The Need for Six Sigma Quality in Organizations
The moment we talk about quality, the word Six Sigma comes to our mind. Number of progressive companies are working hard to build Six Sigma quality levels. Motorola, GE—these are supposed to have pioneered the concept of Six Sigma. Generally, Six Sigma quality points to very high-quality levels that defects become a rarity in operations. It also points to a disciplined way of handling issues in operations, a structured way of addressing quality issues, and a trajectory to an unambiguous destination in the quality management journey that every organization takes.
There are few questions that we need to address at the outset. What is this Six Sigma? Why is it important to have Six Sigma? Secondly, what does a Six Sigma program deliver to an organization? So, let's discuss these issues first. Six Sigma is a mechanism to deliver near-zero defects in operations, of course, using principles of process control. A defect is after all an unacceptable state of a product or a service for a customer. So, when they are talking about near-zero defects, essentially what we are saying is defect becomes an extraordinarily rare event in an organization. For example, a few defects in a million-potential opportunity in a service or one or two defects in a million that was produced in a manufacturing shop. So, this is the kind of quality level that Six Sigma is talking about. The question really is why do we really need this high-level of quality?
Suppose, you have a better-quality management system, what it really means is the organization will have a superior quality control. Superior quality control itself will lead to fewer disruptions and smoother output. Now what does superior quality control mean? Essentially it means three things: you will have fewer rework, you have a high quality finished goods, and, of course, you will have lesser indirect cost because you are not wasting time in inspection, in correcting, sorting it out, and so on. So, this is another reason why it is time for us to think beyond our traditional thinking of 99% and ninety-nine and a half percent and so on. Until now we were thinking that it is often uneconomical to make quality improvements, since it brings down productivity, increases cost and investment. Now, the entire thinking is changed, we feel that the productivity goes up, cost comes down as quality levels go up. Unfortunately, this fact is known, but not necessarily to everyone.
Let's identify some better metrics for quality management and that should drive our journey in quality.
In the earlier days, using principles of statistics, we managed quality with measures such as acceptable quality level-AQL, Average Outgoing Quality Level-AOQL, and so on. All these were in percentages. For instance, an AQL of 10%, and AOQL of a few percentage points, and so on. However, for the current need these measures are grossly inadequate and inappropriate. We are looking for some mechanisms to deliver near-zero defects in operations. Therefore, we need metrics, commensurate to this requirement. If we want defects to really become an extraordinarily a rare event, we can think of two measures. If we take the example of manufacturing one possible measure is, what is called, Parts per Million defects rates (PPM). If you take services, a measure is called Defects per Million Opportunities (DPMO). So, both are equivalent.
Today's quality management approach must be based on a few basic premises to achieve such parts per million defect levels. We shall see some of these basic premises of quality. The first premise is all quality initiatives must be continuous and data driven. It cannot be a hunch, it cannot be a onetime event. It is a continuous process. Only then such high-quality levels can be sustained. The second premise, the system of quality that we need to put in place must be one of prevention and elimination and not detection and correction. There is no way we are going to get to parts per million defect rates by continuously detecting errors and correcting errors. That's just a starter. We need a system of prevention and elimination. The third premise, the performance standard is zero defects. For practical purposes we can go near-zero defects, but the performance standard is going to be zero defects. Fourth premise, the responsibility for quality must lie primarily with those who produce and deliver products and services and not with quality control department who can measure and find something.
I think quality must be owned by those who create products and services through a process. These four premises are very important for us to move on to parts per million defect levels. Given these premises of quality management, it's clear that organizations need robust mechanisms in place to address these issues.