Summary: Six Sigma

Review and Analysis of Harry and Schroeder's Book

BusinessNews Publishing

• Publisher: Must Read Summaries
• Year: 2016
• eBook ISBN: 9782511018262
• Topic: Business
• Subtopic: Leadership
• Index: Business

The must-read summary of Mikel Harry and Richard Schroeder's book: `Six Sigma: The Breakthrough Management Strategy Revolutionizing the World's Top Corporations`.

This complete summary of the ideas from Mikel Harry and Richard Schroeder's book `Six Sigma` presents the simple Six Sigma philosophy that can have powerful ramifications. Companies should focus on improving quality and aiming for perfection in the products it offers. In their book, the authors explain how to apply this philosophy at all levels of your company and how to establish it as a long-term practice. This summary is a must-read for any leader who wants to follow in the footsteps of the world's biggest companies and understand the benefits of the Six Sigma strategy.

Added-value of this summary:
• Save time
• Understand key concepts
• Expand your knowledge

To learn more, read `Six Sigma` and find out how you can achieve great business success on the path to perfection.

Summary of Six Sigma (Mikel Harry & Richard Schroeder)

Section 1
The Six Sigma Philosophy

Main Idea

Six sigma is a business process which empowers companies to dramatically and immediately increase their profitability by:

1. Streamlining operations.
2. Improving quality.
3. Eliminating defects or mistakes.

In essence, six sigma provides specific methods organizations can use to re-create business processes so that less defects and errors will arise in the future. As such, six sigma is proactive rather than reactive -- it focuses on changing processes so less errors arise rather than fixing errors.

Supporting Ideas

The six sigma program originated at Motorola in 1979 when it was realized there was a direct correlation between higher quality and lower development costs across a wide range of manufactured products. The concept that improving quality would cut costs rather than raise them was fairly radical for that era, especially for a company like Motorola which was built around economies of scale.

When a detailed analysis was carried out, however, Motorola found it was spending between 5- and 20-percent of its revenues on correcting poor quality. And significantly, the $800 - $900 million involved would, if not applied to correcting quality defects, flow directly to the company’s bottom line profitability.

How could quality be improved? Motorola identified two ideas:

1. Detect and fix the defects that cropped up.
2. Prevent defects by improving manufacturing and design.

Whereas all previous quality improvement programs tried at Motorola had been reactive (responding to defects as they arose), the six sigma program was proactive -- it focused on how products were designed and all the processes involved. In short, six sigma is a focused program to provide customers with higher-quality products at a cheaper cost.

Within four years, the six sigma program had saved Motorola $2.2 billion. That success didn’t go unnoticed, and within a short period of time six sigma programs were underway in a number of companies across a broad range of industries.

The key points of the six sigma philosophy are:

• A focus on processes, not results.
  Everything an organization does is either:
  • An industrial process -- using machinery, or
  • A commercial process -- using human activity.
  Six sigma seeks to improve both commercial and industrial processes so that errors are lowered.
• Six sigma takes its name from applied statistics. It is calculated as 3.4 out of 1 million. When a process is described as being a “six sigma” process, that means the number of defects produced is less than 3.4 for every 1 million opportunities for something to go wrong. Or to put it another way, when something is at six sigma level, the likelihood of it performing as specified is 99.99966-percent.
• Six sigma is a performance target and applies to a single critical-to-quality characteristic, not to the total product. Thus, the more complex a product is, the more opportunities there are for defects to occur, and the greater the likelihood that a defect may occur somewhere with the product even if all the individual components are six sigma.
• Six sigma focuses on the variability of processes. By creating a better process that reduces variations during the creation, manufacture and delivery of products and services, it is possible for any business to achieve six sigma quality in its processes.
• Six sigma organizations find they spend less than 1-percent of their operating revenues on rework costs. By contrast, an organization whose processes are at the four sigma level (6,210 defects per million opportunities, which is about average for many industries) end up spending between 15-and 25-percent of operating errors on rework costs.
• Six sigma is the goal. The means by which that goal is achieved is by the Breakthrough Strategy -- which is a highly focused system for solving problems and reducing defects. In other words, organizations pursue six sigma by means of the Breakthrough Strategy.
• The Breakthrough Strategy is a disciplined method for gathering data, analyzing the results to pinpoint errors and developing ways to eliminate those errors.
• The Breakthrough Strategy has eight steps, called phases. The four core phases are called M-A-I-C:
  
• Applying the Breakthrough Strategy in any organization requires the services of ...

Table of contents

• Title page
• Book Presentation
• Summary of Six Sigma (Mikel Harry & Richard Schroeder)
• About the Summary Publisher
• Copyright