Six Sigma is a quality improvement methodology that
has revolutionized business over the past decade. While pioneered at
Motorola in the 1980s, it did not rise to prominence until when GE's
Jack Welch championed it in the mid-1990's. Jack saw Six Sigma as the
missing piece in his revamp of the mammoth that GE was. He drove it
through all levels in the company until Six Sigma became 'the way GE
does business'. It was almost simultaneously adopted by Allied Signal
and implemented in similar rigor. Motorola, GE, Allied Signal and
several other blue chips posted billions of dollars in savings each with
their Six Sigma initiatives. As GE CEO Jack Welch put it "the
financial rationale for embarking on this quality journey is
clear." These results generated plenty of publicity and Six Sigma
quickly became a mainstream paradigm.
This paradigm gradually grew from a Quality
Management initiative to a management philosophy. The past 9 years have
seen Six Sigma become a symbol of professionalism and management
maturity. Both large and small organizations have implemented Six Sigma
programs with shining results. Recently, even some public sector
departments in the US have successfully launched their own Six Sigma
In this article I will explore Six Sigma and its
application to Pakistani organizations.
PERCEPTIONS OF SIX SIGMA IN PAKISTAN
Six Sigma is not well known in Pakistan. The few
professionals who have heard of it see it as a quality improvement
initiative specific to manufacturing. Little is known about the use of
Six Sigma in the service and financial industries. These misconceptions
are compounded by a view that Six Sigma can only be applied to large
organizations. As such, the use of Six Sigma in Pakistan is limited to
Multi-National Companies who have internal Six Sigma programs running
Though I searched high and low, I also could not find
any Pakistan based Six Sigma consulting firms. This may explain the lack
of information available. Lets take a look at what Six Sigma is and how
it has benefited organizations around the world.
WHAT IS SIX SIGMA
Six Sigma originated as a quality improvement
methodology with a near-perfection goal of 3.4 Defects Per Million
Opportunities (DPMO). The aim of a Six Sigma effort is to reduce
variation in processes and products and to bring them in line with the
customer's needs. Initially, it was used only by Manufacturing Quality
teams where it exhibited incredible benefits. Eager to deliver in all
functional areas, Six Sigma professionals extended its use to
Transactional and Service Delivery environments as well. Over time Six
Sigma has evolved into a full-scale management technique that includes
the right organization architecture and decision making processes.
Motorola defines Six Sigma as "A management
driven, scientific methodology for product and process improvements
which creates breakthroughs in financial performance and customer
satisfaction." Motorola recorded savings of around USD 14 Billion
over the 10 years of implementation between 1987 and 1997. Their sales
during this period grew five-fold with profits climbing at nearly 20%
per year. Similarly GE saved $12 billion over five years and added $1 to
its earnings per share. Honeywell (AlliedSignal) recorded more than $800
million in savings. GE continues to produce annual benefits of over $2.5
Billion through their Six Sigma program.
WHAT DOES A SIGMA LEVEL SIGNIFY
Well-managed, customer-oriented organizations with
strong quality control initiatives operate between 3 and 4 Sigma. This
translates to 99.37% and 99.9937% defect free processes. While the
percentile sounds good, consider the following 4 Sigma processes:
- 13500 items lost in the mail per hour
- 8539 incorrect surgical operations per week
- 1.5 million wrong drug prescriptions each month
At Six Sigma, these processes start looking more
- 7.4 items lost in the mail per hour
- 4.7 incorrect surgeries in a week
- 864 wrong drug prescriptions each month
The gap between 4 and 6 Sigma was costing GE an
average of USD10 Billion per year. GE's strength through the recent
recession as well as the growing stock price attest to the continuing
benefits of Six Sigma.
LEVELS OF ENGAGEMENT:
So how do you go about implementing Six Sigma in your
company? Most companies initially bring in Six Sigma consultants for
problem solving. They ask these experts to solve some pressing issues
while they observe the Six Sigma in action. This "test run"
leads to a higher level of commitment: An internal Six Sigma program run
under the guidance of external consultants. These consultants train
selected staff members in Six Sigma techniques and designate them as
Black Belts, or internal experts.
As Black Belts run Six Sigma projects in the company
and savings and revenue increases start to build up. This is the right
time to escalate to an enterprise-wide deployment of Six Sigma. This
means training a significant percentage of employees as Green Belts and
selected Six Sigma experts as Master Black Belts.
Each decision put through the Six Sigma discipline is
assigned to a team of 3-4 Green Belts, led by a Black Belt. The 'Belt'
terminology reminds most people of marshal arts, so lets talk briefly
about Six Sigma roles.
Six Sigma 'Black Belts' are full-time Six Sigma
positions. They are internal consultants who lead improvement teams and
are responsible for delivering benefits. The Black Belt position is
frequently used to groom future leaders.
Six Sigma 'Green Belts' are employees trained in Six
Sigma. They apply Six Sigma to their work and participate in improvement
teams but do not have full-time Six Sigma responsibility. The Green
Belts role is applicable to all levels and functions in the
And Six Sigma 'Master Black Belts' are Six Sigma
trainers. They mentor Black Belts and translate the company's
imperatives into bite-size projects that can be led by an improvement
team. Master Black Belts typically fall in the upper management team.
Finally, Six Sigma 'Champions' are functional
managers whose departments benefit directly from the Six Sigma project.
They help provide resources to the Six Sigma team and remove hurdles
from the improvement path. The Champion role may not necessarily be a
The Six Sigma improvement model consists of five
detailed steps or phases — Define, Measure, Analyze, Improve and
Control. These phases include well-known quality and process improvement
tools like the QFD, SPC, FMEA, Lean Enterprise, Process Mapping and the
PHASE 1: DEFINE
The 1st phase, Define, lays out the goal of the
improvement effort and the resources available. The improvement team is
formed in this phase. This phase also includes seeking approval for time
commitment and the budget. The problem definition and project goals laid
out in this phase form the foundation of the Six Sigma Project and
ensure that all personnel are focused on the REAL problem.
PHASE 2: MEASURE
In the Measure phase the team collects the Voice of
the Customer to discover the product features most important to the
customer. These are termed Critical to Quality (CTQ). Here, the team
compares the product or process with the customer defined CTQs to
determine where we stand today (Six Sigma Term: Baseline Performance).
The results of the Measure Phase comparison provide a glimpse of how
well or badly the product/process is performing with respect to the
PHASE 3: ANALYZE
The Six Sigma team uses the Measure phase results as
a starting point and sets a goal for the improvement. Next they delve
deeper into the factors that impact performance in the Analyze Phase.
This is where statistical and process tools are used to get to the Root
Cause. These causes are then prioritized according to their impact on
Customer Satisfaction (CTQ's).
PHASE 4: IMPROVE
With things looking clearer, the Six Sigma team works
towards improvement. The Improve Phase consists of brainstorming
possible solutions to address the root cause and assessing them for
practicality and impact. The team decides on a set of solutions and
pilots them in this phase to ensure they work.
PHASE 5: CONTROL
With a successful solution available, the team
implements it in gradual progression. Solutions must be sustained for
them to have a long-term impact on the bottom line. So the Control Phase
consists of locking in the solution and ensuring long-term performance.
Some of the popular tools used in this phase are Poke Yoke (Mistake
Proofing) and the FMEA (Failure Modes and Effects Analysis).
At this point, the Six Sigma Project is considered
complete. The team seeks a final agreement with the Project Champion on
the benefits achieved before officially closing the project.
OTHER FACES OF SIX SIGMA
The DMAIC methodology I mentioned here is obviously
limited to "improvement" in an existing product or process. So
what about new product design? Six Sigma experts at GE modified DMAIC to
fit new product development as well. Known commonly as Design For Six
Sigma (DFSS), it consists of Define, Measure, Analyze, Design, Verify.
Notice the 2 new phases at the end.
REQUIREMENTS OF A SIX SIGMA PROGRAM
What are the ingredients of a successful Six Sigma
program? And do Pakistani organizations have them?
The 4 often quoted factors in a successful
from the Management team
Training and Advice
Linking Six Sigma to the reward structure
1. COMMITMENT FROM THE MANAGEMENT TEAM
It is absolutely critical that upper management is
committed to the Six Sigma initiative. Like any other successful
initiative, Six Sigma demands a top-down direction and accountability.
Top managers must communicate the importance of Six Sigma to their staff
and hold them accountable throughout the implementation.
As such, a Six Sigma initiative demands established
communication and accountability channels within an organization. The
vast majority of businesses maintain these channels even at the lowest
ebb of professionalism, while public sector organizations in Pakistan
typically fall short of this
It is a Six Sigma consultant's job to educate the
management team on the benefits of Six Sigma and allay any concerns they
2. TRAINING AND ADVICE
Six Sigma training is widely available in the North
America, Europe and East Asia, mostly provided by consulting companies.
Unfortunately, this training is limited within Pakistan and expensive
when bought from abroad. Some Pakistani consulting firms are now making
efforts to build their Six Sigma resources. One such example I know of
is Applied Excellence in Islamabad.
What training is necessary? That depends on who is
getting trained. Here's a snapshot table from iSixSigma, identifying the
major groups of individuals, the suggested training agenda, approximate
cost and duration of the training.
BUSINESS OR ORGANIZATION
COST PER PERSON
* Six Sigma Overview
* Benefits and Case Studies
* How To Implement Six Sigma
* Tools and Resources
* Six Sigma Overview
* Six Sigma Methodology and Tools
* Statistics Training
* Computer Application Training
* Project Selection and Execution
4 weeks delivered over a period of 2-6 months
* Six Sigma Overview
* What To Expect Going Forward
* Simple Case Study and Exercise
Variable, depending on if taught in-house or if
consultant(approximately $2,000 per day plus expenses) is used
3. RESOURCE COMMITMENT
As mentioned above, the organization needs to
identify personnel for Six Sigma specific roles. Black Belts (BBs) need
to be identified and trained. In addition to BBs the organization should
be ready to assign 5-15% of key employees' time to specific improvement
The Six Sigma roles and their job descriptions are as
applicable to Pakistani organizations as they are anywhere else.
4. LINKING SIX SIGMA TO THE REWARD STRUCTURE
All those who work for an organization keep their
paycheck in mind. Just as we expect a factory to produce X widgets per
hour, we should tie Six Sigma projects to a time commitment and measure
the output. The quickest way to initiate success is to tie the results
to the business bottom line, create performance goals, and compensate
Performance linked compensation is not new to
Pakistan though public sector organizations may struggle with it.
This analysis brings us to the crux of the issue:
Implementing Six Sigma in Pakistan, where the industry wide Sigma level
is much lower: possibly less than 0.5 Sigma.
PAKISTANI INDUSTRY AND MANAGEMENT PROFESSIONALISM
Pakistani companies can be categorized into 3 major
chunks: Public Sector organizations, family owned concerns and MNC's.
Each of these is unique in its readiness for Six Sigma.
PUBLIC SECTOR ORGANIZATIONS:
The Public Sector governance has clearly improved in
the past 5 years and prospects continue to look good. Successful Six
Sigma implementation requires commitment from top management as well as
a coherent command structure (excuse the pun) and the recent efforts
aimed at improving governance have positioned the public sector for
improvement. However, unfortunately, the Pakistani bureaucracy is still
too bureaucratic to dive straight into a Six Sigma effort.
Six Sigma requires more than training and consulting
advice. It is a cultural change that demands unwavering leadership ready
to make tough decisions. Like their corporate counterparts key
government officials will need to be trained in Management and
Leadership before they are ready to drive a cultural change in their
Despite the issues, Six Sigma implementation in the
Pakistani government may not be as distant into the future as it seems
today. "Change comes quick to those ready for change". The
decision makers in the Pakistani government must be ready for change.
FAMILY OWNED ORGANIZATIONS
Majority of family owned businesses in Pakistan are
concentrated in the Manufacturing sector and about half are being run by
their founders, (now in the over-40 bracket). Less than a third of these
businesses employ more than 400 staff, or at least openly declare that
they do. (Source: AERC Study on family owned businesses.) The
overwhelming majority of family owned businesses are interested in
expanding their businesses but have no clear growth strategies. Their
situation is similar to their western counterparts 2 centuries ago.
American and European family owned businesses were struggling with
growth when Adam Smith wrote 'The Wealth of Nations'. Today's Pakistani
businesses have a doubtless advantage: They have 3 centuries of western
management experience and research available to them.
Despite the advantage, business owner-managers
hesitate in adopting these "foreign imports". The most
commonly quoted fear is the uniqueness of the Pakistani corporate
culture and the imagined incompatibility of modern management concepts
with the business environment in Pakistan. And this hesitation results
in limited growth.
Fortunately, the new generation of owner-managers
taking over from their entrepreneur parents are more open to change.
Family owned businesses are beginning to value professionalism and are
ready for the leap to Six Sigma.
Many Multinationals are increasing their investment
portfolio in Pakistan, establishing themselves as significant players in
the economy. These organizations are frequently the pioneers at
introducing modern management practices to the Pakistani business
Several multinationals already have Six Sigma
available to their operations in Pakistan. They are applying Six Sigma
in manufacturing, transactional processes (Finance) as well as the
If we succeed in implementing Six Sigma across
industries, it can help Pakistani businesses gain a 'sustainable
competitive advantage' over their international competitors.
Most Pakistani businesses are small and agile. This
makes their management and communication structures simpler and the
implementation of Six Sigma easier. What we need is visionary managers
and business owners willing to take their business to a higher playing
As I mentioned, Six Sigma training costs are very
high at the moment, but more affordable training is becoming available
Six Sigma in the Pakistani public sector remains a
distant dream, though closer to realization than it was 5 years ago.
Fulfilling this dream would mean a quantum leap in governance, cost
management and effectiveness.
If the Pakistani industry is an aircraft preparing
for take-off, the adaptation of Six Sigma could be the take-off point.
Kamran Kiyani is a Six Sigma professional at GE. He
is currently stationed in Singapore.