This is the concluding part of my previous posts: Wipro’s Tryst with Lean (Toyota Production System) and Lessons from Wipro’s Tryst with Lean (TPS), Part-1 of 3, and Lessons from Wipro’s Tryst with Lean (TPS), Part-2 of 3.
The following section is devoted to the lessons that can be derived from the success of Lean principles at Wipro and applied in any of Knowledge industry--be it telecom, insurance or legal services etc. It's an extension of my previous post: Wipro’s Tryst with Lean (Toyota Production System)
The following section is devoted to the lessons that can be derived from the success of Lean principles at Wipro and applied in any of Knowledge industry--be it telecom, insurance or legal services etc. It’s an extension of my previous posts: Wipro’s Tryst with Lean (Toyota Production System) and Lessons from Wipro’s Tryst with Lean (TPS), Part-1 of 3
I recently came across a question on a website about Six Sigma: What should be the primary objective - customer satisfaction or cost reduction? The question still causes a lot of confusion which is quite prevailing among the Six Sigma practitioners. I pondered upon the same and found that I am quite not agree with the question itself.
I realized that being on the technical side of Six Sigma, it always seems to make more sense to carry Six Sigma undertakings for the purpose of reducing costs. Then thinking of passing on the benefits incurred to the customers and strive to enhance customer satisfaction. If we make progress along this thought-line, then no doubt there would be cost-reduction benefits obtained.
Yet this is the same thought-line which, after giving initial cost-reduction advantages, has failed either to provide sustenance of benefits, or bring about desired change in overall culture of organization. There are profound examples of companies which adopted six sigma, but failed to become truly Six Sigma companies. They've always wondered--how other companies like GE, Motorola (with its second avatar of Six Sigma practices) have been far more successful in this arena of Six Sigma.
The Toyota Production System, better known as Lean, is arguably the most important invention in operations since Henry Ford's Model-T began rolling off the production line. In manufacturing, there is a common understanding of how to make an operation lean, and many of the same techniques can be employed in different organizations. This is not the case in knowledge work. Nonetheless, researchers have found that lean principles can be applied in some form to almost all kinds of knowledge work (IT, financial, engineering, and legal services etc.) and can generate significant benefits: faster response time, higher quality and creativity, lower costs, reduced drudgery and frustration, and greater job satisfaction.
Based in Bangalore, India, Wipro is one of the largest IT services and product engineering companies in the world. It has more than 100,000+ employees and 70+ delivery centers in 55+ countries.
It was around 1995, they came to know about that for most companies the average defect rate was 35,000 defects per million operations. Getting to Six Sigma quality level means that you have fewer than 3.4 defects per million operations in a manufacturing or service process. That’s 99.99966% of perfection. GE’s in-house team showed that if GE was running at 3 to 4 sigma, the cost-saving opportunity of raising this quality to Six Sigma was somewhere between $7 billion and $10 billion. For them it was amounted to a huge number, approx 10 to 15 % of their sales. With this opportunity, it was not a rocket science for them to decide to take a big shoot at Six Sigma.
Information technology (IT) organizations increasingly are under pressure to improve their service and process capability. In the quest for improvement methodologies, organizations often adopt a “pick one” strategy – with Six Sigma being the widely favored choice. However, it is possible to integrate Lean and Six Sigma and reap the full benefits that these methodologies can bring to the table.
Defined as a measure of quality that strives for near perfection, six sigma is a disciplined, data-driven approach and methodology for eliminating defects (driving towards six standard deviations between the mean and the nearest specification limit) in any process -- from manufacturing to transactional and from product to service. To achieve six sigma, a process must not produce more than 3.4 defects per million opportunities.
There is nothing which compares to the effectiveness of Six Sigma when it comes to improving a company/organization's operational efficiency, raising its productivity, and lowering its costs. Six Sigma improves design processes, gets products to market faster with fewer defects, and builds customer loyalty. But do you know really-- What is Six Sigma, beyond knowing its methodologies such as DMAIC or DMADV?