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Six Sigma

Written by: Mikel Harry Ph.D., Richard Schroeder
Narrated by: James Lurie
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Publisher's Summary

The extraordinary breakthrough management program - heralded by GE, Motorola, and AlliedSignal - that is sweeping corporate America with its unprecedented ability to achieve superior financial results.

Six Sigma is the most powerful breakthrough management tool ever devised, promising increased market share, cost reductions, and dramatic improvements in bottom-line profitability for companies of any size. The darling of Wall Street, it has become the mantra of Fortune 500 boardrooms around the world because it works.

What is Six Sigma? 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, from filling out purchase orders to manufacturing airplane engines. 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 itself so that defects are never produced in the first place.

Most companies operate at a three- to four-sigma level, where the cost of defects is roughly 20 to 30 percent of revenues. By approaching Six Sigma - fewer than one defect per 3.4 million opportunities - the cost of quality drops to less than one percent of sales.

This is because the highest quality also results in the lowest costs. When GE reduced its costs from 20 percent to less than 10 percent, it saved a billion dollars in just two years- money that goes directly to the bottom line. This is the reason Wall Street and corporations as diverse as Sony, Ford, Nokia, Texas Instruments, Canon, Hitachi, Lockheed Martin, American Express, Toshiba, DuPont, and Polaroid have embarked on corporate-wide Six Sigma programs.

Six Sigma should be of paramount importance to every forward-thinking executive and manager determined to make their company world-class in their industry.

©2000 by Mikel Harry, PhD, and Richard Shroeder (P)1999 Random House, Inc.
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What the critics say

"[Six Sigma] is the most important initiative GE has ever undertaken - it is part of the genetic code of our future leadership." (Jack Welch, CEO, GE)

"We've taken the difficult but basic Six Sigma skill of reducing defects and applied it to every business process, from inventing and commercializing a new product all the way to billing and collections after the product is delivered. Just as we think we've generated the last dollar of profit out of a business, we uncover new ways to harvest cash as we reduce cycle times, lower inventories, increase output, and reduce scrap. The results are better and more competitively priced products, more satisfied customers who give us more business, and improved cash flow." (Larry Bossidy, CEO, AlliedSignal)

"The [Six Sigma] Breakthrough Strategy gives new structure to the tools we already had. Structure has been the key element missing in Polaroid's drive for quality. I keep telling my people that the Breakthrough Strategy cookbook tells us how to use time-tested ingredients in new ways. For us, the results from the Breakthrough Strategy have been quick and powerful." (Mike Hart, Black Belt engineer, Polaroid)

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