Six Sigma and Strategy

According to Six Sigma deployment procedures, separating organization strategies from the Six Sigma initiatives is inappropriate. For instance, if an organization aims to follow a low-cost supplier strategy, it would be suitable to concentrate on the erroneous business costs and pay heed to the voice of the customer.

On the other hand, if the organization aims to follow a market leadership and value creation strategy, it would be appropriate for the customers to guide Six Sigma efforts. Besides, who would understand value better than a customer would? Voice of the customer depends on the service or the product line.

Therefore, it is advisable to listen to the right customer voice as many organizations work for numerous sets of customers.

The Market/Product Matrix

When it comes to choosing a market/products, organizations ought to understand them first. This can be done by classifying all the factors that direct revenue in profit-seeking organizations i.e. Markets (customers) and the services and products they purchase.

A product line is groups of products that are similar define as per the customers' classification. Very often, these can be substituted in the product line and not any other product line. Market segments are group of customers with similar wants. If a given organization concentrates on the value, these segments would signify either different significance for the criteria or different value criteria.

Even though concentrating on a market segment and product line is impulsive for many marketers, today, many are also concentrating on the intersection of product lines and market segments. Both product lines and market segments lessen the difference between product lines and segments correspondingly, leaving only the internal variance as a source of interference, thus giving a clearer and more direct knowledge of the voice of the customer.

Choosing the Right Customers

Before choosing an appropriate market/product, one must first identify certain strategic criterion and then apply a uniform assessment of the criterion on all the markets/products that have been listed. A standard criteria is composed of market growth rate, market size, competitive intensity, market share, downstream service/product revenues and the margins within the market/product.

Firstly, get rid of all factors that denote selling a product or service to a certain segment is not appropriate. Subsequently, assess the remaining factors in conjunction with the strategic criterion. The most sought-after opportunities would be those that score more in terms of fulfilling the given criterion.

However, this does not mean the organization would stop working for the other markets/products. The organization continues to invest and avoid expending Six Sigma resources. At this stage, the organizational strategies and Six Sigma align and run parallel. Lastly, the organizations select appropriate voice/s of the customer to pay attention to and drive Six Sigma projects respectively.

Factors companies should listen to

Six Sigma employs customer satisfaction as the decisive voice-of-the-customer metric. There are times when managing this metric becomes difficult as satisfaction has a minuscule connection to the market performance or is not accountable for the interaction between price and quality

It is essential to get an appropriate voice of the customer to strategically apply Six Sigma. But, before that, it is important to understand how Six Sigma initiatives are coherent with the strategy. It is also essential to know which customer would provide an appropriate voice and what to take note of. With changing times, customer value is also increasing. Today, it is being taken into consideration due to its connection with the market performance and capability to understand dynamics of customer actions. It has now turned into a dominant metric for directing and identifying Six Sigma initiatives and projects.