Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 20

Applying Six Sigma Principles to the Accounting Function Brewer and Eighme (2005) report the results of an actual case study of applying Six Sigma principles to improve the accounting function, specifically, to improve the speed with which a subsidiary communicated quarterly financial results to its parent company (to allow preparation of consolidated financial statements). Assume you are in charge of a Six-Sigma project designed to address this problem. Discuss steps you would take as project manager to address the problem, including the five steps in the DMAIC (design, measure, analyze, improve, and control) framework discussed in the text. (P. C. Brewer and J. E. Eighme, “Using Six Sigma to Improve the Finance Function,” Strategic Finance (May 2005), pp. 27-33.)

Step 1 of 2

Sigma is basically a short-form of standard deviation. Here, six sigma means six standard deviation from the normal value, and three sigma means three standard deviation from the mean value.