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Six Sigma aims for virtually error free business performance. A company’s performance is measured by the sigma level of their business processes. Traditionally companies accepted three or four sigma performance levels as the norm, despite the fact that these processes created between 6,200 and 67,000 problems per million opportunities! The Six Sigma standard of 3.4 problems per million opportunities[*] is a response to the increasing expectations of customers and the increased complexity of modern products and processes. The tools are applied within a simple performance improvement model known as Define-Measure-Analyze-Improve-Control, or DMAIC
It would be a mistake to think that Six Sigma is about quality in the traditional sense.
Unlike mindless cost-cutting programs which also reduce value and quality, Six Sigma identifies and eliminates costs which provide no value to customers, waste costs
General Electric estimated that the gap between three or four sigma and Six Sigma was costing them between $8 billion and $12 billion per year. One reason why costs are directly related to sigma levels is very simple: sigma levels are a measure of error rates, and it costs money to correct errors. Errors are shown as errors per million opportunities, not as percentages
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