Six Sigma is not just any other program; it is a way of running a business. It is a way of carrying out the activities at near perfect levels, and focuses on elimination of defects and tackling variations.
It aims at achieving customer satisfaction leading to customer delight. Process or product improvement and development of new products – if needed – are a few ways improving businesses.
Six Sigma can be considered to be a measure, a philosophy, and a target.
Six Sigma is a management philosophy that is based on the theory that reduction in defects is a better approach to lowering costs and customer loyalty. It realizes the fact that defects are expensive. To gain a competitive edge, developing a high quality product at the right cost is essential for customer satisfaction and profitability. Variations limit process performance.
Though variations cannot be eliminated entirely, efforts to reduce them can be made. The target of Six Sigma is to have 3.4 defects per million opportunities. The cost of poor quality represents 20 to 30 percent of total company revenues. The Six Sigma approach is to implement methodologies that aim at reaching world-class quality by improvement of 50 percent or more.
While some traditional methods rely on measuring output and establishing controls, Six Sigma focuses on eliminating them. It involves listening to voice of customers to bring about this change. By listening to customers, importance is given to understanding the value expectations of customers, which help eliminate the root cause of dissatisfaction.
The Six Sigma philosophy is that of continuous improvement; it is also in making decisions based on data-driven facts that are aligned to the business’ objectives.
The Three Methodologies
Six Sigma encompasses three methodologies, process management, DMAIC and Design for Six Sigma (DFSS). Process management involves control of processes to meet the business’ goals. This necessitates having proper systems for data collection, decision-making and bringing about improvement initiatives. DMAIC, which stands for “Define – Measure- Analyze- Improve- Control”, is the roadmap for achieving the target of defect-free processes and improved products.
Six Sigma teams follow the process of identifying and defining defects, analyzing the defects using various measures, suggesting improvements and having metrics or controls in place to achieve the goals of the business. By implementing the usage of standard operating procedures throughout the business, fewer defects can be ensured along with the integrations of products, services and distribution.
Another methodology that is useful to understand is the DFSS methodology. This methodology is useful when there is a need to design an entirely new product or process that will meet customer requirements.
Thus, the Six Sigma philosophy aims to bring about improvements in profitability and productivity. It can be applied to any organization, big or small and focuses on bringing about a reduced cycle time, reducing waste and developing better time management with a systematic approach to problem solving.
Business leaders have to decide what is necessary for their particular organization, and focus on improving and sustaining the gains.
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