Six Sigma is a revolutionary business process geared toward dramatically reducing organizational inefficiencies that trans- lates into bottom-line profitability. It started in the 1980s at Motorola; then, organizations such as GE, Allied Signal, and Seagate worked with the initiative during the 1990s and made it the most successful business initiative of the era.
Key to the Six Sigma methodology of the 1990s is a five- step process—Define, Measure, Analyze, Improve, and Control

(DMAIC). By systematically applying these steps (with the appropriate tools), practitioners of this approach have been able to save substantial dollars.
The basis of Six Sigma is measuring a process in terms of defects. The statistical concept of six sigma means our processes are working nearly perfectly, delivering only 3.4 defects per million opportunities (DPMO). Sigma (the Greek letter σ) is a statistical term that measures standard deviation. In the context of management, it’s used to measure defects in the outputs of a process and show how far the process deviates from perfection.
A one-sigma process produces 691462.5 defects per million opportunities, which translates to a percentage of satisfactory outputs of only 30.854%. That’s obviously really poor perform- ance. If we have processes functioning at a three sigma level, this means we’re producing 66807.2 errors per million.

Figure 1-1. DPMO at sigma levels

nities, delivering 93.319% satisfactory outputs. That’s much bet- ter, but we’re still wasting money and disappointing our cus- tomers.
Most organizations in the U.S. are operating at three to four sigma quality levels. That means they could be losing up to
25% of their total revenue due to processes that deliver too many defects—defects that take up time and effort to repair as well as make customers unhappy.

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