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Six Sigma - Essay Example

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Six Sigma has emerged as a method of identifying, classifying and solving problems that affect the overall productivity of a business. Large industrial names such as GE and Motorola have proved the efficacy of utilising Six Sigma over and over again. …
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Download file to see previous pages For example GE announced in 1998 that it had managed to save some $350 million as a result of Six Sigma initiatives. Subsequently this figure eventually reached more than $1 billion. (Dusharme, 2001) However, not all companies utilising Six Sigma have ended up saving money or making substantial gains. Fortune 500 reported that ninety one percent of fifty eight large companies that established Six Sigma regimes have been trailing the S&P 500 index ever since. (Betsy, 2006) One major reason for this phenomenon is that Six Sigma is less understood and more employed in businesses often in ways that make little or no sense. In essence, Six Sigma is a statistical technique and the lack of data, its analysis, proper presentation and follow up can all lead up to its demise. Amongst other things attempted through Six Sigma, RCA (Root Cause Analysis) is a major application. The contention behind RCA is to locate and subsequently rectify problems in a business operation. However, the application of Six Sigma to RCA in inappropriate methods often causes less than desirable outcomes. Often Six Sigma is used to “create” evidence in order to justify some kind of process or business hypothesis. This text attempts to delineate clearly defined methods to tackle Six Sigma along with RCA within a lean approach. The external customer’s perspective as well as the VOP (Voice of Process) perspective will be utilised to explain the application of lean Six Sigma to RCA. Differentiating the VoC and the VoP Approaches Any business process will always possess an external customer who receives the finished good. If the business process spectrum consists of multiple processing steps then the external customer might be a secondary processing department. On the other hand if the business is small enough or based on a single process, then the external customer will be someone who gets the final product. However, the size of an organisation is critical to the implementation of Six Sigma. Hence this text will take implementation within a large business context as small businesses can seldom afford Six Sigma initiatives. Therefore the external customer in question will be an allied business processing unit or function. Using the customer’s input as the guideline within Six Sigma is better labelled as VoC (Voice of Customer). The customer specifies their requirements using surveys, discussions, focus groups, comment cards etc. (Curious Cat, 2009) In comparison, the VoP (Voice of Process) depends on the process capability. The contention is to measure the best performance that a system could deliver. This is often described statistically using a control chart. Historical performance statistics may also be used to analyse the situation better. The most differentiated aspect of the VoP approach is its reliance on hard statistical data to take decisions. However, there is a great chance of leaving large gaps in collecting data through misreporting as well as omission. (Mann, 2006) VoP is also reliable in discerning the stability or instability of any given business process or operation. Statistical quality records are utilised to create control chart models and this will be discussed below. Lean Methodology for VoP The methodology for a lean Six Sigma RCA will be analysed by following it step wise. Strengths, weaknesses and vulnerabilities will be discussed in an attempt to introduce the sources of error in such systems. Data Collection and Processing Data collection is the single most important part of any RCA treatment. If data is flawed by any given definition then there is no chance that the entire analysis and its subsequent follow up will yield any favourable results at ...Download file to see next pagesRead More
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