How To Exceed Customer Expectations with Six Sigma

November 18, 2016

This post explains how Six Sigma methodologies can lead to improved customer satisfaction, reduced costs and improved processes.

Six Sigma Concepts

The ideas of Six Sigma (6σ) came from Motorola, in the United States, as a result of the fierce competition they were experiencing from the Japanese electronics sector. It was developed as their approach to improving quality, reducing cost and reducing delivery times.

Although Motorola had been suffering in the US consumer market since the early 1970’s it wasn’t until 1986 that the concepts of Six Sigma development began to appear.

The philosophy of Six Sigma encompasses a wide range of strategies, tools and techniques. The idea that variation must be reduced, though, is key to understanding the fundamentals of the approach.

A key tenet of the concept is that the enemy of customer satisfaction is variation. This leads to one definition:

Six Sigma is about the relentless & ruthless pursuit of reduction in variation.

Underlying this premise is the understanding that:

  • all work takes place in a system of interconnected processes
  • variation exists in all processes
  • understanding and eliminating variation is key to success

Six Sigma is a rigorous structured methodology to improve customer satisfaction, reduce the costs associated with poor quality and improve processes. The purpose of Six Sigma is to reduce process variation so that virtually all the products or services provided meet or exceed customer expectations.

Using Six Sigma Methodologies

Six Sigma has evolved over the last three decades and so has its definition. It is best to think about Six Sigma at three different levels:

  1. as a form of measure
  2. as a methodology
  3. as a management system

Essentially, when used to the ultimate degree, Six Sigma is all three at the same time.

1. A Measurement Tool

The idea behind Six Sigma is that if you can measure how many 'defects' you have in a process, you can systematically figure out how to eliminate them and get as close to 'zero defects' as possible. To achieve Six Sigma Quality, a process must produce no more than 3.4 defects per million opportunities.

Using Six Sigma as a stretch target and a measure can lead to important potential benefits:

  • reduce the defect rate by a factor of 10 every 2 years
  • reduce cycle time by a factor
  • 4σ company uses more than 10% of revenues to do internal and external repairs
  • 6σ company uses less than 1% of revenues to do internal and external repairs

The essence of Six Sigma is the quantification of the improvements necessary (in terms of statistics) and defines a system to achieve the goals.

Improvements can be achieved by:

  • identifying a practical problem and converting it into a statistical problem
  • using a set of tools appropriately to derive a statistical solution which can then be interpreted into a practical solution

2. A Methodology

Prior to Six Sigma, quality management in practice was largely relegated to the production floor and to statisticians in a separate quality department. As Six Sigma has evolved, there has been less emphasis on the literal definition of 3.4 DPMO, but still a focus on a number of important key principles for process improvement.

The customer considerations are most important with ‘The Voice of The Customer’ being the key buzzwords – literally understanding that what is important is controlling and improving process in line with customer requirements (not with respect to the Voice of the Process). This in turn means that it is necessary to:

  • understand and manage customer requirements
  • focus on the satisfaction of internal and external customers
  • align key business processes to achieve those requirements
  • utilise rigorous data analysis to minimise variation in those processes
  • implement rapid and sustainable improvement to business processes

At the heart of the methodology is the DMAIC model for process improvement and DMADV used to create new products or process designs.

3. A Management System

For greatest impact Six Sigma has to be directly linked to the organisational strategy. Six Sigma can be used as a top-down solution to help organisations: It should be considered as a business strategy not a quality initiative. It should be recognised as a long term strategy not a short term campaign.

The Six Sigma Management System drives clarity through the business strategy and the measures that are used with that strategy. This is achieved by:

  • aligning the business strategy to critical improvement efforts
  • mobilising teams to attack high impact projects based on biggest value
  • accelerating improved business results
  • focusing on achieving measurable and quantifiable financial returns from any Six Sigma project
  • managing efforts to ensure improvements are sustained

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