Six Sigma

Case Study Six Sigma is a statistical methodology for implementing a strategy of quality improvement and waste reduction. The process was pioneered in the 1980s by Motorola to improve customer satisfaction through a reduction in manufacturing defects. The first stage of the process is to identify the factors that are the primary culprits in customer dissatisfaction. Each factor is then examined to determine an acceptable range of outcomes and identify opportunities for improvement. The Six Sigma methodology gained widespread exposure when Jack Welch embraced it at General Electric. Welch's assistants subsequently left GE and carried the methodology to their new firms. The Home Depot adopted Six Sigma in 2001 when Robert Nardelli arrived from GE to head the giant Atlanta-based home improvement company. Nardelli centralized operations and initiated a program of staffing cuts and improved productivity. Although sales and profits improved, the firm's stock price languished, and Nardelli was gone from Home Depot by early 2007. Some critics claim the Six Sigma system is designed for manufacturing and is not easily transferable to service companies.