Six Sigma, Risk Assessment and Balanced Scorecard
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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.
