Six Sigma is a business management strategy, initially implemented by Motorola, that today enjoys widespread application in many sectors of industry.  Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and variation in manufacturing and business processes. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization ("Black Belts" etc.) who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified financial targets (Source: Wikipedia)

Six Sigma has two key methods (Source): DMAIC and DMADV.  DMAIC is used to improve an existing business process; DMADV is used to create new product or process designs.

DMAIC consists of the following five steps:

• Define high-level project goals and the current process.
• Measure key aspects of the current process and collect relevant data.
• Analyze the data to verify cause-and-effect relationships. Determine what the relationships are, and attempt to ensure that all factors have been considered.
• Improve or optimize the process based upon data analysis using techniques like Design of experiments.
• Control to ensure that any deviations from target are corrected before they result in defects. Set up pilot runs to establish process capability, move on to production, set up control mechanisms and continuously monitor the process.

DMADV

The basic method consists of the following five steps:

• Define design goals that are consistent with customer demands and the enterprise strategy.
• Measure and identify CTQs (characteristics that are Critical To Quality), product capabilities, production process capability, and risks.
• Analyze to develop and design alternatives, create a high-level design and evaluate design capability to select the best design.
• Design details, optimize the design, and plan for design verification. This phase may require simulations.
• Verify the design, set up pilot runs, implement the production process and hand it over to the process owners.

DMADV is also known as DFSS, an abbreviation of "Design For Six Sigma".

Six Sigma clearly had a profound impact on the corporate world. According to the American Society for Quality, 82 of the 100 largest companies in the U.S. have embraced it.  However, Babson College management professor Tom Davenport argued that "Process management is a good thing. But I think it always has to be leavened a bit with a focus on innovation and [customer relationships]." The discipline was developed as a systematic way to improve quality, but the reason it caught fire was its effectiveness in cutting costs and improving profitability. That makes it a powerful tool—if those are a company's goals. But as innovation becomes the cause du jour, companies are increasingly confronting the side effects of a Six Sigma culture (Source: BusinessWeek). 

In a nutshell, it appears that Six Sigma is a successful process improvement tool but it should be part of a more holistic strategy.