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 1 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.
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