What is Six Sigma? Some business principles need to be understood

To apply the Six Sigma method effectively, businesses need to understand and comply with certain principles. So what is Six Sigma ? In the content below, let's learn with 1C Vietnam the concept, benefits and operating principles of Six Sigma in corporate governance.

1. What is Six Sigma?

Six Sigma (6 Sigma or 6σ) is a method of optimizing quality management business processes, based on statistical analysis to detect errors to determine the cause and apply improvement measures to increase productivity. process precision.

Six Sigma helps promote new thinking in businesses by focusing on improving processes to prevent errors from occurring instead of just dealing with defective products. The Six Sigma benchmark can be achieved with no more than 3.4 errors per million opportunities, achieving 99.99966% perfection in real-world processes.

The table below shows Sigma levels:

2. Benefits of the Six Sigma method system

Six Sigma is widely applied with many benefits for businesses, including:

• Reduce costs, increase profits: Six Sigma helps businesses reduce errors in the production process, avoid the recurrence of errors in the future, and focus resources on new product research, enhance brand promotion and staff capacity training. Thereby, businesses can minimize unnecessary waste.
• Increase customer satisfaction and loyalty: Six Sigma focuses on understanding customers, thereby ensuring products meet their expectations and increasing customer loyalty to the business.
• Building appropriate strategies: Six Sigma plays an important role in building corporate strategy. After the mission and goals have been determined and a SWOT analysis has been performed, Six Sigma helps businesses focus on areas that need improvement to achieve the set goals.
• Enhance corporate culture: Six Sigma creates effective links between businesses and employees through perfect work processes and respect for human factors. The combination of transparent measurement methods and a positive work ethic makes it easy for managers to orient employees, regardless of the type of corporate culture.
• Scale expansion: After meeting Six Sigma standards, businesses can expand production scale and build measurement systems easily.
• Ensuring an agile responsive ecosystem: Six Sigma requires change and flexibility to ensure smooth improvement project implementation. A culture of flexibility and willingness to adapt to changes ensures effective business operations and helps employees and relevant departments adapt quickly to those changes.

3. Operating principles of the Six Sigma method

Six Sigma is a comprehensive approach to quality management that is widely applied in many industries. Six Sigma brings efficiency thanks to its application based on several key principles:

3.1. Customers are the center

Six Sigma establishes a comprehensive focus on customer requirements and desires. The Six Sigma process not only meets current customer needs but also ensures improvement and optimization to grow strongly and adapt to future market changes.

3.2. Collaboration without barriers

Six Sigma encourages collaboration between departments and layers of management within an organization. This includes vertical, horizontal and cross-functional collaboration between different departments.

3.3. Emphasis on data/facts

The Six Sigma quality management process requires the identification of accurate data/facts, completely eliminating ambiguity and judgment. Measurement and evaluation must be performed according to the standard of 3.4 errors per million possibilities to ensure accuracy and reliability. Businesses need to answer the following two questions before making a decision:

• What data/facts are really needed?
• How to apply data to Six Sigma effectively?

3.4. Be proactive in management

Six Sigma promotes a proactive mindset in management and addressing defects before they become major problems. Instead of waiting and facing mistakes, businesses should be proactive in managing and detecting errors early to create effective processes.

3.5. Allow for small mistakes and aim for perfection

The goal of Six Sigma is not absolute perfection from the beginning but continuous improvement. This allows process improvements to be implemented, even when initial failures occur. With the condition of learning from mistakes to ensure the consequences do not seriously affect the organization, business operations processes will bring better efficiency and achieve the ultimate goal.

4. The process of applying the Six Sigma method to businesses effectively

To apply the Six Sigma model, businesses can follow the steps below:

5. Difference between Six Sigma and Lean Six Sigma

Six Sigma and Lean Six Sigma are both methods of quality management and optimizing production processes in businesses, however, these two methods have some differences, including:

Above, 1C Vietnam has shared detailed information about what Six Sigma is , the benefits and operating principles of this method. Six Sigma helps businesses optimize production processes, reduce waste and ensure product quality. To update more useful information about production management, don't forget to follow other articles on 1C Vietnam's website.