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This clearly indicates a 3.5-fold improvement in process performance. The process yield will be increased to 99.38 per cent. This would bring significant financial returns to the bottom-line of any organisations (due to reduced defect rate, reduced number of
customer complaints, improved customer satisfaction, etc.).

Most developed countries no longer have a manufacturing based economy. The real economy in these countries involves such fields as financial services, health care, e-commerce, and logistics, but less manufacturing, which has tended to move offshore to low-cost locations. Six Sigma can be used in this case to reduce the costs of poor quality so that a more consistent process for service delivery may be achieved. Another important reason for the introduction of the Six Sigma strategy in many service companies is that customers of today feel "process variability" in the delivery of the service provided and not just on "process average or mean". The objective of a six sigma strategy is to reduce "process variability" around the acceptable target service performance.

Applications

With the growth in application of Six Sigma in Service areas, there are certain areas that require emphasis in order to ensure proper and fruitful application of the methodology to the sector. The required focus areas include identifying the areas of processes that are the best candidates for improvement and categorizing them as highly customized, mass customized and standardized service processes depending on the nature of tasks. Apart from this a proper method of definition of process defect along with defect measurement is also required in order to design an effective method to remove those defects. Defect definition and measurement is followed by delving into the root causes of the problem and prioritising them for determining their solutions. Finally, it should be noted that the scope of project covers a wider area and focuses on long term benefits rather than short term benefits, thus, stressing on a long-term commitment for quality and service.

Common Myths in Service Oriented Organizations

Six sigma applications in the services sector are still limited in spite of being embraced by many big service oriented companies such as J. P. Morgan, American Express, Lloyds TSB, Egg, City Bank, Zurich Financial Services, BT, etc. A key argument here is that many service processes are unseen, intangible, and even immeasurable. As such, they are not amendable to improvement using a six sigma approach.

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* Contributed by: -
Ankur Gupta & Sumit Roshan,
IMT, Ghaziabad.