Six Sigma For The Service Sector

Introduction

6 Sigma is all about quality improvement and was first pioneered by Motorola in the 1980s. Over the last few years, this methodology has received much recognition and several companies have adopted it in order to meet their targets. Six Sigma's clientele include a long list of well-established manufacturers like General Motors, Ford Motor Co., GE, Honeywell and many more. However, there are still many non-manufacturing companies that have come to the conclusion that 6 Sigma will not work for them. This is because Six Sigma was originally developed for helping the manufacturing industry. Organizations such as health care systems, financial service providers and educational systems all doubt the usefulness of 6 Sigma.

Why The Service Sector Feels That Six Sigma Is Not For Them

The most obvious reason why service companies keep away from 6 Sigma is because they perceive it as a manufacturing tool. Service organizations feel that because their companies have a large amount of human work force, there are no measurable defects to be corrected. However, experts say this is not true. A recent survey has shown that service companies that have invested in Six Sigma are all saving millions of dollars for every project. Human resources makes up a large part of all service organizations. To conquer this problem, leaders of the industry can be trained in 6 Sigma to balance their employment expertise with statistics-based analytical tools. The fear of metrics is another obstacle that stands in the way of the service sector and Six Sigma. Most people feel that 6 Sigma sounds too technical. The importance of metrics is to give an insight into the business working processes. Service based companies need to focus all their attention on developing Six Sigma projects that specialize in their business needs like customer and cash generation. Convincing the service sector about the merits of taking up 6 Sigma has proven to be a big challenge. Most service companies still believe that Six Sigma can only benefit the manufacturing industry.

How 6 Sigma Can Benefit The Service Industry Six Sigma goes in to the details of improving customer service, generating business expansion and gaining knowledge about the service sectors business processes. Most service industries revolve around areas of finance, human resources and sales and marketing. Hence, 6 Sigma delves deeply into the subject of soft skills. Six Sigma can be applied to a company that provides housekeeping services. Firstly, the companies working processes would need to be understood. Using the DMIAC method or the define-measure-improve-analyze-control method, 6 Sigma can definitely implement quality in any industry. As the main aim of this methodology is to reduce defects, the first step would be detecting the particular defect. Secondly, data will be collected to observe how, why and how often these defects occur. Next, the Six Sigma team implements an outstanding employees method of working as the normal method for all employees. Finally, new employees are taught the correct techniques.

6 Sigma is useful in the field of sales and marketing as well. According to Six Sigma data, during sales, too much face time with a customer can prove to be counter-productive. Changing this process can result in an increase in the percentage of sales per product. Other industries that 6 Sigma has assisted in the past are the financial service sector, insurance companies, management companies, educational institutions, high-tech companies, state agencies and many more.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution's Six Sigma Online offers online six sigma training and certification classes for lean six sigma, black belts, green belts, and yellow belts.

How To Overcome Six Sigma Controversies

"The more I learn about customer satisfaction, the less I know," the CEO of a Fortune 500 company recently lamented. By the time some companies get to understand their customers? needs fully, it will be too late. Management is often flooded with customer data detailing their satisfaction levels among other things. However, the data has been collected only as an exercise, not as a means to end customer dissatisfaction.

Can?t Anyone Achieve Six Sigma?

There is no doubt that Six Sigma has enjoyed the seat of power like no other management tool has to date. The milestones crossed by the methodology are also non-controversial. Then where are there any problems and why is doubt being cast upon its ability to deliver?

Paddy Rao, Associate VP of a large software services company, a Champion and Master Black Belt himself, cites a major stumbling block for Six Sigma implementation, which is cultural change. A sudden change in the way people work and an altered reporting structure is what people find as obstructions to their routines. ?Sometimes it takes ages to break this mindset?, says another Black Belt who worked with Rao.

Anyone that says they have successfully implemented Six Sigma means only that they have completed the implementation. It doesn?t mean that they have actually achieved 3.4 defects per million. You will notice many things changing as you go about deploying Six Sigma. The market changes, you may see a change in technology or even an internal matter like organizational change can occur.

The Robust Mechanisms Of Six Sigma

As with all other aspects of life, failures are always attributed to Six Sigma but not the successes. A successful Six Sigma implementation essentially requires a rock solid commitment from top management. Despite this, Six Sigma continues to question any authority, critically shaking most of the beliefs that the organization had about itself. As it goes deeper, it potentially shakes the foundations on which organizations exist.

The inordinate delay in data gathering is another obstacle to get Six Sigma out of the starting block. Sometimes the data is not divulged and other times it genuinely takes time to gather. Other priorities coupled with this pushes the implementation team to rush through the deployment.

Add to this the possibility of selecting the wrong project. If this happens, no matter how well you slog out later, the deployment will be a loser from the beginning. You will invariably fail to see a much different result from that of the original.

Indeed, it is the robust inbuilt mechanisms of Six Sigma that have worked for its success in almost all cases. One genuine concern about Six Sigma is about the cost of implementation, which very nearly challenges the ROI. As one CRM specialist put it, ?where ROI has catapulted because of CRM, Six Sigma has been credited for it?. This is the reason that Six Sigma is so widely accepted, despite the costs.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solutions ? Six Sigma Online ( http://www.sixsigmaonline.org ) offers online six sigma training and certification classes for lean six sigma, black belts, green belts, and yellow belts.

Process Simulation And Six Sigma

Six Sigma has become one of the most commonly used quality management techniques since its introduction in the 1990's. The importance of Six Sigma has continued to increase ever since companies like GE began implementing it's various concepts and techniques in their business processes. This has helped the company in saving billions of dollars since the time when the concepts were first implemented.

The Simulation Process

Process simulation is one of the various techniques used in Six Sigma, involving the use of a computerized model of an actual business process. The computerized model used in process simulation is designed by inputting all the critical components of a business process such as process inputs, process flow, and the various sub-systems used in the process. With the help of the computerized process simulation model, process managers can easily view the whole process within a few minutes that would have normally taken days or even weeks to complete in the real world. Process simulation helps in collecting large data samples, which can be further analyzed and used for predicting the effects of changes made in real business processes. This allows analysts to simulate all the possible changes that can be made in a business process and analyzing the effect of such changes on the end result. Changes that are most helpful in improving the quality can be selected and put through more rigorous simulation processes for confirming the potential benefits of such changes. Once this is done, the changes can be applied in the real process as by now it is quite certain that the changes will be successful in improving the quality of goods manufactured or services rendered.

When And Where To Use

Although process simulation is a powerful tool, it must be used in the right manner and only in appropriate business processes. If the necessary information is not inputted correctly, the computerized simulation model will not be able to predict the effect of changes made in the business process. This can seriously affect the quality of end products if such changes are implemented in the real process. Process simulation is most effective when a business process is complicated and difficult to visualize. For less complicated processes, it is better to use process mapping in combination with brainstorming techniques for generating innovative quality improvement ideas. Process simulation is helpful in simulating business processes that require managers to make informed decision at every stage of the process. Process simulation is used for improving the logistics of a manufacturing company by mapping the exact flow of materials from the time they enter the factory floor to the time when they reach the final consumer in the form of finished goods.

Risks And Drawbacks

Although process simulation is very beneficial, it can also create problems for an organization if not used properly. Companies very often make the mistake of employing process simulation in every business process in the hope of improving quality. This can create confusion among the employees, especially when the company and its workforce are new to the concepts and philosophies of Six Sigma. If a process is too long and involves various sub-processes, it is better to concentrate on sub-processes that affect the quality of the end product. Companies often try to simulate the whole process, which leads to the wastage of both time and effort. For realizing the full potential of process simulation, organizations need to simulate only on those processes that are critical to the quality of goods manufactured or services rendered.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution's Six Sigma Online offers online six sigma training and certification classes for lean six sigma, black belts, green belts, and yellow belts.

Six Sigma - The Customer Angle

The foundation of Six Sigma is customer satisfaction and cost reduction by using various metrics and statistical tools. This is a customer-focused approach equipped with strategies and discipline at all levels of administration, planning and production. Six Sigma is aimed at achieving only 3.4 defects per million opportunities.

Voice of the Customer

Six Sigma places highest priority on customer data input which provides the much-needed insight into what the customers need and what he or she is thinking about the products already on the market as a measure of performance. The design team needs to understand the requirements of the customer and predict whether the proposed (or the existing) design meets customer expectations.

How Is Customer Satisfaction Ensured?

All business activities are customer centric. Even the best product may not sell if it possesses useless value for the customers. A point in the case is the satellite phone Irridium? that Motorola developed some time ago. Although it was the first and the best in its class, it failed in the market because the customer did not find any value in that particular product.

1. Customer's Experience Of Defects and Costs: Customers have a different perspective about quality and cost. The variation in satisfaction levels across different market segments and regions needs to be analyzed as a first step towards reaching goals. In Six Sigma, customer input, however scattered it may be, when analyzed can be categorized making way for an in-depth understanding of company goals.

2. Product Relevance: The relevance of any product to the customer stems from its utility, cost and quality. A robust design is not just strong but simple, flexible and idiot-proof. It consistently produces a high level of performance despite huge variations in manufacturing and customer needs. Anything not adding value will not get customer attention.

3. Adjusting Process Capability to Customer Requirements: The need for adjusting the process capability is basically considered in DMAIC (a Six Sigma methodology for existing products), without putting significant burden on the cost. This begins with estimation of financial impact, feasibility studies of the technicalities involved and market uptake. The outcome of these studies will guide any process adjustments.

4. Controlling Process Variations: The uncertainties of processing are the variation that needs to be tackled as a critical step in achieving the 3.4 defect threshold. Uncertainties arise mainly due to a huge number of key elements in a process, outdated process steps and lack of control. Variability surrounding a product or process can be rooted out at the design and analytical stages.

5. Removing Roadblocks: The roadblocks for Six Sigma implementation can sometimes be within the organization, such as trans-jurisdictional roadblocks which sometimes threaten the effective implementation of Six Sigma. The Black Belts need Champions' intervention in removing these roadblocks.

6. Hitting the Finish line: Taking Six Sigma to its logical conclusion is no small matter, even for cash rich corporations. The millions of dollars that it takes for Six Sigma implementation and the long cycle for the results to show can unsettle even the strongest organizations. Finishing the task, despite allotment of huge funds, accessibility to knowledge base, depends primarily on the commitment level of senior leadership and a dedication to customer satisfaction.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution's Six Sigma Online offers online six sigma training and certification classes for lean six sigma, black belts, green belts, and yellow belts

A Holistic View of Six Sigma

"Only the overall review of the entire business as an economic system can give real knowledge" - Peter F. Drucker

No one needs to emphasize the holistic approach the Six Sigma deployment takes on overall business processes. All processes in an organization present at least one opportunity for improvement. Having a limited picture about the limitations of Six Sigma and its applications projects an all together different picture.

At the enterprise level, each company must consider the entire application of the project and this is certainly beyond the line employee level.

A Little Background

We have all known Six Sigma as a deployment strategy related to company activities and we have examples for justification. We have many glaring examples of successful and not so successful companies in recent history. Motorola, DuPont and General electric are some cases in point. Also known to us are the failures of deployment mostly in non- manufacturing businesses.

While thinking along the same lines, if in your understanding, Six Sigma is not applicable to your organization or industry, perhaps what first step you may take is answer whether it can improve the financial situation of your company within an acceptable timeframe. This fundamental answer must be obtained even before the project selection process. Answers to whether Six Sigma can work in all processes and parts of the organization must be put into place.

Thinking Beyond The Shop Floor

Notions and misconceptions such as those confining Six Sigma to the shop floor and relegating it as something of a quality implementation tool dedicated for manufacturing industry must be shown its due place for it to show results of any significance. The ‘beyond the factory’ approach encompasses almost all non-manufacturing aspects of the economy, not excluding those in the new economy group. For example, law offices, non-profit organizations, online business and the transport sector.

Three Critical Steps To Take Six Sigma Benefits Beyond The Shop Floor

Holistic thinking does not exclude non-production activities within organizations. Activities that don’t produce physical products but are still parts of production activities that go into manufacturing, as well as service industry sectors, such as transport industry or consultancy firms, contribute to the economy in a larger meaning by value creation. The following critical steps help reap major benefits in implementation:

• The Strategic Deployment: Think through the overall deployment of Six Sigma initiatives across the entire organization.
• The Tactical Deployment: Tactically selecting, conducting and closing the projects in all those environments.
• Methodical Deployment Of Operational Tools: Applying the analytic techniques of Six Sigma properly when facing common challenges beyond the shop floor, such as skewed (non-normal) distributions of cycle times, or the predominance of discrete data.

Holistic thinking In Six Sigma calls for adopting a statistical approach in its entirety to all aspects of conducting business and looking beyond statistics is an embedded part of deployment. Judgmental timing and accuracies assume the same degree of significance of decision making. There is not one single sure-fire formula to ensure the success of it.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solutions – Six Sigma Online ( http://www.sixsigmaonline.org ) offers online six sigma training and certification classes for lean six sigma, black belts, green belts, and yellow belts.