The Nation

Published on October 31, 2005

A leading Six Sigma author and exponent explains his craft to KI Woo on a recent visit to Bangkok

Six Sigma today has evolved into a management process brand that is attached to a system of concepts, tools and attitudes

Six Sigma is an oft-mentioned term in Thai management circles. One just needs to browse the business sections of Bangkok bookstores to realise it is a very hot topic in Thailand.

Peter Pande, a noted Six Sigma author and exponent recently told The Nation that Six Sigma had become a global movement to enhance the mechanisms for improving businesses.

“Six Sigma has a lot of legacy tied to previous management-improvement efforts such as reengineering, total quality management and other techniques,” he said.

According to Pande, Six Sigma as a management-process methodology was first coined at Motorola in the 1980s when that company was trying to improve the quality of its products. “At that time Motorola’s product quality was so poor that the Japanese were basically taking away their market share,” he said

Motorola, Pande said, began using Six Sigma as a theme in 1987 when the company was trying to find an easy way to measure the performance levels of its processes. “Sigma is a letter that is used to designate standard deviation in statistics,” he said.

Basically, Pande said, the Motorola people surmised that if they could fit six standard deviations within a customer's requirements, the probability of delivering a defect to the customer would practically be zero. “So it’s a sort of statistical measure that indicates almost perfection,” he said.

A Six Sigma process would mean statistically a company manufactures no more than 3.4 defective pieces per million in manufacturing operations, said Pande. He added that Six Sigma today had evolved into a management concept that promoted an ideal or goal that all companies had to strive for in their operations. “Today, Six Sigma is about how a company makes change a core competency of the business,” he said.

Management consultants such as Pande recognise that in reality most business processes are nowhere close to Six Sigma. Customer requirements change constantly, and a company is always measuring its performance against these changing customer requirements.

“If a customer tightens its requirements or demands more from a company’s processes, a company can go from Six Sigma to Three Sigma in a heartbeat,” he said.

So how does a company implement Six Sigma and make the ability to change a core competency of the business?

Pande said Six Sigma tried to look at the business and its process as a system. “Six Sigma is really about improving the end-to-end processes of the business,” he said.

Six Sigma tries to understand the high-level processes that are really driving a company’s performances. “More importantly, it must all start with focussing on the external customer. Many other management techniques spend too much time focussing on improving specific techniques that really are not connected with satisfying the external customers’ needs,” he said.

Therefore Six Sigma processes should really be focusing on how these improvements add value to the business’ end results. “If a company doesn’t know who its external customers are, Six Sigma probably won’t help,” he said.

Six Sigma processes, Pande said, enable companies to be prepared for and respond quickly to changes in their environments. “Fundamentally, the Six Sigma concept helps management effectively identify and implement common sense, smart business practices.”

As a result, Six Sigma today has evolved into a management-process brand attached to a system of concepts, tools and attitudes about management. “Underlying all that, you will find different versions, flavours and approaches to Six Sigma that depend on how each company decides to apply it within its own context,” he said.

“In general, successful companies applying Six Sigma concepts and principles must really learn to understand their customers, know where they are going and really comprehend how well the company is serving them today.

“Lastly, since we profitably deliver these services at the performance calibre our customers are looking for, we must be flexible as their needs change and most importantly have the ability to identify what’s really happening today so we can readily change and successfully compete in the future.” he said.