The Effectiveness of Six Sigma - Essay Example

Introduction The main objective of implementing Six Sigma is to improve the effectiveness and efficiency in an organization. In the world of Six Sigma quality, the saying also holds true: it takes money to save money using the Six Sigma quality methodology. (Waxer, Charles, 2000). Six Sigma is measure of customer satisfaction that is mere perfection. Six Sigma is initially developed by Motorola in mid 1980s for various systematic improvements and eliminating certain defects. It is a registered trade mark of Motorola which is being adopting by number of companies nowadays, that is Bank of America, General Electrics. Etc. This concept is also focusing on TRIZ, a problem solving methodology widely adopted in Russia. In this concept, brain storming (random Idea Generation), problem formulation, systematic analysis etc are used. The main aim of Six Sigma is customer satisfaction and product improvement, then only profitability and reduction in cost will sustain. It is providing the product which is ‘defect free process and products’. Six Sigma process is defined as the series of steps and activities that take inputs provided by the suppliers and value provide output for their customers. The Management tries to identify the most important 20 to 30 processes in their business. After identifying these process, the management tries to measure the sigma performance of these processes. The management then tries to identify the lowest performing processes that is having a direct impact on company’s performance. A project team is being formed for improving the poor performance processes. They will retained for a period of 4 to six months wherein they will be having a thorough study on these poor performance processes and taking corrective steps for its improvement to achieve effectiveness and efficiency. The objectives of six sigma To deliver high performance, reliability and value to the ultimate customer. It has two key methodology – DMAIC – IT is used to improve an existing business plan. DMADV – It is used to create new product design. Benefits It achieve significant benefits that contribute to competitive advantage and to change the organizational culture. The benefits for the organization are 1. Bottom line cost savings 2. Improved quality of product or services 3. Reduction in process cycle times 4. Development of staff skills 5. Common language Benefits for individuals 1. Improved knowledge and skills 2. Ability to use standardized products “Unlike other quality initiatives, Six Sigma has a strategic component aimed at not only developing managements commitment to Six Sigma, but their active involvement.” (George Eckes. Wiley, 2003. p.16). Six Sigma as a management strategy is a method for obtaining the objectives of the business. The five major Strategic business objectives are 1. Revenue 2. Profit Margin 3. Customer Satisfaction 4. Growth 5. Employee Satisfaction. In order to implement a Six Sigma strategy the responsibility of management is to identify the important process of the organization and measure their effectiveness and efficiency and to make further improvement for the worst performing process. Steps in Six Sigma Six Sigma tactics helps to accomplish greater effectiveness and efficiency. Six Sigma tactics is like scientific method that is identifying certain problem and measuring the problem, determining the solution. The Five steps involved in Six Sigma are 1. Define 2. Measure 3. Analyze 4. Improve 5. Control Define: In this step formation of project team is done and the needs and requirements of the customers are verified. Also the current situations are studied in detail. In this stage we study in three heads a) Charter b) Customer need and requirement c) The High level process map. Charter is a collection of documents that provide purpose and motivation for a Six Sigma team to do their work. It includes a) the business case – what exactly has to be done and why b) the problem statement – it takes the actual problem and describes the gap between the current and desired state. c) project scope – the area which the team has to focus on d) Goals and objectives – what exactly the team should do for improvement e) milestones – states the achievement the team should strive f) Roles and responsibilities of the project team – the role each member in the team should play and their responsibilities. The customers are who gets the benefits of the improvement targeted by the process. In all process of the organization, ensure to produce the real customer need and preferences. Process is defined as the activities that take inputs process it and produce output. It is actually picturizing the process at a high level. Process Map includes the name of the process, the start and stop point of the process, the output of the process, the customer of the process, the supplier of the process and input of the process. Measure – This step include the creation and implementation of the data collection plan. There should be an improvement in the output measure which are related to the customer and also for the effectiveness of the supplier. The entire measure tactics emphasis on tow areas 1. Creation of the data collection plan. 2. Implementation of the collection plan The creation of the data collection plan includes identifying a) what to measure, that is the requirements, b) the type of measure –includes input measure, process measure and output measure c) the type of data – discrete data or Continuous data d) Operational definition – description of the facts e) target specification – is the customers ideal performance of the product and service f) Data collection form – two forms are there, one to collect discrete data and another for collection of continuous data g) Sampling – It includes taking proportion of the total population. Analyze: Analyze is done to find out exactly what to do for improve process. It is focused on 3 areas. 1. Data Analysis 2. Process Analysis 3. Root Cause Analysis Data Analysis – A proper analysis is being done on the data collected particularly for improving the effectiveness to meet customer requirements. The type of data analysis is depended upon the type of data collected, i.e. Discrete or continuous. The discrete data analysis is done by the help of statistical tools like PARETO Chart and PIE Chart. The Continuous data analysis is done through by the help of frequency distribution, check sheets and the the Run Chart. The continuous data analysis is able to identify six major factors affecting the performance of the process. They are a) Machine in the Process b) Material in the process c) Method used in the process d) the environmental measurement e) People. Process Analysis – It is creating a detailed process map and trying to identify where exactly the greatest inefficiency exist. Process analysis is done with the help of sub process mapping. Through this analysis the project team find non value added steps which has to be controlled. In process analysis micro problems statements are formulated for a detailed analysis. Root-Cause Analysis – This analysis helps in further improvement in the process. There are 3 steps adopted for Root-Cause Analysis. They are a) The Open Step – In this step the project team will have brainstorm session and find all the applicable explanation for the current sigma performance. b) The Narrow Step – It is the list of applicable explanation for the current sigma performance c) The Close Step – The project team rectify the narrowed list of explanation. Improve: The improve stage mainly focus on quick easy and satisfying work. The improve stage can be studied in two heads. 1. Generating Solution 2. Selecting Solution The validated root causes are identified and proposed solution chart is being prepared by the project team. The various areas that need improvement are being identified and find a proper solution for overcoming the root cause is being generated. Control: In this step the technical method of control is determined and response plan is being created. The standardization of the new process is thoroughly checked up through the method of technical control. There are certain statistical control charts are being used in the process of control. The employees will be able to know what exactly they have to do. A new process map is created as a result of the improvements and the most important measure for the new process are included. Advantages of Six Sigma in Manufacturing Industries. Six Sigma uses many of the same techniques as other quality improvement techniques. In these techniques mostly a project team is formed and they use various quality tools and techniques for improvement. The management will become more fact based. People will become more familier with the concept of process. There is a complete improvement and participation of teams in the organization. The work in the organization will become proactive rather than reactive. It is like re-engineering process. The business will grow and expand. There is a wide contribution of Six Sigma in the economic performance of a Company. The main benefits of using Six Sigma analysis in an organization is to formulate their goals and integrate their operations and execute it. Six Sigma helps an organization to achieve effective performance and retain their existing business strategies and vision. Customers are treated as Kings. Customer satisfaction is the key area in the Marketing where companies has to focus on. Six Sigma analysis begins with the measurement of Customer satisfaction related with their product. Once the analysis is being done the company will be able to redesign its operation in changing the strategy and providing the required quality product to the customer. “The Eight dimensions of product quality identified by Garvin include 1) Performance 2) Reliability 3) Durability 4) Serviceability 5) Aesthetics 6) Features 7) Perceived Quality 8) Conformance to the Standard.” (S. C. Chen, K. S. Chen, T. C. Hsia). Through six sigma the company is able to know the current and changing requirement of the customers and design product accordingly. By this analysis an organization will be able to create good customer base and enhance market share. Strategic implementation of Six Sigma analysis helps an organization to accelerate innovative production methods and new innovative products to compete in Global market situations. This inturn leads to a revenue growth and systematic sustainable changes and will be able to accustom to the situations prevailing in the market. Six Sigma can be applied in any Industry. First the company has to measure the performance of the Organization for meeting their customer requirements. It is done by the creating a questionnaire and analyse the performance of the product quality. From this we get a related product specifications. Further based on these, manufacturing process improvement takes place. They stress on product quality as per the requirement of the customer, thus a better customer satisfaction and business profit can be achieved through effective product design, manufacturing and service quality. Once the customer requirement is known we can design manufacturing sector in order to produce a product which will give customer satisfaction. Thus to conclude there should be a proper design in the human-machine system which is internal to the organization. This design is based on the Customer satisfaction requirement. Conclusion A growing number of companies are beginning to realize the full implications of Six Sigma--especially as an engine to accelerate corporate strategy and organizational transformation. (Dick Smith, Jerry Blakeslee, T & D. Sep. 2002. Vol 56, Issue 9). Six Sigma can be applied in different industries and in different functions. The six sigma helps to improve in various areas like 1. Manufacturing 2) Services 3) Engineering and R & D 4) Sales and marketing 5) Health Care 6) Corporate Functions. Motorola introduced Six Sigma in Manufacturing. “Six Sigma is an ideal tool kit for high-volume manufacturing processes, where process yield is critical, or where defects can have fatal consequences.” (Thomas Bertels, John Wiley & Sons, 2003, P.29). It is used in various Industries in manufacturing like chemicals, refining and pharmaceuticals. The implementation of Six Sigma analysis helps the Industry to increase their manufacturing yields, reduce assembly cycle time, minimizing change over time and reducing variations in machine speed. Six Sigma can be used in Service Industry. It helps to enhance proper and timely service. Industries like Hotel and Financial service apply Six Sigma techniques for effective functioning of their services. Six Sigma helps the service Industry for reducing their operations timings like for opening an account, eliminating statement errors, minimizing wait time for call centers, reducing cycle time for checking and reducing invoice errors. The advantage of Six Sigma application in engineering and Research & Development involves creating new and existing product and services. The various aspect includes reducing time for engineering drawing change, increasing the number of parts used in Multiple product and reducing the cycle time for approvals and changes. Six Sigma is used in the areas of sales and marketing for effective promotion and customer satisfaction. The benefits of implementing Six Sigma analysis in the area of sales and marketing is to improve sales force activities, provide timely promotion for customers and improve competency of the brand. Six Sigma is also used in Health Care it finds a situation for improvement in performance of health care delivery system such as hospitals, medical centers etc. By implementing Six Sigma it is able to provide better care to more people at a lower cost. Works Cited Waxer, Charles. Six Sigma Costs and savings. The Financial benefits of Implementing Six Sigma at Your Company can be Significant. iSixSigma. 2000. 19 Apr. 2007 . Eckes, George. Six Sigma for everyone. Wiley. 2003. p.16. S.C.Chen, K.S.Chen, T.C.Hsia. Promoting Customer Satisfaction by applying Six Sigma: An example from the Automobile Industry.19 Apr. 2007. . Smith, Dick., Blakeslee, Jerry, T & D. The New Strategic Six Sigma. Sep. 2002. Vol 56, Issue 9, Bertels, Thomas., Wiley, John & Sons. Rath and Strong’s Six Sigma Leadership Handbook. 2003. P.29 Read More