SIX SIGMA INTRODUCTION Six sigma is a highly disciplined process that helps us focus developing and delivering near

perfect products and services. The question arises, what is sigma? Sigma is a Greek letter that measures the capability of the process to perform defect free work. The central idea behind six sigma is that you can measure how many defects you have in a process. You can systematically figure out how to eliminate them and get as close to zero defects as possible. A six sigma defect is defined as anything outside the customer specifications. Six sigma is a business concept that answers customer s demand for high quality and defect free business process. Customer satisfaction and its improvement should be the highest priorities of any business. In other words, six sigma is about abandoning the uncertainty of goals and forecasts. Simply defined, six sigma approach identifies and eliminates defects with a structured, data-driven, problem solving method using rigorous data gathering and statistical analysis. Traditional methods depend on measuring outputs and establishing control plans to shield customers from organizational defects. A six sigma program demands that problems be addressed at the root level, eliminating the need for unnecessary inspection and rework processes. KEY CONCEPTS OF SIX SIGMA Six sigma revolves around a few key concepts: Critical to quality Defect Process Capability Variation Stable Operations Design for Six Sigma : : : : : : Attributes most to the customer Failing to deliver what the customer wants What your process can deliver What the customer sees and feels Predictable processes to improve what the customer sees and feels Designing to meet customer needs and process capability

Six sigma A vision of quality which equates with only 3.4 defects per million opportunities for each product or service transaction. Strives for perfection. SIX SIGMA COSTS AND SAVINGS 1. In the world of Six sigma quality, the saying also holds true: it takes money to save money using the six sigma quality methodology. You can t expect to significantly reduce costs and increase sales during six sigma without investing in training, organizational infrastructure and culture evolution. 2. Sure you can reduce costs and increase sales in a localized area of business using the six sigma quality methodology. But is it going to last when a manager is promoted to a different area or leaves the company? Probably not. If you want to produce a culture shift within your

organization, a shift that causes every employee to think about how their actions impact the customer and to communicate within the business using a consistent language, its going to require a resource commitment. It takes money to save money. Breakthrough Six sigma uses the proven problem-solving technique of Define-Measure-AnalyzeImprove-Control (DMAIC) to deliver quantifiable performance improvement: D M A I C Define customer needs and improvement goals Measure variables of the process Analyze data to establish inputs and output Improve system elements to achieve performance goals Control the key variables to sustain the gains

GLOBAL PERSPECTIVE OF WHAT MAKES SIX SIGMA 1. 2. 3. 4. 5. 6. 7. 8. A new type of top level support Problem solving and team leading super stars Training like never before New metrics Much better use of teams A new level of process comparison A new corporate attitude/culture A closer look at old metrics

SIX SIGMA IN MANUFACTURING The driving force for the new standard that Six sigma quality has come from within global manufacturing, where the scale and type of production implies that 99 percent product quality is no longer good enough. Back in the 1920s, it is likely that production processes had considerably more tolerance to error, and the cost of a defect would be small. Large scale mass production was limited principally to motor car manufacture, where ford and other companies were applying economies of scale to the production line. The way cars were put together implied that if the glass for a windscreen did not quite fit, then small adjustment might be made on the spot, or the glass would be scrapped. Either way, the customer paid. Even as late as the early 1980s, such vehicles as the Land Rover showed how much give and take had been built into the original design, which in part dated back to before World War II. It had been shown many times that an early Land Rover could be maintained in the middle of a desert with only the most rudimentary of tools and skills, but the overall performance of such machines was poor. The engine piston rings allowed copious amounts of sump oil to leak into the upper cylinder, but the result was ease of production and maintenance- it had worked for almost fifty years.

The UK and USA have a long tradition of innovation and design, but necessity is the mother of invention and without the necessity, it is far too easy not to invent and to remain with the status quo. Japanese industry, on the other hand, had nothing to lose, and had no difficulty in obtaining competitors cars, taking them apart piece by piece, and then improving on everything it found. There was a time when many Japanese competitors knew more about a car than the original manufacturers did. The necessity for the Japanese industry was to break into foreign markets, in which they were never leaders, had no competitive edge and little experience. How could this possibly be achieved? The answer is simple: be much cheaper than anyone else. Cost is a strong determining factor, but it is not everything, and if lowering cost means lowering quality, as it usually had in the past, then Japanese manufacturers soon gained a reputation of low cost and low quality products. The aim therefore had to be producing something of equal or better worth, at a lower cost, and this meant eliminating waste and every unnecessary expense. By distilling the very essence of what customers wanted, and then redesigning both processes and products to deliver zero waste, the Japanese destroyed forever the far too comfortable relationship between product cost and quality. In manufacturing today, it is no longer possible to pass the expense involved in generating good quality back to the customer, since someone else in the world will soon find a way of delivering similar quality without the associated costs. Historically, improved quality meant greater quality assurances, where additional expenditure was involved with the testing and rejecting products after manufacture. The quality concept today is the better quality actually saves money. None of this is particularly new, but manufacturing has been far too long obsessed with product quality and not customer quality. Only by looking beyond product specifications and quality assurance can manufacturing see that excellent quality comes with total customer satisfaction, and it is only by employing several quality methodologies to help improve product quality and reduce costs, but Six sigma goes beyond this and brings a new emphasis to three essential areas: 1. Customer requirements 2. Process improvement for defect reduction 3. Total Quality Management involving all employees The cost of quality is a real limiting factor in what can be practically achieved in terms of delivered excellence to the customer. The practical steps involved in guaranteeing product or service quality do inevitably require an associated cost and overhead, which has traditionally been balanced against the reduction in real cost associated with the failure and rework from poor quality. SIX SIGMA IN SERVICE INDUSTRIES

The greatest challenge for Six sigma in practice is to be found in non manufacturing environments. If the methodology relies so heavily upon statistics, how can it be applied to an area where, traditionally such measurement and analysis have often never set foot? The reality is that any task is in fact, a process, and exhibits variation similar to the normal distribution, and it can be measured and improved. The difficulty lies in bridging the gap between subjective issues such as what actually constitutes a defect, and concrete, measurable and actionable variables. Service industry is even more in need of Six sigma quality initiatives than manufacturing simply because output trends to go directly to customers, whereas in manufacturing, most defects in processes are also more complex and less robust than in manufacturing, and often there is virtually no history of design and control of anything except financial matters. The reality is quite blunt. Consider a supermarket checkout, where a customer approaches with 100 items in the Christmas shopping basket. For this customer, success in terms of the checkout process demands that it is fast and accurate. For such a process, manufacturing would have tolerances, scrap and rework procedures, and monitoring control. To give supermarket their due, checkout process has improved dramatically in the major grocery chains during the 1990s, but there still exist major stores in the UK where it is simply not possible to price up 100 items without some problem or the other. Failure to scan, retrieve a price lookup or enter a price accurately will immediately demonstrate that the process has no tolerance for failure: it stops, and rework is very expensive. As far as the customer is concerned, who is very much a part of the process, one defect actually means that the entire process is defective and a failure. No one walks away from supermarket saying, That was 98 percent successful , rather, they just can t get those cash registers to work . Various levels of attainment have been associated with companies which increase quality through better inspection, quality assurance, better design and operation of processes, and the ultimate goal of zero defects. Such levels can be tied loosely to Six sigma process metrics of three, four, five and six sigma, and the various stages in implementing Six sigma quality. The improvement point to note is that only by removing error, failure and rework rather than increasing inspection and quality assurance can the cost equilibrium point be shifted towards a better level of performance. It is this ever growing intolerance among human beings for experiencing failure that drives service industries into repeated quality initiatives. Every year, a new flavor of management consultancy suggests a variation on a theme of staff training, reward encouragement and the likes. No quality initiatives in manufacturing would last for two minutes if it was suggested that talk or exhortation would make better cars. Measurement, analysis, consideration, improvement, and then verification of the improvement are fundamental to any quality initiative today, and service industry cannot be different. Six sigma has the tools and the power to cut ice where hot air has contributed little in the past.

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