Six Sigma Fundamentals: A Complete Introduction to the System, Methods, and Tools

Perhaps the strongest argument for using the six sigma methodology is the notion of customer satisfaction. It is the driving force behind the improvement initiative of excellence. Customer satisfaction is created through knowledge of the customer, overall customer service systems, responsiveness and the ability to meet all customer requirements and expectations.

The basic aim of a quality process is to consistently improve value to customers. To identify this value we must also identify the types of customer. A customer is someone who is influenced by the product (goods or service). Therefore, within any company there are departments and personnel (i.e., internal customers) that supply products or services to each other. If the service to internal customers is unsatisfactory, it is unlikely that the expectations of external customers will be met. External customers are the clients who buy the product or service. Products or services may be sold to end users by intermediaries, such as dealers, retail stores, distributors and so on, thus determining the ultimate customer. Organizations should take into account both intermediaries and end users when defining their customers.

Knowing customer expectations and priorities is essential in product development. Product development translates customer expectations for functional requirements into specific engineering and quality characteristics. This means starting with a desired product and then identifying the necessary characteristics for raw materials, parts, assemblies and process steps.

Two of the most common techniques for documenting the voice of the customer in their own terms are the Kano model and quality function deployment (QFD). Whereas the Kano model allows us to identify and differentiate the basic, performance and excitement items that the customer perceives as important, QFD is a specific technique consisting of a series of interlocking matrices that translate customer functionality into product or service or process characteristics. Specifically, QFD provides a systematic methodology that helps the organization to:

• Thoroughly translate customer functionalities into requirements.

• Prioritize those requirements.

• Benchmark characteristics against competition and best practices.

• Decide how to meet or exceed the requirements by incorporating those features into the product, process or service.

If the appropriate and applicable definition of quality, as it relates to customer expectations, is not introduced early in the concept or design phase, there is a risk that the customer will recognize this lack of quality in the market place and not be satisfied. Because the maintenance of quality is so important, it is imperative that management must continually review the process. This means that management must always be aware of the company's interactions and relationships with the customers, including how the information gained from customers is used to improve products, processes or services. Management must also be familiar with the process by which the organization manages its customer relationships. Management can do this by:

• Ensuring easy access for customers to seek assistance, to comment and to complain.

• Following up with customers on products to determine satisfaction with recent transactions, to seek feedback and to help build relationships.

• Creating customer-contact employees. This involves selecting employees and providing them with special training so they have complete knowledge of a specific product and are empowered to make decisions regarding the product and the customer.

  They must also be given the technology and logistics support necessary for them to offer reliable and responsive service satisfaction to the customer.

• Analyzing feedback and complaint data for policy development, planning and resource allocations. In other words, a commitment to customers by the organization:

  • To promote trust and confidence in its product, even when failure occurs.

  • To make sure they are free from unusual conditions or exceptions.

  • To be open and honest in communications.

  • To improve on competitors' commitment.

Why put such emphasis on customer satisfaction in the six sigma methodology? Because, as we remove the dissatisfaction, we decrease variation, and thereby increase profitability. However, what is the source of dissatisfaction? Simply stated, it is a complaint. It is the recognition of a breakdown in quality. The complaint may concern the product or it may concern other activities, such as incorrect invoicing or the shipment of incorrect goods. As the number of complaints increases, a systematic approach from a centralized location to register all complaints, summarize the complaints and route the complaint to the concerned department must be put in place. The information gained should be viewed as feedback, and appropriate and applicable action should be taken to fix the problems. To enable customers to comment freely on an organization's products, processes, or services, the organization should have a company representative visit each customer frequently, or ask the customer for feedback at frequent intervals. The key is to make sure that feedback is easy for the customer to provide. Typical ways in which to do this are to:

• Provide personnel with well designed standard data sheets for easy and accurate recording of complaints.

• Provide incentives to customers to encourage adequate feedback.

• Provide a glossary of terms to improve communications and code numbers to simplify the data entry analysis.

• Provide training in how to do something and why it is being done.

• Conduct audits of the feedback process to identify and eliminate any roadblocks customers may encounter when giving feedback.

• Use technology to collect the field information (data) from the customer and to provide the appropriate and applicable analysis and summaries to managers, so that they can make optimum decisions.

• Make use of the sample concept.

• Make use of the control concept.

Furthermore, information about customer satisfaction may be obtained through warranty records. A warranty is a form of assurance that a product, process, or service is fit for use or, failing this, that the user will receive some kind of compensation. In most situations there are two kinds of warranties: a general warranty of merchantability—that is, fitness for the customary use of the product—and a special warranty for a specific use of the product, provided the seller knows these special conditions.

These special conditions may be defined through:

• The comprehensiveness of warranty coverage.

• The terms and conditions of warranties, including exclusions.

• The clarity and understandability of written warranties. Both the legal jargon and fine print (footnotes) should be kept to a minimum.

• How customers value the extra commitments the organization makes for customer satisfaction.

• How the organization compares to competitors or best class leaders.

• How innovative the organization's effort to show its commitment to the customer is.

Written guarantees are helpful to both the customer and supplier. They protect the buyer by setting out the seller's obligations to the customer and they protect the seller by clearly stating the limit of the seller's obligation.

In addition to feedback and warranties, an organization can better know its customers by using a proper and applicable segmentation strategy. The organization should first identify and list its current and potential customers (some organizations differentiate this by calling them "customer" and "consumer" respectively.) The next step is to divide the customer group (consisting of all the current and potential customers) into different market segments. While it is true that all of the customers have some common requirements and expectations about the products, those in different markets have their own unique requirements as well. For example, if more than half of your business comes from the automotive industry and the rest from many other different types of industries, it might make sense to segment your customer into two groups: automotive and non-automotive. Once this differentiation has taken place, each customer group can be considered unique. The following are important elements to consider during the segmentation process:

• The thoroughness of the process used in identifying market segments and potential customers.

• The degree to which customer requirements have been identified for each market segment.

• The identification of the common and unique requirements and expectations for each market segment.

• The frequency of data collection for each market segment.

As you can see, customer understanding and satisfaction are of great interest and importance to every organization. However, those organizations' suppliers also play a major role in customer satisfaction. The relationship obviously varies from adversarial to supporting and everything else in between, but the fact remains that unless organizations have a good relationship with their supplier base, the satisfaction they in turn provide to their customers will be short-lived or not present at all. It is imperative that the relationship be cultivated and developed to the point at which both the organization and the supplier see it as a win-win relationship. To do that, some of the following concepts and principles must be followed:

• The supplier must become an extension of the buyer's organization.

• The supplier and buyer organization must work closely together for the mutual benefit of both parties.

• They must establish a long-term purchase agreement.

• They must initiate joint quality-related activities (training, planning, etc.).

Even this short list of requirements demonstrates that communication and teamwork between supplier and buyer organization are essential. The following are some communication techniques that may help this process:

• Warranty cards. Upon purchase of the product, the purchaser is asked to return a card stating the condition of the product when it was received.

• Telephone calls. Customers are called and asked for their impressions of the quality of the item they purchased.

• Individual customer visits. Another form of collecting customer data is the periodic visit to major customers by a marketing or engineering representative of the company.

• Mail surveys. For most of the questions, the customer is asked to respond by checking a box with a description such as excellent, very good, good, fair or poor.

• Special arrangements with individual customers. A simple but effective approach to gaining field intelligence is to establish a special arrangement with a few customers to obtain information in depth. This approach is heavily based on interviewing skills on a one-to-one basis.

• Focus groups. This technique is conducted in order to better understand a customer's perception of a company's product. It consists of about eight to ten current or potential customers who meet for a few hours to discuss a specific product. Depending on the goals of the focus group, the participants may be average customers, non-customers or special customers. The following are some key features of a focus group:

  • The discussion can focus on current products, proposed products or future products.

  • A moderator, who is skilled on group dynamics, guides and facilitates the discussion.

  • The moderator has a clear goal as to the information needed and a plan for guiding a discussion.

  • A company employee often observes and listens in an adjacent room, shielded by a one-way mirror.

In the discussion of data-driven customer satisfaction, many questions must be answered regarding how the data should be gathered and interpreted. For example, how can customer-related data be combined with other key data to create actionable information and develop prompt solutions to customer-related problems? Are the customer data and other key data related? Do they have the same statistical significance? Is the combination appropriate? Or, how do we decide how to interpret and analyze the data? Or, how do we decide what data is appropriate? Conflicts arise because the people collecting and analyzing the data often have differing views about the answers to these questions. Handling these disagreements professionally, using appropriate and applicable conflict resolution practices, is essential. There are three minimum requirements for conflict resolution. They are:

• The existence of a formula and a logical process for resolving customer complaints.

• A clearly defined escalation procedure, for situations when customers do not feel their complaint has been resolved satisfactorily by lower-level personnel.

• A distinct level of empowerment. This means that the authority and responsibility to carry out the assigned task should be clearly defined.

How can six sigma help create customer satisfaction? What are the specific items that six sigma provides that benefit the organization and increase customer satisfaction and loyalty? We believe that the following outcomes are directly related to the effort of implementing six sigma:

• Improved product and service planning. This involves creating a long-term focus that is based on prevention activities rather than appraisal activities and developing a customer-driven strategic planning process.

• Measurable performance improvements. Six sigma can increase customer satisfaction, market share, long-term profitability, and total productivity.

• Improved attitude toward customers. This involves recognizing the importance of the voice of the customer and devoting time to the professional treatment of customer needs, wants and expectations.

• Higher quality of products and services. This is provided according to customer requirements and needs.

• A more informed marketing focus. This results in increased market share and financial growth, which is achieved through increased customer satisfaction.

• Improved process management approach. With six sigma the focus is on:

  • Error and defect prevention not on appraisal techniques and justification.

  • A product and service delivery attitude—the realization that fast time to market is important.

  • A people orientation—processes are customer-driven.

  • Management by data—this means that management makes its decisions based on quantitative facts.

  • Mode of operation—management-supported advancement occurs through teamwork between suppliers, process owners and customers.

  • Improvement strategy—this is the result of total process management and a focus on continual progress.