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Six Sigma Product Development

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Here, we look at how Six Sigma helping businesses to improve their office processes.



Defining Quality and Efficiency Standards

Six Sigma has made it a lot easier for business to define quality and efficiency standards as applicable to office processes, something that is a prerequisite for achieving the desired results. What Six Sigma does is that it converts vague quality and efficiency orders such as "reduce errors", "work fast" etc. into more definitive terms such as "reduce errors by 15 percent in three months", "process 20 files per hour" etc.

Now, all this new definitions may seem to be increasing the workload of employees, but that is certainly not true, because Six Sigma relies on time-tested tools and techniques that generate the most appropriate and realistic estimates of employee performance. In fact, employees stand to gain from such definitions because then they will know exactly what the company expects from them.

Additionally, since Six Sigma stresses replacing old inefficient systems with new newer, more efficient technologies, it is highly unlikely that the employees will have to do anything more that what they already might be doing. Businesses also stand to gain because then they can make accurate and timely predictions about human resource requirements.

This allows them to make the best possible use of existing resources, something that consequently results in huge cost savings.

Streamlining Existing Office Processes

Since office processes are quite different from manufacturing processes and since the human aspect needs to be given special consideration while initiating improvement measures in office processes, Six Sigma focuses on gathering input and feedback from employees before starting the tweaking process. Such input and feedback is gathered both at the time when the implementation team is in the process of selecting the right improvement methodology and when a methodology is finally short-listed for final implementation.

Getting such input and feedback is vital because it is the only way a business can possibly devise an improvement initiative that finds favor with the employees as well as gauge their initial reaction to a proposed improvement initiative. Since the success of such projects depends a lot on employee cooperation and support, it makes sense to take them into confidence right from the start. It is only then will the business be able to streamline its existing office processes without causing unnecessary employee disgruntlement or distrust, factors that are not conducive for the future growth prospects of any given business enterprise.

As we can see, Six Sigma does help a lot in improving the quality and efficiency of existing office processes, but what businesses should never forget is that employees are not machines that can be set to perform at specified levels of efficiency, all the time. As such, businesses need to adopt a more tolerant approach while using Six Sigma for improving their office processes.
Six Sigma Product Development
The need for continuous innovation is the result of growing customer demands and technological challenges.

Determine the Customer

The important point that arises here is which customer to listen to. There will be a large range of customers who are being catered to by most companies. For example a credit card company will have customers ranging from retired people, newly married couples, high earning singles, and so on.

They may even be miners, farmers or self-employed customers. Each segment will have its own demands, and the organization has to decide which voice to listen to.

Market Matrix

One way to decide which customer to listen to is by making a product or market matrix - a matrix of products and their targeted markets. This will help companies understand which products are suited to which market, and most importantly, the variance in the product lines which will provide a direction to the voice of the customer.

Some criteria to identify which market or product to use would be the market size, growth rate, the margins in the product, market share and the competitiveness of the product. The Six Sigma team can identify the problem by talking to the customers and employees, compute the cost of these problems and identify the solution to remove these problems in the beginning. The positive result from this is an increase in profitability and the building of loyal customers.

Elimination of products from the Six Sigma project would be done depending upon the outcome of this study. For example, home mortgages would be suited for new married couples and high earning singles more than retired customers. Not that they would not be useful for retired customers, but Six Sigma efforts will have to be based on the voice of the other groups of customers.

In short, the Six Sigma project will not invest in the retired customer segment as much as married couples or self-employed people.

Value for Money

Customer satisfaction is not the voice of the customer. It is not linked to market performance. Happy customers may not necessarily be loyal customers or profitable ones. In spite of having good scores in customer satisfaction, some companies have realized that their market share is down.

To increase market share, prices don't necessarily need to be reduced - but companies do need to check if they are giving value. Between quality and price, what the customer wants is value, and value proves to be the best forecaster of market share.

For Six Sigma initiatives to succeed, knowing which customer to listen to is most important in developing a consistent long-lasting strategy. Giving value to the customer means adopting new improved strategies that are aligned to the organization's objectives.
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