What is Six Sigma – Point 4

An ironic twist to a customer-focused versus internally-focused comparison is that the primary objective of the internally-focused approach (cost savings) is actually a significant by-product of the customer-focused approach. In other words, increasing customer-focused quality will also result in reducing internal costs.

As a general rule-of-thumb, if you increase customer-focused quality by 50% (i.e., reduce customer-impacting defects by 50%), you should see a resulting 20% reduction in cost.

What is Six Sigma – Point 3

More significant than the ubiquitous DMAIC and Black Belts, most companies that have a Six Sigma program in place underutilize its potential by aiming it primary at reducing operational costs.

When used in this internally-focused way, Six Sigma can be an effective tool with a significant ROI to be expected.

On the other hand, when used in a manner that is externally focused, i.e., on the customer, Six Sigma becomes a powerful tool that can be the foundation of a systematic approach to improve customer satisfaction.

Systematically drive Customer-valued Results

I’m so used to drinking my first cup of coffee in the morning that sometimes I empty the whole cup without even remembering the first sip. As important as it is to me, I must admit that I never really worry about the quality of that cup of coffee. Did it taste good? Was it safe to drink? I take all that for granted. On the other hand, if it didn’t taste right I would surely dump it down the drain. And if it wasn’t ‘safe to drink’ … well, I’d rather not think of that. In hindsight, I expect a lot of quality from that cup of coffee.

Last September, Merck took its painkiller Vioxx off the market after tests showed it increased the risk of heart attacks. Soon after, Pfizer pulled its ads for Celebrex, a prescription drug similar to Vioxx, for similar problems. Dr. David Graham, an FDA scientist, testified before the Senate Finance Committee and said, “We estimate 100,000 people had heart attacks due to Vioxx, with 30,000 to 40,000 dying”. “Under [the FDA's] paradigm, a drug is safe until you can show that with 95% or greater certainty it is not safe.”

I expect a lot from the medicine my doctor prescribes, but I think now I’m going to worry about the quality of it a little more.

The expectation for quality surrounds us constantly, even if we don’t often think about it and take it for granted, but a ‘wait until something happens’ approach will often result in a quality debacle like the Vioxx case. Quality, like any product or service attribute, must be systematically managed if it is to meet customer’s expectation.

Benchmarks show us that any company that does not have a systematic way of finding and removing defects before they make it out of the company and hit the customer will tend to operate at about a 3.5 Sigma level of quality (about 23,000 defects per million or 97.7% accurate). As a comparison, the FDA’s 95% threshold is equivalent to only 3.2 Sigma. In order to be successful, companies need a way to systematically manage the quality of their products/services so that they meet their customer’s expectation – 3.5 Sigma just won’t cut it. They need a sound, systematic Quality Management System and continue to push their way toward the quality level their customers expect.

What is Six Sigma – Point 2

The derivation and significance of its name aside, the term Six Sigma has also become synonymous with a standardized methodology for problem solving.

Known as the DMAIC process (Define, Measure, Analyze, Improve and Control), most companies consider it to be the definition of Six Sigma itself.

Numerous businesses specialize in training new ‘Black Belts’ by the hundreds in the finer art of DMAIC with most of the Fortune 500 employing a large cadre of such specialists.

What is Six Sigma – Point 1

Fundamentally, Six Sigma symbolizes a quantitative level of quality that is generally considered to be world-class.

“Sigma” stands for the statistical standard deviation of a set of data, or the measure of the variability of the data, and “Six” represents the number of such standard deviations from the average, or mean, for a normal distribution of data. Think “bell curve”. The more standard deviations you move away from the average, the less chance there is of finding any data (like fewer ‘A+’ grades than the average ‘C’s in school). When applied to the topic of quality, this concept can be used to estimate the capability of a process and the probability of the existence of a defect in a product or service.

The more standard deviations that fit within the specification limits for a process, the lower the probability of a defect and the higher the level of quality. Therefore, a Three Sigma (3 standard deviations) process reflects lower quality than a Six Sigma one, which is 99.99966% accurate and results in less than 3.4 defects per million opportunities of making a defect.

Posted by Bill Robinson

ISO 9000 vs Six Sigma - Point 1

I belief that ISO 9000 will help bring a company to a standard level of performance, like a UL sticker on an electrical appliance.
The problem is, once it helps drive a company to a plateau level of performance, it will also help keep it at that level and, in fact, it will stifle improvement.