Six Sigma principles and applications

¶ … Sigma

This review addresses the significance of introducing six-sigma for customer satisfaction measurements. Identifying metrics that affect customer satisfaction can be a challenge. Customer needs, no matter the industry, constantly change and evolve. As the number of stages in the process increase, the number of customers increases and the number of employees interacting with the customer increases the chances for introducing errors and mistakes also increase. The value in Six Sigma, in a sense, involves, tweaking the process itself. From the viewpoint of customer satisfaction, the ability to understand the needs of the customer with respect to the product is vital. Collecting the required data and analyzing it to identify the changing customer satisfaction trends is required.

Introduction

Aspiring to get any operation to perform at a zero-defect level is the goal and mission of many organizations. The notion that continuous process improvement eventually leads to higher quality and lower cost was first introduced by Deming and Crosby. (Behara et al., 1995) While six-sigma methodology was initially identified for production and manufacturing, it's (six-sigma) primary concepts are applicable to any organizational management. The main argument that is highlighted in the paper being critiqued is the complex problems that can arise during the process of using six-sigma methodology to identify methods of reducing the "service defects" in dealing with customer satisfaction.

Summary of the article

The article (being critiqued here) offers adequate information to allow the reader to understand the significance of six-sigma in general. Figure 1 and 2 in the article adequately demonstrates the impact that this methodology can have on any process or operation. In addition, Table 1 also offersclear representations of how as the stages in any process get more numerous the overall quality can suffer even if each stage in itself is performed at ± 3?, ± 4? Or ± 5?. As the probabilities of each stage get multiplied together, the overall quality decreases. For example, if a two-stage process operates at a ± 3? (93.32) and ± 4? (99.379) then the number of defects is 7,259 parts per million or 92.74% of the parts fall within the quality range. While it appears that approaching a zero-defect rate ischallenging to many organizations, companies that are able to achieve this low defect rate are more likely to experience higher profitability due to lower wastage and rework/service on the parts or service being provided.

As the ? significance increases, organizations realize that the process and the operations get more streamlined and operate with greater efficiency at all points in time. When applying six-sigma methodology to customer satisfaction, the task gets complicated. This is because customers needs change constantly and is difficult to predict or determine. The scope of six-sigma can also change depending on the industry and the type of customer that is interacting with the organization. "Customer satisfaction is rarely based on contact with only one person or only one aspect of the company." (Rothacker, 2004, Rucker, 2000) Identifying the accurate metrics for understanding the factors that affect quality issues in customer satisfaction arena's is more challenging as the metrics can significantly change between geographical locations, intrinsic knowledge in the customer population and type of service being sought.

The article being reviewed indicated that by introducing six-sigma the company being studied was able to reduce its dissatisfied customers from 77,000 to approximately 44,000 the following year. This was possible because the company was able to identify the attributes that the customer was impacted by and could improve significantly the level of service that was offered in the following year. It is important to note that for any quality improvement the process has to be understood effectively. Even complex, multiple stage operations can be subdivided into the individual components that make the process and six-sigma controls can be implemented on each process as it occurs. (Heuring, 2004)

In the article, it is clear that when a company undertakes a determined effort to improve the quality of service and identify the higher expectations attributes, it can significantly improve the performance that the company experience. Understanding that the customer's priorities can change and that focusing solely on past metrics is always not accurate. The paper is quick to also point out that "higher sigma levels for certain attributes do not translate to correspondingly higher satisfaction scores; while some attributes with a higher satisfaction score do not necessarily have to be at a very high sigma level."

Simplifying processes and ensuring that any customer interaction is made as "defect" free as possible will ultimately help any organization maintain its client base and improve the quality and performance of the service provided.

Research question discussion and evaluation

The concept of six-sigma requires that organizations map their processes and the stages of interaction and identify the areas where improvements and modifications can be made. This process is not easy. The paper reviewed did not identify how the attributes were selected to be tested in the survey that was conducted in 1991 and 1992. Obtaining completed and accurate retuned surveys from 400 customers each year offered the researchers an opportunity to study the range of issues that the high tech manufacturing firms.

Table III of the study indicates that the company was able to improve its performance on all attributes except the "Timely response attribute" within the year. No information is offered in the study that helps the reader understand how the company helped improve it or the internal measures that were useful in improving the process. In all the six-sigma literature reviewed in this paper it was stated that data were collected in the period of assessment critical to the identifying of measures that could be taken to improve the overall performance and consequently improve the sigma levels. Keeping the focus of the company on the process to be understood is important.

Wanting to improve the process and reduce the number of defects in the system is the first step to successfully ensure that everyone in the organization acknowledges that there is problem in the organization. (Elliott, 2003) the need to improve the process is generally a strategy that is identified by organizations that wish to excel and improve their market share and profitability. Six-sigma requires a culture change in the organization. The article, while stating that considerable improvements were made, did not identify how these improvements were made in reality and the effort that was needed to maintain the quality improvement.

The article while statistically explaining the importance of improving any process to a level of six-sigma does not help the reader understands how the high tech manufacturing firms were able to achieve these improvements at any time in the two years (1991-1992) that this study was conducted. The paper however, identified some important elements of customer service issues such as product performance, quality of product, quality of service, pricing of product etc. It is important to note however, that quality can mean different things to different customers. Collecting data that is representative of the population can pose a challenge to any organization wishing to improve the customer service offered. (Trojniak, 2003) Identifying the importance of the attribute to the customer is important and so is evaluating the result in a meaningful manner is needed. Many variables, for example, might display correlation factor with other attributes being investigated. For instance, the product performance and the quality of product might display a relationship. Improving the process to improve the quality of the product might improve the product performance. Understanding the impact of improvement of one process and the effect of the customer satisfaction therefore can become tricky.

Significance and limitation of the study

In business terms, Six Sigma is a business improvement strategy that is used to improve profitability, to drive out waste, to reduce quality costs and improve the effectiveness and efficiency of all operations that meet or even exceed customers' needs and expectations." (Antony and Banuelas, 2002) When applying six-sigma to customer service improvement organizations will have to identify the variables that impact the customer's perception of the product. This factor is not static but tends to change over time. As customers become more knowledgeable about the product for example they might have higher expectations and needs of the service being provided. Where in the past some features of the products might have been a "surprise" and the customer might display satisfaction in having the feature, over time this surprise might change to expectation that the product will have the features.

The limitation of this study is that at no instance did the authors identify the measures that were used by the companies to improve the quality of service or the cultural and process changes that were implemented within the organization. Stress was placed on companies focusing their improvement strategies on areas were the customer had higher expectations. It is important when dealing with customers to have as many error-free encounters as possible. In reality, as the number of processes increase, the numbers of customers increase and the number of employees dealing with the customer increases the chances of making mistakes and errors in the process is greatly increased.