One of the reasons Six Sigma as a quality management tool has proven so popular is its ability to adapt across business environments. Due to its flexibility, Six Sigma has thrived in many varied industries: manufacturing, banking and finance, call centers, health care, hospitality, retail, telecommunications, engineering, construction, software development, research and development, marketing, operations and even in the field of military/defense.
Six Sigma was created in 1986 by telecommunications firm Motorola. Six Sigma was formulated as a strategy designed to improve the efficiency and quality of Motorola's processes. This strategy utilizes scientific methods and statistical measures to reduce the variation and eliminate the defects found in a firm's outputs. Six Sigma was originally designed for Motorola's manufacturing environment but has since gone on to be successfully adapted by hundreds of companies worldwide.
Six Sigma projects employ one of two defined methodologies. Each methodology consists of five phases. The DMAIC (Define, Measure, Analyze, Improve, Control) methodology applies to improvement projects for existing processes. The DMADV methodology (Define, Measure, Analyze, Design, Verify) applies to new product or process projects. The DMADV model is also synonymously known as the Design for Six Sigma (DFSS) method. DMADV/DFSS methodology aims to build Six Sigma into a process before implementation, whereas DMAIC methodology aims for improvement after a process is already in place.
Six Sigma can accommodate application on a minor scale to small and mid-size organizations as well as on a bigger scale to larger businesses, and has proven very successful in both situations. Still, the cost of Six Sigma training often plays a significant role in the deployment to smaller firms and sometimes impedes its implementation. Ultimately, Six Sigma can succeed in any industry that accepts and supports its use.
Six Sigma was not originally developed to have a positive impact on a firm's costs. However, Six Sigma has emerged as a cost-cutting tool. Six Sigma is designed to improve processes through eliminating defects and reducing process variation. Defect elimination and variation reduction results in less waste and less needless work duplication. As a result, this lowers costs and increases financial gains.
The Six Sigma approach helps to improve processes and quality through identifying defect opportunities and addressing them head on. This improvement in quality allows for better performing and longer lasting products and services. Six Sigma also identifies measurable points in a process that are critical to a customer's perception of quality. In time, this effect generates satisfied customers and improved customer relationships. Loyal and satisfied customers provides firms with a competitive edge over those without positive customer relationships.