To put it in layman language, the Six Sigma proposition is all about improving capabilities of business process to such an extent that there in no margin for poor quality. Customers value unswerving, consistent, predictable and world-class quality from a product or service. More often than not however, businesses measure their performance on averages and average-based measures of the recent past. With a Six Sigma approach the organization ensures that the customers are not presented with a variant experience of the service or product every time. The idea is to reduce variation and improve business processes to such an extent that customers are delighted with the consistency of the product or service quality.
The Six Sigma approach recognizes and eliminates defects through a structured, data driven, problem solving method by using painstakingly collected data which is further subjected to statistical analysis. Quantitatively, a Six Sigma approach means fewer than 3.4 defects per million opportunities, where an opportunity is a chance for non-conformance. In most businesses today, the cost of poor quality represents an astounding 20% to 30% of total revenues. With a Six Sigma approach, the company attempts to reduce these costs, while focusing on achieving world class quality levels.
The main point of difference between a Six Sigma program and other performance improvement programs is that while the latter tries to measure output variables and puts in place controls (like an inspection program) to protect customers from organizational defects, the former tackles the problem at the root level thus eliminating the need for any inspection and reworking.
The Six Sigma approach begins with asking customers what is critical to them. After this a rigorous analysis is done for each and every process in the business to asses whether the business is able to deliver irtual perfection and that which the customer deems crucial each and every time. Data is used to reveal the core causes of the defects and then to eliminate or improve the hindrances from the process. Financial and statistical analysis are the primary tools to implement a Six Sigma process. Not only will this lead to improved customer satisfaction, but also increase profit margins, reduce cycle times and cut costs.
The goal of a Six Sigma program is to minimize variation amongst all the critical processes. These processes don necessarily have to be product floor or manufacturing processes. The can related to billing and invoicing, new product development, processing customer orders, managing human resources, recruitment, budgeting or any of the other business processes by which an organization manages its overall running and operations.
The implementation of Six Sigma is not a trifling matter. It requires commitment monetary commitments and wholehearted involvement of employees. A proper foundation needs to be set in place so that training funds are utilized effectively. The business has to adopt a new working culture in which nearly good enough is just not enough. It must be perfect. Organizations that have adopted this approach bear witness that Six Sigma is definitely worth the effort!
Deepshikha Khosla writes on a variety of topics include Six Sigma. See http://www.sixsigmahome.us