorola in the mid-1980s, Six Sigma has since spread to thousands of organizations worldwide. General Electric, under CEO Jack Welch, famously adopted the methodology in 1995 and reported billions in savings. Today, Six Sigma principles are applied across manufacturing, healthcare, finance, and service industries.

Origins and history

The story begins with Bill Smith, an engineer at Motorola. In 1986, Smith was analyzing failure rates in electronic products. What he discovered was troubling: products that had been repaired during manufacturing failed more often in the field than those assembled correctly the first time (T. Pyzdek, P. Keller 2014, p.3). The implication? Defects were expensive—not just in rework costs, but in warranty claims and customer dissatisfaction.

Smith proposed a radical goal. Instead of accepting industry-standard defect rates, Motorola should aim for near-zero defects. He developed a methodology combining statistical process control with systematic problem-solving. Bob Galvin, Motorola's CEO, backed the initiative.

The results came quickly. Within four years, Motorola won the Malcolm Baldrige National Quality Award (1988). By 2006, the company claimed over $17 billion in documented savings from Six Sigma projects.

Other companies noticed. Allied Signal (later Honeywell) adopted Six Sigma in the early 1990s. But the methodology's biggest boost came from General Electric. When Jack Welch launched GE's Six Sigma initiative in 1995, he made it mandatory for all managers. "Quality is not just a program—it's a way of doing business," Welch declared. GE's success attracted attention from virtually every major corporation.

By the late 1990s, roughly two-thirds of Fortune 500 companies had Six Sigma programs (R.R. Cavanagh et al. 2000, p.xi). The methodology had evolved from an engineering tool into a management philosophy.

The DMAIC framework

Six Sigma projects follow a structured approach called DMAIC. Each letter represents a phase:

Define

What's the problem? This phase establishes project scope, identifies customers and their requirements, and sets measurable goals. Teams create a project charter specifying the business case, timeline, and expected benefits. A poorly defined project rarely succeeds. Spend time here.

The "voice of the customer" (VOC) is central to this phase. Six Sigma insists that quality be defined from the customer's perspective, not the producer's. A process that meets internal specifications but disappoints customers is not a quality process.

Measure

How bad is it? Teams collect data on current process performance. This involves mapping the existing process, identifying key input and output variables, and establishing baseline measurements. Statistical validity matters—sample sizes must be adequate, measurement systems must be reliable.

Process capability analysis determines whether the current process can meet customer requirements. The gap between current performance and the target reveals how much improvement is needed.

Analyze

Why is it happening? This is detective work. Teams use statistical tools to identify root causes of defects and variation. Techniques include:

Pareto analysis (identifying the "vital few" causes)
Fishbone diagrams (organizing potential causes)
Regression analysis (quantifying relationships between variables)
Hypothesis testing (validating suspected causes)

The goal is to move beyond symptoms to underlying causes. Fixing a symptom provides temporary relief. Eliminating root causes produces lasting improvement.

Improve

What's the solution? Teams develop, test, and implement changes to address root causes. This often involves piloting solutions on a small scale before full deployment. Design of experiments (DOE) helps optimize process settings.

Change management matters here. Technical solutions fail when people resist them. Successful Six Sigma teams invest in training, communication, and stakeholder buy-in.

Control

How do we sustain it? Improvements erode without vigilance. The control phase establishes monitoring systems, documentation, and response plans. Control charts track key metrics over time. When performance drifts, teams intervene before defects reach customers.

Knowledge transfer is part of control. Solutions should be standardized and shared across the organization. What one team learns, others can apply.

Belt system and organizational roles

Six Sigma uses a "belt" system borrowed from martial arts to designate expertise levels:

Yellow Belt - Entry-level training. Yellow Belts understand Six Sigma concepts and contribute to projects as team members. They typically complete 1-2 days of training.

Green Belt - Working knowledge of Six Sigma tools. Green Belts lead smaller projects while maintaining other job responsibilities. Training runs 2-4 weeks. They handle projects within their functional area.

Black Belt - Full-time Six Sigma practitioners. Black Belts lead complex, cross-functional projects and mentor Green Belts. Training takes 4-6 weeks plus project completion. A typical Black Belt delivers $500,000 or more in annual savings.

Master Black Belt - The experts. Master Black Belts train and coach Black Belts, develop curriculum, and provide statistical expertise for difficult problems. They shape organizational strategy around continuous improvement.

Champion - Senior leaders who sponsor projects, remove barriers, and ensure alignment with business strategy. Champions don't need statistical expertise, but they must understand the methodology well enough to ask the right questions.

This structure creates a career path for quality professionals while embedding Six Sigma throughout the organization. Critics argue it can become bureaucratic. Supporters counter that the formality ensures rigor.

Statistical foundation

Six Sigma's statistical foundation distinguishes it from other improvement approaches. The methodology relies heavily on data—not opinions, not assumptions.

The sigma level measures process capability. A process operating at six sigma produces 3.4 defects per million opportunities. Here's the scale:

Sigma level	Defects per million	Yield
2σ	308,537	69.1%
3σ	66,807	93.3%
4σ	6,210	99.4%
5σ	233	99.98%
6σ	3.4	99.9997%

Most companies operate between 3 and 4 sigma. Moving to six sigma requires dramatic reduction in process variation.

The calculation assumes a 1.5 sigma shift over time—processes drift. This conservative assumption built into Six Sigma methodology accounts for real-world variation that statistical models might miss.

Integration with Lean

Many organizations now practice "Lean Six Sigma," combining Six Sigma's statistical rigor with Lean manufacturing principles. The approaches complement each other:

Lean focuses on eliminating waste (non-value-added activities) and improving flow. Tools include value stream mapping, 5S, and kaizen events.
Six Sigma focuses on reducing variation and defects through statistical analysis.

Together, they address both efficiency (doing things faster) and effectiveness (doing things right). A process can be efficient but produce defects. A process can be defect-free but slow. Lean Six Sigma targets both.

The integration isn't always smooth. Lean emphasizes rapid action; Six Sigma emphasizes thorough analysis. Skilled practitioners balance these tensions based on the problem at hand.

Applications across industries

While Six Sigma originated in manufacturing, it has spread widely:

Healthcare - Hospitals use Six Sigma to reduce medication errors, decrease patient wait times, and improve surgical outcomes. A defect in healthcare can mean a lost life. The stakes drive adoption.

Financial services - Banks apply Six Sigma to loan processing, fraud detection, and customer service. Reducing errors in transactions saves money and builds trust.

Information technology - Software development teams use Six Sigma for defect reduction and cycle time improvement. The methodology adapts to service processes as readily as manufacturing.

Government - Public agencies have adopted Six Sigma to improve service delivery and reduce costs. Results vary—bureaucratic cultures sometimes resist the methodology's demands for accountability.

Supply chain - Quality assurance across complex supply chains benefits from Six Sigma's systematic approach to identifying and eliminating variation sources.

Advantages of Six Sigma

Organizations report several benefits from Six Sigma implementation:

Financial returns - Projects typically target measurable cost savings or revenue increases. GE reported $2 billion in savings during its first five years.
Customer focus - The methodology forces attention on what customers actually want, not what producers assume they want.
Data-driven decisions - Gut feelings give way to evidence. This cultural shift often outlasts specific projects.
Structured problem-solving - DMAIC provides a repeatable framework applicable to diverse problems.
Employee development - Belt training creates skilled problem-solvers who contribute beyond Six Sigma projects.
Cross-functional collaboration - Projects often break down silos between departments.

Limitations of Six Sigma

No methodology is perfect. Common criticisms include:

Resource intensive - Training Black Belts takes months. Projects consume staff time. Small organizations may lack resources.
Bureaucratic overhead - The belt system and formal project structure can become ends in themselves.
Statistical sophistication required - Some tools demand expertise that practitioners lack. Misapplied statistics produce misleading conclusions.
Not suited for all problems - Simple problems don't need DMAIC. Innovation and creativity can be stifled by excessive structure.
Implementation challenges - Without genuine leadership commitment, Six Sigma becomes a slogan rather than a practice.
Diminishing returns - Early projects capture easy gains. Later projects require more effort for smaller improvements.

One study found that over 60% of Six Sigma initiatives fail to deliver expected results (T. Pyzdek, P. Keller 2014, p.8). The failures typically stem from poor project selection, inadequate training, or lack of leadership support—not flaws in the methodology itself.

Six Sigma vs. other approaches

How does Six Sigma compare to other quality management approaches?

Total Quality Management (TQM) - TQM is broader and less prescriptive. Six Sigma provides specific tools and a structured framework that TQM often lacks. Many organizations use Six Sigma within a TQM philosophy.

ISO 9000 - ISO standards focus on quality management systems—documentation, procedures, audits. Six Sigma focuses on improvement projects. They complement each other; ISO provides the management system, Six Sigma provides improvement capability.

Kaizen - Kaizen emphasizes small, incremental improvements by frontline workers. Six Sigma tackles larger projects requiring statistical analysis. Both have roles in a comprehensive improvement program.

Certification and training

No single body governs Six Sigma certification. Several organizations offer credentials:

American Society for Quality (ASQ)
International Association for Six Sigma Certification (IASSC)
Various consulting firms and universities

Quality varies. Some certifications require demonstrated project results; others only require passing an exam. Employers increasingly value ASQ certification for its rigor.

Training ranges from online courses lasting hours to intensive programs lasting months. Effective training combines classroom instruction with hands-on project work. Learning Six Sigma from a book alone rarely produces competent practitioners.

References

Pande P.S., Neuman R.P., Cavanagh R.R. (2000), The Six Sigma Way: How GE, Motorola, and Other Top Companies are Honing Their Performance, McGraw-Hill, New York
Pyzdek T., Keller P. (2014), The Six Sigma Handbook, Fourth Edition, McGraw-Hill Education, New York
Cavanagh R.R., Pande P.S., Neuman R.P. (2005), The Six Sigma Way Team Fieldbook: An Implementation Guide for Process Improvement Teams, McGraw-Hill, New York
George M.L. (2002), Lean Six Sigma: Combining Six Sigma Quality with Lean Production Speed, McGraw-Hill, New York
Harry M., Schroeder R. (2000), Six Sigma: The Breakthrough Management Strategy Revolutionizing the World's Top Corporations, Currency/Doubleday, New York

Footnotes

↑ Pande P.S., Neuman R.P., Cavanagh R.R., The Six Sigma Way, McGraw-Hill, 2000, p.7
↑ Pyzdek T., Keller P., The Six Sigma Handbook, McGraw-Hill, 2014, p.3
↑ Cavanagh R.R., Pande P.S., Neuman R.P., The Six Sigma Way, McGraw-Hill, 2000, p.xi
↑ Pyzdek T., Keller P., The Six Sigma Handbook, McGraw-Hill, 2014, p.8

Author: Slawomir Wawak