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The Book on Business: Concepts of Six Sigma easy to understand with book

Sunday, August 26, 2001

By Carnegie Library's Business Librarians

"The Power of Six Sigma" by Subir Chowdhury. Dearborn Trade, 2001.

The basic concepts of Six Sigma -- a seemingly dry statistical measurement that allows only three to four defects per million products -- is presented here in a way that makes it accessible and relevant.

A concept of error based on the standard deviation from the norm may at first seem somewhat obscure as a business philosophy, but when measured with concrete examples it becomes easy to see its importance.

For example, suppose your home thermostat, set at 70 degrees, is supposed to perform in a way that will keep the temperature in a range from 68 to 72 degrees. If it fluctuates between 67 and 73 degrees in reality, it is still acceptable. But if the temperature bounces between 55 and 85 degrees, the product is performing at unacceptable levels. If 500 or 600 thermostats out of every million were defective in this way, many customers would not be satisfied and profits could be lost.

This simple concept is behind the transformation of such major companies as General Electric and Allied Signal. The ultimate end of Six Sigma is not simply to improve productivity or quality, but in doing so to improve customer service and thereby dramatically increase profits.

Written as a dialogue between old friends, "The Power of Six Sigma" reduces some pretty complex business theory to its underpinnings in way that anyone can understand.

Companies that have made customers happier will enjoy heftier profits. One way to achieve this is to reduce mistakes. This results in fewer throw-outs and refunds, and adds money to the bottom line. In the process the cause of the mistakes should be determined and eliminated. When it comes to the customer, it's not management that usually has the best ideas about what the customer really wants. It's the customer. One happy customer tells three people and one unhappy customer tells 20 people.

Through the conversations his characters have in the book, Chowdhury points out that top management must be the driving force behind this philosophy; executive leadership must support the project managers implementing Six Sigma. These project managers, known as Black Belts, combine excellent management and technical skills with the ability to inspire passion in front-line employees, and should also enjoy the confidence of top management.

Black Belts go through an intensive training program that covers the four main points of Six Sigma: how to measure, analyze, improve and control the processes that improve customer satisfaction and produce a healthier bottom line. After each point is learned, the Black Belts go back to the company and apply the concept to a specific problem before they begin studying the next concept.

Chowdhury's narrative style effectively delivers the message of how the power of Six Sigma can aid any organization.

Also recommended are:

"Antitrust After Microsoft: The Obsolescence of Antitrust in the Digital Era" by David B. Kopel. Heartland Institute, 2001.

"Be Our Guest: Perfecting the Art of Customer Service" by Disney Institute; foreword by Michael D. Eisner. Disney Enterprises, 2001.

"How to Use a Consultant in Your Company: A Managers' and Executives' Guide" by John J. McGonagle and Carolyn M. Vella. Wiley, 2001.

Contact the business librarians, who also answer questions about business, money and work, at 412-281-7141 or at http://www.carnegielibrary.org/clp/libctr/business.

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