The recent Insight from Aberdeen Group, Technologies Enable Six Sigma (now Aberdeen Access Members Only) does a great job at demonstrating why we need Six Sigma, or 99.9997% accuracy, and why 99.9% accuracy is not good enough. At a 99.9% quality level, in the United States alone, this would mean:
no electricity for nearly an hour each month
unsafe drinking water once per week
2,000 lost articles of mail per hour
2 short or long landings at most airports each week
20,000 wrong drug prescriptions per year
500 wrong surgical procedures a week
The insight also makes it a point to note that Six Sigma is not just for manufacturing, since the metrics can apply universally. Whether you measure bad parts coming off an assembly line, or errors made in processing orders, a process is a process and a defect is a defect.
Based on a recent study, the insight notes an interesting fact – those companies that measure PPM (parts per million) and DPMO (defects per million opportunities) achieve better performance than those that simply measure defect rates in terms of %good or %defective. Although none of the Best in Class performers achieved true six sigma quality, those that measured PPM and DPMO were very close to five sigma performance (99.98%).
Why? I think it is partly due to the lessons offered in the Aberdeen Insight, “what gets measured, gets managed” and Six Sigma relies on accurate and accessible data which requires the proper technology, and partly due to psychology. We’ve been trained by the media’s overuse of statistics to accept 99% as very good and 99.9% as excellent and 99.99% as absolutely fantastic. After all, Ivory is 99.99% pure, and we’re supposed to accept that to be as good as it gets, but the reality is this is barely five sigma, which we know to be unacceptable in any critical operation.
As implied in the lessons learned, Aberdeen found a direct correlation between the application of technology and Best in Class performance. In all but one category of IT solutions (non-conformance reporting), adoption rate increases with performance. Although this does not decisively prove cause and effect, there is a strong correlation between top performers and supporting technology, and what’s more important – a detailed cause and effects analysis or being in the “better” pool?
Of course, six sigma is more than just measuring defect rates. Six Sigma employs a structured approach to problem-solving and requires the management of projects which have the potential of having significant impact on the business. To maximize the benefits of these projects, it is necessary to provide an infrastructure that facilitates the adoption of Six Sigma across the organization, manage individual projects, share information effectively and manage financial information in such a way as to gain acceptance on an enterprise-wide basis. While, strictly speaking, tools such as spreadsheets and generic desktop tools, and even pencil and paper, can assist in early stages of Six Sigma implementation, standardization and collaboration are necessary to achieve the next level of benefits.
By implementing project management tools that support collaborative efforts and provide workflow automation, Six Sigma practitioners are able to focus on the analytical aspects of the methodology to drive to true results.
For more information on Six Sigma, I refer you back to parts I through III of the series which appeared on eSourcing Forum back in September.