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Your Online Guide » A Guide to Business » What is Six Sigma

[S520]Six Sigma For Service
by Tony Jacowski, Ton
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.

The term “six sigma” is defined as a statistical measure of quality, specifically, a level of 3.4 defects per million or 99.99966% high-quality. To put into practice the Six Sigma management philosophy and achieve this high level of quality, an organization implements the Six Sigma methodology. The fundamental objective of the Six Sigma methodology is the implementation of a measurement-based strategy that focuses on process improvement and variation reduction through the application of Six Sigma improvement projects. Projects are selected that support the company's overall quality improvement goals.

A Six Sigma project begins with the proper metrics. Six Sigma produces a flood of data about your process. These measurements are critical to your success. If you don't measure it, you can't manage it. Through those measurements and all of that data, you begin to understand your process and develop methodologies to identify and implement the right solutions to improve your process. Six Sigma's clear strength is a data-driven analysis and decision-making process—not someone's opinion or gut feeling.

Metrics lie at the heart of Six Sigma. Critical measures that are necessary to evaluate the success of the project are identified and determined. The initial capability and stability of the project is determined in order to establish a statistical baseline. Valid and reliable metrics monitor the progress of the project. Six Sigma discipline begins by clarifying what measures are key to gauging business performance, then it applies data and analysis to build an understanding of key variables and optimize results. Fact driven decisions and solutions are driven by two essential questions: What data/information do I really need? How do we use that data/information to maximize benefit?

Six Sigma metrics are more than a collection of statistics. The intent is to make targeted measurements of performance in an existing process, compare it with statistically valid ideals, and learn how to eliminate any variation. Improving and maintaining product quality requires an understanding of the relationships between critical variables. Better understanding of the underlying relationships in a process often leads to improved performance.

To achieve a consistent understanding of the process, potential key characteristics are identified; the use of control charts may be incorporated to monitor these input variables. Statistical evaluation of the data identifies key areas to focus process improvement efforts on, which can have an adverse effect on product quality if not controlled. Advanced statistical software such as Minitab or Statgraphics, are very useful if not essential for gathering, categorizing, evaluating, and analyzing the data collected throughout a Six Sigma project. Special cause variation can also be documented and analyzed. When examining quality problems, it is useful to determine which of the many types of defects occur most frequently in order to concentrate one's efforts where potential for improvement is the greatest. A classic method for determining the "vital few" is through a Pareto chart.

Many statistical procedures assume that the data being analyzed come from a bell-shaped normal distribution. When the data to be analyzed does not fit into a normal bell-shaped distribution, the results can be misleading and difficult to discern. When such data distribution is encountered, other statistical techniques can be used to assess whether an observed process can reasonably be modeled by a normal data distribution. In such cases, either a different type of distribution must be selected or the data must be transformed to a metric in which it is normally distributed. In many cases, the data sample can be transformed so that it is approximately normal. For example, square roots, logarithms, and reciprocals often take a positively skewed distribution and convert it to something close to a bell-shaped curve. This process will uncover significant statistical variation, separating the important data from meaningless data “noise.”

Once the data is crunched and a problem's root causes are determined, the project team works together to find creative new improvement solutions. The data is used and relied upon—it is the measurements of the realities you face! Yet it is smart measurement and smart analysis of the data—and above all the smart creation of new improvement solutions and their implementation—that create real change. The Six Sigma statistical tools are only the means to an end and should not be construed as the end itself. Using tools properly is critical to getting the desired result. Through a successful use of statistics in uncovering significant data, Six Sigma will drive an organization toward achieving higher levels of customer satisfaction and reducing operational costs.

Article Source : Sigma Corporation Of America

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Both Tony Jacowski & Peter Peterka are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Tony Jacowski has sinced written about articles on various topics from University, Six Sigma and Information Technology. Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution's Six Sigma Online offers online and certification classes for lean six sigm. Tony Jacowski's top article generates over 90500 views. to your Favourites.

Peter Peterka has sinced written about articles on various topics from Six Sigma, Leadership and Six Sigma. . Peter Peterka's top article generates over 12100 views. to your Favourites.
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