A Guide To Implement Six Sigma In Your Process

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  • 1. A GUIDE TO IMPLEMENT SIX SIGMA IN YOUR PROCESS The last decade has been very kind to the global industry with increasing market sizes fuelling global competition and sudden surges in market shares. Companies have put customers and their managers at the forefront of their strategies with minimal or no concern to the excesses availed. Unfortunately such a market built on inflationary claims doesn’t last long and when the markets came crashing down panic gripped the financial and non-financial markets, with a sudden need to cut costs and rationalize business and corporate spending. The quest for a rationalizing mechanism has lead the industry to the old and tested tools of management such as LEAN, Six Sigma amongst others, but are these solutions appropriate for all or they need to be applied with caution is what the author tries to explain in this article. This article summarizes the necessities for implementing a program such as Six Sigma and highlights the dos and don’ts. This article can be viewed as a guide or a catalyst for debate but the article is not necessarily designed to be a rule book. INTRODUCTION TO SIX SIGMA Six Sigma as it was implemented in Motorola by Bill Smith was designed to be a process improvement methodology specifically in the manufacturing sector. It was designed to bring down the number of defects through various tools which are used individually or in combination to reduce variances in cost, quality and time. Increasingly this tool has been used in other process and functions such as HR and management wherein it has gained a reputation to be an effective tool. Yet in our approach to Six Sigma and its development to a management tool we still have to understand that just as other business management tools, this tool has also a tendency to fail not because of ITS flaws but because of the way in which it is implemented. THE THREE KEY ELEMENTS As a marketing person I have tried to look at analogies within the subject to explain the key aspects for implementation of Six Sigma. The marketing function looks at the 4p’s of marketing i.e. Product, Promotion, Price and Placement; these factors both individually and collectively decide the success of a product/service in the market. Similarly I have tried to identify three key factors which could influence the success or failure of a six sigma program.
  • 2. Process Management Organization People The paragraphs below would look into each component in detail ORGANIZATION An organization is formed through merger of people and processes both of whom are appraised on the basis of their performance. Though processes have increasingly taken a key role in large multinationals, let us not forget the driving force behind these processes is people. The organization is formed of various capabilities which make it unique and provide the necessary competitive edge to survive and grow in the market. These capabilities are however acquired through individual employees exhibiting their competencies and using them to drive a process, this is why this triangle is inverted with people given the most importance. PEOPLE When we refer to people we not only refer to the individual needs but the societal needs exhibited as culture. For understanding how we can drive Six Sigma in our organization we need to first understand what tools we use in this process. Six Sigma has evolved as a set of tools with origins in Deming’s, Juran’s Taguchi’s and other gurus’ principles and teachings on quality. Most of these principles were first adopted by the Japanese, the fundamental reason being these tools fit their culture best. It is important that we analyze the existing culture within the organization as well as the possible cultural effects of implementing this methodology. Six Sigma needs a fundamental/paradigm shift in how managers and workers approach quality. No longer are manager’s just facilitators within this process but they form an active part of the process. We need to understand that a Six Sigma culture drives quality as a collective responsibility and not as most western management systems do i.e. through competition. This does not mean that a Six Sigma organization is not competitive, but it competes with
  • 3. others in the market and not with itself. Hence it is important that there is a cultural shift, with an increased spread of both responsibility and authority to drive Six Sigma. As a part of the above argument I feel that any Six Sigma program should be spear headed by the operators and workmen and not the management. This does not mean that every workman needs to be trained in Six Sigma, rather they need to form the most important link in the chain. As managers or consultants our role should be to guide them in this endeavor and not demoralize them by using our authority. Often we tend to forget this and hence many organizations do Six Sigma projects, which very rarely generate revenue/results as most do not consider the operator/process owner’s interests. The next important factor we need to consider is that, the tool we are using relies on advanced statistical methods to arrive at solutions. It does not mean that Six Sigma is about statistics but statistics is an integral part of this methodology. Hence it is necessary that the people who implement Six Sigma have the comfort and confidence in using such a tool and therefore as a manager it would be wise to start with a less demanding system such as Kaizen or LEAN before exposing the team to Six sigma. Thus I feel that there are two key aspects which a manager needs to work (at the people level) on before implementing Six Sigma they are:- • Cultural Fit with Six Sigma • Comfort fit with Six Sigma • Knowledge fit with Six Sigma PROCESS To understand the importance and influence of Process on Six Sigma we need to revisit the definition of Six sigma which is – Six Sigma is a methodology which uses a set of tools to reduce variations in a process and bring about overall improvement. This definition leads us to define the variation that we are striving to reduce, all variations or some in particular. To answer this question we need to then understand the causes of variation i.e. common and special causes. For this article’s purpose I assume that the reader can define the two causes so that we can focus on the key issue. In Six Sigma it is said that the elimination of special causes would result in the process achieving 3 sigma i.e. 66,800 defects in a million. It is only when the common causes are eliminated does a process achieving a higher sigma rating. Hence it needs to be ascertained by the manager if he/she needs to eliminate special or common causes and it is important that he/she is able to classify and define them at the earliest. If the manager
  • 4. fails to do so it would lead to wastage of resources as special causes can also be tackled with simpler tools such as Kaizen and LEAN. The next element to be considered is the complexity of the process. Even before a manager contemplates the use of Six Sigma it is important he/she understands the complexities of the process. The more complex the process the more difficult it would be to implement Six sigma methodology and as a consequence would add additional strain on the company’s resources. It would be business prudence to first simplify existing processes and then implement Six Sigma. Thus the author feels that the key issues in processes are:- • Type and nature of variation • Complexity of the process MANAGEMENT The current economic situation has put a lot of strain on the resources of companies, leading to a greater focus on performance and performance related issues. But most of the companies fail to understand that non-performance creeps into an organization because of non-performing systems (including HR) and not non-performing people, this is what most of the Japanese firms have understood and hence their focus on training across the hierarchy and belief in continuous improvement. Such systems are immune to non- performance and protect an organization from accumulating non-performance assets. Six Sigma as a philosophy, works towards reduction of this non-performance by eliminating variation and improving the process. But it does so focusing on a single process and hence needs to be implemented across the organization. It also believes in continuous improvement and training like the Japanese and like their programs runs for a longer period of time. It has certain organizational needs which can be listed as follows:- • Top management support • Need for a dedicated project lead • Need to allocate a dedicated team for the project • The team requires to be multifunctional for improved effectiveness • The team requires time apart from their regular work time • They need time to pinpoint the problem, collect data, validate data and implement the findings. A typical project needs at least 3-6 months from the Define phase to the Control phase • They need to work together with the process owners and hence the latter’s approval is also necessitated • Most importantly they need access to financial resources
  • 5. Thus the key for any manager before considering implementing Six Sigma is to consider whether the above criteria can be met and whether the company can spare time and resources to go ahead with implementing this exercise. All big corporate such as GE, Honeywell and Motorola would have encountered these issues and hence they have separate teams to look into process improvements but at the onset their managers would have had to make the very same decisions that would haunt you as managers if you are implementing Six sigma for the first time in your organization. The above mentioned organizations harnessed the benefits and converted process improvements into financial results and that is probably the reason why they have separate teams and verticals working on such projects. As managers implementing Six Sigma for the first time, you would also need to prove the benefits in terms of financials and only then would the performance be rewarded and replicated across the organization. Thus I feel it is important for the manager to:- • Perform a cost to benefit analysis before implementing Six Sigma • Get the top management support • Check availability of staff • Willingness of the staff to spend additional project time • Willingness of the company to spend additional resources • Finally to define the scope and deliverables of the project in people, process and financial terms It is only then that the manager can expect performance out of his project and team, further the company and top management would feel justified in investing in such projects which have clear deliverables, requirements and outcomes. Because lot of managers forget these preliminary requirements, they get frustrated when their projects fail or are scrapped midway. They feel lonely and let down, but what they do not understand is that it I they who have let down themselves and not the organization, hence it is they who need to rethink their strategy on how to implement Six Sigma. Therefore it is important for all of us to understand that as a methodology Six Sigma has its own requirements which can be classified as above. What as managers we need to understand is that if and only if we are able to meet the above mentioned requirements should we think about implementation/introduction of Six Sigma in our organization. Else it will be personally, carrier wise and a financially prudent decision to first prepare our organization and team with much simpler quality/management tools and assignments and progress towards Six Sigma at a later stage. "The difference between failure and success is doing a thing nearly right and doing a thing exactly right." Edward Simmons