There is just an increasing amount of pressure on organizations to meet stringent quality and delivery specifications at lower prices. Generally, definitions of ‘quality’ have focused on conformance to standards, as organizations certain specified limits. Such definitions of quality assumed that if the organizations produced quality products and services, their performance standard was correct, irrespective of how these standards are met.
In other words, performance standards may have been achieved after considerable rework of a specific part or service. Moreover, these definitions ignored the fact that products or services rarely consist of a single element. Even a product or service, made up of as few as five different elements that individually conform. Six Sigma is a rigorous methodology that uses data and statistical techniques to measure and improve an organizations operational performance by identifying and eliminating defects and thereby eliminating the cost of defects.
What is six sigma?
Six Sigma is a statistical concept that measures a process in are delivering only 3.4 defects per Million Opportunities (DPMO) or in simple words they are working nearly perfectly. Sigma (the Greek letter ) is a term in statistics that measures in the outputs of a process, and helps us to understand represents 6,91,462.5 defects per ten lakh or one million opportunities (that means defect percentage is 69.146), which really is a very poor performance. Three sigma levels represent 66807.2 defects (the defect percentage is 6.681). Four sigma levels indicate 6,210 defects per million (the defect percentage is 0.621). Similarly five sigma levels indicate 233 defects per million (the defect percentage is 0.023). Six sigma levels indicate 3.4 defects per million (the defect percentage is 0.000034), which is almost negligible.
Most of the organisations are operating at three to four sigma levels. Three sigma means 66,807 defects in a million that are 933,193 items/deliveries are perfect in a million (that is 93.319% perfection or 93.319 percent of its customers is satisfied). But for customers, three sigma represent highly unsatisfactory level of performance. The organisation may also lose the unsatisfied clients. So more and more organisations are adopting six sigma in order to enhance customer satisfaction and to avoid expenses on rework. They follow the “Get it right the first time “ approach. Simply stated. Six Sigma is a problem solving technology that uses human assets, data, measurement and statistics to identify increasing customer satisfaction, profit and shareholder value. vital few factors are the factors that directly explain the cause and effect relationship of the process output process.
Typically, data show that there are six or fewer factors for any process that most affect the quality of outputs in any process, even if there are hundreds of steps in which a defect could occur. When these factors are isolated, one can easily identify the steps to be taken to correct these factors to improve the quality of the output. Initially, the Six Sigma approach was started in the manufacturing sector, it later picked up in service related sectors too. Motorola, the pioneer in six sigma concept, claims to have saved $16 billion through Six Sigma since the implementation of Six Sigma concepts in their company in 1986. Mr. Jack Welch, CEO, GE are seen as an icon in implementation of the concept. Now six sigma has entered the banking industry too, through the new age private sector banks. after ICICI Bank, HDFC Bank is the second to implement the concept.
Improvement directly to financial results. So the annual ROI of the above employee is 25%. By calculating employee ROI, the organisation can focus on making the most of them as assets invested in the business.
By changing the way of looking at the processes, by understanding the vital few factors that cause waste, error and rework, one can improve the ability of the processes to deliver higher quality of service to the consumers at a lower cost. Once the vital few factors are determined, one can make improvements that deliver dramatic results. Six Sigma is frequently perceived as a statistics and measurement programme. This is not so. Six Sigma approaches uses statistics sole are on tool selection and the use and interpretation of data for decision making. Six Sigma practitioners also use computers and statistical software to build on knowledge and the speed. The ultimate goal is to create Six Sigma companies – the companies whose systems and processes are levels.
To achieve the desired level of quality requires not just statistics, but changes in the culture of the organisation. The Six Sigma approach is rigorous, requiring a deep commitment from the top management that flows down the entire organisation. It requires a tolerance for endlessly questioning the validity of sacred company beliefs and traditional ways ‘the things are done around’. It also requires a sense of urgency – an understanding that, in order to solve the problems that undermine profitability and customer satisfaction, one need to involve key people in actively implementing the Six Sigma Process.
Champions and Black belts:
Six Sigma to bring about this cultural change is key players known change. These two titles play a pivotal role in the success of six sigma managements. A Champion is a senior level manager who promotes six sigma methodologies throughout the organisation, and especially in the functional groups. He champions and understands the discipline and tools of Six Sigma, selects and mentor, removes barriers, and dedicates resources in the projects and measuring the savings realized.
Black Belt solves product and process defects, project by project with analysis and works with others to put improvements in place. Working strictly on defining, measuring, analyzing, improving and controlling (DMAIC) processes in order to attain the desired outcomes. Black belts do nothing else. Their only responsibility is tantamount to root out variations and identify the vital few factors. They devote 100% of their energies to the chosen project, supported by project team members.
Green belts assist black belts in their purposeful specific area. They apply Six Sigma tools to review and job. In this approach, knowledge is being transferred and used even in narrow applications. They also help black belts accomplish more, in less time. They may help in the collection and analysis of data, run experiments or conduct other important tasks in a project. They are team members, with sufficient understanding from the ground up. Working in a complementary fashion with the charter of executive leadership, Champions, black belts and green belts are essential worker bees driving bottom line results.
What Six Sigma is not?
- Six Sigma is not another quality programme: Business exists for one purpose solving initiative should do the same. Six sigma uses its value by connecting outcomes to the bottom line. Quality programs aim at devising particular standards and ensure that the product or service offered conforms to the set bottom line, while every six sigma projects aims at improving the profits with improved customer service.
- Six Sigma is not a theory: It’s a practice of discovering the vital analyses, improves and controls them to tie quality improvement to the bottom line.
- Six Sigma is not a training programme: of course black belts and champions are trained in the. Nevertheless, six sigma is a business strategy that fosters a cultural shift at all levels. Corporate departments, functional groups, and at all levels of management of Six Sigma change the outlook and practices of everyone in the organisation.
Some myths about Six Sigma:
There are many myths and misunderstandings about Six Sigma like:
Ø It works only in manufacturing companies
Ø Does not include customer requirements – concentrates on improvement of bottom line only It is a prepackaged TQM
Ø It uses difficult to understand statistics
Ø It is an accounting game without real savings
Ø It is just another training
Ø It is a ‘magic pill’ with little efforts called for.
One must remember that Six Sigma actively links people, processes and outcomes in a scrupulous, adaptable way to get the results the organisation is looking for (i.e. improvement in bottom line with improved customer service). One can see tangible results when six sigma is applied, no matter whatever be the industry, business, service or product.