Six Sigma was developed in 1986 by Motorola and later, gained popularity with companies when Jack Welch implemented the business practices in General Electric. These best practices will reduce the number of defective products produced by companies and improve the efficiency of business practices. Six Sigma has increased the revenue of many companies.
Here is one case study example that can help companies learn how Six Sigma best practice can be applied:
One unnamed cellular service provider was experiencing a problem with their DMAIC process and online top-up system. The service provider was also experiencing low registration rates and top-up rates. Before Six Sigma was implemented, the registration success rate was approximately 80 per cent, and the top-up success rates were approximately 60 per cent.
The customer service centre did not operate efficiently. The company invested a significant amount of time and money into the company because of the inefficiencies. The company found that many customers switched to providers with efficient online top-up systems.
A team worked together to increase and improve registration rates. Hypothesis tests were conducted to find significance. The Chi-Squared test is commonly used for this purpose. Studies showed factors that traditionally do not have an effect on output actually had a strong correlation. Without conducting this test, the company would have never revealed this information. This information indicated to the Six Sigma Black Belts that there was an inconsistency in the current system that should be modified for improved efficiency.
New rules were created to follow logical decisions regarding accepting and rejecting a simple transaction. The criteria for defining a fraudulent transaction were updated. IP addresses were reviewed to determine which were blacklisted and how to prevent the common practice.
When the evaluation was complete, Six Sigma leaders noticed that the success rate of registration increased by 11 per cent to 91 per cent. The success rate for Top-Up increased to 90 per cent. The company increased revenue by $300,000 by following and implementing Six Sigma best practices.
This is just one example of how Six Sigma helps companies improve. Other companies have used Six Sigma processes and got different results than expected. Some companies have increased revenue and savings beyond $400,000. This is proof that Six Sigma can help companies and organizations improve in significant ways.
Six Sigma Helps Companies Improve Business Practices
Businesses with an understanding of Six Sigma will improve significantly. Every company should consider Six Sigma training for their employees. Companies most often use Six Sigma black belt leaders to lead the projects. Six Sigma green belt leaders and Six Sigma yellow belt leaders are also effective in improving companies’ business processes. Businesses should consider integrating Six Sigma best practices in their organization to improve revenue and efficiency.