Six Sigma
Six Sigma was originally developed as a set of practices designed to improve manufacturing processes and eliminate defects, but its application was subsequently extended to other types of business processes as well. In Six Sigma, a defect is defined as anything that could lead to customer dissatisfaction.
The particulars of the methodology were first formulated by Bill Smith at Motorola in 1986.Six Sigma was heavily inspired by six preceding decades of quality improvement methodologies such as quality control, TQM, and Zero Defects, based on the work of pioneers such as Shewhart, Deming, Juran, Ishikawa, Taguchi and others.
Like its predecessors, Six Sigma asserts that –
Continuous efforts to achieve stable and predictable process results (i.e. reduce process variation) are of vital importance to business success.
Manufacturing and business processes have characteristics that can be measured, analyzed, improved and controlled.
Achieving sustained quality improvement requires commitment from the entire organization, particularly from top-level management.
Features that set Six Sigma apart from previous quality improvement initiatives include –
A clear focus on achieving measurable and quantifiable financial returns from any Six Sigma project.
An increased emphasis on strong and passionate management leadership and support.
A special infrastructure of “Champions,” “Master Black Belts,” “Black Belts,” etc. to lead and implement the Six Sigma approach.
A clear commitment to making decisions on the basis of verifiable data, rather than assumptions and guesswork.
The term “Six Sigma” is derived from a field of statistics known as process capability studies. Originally, it referred to the ability of manufacturing processes to produce a very high proportion of output within specification. Processes that operate with “six sigma quality” over the short term are assumed to produce long-term defect levels below 3.4 defects per million opportunities (DPMO). Six Sigma’s implicit goal is to improve all processes to that level of quality or better.
Six Sigma is a registered service mark and trademark of Motorola, Inc. Motorola has reported over US$17 billion in saving] from Six Sigma as of 2006.
Other early adopters of Six Sigma who achieved well-publicized success include Honeywell (previously known as AlliedSignal) and General Electric, where the method was introduced by Jack Welch.By the late 1990s, about two-thirds of the Fortune 500 organizations had begun Six Sigma initiatives with the aim of reducing costs and improving quality.
Businesses of all sizes are aiming for growth, development, and success. In today’s highly competitive world where economy is rapidly changing, it is inevitably important for all managers of every business establishment to make sure that everything they do and create can help meet their financial needs and expectations of their respective clientele. The good news is that a lot of company development techniques are now available for businesses to employ. Developing an effective Six Sigma scorecard is just one of the most known.
The Six Sigma scorecard is basically a measurement system that works to calculate and quantify the performance value of the workforce. Creating this system takes time, consideration, proper planning, and a lot of effort. If these are not exerted, then developing the Six Sigma scorecard would definitely be bothersome. It is made to realize overall success by way of estimating the contributions of all the employees that belong in the workforce of a particular business. Simply put, the Six Sigma scorecard focuses much on the value of the human element, which inevitably is the most precious unit in every business.
Contrary to what the other measurement schemes are doing, Six Sigma is designed and developed to measure the operational performance of a company in a unique way. What happens is that the scorecard is made to identify the major and minor defects in the manufacturing and other service-related operations that a company is handling. It is targeting these defects in order to realize the most valuable steps and methods that could help prevent the possibility of defects. The performance of the workforce is then subject to assessment, monitoring, and course-correcting; all of which are considered to align the employees with the missions and visions of the organization they’re working with.
So, how exactly is the Six Sigma scorecard built? What sort of strategies should the company employ to achieve this? This is actually pretty simple! The company needs to understand that in developing the scorecard, there are four categories involved. First has something to do with meeting the customers’ expectations. No company can do without considering the expectations of their customers. Thus, it is of such importance to consider these aspects. The second is focused on financial aspect. This is self-explanatory already. The third is all about the operational system of the company itself and the last has something to do with continual improvement. All of these factors serve as the foundation for setting certain objectives and goals to realize the best organizational direction.
So, if a particular company seeks to link with its branches to generate performance and contributions, then direct action and partnerships are needed. This is where the Six Sigma scorecard process comes in. And, if all the necessary elements are realized and acquired, the output of the performance balancing is what will help the employees and decision makers to realize their roles and responsibilities when it comes to delivering their company’s services. Simply put, the Six Sigma scorecard is a measurement scheme that should be created with reliable and powerful strategies to ensure the best performance output possible.
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Great article Dr. Cisco! Your approach is simple yet elegant in its description of the methodology and history. Thank you for being a practitioner and educator.