Six Sigma: Long-term Business Strategy

Quality management (QM) has been seen as an important management strategy for achieving core competencies. Conventional quality tools like Zero Defects, Statistical Process Control (SPC) and Total Quality Management (TQM), have been important players for some time. Six-sigma being more recent quality improvement initiative gained popularity and gained acceptance in most industries around the globe. Most Basic elements of six-sigma like, Failure Mode Effect Analysis (FMEA), Statistical Process Control (SPC), gage repeatability & reproducibility and many other tools are being used from quite some time. In fact, Six-Sigma gives a guide framework which tries to unite the basic quality tools with the help of high-level management support. However, many service industries are still not using the basic aspects of SPC. Actually, they can benefit enormously by implementing both Statistical Process Control (SPC) and six-sigma. Proper Implementation of six-sigma helped industries like General Electric (GE), Citibank and many other service based industries to remove defects/errors from their delivery process & create great success stories which others can follow. Only limitation of six-sigma in service based industries is that features of service based industries are not uniform. Application of Six-Sigma and its benefits are somewhat limited to few specific type of services like health care industry and banking industry. Understanding the control variables of the process will be of help in broadening applications of six-sigma in service based industries.

Six Sigma:

Six Sigma, being a part of long-term business strategy, will include following:

• Process Orientation.

Insurance/financial services based organizations should learn to identify important business processes which are critical for satisfying customer. This will enable them to be more focussed on trying to improve their quality at business process level— upon a short and more apprehensive understanding of the policy owners’ requirements.

• Improve quality along with reduction in costs.

Six Sigma gives firms a more proper path to prevent errors/defects, reduction in hand-offs, and elimination of rework. This will aid hugely in making fast transactions and reduction in costs.

• Use of facts for making management decisions.

Six Sigma will add statistical efforts to improve. Managers will be capable to make decision on the basis of the data and the given facts—will not rely on perceptions & gut feelings, will be more accurately trying to establish better levels of performance which can be achieved and promised to the customers, clients and prospect customers.

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• Customer loyalty Retention.

Have very strong emphasis on voice of the customer (VOC), Six Sigma provides very good understanding of what can create & drive customer loyalty, and how can you try t