Thursday, May 24, 2012

Six Sigma - Show Me the Money

High Point Insurance Company - Six Sigma - Show Me the Money
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What is Six Sigma?

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How is Six Sigma - Show Me the Money

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First, what it is not. It is not a underground society, a motto or a cliche. Six Sigma is a extremely disciplined process that helps all kinds of companies focus on developing and delivering near-perfect products and services. Why "Sigma"? The word is a statistical term that measures how far a given process deviates from perfection. The central idea behind Six Sigma is that if you can measure how many "defects" you have in a process, you can systematically form out how to eliminate them and get as close to "zero defects" as possible. To accomplish Six Sigma Quality, a process must produce no more than 3.4 defects per million opportunities. An "opportunity" is defined as a occasion for non-conformance, or not meeting the required specifications. This means we need to be nearly flawless in executing our key processes.

Achieving ability for the Customer

There are three key elements of quality: customer, process and employee. Customers should be the centre of each company: they define quality. They expect performance, reliability, competitive prices, ontime delivery, service, clear and definite transaction processing and more. In every attribute that influences customer perception, we know that just being good is not enough. Delighting our customers is a necessity. Because if we don't do it, man else will! ability requires us to look at our firm from the customer's perspective, not ours. In other words, we must look at our Processes from the outside-in. By insight the transaction lifecycle from the customer's needs and processes, we can explore what they are finding and feeling. With this knowledge, we can recognize areas where we can add primary value or revision from their perspective. People originate results. Absorbing all employees is primary to quality. All employees should be trained in the strategy, statistical tools and techniques of Six Sigma Quality. Training courses contain Champion Training for the Leadership Team, Black Belt and Green Belt Training for Six Sigma revision task leaders, awareness training for all employees as well as special training for functions like finance or sales. Additionally there is a need for internal coaches to sustain the Six Sigma journey - the so called scholar Black Belts. scholar Black Belt, Black Belt and Green Belt Training contain high-level statistical tools, basic ability operate tools and soft-skills tools. ability is the accountability of every employee. Every laborer must be involved, motivated and knowledgeable if you are to succeed.

Focus on the Variance, Not the Mean

Often, the inside-out view of the firm is based on average or mean-based measures of our new past. Customers don't judge us on averages, they feel the variance in each transaction, each stock we ship. Six Sigma focuses first on reducing process dissimilarity and then on enhancing the process capability.

Customers value consistent, predictable firm processes that deliver world-class levels of quality. This is what Six Sigma strives to produce. Jack Welch, Ge

Six Sigma was developed by Motorola

Although, normal galvanic has made Six Sigma as supreme it is now, the real creator of the belief was Motorola. Motorola - under economic pressure in their Tv firm in the 1980s - were finding for ways to heighten the ability of their products. In 1986, Bill Smith, a senior engineer and scientist within Motorola's Communications Division, introduced the belief of Six Sigma in response to addition complaints from the field sales force about warranty claims. It was a new recipe for standardising the way defects are counted, with Six Sigma being near perfection. Smith crafted the former statistics and formulas that were the beginnings of Motorola's Six Sigma methodology. He took his ideas to Ceo Bob Galvin, who was struck by Smith's passion and came to recognise the coming as key to addressing ability concerns. Six Sigma became central to Motorola's strategy of delivering products that were fit for use by customers. Following a coarse Six Sigma methodology (measure, analyse, heighten and control) Motorola began its journey of documenting key processes, aligning processes to primary customer requirements and installing measurement and determination systems to continuously heighten the process. As a result, in 1988 Motorola became the first firm to win the Malcolm Baldrige National ability Award. In 1990, Motorola-together with companies such as Ibm, Texas Instruments and Xerox-created the belief of Black Belts (Bbs), who would be experts in applying statistical methods. Later, Allied Signal (now Honeywell International Inc.) and normal galvanic Co. Successfully applied and popularised Motorola's Six Sigma methodology as part of leadership development.

Four Steps To Success

Experience leads to the insight that Six Sigma demands the following four steps:

1. Align Executives to the Right Objectives and Targets. Align Executives to the right objectives and targets: It starts with senior executives creating a balanced scorecard of strategic goals, metrics and initiatives to recognize the revision points that will have the most corollary on the organisation's lowest line.

2. Mobilise revision teams. customer focused task teams are formed and empowered to take action. Menagerial process owners empower Black Belts to lead well-defined revision projects. Six Sigma firm revision teams use:

* A systematic qoute solving recipe to frame the sequence of task tasks.

* Analytical techniques to drive fact based decision making.

* Interventions to sustain firm impact. The step by step problem-solving framework. The Dmaic cycle.

3. Accelerate results. Six Sigma firm revision teams use an operation studying framework to build their ability and execute the project. Champions plump accepted Bb and Green Belt (Gb) team members based on functional expertise and furnish accepted resources.

4. Govern sustained improvement. Finally, the methodology includes a process for governance. Leaders actively and visibly sponsor the key revision projects required to execute the strategy. They rigorously relate projects in the context of process metrics and firm outcome goals. Menagerial process owners look at total organisational dashboards, their own process metrics and the status of revision projects chartered to make improvements and ensure the total firm ideas is functioning as desired. The final governance step is for leaders to actively share best practices and knowledge about improvements with other parts of the organisation that can benefit.

Application & Benefits

During the last 15 years, companies like normal galvanic or Motorola have moved from counting defects in their stock manufacturing to managing dissimilarity and systematically enhancing all their processes. Most important, they have moved from Six Sigma as a tool for enhancing stock ability to Six Sigma as an total firm revision methodology. The new Six Sigma combines the power of good firm application of statistics with the primary elements of productive firm strategy. It uses an total firm revision framework to heighten the organisation's ability to realise its strategic objectives. The results are impressive:

Ge's success with Six Sigma has exceeded our most optimistic predictions. Across the company, Ge company embrace Six Sigma's customer-focused, data-driven religious doctrine and apply it to all we do. We are construction on these successes by sharing best practices Across all of our businesses, putting the full power of Ge behind our quest for better, faster customer solutions. Jack Welch, Ge

With an speculation of about 700 Million Us$ Ge was able to gain about 2 Billion Us$ by Six Sigma revision work in 1999. In 2001 Johnson & Johnson was proud to deliver about 900 Million Us$ benefits with their Process Excellence Initiative - an umbrella Initiative that includes a strong Six Sigma pillar. Jpmorgan Chase announced savings of about 400 Million Us$ in 2002 with their newly launched process revision efforts. This is only the tangible part of the benefits, whereas the intangible benefits like customer and laborer delight are noticeable considerably as well. Now, Six Sigma applications are on the way in all kind of industries all over the world. Apart from Manufacturing it has come to be the way for managing and enhancing the firm for financial services companies like banks and insurances, for Healthcare institutions, and even for governments, who are aiming to streamline their processes. Although, the ideas of Six Sigma are applicable in all kind of industry, there are some differences that need to be paid attentiveness to in order to make it prosperous even in these environments:

1. Processes are not clearly defined like in a manufacturing environment. It means the early stages of the revision cycle need more attentiveness since the "identification" and definition of process, customer needs and defects are critical.

2. Processes are "people" driven and labour intensive. We can't adjust or measure humans the way we adjust machines. The soft-factor needs much more attentiveness than in manufacturing companies.

3. Measurements more often hand-operated rather than automated. Data collection is more complicated, focuses on discrete data and needs hand-operated intervention. Therefore, to accomplish high-quality data, more effort is needed.

4. All these factors corollary in a constant need to motivate and attain people-buy throughout the whole initiative.

5. Rewards and recognition as well as success stories are primary to ongoing success.

Six Sigma and Iso 9000

Almost all companies who apply Six Sigma have already implemented Iso 9000. One of the major differences in the middle of both systems is that Iso 9000 is a shell of requirements without any tools, whereas Six Sigma is a methodology connecting tools and procedures for applying these tools through a "red thread". Done the right way the compound of both approaches is a excellent fit: On the one hand Iso 9000 is designed to collate companies based on both, external and internal needs and is made to help closing the gaps on a mid-term and long-term basis. Adding typical Six Sigma deployment requirements to the Iso 9000 internal audit questionnaires makes Six Sigma becoming part of the ability administration System. On the other hand Six Sigma provides a rich toolbox for process revision to meet the requirements of Iso 9000:2000 targeting on continuous process improvement. Aligning Iso 9000 and Six Sigma can help to heighten the credibility of the Iso 9000 ability administration ideas and can increase the sustainability of the Six Sigma initiative at the same time. It can save resources and investments and enriches the way to carry on the business.

What Comes Next?

Over the last 15 years, Six Sigma went through a consolidate of cycles to adjust to evolving needs and to adapt all the studying contact made by thousands of People using it every day in a lot of companies world-wide. After gaining reliance in the coming and through an superior image it has been moved from production processes to transactional processes in manufacturing companies, later it has been applied in service companies and even in non-profit organisations. By adding originate tools to the "standard" toolbox a new methodology to be used in all kind of originate processes has been developed. normal galvanic brought it to the customer in dissimilar aspects and call it Acfc - "At-the-customer-for-the-customer". Johnson & Johnson developed an coming to bring it to their sales force in order to increase incremental revenue. They call it "Sales Force Effectiveness". Pfizer is heavily focusing on customer delight by zero-defect products and call it "Right The First Time". Other companies bring the dissimilarity reducing power of Six Sigma into the furnish chain and apply it as a combined toolset called "Lean - Six Sigma". All this leads to the closing that there is no end of Six Sigma in sight. The name may change, the toolset may be enriched, the methodology may be adjusted but the goal remains the same: ability products and services for customers through enduringly enhancing and profitable processes driven by knowledgeable and motivated people.

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