Six Sigma Breakthrough

You might have heard or read about Six Sigma Breakthrough in the newspaper as organization after organization has begun to adopt and implement this powerful management philosophy.

Lets agree in the following basics :

1- Companies exist to be profitable. Profitable companies provide jobs and pay taxes that benefit the community. Making a profit is based on having customers who want your product or service. Wanting your product or service is just the beginning.

2- Every customer has requirements regarding the product or service.Think about the customers of your business. Are they happy with your products or services?

Every business exists because it has customers. Every customer has a set of requirements.If you are meeting their requirements, you are being effective. If their requirements are not being met you are being ineffective.

If you are ineffective and do nothing about it, soon you will be out of business.

However, focusing merely on customer effectiveness would eventually mean they could go out of business. Why? Because to be a profitable business, an organization must also be efficient.

3- Efficiency relates to the amount of resources consumed in being effective. Efficiency can be measured in time ,cost , labor, or value.Since businesses exist to make a profit, being focused on the customer without also being focused on efficiency will not be a good business decision.

4- Six Sigma , at its basic level, is attempting to improve both effectiveness and efficiency at the same time.

For example, if on any day McDonald’s served one million customers, how many of them experienced bad service during lunch ? If only three (yes, three) customers were unhappy with their Lunch, then McDonald’s achieved 6 Sigma on that day. This is because 6 Sigma is equivalent to only 3.4 bad customer experiences for every million opportunities.

So do you think only 3.4 bad customer experiences at McDonalds occurred today?

If 233 bad customer experiences occurred per million McDonald’s customers then McDonald’s would be a Five Sigma company. If 6,210 customers had experienced soggy french fries or an inaccurate order then McDonald’s would be a Four Sigma company.

If 66,807 McDonald’s customers opened their lunch bag and found a Big Mac when they had ordered a Quarter Pounder, McDonald’s would be a Three Sigma company.

Most companies are at the two to three sigma level of performance–that means between 308,538 and 66,807 customer dissatisfaction occurrences per million customer contacts.Companies that have a two to three sigma level of performance experience business problems. They don’t make as much money as they should for their shareholders.

Shareholders get mad and begin to take their money elsewhere. Management wants to increase profitability.Often, they think too much in the short term and begin to lay off employees.What management forgets by “downsizing” is that if they run a business that is neither effective nor efficient, things will only get worse with less people expected to work harder.

So,What Can Six Sigma Do for You and Your Company ?

1-Successful implementation of Six Sigma will result in improved effectiveness and efficiency in the first “wave” of projects .

2- greater job security.

3- learning new skills.

4-These new skills will mean greater opportunities such as promotions in your current company.

5- You will start by 20 to 30 processes in an organization, usually 7 to 10 will be part of the first implementation efforts. Of those 7 to 10 projects, 4 to 7 will probably be successful. These first projects will help generate increased enthusiasm and momentum for future Six Sigma activity within your company.

Let' see example: In a food ordering process, data collected on three customer requirements:

1. Food delivery time.

2. Food order accuracy.

3. Food freshness.

For food delivery time, the food preparation group indicates that the target for delivery is on Tuesdays at 6:00 P.M. Further, the food preparation group indicates that a delivery is considered late if the delivery arrives at 8:00 P.M. and is considered too early if it arrives before 4:00 P.M. With the target and specifications (Target = 6:00 P.M. and the specifications being 8:00 P.M. and 4:00 P.M.)

This distribution of delivery performance for 22 previous deliveries shows that 11 of the 22 deliveries arrived earlier than the “window” of allowable time. Two deliveries arrived later than the “window” of allowable time.

This window of allowable timehelps to define what is unacceptable to the customer. Anything that is unacceptable to the customer in terms of a product or service is considered a defect.

Determining the number of defects is a critical part of calculating sigma performance.In this example, the 11 early deliveries and the 2 late deliveries are defects. Adding them together we have 13 total defects out of 22 total deliveries.

The easiest way to calculate sigma performance is defects per unit. The unit in this example is the food delivery. Here we had 22 deliveries (units). Dividing 13 defects by the number of units (13 / 22) equals 0.59.

This means 59 percent of the deliveries are defects. If 59 percent of deliveries are bad, then 41 percent of the deliveries are considered acceptable by the customer (the number acceptable is called the yield)

The Figure shows a sigma conversion chart for what would be the equivalent for a yield of 41 percent. A yield of 42.1 percent would equal a sigma of approximately 1.3. Therefore, a yield of 41 percent would be 1.29+ so we will round up and call the food service delivery baseline sigma 1.3.