You’ve probably heard of Six Sigma. Although it has been in existence for a few decades now, it seems that only in the past five years has Six Sigma been a buzzword. This resource will give you a quick overview of Six Sigma from a purchasing and supply management perspective.
The name “Six Sigma” is derived from the statistical measure of six standard deviations. In statistics, the Greek letter sigma represents a standard deviation.
Six Sigma is a highly disciplined process improvement methodology that focuses on improving both customer satisfaction and profitability through near-perfect quality. In Six Sigma, quality is measured by the ratio of defects per million opportunities, which translates into a Sigma Level (four sigma, five sigma, six sigma, etc.). The goal of Six Sigma is to limit defects to 3.4 per million opportunities.
Process improvement teams, led by highly trained individuals called “black belts,” set out to achieve Six Sigma quality standards using an approach labeled DMAIC. DMAIC is an acronym describing a series of steps that Defines a process, Measures the current performance of the process, Analyzes the causes of defects in the process, Improves the process, and establishes means of Control for the process so that improvements can be sustained.
The DMAIC steps emphasize the use of tools such as process maps, charts, matrices, and so forth to understand a process and evaluate quantified effects of the process using metrics (statistical measurements).
As a purchaser, you can use the Six Sigma methodology in a variety of ways. You can apply the Six Sigma approach in working with a supplier to improve the quality of parts that the supplier provides to you. You can apply the Six Sigma approach to minimize the number of invoice discrepancies that your organization has to handle. You can use Six Sigma to improve almost any purchasing process that has inefficiencies that cost your organization money.