The impact of six sigma on operational efficiency

Abstract

Globalisation of markets has brought about enormous challenges and opportunities for business organisations. The prevailing business environment propels organisations to improve and create value in order to remain competitive. Improvement and value creation begin internally and get reflected externally in the form of value added propositions to the market. Six Sigma is a methodology known for creating value within organisations, in all industries, through process improvement which translates into enormous savings for the organisation. Six Sigma is widely used globally and it has been in existence for many years, yet it is not so prevalent in the South African business environment. This research explores the principles and approach adopted, which distinguish the Six Sigma methodology from other improvement programs. In the manufacturing industry, operational efficiencies are essential to enhance value creation and profitability. The study begins by discussing the origin, history and evolvement of Six Sigma into a methodology recognisable and espoused by leading world class organisations. The technique used to effect Six Sigma is entrenched and enforced by adherence to stipulated basic principles, breakthrough strategy and Six Sigma tools in identification and elimination of variation. The study later models some of Six Sigma tools by application on the operational entity in verification and testing of theoretical knowledge into practical knowledge that can be exploited for process improvement consequently enhancing operational efficiencies. The impact of Six Sigma on operational efficiencies underlie on the ability to positively change process effectiveness and capability to near perfection as expressed by defect rate of not more than 3.4 defects per million opportunities.