In the final part of the three-part article on Six Sigma, Sanjay Matai shows how it can be used in service industries and compares it with other quality tools.

The earlier articles in this series acquainted us with the basics of Six Sigma, its benefits, the team and infrastructure required, implementation strategy and some common statistical tools. In the last part in the series we look at how Six Sigma is being employed in non-manufacturing situations and how it compares with the other quality improvement tools.

Six Sigma in non-manufacturing
Six Sigma began with quality improvement in manufacturing processes. However, its application has since been suitably adapted and successfully deployed not only in the non-manufacturing functions such as design, commercial, accounting, etc, but even in service-oriented industries such as IT, banks, schools, etc.

Consider the following facts:

Six Sigma is a broad framework and is essentially data-driven

It emphasises a cross-functional approach with a focus on overall business improvement

It is not restricted to just 'product' quality improvement

Many non-manufacturing processes and service functions relate directly or indirectly with the customer

Even in manufacturing, non-manufacturing elements like IT and after-sales service play an important role today
It is not only possible, but essential to bring non-manufacturing functions within the ambit of the Six Sigma programme.

Many non-manufacturing functions can be:

Looked upon as a statistical process susceptible to variation

Defined in terms of customer satisfaction metrics

Amenable to rigorous data collection and analysis

Appropriately modifiable to improve service levels

A few examples:

The time taken to answer the phone and resolve customer queries in a BPO

The number of customers handled per hour by a teller in a bank

The number of error-free bills generated by a telephone company

The minimum lead-time the logistics department can maintain, without disrupting production schedules

Minimising the time taken to book an airline ticket

The number of days it takes for an insurance company to settle a claim

The number of error-free deliveries by a courier company
Many such white-collar activities hold an enormous potential for improvement and can benefit from the rigour of the data driven Six Sigma approach. Whether it's R&D, commercial, accounting, banking, airlines or any other service industry, it is possible to identify a lot of functions that are repetitive, standardised and mechanical.

In a marketing department, for example, acquiring a customer may be a process that is unique to each individual or entity, and hence Six Sigma may not work. But there are processes, like dealing with quality complaints, which could benefit a lot from Six Sigma:

Cutting down the time taken to resolve customer complaints

Identifying common quality issues

Reducing costs

In market research, sampling techniques can be standardised and made more quick and accurate

In accounting, data flows can be streamlined and redundant activities eliminated to ensure faster and more accurate reporting of business numbers
The challenge, however, is that many such improvements may not be easily measurable, and the benefits may be more qualitative in nature than quantitative.

Six Sigma and other quality programmes
There are as many diverse quality improvement initiatives as the gurus that propound them. Some are successful, and some not so successful. Quite a few of them are no longer in vogue. A few of the popular programmes today include:

Total quality management (TQM)

Lean thinking

Theory of constraints

ISO 9000

Just-in-time

Toyota production system

Benchmarking

Value engineering

Each methodology has its own advantages and disadvantages. Depending on individual needs, budgets, management time, time frame, etc, the CEO and the senior management would have to assess the suitability of particular initiatives and adopt the approach that best suits the organisations needs. The choice of methodology adopted may differ, but there is no denying the fact that in today's competitive world customer satisfaction is paramount.

As far as Six Sigma is concerned, it does not conflict with other programmes. In fact, it complements and supports them by providing a focus:

Business focus: How to make the business more profitable

Customer focus: Quality improvement means not just improved products but consistently improving customer satisfaction

Enterprise focus: All employees are part of the initiative, not just a few quality control 'experts'
Even if companies have other quality improvement initiatives in progress, Six Sigma can only add value.

Six Sigma has its critics. They say that it has nothing new to offer; that most of the concepts and tools have been used in other quality initiatives; that it is focussed on problem solving and not prevention and that the failure of other initiatives may not have anything to do with the initiative itself, but come from lack of management focus, something that could happen with Six Sigma too.

But Six Sigma is not merely another quality improvement initiative. It looks at quality not as something external to the system, which need to be controlled and supervised, but assumes that quality can be in-built into the process. According to the Six Sigma definition, quality is what customers want, not what you can give.

To do this, it aims at improving and designing processes in a way that variations are practically eliminated, thereby creating products and services of the desired parameters, consistently. The focus is on processes and the people manning those processes, making them customer-oriented rather than job-oriented.

Process improvements help reduce defects to the minimum and as such result in huge cost savings. The methodology and tools used are standard and widely applicable. The entire effort is rigorous, data-driven and scientific. Six Sigma, however, is not a magic wand or panacea. Like any other tool, it needs to be used judiciously.