Is It Greek To You? With just 3.4 defects per million units, the Six Sigma strategy may seem somewhat foreign. Welcome to the quality-assurance system the big boys use.

Simon Dolan first heard of Six Sigma in a 1994 book recountingchairman John F. Welch's revitalization of General Electric. Itsounded awesome--a quality measurement goal that allows just 3.4defects per million units. (For comparison, 99 percent accuracyallows for 10,000 failures per million.)

At the time, that quality level seemed almost unimaginable atDolan Industries Inc., a 41-person fastener manufacturing companyfounded by Dolan's father. But within a few years, afterstrenuous effort, the Clinton, Massachusetts, company begansuccessfully meeting the rigorous requirements of the ISO 9000quality standard, which is comparable to Six Sigma.

Six Sigma came up again more recently at Dolan Industries, thistime at a meeting of suppliers for one of the company's largecustomers. All the suppliers were told they must embrace the SixSigma goal to keep selling to the company. Suddenly, achieving SixSigma was no longer a choice--if Dolan Industries wants to keepselling to one of its largest customers, that is. Says Dolan,"Inevitably, we're going to have to achieve SixSigma."

More and more small companies will be chasing Six Sigma qualityas large corporations increasingly endorse the goal as arequirement for doing business with them. In addition to GE,Allied-Signal and Motorola are among the other corporate leadersusing Six Sigma as a quality objective.

Reported benefits include better-performing products and happiercustomers, which can turn into higher profits. At GE, Welch saysthe sky-high quality goal has helped raise overall profit marginsby nearly 2 percent.

Not everyone feels Six Sigma is a panacea, especially for thesmall companies that will soon have to toe the line. But as Dolansays, "By and large, it's going to be a requirement in thecoming years to have a Six Sigma mindset."

Mark Henricks is an Austin, Texas, writer who specializes inbusiness topics and has written for Entrepreneur for nineyears.

Six Sigma Starts Up

Statisticians use the Greek letter sigma to express standarddeviation, which refers to the average difference between a givenpoint in a set of data and the average of all other points. In aquality context, that might mean comparing measurements formanufactured screws. A quality process that meets a performancegoal of one sigma will produce slightly more than two out of threescrews that meet specifications. Reaching two sigma means more than95 percent of all screws will pass muster. By the time you get tosix sigma, only 3.4 defects would show up in a million screws.

The use of Six Sigma in quality management originated, or atleast was popularized, at Motorola. About 15 years ago, Motorolawas trying to get its thousands of cost-oriented, technically-savvyengineers more concerned about quality. The odd-sounding name wasconsidered appropriate to these goals.

"Six Sigma was a good way to describe quality toengineers," according to James Morehouse, a quality consultantwith A.T. Kearney Inc., a global management consulting company inChicago. "It was a tool for changing a very entrenched,engineering-driven organization from focusing on cost to focusingon quality. That's what Six Sigma is really allabout."

Let's Talk About Six

By boosting quality and achieving financial success, Motorolamade itself a model for other companies. Six Sigma, however, ismore than a way to measure manufacturing quality, says MarioPerez-Wilson, who helped develop the Six Sigma philosophy andtechniques at Motorola and is now a principal consultant atAdvanced Systems Consultants, a Scottsdale, Arizona, engineeringand processes improvement consulting firm specializing in SixSigma. It can be applied to a company's services as well, suchas customer service, delivery performance--virtually any aspect ofa business.

"Six Sigma views a business as a bunch of processes, whichinclude administrative processes, service processes, transactionalprocesses and manufacturing processes," Perez-Wilson says."[Implementing it] makes everybody look at all thecompany's processes."

Although Six Sigma is a goal that doesn't specify preciselyhow companies should attempt to achieve it, there are a number ofquality improvement tricks Six Sigma fans often employ. The firststep in achieving Six Sigma is accurately understanding andoptimizing all of a company's processes. Standard procedure isto break an operation, such as assembling a product or processingan invoice, down into small steps and use statistical analysistechniques to see how well each process performs. Without knowingthe number and nature of defects you're currently producing,you won't be able to monitor progress toward goals.

Once you determine your defect rate, there are a number of toolsyou can use to edge closer to Six Sigma. One is poka-yoke, aJapanese term referring to the practice of designing products andmanufacturing processes in order to reduce the opportunity forerror and defects. For example, a company using poka-yoke in itsorder-entry operation may program computers so they won'taccept erroneous postal codes in customer addresses. By reducingerrors in this way, a company can improve on-time delivery ofshipments and move closer to overall Six Sigma quality. (To searchfor past articles on poka-yoke, visit http://www.entrepreneurmag.com)

Robust design is another technique companies use to achieve SixSigma. It calls for using simple, rather than complex, designs toreduce the opportunity for errors in assembly. Robust designersalso engineer products and components to perform adequately inspite of extreme circumstances. For example, designers at GeneralElectric found putting a rougher finish on a metal connector in oneof its X-ray machines reduced leakage through an important seal.This helped improve reliability to get the company closer to SixSigma and allowed it to offer a better warranty to itscustomers.This is similar to the experiences of other companiesseeking Six Sigma: It's a big goal you try to achieve by takingmany small steps.

Achieving The Goal

Mastering Six Sigma is a challenging undertaking. Fortunately,there are a number of books exploring the topic, and it's beenadded to the curriculum at some colleges. Small businesses thathave been asked by important clients to provide Six Sigma qualitymay be able to get training in the techniques from those sameclients, suggests Dolan. His own large customer is arranging for acrash-course seminar he can attend at his own expense, he says.

You can also get grounded in the subject by attending a one-dayclass put on by Advanced Systems Consultants that costs about $490,according to Perez-Wilson. More detailed training for a team of 20employees may cost from $12,000 to $15,000. But payback can come inas little as six months, Perez-Wilson contends.

With its standard of near-absolute perfection, Six Sigma maysound more like a celestial vision than an earthly goal. That'snot necessarily a negative thing if Six Sigma helps companies jerkthemselves out of complacency, says Morehouse. "The beauty ofSix Sigma," he says, "is to move us away from thetoleration of failure to the idea that we're going to be asperfect as we can be."

At Dolan Industries, where the future is increasingly tied in tothose of the large automotive firms, power-tool makers andtelecommunications companies that are its customers, Six Sigmaholds a much earthier promise: The company can either pursue SixSigma or find other customers. "If you want to grow and be aplayer with the Fortune 500 companies," Dolan says, "youhave to accept the Six Sigma mentality."

Next Step

The American Society for Quality publishes a number of books andinformational materials on Six Sigma and other quality-assuranceprograms. Contact the organization at (800)?48-1946 or visit itonline at http://www.asq.org

Contact Sources

A.T. Kearney,http://www.atkearney.com

Advanced Systems Consultants, (602) 423-0081, sixsigma@mpcps.com

Dolan Industries Inc.,http://www.dolanind.com