Six Sigma Process to Service Quality Improvement - Research Paper Example

Six Sigma, the quality improvement program, means differently to different people. At Motorola, it is identified as a quality improvement program with the aim of reducing the number of defects (Henderson & Evans, 2000). Other successful users consider Six Sigma as the “modern form of quality management” (Pfeifer, Reissiger & Canales, 2004). It has also been defined as ‘‘high-performance, data-driven approach to analyzing the root causes of business problems and solving them’’ (Blakeslee, 1999, p. 78 cited in Schroeder, Linderman, Liedtke & Choo, 2008). Six Sigma has also been described as a “business process that allows companies to drastically improve their bottom line by designing and monitoring everyday business activities in ways that minimize waste and resources while increasing customer satisfaction” (Barney, 2001 cited in Mehrabi, 2012). The definitions all point out to improvement in quality and business processes. Six Sigma has enhanced organizational performance and many have achieved success but failures too have been found with the implementation of Six Sigma. However, Six Sigma has its roots in quality management with certain changes, as has been argued by several researchers. In the service industry production and consumption takes place simultaneously and hence chances of service failure are high, leading to complaints and discontent. Maintaining high quality and customer satisfaction in Fitness Clubs can help the organization from losing customers. The Six Sigma process was applied by a Fitness Club in Taiwan. All the five phases of Six Sigma have to be implemented – (DMAIC) – Define, Measure, Analyze, Improve and Control. Once the occurrence of service failure has been defined and the measure criterion determined, it becomes easy to analyze the cause of failure. This then helps identify the responsibilities of each department and correct deficiencies, if any. Cheng (2010) used the Pyzdek’s theory to analyze the cause of service failure. The author finds that the five-step Six Sigma Methodology can effectively minimize service failures thereby ensuring customer satisfaction and sustainable management for enterprise. This can be applicable to all service industries although this study was aimed at improving the service quality on a Fitness Club in Taiwan. The Six Sigma DMAIC cycle was applied by Kumar and McKewan (2011) in examining the expanded role of nurses for delivering improved healthcare during and post-hospitalization of patients. This study was conducted in the United States. Along with the Six Sigma elements, the researchers also included operations management service tools such as service blueprints and poka-yokes. The application of all tools including Six Sigma revealed that greater nurses’ involvement in education and counseling, structured home visits by the nurses, improving communication with the patients would decrease the number of unplanned re-admissions. If the nurses are provided training they could take on some of the work currently executed by the doctors, thereby reducing the workload of the doctors. Data from the nurses was gathered through questionnaire. However, the conclusion that this would improve services, is an expectation. There is no evidence from the study that process improvement has actually resulted in the expected benefits. Six Sigma has traditionally been used for cost reduction and efficiency .However, Parast (2011) finds that application of Six Sigma can be used to increase productivity, profitability, enhance creativity, organizational learning and facilitate innovation. Implementation of Six Sigma requires top management commitment, a disciplined approach and training. Parast evaluated the impact of Six Sigma on innovation and found the causes of failures in Six Sigma application. The author finds that TQM cannot provide firms with sustainable competitive advantage. Even the failure of process programs such as Six Sigma is because of their inability to address radical innovation. Voice of customers has been given importance in this study but it has to stretch beyond the voice of the existing customers. The voice of future customers also has to be addressed. Six Sigma projects also do not address the pattern and evolution of the firm over time. Sig Sigma processes also do not take into account the behavioural and change processes that take place as the firm evolves. Therefore, if Six Sigma is used to enhance technological innovation of the firms, the firms should be in stable environments. In dynamic environments where the rate of technological change is dramatic, Six Sigma cannot yield the expected synergies and benefits. This study was not based on any empirical research but on theories from process management and innovation. Strang and Jung (2009) also evaluated the spread of participatory improvement efforts within a multinational bank focusing on the link between participatory improvement and the firm’s employment practices. They traced the formation of cross-functional process improvement teams within and across business units. The bank’s Six Sigma initiative centered on individual quality training, consumer satisfaction metrics, and off-line process improvement. This was an empirical study which revealed that team activity increased with wage gains and the quality teams could enhance the automation of everyday clerical tasks. Fund transfers could be accelerated and the number of unresolved customer inquiries reduced. This resulted in greater customer satisfaction, reduced organizational errors and simplified work processes. However, the focus was only on improving processes while employee turnover and employee satisfaction was totally neglected. In fact quality improvement also added to downsizing. The authors find that such participatory improvement cannot be stable when employees remain dissatisfied. As the company evolved, there were sharp declines in team. This is precisely what Parast contends when he mentions that firm’s do not take into account the behavioural changes that take place as the firm evolves. The participatory improvement was inconsistent with the employment conditions of the workers. Besides, efficiency did not translate into enhanced profits. The Sig Sigma initiatives failed to produce technical benefits. The bank was trying to innovate the processes but as Parast points out for innovation to be successful the firm should be in stable environment. Strang and Jung also contend that the conditions at the bank did not provide a stable environment for participatory improvement. According to Zu, Fredendall and Douglas (2008) Six Sigma simply puts traditional quality management practices in a new package while Strang and Jung also refer to Six Sigma as a quality management variant. In fact the study by Zu et al. was based on the argument by Schroeder, Linderman, Liedtke and Choo (2008) that the tools and techniques in Six Sigma are similar to prior approaches to quality management. Only the organization structure changes, which helps the organizations to rigorously control process improvement activities. It also enables to explore the problems between organizational members. Schroeder et al find that firms such as 3M’s Dental Division that had already won the Baldridge Award for Quality adopted Six Sigma and their financial performance is bound to be impressive. Adopting the grounded theory approach, Schroeder et al evaluated the Six Sigma implementation in one manufacturing and one service firm. The authors could identify only four differences between Six Sigma and earlier quality management programs such as TQM. The financial focus in Six Sigma is at the project level whereas in TQM it is at the organizational level. Six Sigma requires structured method for process improvement and intensive training which was not necessary earlier for quality improvement teams. It also requires a disciplined approach towards measurement and improvement not evident in previous quality improvement techniques. In addition, Six Sigma requires the use of a significant number of full-time improvement specialists. Apart from these four factors, there are not additional quality tools or principles that have been deployed. It is based on these very principles but just offers a new structure for improvement, which promote control and exploration in improvement efforts. Zu et al (2008) conducted a large-scale survey to test the Six Sigma practices and their relationship with traditional quality improvement practices. Their study, through extensive literature review and through empirical data, confirm that Six Sigma is based on the traditional QM methods but as identified by Schroeder et al (2008), it does require establishing a role structure within the organization’s human resource management system. Both the studies, by Schroeder et al and Zu et al point out that top management directly affects the implementation and hence their acceptance is critical to successful adoption of Six Sigma. In addition, as pointed out by Schroeder et al, Zu et al also support that a structured improvement procedure and focus on metrics is essential. Zu et al further clarify that while Six Sigma is principally based on QM techniques and methods, the Six Sigma practices are distinct and they complement the traditional quality management practices. Schroeder et al point out that even though distinct Six Sigma creates new challenges for practitioners and researchers. Parast also adds that even though Six Sigma has its roots in the quality movement, it has a limited time-frame, and measurable and quantifiable goals. Pfeifer, Reissiger and Canales (2004) also compared the traditional approaches of quality management and found that Six Sigma is the most effective concept because the strategy, organizational structure, procedures, tools and methods are all interrelated. Since firms are at different levels of maturity, the concept has to be adopted based on requirements. Henderson and Evans (2000) reinforce that successful implementation of Six Sigma requires top management support and involvement, organizational infrastructure, training, tools and links to human resources-based actions. Organizations required revolutionary changes in a short time and to achieve this, Six Sigma can be a powerful tool. It helps sales people focus on building customers; it helps them anticipate customer needs, helps in reducing defects inherent in the processes and materials. Henderson and Evans also highlight that it enhances financial performance and profitability but Schroder et al find that process and quality improvement need not necessarily translate into profitability and enhanced financial performance. Pfeifer, Reissiger and Canales (2004) also endorse that the success of Six Sigma is based on the establishment of a special Six Sigma organizational structure. The authors also cite the limitations of Six Sigma stating that the quality of business processes have to be evaluated before the start of a project. Only if they provide a high improvement potential, considerable savings can be expected. In mature enterprises, the processes have already been optimized and hence the focus is on maximizing customer satisfaction through innovation. General Electric (GE) achieved success with Six Sigma implementation as it followed the five phase approach and this enabled them to obtain full-process understanding, including details of how the key process inputs affect the process output. Six Sigma program can be a success because of leadership and direction from the top management. In addition, it requires total commitment from every department and active participation from every member of the team. GE followed Motorola’s experience and put trained people in key positions to lead the Six Sigma effort. The training involved introduction to the theory as well as to the set of tools such as team tools, process tools and statistical tools. Moreover, early communication to employees, measurement systems, and an information technology infrastructure are also critical to the success of the program. GE achieved success by way of reduced workforce and enhanced profits. It also had a significant impact on customer satisfaction and customer perception of the company. Henderson and Evans, however feel that no company has actually achieved Six Sigma performance levels. Thus, while Six Sigma has its roots in quality management, it is a step ahead as it integrates the business processes, the organizational structure and the tools and methods. This requires culture change within the organization and the involvement and commitment of the top management. Moreover, as the organization evolves, behavioural changes occur, which need to be considered when devising the Six Sigma strategy. Firms have been able to derive benefits such as improvements in business process and customer satisfaction through Six Sigma but the necessary training and supporting tools and methods are prerequisites. However, Six Sigma has a limited time-frame. For initiating innovation, the business environment should be stable for Six Sigma to be effective. Some of the researchers also point out that enhanced performance and improvement in the business processes does not necessarily translate into enhanced profits. References Cheng, K. (2010). Application of the Six Sigma Process to Service Quality Improvement in Fitness Clubs: A Managerial Perspective. International Journal of Management, 27 (3), 528-540 Henderson, K.M., & Evans, J.R. (2000). Successful implementation of Six Sigma: benchmarking General Electric Company. Benchmarking: An International Journal, 7(4), 260-281 Kumar, S., & McKewan, G.W. (2011). Six Sigma DMAIC Quality Study: Expanded Nurse Practitioners Role in Health Care During and Posthospitalization Within the United States. Home Health Care Management Practice, 23, 271 Mehrabi, J. (2012). Application of six-sigma in educational quality management. Procedia – Social and Behavioral Sciences, 47, 1358 – 1362 Parast, M.M. (2011). The effect of Six Sigma projects on innovation and firm performance. International Journal of Project Management, 29, 45-55 Pfeifer, T., Reissiger, W., & Canales, C. (2004). Integrating six sigma with quality management systems. The TQM Magazine, 16 (4), 241-249 Schroeder, R.G., Linderman, K., Liedtke, C., & Choo, A.S. (2008). Six Sigma: Definition and underlying theory. Journal of Operations Management, 26, 536–554 Strang, D., & Jung, D. (2009). Participatory Improvement at a Global Bank: The Diffusion of Quality Teams and the Demise of a Six Sigma Initiative. Organization Studies, 30, 31-55 Zu, X., Fredendall, L.D., & Douglas, T.J. (2008). The evolving theory of quality management: The role of Six Sigma. Journal of Operations Management, 26, 630-650 Read More