Sunday, November 21, 2010

Six Sigma and Process Improvement

Out of the CrisisOnce upon a time some very smart and intelligent people looked at the world around them and realized that the way things are working now is not the only way in which things can work.  These people realized that the businesses exist to service a need and the need they are fulfilling is what people are willing to pay for.  At the same time they also saw that by giving customers a more valuable and quality focused product they would be able to ensure that those customers would continue to come back.  Some of these extremely smart people were W. Edwards Deming, Michael Hammer and Joseph Juran and they focused on a a very fundamental truth: The main source of waste and inefficiencies are problems in the process.

After careful analysis and much further work by other visionaries over the years Six Sigma was born.  What is Six Sigma you may ask?  At its simplest you could say that 99% quality is One Sigma.  Businesses that state they function at this level seem laudable until you do some more digging though -

99% “good quality” means:

Unsafe drinking water almost 15 minutes each day.
5,000 incorrect surgical operations per week.
Two airplane accidents at most U.S. major airports each day.
200,000 wrong drug prescriptions each year.
No electricity for almost 7 hours each month.
The Deming Management MethodConversely Six Sigma is a striving for 99.9999% quality.  As you can well imagine reaching this lofty goal is NOT an easy matter and takes significant effort and focus.  Not just in the initial stages but on an ongoing basis.  However those companies that are able to reach this goal are some of the best run and most profitable in the world.  Their clients are the happiest and most loyal and the products that they sell some of the most ubiquitous ones out there.

One of the ways in which Six Sigma is achieved is through analysis of existing processes (A process is a repeatable sequence of operations, organized to produce a set of desired outcomes) in a search for things that are going wrong and don't make sense.  Interestingly, when organizations first analyze their critical processes they are usually struck by how complex they are.  Many processes that are absolutely central to the success of an organization were not designed; they just evolved. They consist of activities passed on from one generation of managers and workers to the next.

The Six Sigma Handbook, Third EditionBy analyzing the process and removing some the complexity an immediate impact can be made and this is where the different tools of Six Sigma come into play - things like the Spaghetti Tree and Kaizan events and others.  Once you know what isn't working and WHY you can take the necessary next steps to resolve them.  However the thing that should be kept upermost in your thoughts at all times is that Six Sigma is a quality improvement and the person who determines the final quality of your product is your customer!

If quality or expected performance is below expectations when people do their jobs as designed, then asking them to "do better" is managerial nonsense. The process must be significantly improved or redesigned. Doing the job right when saddled with a flawed process inevitably results in sub-standard performance.  The only way to improve performance is to understand and correct the process that generates problems. Fix the process, and the problems will vanish.
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