Six Sigma
Last Word


21st Century Quality
Stanley A. Marash

ISO 9000:2000--Foundation for Six Sigma

The revised standard's emphasis on continual improvement can boost customer satisfaction.

With the 21st century upon us, ISO 9001:2000 is providing even more encouragement to focus on our customers and reach higher levels of performance. The year 2000 update to ISO 9000 is quickly moving from draft international standard status to ratified international standard status, which it should achieve late this year. Although some issues are yet to be resolved, there is general agreement regarding increased focus on three areas: the process model, continual improvement, and measurement and analysis. Businesses will be expected to determine measurement opportunities within and across their processes, and, in turn, these metrics will assess performance against plans and goals and identify opportunities for improvement. Analyses of metrics will help guide both corrective and preventive actions. Data will thus be transformed into information that will support effective decision making.

 As we enter this new century, technological improvements are providing tremendous momentum by shrinking components, reducing cycle times, increasing productivity and lowering costs. Similarly, we find a continuation of heightened expectations for client focus and overall performance. Consistency and defect-free workmanship are not only preferred, but also assumed. With "windows of opportunity" opening and closing more quickly, with market entry opportunities cropping up in nanoseconds rather than weeks or months, and with an Internet-supported economy facilitating global competition, higher expectations are directed toward timely market entry and the required cycle time improvements.

 In the 21st century, goals, expectations and performances must be advanced exponentially; yearly improvements of 5 percent to 10 percent are no longer competitive. Tenfold improvement objectives must be established and met. Overall customer experiences--typically the cumulative result of a series of interactions--must be thought of in a multiplier context. Customer experiences and perceptions result from the multiple "moments of truth" described by Tom Peters, which occur in various product life cycle phases: marketing/sales, order placement, provisioning of product, in-service, billing and end-of-product/migration to new product. Various phases have different effects and values, but customer satisfaction results from the product of those experiences. In each experience an organization has to perform at a high enough level to make the customer's summary experience acceptable.

 Table 1: A Five-Phase Customer Experience

Table 1 demonstrates a simple five-phase customer experience at a 95-percent satisfaction level per phase. In reality, most of our customers experience more than five interfaces. The calculation is similar to the one used in a product yield analysis activity. It's also comparable to the way we calculate the reliability of a complex system based on the individual reliability of each subsystem.

 We would probably not be thrilled with the 77.4-percent overall customer satisfaction level shown in Table 1. Our business systems units must now set objectives and ensure that administrative and service functions consistently reach performance levels that once were only applied to selective product defect rates.

 A few considerations: When we first set objectives for defect rates and customer satisfaction for each key function of our organizations, did we consider the implications of cumulative performance results? If not, now is the time to review our objectives. The arithmetic is easy; start with the end result and work backward to the required subcomponents. Then comes the challenge. Will functional leaders commit to the subcomponent prerequisite goals? Even if we can get the goals (or even a trajectory to the goals) onto a scorecard, how are we going to achieve these expectations?

 Six Sigma, the quality philosophy developed by Motorola and reinforced and expanded by others (notably General Electric and AlliedSignal) offers tools, approaches and techniques to address the development of measurements to assess performance and to identify areas for improvement. It uses customer-focused goals and measurements to drive continual improvement at all levels in any enterprise.

 Six Sigma methodologies are instrumental in analyzing the root causes of problems, guiding both corrective and preventive actions, and evaluating the results of those actions. Six Sigma techniques help transform data into information, thus supporting information-driven decision making.

 The basic Six Sigma measure, defects per million opportunities (DPMO), applies to both products and services. It addresses the capability of a process in statistical terms, providing the metrics to address the high customer expectations of this new century. Previously, capability levels of three sigma (0.27 percent defects, or 99.73 percent acceptable) were commonplace. Today, customer expectations have raised the bar to five and six sigma levels. A Six Sigma process would perform at a 3.4 DPMO level. What happens to that same customer process result if our process capability is operating in the five or six sigma range? Let's repeat the five-phase process shown in Table 1 with a 99.5 percent customer satisfaction level (vs. 95%) for each phase. Now the cumulative result is 97.5 percent customer satisfaction (vs. 77.4%)--a far different outcome.

 So, how does ISO 9000:2000 fit in? It provides, better than ever before, a platform to support information-based, customer-driven management systems focused on adding value to an organization's processes and contributing positively to bottom-line business results. The expressed rationale behind the 2000 version of the ISO 9000 family of standards is to achieve customer satisfaction.

 Previously, meeting customer requirements imposed a demand for control and precision execution, which was met partially by applying ISO 9001:1994 and various industry-specific standards or requirements, such as QS-9000, TL 9000, AS9000, VDA 6.1 and so forth. Meeting future needs requires aggressive continual improvement and measures to prove that improvement programs really are being implemented and bottom-line results can be demonstrated. Addressing the high expectations of customer satisfaction, defect rate, cycle time, productivity and unit cost requires the appropriate use of Six Sigma tools and philosophy, applied to a documented, verifiable ISO 9000:2000 quality management system.


About the author

 Stanley A. Marash, Ph.D., is chairman and CEO of STAT-A-MATRIX/The SAM Group and chairman of the World Quality Council. He can be reached by mail at 1 Quality Place, Edison, NJ 08820, by telephone at (732) 548-0600 or by e-mail at smarash@qualitydigest.com .

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