After picking the low-hanging fruit, they will find themselves in need of a broader and more robust approach. Subsuming six sigma beneath the process-management umbrella addresses those challenges and allows companies to reap its substantial benefits while keeping it away from areas where it won't work.
Because process management entails major changes to virtually all management systems, it demands absolute commitment from executives. IT Companies that rise to the challenge will garner extraordinary rewards: not just cost savings, but accelerated new-software introduction, major improvements in client satisfaction and sharp increases in profitability.
For those not familiar with Six Sigma, it is first and foremost a philosophical approach that demands the effective use of data to analyze business issues. Key decisions about business activities now beg the question, "How does the available data support that decision" Whether the decision is a make-buy decision, a product change question, a new-model introduction question, or a manufacturing-process decision, the decision on how to proceed is dependent on the available data.
Six Sigma is a measurement. ...
the decision is a make-buy decision, a product change question, a new-model introduction question, or a manufacturing-process decision, the decision on how to proceed is dependent on the available data.
Six Sigma is a measurement. A more illustrative explanation can be found in a 1997 letter Welch sent to GE stockholders: "The Six Sigma quality initiative, very briefly, means going from approximately 3S,000 defects per million operations, which is average for most companies, including GE, to fewer than 4 defects per million in every element in every process that this company engages in every day." (Pande, P.S., et al. 2000)
GE was not the first large corporation to undertake the Six Sigma discipline. In the ten years prior to 1995, a number of companies began Six Sigma: Motorola, Texas Instruments, Eastman Kodak, and Allied Signal. Their discoveries and successes were well documented. When embarking on their own process, GE adopted many of the concepts and disciplines of Motorola's Six Sigma methodology. (Pande, P.S., et al. 2000; Harry & Schroeder 2002)
Motorola's involvement with Six Sigma began in 1982, when it implemented a quality-improvement program that later became known as Six Sigma. Motorola's CEO asked corporate managers to cut quality costs in half that year. He repeated the charge in 1983. By 1984, the cost-reduction efforts were beginning to point to the need for improved analytical methods and product design for continued process improvement-and the Six Sigma discipline answered this need. (Pande, P.S., et al. 2000; Harry & Schroeder 2002)
Motorola's emphasis was on designing for Six Sigma quality, and a number of advanced quality tools were used. Because effective application of these tools was essential, Motorola developed its extensive Six Sigma