Six Sigma

Six Sigma

by

Lixin Chen

Henry Ho

Stephanie C. Mealer

Benjamin C. Stewart

Professor: Oscar J. Harvin

Managerial Accounting 2071

20 April 2009

SIX SIGMA

Introduction:

During the 1980’s Six Sigma was a strategic approach developed by Motorola Corporation to reduced manufacturing errors and inconsistencies. Technology was becoming very complex and new approaches were necessary to replace the inadequate ideas used for quality control and cost management.

Since then many other companies such as General Electric, Allied Signal, and Honeywell have successfully adopted the program.

Nowadays, Six Sigma is not only a technique that revolutionized the manufacturing and production sectors. This approach is now streamlined in many firms across the globe, and saved millions of dollars for American businesses. Six Sigma has developed into a conceptual framework that it is applicable to any area of an enterprise. The application of Six Sigma’s basic principles to investments, capital budgeting, and mergers and acquisition is just a minimal example in how Six Sigma could be applied in the future. Six Sigma’s framework saves time, money, and reduces waste to any firm willing to join the ranks of enterprises seeking to tap unrealized gains, develop more cost effective production techniques, and increase their market share.

Development:

Six Sigma is a statistical concept that measures process in terms of defects. Achieving Six Sigma means that a company is only delivering 3.4 defects manufacturing products or providing services, per million opportunities. An opportunity is defined as “a chance for non-conformance, or not meeting the required specifications” (Hindle). Therefore, it is logical to consider Six Sigma as the improve outcome of the quality movement that was pioneered by W. Edwards Deming best known for helping the Japanese revive t heir industries after World War II. Deming approach to improvement came to be known as TQM or Total...