SIX SIGMA - BASICS - (Lesson 1)

 

Lesson 1

Six Sigma is a structural problem solving methodology which is powerful lever for business improvement

Six Sigma is a data driven structured problem solving methodology for solving chronic issues facing a business. It is a break through management process that is used to improve a company’s performance by variation reductions. The method encompasses breaking down the customer’s requirements into steps to pinpoint pains in a process. This results in the reduction of defects and sustenance of process of improvement.

The six sigma methodology essentially has two elements which comprises the voice of customers and voice of process. It essentially entails reducing the gap between the two voices and ensuring that they both match. What differentiates Six Sigma from other quality metrologies is that it can be used to solve key business pains.

For the first time we have a methodology which can help quality professionals to add directly to the top line or bottom line. Earlier quality professionals always faced a struggle because the impact of their work was often not felt in the company’s balance sheet. Six Sigma has changed all of this. This methodology can leveraged to address issues which can be used in any part of business. Traditionally quality tools have been used for solving only quality issues but this tool facilitates the resolution of pains beyond the domain of quality. Some areas where six Sigma projects can be effectively used are: Revenue Generation, Cost Avoidance, Productivity Improvement, Customer Satisfaction, Customer Retention and so on. This is partial list and can be further increased.

Six Sigma gives an excellent project management framework wherein all power tools are packaged in such a manner that it helps in providing the best solution to a problem. Tools used are not new but the way they have been structured gives its power.

Six Sigma uses a handful of powerful tools of statistics instead of getting lost in over 400 tools of Total Quality Management (TQM). The beauty of the method is in its ability to use these tools in a model known as DMAIC (Define, Measure, Analyze, Improve, and Control). Also Six Sigma has added a component of financial accountability and demands a strong focus on measurement to constantly monitor the results of the improved state.

The Six Sigma framework has also taken quality from the domain of quality professionals to others in the organization. This is probably the best thing to happen. Earlier there was always a struggle to ensure that quality seeps deep and wide in organizations. Despite all the efforts and various initiatives, progress was not a expected and it only ended with the jargon ‘quality is everyone’ business’

Six Sigma puts a stop to gut-based solutions and lools at all variables affecting a process. The solutions are validated statistically so that the chance of implementing a wrong solution goes down. It can be used for both service and manufacturing organizations. Earlier all quality tools had been manufacturing centric but now this power packed method has been successfully used in service companies.

What makes Six Sigma different is that it forces individuals to define customer satisfaction measures and use teams to improve it. So it uses customer-focused goals and measurements and drives continuous improvement at all levels of the enterprise. When effectively implemented, the Six Sigma technique can help to ensure that both internal and external customers voices are heard and efforts are made towards their improvement.

The power of Six Sigma can be leveraged by setting attainable short-term goals while striving for long range objectives. It is imperative that the projects support the company and division goals that flow from top level company objectives. For making Six Sigma a success, it should be treated as a business strategy and not just another quality programme. Remember, the ideal  project should have a connection to strategic objectives, should be recognized as being important to the company, can be completed within a reasonable time period, has the support of the management and has an accurate evaluation framework to ascertain its effectiveness.

Let me caution that Six Sigma is not a panacea for all ills plaguing a company. If there are event outside the organization’s control, Six Sigma cannot be of any benefit. For example, an economic crisis affecting the performance of a company cannot be solved by Six Sigma.

It has been seen that with the change in the leadership of a company, the Six Sigma implementation can go to docks. It shall stay till there are leaders like Jack Welch who give it the required thrust and understand the power.

 

Six Sigma Takeaway

Six Sigma as a business strategy increases customer responsiveness, builds customer relationships, improves organizational resilience to respond to market conditions and aligns people and processes behind agreed objectives.