Whether you’re selling a product or a service, customers are the life blood of your business. Of course they are, everyone knows this. But business managers are so busy with day-to-day operations that they often forget about the one person they should be emphasising on – the customer. We all know that your happy customers may tell one or two people about your company, but your unhappy customers will tell everyone they know! With all of the fires that need to put out every day, it’s easy to forget about your customers.
Six Sigma can change all of that.
What is Six Sigma?
Six Sigma is just a better way to run your business or department. It is a system that focuses on the customer first and foremost. It uses statistical measurements, performance goals and a new system of management to reinvent and reinvigorate your business. It uses real data to help you keep on customers, reduce defects and finally make your company more profitable.
But Six Sigma is not just a defect reduction tool – it is much more than that. Organizations that have embraced the Six Sigma model have completely transformed their management philosophy. Management’s role is no yearner that of putting out fires; it is now a proactive, visionary force that looks for inefficiencies and discarded, and uses data, research and teamwork to improve your process.
Six Sigma has been used by some of the greatest and best companies in the country to drive accomplishment and breakthrough improvements in every department in their organization. Companies like General Electric, Motorola, 3M, and Allied Signal have saved billions of dollars through the integration of the Six Sigma model into their corporate culture. But it’s not just for big companies; any size business in any field can benefit from using Six Sigma. And that includes yours.
What makes Six Sigma different?
If you’ve been in business for any length of time, you’ve no doubt seen many business improvement programs come and go. They hit the best seller list for a few weeks, become all the rage in the business residential area, and then in a few years they’re just a abstracted memory. So then why is Six Sigma different?
Six Sigma is different than other models because:
- It has lasted the test of time. Many of the biggest corporations have used Six Sigma for many years, and instead of the program fading away, it has become part of the culture and its implementation has spread.
- It is not a Band-Aid fix. Six Sigma is not just a set of guidelines to follow or a couple of improvement projects; it changes the way your management thinks, plans and executes.
- It has saved companies millions of dollar a year. Jack Welch, former CEO of General Electric, claimed that Six Sigma saved his company 2 billions dollars in 3 years.
- It focuses on the most important person in your business – the customer. Every aspect of the Six Sigma model is geared towards customer satisfaction
As we look deeper into the Six Sigma model, you will kickoff to see how it achieves all of these benefits.
What does Six Sigma mean?
Sigma is the Greek letter used in statistics to represent accepted deviation. It is usually used in its symbolisation form, σ, the lowercase sigma. In simple terms, standard deviation is a measure of how much variation exists in a set of data.
Take a look at the diagram below.
The mean (average) of the data set is the vertical line in the middle of the curve. The dark blue area under the curve represents all the data headers that are within one standard deviation (1σ). This accounts for 68% of the data set. Two standard deviations (2σ) would include the medium blue and the dark blue and represent about 95% of the data.
So how does this relate to Six Sigma? Six Sigma is a business model that strives for your processes to put out non-defect products within six standard deviations (6σ or Six Sigma). That means that your products will be defect free 99.9997% of the time.
Let’s use an example to illustrate the tycoon of Six Sigma. Let’s say your company manufactures paperweights in the shape of the Statue of Liberty. Your customer requires that they weigh 16 ounces, plus or minus one ounce. If it is less than 15 ounces or more than 17, they will send it back.
According to the Six Sigma model, if you delivered 68% of your paperweights within your customer’s specs, you would be at a two sigma level. That means that 31% of your paperweights would be defects. If your process put out 99.38% of your paperweights without defects, you would be at a four sigma level. To be at Six Sigma, you would have to export 99.9997% of your products without defects. That’s 3.4 defects per million.
Six Sigma is designed to challenge your management and employees to raise the bar and make products that are almost defect-free. Perfection is not the goal – that is impossible. The goal is the improve and manage your processes so that defects are almost non-existent.
Is Six Sigma for Management Only?
Absolutely not. Six Sigma must be enforced at all levels of an organization for it take hold and stay effective. It must become a part of an organization’s culture, starting at the executive level and continuing down to the in conclusion employee.
To facilitate the implementation of Six Sigma, specific roles have been defined, each with its own responsibilities.
The roles are as follows:
- Executive Players are usually top executives that are in charge of the vision and implementation of the Six Sigma model and also charged with keeping the other team members motivated. They drive the program from the top.
- Champions are top managers that supports the Master Black Belt. Their main job is to eliminate any hurdles that the Master Black Belts may encounter and to make sure that the program is in line with the vision set forth by the Executive Players.
- Master Black Belts serves as a coaches or mentors to the Black Belts. They are devoted full-time to Six Sigma and spend their time ensuring that each department is on task and using the Six Sigma tools correctly.
- Black Belts also spend 100% of their time working on Six Sigma. They spend their time an actual project execution. They are the driving force of the operation at the project level. They quickly become experts of each process so that they can identify problem areas and make specific suggestions for improvement.
- Green Belts are trained in Six Sigma and assist the Black Belts in the day to day implementation of it. They are part-timers in Six Sigma as they have regular jobs as well. Many companies require a meaning(a) piece of the workforce to be trained as Green Belts.
Each role has specific responsibilities and are thoroughly trained and certified so that can execute at the highest level.
What is DMAIC?
We’ve seen that Six Sigma has a goal of only 34 defects per million and that it has a specific roles for members of the organization to achieve these goals. The missing piece to the puzzle is a roadmap – a set of common practices that the team members can follow to achieve their goals.
That’s where DMAIC enters the picture show. It is a series of five steps or phases that the players can follow to make improvements on both a short term and long term footing 54Bring. The five steps that make up DMAIC are Define, Measure, Analyze, Improve and Control. Let’s take a closer look at each step to see how they work.
Define – The first substance you need to do is to define the problem. The best way to do this is start asking questions. What is the problem? Is Six Sigma the best way to solve the problem? How is it affecting our customer? What part of the process should we focus on? What are our goals for this project? Who should be on the team that is working on it?
By asking these questions, you can determine the roadmap for solving the problem and put together a team to move on to the next steps. In this step, as well as the other steps, you must always keep in mind your most important player of the project – the customer. Your customer could be internal (the next phase of an assembly) or external. You must always heed the voice of the customer.
Measure – The purpose of the Measure phase is to determine where you are at every phase of your project. In set to see if your project is actually making things better, you must initially create a baseline of data. Once you have this baseline, you can then create milestones to guide the project and determine your present sigma value.
The data collection plan is one of the most important parts of Six Sigma. Defining what kind of data to collect, when and how to collect it and what to do with it is absolutely essential to a successful project. Data collection should be a part of the daily schedule.
Analyze – After the data has been collected, it’s time to put it to good use. The Analysis phase is when the team takes a good hard look at the data and tries to figure out what is causing the problem. Is it a bad input? Is the process wrong? Is the process right but there is some type of operator error? Is the machinery malfunctioning 5 S?
This is where the expertise and the collaboration of the team are the most important. They must take an unbiased look and determine the root cause of the issue. They do this by creating a hypothesis (an educated guess) and then by examining the data to see if the numbers support the theory. If the data doesn’t confirm it, they either create another hypothesis and test it again, or they go back to the Measure step and start assembling data on wider range of data points.
Once a root cause has been found that is supported by the data, then and only then can they move on to the next phase.
Improve – The Improve phase is where all the hard work is rewarded. It is where a solution to the problem is created and implemented. It is where the team will start to see the fruits of all of their labor.
With the root cause in mind and all of the collected data in hand, the team will begin to brainstorm to find various solutions to the problem. It is very important to not rely on only methods that have been used in the past. At this point, thinking out of the box to find new and creative solutions is mandatory. It is too easy to rely old thinking to solve new problems. The team may at times look at what other companies have tried to solve similar problems.
Once one solution has been agreed upon, it must be approved by either the Champion or Executive Player. At that point, the team can begin to implement the solution on a small scale to see if it is an effective solution. They can then determine the cost, the effectiveness and the potential problems of their solution.
Control – The last step in the DMAIC model is the Control step. In the Control phase, the team will take steps to ensure that improvements gained in the Improve stage are sustained. They need to document the steps to the solution and create and implement a system of checks and procedures that keep the process on track. The team needs to make sure that all employees involved in the process are brought up to speed and trained so that these employees can take over the day to day operation and monitor its progress.
At this point the team will disband and the Black and Green Belts are responsible for keeping the solution on track.
But my company does not produce a product. How can I manage defects?
In Six Sigma lingo, defect just means any variation from the normal process that creates inefficiency or an unhappy customer. It does not specifically have to be a product of a manufacturing process. Any company – service, support, administrative, sales – has variations in their “products” that ultimately affect customer satisfaction and profits. Here are some examples of some Six Sigma “defects.”
- The response time for your computer service man range from 30 minutes to four hours. This variation in times is a defect in your service. What do your clients think when their computers are down for four hours?
- Your call center takes phone orders for your product and is supposed to suggest an upgrade. Some of your operators successfully upgrade 40% of the time and some less than 10%. This is a defect in training that directly affects your bottom line.
- Your insurance brokers are responsible for completing applications that are forwarded to the insurance providers for approval. Over 15% of the applications are being rejected because of wrong of missing information 5S.
Any company that has customers can use the Six Sigma model. The best way to find a defect in your company’s processes is to ask your customers (remember, the focus is always the on the customer). Start asking them what you’re doing right and what you can be doing better. Do a customer satisfaction survey, or just start having your salesmen ask them what you can improve on. Many times you will be surprised at the answers. But you will never know unless you ask.
Conclusion
Six Sigma is not the latest management fad. It is a proven model that has been used by Fortune 500 corporations as well as local small businesses. If used correctly, it can increase productivity and save money by using a data driven and customer centric admittance to solve problems. The tangible benefits will be obvious – greater profits. But the intangibles are Six Sigma’s greatest achievements – happier employees and fast(a) customers.
