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What is Project Risk ?
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Will Automation Kill the Economy ?
Automation is the next big thing! Right from the time of the printing press, automation has always been making headlines. It fundamentally changes the way jobs are performed. However, given the rapid technological advancement in the recent past, there has been an unusually high level of scaremongering regarding how automation is going to affect the […]
Offshoring and Outsourcing Firms in the New Normal and what is in Store for Them?
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Customs Clearance – Meaning, Scope and Documentation
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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
