INSIGHT – Six Sigma to success

This management philosophy has become a crucial factor in organisational growth
Globalisation and instant access to information, products, and services has redefined the way companies function — old business models no longer work. Organisations must delight their customers and constantly look for new ways to exceed their expectations. But how do they do it? The answer may lie in Six Sigma, a buzzword in corporate management circles.

A management philosophy, Six Sigma propagates setting extremely high objectives, collecting data and minutely analysing results to reduce defects in products and services. Sigma is the Greek symbol for standard deviation in statistics. The standard deviation measures the number of variations in a process.

“Six Sigma is a disciplined approach to business process improvement,” explains Dr. Vivekanand Kochikar, Associate Vice-President, Infosys Technologies. “It helps achieve significant quality and performance improvements without requiring much investment.”

Although Six Sigma was started at Motorola’s manufacturing division, it eventually evolved and was adopted by other non-manu facturing companies as well which include services, call centres as well as medical and insurance procedures.

Incidentally, Mumbai’s super-efficient dabbawalas were given a Six Sigma rating by Forbes magazine. About 5,000 dabbawalas work daily in a finely tuned system to deliver tiffins in an exercise that begins at 9 a.m. and ends at 5 p.m. According to the article, only one mis take for every eight million deliveries is their norm. How it works Six Sigma is a data-driven, customer-focused management methodology that supposedly improves process performance, decreases levels of variation and maintains consistent quality of output. This reduces defects and enhances product quality, profits and customer satisfaction.

The principle of Six Sigma is that by measuring the quantity of defects in a process, you can figure out how to systematically eliminate them and get as near to perfection as possible. For a company to achieve Six Sigma, it cannot produce more than 3.4 defects per million parts (or opportunities).

“Over time, Six Sigma serves as a mechanism for cultural transformation in organisations by making managers more data-oriented and by using sound techniques in decision-making,” says Naresh N. Shahani, Managing Director, Breakthrough Management Group India. Training There are three levels of training in the Six Sigma quality system: black, green and yellow belts. An external Six Sigma expert trains Master Black Belts. Black Belts are the on-site experts who develop and lead cross-functional teams, and advise management on prioritising, planning and launching Six Sigma projects. They are directly responsible for the execution of projects in a Six Sigma organisation.

The Master Black Belts train black, green, and yellow belts. Green Belts are the organisation’s employees who apply Six Sigma to their jobs. They have less Six Sigma responsibility and their efforts are focused on projects that are directly related to their daily work.

Success factors Six Sigma is heavy on statistics, but process change is about mindset, too, and so the people aspect receives considerable focus. Shahani stresses that establishing the Six Sigma management system is crucial to success. “The company needs to also make a commitment to have full time Black Belts. These Black Belts should be selected carefully from within the organisation and their career planned carefully to send the right signals to other employees.”

Concurs Suresh Tiwari, Vice President, HR, Eli Lilly (India), “The selection of Black Belts is important. In the initial phase of implementation, there is a mix of uncertainty and resistance to change. Therefore, the Black Belt should have leadership qualities in addition to technical capabilities to quickly remove barriers.” Constant communication and involvement of all stakeholders at all stages are a must. Pertinent issues Today, for the large and small companies, which have launched Six Sigma initiatives, it is just about joining the bandwagon. According to Tiwari, at times, people think that every problem will have a Six Sigma solution, which is not the case. “There are certain problems, which need a quick-fix solution and then there are problems related to culture and people that cannot be addressed using Six ¦ Sigma,” he adds.