Six Sigma Strategy

Six Sigma is probably one of the best methodologies to pervade the world of improvements. Its measurement orientation, rigorous training scheme, process centricity and stakeholder involve­ment differentiate it from other quality methodologies. The tools in Six Sigma are not new, but its direct linkages to business objectives and priorities make it a powerful strategy in business.

Six Sigma is the business strategy and a philosophy of one working smarter not harder. One Sigma gives a precision of 68.27 per cent, Two Sigma of 95.45 per cent and Three Sigma of 99.73 per cent, whereas Six Sigma gives a precision of 99.9997 per cent. Although 99.73 per cent sounded very good, it slowly dawned on companies that there was a tremendous difference between 99.73 per cent and 99.9997 per cent. For example, for every million arti­cles of mail, the difference was between 66,738 lost items and 3.4 lost items.

Six Sigma is a data-driven structured problem-solving methodology for solving chronic issues facing a business. It is a breakthrough management process that is used to improve a company’s performance by variation reduction. 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 improvement.

The Six Sigma methodology essentially has two elements, which comprise the voice of the customer and the 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 methodologies is that it can be used to solve key pain areas in business.

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.

A gauge of quality and efficiency, Six Sigma is also a measure of excellence. Embarking on a Six Sigma programme means delivering top-quality service and products while virtually eliminating all internal inefficiencies. A true Six Sigma organization produces not only excel­lent products but also maintains highly efficient production and administrative systems that work effectively with the company’s other service processes. However, not every organiza­tion takes this holistic approach. A manufacturer, for instance, may concentrate instead on implementing Six Sigma for outgoing product quality—through 100 per cent final inspec­tion, for example—thereby assuring that quality level for its customers. However, produc­tion processes still may run at low yields with high scrap ratios and defects.

That is the typical scenario. A better strategy optimizes the production process, bringing it to Six Sigma (i.e. plus or minus six standard deviations within specifications) and assuring high yields with little or no scrap or defects. Any product made by such a process also will fall within the specification limits.

Thus, implementing a Six Sigma programme in manufacturing entails much more than delivering a defect-free product after a final test or inspection. It also entails concurrently maintaining in-process yields around 99.9999998 per cent, defective rates below 0.002 parts per million and virtually eradicating defects, rework and scrap.

Other Six Sigma characteristics include operating processes under statistical control, controlling input process variables rather than the usual output product variables, maxi­mizing equipment uptime and optimizing cycle time.

In administrative processes, Six Sigma may mean not only the obvious reduction of cycle time during production but, more importantly, optimizing response time to inquiries, max­imizing the speed and accuracy with which inventory and materials are supplied and fool proofing such support processes from errors, inaccuracies and inefficiency.

Implementing Six Sigma requires more than simply explaining what Six Sigma means and expecting everyone to begin doing it immediately. Such an approach leaves numer­ous questions unanswered, directions undefined and everybody—particularly those
inexperienced with the concept—scrambling to invent their own version of the pro­gramme. The inevitable free-for-all that ensues yields few successes, thereby lowering the programme’s acceptance rate and endangering its very existence. Box 7.2 discusses the Six Sigma Excellence Award received by ICICI Prudential for its quality initiatives.

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

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