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If customers are a company’s only source of revenue, why aren’t we doing everything we can to provide red carpet treatment? Dissatisfied customers breed more dissatisfied customers. Your super-sharp sales force may be bringing in new business…..but is your existing customer base sticking around? The goal of Six Sigma is to obtain a product or service that is free of problems 99.9997% of the time. I didn’t make that number up. It is based on a normal bell curve. What this means to people with statistical-phobia is: A Six Sigma company produces 3.4 negative customer experiences for every million. Most companies are Two & Three level sigma. Which means between 66,000 & 310,000 negative experiences per million served. This is considered poor performance and will lead to lost revenue and market share.
Before we get into Six Sigma, we have a related process called Lean Six Sigma. We’ll discuss that in our section on Lean. Lean Sigma is more about speed. How can we deliver: more….faster….still maintain quality ……all a low cost. In order to join the proud, the few, the level six; there must be a commitment from management to a philosophy of excellence. Not just a “Sure, whatever the boss wants” type of yes. It is without a doubt, realizing that customers who are happy 100% of the time, will buy from you 100% of the time. Sigma uses hard facts to establish metrics. Not estimates. Sigma believes that variation leads to problems. By using quantitative tools we can measure the variation from “what works” and eliminate it. It lives by the cause & effect relationship. Inputs added together produce outcome for the customer. If outcome has high defects or shoddy service, then we must identify and fix inputs; because they can be controlled. The results of minimal variations are happy customers. The driving force of Sigma. Six Sigma is based on a statistical measurement of a product or process. It also provides a lofty goal as discussed above. 99.9997% perfection in case you forgot. How do you figure out what is perfection? That grasshopper, comes from your customer. You must determine what your customer expects. A CTQ will help figure that out. Critical To Quality is a measure of customer expectations. You must determine a set of processes that will achieve the best CTQ. And of course, that translates into a process that leaves the customer happy 99.9997% of the time. I wonder if they have Six Sigma for marriage.
Nothing this big succeeds unless those guys in the shag carpeted offices understand how important this strategy is to the bottom line. Six Sigma identifies areas for improvement based on a careful study of performance metrics. Members of a Sigma team must be trained. Team members usually come from a cross-section of different departments and have varying experience. Team leaders are responsible for the readiness of the team. If it sounds like you're going into battle, you are. Elements of a Six Sigma program are: • Customer is King: Seek the definition of customer satisfaction based on what the customer considers satisfaction. • Competitive Advantage: Satisfying customers is not the end goal. It is a continuing process. That process will be your advantage. • Spread it around: Fixing a problem is a great beginning. But don’t consider the case closed. Everything changes. Review & monitor…..set goals. Apply what works elsewhere. • Collaboration: Accounting doesn’t like sales…..sales doesn’t talk to marketing. Break down barriers between departments. Especially the ones that hand off work to each other. • Risk / Reward: Wall Street knows you don’t get rich by investing in money market funds. Establish a tolerance for failure. It’s necessary to take on risk when you try new ideas.
Putting together a Sigma team requires leaders and facilitators. These key roles were given martial arts titles for two reasons. The terms were coined by an expert from Motorola who liked karate. Six Sigma originated at Motorola. And last but not least, the titles sound tough. That may come in handy…….. • Black Belt: This person is in charge of leading the change effort full time. He or she will launch the team, inspire them, train them and make sure the group works well together. Think of Tom Hanks in Saving Private Ryan. • Master Black Belt: This is the expert in tools and analytics. As coach and mentor they work closely with the Black Belt. • Green Belt : The Green Belt is well trained and is usually a part-time leader or member of a team. His or her mission is to bring the concepts and tools into the daily activities of the business. Other team roles include the Sponsor and Implementation Leader. Define. Measure. Analyze. Improve. Control. Before a Sigma team begins DMAIC (it wouldn’t be project management if we didn’t have acronyms) we need to accomplish some basics. Management decides which project a team will work on; and specifics, goals and metrics will be identified. The Six Sigma team will be assembled. The members will have an understanding of the situation, but not be related to the problem. Management will develop a charter. This document lays out the reason for the project, the end goal, team responsibilities and the scope. Team leaders will put the members through the DMAIC training and project preparation. This usually lasts from one- to four weeks. With any luck, the team will be ready for some serious organizational changing:
Sorry for the picture. I wanted to make sure you’re awake. DMAIC is the problem-solving process: Define : The team defines the problem at hand. The goals will be realistic. Constraints and assumptions will be identified and roles will be assigned. This is when the team has their work laid out for them Measure : The team will gather data that quantifies the problem. The metrics will cover outcomes, process measurement and inputs. The rate of defects are identified Analyze : The details are analyzed as the team searches for a root to the problem. All factors are under scrutiny including: people, measures, machines, methods, and the environment. Improve : This is where the team develops solutions. Solutions are assessed in light of costs, benefits and efficiency. The most promising solutions must gain approval from the leadership. Control : The solution is set in place. But the job is not over. The team continually monitors the changes and reports progress & problems to management. The team makes sure the new process is followed through and no one rturns to bad habits. The group may have to do presentations or whatever is necessary to sell the project internally to make sure it “sticks.” The process is eventually handed over to those doing the regular work.
All problems have causes and implications. Understand the problem and who is affected before solving it. Minimize variation. You reduce training costs and the process becomes predictable and controllable. When several parties are involved in the same operation, confusion usually follows. Reduce duplication. When the team completes the project and hands off the solution, they will disband. The group was only formed for that specific issue. Most of the times there will be a celebration and the team probably won’t make it to work the next morning. After a job like that…….they deserve it. Go From Six Sigma To Business Strategy
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