Low cost, differentiation strategy
SIX - SIGMA
3.4 defects per 1,000,000
Is a systematic method for improving the operational performance of an organization by eliminating variability and waste. Sigma – Standard deviation from the mean of a normal curve. Driven by the customer and thus aims to achieve maximum customer satisfaction by minimizing the defects. It targets the customers delight in new, innovative ways to exceed the customers expectation.
* Introduced by Motorola in the year 1981.
* Increase the efficiency level and reduce wastage
* Optimal utilization of resources with minimal wastage
* Important Methodology – DMAIC
* Used as a strategy to grow eg. GE – saved US$ 10bn
* Millitary US$ 5 bn
Management Phillosophy – way to create a common language.
Implementation leads to rise of profitability and reduction in cost. Thus, improvements achieved are directly related to financial results. *
It is successfully implemented in every business category including stock value growth, employment growth, ROI *
Six Sigma targets variation in the processes and focuses on the process improvement rather than final outcome. *
* It is a prospective methodology as compared to other quality programs as it focuses on prevention rather than correction.
To create Six Sigma or Total Quality Management, there has to be a cause-effect relationship. *
* Applicability of Six Sigma is being questioned – Quality standards should be according to specific tasks and measuring 3.4 defects per million as a standard leads to more time spent in less profitable areas. * Gives emphasis on the rigidity of the process. Which contradicts the innovation and kills creativity. * People argue that 6sigma is a...