2. Evolution of Continuous Improvement Programs and Six Sigma
2.7. Incremental features and benefits of Six Sigma
Six Sigma not only fulfills gaps in TQM as described in the previous section, it also adds incremental features that represent an evolution toward better process
improvement. Some of the innovative features of Six Sigma add useful elements to the three existing percepts of TQM – customer satisfaction, continuous improvement and system view. Further, we propose three additional percepts essential to capture the underlying philosophy of Six Sigma: interlinked project coordination, full time experts, and transfer of learning. The six percepts are described below, each followed by a proposition for an incremental effect of Six Sigma:
1. Customer Satisfaction: Six Sigma emphasizes the concept of total value to the customer by focusing on the total customer experience that includes, besides the conformance and performance quality of the product, the cost at which the product is delivered, the customization that is offered and the cycle time from the customer experiencing a need to receiving the product. Stakeholders in the organization that include stock holders, who care about their returns, and
employees, who are internal process customers, are included under the domain of customer satisfaction.
Proposition 9: The total customer value perspective in Six Sigma provides sustained long term process improvement.
2. Continuous Improvement: The insistence of pre specified goals for every project forces the team to assess the numerical value of the project in units such as dollars or defect rates or time. This ensures that every change that emerges as a result of the project is grounded in real data. The magnitude and type of goals also have psychological implications on team members (Linderman et al., 2003); on the one hand impossible goals can dishearten employees and on the other, stretch goals can motivate them to extend performance frontiers. Improvements from Six Sigma projects have to be approved by independent financial controllers and this provides a check against crediting project teams with illusionary and unreasonable credits for improvements. It also points to areas in which improvements are difficult. In order to guard against situations where short term benefits may be easy to achieve while long term benefits may be hard to sustain, some
organizations give credit to project teams for improvements only after a suitable extended period.
Proposition 10: The attention to setting concrete and independently verified goals for Six Sigma projects and their assessment after appropriate periods of time supports sustained long term process improvement.
3. System view: Six Sigma projects are led by full time Black Belts who have the authority to utilize resources from various functions during the course of the project execution as well as for the implementation of suggested changes
(Edmondson, 2003). This supports cross-functional co-ordination. The relatively neutral posture of the Black Belt as an independent consultant also provides a
more objective assessment of total system benefits of any changes and guards against sub optimization of total system performance.
Proposition 11: The structure of Six Sigma project teams – with full time independent-from-process leaders and cross-functional members – assures a systems perspective in targeting process improvements.
4. Interlinked project co-ordination: Organization-wide coordination based on metrics is necessary for the long term success of quality initiatives (Beer, 2003).
Six Sigma’s structure referred to earlier, includes steering committees at various levels with interlinked participation, e.g. there are operational front-line
employees included in the unit level steering committees and there are some top management officials that take part in middle level steering committees. This type of interlinked structure (Graham, 1995) for the coordination of projects helps maintain coordination among the different hierarchical levels in both directions – there is communication of ideas from front lines to the top management and that of overall strategic outlook in the opposite direction. The interlinked structure helps achieve the middle-up-down management that is critical for organizational knowledge creation (Nonaka and Takeuchi, 1996) and absorptive capacity (Van den Bosch et al., 1999). By superimposing this project co-ordination structure the speed and ability of absorbing changes in practices in response to the environment is enhanced.
Proposition 12: The top-down-bottom-up infrastructure for selection and coordination of Six Sigma projects requires environmental scanning at all organization levels and quickens the pace of process improvements.
5. Full time experts: The periodic training waves of Black Belts and Master Black Belts can be used to maintain a repertoire of the latest tools and techniques. The broad repertoire also provides the organization with dynamic capabilities to deal with operational level contingencies and changes. The frontline operational personnel can be trained or refreshed by Black Belts in the use of the tools of techniques, if required, as part of the implementation of individual project results.
Proposition 13: The differential training provided to different levels of employees depending on their involvement in process involvement provides an efficient way of combining process-specific information and methodology expertise, resulting in better sustainability of process improvement efforts.
6. Accumulation and transfer of learning: Six Sigma projects have periodic reporting at “tollgates” during their executions; these typically coincide with the DMAIC stages. These reports are maintained in centralized databases by most
organizations and they assist in the leveraging of insights from the projects across time and across different units. Using the example of a high technology medical equipment manufacturer Graham (1995) highlighted the importance of creating repositories of project information for getting sustained learning benefits from a quality program. Larger organizations especially consider such a database to be of great value and have “keyword search” software included so that their
employees all around the world can have access to the benefits of investments made in Six Sigma projects. Some organizations deploying Six Sigma have adopted the method of having the Black Belt on projects responsible for finding applications of their project results in their various divisions.
Proposition 14: The repertoire of project reports from multiple projects results in efficient sharing of best practices across the organization.
Six Sigma provides a structure to integrate and effectively follow principles and practices from previous initiatives like TQM and BPR. With such a large scope, there are differences in implementations that might be ideal for different environments; this is an area where further research and analysis are needed to discover important contingencies and appropriate implementations in the face of these different contingencies.