Why is Everyone Talking About Artificial Intelligence Suddenly and How it Matters to All of Us?
Understanding the Sudden Interest in Artificial Intelligence by Explaining the Impact on Us Unless you were on another planet and just returned to Earth or you were in a cave, shut off from the world, you wouldn’t have missed the “sudden” explosion in interest around Artificial Intelligence. Right from serious editorials to comical takes on […]
Will Capitalism Destroy Itself?
Karl Marx was one of the most influential philosophers and economists during the 18th century. His ideas relating to economics are profound and have an enormous impact on the world today. The amazing thing about Karl Marx was that he was able to predict the crisis that capitalism would go through. Even though Marxism and […]
Employee Relations – Importance and Ways of Improving Employee Relations
Maintaining healthy employee relations in an organization is a pre-requisite for organizational success. Strong employee relations are required for high productivity and human satisfaction. Employee relations generally deal with avoiding and resolving issues concerning individuals which might arise out of or influence the work scenario. Strong employee relation depends upon healthy and safe work environment, […]
How Hedge Funds Makes Money ?
The inner workings of hedge funds are as elusive as their outward appearance. The general public usually does not know how hedge funds generate revenue and how they manage to pay their employees record salaries and pay rent for the prime properties where their offices are located. The general population is unaware of the various […]
Kinds of Change and the Barriers to Change
There are different kinds of change that an organization might undertake or be forced to undertake because of internal and external factors. The internal factors for change include reorganization and restructuring to meet the challenges of the future and also to act proactively to initiate change as a means of staying ahead of the competition. […]
Six Sigma is not a mere methodology or a quality tool. It is a philosophy i.e. a systematic way of thinking to solve quality problems. Six sigma involves use of statistics to convert raw data into facts about how the processes of the organization are being run. The thrust is on creating processes which can replicate the same results over and over again with near 100% predictability.
Experts in the field of quality have been fighting variation for decades. It is this variation that can be attributed towards creating inconsistent processes. These inconsistent processes lead to different experiences for different customers. It may even lead to different experiences for the same customer at different times.
Thus variation has a significant monetary impact on the working of the organization. This is because it is the root cause of process deficiencies and dissatisfied customers. It is for this reason that top management of various organizations of the world have systematically tried to remove variation from their processes.
Variability is inherent in every process. It a part and parcel of business, however it needs to be managed with an iron fist. This is because variability in every business process tends to cumulate and the end result is mediocre performance. Consider the case of a hotel. There are many processes in a hotel like checking in, ordering room service, housekeeping and check out.
Here is how minor defects in each of these processes are capable of leaving customers thoroughly dissatisfied and enraged. Let’s assume that each of these processes has a 97% efficiency. Therefore out of a 100 cases, only 3 defects will be present. Here is what happens:
Total Number of defects for the hotel: 0.97 × 0.97 × 0.97 × 0.97 = 0.8852 = 88.52%
Hence even though each of the processes may be doing pretty well if you look at it from an individual standpoint, the organization is doing badly. Any business where roughly 12% of the customers will have bad experiences predictably cannot be expected to survive for long.
The answer to this challenge that variation poses can be found only in Six Sigma. Six Sigma achieves for 99.99966% accuracy meaning 3.4 defects per million.
The Six Sigma philosophy stems from the belief that statistics and numerical facts can be used to control the quality of manufacturing processes and service organizations.
Six Sigma processes are completely driven from the point of view of the customer. They start by identifying what is important to the customer i.e the critical to quality metrics. The next step is to identify the gaps in the process that are the cause of not being able to meet the CTQ’s and as a result causing immense customer dissatisfaction.
The usage of Six Sigma has grown by leaps and bounds. Today almost every major organization in the world is following Six Sigma initiatives and making their processes more controlled and more predictable.
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What the Current Wave of Protectionism and Populism mean for the Future of Globalization and Free Trade
February 12, 2025
