CIMA E1 Syllabus E1. Operations management - Six Sigma - Notes ^{17 / 21}

is a process designed to help organisations to focus on developing and delivering near-perfect products and services.

It is a measure of quality that strives for near perfection.

Six sigma indicates 99.999% of manufactured items are within specification.

To achieve six sigma, a process must not produce more than 3.4 defects per million opportunities.

In the context of six sigma, cost versus benefit is not considered.

Target setting is only part of the story, you must be focussed on the correct needs of the users

Elimination of defects

Six Sigma ensures the progressive elimination of defects by:

1. Identifying the root caused of error

2. Confirming the critical root causes

3. Implementing corrective action

By minimising defects, customer satisfaction should improve and this should improve profitability.

3 elements

• Delighted customers

  The customer sets the quality standard, rather than some manager within the company.

  A focus on performance, reliability, price, delivery, service and transaction processing.

• Outside-in thinking

  The company must be seen from the customer's perspective.

  There is a need to understand what the customer is seeing and feeling as regards the company's processes.

  Customer knowledge is used to improve company processes and add value.

• Leadership commitment

  People are key to creating quality and generating results.

  There is a commitment to providing opportunities for employee to develop themselves in the services they provide to customers.

  There is a focus on ensuring employee training needs are satisfied.