An amazing management philosophy known as Six Sigma, which has taken the world by storm during the last several years and practised to perfection by companies such as Allied Signal, General Electric, Motorola etc, has helped save billions of dollars forex while improving satisfaction ratings and stock prices as well.
A spokesperson of PIQC Institute of Quality told Business Recorder that Six Sigma is a rigorous, focused and highly effective implementation of proven quality principles and techniques. Incorporating elements from the work of many quality pioneers, Six Sigma aims for virtually error free business performance, she added.
According to her, Sigma is a Greek alphabet used by statisticians to measure the variability in any process. A Company's performance is measured by the sigma levels of their business process. Traditionally companies accepted three or four sigma performance levels as the norm, despite the fact that threes processes created between 6,200 and 67,000 problems per million opportunities.
The six sigma standard of 3.4 defects per million opportunities is a response to the increasing complexity of modern products and process, she said, adding, "Six Sigma focuses on customer requirements, defect prevention, cycle time reduction, and cost savings. Thus, the benefits from Six Sigma go straight to the bottom line. Unlike mindless cost-cutting programmes, which also reduce value and quality, Six Sigma identifies and eliminates costs, which provide no value to customers, waste costs".
She maintained that companies operating at 3 to 4 sigma levels are almost spending 25-40 percent of their profit on fixing the problems. This is normally considered as Cost of Quality or Cost of Poor Quality (COPQ). Whereas companies working at six sigma levels having COPQ less than 5 percent. So therefore higher the sigma levels lower will be the COPQ and higher will be the profitability.
Secondly, Six Sigma places a clear focus on getting bottom line results. Identification of the business impact is part of the methodology. No Six-Sigma project is approved unless the bottom line impact has been identified. Bottom line impact gets the attention of top management for their language is money, she added.
The primary improvement methodology of Six Sigma has five essential phases: Define Measure, Analyse, Improve, And Control (DMAIC). All Six Sigma projects touch on these phases in one way or another. The tools of Six Sigma are integrated into these phases.
This is a strength and uniqueness of Six Sigma. All projects utilise the same improvement process, although the individual applications may be quite different, she added. In contrast to most statistics training that throws a lot of tools on the table and lets practitioners fend for themselves, the DMAIC framework shows practitioners how to integrate and sequence the tools into an overall improvement strategy. This enables practitioners to attack virtually any problem in a systematic manner, she added.
Regarding six-sigma structure, she added that it is about selecting and training the right people to fill the essential roles. Successful organisations select their most talented people to fill the key Six Sigma positions (Champions, MBBs, BBs, and GBs).
Most companies consider these people to be their future leaders. After those selected complete their Six Sigma assignments, they move into leadership positions and utilise their Six Sigma experience to guide others in improving the organisation using the same approach.
In this way, the cycle of continuous improvement is ingrained into the culture of the organisation, and the company is assured of having "enlightened" leaders in the future.
Moreover, PIQC Institute of Quality in collaboration with Singapore Quality Institute International had organised various batches of Six Sigma Training Course with an objective to give the participants requisite knowledge and skills to develop their leadership traits needed for business improvement.