One of the frequently-used buzzwords in today’s business jargon is digital transformation. Thanks to technological boom in the 20th century information age era, emerging smart gadgets and tools are aiding the companies, irrespective of their size, to pursue the transformation path to claim a big pie of business in a fast paced and cut-throat business arena. However, there are some pressing questions demanding immediate answers. Is it sufficient to streamline the transformation process of an organization to grow? Can the digital transformation be a panacea of an enterprise for its growth and success? Can the implementation of latest technological tools be a guarantee of flawless production process, zero waste, curtailed expenses and enhanced revenue? The single word answer to all these questions is a big NO. Here comes the ides of Six Sigma.
Here comes the unavoidable and irresistible concept of latest management tools of quality control and business re-engineering. Fully cognizant of evolving market dynamics and processes, the American multinational telecommunication giant Motorola pioneered a new idea of quality management and control process in 1986. It was so powerful and ground breaking idea that even Jack Welch made it mandatory for all his business strategies at General Electric in 1995. Over the years, this idea was tested, deliberated, improved, refined and further refined that today we know it by the name of Six Sigma.
What is Six Sigma?
In layman’s terms, Six Sigma refers to the management’s set of tools and guidelines specifically considered to achieve a zero or near zero defects in business processes. It focuses on developing strategies for improving the value of a business process by first recognizing and later eliminating the roots of imperfections and reducing brunt inconsistency in production and business process. Six Sigma uses a variety of quality management tools including but not limited to empirical and statistical analysis packages, which include well-trained human resources.
The term i.e. Six Sigma is derived from the 18th letter of Greek alphabet-Sigma, which also denotes “sum” or “deviation” in mathematical or statistical sense. Statistically speaking, “6” is that stage of deviation that we aim to achieve as anything better than that is considered not feasible at least in statistical sense. Full set of Sigma breakdown can be observed in below table.
Also read: You think digital currencies will not thrive? Think again.
The Fundamental Six Sigma Principals
Irrespective of whether you are engaged in a manufacturing process or delivering services, the ultimate objective of Six Sigma is the same-delivering a zero or near-zero defect goods or services for maximum customer satisfaction with a view to enhancing your organization’s values. Some of the cardinal Six Sigma principals are discussed below.
Maintain your focus on the customer:
Customer is the reason for a business success or failure. Customers can make or break any business. The age-old mantra of “Customer is king” is still true and valid even today. The prime objective of every business, irrespective of its size and scale of process, is to
ensure maximum customer satisfaction at the minimum of costs. It is imperative that a business aspires for a higher standard of its output to attract and maintain a large customer base.
Be aware of the work flow:
Improving a system without first understanding it is nonsensical, illogical and waste of time. It is essential that first we understand the existing process flow completely, identify its drawbacks and later suggest its redressal.
Ensure smooth work flow:
A key underlying understanding of Six Sigma is that nothing is left on chance. Each and every process, be it the smallest, is process-driven. It is not uncommon to experience hurdles or bottlenecks in the way of smooth work flow. For a big organization, there is software like The Automated Business Process Discovery tools which can identify or highlight bottlenecks in a smooth process. For small enterprises, asking 5 Whys questions prove a powerful method for problem identification. The crux is that after asking 5 Whys question, one can easily gauge the root cause of a bottleneck.
Always aim for zero waste and adding value:
If you focus on adding value to your business process, you must identify and remove all those steps, components or sub-processes, which do not add any value. It simply boils down to the concept of elimination of waste or wasteful. Rene T. Domingo, in his paper “Identifying and Eliminating The Seven Wastes or Muda” for the Asian Institute of Management, presents the five steps he believes are important for reducing waste:
- Make waste visible by everyone involved.
- Feel a sense of responsibility for the waste.
- Estimate the waste.
- Abolish or reduce the waste.Be aware of the waste.
- End flaws through absence of variation: This is undoubtedly the crux of Six Sigma. By replicating a process of getting it execute flawless every time, defects or waste can be controlled massively. Here comes the concept of standardizing your processes. Absence of variation at the optimal level of process ensures a zero or near zero defective output.Team work through collaboration: Collaboration is the key to success. This is true not only on individual level but also on organizational level. While executive management and analysts make excellent strategies and plans, it is equally important to get the feedback from or involve those who are at the helm of day to day processes.Create systematic and scientific efforts: One of the reasons why Six Sigma is a successful and popular concept for process improvement is that it is based on scientific quality control and statistical tools. It works on collecting data, analyzing and leveraging that data to conceive and sustain improvement in the systems.
The Six Sigma Methodologies
The two main Six Sigma methodologies are DMAIC and DMADV. Both are inspired by the renowned management consultant Dr William Edwards Deming’s Plan-Do-Check-Act (PDCA) cycle. DMAIC is usually used forprojects executed for improving an existing business process. DMADV, on the other hand, has its utility for creating new product or process plan. DMAIC project methodology has five steps i.e. Define the system, Measure key aspects, Analyze the data, Improve the existing process and Control the future path.
DMADV is used when existing processes do not meet customer expectations. The five steps of DMADV are D-Define the objectives, M-Measure and recognize product capabilities, A-Analyze and replicate design alternate, D-Design an enhanced alternative and V-Validate the plan.
Difference between Lean Management and Six Sigma
Never confuse lean management with Six Sigma. This is an easy mistake to make. Lean management and Six Sigma share similar concepts and philosophies, but they are not the same. Lean management focuses delivering value, abolishing waste by using pre-determined standard procedures and constant perfection, while Six Sigma concentrates on killing defects and ensuring no variation.
What critics say about Six Sigma
Despite having universal acceptability, Six Sigma is not without its fair share of criticisms. There are two main points of objections over Six Sigma. First, it is argued that Six Sigma does not offer anything, which can be termed as new or unique. True that its foundation are built over old school of thoughts, however it is a more refined and polished concept of zero or near zero defects in business processes. Second, some critics say that Six Sigma emphasizes more on appraisal or corrective action systems instead of taking proactive approach towards problem solving. It is tantamount to belittling
the importance of appraisal or corrective action systems. Some other criticisms are more technical in nature.
Conclusion
To sum up, Six Sigma proved to be an excellent strategy that focuses on achieving standardization and minimizing defects. It has been proved time and again a better and more productive tool for quality assurance than earlier concepts and practices. CEOs of leading US and European firms admire the remarkable accomplishments of their Six Sigma initiatives. High-powered professionals and industry statisticians are satisfied with and willing to implement Six Sigma practices in their organizations.
