Six Sigma

In the beginning of the 1970s, the Japanese shipbuilding industry, and later on the Japanese electronic and consumer goods industry, applied the forerunner of Six Sigma to their business practices. In the middle of the 80s, Bob Galvin, the former CEO of Motorola, decided along with his engineers that the traditional measure of quality – defect per thousand opportunities – was no longer acceptable. Instead, he believed that an even larger measure – defect per million opportunities (DPMO) – would be more suitable. In addition to this, Motorola’s product engineer, Bill Smith, observed that there was a strong correlation between the lifespan of finished products and the frequency of repair during their production process. He came to the conclusion that an effective quality management should prevent defects during production instead of trying to repair them. Motorola introduced these new procedures, which would go on to become the central aspects of the Six Sigma method and mindset. Motorola, together with General Electric (GE) and Honeywell, achieved above-average financial performance because they applied this method, and this contributed largely to the increasing popularity of Six Sigma.

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