Archive

Archive for the ‘6 Sigma’ Category

Balanced Scorecard Adoption

The world appears to be waking up to the need of rapid and multidimensional performance assessment and rapid feedback mechanisms. We are starting to see a whole slew of phone applications that help people track the food they eat, the miles they walk, the time they use to engage in various activities. Measurement is becoming the need of the modern psyche. More importantly, many of these measurement tools provide guidelines, benchmarks. For example, our diet programs might be able to make suggestions like based on your height and weight and your lifestyle, you should be consuming X of calories, they should consist of combination of the following food groups. Now, these suggestions are not yet fully refined or have been universally tested, but nevertheless, they provide recommendation that enable us to have a much better than our likely performance without these recommendations. What’s more, many of these programs allow us to share this information with our friends, since transparency will likely help us stay motivated. This has resulted in more than one friendly competition among my friends, and they were all better off for it. After all they all were able to do more push ups, run faster and farther, and eat healthier as a result.

Yet, in business context, it appears that measurement is just now becoming common place. Don’t get me wrong, measuring business performance predates Frederick Taylor, but a comprehensive measurement system that would allow feedback and provide guidelines and recommendations based on best practices has not yet been developed.

I can hear the arguments already. Business management is more complex, there is no one size fits all formula, the way we do our business is unique. And I have one thing to say to that, it is bunch of baloney.

If business is more complex than a human being, and that’s a big if, we would need to have more measurement and guidelines, rather then less to help us navigate it appropriately. Yes all businesses are different, but so are all humans. Just like a diet that is appropriate for someone preparing for a marathon would kill a two year old baby, so in business context, though we can find guidelines that are appropriate to the business’s stage of development, it’s goals and abilities. Let’s face it, the reasons you are in business are not unique, there are only a small variety of options and they likely include making money and changing the world to some degree. Moreover, even your business practices are likely not too different from everyone else, otherwise your business would either fail or be growing so rapidly that you would not be able to take the time to read this article.

The reason we are not looking at measurement in business in this way appears to be for a very different reason, it is a matter of personal pride. While we are ready to acknowledge that a dietitian or a trainer can give us guidelines for managing our body that are much better than what we would create if we just arbitrarily picked our guidelines based on our own perspective, it is not so with managing a business. How could somebody outside our organization possibly know what might be the guidelines or direction for our management? Yet, the parallel is clear, if we know where you are and have a general idea of where you want to get to, the way you do it might be unique, but there are some fundamental measurements that you absolutely must hit in order to get to your goal and not allow it to blow up your business in the process.

This means that our Scorecard Key Performance Indicators should not be random or arbitrary, the targets should not be arbitrary either. Within the indicators we also need to account for common cause variation and separate it from special cause variation. But more importantly, we need to have clear trigger points. If I am eating 3000 calories a day and burning 2500 calories, It’s not that relevant if the actual numbers 3100 and 2400. Clearly, unless my goal is to gain weight, the action should be to reduce calorie intake or to increase calorie consumption. What is relevant is that there is a trigger to spring in to management action. The parallel should exist in the Balanced Scorecard design for the organization. We need indicators that become trigger points for action and it is not that relevant if they are perfect, it is more relevant that they cause us to make good decisions.

There is another reason in business that we do not seem to make our decisions based on measurement. Frankly, as a civilization we have not learned to measure things like sentiment precisely and yet we have not learned to make decisions using imprecise data. So the measurement inversion sets in, we measure things that we can measure precisely, yet it is the other imprecise things that commonly act as the input, rather than output variables and it is they that need precise measurement.

Oleg Tumarkin, Juris Doctor, Master of Business Administration, Certified Six Sigma Black Belt, Practitioner of Theory of Inventive Problem Solving (TRIZ) is an Adjunct Professor of Business at Concordia University of Wisconsin. His firm, FutureWorks, in partnership with Bucket Brigade and AKS-Labs provides business coaching and Balanced Scorecard implementations.  His life’s passion is the development of a universal business measurement and management system that would cause management out of the realm of unpredictable black art and closer to the realm of a repeatable, replicable, yet humane and flexible science.

Share

6 Sigma, Balanced Scorecard Theory

Step-By-Step Guide on How to Use Six Sigma for Solving Business Problems

Download 6 Sigma Guide
Download FREE Six Sigma Guide

The step-by-step procedure of using Six Sigma to solve business problems involves intensive implementation of the technique, Define, Measure, Analyze, Improve, and Control (DMAIC). Through this business process strategy, organizations achieve customer satisfaction and improved employee performance simultaneously.

The basic human tendency is to strive for perfection. However, when it comes to the practical life, we find that achieving perfection with zero errors or zero defects is nearly impossible. The major theme of Sig Sigma principle is to reduce the errors and defects to a near zero level, even if zero level is unattainable. The step-by-step implementation of Six Sigma program for solving business problems is usually termed as Define, Measure, Analyze, Improve, and Control (DMAIC). This is a five-phase project improvement approach.

  1. The Define phase consists of putting together a team, listing the stakeholders and analyzing their expectations, developing project goals, and preparing a detailed chart of suppliers-inputs-process-output-customers (SIPOC).
  2. The Measure phase comprises of three parts. They are collection of all relevant data, evaluation of collected data, and failure-mode-and-effects-analysis (FMEA)
  3. The Analyze phase is separated into five factors. The source is analyzed first, followed the analysis of process. Collected data is analyzed after that. The analysis of resources follows this. Finally, the communication channels and their effectiveness are analyzed.
  4. The Improvement phase concentrates on all possible improvements that could be made to reduce all the defects that had occurred so far or the defects that are likely to occur in future.
  5. The Control phase ensures that the modifications to the processes work on a continuous basis. The control is achieved through product or process standardization, quality control targets, actual quality control methods, alternative measures when standard approaches fail to achieve set targets, and spontaneous response mechanisms for defect detection and rectifications.

When the Sig Sigma program is implemented on a step-by-step process, the process inputs are evaluated and listed out initially. These include variables such as raw materials, energy, water, etc. In the next step, the controlled process variables like flow rate, concentration of catalysts, pressure, temperature, etc. are considered. In the third step, the uncontrolled process variables, known as noise variables are measured. These variables include ambient working conditions of humidity and temperature, duration of each shift, members in each team, individual operators, number of machines, and the raw materials lot. The final step is estimating the variables of process output, comprising of capacity, production rate, downtime, yield, and waste.

The business problems usually faced by organizations are complete customer satisfaction and improvement of employee performance. Both these goals are achieved by the step-by-step-guide to use Six Sigma program. When customers face a problem with a particular product, it had been found out that the customers not only remembers the actual defects in the product but also the treatment method of their complaint. As such, the Six Sigma program emphasizes on high standards of people relationships, particularly those with customers. If all the personnel in an organization understand the basic principles of Six Sigma program, its importance, techniques, implications, and benefits, then the company would definitely prosper and the profits of the organization would rise significantly.

Share

6 Sigma

Six Sigma – Reviewing of Alternatives

Download 6 Sigma Guide
Download FREE Six Sigma Guide

Certain deficiencies in Six Sigma and its strong emphasis on process control had lead to alternative techniques such as Multivariable Testing (MVT), behavioral approach, and Capability Maturity Model Integration (CMMI). However, integration of these approaches with Six Sigma optimizes the potential of Six Sigma and yields maximum results.

Alternatives to Six Sigma

Six Sigma is one of the best business management strategies available to organizations for improving product quality and reducing defective products. Most of the companies that had implemented Six Sigma had achieved improvement in product quality, decline in manufacturing costs, and increase in efficiency levels. At the same time, it is widely believed that this achievement is very good on a short-term point of view but fails when it comes to long-term sustainability. Apart from the fundamental principles of Six Sigma, several other factors influence the performance of the products of a company in the market over a period of time. Unless the business entities take into account all these factors, continuous success would elude the business ventures.

A specialist who had been involved with the development and propagation of Six Sigma since its inception concluded that around 60% of the business initiatives implemented by various organizations did not yield the expected results. According to him, the concern in various sectors of different industries had been on the increase about the failure of several Six Sigma projects when they were vigorously implemented internally.

A survey by QualPro, a consulting company based in Knoxville, Tennessee revealed another alarming trend. The company selected 58 organizations that publicly announced the implementation of Six Sigma strategies. QualPro compared the performance of the stocks of these companies for a period of 5 years from the date of their Six Sigma program announcement. The performance of the stocks of these organizations was compared with the performance of the S&P 500 stock index. A disturbing trend emerged. Out of the 58 organizations, stocks of 53 companies were underperforming the S&P 500 index. This constituted about 91% of the total companies selected for stock performance consideration. Only 5 organizations managed to exceed the performance of the index. Ironically, the underperformers included earliest adopters of Six Sigma business management strategy, namely, Motorola, General Electric, and Home Depot. Similarly, Ford announced the implementation of Six Sigma program in January, 2000. The Ford stock had lagged the S&P 500 index by more than 60%. GE and Home Depot stocks had underperformed by 30% against the S&P 500 index.

The inherent weakness in Six Sigma business management strategy techniques shows that business management should include alternative methods and practices to compensate the deficiencies in the Six Sigma techniques. Some of the major alternatives to Six Sigma are presented here to help organizations continue development and growth from a long-term perspective.

Multivariable Testing (MVT)

Multivariable testing is a business management design that controls the business processes by testing 20 to 30 possible changes simultaneously. This methodology helps the management in the determination of exact combination of actions that would lead to breakthrough improvements in product enhancement and business performance. MVT maintains that testing of all processes and changes is critical to achieve process improvement. The testing is always done as controlled experimentation. In the final analysis of MVT, it was found out that around 25% of the proposed changes helped in improving the business process, 22% of the changes actually damaged the process, and 53% failed to make any impact to the process. Lowe, a competitor to Home Depot and Superior Essex, manufacturer of electrical products implemented MVT. Lowe and Superior Essex had managed to outperform the S&P 500 index by 200% and 135%, respectively, after implementing MVT.

Behavioral Approaches

Another strategy that had been suggested as an alternative to the inherent weaknesses in Six Sigma is behavioral approach. It is considered that mid-sized organizations, as well as large corporations would be better off by focusing on the human element aspect. It is `generally believed that Six Sigma is highly effective in process control but production innovations and employee behaviors are not fully considered by Six Sigma. The behavioral approach focuses on this aspect of change. This technique concentrates on the optimization of human assets existing within the organization to peak levels, instead of higher capital outlay in new equipments and technologies. The behavioral approach comprises of 3 basic disciplines.

  • Process improvement is achieved through regular review and proper redesign of all the existing business processes involving production, capital expenditures, cost control, supply chains, and sales. This process improvement is aimed at delivering quantifiable improvements in efficiency and effectiveness.
  • Employees and clients are educated and trained on a continuous basis. The communication and interaction with both these groups are conducted at all levels for obtaining solutions to align the behavior and thinking with the redesigned processes. If necessary, new processes are created to suit the solutions arrived at after these interactions.
  • Behavioral approach brings in benchmarks that are focused, specific, high-impacting, and easily understood by the stakeholders. The management operating systems are modified to monitor individual performance and identify problems areas that require urgent managerial attention.

Capability Maturity Model Integration (CMMI)

Capability Maturity Model Integration (CMMI) had been gleaned from several proven process disciplines. CMMI guides the management in certain specific areas of processes through the provision of predetermined goals and anticipated practices that are required to meet these goals. Under the CMMI methodology, the process areas are divided as project management, process management, engineering, and support. The basic CMMI models consist of 22 process areas covering various systems and engineering disciplines. Certain characteristics should be present for satisfying a designated process area. The entire approach is designed to attain comprehensive collaboration with all the stakeholders of the organization to meet the exact needs, requirements, and expectations of the customers.

Comparison of Six Sigma with other alternatives

It is generally accepted that Six Sigma detects problems in business processes but does not automatically provides more effective and redesigned process solutions. MVT is considered as a less costly, more effective, and quicker alternative to the problems that exist in Six Sigma. The behavioral approach compensates the lacunae existing in control of employee behaviors and product innovations, though Six Sigma is a good approach for efficient process control. Similarly, CMMI upholds the interaction of the company management with all the stakeholders, instead of solely concentrating in process control.

Integration of Six Sigma with alternative solutions

In spite of the above differences between Six Sigma, MVT, behavioral approach, and CMMI, industry experts unanimously agree that the maximum results could be obtained by combining all these techniques and implementing them in tandem. They believe that the alternative strategies are not competitors to Six Sigma but are complementary solutions that reinforce the effectiveness of Six Sigma. Optimization of the full potential of Six Sigma would be ideally achieved when all the above techniques are integrated and implemented with the necessary modifications suitable to each type of industry.

Share

6 Sigma

Six Sigma, Risk Assessment and Balanced Scorecard

Download 6 Sigma Guide
Download FREE Six Sigma Guide

When the strategies of risk assessment, balanced scorecard, and strategic planning are used by the management in tandem with Six Sigma techniques, the employees and customers are made to understand the management vision clearly. This helps the organization to optimize its products with low defect outputs and satisfy its clients.

The risk assessment process in Six Sigma is not something performed at the end of manufacturing process or business process but it is an inherent part of the designing of Six Sigma for business purposes. The risk assessment starts at the time of conceptualizing the Six Sigma process design and the exercise of evaluation continues throughout the production, until the final products are tested for quality and delivered to the customers. The risk assessment consists of a comprehensive qualitative assessment of possible hazards, all the constituents of the related functional systems and succession of events that could possibly lead to avoidable consequences. This analysis is termed as preliminary hazard analysis (PHA).

All the results of the risk assessment process should be properly documented. This documentation should be updated on a continuous basis when the product passes through the production cycle. The tests conducted on the product should be based on actual statistics of real-time failures. This would help the management evaluate the process of manufacturing the product with minimum defects and least failure rates and comply with the higher level ratings of Six Sigma.

Balanced Scorecards

Balanced scorecards are used to measure the performance of each individual associated with the organization. Through the balanced scorecards, the employees are able to understand their performance levels. This helps the management to improve performances in each group, without disturbing the performance criteria for the groups that are working better. Most business entities use simple coloring methods to measure performance levels. In general, green is used to signify excellent performance, yellow denotes tolerable or average performance, and red indicates bad performance. However, the most crucial part of balanced scorecards is to convert real-time data into above types of measurable readings. Kaplan of Harvard Business School developed the Balanced Scorecard.

The management of the company implementing Six Sigma techniques obtains valuable information about the performance of each employee through the balanced scorecards. Any individual performing below par is normally alerted to improve personal performance as a top priority. Those consistently underperforming in spite of a few warnings could be terminated by the management. These actions are required to prevent bad or underperformance spreading to other employees, groups, or departments. The final balanced scorecards use simple colors to signify performance levels and the employees comprehend their standing in the company without any difficulty. Those marked as red take immediate steps to improve and they are highly satisfied when they reach the green stage. This boosts the morale of the employees.

Strategic Planning

Strategic planning is used in Six Sigma implementation for systematic and detailed planning in project selection and concern areas. Strategic planning helps the management in developing required action plans to succeed in the business process. The chief aim of strategic planning is to achieve complete customer satisfaction. In this process, the employees are advised about the impact of their performances on the customers. Similarly, the customers are requested to define their specific needs and expectations about the products manufactured by the organization. Creation of proper links between the key elements, strategies, activities, and the company vision is the most critical requirement for this task. The Six Sigma tools make strategic planning quite easy.

Collaborative Effort for Ensuring Success

When the risk assessment, balanced scorecards, and strategic planning are combined effectively while implementing the Six Sigma tools, the company could be assured that the production process would function at the highest quality levels to satisfy the customers with best products. The importance of the human element in the form of employees and customers is the fundamental driving force of Six Sigma.

This is efficiently accomplished when the above strategies are combined with the basic Six Sigma principles.

Share

6 Sigma

Fundamental Principle of Six Sigma

Download 6 Sigma Guide
Download FREE Six Sigma Guide

Six Sigma developed by Motorola is a business management strategy to reduce the number of defects to miniscule levels and achieve production yield of around 99.99966%. This technique had been adopted by major global organizations to implement stringent quality control methods.

Six Sigma is a special, proven business management strategy that helps control quality of outputs. Even though this technique had found widespread applications in several sectors of various industries, controversies also exist about its practical use as an effective business management tool.

The basic principle of Six Sigma is to enhance the quality of process outputs through the identification and removal of defects, errors, or causes that reduce the process output. The technique also seeks to minimize any variability in business and manufacturing processes. Six Sigma utilizes effective and proven methods of quality management, including several statistical methods. The technique is intended to create special group of people within each organization. Each group is expected to be experts in quality management method.

Six Sigma designates such groups as ‘Yellow Belts’, ‘Green Belts’, Black Belts’, ‘Master Black Belts’, ‘Champions’, etc. adopting the Karate ranking process.

Each project in an organization is treated as a separate Six Sigma project. The project is designed in such

a manner that the sequences of project implementation steps are clearly defined and quantified targets

are set in advance. The targets could vary from one project to another, such as financial targets of achieving increase in profits or reduction in costs. All the factors critical to the customers that have direct impact on them through the implementation of the process like delivery, safety, product cycle time, etc. are created as charts for easy analysis.

The term ‘Six Sigma’ was derived from a basic manufacturing technology, particularly the ones related to statistical modeling of all manufacturing processes. The Sigma rating was used to measure the maturity of all manufacturing processes. The Sigma rating quantifies the process yield, expressed in percentage of total defect-free products produced by the manufacturing process. A single Sigma rating would mean that about 30% of the products are defect-free. On the other hand, the highest rating in this Sigma scale is 6, which denotes manufacturing of 99.99966% defect-free products. Motorola defined this measurement of ‘Six Sigmas’ and advocated the Six Sigma business management strategy in 1981 in the United States. Another Sigma at the seventh level was added later on for even higher quality control measures.

Problems Addressed and Solved by Six Sigma

Six Sigma could not be termed as an absolutely original business management strategy, since the technique was a development of the pioneering work done by management experts like Shewhart, Juran, Ishikawa, Deming, Taguchi, and several others. The major principles of these pioneers were adopted by Motorola. This strategy reiterates some of the manufacturing process doctrines of these pioneers. The previous doctrines adopted by Six Sigma are:

  • Continuous efforts by the organization and its personnel in the achievement of predictable and stable process results, such as process variation reduction, etc. This factor is vital to success in any business.
  • All manufacturing processes and even standard business practices possess characteristics that could be measured, analyzed, controlled, and improved constantly.
  • Achievement of sustained and continuous quality improvement necessitates total commitment from everyone in the organization, starting at the top level management staff.

Apart from the above general doctrines that had been emphasized by Six Sigma, the technique also introduced several new features for initiatives in quality improvement of business processes. Some of the most important novel features of Six Sigma are:

  • Clear focus in the achievement of quantifiable and measurable financial results from projects executed under Six Sigma.
  • Higher prominence to strong, committed, and passionate management support and leadership attributes.
  • Creation of special infrastructure groups for leading and implementing the Six Sigma techniques, such as ‘Yellow Belts’, ‘Green Belts’, Black Belts’, ‘Master Black Belts’, ‘Champions’, etc.
  • Unambiguous commitment in making decisions to improve process quality and reduce defects, based on verifiable data, instead of guesswork and assumptions.

It is the aim of Six Sigma to bring down long-tem defect levels to below 3.4 per million opportunities, starting with higher short-term goals and gradually reducing the defects in the long run. Six Sigma had termed this process as the number of Defects per Million Opportunities (DPMO). The purpose of implementing Six Sigma is to improve all the manufacturing or business processes to the lowest possible defect-free level and achieve premier quality outputs.

Stakeholders of Six Sigma

The major stakeholders of Six Sigma are the management personnel, the quality assurance department staff, the employees, and the end customers of an organization that is implementing Six Sigma. The Six Sigma stakeholders should understand the five basic steps in executing this technique. The five-step process is known as DMAIC. The first step defines the customers, issues critical to them, and core processes that are involved with such issues. The second step measures the core business process performance. The managerial staff collects data on defects and other metrics in the Six Sigma process. The results derived from the data and process map are compared with those obtained from customer surveys to bring out shortfalls and potential gaps between ideal and present performance by the quality assurance team.

Based on the analysis, the management, the quality assurance department, and the employees deploy innovative solutions that involve employee discipline and technology improvement to prevent problems and correct issues.  Finally, the above stakeholders adopt control measures through documentation and implementation of ongoing plans for monitoring changes and preventing employees from reverting back to previous incorrect practices. As such, the role of stakeholders in Six Sigma technique is an all-inclusive one, with the management personnel, the quality assurance staff, the employees involved in the production process, and finally the customers. The complete involvement of all the stakeholders in applying Six Sigma is very important for the program to succeed and the company to thrive in its chosen field of industry.

Users/Organizations benefiting from Six Sigma

The organizations that adopted Six Sigma immediately on its introductions were Honeywell and General Electric. In GE, Six Sigma was introduced by Jack Welch. It is estimated that nearly two-thirds of the global Fortune 500 companies had initiated Six Sigma processes for cost reduction and quality improvement. Recently, several organizations had combined the principles of Six Sigma with the technology of lean manufacturing for achieving even better results. This methodology had been termed as Lean Six Sigma.

Share

6 Sigma

Download 6 Sigma Guide

Please, specify your email address below to download Six Sigma Guide Free Version:

  • You will have download link immediately;
  • You will have e-mail with some start-up instructions;
  • We can send you some offers about BSC Designer products;

Please, note: if for some reasons you don’t want to have emails from us, but still want to use Six Sigma Guide, you can just click the button without entering any email.

Share

6 Sigma

Six Sigma Guide License

NO WARRANTY

Six Sigma IS SOLD “AS IS” AND WITHOUT ANY WARRANTY AS TO MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTIES EITHER EXPRESSED OR IMPLIED. THE AUTHOR WILL NOT BE LIABLE FOR DATA LOSS, DAMAGES, LOSS OF PROFITS OR ANY OTHER KIND OF LOSS WHILE USING OR MISUSING THIS PRODUCT.

Evaluation and Registration

Six Sigma (“the document”) is not free document. You may use a trial copy of the document (http://www.bscdesigner.com/six-sigma-guide.htm) for evaluation purposes without charge.

Visit ordering page http://www.bscdesigner.com/six-sigma-guide.htm for detailed information about registration method and price list.

Distribution

You may copy the trial version of this product and documentation as you wish, and give exact copies of the original evaluation version to anyone, and distribute the trial version of the product and documentation in its unmodified form via electronic means. But you should not charge or requesting donations for any such copies however made and from distributing the document and/or documentation with other products
without the author’s written permission.

Registered version

One registered copy of Six Sigma may either be used by a single person who uses the document personally on one or more computers, or installed on a single workstation used non-simultaneously by multiple people, but not both. You may access the registered version of Six Sigma through a network,
provided that you have obtained individual licenses for the document covering all workstations that will access the document through the network.

If you do not agree to these conditions you should not install this document.

Thank you for using Six Sigma.

Share

6 Sigma

Six Sigma Guide

Six Sigma GuideThe Guide to Six Sigma brings out the various features of Six Sigma methodologies and their correct implementation in business processes.

Buy Full Version of Six Sigma GuideDownload Free Six Sigma Guide

Inside:

  • 65 KPIs (KPIs for Quality Improvement, Six Sigma, TQM, Continuous Improvement)
  • 23 page Six Sigma Guide (delivered in Adobe PDF format)
  • 15 slide Six Sigma Presentation (delivered as PowerPoint presentation file)

Inside the Six Sigma Guide

  • 65 KPIs (KPIs for Quality Improvement, Six Sigma, TQM, Continuous Improvement):

65 KPIs (KPIs for Quality Improvement, Six Sigma, TQM, Continuous Improvement):

  • 23 page Six Sigma Guide (delivered in Adobe PDF format)

6 sigma 23 pages guide

  • 15 slide Six Sigma Presentation (delivered as PowerPoint presentation file)

6 Sigma Presentation Template

The Guide shows how several major organizations had benefited in real-life situations though the successful integration of Six Sigma to obtain benefits that were considered nearly impossible. The improvement of business process yield to 99.99966% was the major achievement of Six Sigma. Motorola, General Electric, Dow Chemical Company, Honeywell, and Tata Steel were able to reach the goals set by the management of these organizations with the rigorous implementation of Six Sigma.

It had been proved that Six Sigma could work not only in short-term but also remain effective over longer periods, if the business process procedures were carefully designed by the individual managements to suit each area of operation or each individual project. The Define-Measure-Analyze-Improve-Control (DMAIC) process of business problem solving, coupled with other strategies like balanced scorecard, MVT, behavioral approaches, and CMMI had helped business houses to reach the sixth level of Six Sigma, which is attaining 34 defects per million opportunities. It had become a universally approved and followed business process management system at present.

  • The first part ‘Introduction to the method and problem’ defines the fundamental principles of Six Sigma. The major aim of Six Sigma is to improve the business process output quality by identifying the defects, errors or causes that reduce process output. Further, the technique strives to minimize variability in business process. The purpose of Six Sigma is to reduce the defects to 34 DPMO and achieve 99.99966% output yield. This methodology was introduced by Motorola in the 1980s and had been widely followed by several organizations in the last 3 decades.
  • The second part ‘Risk assessment and balanced scorecard’ describes the risk assessment process of qualitative assessment of business process hazards, the constituents of process functional systems, and event successions that lead to avoidable consequences. The part further explains the use of balanced scorecards of green, yellow, and red to measure performances levels of each employee, to make the employees realize their under-performance, and to improve on their own or with the help of higher level personnel. Finally, the part emphasizes on the importance of strategic planning in assisting the management to develop appropriate business process plans for total customer satisfaction.
  • The third part ‘Reviewing of alternatives’ points out certain lacunae in the Six Sigma business process and alternative management tools that could be integrated with Six Sigma to make it a comprehensive business management process control tool. Multivariable testing (MVT) tests 20 to 30 business process changes to arrive at combination of changes that would result in product improvement and enhancement of business process. Behavioral approaches focus on human element by interacting with customers and employees to train and educate them for reduction of defects and improvement of employee, process, and product performances. The Capability Maturity Model Integration (CMMI) covers 22 processes to address diffident disciplines of systems and engineering processes.
  • ‘Step-by-step guide on how to use Six Sigma for solving business problems’ is the fourth part. This guide explains the Define-Measure-Analyze-Improve-Control (DMAIC) process of business problem solving. The most important role of Six Sigma in solving business problems is identifying the problems faced by customers in the products and in the attitude of the company personnel in treating such customers. This enables the company to satisfy the customers fully, while making the employees also becoming aware of providing practical solutions to problems of customers.
  • The fifth part ‘Examples of real-life usage of Six Sigma’ illustrates the success obtained by 5 organizations in entirely different fields through the implementation of Six Sigma. Motorola was the first company to initiate the Six Sigma philosophy in 1986. The pioneering effort of Motorola brought out the minor drawbacks in proper usage of Six Sigma, such as training the bottom level workers, who could not easily understand the statistical methods. This made Motorola to start the training program of employees from top level to reach down slowly through the ranks. General Electric initiated Six Sigma in 1995. GE selected customers, employees, and processes as the three key elements to achieve sixth Sigma level in quality control and quality assurance.
  • Dow Chemical Company adopted Six Sigma in 1999 and a 10-stairs model, containing vision, values, attitude, language, behavior, best practices, articulated strategy, implementation, culture change, and success was developed and applied successfully by the company. The results were impressive. Honeywell embraced Six Sigma in 1998 after being merged with AlliedSignal, which was already following this technique. The QMS of Honeywell was integrated with Six Sigma and the results reflected in all the divisions. Tata Steel used Six Sigma in 2007 to consolidate its Total Operational Performance (TOP) and Total Productive Maintenance (TPM). This step helped Tata Steel to globalize its operations and emerge as the lowest cost steel producer in the world.
  • ‘Conclusions’ is the sixth part. This reveals how Six Sigma had helped large-sized organizations like GE and Ford, as well as much smaller companies to reduce defects to 3.4 DPMO by consistently following the DMAIC principles of Six Sigma and using the balanced scorecard to improve employee performances. The linking of key elements, activities, strategies and management vision had been the main reason for the effectiveness of Six Sigma.
  • The ‘FAQs’ seventh part answers three major questions on Six Sigma. The questions are 1) How does Six Sigma help in business process improvements? 2) Does Six Sigma involve only statistical data? and 3) Can all types of projects be brought under Six Sigma? The answers clearly bring out the effectiveness of Six Sigma in various business processes and operating environments.
  • The eighth part is ‘Checklists for Six Sigma’. The checklists consist of several key points on Six Sigma. The management becoming fully familiar with Six Sigma before introducing it in the company, helping employees to accept and cope up with change management, applying Six Sigma in crucial areas initially, identifying and selecting key personnel in the beginning, deploying teams trained in Six Sigma, integrating Six Sigma seamlessly in the functioning of the organization, and continuously evaluating performances are the most important checklists.
Share

6 Sigma