There is nothing which compares to the effectiveness of Six Sigma when it comes to improving a company/organization’s operational efficiency, raising its productivity, and lowering its costs. Six Sigma improves design processes, gets products to market faster with fewer defects, and builds customer loyalty.
Perhaps the biggest but most unheralded benefit of Six Sigma is its capacity to develop a cadre of great leaders.
We need to understand the fact that Six Sigma is one of the great management innovation happened during the last 30 years and an extremely powerful way to boost a company’s competitiveness. Yet, Six Sigma causes a lot of anxiety and confusion. If it is done right, it is energizing and incredibly rewarding. It can even be a fun, because a lot of creativity is also involved.
You just have to understand—what Six Sigma really is. Six Sigma is about a lot of statistics, but—it is very much more. We need to know what Six Sigma is all about and why it matters so much.
“Six Sigma is a quality program that, when all is said and done, improves your customer’s experience, lowers your costs, and builds better leaders”—Jack Welch
Six Sigma establishes that by reducing waste and inefficiency and by developing a company’s products and internal processes so that customers get what they want, when they want it, and when you promised it. We all know that making your customers to stick with your company, you need to meet or exceed their expectations, which is exactly what Six Sigma helps you do.
One thing that is sure to kill stickiness is inconsistency in service or products.
Consider the following hypothetical example. Suppose you are a manufacturer of spare-parts and you promise your customer of 10 days delivery.
You start with making a record of say, three deliveries and you find that your customers receive their parts on day 5, 10, and 15. Your average delivery time is 10 days.
Then you record the next 3 deliveries to your customers and your find that they receive their parts on day 2, 7, and 12. This time your average delivery time is 7 days. You would state that there is a big improvement in the customer experience. This is not the reality—you might have done some internal process or cost improvement. What would your customers experience?
Nothing, but inconsistency! If you use Six Sigma, your customers would receive all three deliveries on day 10, or in the worst case, on day 9, and day 11.
In other words, Six Sigma is not about averages. It is about ‘variation’ and removing it from your customer’s interface with you.
To remove variation, Six Sigma requires companies to unpick their entire supply and distribution chains and the design of their products. The objective is to wash out anything that might cause waste, inefficiency, or a customer to get annoyed with your unpredictability.
So, that’s Six Sigma—the elimination of unpleasant surprises and broken promises.
From 30,000-feets, Six Sigma has two primary applications. First, it can be used to remove the variation in routine, relatively simple, repetitive tasks—activities that happen over and over again. And second, it can be used to make sure large, complex projects go right the very first time.
Examples of the first kind of application are a large number of Call Centers in India or other parts of the world. They use Six Sigma to make sure the phone is answered after the same number of rings for each incoming inquiry. Credit Card processing facilities use it to make sure people receive accurate bills on the same day every month.
The second application of Six Sigma is the territory of engineers and scientists involved in multipart endeavors that sometimes take years to complete. If you are spending hundreds of millions of dollars on a new jet-engine or a gas turbine, you cannot afford to figure out process or design inconsistencies late in the game. Six Sigma is incredibly effective in discovering them on the drawing board, i.e., the computer screen.
Obviously, the amount of Six Sigma training and education required depends upon where and how you intend to apply it.
Yet, Remember: Six Sigma is not for every corner of a company. Jamming it into creative processes, such as Ad-copy writing, new marketing initiatives, or one-off transactions like investment banking, make little sense with Six Sigma. When deploying Six Sigma, it’s important not to stifle creativity for the sake of operational efficiencies. For example, successful Research and development (R&D) involves a good deal of original creative thinking. Research may actually suffer from too much rigor and focus on error prevention. Cutting-edge research is necessarily trial and error and requires a high tolerance for failure. The chaos of exploring new ideas is not something to be managed out of the system; it is expected and encouraged. To the extent that it involves process design and product testing, including the concept of manufacturability, Six Sigma will certainly make a contribution to the development part of R&D.
The objective is to selectively apply Six Sigma to those areas where it provides benefit.
Six Sigma is meant for and has its most meaningful impact on repetitive internal processes and complex new product designs.
You better not look for statisticians or experts for marching your company on the path of Six Sigma. They might be great, but for relatively straight-forward projects, you just need everyone in your company to understand Six Sigma. You don’t see Six Sigma as the purview of experts, you see Six Sigma in the blood of your company.
(The article is originally published at my blog at wordpress.com)