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Impact of Six Sigma in MBA
Six sigma is a new concept that tries to achieve a near zero defect with 3.4 defects in a million events. A “Defect” can be defined as any product or service that does not conform to the set standards or satisfaction of the customer. Through the six sigma concept, any business process can be improved by constantly reviewing, updating and re-tuning the existing process. Six sigma provides the tools to improve the capability of any business process.
Six sigma professionals evaluate a business process and determine ways to improve upon the existing process. Six sigma incorporates the same principles and techniques used in Business, Statistics, and Engineering. Six Sigma improves the process performance, decreases variation and maintains consistent quality of the process output. This leads to defect reduction and improvement in profits, employee morale, product quality and finally customer satisfaction.
Six Sigma strives for perfection. It allows for only 3.4 defects per million opportunities for each product or service transaction. Six Sigma relies heavily on statistical techniques to reduce defects and measure quality.
Evolution of Six Sigma
Japan has been credited with the evolvement of Quality Systems like TQM, Kanban, Kaizen, etc., but Six Sigma has been evolved by the Americans by a company called Motorola in early 1990's. Later in the mid-nineties, GE and Allied Signal adopted it. According to Jack Welch CEO of GE, "Six Sigma is the most challenging and potentially rewarding strategy that GE has ever undertaken". Now Japan has always been known for controlling wastages by having Just-in-time Inventory systems but this concept of Six Sigma, which relies heavily on statistical controls, encompasses all the systems and gives near perfect and measurable results, which in other systems cannot be done easily.
Six Sigma was originally centered around manufacturing improvements. The reason for this was knowledge of the statistical tools in the manufacturing functions and the ease with which we can quantify the benefits. However the customers did not readily see these improvements. The approach was therefore broadened to all business operations. The success of these companies with the six sigma approach caught the attention of the Wall Street making it a popular strategy that is being adopted by many organizations worldwide. Indian organizations such as Wipro, Tata Motors, Hero Motors, Godrej-GE have also adopted six sigma strategy to improve their businesses.
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