Six Sigma is a long-term, forward-thinking initiative designed to fundamentally change the way corporations do business. It is first and foremost ‘a business process’ that enables companies to increase profits dramatically by streamlining operations, improving quality, and eliminating defects or mistakes in everything a company does. While traditional quality programs have focused on detecting and correcting defects, Six Sigma encompasses something broader: It provides specific methods to re-create the process so that defects are significantly reduced or even prevented at all ('Implementing Six Sigma', Second Edition, Forrest W. Breyfogle, 2003).
The journey began at Motorola in 1979 when executive Art Sundry's stated in a management meeting, "The real problem at Motorola is that our quality stinks!" Facing stiff competition by Japanese manufacturers, Motorola began its search for ways to eliminate waste in its processes. Two Motorola engineers Bill Smith and Mikel Harry were credited for their pioneering work on defects, incited significant debate within Motorola on the process of finding and fixing defects. (first published in 1985). Their work on process capability, tolerance, critical-to-quality characteristics and design margins laid down much of the foundations of what today is called Six Sigma.
Recognizing a link between fewer defects and lower costs, Motorola set out to incorporate this into their manufacturing processes that was called ‘Six Sigma’. Motorola's Six Sigma quality program was so radical that it forced managers to think about the business differently. Applying these concepts to Motorola's electronics manufacturing delivered more than $2.2 billion in benefits within four years and $16 billion within 15 years. Motorola's CEO Bob Galvin cited the work of Bill Smith and Mikel Harry in achieving these benefits.
One of the companies that embraced the Six Sigma philosophy was General Electric. Jack Welch was told that Six Sigma could have a profound effect on GE quality. Although skeptical at first, the GE Chairman initiated a huge campaign called ‘the GE Way’. He made an official announcement launching the quality initiative at GE's annual gathering of 500 top managers in January 1996. He called the program ‘the biggest opportunity for growth, increased profitability, and individual employee satisfaction in the history of our company’. He has set itself a goal of becoming a Six Sigma quality company producing nearly defect-free products, services, and transactions, by taking quality to a whole new level. Welch intention was to infuse quality in every corner of the company. Layer on he called Six Sigma ‘the most difficult stretch goal’, but also ‘the most important initiative’ GE had ever undertaken. General Electric saved more than $12 billion with Six Sigma in the first five years after implementation.
In the last couple years the Lean and the Six Sigma philosophies are combined to Lean Six Sigma, with a combined set of tools and the common approach of reducing lead time and operational costs, and improving quality.