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6. The Basics of Six Sigma - The problem solving startegy continued
Organizational change. Business and technological changes have accelerated at an alarming rate. The world is becoming smaller, and companies in today's environment must face global competitors in their own backyards. Customer expectations of products and services arealso increasing at the same exponential rate. What was delightful to the customer yesterday is now expected. A company must improve its products to meet the customer's new expectations and must perpetually improve operations, processes, costs, cycle time, technology productivity, etc. In times of change, everyone is involved in the effort to change effort.Most managers and process owners are expected to act as change agents. The change agent role is not limited to the top leaders of the corporation. The Change Process The classical model for a change process consists of three phases: unfreezing, movement, and refreezing. To the change agent, unfreezing the first phase means unfreezing the existing behaviour patterns and practises of the work group. To the change agent, the first phase means unfreezing the existing behaviour patterns and practises of the work group. This is where resistance to new programmes appears and must be dealt with. Movement. The next step would be to move the people or practises to a new arrangement. This could be accomplished through training or technology refreezing at the proper moment in time. The process, including the people, is frozen once the skills, technology, or practises are in place. This is where the company wants to be. A process, procedure, or department is now aligned for optimum organisational effectiveness. The acceleration of change in the world can be described as being in permanent whitewater. As soon as the programme is completed, it is time to change again. That is, unfreeze the process, move in a new direction, refreeze, pause, and start ess, move in The change agent is the person or group that acts as the catalyst and assumes responsibility for managing the change process. CEOs Leaka and Welch could drive the change effort. A manager may act as a sponsor or patron of the change process. The sponsor is a key political supporter and may provide the change agents with funds, staff, and resources. The process to be changed is defined as the target. Change agents can be managers or other employees of the organization. They would be termed internal change agents. External change agents are outside individuals who are free from the political restraints of the organization. They can offer more objective viewpoints andanalysis of the situation at hand. However, outside change agents will not have insider knowledge of the organisation's culture, history, procedures, and personnel. Some characteristics of a good change agent include being empathetic, sensitive, open, tolerant, flexible, patient, friendly, cooperative, imaginative, confident, self-reliant, and risk-taking as provided in the table. The advantages of internal change agents are moreknowledge of the company may be more available lower cost, unknown quantity, more local authority The advantages of external change agents are moreobjective, more diverse experience has a broader network technically prepared the disadvantages of internal change agentsare too close to the problem may bepart of the problem may be biased, maybeunwilling and the disadvantages of external change agentsare less company knowledge, higher cost, an unknownquantity, longer start up time and bad management. Image. Types of Organizational Change Organizations generally undergo change in four major areas: strategy, technology, structure, and personnel. Strategic changes occur when the company shifts its direction and resources towards new business or markets. Technological changes occur when the company decides that automation or modernization of key processes are essential for overall competitiveness. Structural changes occur when the company undergoes a management delayering process or goes from a functional structure to a product structure. Changing the attitudes and behaviours of company personnel is often undertaken through organisational development techniques. Large scale Change: most change agents enacting revolutionary organisational changes will advise management to allow three to five years for the change to take effect. The chief executive officer is often anxious for results to appear much quicker than that. The efforts to remodel an organisation and align personnel take years due to the current methods of imparting knowledge. The philosophy of change to train everyone in a large organisation could take six months or a year. By that time, the emphasis on the direction of the company and the intensity of the effort could be waning. It's no surprise that more time and effort are required to realign people toward the direction or focus of the effort. A new movement coming from the organisational development area is the concept of very large groups coming together to work on a change. The idea is to involve people from the start and to have them enrolled in the cause. Teams of large size will definitely shorten the time needed to transmit the vision and mission and to enrol people in the change effort. A key element is to make sure that everyone who can make a decision is in the room. As a result of this effort, people will commit to and agree to specific action plans. A large-scale change effort of this type generally lasts several days, but organisations can see results immediately. Resistance to Change People resist change because they will be asked to do something that they may be unfamiliar with. They could also be asked to accept a change, which could cause them a personal loss. For example, certain older employees may reject change because they might be uncomfortable doing their job. With a slightly different twist, younger employees may not have invested as much time with the old process and may be more accommodating of change. The change agent must anticipate resistance to change and find ways to overcome it. A strategy for dealing with resistance to change includes educating and communicating the change. Enlist employee participation in the project. Provide support efforts such as training or counseling. have negotiated arrangements for change Use manipulation to gain support; use threats or direct force, but only as a last resort. linking projects to organisational Goals Embarking on a Six Sigma initiative begins with a management decision to embrace a change that says there's a better way to run our organization. The readiness assessment includes a review of the following areas Assess the outlook and future paths of the business. Is the strategy course clear for the company? Can we meet our financial and growth goals? Does our organisation respondeffectively to new circumstances? Evaluate the current organisational performance. What are our current overall business results? How effectively do we meet customer requirements? How effectively are we operating? Review the capacity for systems change and improvement. How effective are we in managing system changes? How well are our cross-functional processes managed? Are our current efforts in conflict with Six Sigma? The above assessment will go a long way towards deciding if current efforts are sufficient or whether the timing is appropriate to undertake a Six Sigma effort. Six Sigma can be applied as a targeted approach. A number of so-called Six Sigma companies have improvement techniques and teams in place and only assign black belt assistance as needed, as described in the table. The recommended strategies, dependent upon the current performance levels, are that for a company with low performance, the company should concentrate on the basics, use problem-solving teams, and apply cost management, and should not focus on empowerment, benchmarking, or strategic planning. For a company with medium performance, the company should set goals and monitor them, use process simplification, use department improvement teams, and get middle management involved. For a company with high performance, the company should benchmark other firms, empower employees, communicate strategic plans, and continuously improve. The above discussion tells us that a pure Six Sigma approach achieves the best results if implemented by high-performance organizations. Medium and low-performance companies should consider some building blocks in order to take advantage of the low-hanging fruit that can be picked. With these more basic techniques, a decision on Six Sigma might be negative if the following conditions exist: the company already has an effective improvement effort in place. Current changes are already overwhelming the company's resources. The potential gains aren't sufficient to finance the necessary investments. For the deployment of Six Sigma projects, there are a considerable number of options dependent upon the goals and objectives of the organization. Considerations include a focus on project cost savings, a focus on customer satisfaction deliverables, a focus on processes, a focus on problems, a focus on a targeted location, a focus on design, and a focus on supplier processes. The typical methodology that is often followed for Six Sigma projects is either define, measure, analyze, improve, control, or some variation of this approach. This assumes that a problem facing a key business concern can be clearly defined in that it can be addressed by data measurement and/or other statistical improvement techniques.
7. The Basics of Six Sigma - Identify the customer
Voice of the Customer: Businesses and employees identify the customer. Six Sigma quality is built around the customer. Everything starts and ends with customers. They define quality and set expectations months before they rightfully expect performance, reliability, competitive prices on time, delivery service, and clear and accurate transaction processing. The project's customer may not always be as obvious as first thought. The receiver of the next operation, an internal department, could be thought of as a customer. The purchaser could be an external customer of a process. But yet, if the purchaser is a distributor, then they may not really be the true customer. The primary customer of the process will or should have the greatest influence on it. The primary customer is of utmost importance to the process. The sorting out of the primary customer may take some discussion on the team's part. The question of who is the customer may bring out discoveries about which customers make us money. That is, are there certain customers that make up the bulk of company revenues? Is there a small proportion of customers that simulate the Pareto law? Is the case that 80% of the revenues come from 20% of the customers, or that 80% of the net profit comes from 20% of the customers? Customers can constitute "happy customers." Current unhappy customers lost customers competitors Customersprospective customers The following are methods to collect information and data from customers or would-be customers through surveys focus groups Interviews Complaintsystems Market research and shopper programmes The traditional methods of obtaining customer information could also include targeted and multilevel surveys Targeted and multilevel interviews customer scorecards data warehousing datamining customer audits Supplier Audits Quality functiondeployment The information gathered should allow the organisation to identify customer requirements and to spot upcoming trends. The trends will be new ways for the company to gain or retain customers. Customers seem to be more satisfied if they receive feedback than if they do not receive feedback. Clearly, the voice of the customer is critical to business success. Likewise, green belts and black belts must consider how both internal and external customers can be identified and what their requirements might be in order to understand and improve the business process. The relationship that management can develop with either basic customer type will affect the company's ability to be effective in delivering customer satisfaction. Internal Customers An internal customer can be defined as anyone in the company who is affected by the product or service as it is being generated. The internal customer is sometimes forgotten in the effort to produce an item or service. For the external customer, the immediate goal should be to produce the product or service in a simple and convenient manner. for internal consumption. The effort to remember, to do things in a specific way, to be trained properly, to be given the proper equipment, or to be given specific instructions can often be neglected. Internal customers are often employees of the company. Kawaru Ishikawa is a customer in the next operation to eliminate departmental sectionalism toward one another. The essential idea is to enable employees of all departments to come together to solve problems. Staff members such as those in design, manufacturing, purchasing, projects, and plant engineering must consider themselves as service providers. Otherwise, the staff members are in constant struggle with the line management and employees, and nothing gets done within a company. The staff should consider what kind of work they can perform for the line departments. Research has shown that management practises relate to employee satisfaction, which also impacts customer satisfaction when employees are satisfied with their treatment. Given the right tools to do the job and supported by management, customers are more likely to have higher perceptions of quality and will continue to do business with the company. Internal employee communications for customer satisfaction can be improved through the followingoptions company Newsletters Basic Information Corporate News storyboards a wallboard display, memos, letters, projects, etc. Team meetings Share business news or announce new events, post customer letters of appreciation or dissatisfaction, and hold staff meetings Share the information—display of goals, progress charts, etc. Quality Awards from customers: to stay competitive in this environment, a constant schedule of training for the entire workforce is required. Typical employee training must focus on helping them do their job better. External Customers: External customers are not part of the organization but are impacted by it. End users, intermediate customers, and impacted parties are described in more detail below. Generally, external customers play a critical role by providing a major portion of company revenues. End Users The category of external customers includes those that purchase a product or service for their own use. In this case, they would be the end user of the product. Intermediate Customers Intermediate customers purchase the product or service and then resell, repackage, modify, or assemble the product for sale to an end user. These channels can provide volume sales opportunities for a business that will have significantly different requirements from end users. Examples of intermediate customers in other areas include retailers, distributors, manufacturers, reps, wholesalers, and transport companies. Impacted Parties The third external category is those who did not purchase or use the product but are impacted by it. The impacted parties for an educational system might include parents, service companies that hire students, communities, vocational schools, city governments, colleges and universities, civic groups, and service companies that are suppliers. Meeting external customer needs can be a complex process. External Customer Identification External customers may be sorted in many ways in an attempt to better understand their requirements and identify possible market niches. Business customers can include for-profit and not-for-profit enterprises. Examples of non-profits might include schools, hospitals, public agencies, etc. In addition, the various customer groups could be examined for high profit margin competition. Market Risk of Market Growth in Market The consumer customer market differs from the business market as follows: the consumer market has a large number of customers. The majority of consumer purchases are small in actual dollar amounts. The transaction is usually a simple purchase. Most consumers are not very knowledgeable about the product. The supplier does not share proprietary information with the consumer. In contrast, the business customer acts in the following manner: There are a very small number of business customers, maybe only one. The amount purchased per transaction is quite large. The purchase is handled through specialised personnel. The customer may know more about the requirements than the producer. The supplier may allow the customer access to all sorts of information. It is also important to look at the market for the next two to five years and estimate how it will change and grow. This requires a look at all potential customers and their requirements.
8. The Basics of Six Sigma - Voice of external customer
Basics of Six Sigma Voice of the Customer Business and Employee Voice of Internal Customers Business and employee surveys can establish a communication process and serve as a tool for overall improvement. Information should be gathered on improvement efforts and some of the following factors State of the Company What is the employee's perception of the company? state of quality efforts? Are the quality efforts worthwhile? The state of the processes: are there improvements? reaction to policies? What dumb things have been implemented? rating of job satisfaction. Do I like my job? My boss, etc. etc. Rating of Company Satisfaction Is the company a good place to work? Voice of the External Customer The voice of the customer is an expression for listening to the external customer. It is necessary to have constant contact with the customer. For some companies, complaints are the only way to get their customers' attention. It has been stated that complaints are gold because they let the company know how to improve and how to beat the competition. Among the ways that a company can listen to the external customer are immediate customer surveys. Customer Follow Up Surveys six months,one year, or two years. Community surveys look at what the community is doing. Personal customer contact The CEO spends one day per month with a customer. Customer contact reports are provided to employeefocus. Groups Small and large groups, customer interviews or councils electronic mail test marketing A small area is tested for use. Quality Guarantees: If you are dissatisfied with the training, we will redo it. Inspectors use mystery shoppers or auditors. The Ombudsman advocates for the customer's use of toll-free phone numbers or suggestion boxes. Instruments to Gather Data There are instruments or tools available to everyone for the purposes of collecting customer information. Some of the common instruments are described below. Surveys: a properly designed questionnaire gathers data using a consistent set of standardised questions. Usually, a sample is selected for use. Interviewers can be used, or it can be self-administered. Focus Groups A small group of three to twelve, typically individuals, is assembled to explore specific topics and questions. A time period of one to two hours is normally required. Face-to-face interviews—individual interviews of 30 to 60 minutes in length—may be used. This can be very time consuming.Satisfaction or Complaint Cards The return of aCard prompts a reaction by the company. These could function as feedback forms. Dissatisfaction Sources: Some methods that people use to voice dissatisfaction include complaints, claims, refunds, recalls, returns, repeat service work, litigation replacements, downgraded warranty work, missed shipments, etc. Competitive Shoppers evaluate the company and competitors. CEOs may call their own offices to measure the ease of customer access. Customer Metrics Selection The primary and more detailed metrics are developed but are not finalised in the definition step, which is left to the measure step. The primary metrics for consideration in a project could come from several sources suppliers Internal processes give customers the metrics that will affect projects involving suppliers. Internal processes and customers would include quality, cycle time, cost, value, and labor. Below are nine dimensions of quality measurement performance. primary features of the product and secondary features added to the product conformance Obtaining a product that meets fit, form, and function reliability the dynamic quality of a product over time: durability, usefulness, life, service, ease of repair, response, human interface, aesthetics, product appearance, and reputation based on past performance. There are similar measurements that are important in the marketplace. These characteristics can answer the question: how do products win orders in the marketplace? Price, product range, conformance, quality, design, delivery speed, brand name, delivery reliability, technical support, demand increases after sales support, and colour range are suggested measurements. The secondary or consequential metrics would be derived from the primary metrics. For example, if cycle time was determined to be a key metric, the next step would be to establish the numerical measurement. Examples of measurements include defects per unit or DPU (defects per million opportunities) or DPMO (average age of receivables) and lines of error-free software code reduction in scrap voice of the customer. Business Employee Feedback collecting Customer Data Collecting data to gain the voice of the customer is a multi-level task. When collecting data from customers, it helps to consider the level at which customers impact the business. Business-level customers at this level are primarily shareholders and top management employees. The data of interest is primarily financial data such as stock price, market share, revenues, earnings, return on investment, or ROI, return on net assets, or RONA, etc. Typical measurement intervals may be quarterly or annually. Operations Level: Customers at this level are primarily those who purchase the product externally and those who manage production, operations, or internally. Data of interest measures overall process performance with a focus on customer satisfaction or external measures of operational effectiveness and internal operations efficiency, or internal measures such as rolled throughput yield, sigma levels, WIP inventory, etc. Typical analysis tools come from six sigma methods and lean manufacturing, industrial engineering, and various forms of operational analysis. Typical measurement intervals may be daily or weekly. Process Level: customers at this level are primarily internal, including employees and the next process in the operation. External customers include suppliers for detailed material specification questions. The data of interest primarily involves key process variables. Typical analysis tools are statistical methods for process control, capability, and improvement. Typical measurements may vary from hours to fractions of a second, depending on production rates. Since employees or customers should be surveyed on a regular basis, Employee satisfaction is key to greater productivity and quality. The key survey factors should include job satisfaction, advancement, fairness, training, treatment, respect, and dignity. Pay Company's Interest in Wellbeing Internal customers' business and employee surveys can establish a communication process serving as a tool for overall improvement. Information should be gathered on improvement efforts and some of the following factors State of the Company What is the employee's perception of the company? State of quality? Efforts: Are the quality efforts worthwhile? The state of the processes: are there improvements? reaction to policies? What dumb things have been implemented? Rating of Job Satisfaction: Do I like my job, my boss, etc? Rating of Company Satisfaction: Is the company a good place to work? Voice of the External Customer The voice of the customer is an expression for listening to the external customer. It is necessary to have constant contact with the customer. For some companies, complaints are the only way to get their customers' attention. It has been stated that complaints are gold because they let the company know how to improve and how to beat the competition. Among the ways that a company can listen to the external customer are immediate customer surveys, Customer Follow-Up Surveys Six months. One year or two years community Surveys a lookat what the community is doing personal customer Contact The CEO spends one day per month with a customer contact report given to the contact employee focus groups Small and large groups, customer interviews, or councils' electronic mail test marketing a small area are tested for use. Quality guarantees if not satisfied,we will redo the training. Inspectors advocate for the use of mystery shoppers or auditor-ombudsmen and encourage customers to use toll-free numbers or suggestion boxes customer Survey research on customer satisfaction can be worthwhile in aiding the company's efforts. Customer satisfaction research was a $2 billion industry in the United States in 1994. The objectives of customer research vary, but a few major themes are noted below to determine what quality is and find out what competitors aredoing Define quality performance measures for use identify factors that will provide a competitive advantage identify urgentproblems Griffin conducted a study on the best customer satisfaction practises and recommended the use of multiple instruments to collect customer satisfaction data. Perceived quality and satisfaction must be measured. Customer survey sample sizes and frequency can have significant cost implications and should be chosen to balance business resources and the need to monitor changes in the business environment. In the evaluation of customer information, not all attributes and transactions should be treated equally. Some are much more important than others. As customer needs change, the evaluations will change. Survey Pitfalls Surveys are a method to gather data, so care should be taken. With that data, a well-designed and properly executed survey can be a help to the company. The survey can show what resources do not satisfy customers, identify opportunities for growth or correction, and focus on customer issues. However. There can be problems with the use of surveys improper survey form design Poorly defined survey issues sampling errors or poorsampling techniques ignoring non responses treating customer perceptions as objective measures with incorrect analysis methods that treat surveys as an event.not a process of asking nonspecific questions failing to ask the right questions, ignoring the results, or using the wrong questions, failing to provide feedback when necessary, using too many questions 25 to 30 questions are typical when using a temporary employee to conduct interviews. instruments to gather data There are instruments or tools available to everyone for the purposes of collecting customer information. Some of the common instruments are described below. Surveys: A properly designed questionnaire gathers data using a consistent set of standardised questions. Usually a sample is selected for use. Interviewers can be used, or it can be self-administered. Focus Groups A small group of three to twelve, typically individuals, is assembled to explore specific topics and questions. A time period of one to two hours is normally required. Face-to-face interviews—individual interviews of 30 to 60 minutes in length—may be used. This can be very time consuming.Satisfaction or Complaint Cards The return of aCard prompts a reaction by the company. These could function as feedback forms. Dissatisfaction Sources: Some methods that people use to voice dissatisfaction include complaints, claims, refunds, recalls, returns, repeat service work, litigation replacements, downgraded warranty work, missed shipments, etc. Competitive Shoppers evaluate the company and competitors. CEOs may call their own offices to measure the ease of customer access. Customer Service Measurements Customer service measurements can be obtained through the various instruments mentioned above. Some of the more common techniques include customer surveys, measuring quality, service performance, etc. Customer visits; customer service engineers' feedback; complaint rejects parrito analysis for a consumersurvey, there may be some differences apotentially larger customer population, small purchase volumesa small purchase transaction the supplier mayknow more than the customer. Customers interact with the business at many levels, each with their own specific interests in the business. Outcomes In this section, we have discussed the objectives of internal and external customer surveys, different survey types, data gathering methods, and customer service measurement. The student may wish to consult with customer survey experts to ensure the cost-effectiveness of survey efforts. Customer Data Analysis The Black Belt analyses customer data in order to determine when and where customer attitudes are different or are changing. Comparing customer attitudes over time or between groupings can provide insights into market niches and changes. The results of customer feedback data collection can be analysed using a variety of tools. Statistical Tests A large number of nonparametric tests and contingency tables can be used to determine, with identified confidence levels, whether customer preferences have shifted. In addition, most normal statistical tests may be used on many of the numerical survey results, such as the Lycrat scale or zero to five or zero to ten ranking surveys as described earlier. Line Graphs: Line graphs can graphically show whether either discrete or continuous characteristics of a product or service are changing. In most cases, a visual assessment can be made to determine if the product or service is getting better, worse, or staying the same. Control charts—a variety of variable or attribute charts—can also be used to display customer feedback data. This tool offers an advantage over linecharts because the addition of calculated control limits facilitates the ability to detect special or assignable causes of variation. Matrix Diagrams: A variety of matrix diagrams can be used for examination of customer defects or complaints. Data from matrix diagrams can be used to create a paredo chart or can be used directly for project selection. where a large number of occurrences are noted. Pareto analysis snapshots of customer defects or rejects or parrito charts can be displayed at selected time intervals to answer such questions as, "Are reject categories still of the same magnitude?" Are the reject categories still of the same magnitude? Other Comparative Analysis The comparative pareto analysis illustrated above is a powerful tool for analysing customer data in the same way. Other charts such as control charts, linegraphs, histograms, and even matrix diagrams can be compared from one time period to another, from one supplier to another, etc. to provide real insight into the needs of the customer and the changes in the market. Visual comparisons, however, are risky. A significance test may be required. Voice of the Customer: Business and Employee Customer Requirements Determining Critical Customer Requirements Customers ultimately determine the value of any product or service by purchasing or refusing to purchase it. These decisions are made based on a complex system of critical customer requirements. In order to manage or control and improve any business process, one must be able to determine the critical customer requirements that influence these decisions. Customer value consists of cost, quality, features, and availability factors, or CQFA. To prosper, a business process must do well in at least one of these four areas while at least meeting acceptable levels in the others. If a business can be best in class in one of these four quadrants or above average in more than one quadrant, they can thrive. However, the level of the bar in all of the quadrants is constantly changing because of the environment and competition. For this reason, the determination of critical customer requirements must be a continuing activity rather than a onetime study. In addition to looking at customer CQFA preferences, it also helps to understand the entire system of customer expectations, needs, and priorities. To understand the critical relationships and interactions among all these factors, tools such as cause-and-effect, matrix, and quality-function deployment should be employed. Customer Expectations A deep knowledge and understanding of the customer is required in order to properly serve them. There is a need to go beyond the sale to uncover the subjective factors behind why the product was purchased. By emphasising the need to listen to the customer, one will gain a better understanding of the customer's expectations, priorities, and needs. The customer's expectations can be described through an analogy similar to Maslow's Hierarchy of Human Needs. Basic: The bare essential attributes of the product or service should be present. A new personal computer should be assembled, formatted, and loaded with some basic software. A rental car will be serviced and operate as expected. Some attributes will be provided as part of the product. A knowledgeable technician may provide general information on the operating features of a personal computer. The rental car should be conveniently located, with features explained and policies clarified as desired. These are attributes that are worthwhile to have but are not necessarily provided as part of the package. With a few extra hints from the technician on operating procedures or hookups, the person at the rental car agency gives good directions to your location and helpfully tells you how to save some money. When returning a rental car unanticipatedly, these are surprise attributes that go beyond what the customer expects from a purchase. The computer technician calls for an appointment to deliver your personal computer to your home at your convenience. The rental car agency drops the car off at your place at your requested time and will pick it up when you're finished.
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