Six Sigma is a widely used Operational Approach towards Operations Management and is frequently applied within Manufacturing Businesses, however the fundamental processes also apply within businesses operating within the Service Industry. The Purpose of Six Sigma is to reduce process variation so that virtually all the products or services provided meet or exceed customer expectations. Six Sigma adopts a very data driven, disciplined method for eliminating defects within processes and promoting business improvement within organisations. Six Sigma is able to show quantitatively how a process is performing and to achieve ‘Six Sigma Status’, a process must not produce more than 3.4 defects per million opportunities. Six Sigma is dissected into three core elements including: Process Improvement, Process Design/Re-Design & Process Management and will be explored below.
1. Process Improvement
The Process Improvement aspect of the Six Sigma Model addresses the concept of improving existing processes with the ultimate objective of increasing the quality of product/service that the consumer receives and attainment of ‘Six Sigma Status’ within operational processes. Key emphasis is focused on identifying the root cause surrounding deficiencies within Organisational Processes. A Five Step Approach is used to eradicate these deficiencies;
- Define – Define what the issue is. Form a Project Team responsible for the eradication & resolution of the issue.
- Measure – Gather data surrounding how the given process is currently operating to gather initial thoughts on what may be causing the problem with the process.
- Analyse – Stage where the root cause is identified through testing many theories based upon what may be causing the problem. Thus, the root cause is ultimately obtained.
- Improve – The crucial stage of devising/designing the necessary changes to substantially improve the process.
- Control – Controlling the effective implementation of the changes and making adjustments/tweaks when necessary if issues arise with the new change in process.
2. Process Design/Re-Design
When Operational Processes become significantly degenerative or possess multiple deficiencies, sometimes the most effective course of action is to Re-Design the Process as in its current duration it will never be able to meet Consumers expectations. This process also applies to designing new operational processes for new Products/New Plants etc. Similarly to Process Improvement a 5-Step Process is utilized to re-design/design a process.
- Define – Define the targets/aims and objectives of the new process and the quality of product/service the consumer requires to be produced.
- Match – Develop Performance Requirement that are aligned with the targets identified in the ‘Define’ stage.
- Analyse – Analyse these Performance Requirements and build an outline framework as to what the basis of the design will consist of.
- Design & Implement – The process of designing and implementing the new process/process change. The design must consider Consumer Requirements and can deliver the ‘Targets’ and incorporating the ‘Performance Requirements’ identified in earlier stages.
- Verify – Ensure the process is operating effectively and as it was designed to do so. Produce Control Mechanisms to ensure that standards are maintained and mitigate the risk of problems arising from this new process design.
3. Process Management
Process Management is often perceived as the most complex and time consuming aspect of Six-Sigma. Process management is a structured approach to performance improvement that centers on the disciplined design and careful execution of a company’s end-to-end business processes. Process Management focuses on operating as a team and a guide as to which activities should be done when and by whom. Process Management is responsible for the overall design of concept and ensuring the employees are acutely aware they are part of a larger picture/process. Ensuring that an end-to-end process is designed enables Key Decision Makers to make Operational Adjustments as they are dealing with one process that is inter-connected rather than dealing with isolated separate processes which can be difficult to control and improve.
Advantages and Disadvantages of Applying Six Sigma
Six Sigma possesses numerous advantages in relation to fulfilling its objective in eliminating defects and continued business improvement. Six Sigma when administered effectively can lead to increased profitability and decreased costs due to eradicating inefficient processes, thus increasing profitability. This is an incredibly potent attribute of Six-Sigma. Six-Sigma focuses heavily on consumer preference and strives to ensure businesses consistently meet consumer requirements. This leads to happy customers, repeat business and likely increased revenue. There are however considerable limitations to the Six-Sigma Process. Six-Sigma often focuses attention on the rigidity of processes and often stifles innovation which can lead to preventing organisations from realizing full potential. Achieving the Six-Sigma target can often lead to poor business decisions being made due to a fixation on achieving the stipulated ‘Six Sigma Status’, For Example a vastly cheaper production method not being utilized due to a marginally higher defect rate, which within some organisations may be the most informed course of action to take.