Six Sigma is a proven methodology that works to improve business processes by identifying and reducing errors and defects in manufacturing and production. It can be applied to both products and services. While its roots are in a 19th Century theory, the practices we know today as Six Sigma were first introduced by an engineer at Motorola in the 1980s and gained prominence when they were adopted by General Electric.
There are many benefits to providing your employees with Six Sigma tools and training. Six Sigma is applicable in a variety of situations — it can address short-term and long-term problems, and it can also be applied to discover ways to improve processes that are working well.
Formalized Steps
When your employees learn Six Sigma, they are introduced to a formalized process to evaluate processes and implement improvements. These steps are well-established and have proven effective at many organizations, so they often provide better results and more structure than approaching problems and process improvement in a haphazard, unsystematic fashion.
There are two main approaches to Six Sigma. The first, which is applicable to existing business processes, is called DMAIC. The letters stand for:
- Define: Identify the problem and establish goals
- Measure: Determine which metrics are necessary to track and quantify them
- Analyze: Find the root causes of problems, using the data collected in the measure step
- Improve: Find ways to eliminate problems, implement the changes
- Control: Create new processes that will reduce the possibilities for future problems
Six Sigma is applicable in a variety of situations — it can address short-term and long-term problems, and it can also be applied to discover ways to improve processes that are working well.
The second approach is called DMADV, and is often used to create new processes, products and services.
- Define: Establish goals, clearly defining the scope of the new process or description of the new product or service
- Measure: Determine metrics which must be tracked
- Analyze: Look at data collected in the above stage to help design new processes, products or services; several solutions may emerge and at this stage the most promising one should be selected
- Design: Detail the new product, process or service
- Verify: Run simulations and conduct a pilot, and then transfer the new process, product or service project to the end user
Root Cause Analysis
It costs your organization a lot of time, money and resources to address the symptoms of problems — it’s a Band-Aid that rarely works in the long run. Six Sigma courses are designed to teach your employee how to identify the root causes of problems, so the problem itself can be minimized or even eradicated.
Professors teach several approaches to root cause analysis, but one of the basic ones is called the Five Whys. Using the Five Whys, project teams are encouraged to look five steps beyond the obvious problem to discover the real issue that needs to be addressed. Five Whys exercises look beneath the surface to identify concrete, non-superficial problems.
Customer Satisfaction
Six Sigma methodology can be applied to customer-facing interactions, and has been adopted by a number of major retailers including Amazon, Best Buy and Home Depot. This is because customer interactions can be broken down into identifiable actions and points of contact, each of which can be treated as a process that can be improved using the DMAIC and DMADV steps described above.
The Kano Model, which is taught in Six Sigma classes, can help your employees identify the needs of customers. The Kano Model looks at three dimensions of customer interaction:
- Must haves: Why do people come to a retailer and what do they expect?
- Performance: How well did the product or service meet the customer’s needs?
- Excitement: Were customers delighted by their retail experience?
Six Sigma can also be used to reduce waste in retail operations. For customers, waste can lead to inventory issues and poor deployment of employees, which equate to customer frustration.