define six sigma

Six Sigma projects can be defined as the process through which companies are able to reduce defects and improve the quality of business processes. However, the success of any Six Sigma project depends on a number of factors such as clearly defined objectives, management support and approval, and proper training of Six Sigma teams associated with the project.

For ensuring the success of Six Sigma projects, senior management issues a project charter, which clearly defines the specific goals and objectives of the project. The project charter authorizes the project manager to allocate organizational resources for the completion of the project in the stipulated period.

Project Charter

A project charter typically contains a detailed description of business needs that are to be addressed by the project. It lists all the reasons underlying the need for the project, which may include new business opportunities or even new business threats posed from competitors. The charter lists the basic characteristics of the product or service that is to be created during the course of the project based on customer feedbacks and suggestions. The charter explains in detail the process through which the new product or service will help in meeting existing business needs and that of the future.

Problem Statement

The charter also contains the problem statement, which lists the essentialities of the project and enables the project manager to identify the scope of the project and all the related stakeholders. The problem statement acknowledges the complexity of Six Sigma projects and calls for breaking up the whole project into various subprojects that can easily be executed by Six Sigma teams.

Mission Statement

The project charter contains a mission statement that helps the project team to understand the scope of the project in relation to the larger goals and objectives of the project. The mission statement is described in clear, precise words so that project managers do not make mistakes in understanding its real meaning. The mission statement quantifies the objectives that are to be achieved and does not use vague suggestions such as 'reduce customer complaints'.

A mission statement related to customer complaints will provide a clear-cut objective such as 'reduce customer complaints by 20 percent within the next two months'. Defining clear cut objectives is necessary because it has often been noticed that the project team is unable to make progress in the project due to lack of precise goals or objectives.

Other Essentials Of The Mission Statement

The mission statement of a project that aims at reducing defects quantifies the nature of the defect and how important it is in terms of affecting customer behavior. Such mission statements also call for eliminating the root cause of defects rather than overhauling an existing system or business process. Mission statements are different for different subprojects and do not overlap each other as this can create a lot of confusing and affect the implementation of the overall project. For clearing confusions regarding the mission statement, project team members can communicate with the project sponsors.

The project charter, containing problem statements and mission statements is very helpful in defining the scope and importance of the Six Sigma project. Just by reading through the document, project managers and team members can get a fair idea about what is to be done and how it is to be done. This will help in successful project implementation, allowing the company to achieve all the aims and objectives associated with the project.

Six Sigma Terminologies

Affinity Diagram - A technique for organizing individual pieces of information into groups or broader categories.

ANOVA - Analysis of Variance – A statistical test for identifying significant differences between process or system treatments or conditions. It is done by comparing the variances around the means of the conditions being compared.

Attribute Data - Data which on one of a set of discrete values such as pass or fail, yes or no.

Average - Also called the mean, it is the arithmetic average of all of the sample values. It is calculated by adding all of the sample values together and dividing by the number of elements (n) in the sample.

Bar Chart - A graphical method which depicts how data fall into different categories.



Black Belt - An individual who receives approximately four weeks training in DMAIC, analytical problem solving, and change management methods. A Black Belt is a full time six sigma team leader solving problems under the direction of a Champion.

Breakthrough Improvement - A rate of improvement at or near 70% over baseline performance of the as-is process characteristic.

Capability - A comparison of the required operation width of a process or system to its actual performance width. Expressed as a percentage (yield), a defect rate (dpm, dpmo,), an index (Cp, Cpk, Pp, Ppk), or as a sigma score (Z).

Cause and Effect Diagram - Fishbone Diagram - A pictorial diagram in the shape of a fishbone showing all possible variables that could affect a given process output measure.



Central Tendency - A measure of the point about which a group of values is clustered; two measures of central tendency are the mean, and the median.



Champion - A Champion recognizes, defines, assigns and supports the successful completion of six sigma projects; they are accountable for the results of the project and the business roadmap to achieve six sigma within their span of control.

Characteristic - A process input or output which can be measured and monitored.



Common Causes of Variation - Those sources of variability in a process which are truly random, i.e., inherent in the process itself.



Complexity -The level of difficulty to build, solve or understand something based on the number of inputs, interactions and uncertainty involved.



Control Chart - The most powerful tool of statistical process control. It consists of a run chart, together with statistically determined upper and lower control limits and a centerline.

Control Limits - Upper and lower bounds in a control chart that are determined by the process itself. They can be used to detect special or common causes of variation. They are usually set at ±3 standard deviations from the central tendency.



Correlation Coefficient - A measure of the linear relationship between two variables.



Cost of Poor Quality (COPQ) - The costs associated with any activity that is not doing the right thing right the first time. It is the financial qualification any waste that is not integral to the product or service.

CP - A capability measure defined as the ratio of the specification width to short-term process performance width.

CPk -. An adjusted short-term capability index that reduces the capability score in proportion to the offset of the process center from the specification target.

Critical to Quality (CTQ) - Any characteristic that is critical to the perceived quality of the product, process or system. See Significant Y.

Critical X - An input to a process or system that exerts a significant influence on any one or all of the key outputs of a process.

Customer - Anyone who uses or consumes a product or service, whether internal or external to the providing organization or provider.



Cycle Time - The total amount of elapsed time expended from the time a task, product or service is started until it is completed.

Defect - An output of a process that does not meet a defined specification, requirement or desire such as time, length, color, finish, quantity, temperature etc.

Defective - A unit of product or service that contains at least one defect.

Deployment (Six Sigma) - The planning, launch, training and implementation management of a six sigma initiative within a company.

Design of Experiments (DOE) - Generally, it is the discipline of using an efficient, structured, and proven approach to interrogating a process or system for the purpose of maximizing the gain in process or system knowledge.



Design for Six Sigma (DFSS) - The use of six sigma thinking, tools and methods applied to the design of products and services to improve the initial release performance, ongoing reliability, and life-cycle cost.

DMAIC - The acronym for core phases of the six sigma methodology used to solve process and business problems through data and analytical methods. See define, measure, analyze, improve and control.

DPMO - Defects per million opportunities – The total number of defects observed divided by the total number of opportunities, expressed in parts per million. Sometimes called Defects per Million (DPM).

DPU - Defects per unit - The total number of defects detected in some number of units divided by the total number of those units.

Entitlement - The best demonstrated performance for an existing configuration of a process or system. It is an empirical demonstration of what level of improvement can potentially be reached.

Epsilon ? - Greek symbol used to represent residual error.

Experimental Design - See Design of Experiments.

Failure Mode and Effects Analysis (FMEA) - A procedure used to identify, assess, and mitigate risks associated with potential product, system, or process failure modes.



Finance Representative - An individual who provides an independent evaluation of a six sigma project in terms of hard and/or soft savings. They are a project support resource to both Champions and Project Leaders.

Fishbone Diagram - See cause and effect diagram.



Flowchart - A graphic model of the flow of activities, material, and/or information that occurs during a process.



Gage R&R - Quantitative assessment of how much variation (repeatability and reproducibility) is in a measurement system compared to the total variation of the process or system.

Green Belt - An individual who receives approximately two weeks of training in DMAIC, analytical problem solving, and change management methods. A Green Belt is a part time six sigma position that applies six sigma to their local area, doing smaller-scoped projects and providing support to Black Belt projects.

Hidden Factory or Operation - Corrective and non-value-added work required to produce a unit of output that is generally not recognized as an unnecessary generator of waste in form of resources, materials and cost.

Histogram - A bar chart that depicts the frequencies (by the height of the plotted bars) of numerical or measurement categories.



Implementation Team - A cross-functional executive team representing various areas of the company . Its charter is to drive the implementation of six sigma by defining and documenting practices, methods and operating policies.

Input - A resource consumed, utilized, or added to a process or system. Synonymous with X, characteristic, and input variable.

Input-Process-Output (IPO) Diagram - A visual representation of a process or system where inputs are represented by input arrows to a box (representing the process or system) and outputs are shown using arrows emanating out of the box.

lshikawa Diagram - See cause and effect diagram and fishbone diagram.

Least Squares - A method of curve-fitting that defines the best fit as the one that minimizes the sum of the squared deviations of the data points from the fitted curve.

Long-term Variation - The observed variation of an input or output characteristic which has had the opportunity to experience the majority of the variation effects that influence it.

Lower Control Limit (LCL) - for control charts: the limit above which the subgroup statistics must remain for the process to be in control. Typically, 3 standard deviations below the central tendency.



Lower Specification Limit (LSL) - The lowest value of a characteristic which is acceptable.



Master Black Belt - An individual who has received training beyond a Black Belt. The technical, go-to expert regarding technical and project issues in six sigma. Master Black Belts teach and mentor other six sigma Belts, their projects and support Champions.

Mean - See average.



Measurement - The act of obtaining knowledge about an event or characteristic through measured quantification or assignment to categories.



Measurement Accuracy - For a repeated measurement, it is a comparison of the average of the measurements compare to some known standard.

Measurement Precision - For a repeated measurement, it is the amount of variation that exists in the measured values.

Measurement Systems Analysis (MSA) - An assessment of the accuracy and precision of a method of obtaining measurements. See also Gage R&R.

Median - The middle value of a data set when the values are arranged in either ascending or descending order.



Metric - A measure that is considered to be a key indicator of performance. It should be linked to goals or objectives and carefully monitored.

Natural Tolerances of a Process - See Control Limits.

Nominal Group Technique - A structured method that a team can use to generate and rank a list of ideas or items.



Non-Value Added (NVA) - Any activity performed in producing a product or delivering a service that does not add value, where value is defined as changing the form, fit or function of the product or service and is something for which the customer is willing to pay.

Normal Distribution - The distribution characterized by the smooth, bell- shaped curve. Synonymous with Gaussian Distribution.

Objective Statement - A succinct statement of the goals, timing and expectations of a six sigma improvement project.

Opportunities - The number of characteristics, parameters or features of a product or service that can be classified as acceptable or unacceptable.

Out of Control - A process is said to be out of control if it exhibits variations larger than its control limits or shows a pattern of variation.

Output - A resource or item or characteristic that is the product of a process or system. See also Y, CTQ.



Pareto Chart - A bar chart for attribute (or categorical) data categories are presented in descending order of frequency.



Pareto Principle - The general principle originally proposed by Vilfredo Pareto (1848-1923) that the majority of influence on an outcome is exerted by a minority of input factors.

Poka-Yoke - A translation of a Japanese term meaning to mistake-proof.

Probability - The likelihood of an event or circumstance occurring.

Problem Statement - A succinct statement of a business situation which is used to bound and describe the problem the six sigma project is attempting to solve.



Process - A set of activities and material and/or information flow which transforms a set of inputs into outputs for the purpose of producing a product, providing a service or performing a task.



Process Characterization - The act of thoroughly understanding a process, including the specific relationship(s) between its outputs and the inputs, and its performance and capability.



Process Certification - Establishing documented evidence that a process will consistently produce required outcome or meet required specifications.

Process Member - A individual who performs activities within a process to deliver a process output, a product or a service to a customer.

Process Owner - Process Owners have responsibility for process performance and resources. They provide support, resources and functional expertise to six sigma projects. They are accountable for implementing developed six sigma solutions into their process.

Quality Function Deployment (QFD) - A systematic process used to integrate customer requirements into every aspect of the design and delivery of products and services.



Range - A measure of the variability in a data set. It is the difference between the largest and smallest values in a data set.



Regression Analysis - A statistical technique for determining the mathematical relation between a measured quantity and the variables it depends on. Includes Simple and Multiple Linear Regression.

Repeatability (of a Measurement) - The extent to which repeated measurements of a particular object with a particular instrument produce the same value. See also Gage R&R.

Reproducibility (of a Measurement) - The extent to which repeated measurements of a particular object with a particular individual produce the same value. See also Gage R&R.

Rework - Activity required to correct defects produced by a process.

Risk Priority Number (RPN) - In Failure Mode Effects Analysis -- the aggregate score of a failure mode including its severity, frequency of occurrence, and ability to be detected.

Rolled Throughput Yield (RTY) - The probability of a unit going through all process steps or system characteristics with zero defects.



R.U.M.B.A. - An acronym used to describe a method to determine the validity of customer requirements. It stands for Reasonable, Understandable, Measurable, Believable, and Achievable.

Run Chart - A basic graphical tool that charts a characteristic’s performance over time.



Scatter Plot - A chart in which one variable is plotted against another to determine the relationship, if any, between the two.

Screening Experiment - A type of experiment to identify the subset of significant factors from among a large group of potential factors.



Short Term Variation - The amount of variation observed in a characteristic which has not had the opportunity to experience all the sources of variation from the inputs acting on it.

Sigma Score (Z) - A commonly used measure of process capability that represents the number of short-term standard deviations between the center of a process and the closest specification limit. Sometimes referred to as sigma level, or simply Sigma.

Significant Y - An output of a process that exerts a significant influence on the success of the process or the customer.

Six Sigma Leader - An individual that leads the implementation of Six Sigma, coordinating all of the necessary activities, assures optimal results are obtained and keeps everyone informed of progress made.

Six Sigma Project - A well defined effort that states a business problem in quantifiable terms and with known improvement expectations.

Six Sigma (System) - A proven set of analytical tools, project management techniques, reporting methods and management techniques combined to form a powerful problem solving and business improvement methodology.

Special Cause Variation - Those non-random causes of variation that can be detected by the use of control charts and good process documentation.

Specification Limits - The bounds of acceptable performance for a characteristic.

Stability (of a Process) - A process is said to be stable if it shows no recognizable pattern of change and no special causes of variation are present.



Standard Deviation - One of the most common measures of variability in a data set or in a population. It is the square root of the variance.



Statistical Problem - A problem that is addressed with facts and data analysis methods.

Statistical Process Control (SPC) - The use of basic graphical and statistical methods for measuring, analyzing, and controlling the variation of a process for the purpose of continuously improving the process. A process is said to be in a state of statistical control when it exhibits only random variation.

Statistical Solution - A data driven solution with known confidence/risk levels, as opposed to a qualitative, “I think” solution.

Supplier - An individual or entity responsible for providing an input to a process in the form of resources or information.

Trend - A gradual, systematic change over time or some other variable.

TSSW - Thinking the six sigma way – A mental model for improvement which perceives outcomes through a cause and effect relationship combined with six sigma concepts to solve everyday and business problems.

Two-Level Design - An experiment where all factors are set at one of two levels, denoted as low and high (-1 and + 1).



Upper Control Limit (UCL) for Control Charts - The upper limit below which a process statistic must remain to be in control. Typically this value is 3 standard deviations above the central tendency.



Upper Specification Limit (USL) - The highest value of a characteristic which is acceptable.



Variability - A generic term that refers to the property of a characteristic, process or system to take on different values when it is repeated.



Variables - Quantities which are subject to change or variability.

Variable Data - Data which is continuous, which can be meaningfully subdivided, i.e. can have decimal subdivisions.

Variance - A specifically defined mathematical measure of variability in a data set or population. It is the square of the standard deviation.

Variation - See variability.

VOB - Voice of the business – Represents the needs of the business and the key stakeholders of the business. It is usually items such as profitability, revenue, growth, market share, etc.

VOC - Voice of the customer – Represents the expressed and non-expressed needs, wants and desires of the recipient of a process output, a product or a service. Its is usually expressed as specifications, requirements or expectations.

VOP - Voice of the process – Represents the performance and capability of a process to achieve both business and customer needs. It is usually expressed in some form of an efficiency and/or effectiveness metric.

Waste - Waste represents material, effort and time that does not add value in the eyes of key stakeholders (Customers, Employees, Investors).

X - An input characteristic to a process or system. In six sigma it is usually used in the expression of Y=f(X), where the output (Y) is a function of the inputs (X).

Y - An output characteristic of a process. In six sigma it is usually used in the expression of Y=f(X), where the output (Y) is a function of the inputs (X).

Yellow Belt - An individual who receives approximately one week of training in problem solving and process optimization methods. Yellow Belts participate in Process Management activates, participate on Green and Black Belt projects and apply concepts to their work area and their job.

Z Score – See Sigma Score.

Six sigma was once reserved for the largest corporations in the world. During the last few years, six sigma has moved to mid-size and small organizations seeking a way to improve their business. Some of these companies employ a single six sigma black belt to produce project results.

Six sigma has now become so popular there are thousands of job openings for green belts, black belts, and master black belts. As a result of this huge job market, there are now hundreds of six sigma training courses and seminars.

One major focus of six sigma is the reduction of variation. The ironic fact is that six sigma training courses have huge variation, the very characteristic the discipline attempts to minimize.

A recent look at green belt courses at a few major universities looked like the difference between algebra and geometry.

Master Black Belt courses also had extreme variation – some teach the black belt to instruct six sigma, while others have an in depth study of just a few areas, such as Design of Experiments or Design for Six Sigma. This variation does not help companies when seeking a Master Black Belt.

The six sigma training landscape is such that the student must determine their needs prior to taking a course. This is difficult, especially at the green belt level. Many students aren’t even sure what six sigma is – they just know it’s in high demand.

The problem with a short six sigma learning period is the body of knowledge required is very large, and most people simply cannot absorb all of it by attending a few week course.

Online courses have several advantages and a few disadvantages. Six sigma online courses can offer a larger and longer course since no travel or instructor is involved. Live instructors cannot afford to deliver a 10 – 16 week course. Online courses generally have a liberal time limit.

Live courses have the disadvantage of necessary travel time and costs. The advantage is the one-on-one contact, although it’s for a brief period.

Regardless of which type of course is taken, anyone pursuing a six sigma training course should obtain a good collection of books for reference. The depth and instruction within books varies as widely as training courses. Therefore, most practicing black belts have quite a collection of reference materials.

It is also important to determine the type of instruction before taking the course. Most companies are not doing six sigma for the fun of it. They want impact, which in laymen’s terms is financial gain. If a course only teaches the tools and methods behind six sigma the student is only learning a portion of the skills needed to be successful.

It is the use of the tools that will ultimately determine success. For example, anyone can learn Failure Mode and Effects Analysis (FMEA), Design of Experiments (DOE), and hypothesis testing for equal means and variances. The successful black belt knows which tool to use and when to use it. There are simply too many tools to apply them all and hope something is gained.

Lean 6 Sigma helps because it allows companies to reduce operational costs by identifying and eliminating steps or procedures that add little or no value to a business process. Companies can easily improve quality and efficiency just by combining the basic concepts of 6 Sigma with the principles of Lean 6 Sigma.

Understanding Lean Six Sigma

In industry circles, Lean 6 Sigma is termed in many different ways such as Lean Service, Lean Manufacturing, and Lean Enterprise depending on the type of methodology being utilized. Lean Six Sigma principles can be implemented along with other 6 Sigma concepts in any type of company, be it a manufacturing company or a service provider. When Lean 6 Sigma concepts and methodologies are implemented, it helps organizations to speed up their business processes without affecting the quality of the outcome.

As business processes are optimized, it becomes much easier for companies to reduce operational costs related to the maintenance of additional inventory of both raw materials and finished goods. Optimized business processes then enable companies to clear customer orders within the specified time and budget. Just as with standard 6 Sigma, Lean 6 Sigma also stresses providing the requisite training to employees so that they become familiar with the tools and techniques that will be utilized during the implementations. Lean sigma also encourages key mentors and senior management personnel to understand the basics so that the implementations can be executed without affecting the day-to-day operations of the organization.

Benefits Of Lean Six Sigma

Lean 6 Sigma involves the use of advanced tools and techniques that help companies to reduce operational costs, reduce production cycle times, expand existing capacity, and improve overall productivity. It makes use of Value Stream Mapping (VSM) for identifying improvement opportunities that exist in a business process. However, VSM has limited use and other advanced analysis tools are required for resolving complicated implementation issues.

When combined with standard 6 Sigma concepts, Lean 6 Sigma helps in identifying and resolving quality issues that are vital for attracting and retaining customers. Offering quality products or services in turn helps in developing customer loyalty that is vital for the success of any business, large or small. However, for realizing the full potential of the implementations, it is important to execute Lean Six Sigma projects under the guidance of 6 Sigma Black Belts and 6 Sigma Champions.

In the past, increased competition forced companies to deploy quality improvement techniques such as Six Sigma. With customers demanding more quality, companies had no other option but to deploy even more effective quality improvement techniques such as Lean 6 Sigma. Quality improvements are an ongoing process and we never know what new techniques will be developed in the future that may replace both Six Sigma and Lean 6 Sigma.

Six Sigma can be successfully deployed in any industry irrespective of size. 6 Sigma concepts are designed in accordance with the basic characteristics of a business and not the size of a business. Businesses that do not have adequate resources for deploying Six Sigma can get help from 6 Sigma professionals such as Black Belts or Master Black Belts who have plenty of experience in deploying Six Sigma. Businesses that do not want an organization-wide deployment can opt for a pilot project where 6 Sigma will be deployed only to a specific business process.

Scalability

The most interesting aspect of Six Sigma is that it is scalable, which means that 6 Sigma concepts can be applied to any business process irrespective of the size and complexity of the business process. Opting for a pilot project instead of overall deployment will help the business to concentrate its efforts and resources on deploying 6 Sigma in a specific area. Deploying 6 Sigma to a specific business process will help the business to achieve fast and accurate results. It will help in highlighting the efficacy of 6 Sigma to other functional departments within the organization. The concepts and resources used during the pilot project can then be used to deploy 6 Sigma in other departments.

Project Selection

For the successful deployment of 6 Sigma pilot projects, businesses need to select only those projects that are critical to the day-to-day functioning of the organization. Selecting a project that focuses on achieving one or more basic goals or objectives of the organization will prove beneficial for the project as well as for the organization. Businesses need to make sure that pilot projects are completed within the stipulated timeframe, preferably within three to four months depending on the complexity of the pilot project. Pilot projects will set the tone for future organization-wide deployments and as such, it is necessary to follow all the basic guidelines that will help in making the pilot project a success.

Training

Deploying 6 Sigma across the whole organization will require businesses to give proper six-sigma training to deployment teams, as well as employees who are related to a particular deployment project. Training will help employees in understanding the basic concepts of 6 Sigma and give them an idea of what they will be required to do or will be doing during the deployment period. This will help in eliminating deployment problems that often arise due to general unawareness about 6 Sigma concepts and methodologies. Training may be done onsite or offsite depending on the type of training. Training needs to be done in such a way that it does not affect the normal functioning of the organization. If employees are willing, businesses can also opt for online training that will enable employees to receive training when they have free time, in the comfort of their homes.

Businesses need to make sure that employees who receive training are the ones who will eventually work under a Six Sigma deployment team. Maintaining proper communication channels between deployment teams and senior management is also important when it comes to the successful completion of Six Sigma projects. Businesses need to maintain two-way communication channels for sharing information that might prove critical for a Six Sigma deployment project.

Although the program has proven wildly successful in many different cases, other companies have tried to implement the Six Sigma system with results that can best be described as mixed. A large part of the "mixed" (and you can read that as "negative"!) results can be attributed to an improper implementation of the Six Sigma process.

One way in which to avoid mixed results stemming from improper implementation is Six Sigma certification.

What is Six Sigma Certification?

Simply put, Six Sigma certification is an indication that an individual has received training in Six Sigma programs. It is usually issued after the successful completion of a training course at a certain level of the Six Sigma program (black belts, green belts, master black belts, and so on).

As with certification in many different areas, such as obtaining a driver's license, the certification comes not just after training, but after a student has demonstrated an understanding about that training. This understanding can be demonstrated both through class participation and the oral and written test portions of the program. It should be understood that this certification does not necessarily denote skill level within the area; there are different levels of proficiency across any classroom and Six Sigma is no exception.

In addition, many aspects of the training are not standardized, therefore some aspects demonstrated by employees with Six Sigma certification in one company will be different from those in another company.

Obtaining Six Sigma Certification

As you might have guessed from the last line above, there are several different ways in which an individual can gain Six Sigma certification. There are several Six Sigma training companies which provide the training necessary for companies wishing to implement the Six Sigma concept to eliminate defects within their processes. In addition, employees at companies with a long standing record of using the Six Sigma approach will probably receive some Six Sigma training of their own. Motorola and General Electric, for example, have developed their own in house training for Six Sigma principles which achieve the same results as the training companies.

You can probably infer from that that Six Sigma certification will not transfer as well from one company to another, generally speaking. Usually the companies wherein the Six Sigma concept originated (GE and Motorola as mentioned above) will have the most transferable value, with second tier training (training companies) coming in second and recent Six Sigma companies bringing up the rear as far as rock solid reliability in their training.

In short, it's important to understand that certification will not guarantee that an individual will be able to flawlessly perform the Six Sigma ideas. What it will do, however, is guarantee that assist in the proper implementation of the Six Sigma process, which will guarantee profit both to the individual (it's a good thing to have on a resume) and for the company that chooses to implement the process.

The formula for calculating profit is really quite simple; the total earnings of the business minus the expenditures of the business (employee wages, materials, office space, etc.) equals the total profit for the year.

Obviously, there are several ways in which that profit margin can increase. One way is by increasing the amount of revenue that the business brings in. This is nice and it's also the goal of steps such as advertising; bring in more sales and the profits go up.

Unfortunately, generating extra business and sales will not always mean an increase in profit. Think about this; the more business that comes in, the more product needs to be created in order to be sold. The more product being manufactured, the greater the chance of defects. This chain of events is what is at the heart of the Six Sigma business plan; costs are managed by decreasing defects within the production system.

What Exactly Is Six Sigma?

As stated above, the fundamental underpinnings of the Six Sigma system is increasing profit by eliminating defects. It's a system that was created by the Motorola company back in the 1980s, built on proven processes that had been developed in other industries.

The Six Sigma system is specifically applied to the goods produced by a company. In Motorola's case, electronic goods were the product wherein the manufacturing process was analyzed through six different steps, with the idea being to reduce defects within the products to 3.5 per one million units produced. Obviously achieving this goal would help greatly in managing the overhead costs of many different businesses, as each unit that came out perfect was a unit perfectly suited for sale.

Six Sigma in Motion

One of the most important parts of the Six Sigma program is its implementation, specifically through different roles. Like many modern business ideas. Six Sigma has some well defined roles that come with titles that may sound unusual to the unindoctrinated. Let's take a very brief look at the titles and their roles within the implementation process.

-Executive leadership. These people are the power players within the company; CEOs and others with the power to put a vision into motion for the entire company. In addition to getting the ball rolling, they also empower other roles in their implementation process.

-Champions. Upper management makes up the majority of the champion roles, and it is here that the Six Sigma program begins to truly be implemented across a company. The champions will integrate Six Sigma planning across the company and will also serve to train black belts.

-Master Black Belts. These people are essentially the coaches of the Six Sigma system, the people who understand the process inside and out. They train the other "belts" and their sole role within the company is the implementation of Six Sigma processes.

-Black Belts. These individuals are responsible for executing the programs which are part of Six Sigma. Like the Master Black Belts, they devote all of their time to the Six Sigma process.

-Green Belts. At this level, individuals are responsible both for Sigma Six implementation and their usual job roles.

-Yellow Belts. These employees have been exposed and trained to some degree in Six Sigma but have not yet completed a program. They are not expected to actively engage in improvement of quality activities that are part of the process.

The key to a successful Six Sigma integration within a company is a well defined plan with personnel that are on board. The successful implementation of the process will help to manage costs through the elimination of defects.