Reviving Six Sigma

Reviving Six Sigma

Mark Crawford

There’s been some industry discussion that Six Sigma, the longtime standard of quality implementation, isn’t what it used to be—that in fact, for a growing number of companies, it is actually more of a negative than a positive.

For example,a 2007 study by QualPro revealed that 53 of 58 large companies that use Six Sigma have trailed the S&P 500 since they implemented it.

Others maintain Six Sigma is outdated and being replaced by newer methods, such as the theory of constraints and systems thinking

However, don’t be too quick to dump Six Sigma—it’s still the same; the difference is in the way companies use it today, especially when dealing with an increasingly fast-paced and competitive global marketplace. Companies simply aren’t taking enough time and attention to implement Six Sigma properly.

A key reason Six Sigma gets disappointing results these days is the lack of leadership strategy and commitment at the top.

“Not enough leaders truly understand that Six Sigma is not an overnight savior,” comments J. Bruce Weeks, a senior business process improvement coach with Quality Engineering Consultants LLC in Charlotte, Michigan, and author of“Is Six Sigma Dead?” (http://asq.org/qic/display-item/index.html?item=32661) in the October 2011 issue of QP, the publication of the American Society of Quality (www.asq.org). “It takes time and work to achieve outstanding results.”

Weeks indicates too many leaders bought into what was called the “latest and greatest fad” in business process fixes, rolled out a Six Sigma program, trained everyone, “and now have up to 80% of their people working on projects to improve processes,” he says. “This sort of Six Sigma undertaking often takes valuable resources away from launching new products and satisfying customers—core processes required to stay in business and make money year after year.”

Another problem occurs when leaders declare victory after using Six Sigma to solve one problem or one set of problems. The organization then moves on to the next hot improvement strategy, usually lean; the Six Sigma process then stalls and the Six Sigma Black Belts are hustled off for training in something else.

Inappropriate accounting methods can also quickly tarnish Six Sigma’s reputation. Companies often use the wrong measure—cost—to determine Six Sigma results, especially early in the process.

Because they focus on cost, “activity-based costing (ABC) and resource-consumption accounting (RCA) practices do not lend themselves to determining the value of a particular activity or resource to the revenue stream or customer satisfaction,” says Weeks.

Therefore key process/production metrics such as quality, throughput, rework, time to market, and customer satisfaction must be measured and factored into the quality equation.

To maximize Six Sigma results, Weeks emphasizes the following points:

  • Leadership commitment.Create strategic business goals and objectives that embrace Six Sigma thinking instead of trying to add it as a separate goal or objective. All Six Sigma projects must be customer-focused, provide value, and be integrated into the larger objectives of the company.
  • Track the right metrics. Key critical-to-quality drivers—such as cost, new product introductions, and market share—must be determined based on the goals and objectives of the program. They should be monitored regularly on a near-real-time or real-time basis.
  • Implement fair accounting methods.A better financial reporting system is required to capture Six Sigma improvements early. Most financial measures are too slow and too aggregated to determine these micro-level (process) improvements.

“When an organization has goals and objectives with appropriate measures that can quickly and accurately reveal the results of improvement efforts, it must determine a project-selection process,” adds Weeks. All improvement projects must meet certain criteria, such as:

  • Have a project charter that clearly defines the scope
  • Have an assigned leader and tentative team
  • Have an expected timeline for completion
  • Have an expected ROI that meets company goals

The addition of lean to the Six Sigma processes to create lean Six Sigma (LSS) makes “so much sense that not doing it seems unimaginable,” says Weeks. “This combination of two methods to reduce waste first, eliminate defects, and improve the remaining necessary processes is powerful. Today’s 110% is tomorrow’s 95%. This will avoid complacency that tends to set in after a goal has been achieved, particularly if it was a difficult project.”

With changes to an organization’s way of thinking, an LSS effort can now be a part of a normative business system for the long haul. “Select key drivers that are customer-focused and have clear key success factors,” advises Weeks. “An organization will be managing to value, not cost. That way, financial reporting will be consistent and timely and global goals and objectives will be supported.”
 

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Pilgrim pioneered quality management software more than 25 years ago for regulated enterprises that needed a better way to deliver, track and oversee quality-related activities.

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