Implementing Six Sigma

Six Sigma is a rigorous, focused and highly effective implementation of proven quality prin­ciples and techniques. A company’s performance is measured by the sigma level of their business processes. Traditionally, companies accepted Three or Four Sigma performance levels as the norm, despite the fact that these processes created between 6,200 and 67,000 problems per million opportunities! The Six Sigma standard of 3.4 problems per million opportunities is a response to the increasing expectations of customers and the increased complexity of modern products and processes.

Six Sigma relies on tried and true methods that have been around for decades. In fact, Six Sigma discards a great deal of the complexity that characterized TQM. By one expert’s count, there were over 400 TQM tools and techniques. Six Sigma takes a handful of proven methods and trains a small cadre of in-house technical leaders, known as the Six Sigma black belts, to a high level of proficiency in the application of these techniques. To be sure, some of the methods used by the black belts are highly advanced, including the use of up-to-date computer technology.

Box 7.2 ICICI Prudential Life Awarded at the 10th Asian Six Sigma Excellence Awards

ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank and Prudential PLC. It was one of the first players to commence operations when the insurance industry was opened to the private sector in 2000. For the first quarter ended 30 June 2009, the company garnered Rs 2,844 crores of total premiums and has underwritten over 9 million policies since inception. The com­pany has a network of 2,079 offices and 225,668 advisors. For the past eight years, ICICI Prudential has maintained its dominant position amongst life insurers in the country, with a wide range of flexible products that meet the needs of the Indian customer at every step in life.

In keeping with its belief that a happy customer is the best endorsement, ICICI prudential is one of a handful of companies in the service industry, which had the mettle to take up the Six Sigma initiative. An exercise that begins and ends with the customer from capturing his voice to mea­suring and responding to his experiences. The company has utilized the Six Sigma approach as the preferred methodology to measure the impact on key performance metrics across customers, distributors and employees. This initiative is helping the company improve processes, turnaround times and customer satisfaction levels. Since then the company has cut down cost and process inef­ficiencies and grown beyond expectations.

ICICI Prudential Life Insurance Company was awarded the 1st Runner in the Best Defect Elimina­tion in Service and Transaction category at the 10th Asian Six Sigma Excellence Awards 2009, held at Singapore. The Six Sigma Excellence Award is a testimony to company’s quest for excellence using a structured methodology to resolve critical business problems. Through such unique initia­tives the company will continue to provide world-class service to our customers.

The Best Defect Elimination in Service and Transaction category in the Six Sigma Excellence Awards recognizes companies with strong Six Sigma practices, operational excellence, and greater customer efficiency amongst other critical aspects. The submissions for the Excellence Awards were evaluated on a varied range of qualifications by some of the Six Sigma most experienced practitioners. Source: Adapted from www.icicibank.com, accessed June 2016.

There are many ways to explain how Six Sigma works. However, the two most common approaches are:

1. Define, measure, analyse, improve and control (DMAIC)
2. Define, measure, analyse, design and verify (DMADV)

DMADV (define, measure, analyse, design and verify) along with DMAIC (define, mea­sure, analyse, improve and control) are the two approaches used in Six Sigma. Both the processes have a lot of commonality, but their disparity also means that one cannot be used for the other.

Both methodologies are used to decrease the number of defects to 3.4 for every one mil­lion opportunities. In order to achieve this, both methodologies use facts and statistical tools for finding solutions to common problems—problems which are always related to quality. Finally, the methodologies are similar in that they both focus on increasing the objectives of an organization, both financially and in business.

There are some differences in the two methodologies. DMADV helps clarify client needs as it relates to services or products. It also assists in matching the requests of the client by creating business models. DMAIC is utilized to clarify the work processes and how they fit with the organizational goals. In addition, it creates work process enhancement to lessen or completely eliminate defects.

The contrast shows that DMADV generally comes into the picture when the product is in the initial stages and requires a maturing process in order to develop into what the customer desires. DMAIC is useful when there is a service or commodity already established but not rising to customer demands.

Source: Poornima M. Charantimath (2017), Total Quality Management, Pearson; 3rd edition.