Limitations & Disadvantages of Decision Support Systems
Limitations of Decision Support Systems Decision support systems have been incorporated into businesses to support human intelligence for years. However, these systems are not perfect. Although DSSs stop a decision maker from promoting a bias, they simply aid in decision making by offering useful insights into easily consumable bites. The idea is to present all […]
COVID 19 and Its Impact on the Technology Sector
In the past few years, technology companies have been driving the boom in the financial markets. The FAANG companies (Facebook, Amazon, Apple, Netflix, and Google) have seen their valuations increase by leaps and bounds. However, COVID-19 is causing a worldwide stock market collapse. It would be fair to say that the pandemic is not affecting […]
The Rise of India as a Manufacturing Hub
A couple of decades ago, India was considered to be a third world country with limited economic potential. When the idea of outsourcing first came up, most executives in the United States thought that Central American nations or Ireland would prove to be a better fit. However, two decades later, India is the ultimate destination […]
How a typical Business Continuity Program Works ?
In the last decade or so, the threats to the working environment of companies have multiplied ranging from 9-11 type attacks, earthquakes and the spread of diseases like SARS. Further, there is the very real threat of natural and manmade disasters like these disrupting the working patterns of organizations. Hence, there is a need to […]
What Businesses, Groups, and Professionals can do when Faced with Stagnation
What to do when Businesses and Professionals Stagnate Stagnation can happen to anyone. Whether they are businesses, nations, societies, groups, or individuals, the prospect of withering away due to lack of growth or career mobility or opportunities can make even the most resilient of the institutions to atrophy and stagnate. Indeed, the fact that there […]
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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The Cost of Poorly Performing Processes – Need for Six Sigma
February 12, 2025
