Market Snapshot


The concept of Six Sigma has been applied to many big businesses as a way to improve business processes, and several of these companies report substantial cost savings as a result. You can find out more about Six Sigma by downloading a series of SEMA webinars by going to and searching under archived webinars. In addition, the following article below, written by the National Federation of Independent Businesses, gives a simple example to help understand the basic approach to applying Six Sigma to your business.

Chances are you’ve heard about classes, seminars and websites devoted to the Six Sigma principle. Maybe you’ve even heard that it’s a management tool used by companies such as Motorola and General Electric. But you might not have heard a concise definition of exactly what Six Sigma is.

“Sigma” is a statistical term measuring how far a given process deviates from perfection; the governing philosophy of Six Sigma states that if you can measure how many defects are in a process, then you can systematically eliminate those and get closer to perfection.

Companies that adapt the Six Sigma management style use specific techniques to produce less than 3.4 defects for every 1 million “opportunities,” or steps in the process where a problem could occur. These companies hire Six Sigma quality managers and implement a more complex hierarchy of methodologies than could ever be practical for a small business. However, parts of the Six Sigma model can still be a useful management tool, no matter the size of your company.

One quality-control methodology in particular, known in Six Sigma text as DMADV (define, measure, analyze, design, verify), can be a useful model for business improvement. Let’s look at each part:

In the greatest amount of detail you can, write down the goals for your project. For example, if you own a restaurant, you might set the goal that your servers sell dessert to 60% of their tables, as opposed to the vague, immeasurable goal “servers should sell more desserts.”

Designate a time period over which you’ll track your goal and your method for doing so.

Let’s say you calculate the number of tables that ordered dessert for one week, and the total number is only 40%. Come up with all the reasons this might have happened. Are your servers remembering to offer dessert to each of their tables? Are your portions so large no one has room for dessert? Are you serving the same frozen cheesecakes from the same food supplier that half the other restaurants in your town serve? Go over every possibility.

Once you’ve analyzed the problem, design your plan for correcting the situation. Retrain servers to offer desserts to every table. Put together a dessert tray to show each table after the main course is finished. Hire a local bakery to prepare pastries especially for your restaurant. Inform your employees about the plan, and put it into use.

Once again you’ll want to measure the results to see how your new plan is working. If you’re not getting the results you want, you may have to re-analyze and redesign. Perhaps the problem wasn’t the servers, but the limited choice of desserts. Your next plan could be a simple as adding sorbet to the menu. Keep up with this process until your original goal is met.

As you can see, behind the complicated numbers and processes of Six Sigma are old-fashioned, common-sense principles. And while most small-business owners can save their money and skip the next Six Sigma training seminar that comes to town, it may be worth looking through a book or two and seeing what you can adapt for your own business-improvement techniques.

Source: Flynn, Maggie. (July 18, 2007). “Putting Six Sigma Ideas to Work at Your Small Business.” The National Federation of Independent Businesses. Retrieved July 27, 2007 from