How Six Sigma Increases Customer Satisfaction
Kimberly Brown-Harden
University of Indianapolis
Kimberly Brown-Harden is currently a part-time undergraduate in Business Administration and
Psychology at the University of Indianapolis, Indianapolis, Indiana.
4333 Irwin Ave.
Indianapolis, IN 46226
(317) 549-0737
How Six Sigma Increases Customer Satisfaction
As businesses try to compete globally and locally for customers, and shareholders expect
higher returns, line and upper level managers are looking to total quality management tools such
as Six Sigma to ensure quality products and services that enhance customer satisfaction. Six
Sigma is a necessary process in order to achieve the ultimate goal of customer satisfaction and
loyalty. Managers must (1) know what quality and Six Sigma are (2) fully commit to the
implementation and follow-through of the Six-Sigma program, and (3) get employees trained
and motivated to pursue Six Sigma implementation to achieve high quality products and
services.
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In today’s global economy, businesses must realize that consumers are smarter and more
sophisticated than ever; they have the resources to expect and demand high-quality products and
services. In order to compete, companies have to provide superior service and quality in order to
capture a reasonable market share and increase customer satisfaction. Price is no longer the only
deciding factor on purchases; smarter consumers like reasonable prices but high quality products
and services as well.
As one watches television or reads the newspaper you will notice quite a few companies with
tremendous amounts of product recalls. For example, Ford Motor Corporation and Firestone
would have saved millions of dollars in lawsuits and lives if Six Sigma had been properly
implemented; Cosco Industries, which manufactures baby products such as cribs, car seats, etc.,
would also have fewer defects and recalls if they had utilized Six Sigma and its guidelines. Alex
Trotman of Ford says, “We are in the new era of competition. TQM (total quality management)
will be the norm rather than the exception. Some of us are not going to be around in several
years. We are in a battle for survival and total quality is going to sort out the winners from the
losers.” (2, pg. 60) This paper provides the reader with the importance of implementing Six
Sigma to improve quality and provide the ultimate goal: Customer satisfaction.
But what is the elusive definition of quality? Quality means different things to different
people. Quality, as defined in the Webster School and Office dictionary states:” (1) A special
power or property; attribute. (2) A degree of superiority. (3) Greatness.” (6, pg. 582) The
textbook, Principles of Operations Management, also offers a definition of quality: “The ability
of a product or service to meet customer needs.” (4, pg. 171)
“The business world is a jungle in which laws are set by the environment made up of the
market or customers. Companies, representing the creatures, prey and predators which reside in
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this jungle, are all subject to its changing laws.” (2, pg. 60) Those who survive are those who
have better quality.
What is Six Sigma?
Six Sigma is a business process that allows companies to drastically improve their bottom line
by designing and monitoring everyday business activities in ways that minimize waste and
resources while increasing customer satisfaction. Sigma represents one standard deviation from
the average or mean. In Sigma, there is a range from three to six; with six being the highest. At
Six Sigma, there are only 3.4 parts per million (PPM) defective. (1, pg. 25) Six Sigma guides
companies into making fewer mistakes in everything they do--from filling out a purchase order
to manufacturing airplane engines--eliminating poor quality at the earliest possible stage.
Quality-control programs have focused on detecting and correcting defects. Six Sigma
incorporates something broader; it provides specific methods to re-create the process so that
defects and errors never arise in the first place. Six Sigma basically ensures that things are done
right the first time.
Six Sigma was introduced in 1979 at Motorola when executive Art Sundry stood up at a
management meeting and proclaimed, “The real problem at Motorola is that our quality stinks!”
(3, pg. 20) This proclamation started a new era within Motorola and led to the discovery of the
critical correlation between higher quality and lower development costs in manufacturing
products of all kinds. (3, pg. 20)
According to TQM (total quality management) specialist, Jay Arthur, Six Sigma is a
results-oriented, project-focused approach to quality. It is a way of measuring and setting targets
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for reductions in product or service defects that is directly connected to customer requirements.
These reductions in the cost of poor quality translate into cost savings and competitive
advantage. Here is a simplified example of how Six Sigma is measured: “If wall-to-wall carpet
in a 1500-square foot home were cleaned to the three sigma level about four square feet of carpet
(the carpet area under your average-size recliner chair) would still be soiled. If that same carpet
were cleaned to the Six Sigma level, the soiled area would be the size of a pinhead--virtually
invisible.” (3, pg.30)
Now that quality has been defined and Six Sigma has been introduced, how do they relate? In
the definition of quality, the objective is a product or service that meets the customers’ needs.
Quality is a subjective term. What quality is to one person may be inadequate to another. Six
Sigma can assist with quality assurance because managers as well as employees are trained to
know what items pass through Six Sigma quality guidelines. Six Sigma assures that whatever
product or service a customer receives is safe, absent of defects, and of the highest quality. Here
are a few everyday of how Six Sigma could be used: if Six Sigma was applied to tax returns,
there would be 340 defects in the 100 million returns filed each year; there would only be 3.4
accidents for every 1,000,000 miles driven. (1, pg. 20) The previous examples show that Sigma
can be just as beneficial to service industries and government agencies as well as to
manufacturing industries.
As businesses try to remain stable and competitive in this stable economy, most managers and
CEO’s struggle with how to maintain acceptable market share, maximize shareholder wealth,
and survival. They search for all the latest Research and Development techniques, technology,
etc. These methods are necessary to compete successfully, but the most basic, important element
is overlooked: Customer satisfaction. “An organization that is committed to quality strives for
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excellence in everything it does…an organization that values its employees and its customers
above all else…an organization that accepts change as part of the natural evolution of its
success…” (5, pg. 50) The number of businesses that use the above quotes has increased in
recent years. Companies that insist on quality have developed common benchmark
characteristics that have made the vision of customer satisfaction/quality real. Most companies
that share in this vision have ten action steps for improving and maintaining quality to provide
the foundation for achieving quality and putting the customer first. (5, pg. 50)
Ten steps for customer-focused quality.
There are ten characteristics shared by customer-driven companies. These companies not
only believe in customer satisfaction but they also put their words/beliefs into action.
1.
Make a commitment to instituting a total customer-focused quality process in your
organization.
2. Accept responsibility for your quality process.
3. Listen to your customers’ requirements and measure their level of satisfaction on each
of these requirements.
4. Develop a complete understanding of your employees’ needs; communicate your
vision and values and empower your employees to succeed.
5. Evaluate your processes and policies and benchmark them against the best-in-class.
6. Set goals for improving your practices, processes, and policies based on feedback
from customers, employees, and best-in-class comparisons.
7. Establish a series of measurement systems to evaluate and track goal attainment and
ongoing customer satisfaction.
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8. Educate and train your employees in the ways of excellence.
9. Take delight in rewarding and recognizing the progress and achievements of your
employees.
10. Begin anew; always seek to “raise the bar”. (5, pg. 55)
Each step represents a process that puts businesses on the right track to successful Six Sigma
implementation and deployment. Step one is obvious; in order for a quality program to succeed,
management and employees must be committed to improving standards to achieve customer
satisfaction. Next, all employees must be active and accept responsibility--all employees must
understand their importance to the organization and their contribution to the organization and the
process. Next, management needs to implement procedures to gauge customer feedback with
tools such as databases to track complaints or concerns or to carefully monitor surveys; Also,
clear mission and vision statements need to come from upper management to all employees to
communicate the importance of the mission. The goals need to be stated in clear precise terms
so employees can understand and commit to the process. Next, the goals and processes need to
be monitored and evaluated in order to remain effective. Management must be willing to look at
other industries and use them as a gauge or benchmark, if necessary.
Next, any quality process must be continually improved and new goals must be set in order
for a company to remain competitive and ensure the best practices. Next, employees need to
have continual training and development to stay informed and empowered. Informed and
empowered employees are the ones to carry out the vision set by upper management; next,
employees need to have some reward system in place to keep them motivated. Reward systems
such as incentives, stock bonuses or employee recognition programs keep employees lean and
focused on the goal of customer satisfaction. Finally, managers need to be willing to step out of
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their comfort zones and keep looking for ways to continually improve their processes. Setting
new goals and implementing new processes keep managers and employees ‘on their toes’ to
remain competitive in today’s unstable economy.
These steps are the keys to unlocking the mystery of quality and customer satisfaction. These
steps may sound intimidating but they can assure success. Most managers and CEO’s view Six
Sigma like these ten steps--mysterious, difficult, and lengthy. One of the biggest obstacles in
bringing Six Sigma to an organization is how to begin.
Six Sigma Implementation and Commitment
Once a company has decided that customers and quality should be their main focus, they need
to be prepared to work continuously, and to be able to analyze their current processes and
procedures. Implementing Six Sigma will require a careful plan to ensure that it will prosper and
grow. If a plan is not discussed and thoroughly researched, Six Sigma and any other quality
improvement plan will be a waste of time and money. Leadership must first take the time to
develop a plan that focuses the organization on a few key areas for improvement. This requires
setting long-and short-term objectives, measures, and targets. Next, management can identify
the few core processes, those things that the company does well relative to their competitors,
which are necessary to the organization’s success. Using a brainstorming strategy, management
would want to define and measure these processes. Some of these processes will be outdated,
and so inflexible that only benchmarking or reengineering will close the gap between where the
company is and where their customers expect them to be. Problem solving will quickly move
other processes in line with customer expectations. A good Six Sigma implementation plan will
identify: (1, pg. 35)
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♦ What activities to implement
♦ How to do them
♦ Who will do them
♦ When will they be started and completed
♦ How will they be measured
An example of a Six-Sigma implementation plan is shown in Table 1, located at the end of this
paper. The first four terms on the left: Focus, Improve, Sustain, Honor, illustrate a plan to
measure and track performance. The questions at the top of the plan ask specific questions about
the implementation. These questions are a tremendous start to the implementation of Six Sigma,
but they are only the beginning. Companies must determine how to focus and implement the Six
Sigma strategies so that the key business priorities and strategy issues are addressed. Different
companies have different reasons to implement Six Sigma and various differentiation strategies
to focus on. One company may decide to focus on short-term cost reductions because of losses
and an unstable economy. Another company may decide to implement Six Sigma because of
customer complaints and lost revenues, and another company may want to reduce costs by
focusing on reducing cycle time. (3, pg. 75) (Cycle time is the maximum time that the product is
available to each workstation) (4, pg. 357)
Reducing defects not only improves reliability but also helps to reduce cycle time and increase
capacity. Service industries can be much improved with Six Sigma, the same as manufacturing
industries. Focusing on one or two areas to implement Six Sigma does not mean that one will
not have to implement it again in another area. It means that companies have chosen to focus
their attention on one specific product, process, or division, hopefully expanding Six Sigma to
include other processes extremely important to customer satisfaction. All implementation
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strategies must come down from the executive leadership. “Six Sigma is not a grassroots
initiative. It simply will not bubble up to the surface.” Successful implementation depends on
an interaction among the following principles: (3, pg. 35)
•
Highly visible top-down management commitment to the initiatives. Employees
must perceive active leadership during implementation.
•
A measurement system (metrics) to track the progress. This weaves accountability
into the initiatives and provides a tangible picture of the organization’s efforts.
•
Internal and external benchmarking of the organization’s products, services, and
processes. This information inevitably leads to a “significant emotional event” when
the organization understands and begins to discuss its ‘real’ market position. This
experience leads the organization to gravitate toward a breakthrough philosophy.
•
Stretch goals to focus on changing the process by which the work gets done, rather
than ‘tweaking’ the existing process. This leads to exponential rates of improvement.
•
Educating all levels of the organization. Without the necessary training, people
cannot bring about breakthrough improvement.
•
Success stories to demonstrate how the breakthrough strategy is applied and the
results.
•
Champions and Black belt to promote the initiatives and provide the necessary
planning, teaching, coaching, and consulting at all levels of the organization.
Elements of Six Sigma
Most companies implement Six Sigma in increments, training employees from four or five
departments, units, or factories during each period of implementation. Black Belts are people
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who have been thoroughly trained in Six-Sigma implementation and deployment. Black Belts
train other employees when the process is being implemented; Black Belts within the department
can expand the use of Six Sigma to other processes within the department, factory, or unit to
reiterate the plan. Six Sigma begins to reach a critical level as employees are trained to apply the
strategy across the organization. Momentum of the strategy is sustained as organizations
standardize and integrate Six Sigma into all their everyday operations by incorporating Six
Sigma practices into their policies and procedures.
How a company organizes the people working on Six Sigma projects depends upon: “ (1)
how the company focuses its deployment--does it begin in a particular geographic location or
focus on design and engineering processes? And (2) how six sigma is integrated into the
organization so that Six Sigma resources don’t get lost in the concerns of “business as usual,” or
the latest firefighting endeavor.” (3, pg. 55) There are a number of concerns that must be
discussed and decided upon prior to launching Six sigma, such as: who will oversee Black Belt
selection? What selection criteria will be used? What will be the company’s policy on pay,
recognition, and rewards linked to Six Sigma performance? What should the project selection
process look like? What quality measures will be used? What measures will be standard? What
goals will the company set? How will the company familiarize and coordinate Six Sigma with
its other major initiatives and systems, such as new-product development, materials requirement
planning (MRP), or just-in-time inventory control (JIT), etc? (3, pg. 55) With Six-sigma
implementation, there seems to be more questions than answers. Earlier in this section, the term
‘Black Belt’ was introduced; what does this mean? “Black Belt” and other definitions related to
Six Sigma are addressed shortly.
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Six Sigma Roles
A clear understanding of roles and responsibilities is crucial to the success and
implementation of Six Sigma. All employees need to understand the vision of Six Sigma and
eventually be able to apply some of the Six Sigma tools to improving their work. The following
are ten roles that are common during the initial planning stage, implementation, and deployment.
(3, pg. 65-70)
1) Executive Management. As a group, executive management must inspire, own, find,
and drive the Six Sigma initiative. This group establishes the corporate-level goals
and targets and determines the time frame of performance expectations. They
establish how the Six Sigma initiative will initially be focused. Their initial steps can
significantly add to the likelihood of success or detract from it. It must be
remembered that nothing is more disappointing or frustrating than a “hard restart.”
Getting it right up front is the ticket to overall success.
2) Senior Champion. This is a strategic corporate-level position. It requires a strong
business executive selected from the executive group, most often on a direct report to
the President. This person is responsible for the day-to-day corporate-level
management of Six Sigma. He or she must be a strong leader, capable of “doing the
right thing-now.” A Senior Champion typically remains in this position indefinitely.
However, as the Six Sigma deployment progresses, the Senior Champion will move
from a full-time position to a less dedicated role.
3) Deployment Champion. This is a strategic business unit-level position. These
individuals are responsible for the deployment and execution of Six Sigma
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implementation and deployment plans for their business unit or area of responsibility.
They are also responsible for the effectiveness and efficiency of the Six Sigma
support systems. They often report to the Senior Champion.
4) Project Champion. This is a tactical business unit-level position that’s most often
dedicated for a period of two years. This person is responsible for the identification,
selection, execution and follow-on of Six Sigma Black Belt projects. Project
champions are the “trail bosses” that drive the Six Sigma initiative. In addition, they
develop and oversee many of the details associated with the implementation and
development plans.
5) Deployment Master Black Belts. This is a dedicated and strategic position with a
highly technical orientation, normally posted at the business-unit level. These people are
responsible for the long-range technical vision of Six Sigma. They are responsible for
the development of technology road maps, and work technically across functional areas
and businesses. They also seek out and transfer new and advanced Six Sigma
technologies, methods, procedures and tools, and ensure that this knowledge is translated
into training materials, manuals, and operational documents.
6) Project Master Black Belts. This is a dedicated and tactical position with a highly
technical orientation. Project Master Black Belts usually serve in this position for two
years. They are responsible for the transfer of Six Sigma knowledge to the Black Belts.
They are the teachers of Six Sigma and mentor their students on the job.
7) Project Black Belt. This is a two-year dedicated technical application position within
a business unit. This person is responsible for executing his or her application project
and realizing the targeted benefits. Black Belts are developed and implanted on-site as
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Six Sigma experts within each business unit. These on-site experts are referred to as “Six
Sigma Black Belts.” Black Belts have the ability to (1) effectively develop and leaf lineof-sight or cross-functional process-improvement teams; (2) work with, mentor, and
advise middle management on the formulation and subsequent implementation of
process-improvement plans; (3) utilize and disseminate the Six Sigma tools and methods;
and (4) network with other Black Belts around the world for the benefit of their business.
8) Process Owners.
Line managers “own” specific business processes and are in the
position of ensuring that process improvements are captured and sustained. In cases
where a process cuts across organizational boundaries, several line managers may need to
work together to coordinate resources.
9) Six Sigma Green Belts. These individuals work part time in their specific areas
extending the reach of Black Belts on Six Sigma projects and take on mini-projects of
their own.
10) Project Team Members. Project team members should have fundamental Six Sigma
training so that they can provide project-specific, part-time process and crossfunctional support. Under the guidance of Black Belts, they can gather and analyze
data, as well as help sustain the gains created by Six Sigma projects. Project team
members work part time on projects and can provide expertise on areas directly or
indirectly involved in the process. In the case of larger projects, team members may
dedicate themselves full time to the project.
In Six Sigma, the Black Belt plays an important role in its implementation and execution.
Successful implementation, execution, and follow-up ensure that Six Sigma will be used as
efficiently as possible to produce high-quality products or services. Managers and other key
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players within the organization must fully commit to the strategy before they can get the
excitement and cooperation of employees.
The previous sections show that participation and training of all employees is critical to the
success of Six Sigma. Quality and customer satisfaction depend on the adequate training and
empowerment of employees. If employees are trained well and communication is open
throughout all levels of the organization, then employees will take ownership of their part of the
quality/customer satisfaction goal. While Six Sigma training and implementation can be
expensive and time consuming, in the long run it is cheaper to invest in quality to ensure
customer satisfaction and profitability.
Doing Things Right the First Time
If companies pursue quality and customer satisfaction, they are on the right track to
preventing disappointed customers and lost sales. Some companies pay lip service to quality
until they’re beaten by competitors and no longer have customer loyalty. Others suffer costly
tragedies because somebody forgot or didn’t seem to care to do his or her job right. Why wait to
be destroyed or made bankrupt by a quality crisis when one can learn from the lessons of
companies that have already suffered?
Disasters are quality problems caused by errors, defects, or flawed design resulting in
catastrophic results. “Quality literally means survival, not only your company’s survival but also
that of its stakeholders and other innocent people.” (2, pg. 45) Every company and customer pays
a high price for less-than-perfect quality. Every defect is an economic diminsher for the
producer and customer. The results are costly when quality isn’t part of designing and producing
a product or service. Most companies will find that the cost of quality falls between 15 to 25 %
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of total sales. (3, pg. 80) Activities such as inspection, testing, and review to prevent defective
products from being shipped to the customer can increase the costs to 20 to 25% of the total
sales. The typical corporation produces products and services below Six Sigma level, which
means that the cost of quality is around 20 to 30% of each sales dollar. Enlightened companies
recognize the true cost of poor quality and are setting out to accurately measure and reduce it. (3,
pg. 80)
Quality saves companies money and it makes sense to produce a product or service with no
defects by doing it right the first time. For example, in 1995, when General Electric determined
that its overall sigma level to be 3.5, they discovered they were wasting $5 billion each year in
the cost of quality. United Technologies Corporation Chairman and CEO George David says
that poor quality costs his company more than $2 billion a year. (3, pg. 85)
Lost revenue is just that, lost. It’s substantial money that shareholders and corporations are
entitled to but will never see. Sadly, it becomes the price that customers pay for a company’s
inability to run its business in a quality manner. Money that’s lost in the factory or in the
transaction will never earn interest and never add to the company’s wealth. Poor quality creates
a poor history. Customers cannot be confident that goods and services will be delivered on time
and will spend precious time and money recording, processing, packing, and returning what
never should have been shipped this way in the first place. In the end, poor quality costs
companies, customers, consumers, and society. It’s very real--and pretty big money. (3, pg. 85)
Conclusion
Six Sigma should be implemented in every company that is considering becoming a local or
global competitor. Companies must pursue and implement Six Sigma to ensure that consumers
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are given the best quality products and services. Consumers are intelligent yet fickle creatures;
yesterday, consumers looked for differentiation based on low cost, today’s consumers are
concerned with safety and high quality products. Companies can no longer sacrifice quality to
“earn a quick buck,” but must aggressively pursue customer satisfaction through quality, and the
only way that can be accomplished is through the implementation and deployment of Six Sigma
or other Total Quality Management strategies. Most employers feel that Six Sigma may be too
expensive or too difficult to implement, but the end results—achieving superior quality and
increased customer satisfaction would be worth the hard work, effort, and expense.
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REFERENCES
(1) Arthur, Jay, Six Sigma Simplified-Quantum Improvement Made Easy. Denver: Lifestar c2000
(2) Domingo, Rene T, Quality Means Survival-Caveat Vendidor Let the Seller Beware. Singapore; New York;
Prentice Hall, c1997
(3) Harry, Ph.D. Mikel, and Schroeder, Richard, Six Sigma: The Breakthrough
Revolutionizing the World’s Top Corporations. New York: Currency c2000
Management Strategy
(4) Heizer, Jay and Render, Barry, Principles of Operations Management, 4th Edition
(5) Hinton, Tom, and Schaeffer, Wini, Customer Focused Quality: What to Do on Monday Morning. Englewood
Cliffs, NJ: Prentice Hall, c1994
(6) Webster’s Dictionary
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