See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/243461561 Six Sigma for service processes Article in Business Process Management Journal · March 2006 DOI: 10.1108/14637150610657558 CITATIONS 305 READS 6,724 1 author: Some of the authors of this publication are also working on these related projects: Leadership for Quality in Public Sector Reform View project The role of government in leadership for LSS in the public sector View project Jiju Antony Heriot-Watt University 359 PUBLICATIONS 13,565 CITATIONS SEE PROFILE All content following this page was uploaded by Jiju Antony on 11 December 2015. The user has requested enhancement of the downloaded file.
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See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/243461561
Six Sigma for service processes
Article in Business Process Management Journal · March 2006
DOI: 10.1108/14637150610657558
CITATIONS
305READS
6,724
1 author:
Some of the authors of this publication are also working on these related projects:
Leadership for Quality in Public Sector Reform View project
The role of government in leadership for LSS in the public sector View project
Jiju Antony
Heriot-Watt University
359 PUBLICATIONS 13,565 CITATIONS
SEE PROFILE
All content following this page was uploaded by Jiju Antony on 11 December 2015.
The user has requested enhancement of the downloaded file.
Business Process Management JournalSix sigma for service processesJiju Antony
Article information:To cite this document:Jiju Antony, (2006),"Six sigma for service processes", Business Process Management Journal, Vol. 12 Iss 2pp. 234 - 248Permanent link to this document:http://dx.doi.org/10.1108/14637150610657558
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Users who downloaded this article also downloaded:Jiju Antony, Ricardo Banuelas, (2002),"Key ingredients for the effective implementationof Six Sigma program", Measuring Business Excellence, Vol. 6 Iss 4 pp. 20-27 http://dx.doi.org/10.1108/13683040210451679Ricardo Banuelas Coronado, Jiju Antony, (2002),"Critical success factors for the successfulimplementation of six sigma projects in organisations", The TQM Magazine, Vol. 14 Iss 2 pp. 92-99 http://dx.doi.org/10.1108/09544780210416702Mahesh S. Raisinghani, Hugh Ette, Roger Pierce, Glory Cannon, Prathima Daripaly, (2005),"Six Sigma:concepts, tools, and applications", Industrial Management & Data Systems, Vol. 105 Iss 4 pp. 491-505http://dx.doi.org/10.1108/02635570510592389
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Six sigma for service processesJiju Antony
Division of Management, Caledonian Business School, Glasgow CaledonianUniversity, Glasgow, Scotland, UK
Abstract
Purpose – This paper attempts to demonstrate the power of six sigma, a disciplined approach toimproving product, process or service quality, in the service industry.
Design/methodology/approach – The paper presents the basic features that characterize sixsigma followed by a simple methodology for six sigma applied to service operations. The paper alsoillustrates a set of tools and techniques used within six sigma for service process performanceimprovement. Key success factors for the implementation of six sigma in service organisations and thefactors for selection of winning projects are also addressed.
Findings – The paper draws the point that six sigma is not same as other quality initiatives such asTQM due to various misconceptions among many quality practitioners with these two philosophies.There are also limitations of six sigma and these are outlined and discussed.
Originality/value – Although six sigma has been successfully implemented in manymanufacturing industries, its application in the service sector is still comparatively limited dueto various constraints. This paper presents the potential areas where six sigma could be exploitedin service functions.
Keywords Six sigma, Customer services quality, Quality improvement, Service industries
Paper type Research paper
IntroductionSix sigma as a business strategy has been well recognised as an imperative foroperations and business excellence. This powerful business management strategy hasbeen exploited by many world class organisations such as General Electric (GE),Motorola, Honeywell, Bombardier, ABB, Sony, to name a few from the long list. Sixsigma applications in the service sector are still limited although it has been embracedby many big service oriented companies such as J P Morgan, American Express,Lloyds TSB, Egg, City Bank, Zurich Financial Services, BT, etc. Six sigma today hasevolved from merely a measurement of quality to an overall business improvementstrategy for a large number of companies around the world. The concept of six sigmawas introduced by Bill Smith in 1986, a senior engineer and scientist within Motorola’scommunication Division, in response to problems associated with high warrantyclaims. The success of the efforts at Motorola was not just achieving six sigma qualitylevel rather the focus was on reducing defect rate in processes through the effectiveutilisation of powerful and practical statistical tools and techniques. This would lead toimproved productivity, improved customer satisfaction, enhanced quality of service,reduced cost of operations or costs of poor quality, and so on.
Mikel Harry formerly at Motorola is accredited with the development of the sixsigma concept in the late 1980s (Maguire, 1999). In 1988 Motorola was honoured withthe Malcom Baldridge Award, and prior to this date in three consecutive years,Motorola had spent $170 million on worker’s education and training. As a result,Motorola saved $2.2 billions in terms of cost of poor quality (Antony and Banuelas,2002). GE is one of the most successful companies in implementing six sigma projects.
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1463-7154.htm
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Business Process ManagementJournalVol. 12 No. 2, 2006pp. 234-248q Emerald Group Publishing Limited1463-7154DOI 10.1108/14637150610657558
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According to the Chairman of the Board and CEO of GE (Jeffrey R. Immelt), “We are inthe ninth year of six sigma at GE, and it has become a permanent initiative – six sigmais the way we work”. During the last year, GE has completed over 50,000 projectsfocused primarily in three areas: working with our customers on their issues;improving our internal processes to improve our customer interfaces and generatecash; and improving the flow of high-technology products and services to the marketplace. Six sigma is creating repeatable and reliable processes that allows us to reducecash tied up in inventory and receivables (GE, 2002). Other companies such asHoneywell (previously allied signal), Texas Instruments, Sony, Caterpillar, ABB, DowChemical, etc. have also reported their success stories of six sigma implementation andcredited six sigma with several millions of dollars in savings.
The six sigma logicThe term sigma is a measure indicating the deviation in the performance characteristicof a service from its mean performance. The basic goal of a six sigma strategy is toreduce variation within the tolerance or specification limits of a service performancecharacteristic. In order to improve the quality of a typical service, it is imperative tomeasure or quantify variation and then develop potential strategies to reduce variation.Assume a process where the output, say, the time taken to process an insurance claim(Y), is desired to be not more than a specification limit (SLupper) or upper specificationlimit. If the distance between process mean and the SLupper is about six standarddeviations, the process is said to then achieving a “six sigma” quality level. If processdrift factor is taken into account due to various sources of external uncontrollableinfluences (fluctuations of emotional conditions of staff members) over a period of time,then the defect rate is about 3.4 parts per million. In essence, six sigma quality levelrelates to 3.4 defects per million opportunities (DPMO). The primary means toachieving six sigma quality level is to eliminate the causes of quality or process relatedproblems before they are transformed into defects. The focus of “six sigma” is not oncounting the defects in processes, but the number of opportunities within a process thatcould result in defects. For instance, consider a call or contact centre and for any givencall from a customer to the contact centre, the following opportunities might lead todefects, which ultimately causes customer dissatisfaction and hence lost customers:
. the manner in which the customer is greeted by the customer service agent orcustomer service representative;
. the accuracy of information provided by the agent to the customer;
. the queuing time before the customer gets hold of an available agent;
. the number of rings before an agent responds to the call;
. the accuracy of the data entry of customer identity to retrieve past data;
. the listening, speaking and interpretive skills of the agent;
. the accuracy of data entry if a fault or problem has been reported by thecustomer;
. the time taken to restore the service if a fault has been reported;
. the manner in which the call is ended; and
. the timely arrival of any requested follow-up material, etc.
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The objective of a six sigma strategy in the above case is to understand the processwithin the call centre which creates the defects and devise process improvementmethods to reduce the occurrence of such defects which improve the overall customerexperience. The focus must be on four issues:
(1) What are the nature of the defects which are occurring in the process?
(2) Why such defects are occurring and at what frequency?
(3) What is the impact of defect on customers?
(4) How these defects can be measured and what strategies should be implementedto prevent the occurrence of such defects?
Why six sigma is required in the service industry?Research has shown that most of the service processes like payroll processing,billing, invoicing, shipping, order entry, response to service requests, baggagehandling, etc. are performing at less than 3.5 sigma quality level with a defect rateof over 23,000 ppm or yield 97.7 per cent (Yilmaz and Chatterjee, 2000). If weimprove the sigma quality level of any of the above mentioned service processesto four sigma quality level, the defect rate will be dropped significantly to6,210 ppm. This clearly indicates a 3.5-fold improvement in process performance.The process yield will be increased to 99.38 per cent. This would bring significantfinancial returns to the bottom-line of any organisations (due to reduced defectrate, reduced number of customer complaints, improved customer satisfaction, etc.)engaged in powerful business process improvement methodologies such as sixsigma.
Many service-oriented companies still conform to the notion that six sigma isconfined just to manufacturing companies. The best way to convince a service-orientedcompany to initiate, develop and implement six sigma strategy is through the threerudimentary principles of statistical thinking advocated by Hoerl and Snee (2002).These are:
(1) all work occurs in a system of interconnected processes;
(2) all processes exhibit variability; and
(3) all processes create data that explains variability and it is our responsibility tounderstand the sources of variability and devise effective strategies to reduce oreliminate variability.
Service-oriented companies adopting six sigma will have the following benefits:. Effective management decisions due to heavy reliance on data and facts instead
of gut-feelings and hunches. Hence costs associated with fire-fighting andmisdirected problem solving efforts with no structured or disciplinedmethodology could be significantly reduced.
. Increased understanding of customer needs and expectations, especially thecritical-to-quality service performance characteristics which will have thegreatest impact on customer satisfaction and loyalty.
. Efficient and reliable internal operations, leading to greater market share andsatisfied shareholders.
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. Improved knowledge across the organisation on various tools and techniques forproblem solving, leading to greater job satisfaction for employees.
. Reduced number of non-value added operations through systematic elimination,leading to faster delivery of service.
. Reduced variability in service performance, leading to more predictable andconsistent level of service.
. Transformation of organisational culture from being reactive to proactivethinking or mindset.
. Improved cross-functional teamwork across the entire organisation.
Key benefits of six sigma in service organisationsThe following benefits have been derived from the published literature with regard tosix sigma applied to service-oriented business processes.
Citibank group – (Rucker, 2000). Private bank. Reduced internal call backs by 80 per cent, external call backs by
85 per cent and credit processing time by 50 per cent.. Global equipment finance. Reduced the cycle time from customers placing an
order to service delivery and the credit decision cycle by 67 per cent (i.e. fromthree days to one day).
. Copeland companies. Reduced statement processing cycle time from 28 to15 days.
J P Morgan Chase (Global Investment Banking) – www.helpingmakeithappen.com. Six sigma has enabled J P Morgan Chase to reduce flaws in its customer-facing
processes such as account opening, payment handling and cheque-bookordering. This has resulted in increased customer satisfaction and improvedefficiency and cycle times by over 30 per cent.
Healthcare industry. Increased radiology throughput by 33 per cent and decreased cost per radiology
procedure by 21.5 per cent, generated savings in excess of $1.2 million(Thomerson, 2001).
. Reduced medication and laboratory errors and thereby improved patient safety(Buck, 2001).
British telecom wholesale (www.celerantconsulting.com/). Increased levels of customer satisfaction.. Established more robust and effective processes.. Created common language for business process improvement.. Business benefits in excess of over $100 million (reduced capital expenditure,
Financial services (www.executiveonline.co.uk). Administrative cost reductions in excess of $74,000 per annum.. Opportunity gains in excess of $288,000 per annum.. Increased customer satisfaction and retention by reducing wire transfer
processing time by over 40 per cent in a banking and financial services company.Moreover, the estimated savings generated from unnecessary processing costs isabout $700,000 per annum (www.sixsigmaqualtec.com).
Utility company. Annual savings of $1.7 million from improving service delivery (www.
executiveonline.co.uk).. Within the contract department of a utility company, excavation, cable-laying
and re-instatement contract complaints resulted in customer dissatisfactionand high costs. Using the six sigma methodology the number of contractcomplaints has been reduced from 109 to 55 during 2000-2001. (www.sixsigmaqualtec.com).
Table I briefly presents the type of quality characteristics within various servicefunctions where six sigma could be employed. The author believes that this tablewould be useful for those service-oriented companies who are embarking on the sixsigma journey for process performance improvement or cost reduction projects. One ofthe challenges in service processes is about “what to measure and how?” It is importantto ensure that the characteristics which you measure from the processes are critical toimprove customer satisfaction and the level of service quality.
Type of service function Potential areas where six sigma may be employed
Banking Wire transfer processing time, number of processingerrors, number of customer complaints received permonth, number of ATM breakdowns, duration ofATM breakdowns, etc.
Healthcare Proportion of medical errors, time to be admitted inan emergency room, number of successful surgicaloperations per week, number of wrong diagnoses,waiting time to be served at the reception in ahospital, etc.
Accounting and finance Payment errors, invoicing errors, errors in inventory,inaccurate report of income, inaccurate report of cashflow, etc.
Public utilities Late delivery of service, number of billing errors,waiting time to restore the service after a fault hasbeen reported, call centre of the utility company, etc.
Shipping and transportation Wrong shipment of items, wrong shipment address,late shipment, wrong customer order, etc.
Airline industry Baggage handling, number of mistakes inreservation, waiting time at the check-in counter, etc.
Table I.Potential applications ofsix sigma within serviceprocesses
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Six sigma methodology for service processesAs a problem solving methodology or process improvement framework, six sigmastrategy makes use of a series of well-defined steps. This includes definition of theproblem (D), measurement (M) of the problem (i.e. defects which are responsible for theproblem), data analysis (A) to discover the root causes of the problem (i.e. analysis ofdefects), improvement (I) of processes to remove the root causes of defects andcontrolling (C) or monitoring processes to prevent the perennial problem. The sixsigma methodology for service processes is shown in Figure 1.
Define phaseThe following steps must be carried out in the define phase:
. Define the problem (as a project) both succinctly and specifically.
. Identify stakeholders.
. Understand the link between the problem at hand and the criticality of theproblem from the perspective of the customers.
. Carry out a simple mapping of the processes both up- and down-stream todetermine where the problem lies.
. Establish the process inputs, outputs and various controls of the processes.
. Form a six sigma project charter which clearly illustrates the roles of people andtheir responsibilities for the project. Define the resources required for the projectand allowed time-frame for the project at hand. The charter should also revealthe scope of the project, the project boundaries and the key benefits to internal orexternal customers.
. Identify the project sponsor and stakeholders and determine whether this projectis worth an effort using cost-benefit analysis.
. Identify all customers (both internal and external) and justify how this problemis linked to customer satisfaction.
Measure phaseThe following items should be considered during the measurement phase of the sixsigma methodology:
. determine the current performance of the service process (process yield, DPMO,short-term and long-term capability);
. decide what to measure (critical-to-quality characteristic – CTQ) and how tomeasure;
. establish a simple measurement system study (if applicable);
. determine how well our process is performing compared to others throughbenchmarking exercise; and
. identify the strengths and weaknesses and determine the gaps for improvement.
Analysis phaseThe following salient points must be looked at during this phase:
. uncover the root causes of defects in processes;
. understand the root causes of variability which lead to defects and prioritisethem for further investigation;
. understand the nature of data and the distribution or patterns of data;
. determine the key service process variables that may be linked to defects; and
. financially quantify the improvement opportunity (i.e. estimate of potentialfinancial benefits).
Improve phaseThe improvement phase of the methodology encompasses the following issues:
. Develop potential solutions to fix the problems and prevent them from recurring.
. Evaluate the impact of each potential solution using a criteria-decision matrix.Solutions that have a high impact on customer satisfaction and bottom-linesavings to the organisation need to be examined to determine how much time,effort and capital will need to be expended for implementation.
. Assess risks associated with potential solutions.
. Validate improvement (i.e. reduce defect rate or improve sigma quality level ofthe process) by pilot studies.
. Re-evaluate the impact of chosen potential solution.
Control phaseThe control phase of the methodology should comprise of the following items:
. develop corrective actions to sustain the improved level of service processperformance;
. develop new standards and procedures to ensure long-tern gains;
. implement process control plans and determine the capability of the process;
. identify a process owner and establish his/her role;
. verify benefits, cost savings/avoidance;
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. document the new methods;
. close project, finalise documentation and share key lessons learned form theproject; and
. publish the results internally (monthly bulletins) or externally (conferences orjournals) and recognise the contribution made by the team members.
Tools and techniques for service process performance improvementTools and techniques are practical methods, skills, means or mechanisms that can beapplied to particular tasks which foster positive change and improvements (McQuateret al., 1995). A tool has a clearly defined role and is often narrow in focus. Examples ofservice process performance tools include process maps, cause and effect analysis,affinity diagrams, run charts, etc. In contrast, a technique has a wider application andrequires specific skills, creativity and training. Statistical process control (SPC) is atechnique as it utilises various tools (e.g. control charts, histograms, root causeanalysis, etc.) within it. The successful implementation of six sigma requires stringentapplication of tools and techniques at different stages of the methodology. Althoughthe tools and techniques are not new, they have been brought together to provide awell-stocked toolbox. It was interesting to observe that many service organisations aregaining significant benefits through the application of basic tools of six sigma (e.g.Pareto analysis, root cause analysis or cause-and-effect analysis, process mapping orflow charting of processes, etc.). This would align itself with Ishikawa’s(1986) viewthat the basic tools of quality control would be able to tackle more than 80 per cent ofquality or process related problems. The purpose of this section is to look at thecommonly and widely used tools and techniques of six sigma within the serviceindustry. These tools and techniques are generally employed by project teams andspecially trained black belts with technical expertise to tackle process or quality relatedproblems (Pande et al., 2000). The following six sigma tools and techniques grid(Table II) provides some guidelines for people in the service sector regarding whattools and techniques for service performance improvement should be used and at whatstage in the six sigma methodology they should be applied. It is important to note thatthe effective application of tools and techniques in a service environment is dependentheavily dependent on effective and planned training, uncompromising support fromsenior management, a co-operative environment, etc. Some of the tools and techniquesare relevant to more than one stage of the six sigma methodology.
Six sigma performance metrics commonly used by service industriesThe key performance indicators (KPIs) vary from process to process, and fromcompany to company. Nevertheless, there are some commonly and widely used KPISor performance metrics of six sigma, across a number of service industries. Thefollowing are some of the commonly used six sigma performance indictors (KPIs)within service sector:
. cost of poor quality (COPQ);
. DPMO;
. process capability;
. time to respond to customer complaints;
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. processing time (mortgage applications, insurance cover, bank loans, etc.);
. delivery time or speed of delivery;
. time to restore customer complaints;
. waiting time to obtain the service;
. service reliability; and
. accuracy of information provided to customers.
Success factors for the implementation of six sigma in the service sectorA number of authors (Pande et al., 2000; Eckes, 2000; Breyfogle et al., 2001; Antony andBanuelas, 2002) have written about the success factors for implementing six sigma inworld class organisations. The identification of success factors will encourage theirconsideration when companies are developing an appropriate implementation plan. Ifany of the critical success factors is missing during the development andimplementation stages of a six sigma program, it would then be the differencebetween a successful implementation and a waste of resources, effort, time and money.The following success factors have been identified from existing literature:
. strong leadership and management commitment;
. organisational culture change;
. aligning six sigma projects to corporate business objectives;
. selection of team members and teamwork;
. six sigma training;
Tools/techniques Define Measure Analyse Improve Control
Process mapping (2) Y N N N NBrainstorming (2) Y N Y Y NRoot casue analysis (2) N N Y Y NQuality costing (1) Y Y N Y NHypothesis testing (2) N N Y N NSPC (1) N N N N CSIPOC (2) Y N Y N NSERVQUAL (2) N Y N Y NGANTT charts (2) Y Y Y Y YProcess capability analysis (1) N Y N Y NRegression þ correlation analysis (2) N N Y N NBenchmarking (1) N Y N N NControl charts (2) N N N N YPareto analysis (2) N N Y N NCost-benefit analysis (2) Y N N N NHistograms (2) N Y Y N NService FMECA (1) N Y N N NQFD (1) Y N N N NAffinity diagram (2) N N Y N NProject team charter (2) Y N N N NKANO model (2) N Y N N N
Note: Y ¼ applicable and N ¼ not applicable; (1) ¼ technique and (2) ¼ tool
. understanding the DMAIC methodology, tools, techniques and key metrics;
. selection of projects and project management skills;
. linking six sigma to customers; and
. accountability (tying results in financial terms to the bottom-line).
Project selection process within six sigma programThe selection of right projects in a six sigma program is a major factor in the earlysuccess and long-term acceptance within any organisation. This factor becomes evenmore critical in a small and medium enterprise. If you do not have a rigorous anddisciplined approach to selecting projects, there is a high probability that your effortswill flounder. According to Adams (2003), “doing black belt training before projectidentification is the classic – getting the cart before the horse”. The project selectionprocess should be listening to three important voices: the voice of the process, the voiceof the customer and the voice of the strategic business goals. The following guidelinesmay be used to select six sigma projects:
(1) Linkage to strategic business plan and organisational goals.
(2) Sense of urgency – how important is the proposed project for improving youroverall business performance (both financial improvement and service processperformance improvement)?
(3) Select projects which are doable in less than six months. If the project scope isbroader, the time to completion increases, the cost of the project deployment willincrease. This would lead to frustration among the key players due to lack ofprogress, diversion of manpower away from other activities, delay in realisationof financial benefits, etc.
(4) Project objectives must be clear, succinct, specific, achievable, realistic andmeasurable.
(5) Establish project selection criteria – the following criteria may be consideredduring the project selection process:. impact on customer needs and expectations;. financial impact on the bottom-line;. duration of the projects considered;. resources required for projects under consideration;. expertise and skills required to carry out the projects;. probability of success of projects under consideration; and. risk involved in projects, etc.
(6) Projects have the support and approval of senior management.
(7) Define project deliverables in terms of their impact on one or more criticalcharacteristics in the service such as critical-to-quality, critical-to-cost orcritical-to-delivery.
(8) Projects must be selected based on realistic and good metrics (DPMO, sigmaquality level, capability indices, etc.).
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The type of projects and their criteria will vary from business to business and projectto project. However, typical service six sigma projects could have the following generaland specific goals:
. Improved business value by removing non-value added processes, reducingerrors in processes, reducing cycle time of critical processes, etc.
. Improved customer value by providing faster delivery to customers, reducinghassle for customers, providing consistent and reliable service every time,building better customer relationships, etc.
. Improved employee value by building employee relationships, creatingopportunities for employees to acquire new skills and expertise, buildingemployee pride and confidence, etc.
Project reviews must be carried out on a regularly scheduled basis to drive the projectsto a successful completion and closure. Six sigma champions or sponsors should viewthe project review process as a mechanism to identify stumbling blocks (if any) presentin the system and the milestones ahead and to obtain a clear picture of what progresshas been made by the team.
What makes six sigma different from other quality improvementinitiatives?I personally have seen that senior management in many organisations view six sigmaas another quality improvement initiative or flavour of the month in their list. I amoften told by many engineers and managers in small and big companies that there isnothing really new in six sigma compared to other quality initiatives we have seen inthe past. In response, I often ask a simple question to people in organisations whopractise TQM, “what do you understand by the term TQM?”. I often get many varyinganswers to this question. However, if I ask a bunch of six sigma practitioners, “what doyou know of the term six sigma?”, I often get an answer which means more or less thesame thing that I would have expected. The following aspects of the six sigma strategyare not accentuated in previous quality improvement initiatives:
. Six sigma strategy places a clear focus on achieving measurable and quantifiablefinancial returns to the bottom-line of an organisation.
. Six sigma strategy places an unprecedented importance on strong andpassionate leadership and the support required for its successful deployment.
. Six sigma methodology of problem solving integrates the human elements(culture change, customer focus, belt system infrastructure, etc.) and processelements (process management, statistical analysis of process data,measurement system analysis, etc.) of improvement.
. Six sigma methodology utilises the tools and techniques for fixing problems inbusiness processes in a sequential and disciplined fashion. Each tool andtechnique within the six sigma methodology has a role to play and when, where,why and how these tools or techniques should be applied is the differencebetween success and failure of a six sigma project.
. Six sigma creates an infrastructure of champions, master black belts, black beltsand green belts that lead, deploy and implement the approach.
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. Six sigma emphasises the importance of data and decision-making based onfacts and data rather than assumptions and hunches!
. Six sigma utilises the concept of statistical thinking and encourages theapplication of well-proven statistical tools and techniques for defect reductionthrough process variability reduction methods (e.g. statistical process controland design of experiments).
Table III briefly illustrates some of the fundamental but critical differences between sixsigma and TQM.
The following common features can be found in both TQM and six sigmaphilosophies (Hoerl and Snee, 2003):
. customer focus;
. continuous improvement in process/service quality or cost reduction strategies;
. process management;
. fact-based decision-making; and
. use of statistical tools and techniques for problem solving.
Some final key tips to adapt six sigma strategy to service processesThis section is aimed to provide some key tips about how to adapt six sigma methodsto service processes. It is important to note that these tips are just mere guidelines forpeople from service sector engaged in six sigma endeavours:
. Identify which processes in your business are the best candidates for six sigmaprojects.
. Select problems within business processes that can yield substantial benefitsfrom a six sigma campaign.
. Determine how the selected process would affect your customers. In other words,determine the impact of the selected process on customer satisfaction.
Criteria TQM Six sigma
Deployment process to drivefundamental change
Not strong Strong
Integration of tools and techniqueswithin the problem-solving framework
Missing Very much emphasised
Role of leadership and infrastructure toenable the successful deployment oftools and techniques
Weak Strong
Alignment of projects with strategicbusiness objectives of the organisation
Missing Strongly accentuated
Measurement of results in hard-dollarsavings (financial results)
Missing Probably one of the strong features
Management style Bottom-up Emphasis is on top-down leadershipCultural change Gradual and slow Fast change in many casesRewards and recognition Less emphasised More emphasised
Table III.Some fundamental
differences between TQMand six sigma
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. Establish a team and a project charter clearly indicating the roles andresponsibilities of individuals, project milestones, benefits and costs involved ateach stage of project, risks associated with project, etc.
. Define what you mean by a service defect and how you intend to measure it.
. Identify the main contributors or candidates which causes defects in yourprocess.
. Apply six sigma tools /techniques to remove these defects for processimprovement.
. Verify the improvements made by collecting data from the process and comparethe capability before and after six sigma was introduced.
. Implement changes on the process with approval of top management.
. Celebrate the success.
. Extend the application to other critical processes.
. Always remember that “six sigma requires a long-term commitment, andtherefore, it should not be treated as instant pudding for your daily businessproblems”.
Limitations of six sigmaJust like any other quality improvement initiatives we have seen in the past, six sigmahas its own limitations. The following are some of the limitations of six sigma and thuscreates opportunities for future research:
. The challenge of having quality data available, especially in processes where nodata is available to begin with (sometimes this task could take the largestproportion of the project time).
. In some cases, there is frustration as the solutions driven by the data areexpensive and only a small part of the solution is implemented at the end.
. The prioritisation of projects in many service-oriented companies is still based onpure subjective judgement. Very few tools are available for prioritising projectsalthough selecting the right projects is one of the critical success factors of sixsigma implementation.
. The statistical definition of six sigma is 3.4 defects or failures per millionopportunities. In service processes, a defect may be defined as anything whichdoes not meet customer needs or expectations. It would be illogical to assumethat all defects are equally good when we calculate the sigma capability level of aprocess. For instance, a defect in a hospital could be a wrong admissionprocedure, lack of training required by a staff member, misbehaviour of staffmembers, unwillingness to help patients when they have specific queries, etc.
. Owing to dynamic market demands, the CTQs of today would not necessarily bea meaningful one tomorrow. All CTQs should be critically examined at all timesand refined as necessary (Goh, 2002).
. Assumption of 1.5 sigma shift for all service processes does not make muchsense. This particular issue should be the major thrust for future research as asmall shift in sigma could lead to erroneous defect calculations.
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. Non-standardisation procedures in the certification process of black belts, greenbelts, etc. This means not all black belts or green belts are equally capable. Thecapability of black belts or green belts vary enormously across the serviceorganisations, depending a great deal on the certification body. For moreinformation on this aspect, readers are advised to refer to Hoerl (2001).
. The start-up cost for institutionalising six sigma into a corporate culture can be asignificant investment. This particular feature would discourage many smalland medium size enterprises from the introduction, development andimplementation of six sigma strategy.
ConclusionThis paper makes an attempt to demonstrate the power of six sigma in the serviceindustry. Although six sigma has been successfully implemented in manymanufacturing industries, its application in the service sector is still comparativelylimited due to various constraints. This paper briefly presents the potential areaswhere six sigma could be exploited in service functions. The paper also reveals mostcommon six sigma performance metrics commonly used by service industries. Thecritical success factors which make the successful deployment of six sigma arediscussed, followed by providing some guidelines for six sigma project selectionprocess. The critical differences and commonalities between six sigma and TQM arealso highlighted in the paper. The paper culminates with the limitations of six sigmaindicating the future research work to be carried out by both six sigma practitionersand research community in the years ahead.
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Corresponding authorJiju Antony can be contacted at: [email protected]
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