Six Sigma Methodology has its origin from Motorola, has an interesting history. Sigma is Greek for the letter ‘S’, and the term ‘sigma’ has been used for many years by statisticians, mathematicians and engineers, as a measurement unit of statistical variation till it was integrated into the quality System and business strategy by Motorola in 1987.
The seeds of this concept go back to 19790 when the Japanese management took over a TV manufacturing division of Motorola. The Japanese concentrated on the quality of the output and actually reduced the defects to 5% of defects when the same unit was managed by Motorola. This result made the Motorola Management to take serious note of Quality.
The actual push came in Motorola only after 1981, When Bob Gavin became the CEO of Motorola. He targeted a 10 fold increase in performance within a 5 year period.
The Motorola Engineers Bill Smith or Mikal Harry – felt that measuring defects in terms of thousands was Not Sufficient for achieving a rigorous standard. They increased the measurement scale to parts per million, described as ‘defects per million’, which prompted the use the the ‘six sigma’ terminology and adoption of the capitalized ‘Six Sigma’ branded name, given that six sigma was deemed to equate to 3.4 parts – or defects – per million opportunities.
This has caught the eye of Gavin and launched the program Called “The Six Sigma Quality Program” on 15th Jan 1987. Stringent Targets were set to achieve Six Sigma Capability in 5 years. Astronomical Targets like 10 fold increase by 1989, and 100 fold increase by 1991 and Six sigma capability by 1992. A deep Sense of urgency was shown and every part of the organization was made to obsess with Six Sigma.
Soon after the success of Motorola, Allied Signal ( Now a part of Honeywell) plunged into this concept and achieved success.
The biggest push to Six-Sigma was given by Jack Welch the CEO of General Electric (GE) in 1995. He believed the possible improvement that can be achieved by this change and imbibed into the culture of the company. There were rewards, targets and training which were incorporated. By 1998, GE Reported a savings of more than three quarters of billion in profits.
By the year 2000, Six Sigma was effectively established as an industry in its own right, involving the training, consultancy and implementation of Six Sigma methodology in all sorts of organizations around the world.