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Six Sigma is a measure of quality expressed in defects per million
opportunities. Defects for service companies can be anything such
as poor sales performance, typos, service that doesn’t meet
the customer’s expectations, unanswered telephone calls,
excessive overtime, late delivery, early delivery, waste, rework,
excessive cycle time, invoice errors, excessive inventory levels,
billing errors, and many other performance departures from the
target levels. Six Sigma performance means allowing only 3.4 defects
per million opportunities. Most American companies operate at
around three sigma which means that their processes allow 66,800
defects per million opportunities. The cost of this level of performance
in lost or unrealized revenue, customer loyalty and rework is
staggering!
Six Sigma was pioneered by Bill Smith at Motorola in the mid
1980’s and used to significantly reduce manufacturing defects.
In recent years this structured, disciplined, data-driven approach
has been used to manage process variations that cause defects
or unacceptable variance from the target performance levels that
customers expect. Where we differ from other companies is our
focus on the service industry. In manufacturing you never want
the average to change; that would mean that the part no longer
fit, being either too big or too small. In service companies,
especially sales, you WANT the average to shift to a brand new
level, hopefully 10-50% higher. Six Sigma was started to reduce
variation or have more consistency in what you do. But in SERVICE
companies where the emphasis is on sales revenue, cost reduction,
customer satisfaction and employee satisfaction, we not only want
consistency but we must reach new significant levels of improvement.
We must change the average too and we must be quick. We at Whitland
Partners are experts at this.
The Six Sigma approach utilizes data and statistical analyses
to align front-line employees with a series of high-impact projects
that typically result in:
• 5 X return on the investment
• Double digit improvements in key metrics
• Improved customer relations
• More efficient processes
• Improved morale within the company
• Organization discipline
• Sustained benefits
• Enduring organizational change
Correctly deployed, the Six Sigma approach for service companies
has the capability to generate breakthrough value for any business.
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