PART A
- Some organisation set the policy that an engineer can only be promoted to higher position if he or she becomes a green belt and later a black belt. What is your opinion on such policy from organisation performance perspective? (30 marks)
Six Sigma has in the 20th century emerged as successful business improvement model. Considered both a business strategy and also science, the Six Sigma model aims create significant improvement to bottom line savings through improved customer satisfaction. Deeply rooted in the manufacturing sector, Six Sigma has evolved in application to other industry namely banking & finance, healthcare and many others (Anthony 2006).
Six Sigma in practice facilitates employees’ learning and growth through knowledge creation. It is believed that knowledge creation has significant impact on an organisation’s financials, business process, customer and employee learning & growth. Through learning and growth, employees gain knowledge and skills that improves their capability in conducting business processes and thus results in lower possibilities of variation, reduction of defects, meeting expectations and increased profits.
Organisations practicing Six Sigma provides comprehensive trainings for their employees. Through training programs, employees are prepared and equipped with necessary knowledge and skills in conducting projects. It is imperative that employees assigned to leading improvement projects are capable of handling challenges in conducting improvement projects.
Six Sigma Belting System
In Six Sigma, a belt signified a practitioner’s level of experience. Similar to martial arts, darker coloured belts signify more experience in terms of knowledge, skills and trainings. Six Sigma provides different levels of certification at different levels corresponding to an employee’s level of trainings, knowledge and experience.
Six Sigma originally developed by Motorola in 1987 has an aggressive goal of 3.4 ppm defects. In order for a process to achieve Six Sigma, the said process must not produce a defect outside 3.4 times per million opportunities. Six sigma works through two sub methodologies namely DMAIC (Define, Measure, Analyse, Improve & Control) and DMADV (Define, Measure, Analyse, Design & Verify).
Key advantages of Six Sigma to Organisational Performance
- Improved customer loyalty
Customer loyalty comes as a result of high levels of satisfaction. Dissatisfaction with customer experience from products or services and levels of employee attitude plays significant role in ensuring customers return to a business. Six Sigma reduces customer dissatisfaction as customer experiences are kept within specifications through zero variations and defects, exceeding customer expectation and perception of high quality.
- Time Management
In Six Sigma, employees manage time effectively and thus resulting in high productivity and efficient business process. The principles of Six Sigma require employees to set SMART goals and apply Six Sigma data principles to goals. Key areas of learning, performance and fulfilment are reviewed and improved upon.
- Reduced Cycle Time
All projects are restricted by triple constraint of Cost, Time and Quality. Often projects are delayed due to changes to project scope. In Six Sigma practices, experienced practitioners are deployed to identify factors that affects long cycle times. Solution developed allows the organisation to create shorter cycle times for projects and improve efficiency.
- Employee Motivation
Employees are the driving factor behind organisational success. It is imperative that employees are correctly motivated to drive business. Fully engaged employees also performs at higher productivity levels. Six sigma problem solving tools and techniques leads to employee empowerment, engagement and promotes healthy motivation.
- Supply Chain Management
Six Sigma sets aggressive goals for defect rate of less than 3.4 times per million opportunities. Quality of input is critical in achieving this goal. Driving down the number of suppliers and implementation of strict input controls reduces risk of defects. Driving six sigma improvements far up the supply chain ensures every aspect of manufacturing input is controlled even before production begins.
In order to achieve improved organisational performance, businesses need to look beyond process improvement and manage effectively the people equity. Improvement in people equity incorporated in Six Sigma develops quality driven culture. Engaged employees are highly connected and committed to their organisation and often outperform peers in many aspects. Organisations that develop the capabilities of individual employees also drives higher degree of alignment of employees towards organisational goals.