Sunday, November 3, 2013

Combination of Six Sigma and Balanced Score Card…value creation.

After 2008 the quality of service and product has taken new shape and formats. Cost management and accosting tools are being used extensively to derive and build growth and value proposition among various business segments. In management theory there are thousands of quality metrics which would provide substantial opportunity to grow the management and business skills. In my previous articles I have been writing a lot and discussing about Balanced Score card but I find that using Six Sigma with the same can create long term sustainable business growth in all terms.   Balanced score card and Six Sigma are few of the deadly combination of management principles which can create a long term business growth which could further enhance the growth prospect of the Industry in the long term. But in my research I find that Six Sigma is one of the key metric which might look into complicated but in real terms it is one of the best management policies to improvise the quality of service and products. Six Sigma helps to control the changes being brought into the systems and also like balance score card it measures the performances  of its new strategies. Markets like India where quality of service and product are   under much questions six sigma helps to bridge the gap and improve the management quality over the time. Businesses use sigma to measure quality because it is a standard that reflects the degree of control over any process to meet the standard of performance established for that process.

Six Sigma follows the steps of DMAIC (Define, Measure, Analyze, Improve, Control) methodology to analyze processes in order to root out sources of unacceptable variation, and develop alternatives to eliminate or reduce errors and variation. Today I will discuss about using the Six Sigma in customer satisfaction process which would develop the business growth.

Customer satisfaction is one of the key aspects of business and application of Six Sigma can be of great improvisation to the system.  Voice of the customer is the key to be heard to bring improvisation within the system, service and product. This is the first steps of defining the problems and at the same time designing steps to measure the problems of customer satisfaction. In the process of defining the customer satisfaction we find the following aspects
1.      Specifications
2.      Expectations
3.      Delighters

Specification about products, expectation from the service and the product and delighters are the ones where customers expect something beyond the common proposition of value being offered. Specification becomes more based on knowledge based and is currently under huge demand since the entire sales process of products and services have been converted into an online platform. Online platforms are extensively getting into brief product specifications and reviews comments so that the consumer can get better understanding of the products. Delighter segments is also being equally given focus where recently in this Diwali all the online shopping portals gave extensive discounts on its products which leads to providing something beyond the peer competitors. Well competitors can easily copy the delighter segment but the specification and expectation are key behind improving the customer satisfaction levels. Proper analysis of the three above principles would help an organization to design its products and service s accordingly.

Developing effective website and online sales portal is an easy step if Six Sigma principles are applied in the initial stage. This results into less errors and more perfection in delivery of value and services to the end user/consumers. Developing six sigma into the process leads to an system where various segmentation of clients can be made. We must remember that not all customers create equal value. In order to discover growth opportunities, gain a competitive advantage, and build loyalty into the business strategy, it is helpful to segment customers. Now if we don’t apply Six Sigma then we would never be able to derive customer segmentation properly in the initial phase of the business.

Six Sigma helps to define and measure the value of service to be offered. Proper analysis is being carried out to develop the perfect combination of strategies to develop the value proposition for the consumer. According to the general theory it is being found that the greatest value might come from a small portion of the customer base. Part of the challenge is to understand how these customers define and prioritize the various needs and expectations they have of the products and services provided by the process. Hence listening to the minds of the consumer should be priority for value creation and product designing. In between if balanced score card is being used with Six Sigma then just imagine the long term value and growth a company can achieve from its business model.

 The Value-Added concept can also be applied to internal business operations. Just getting adapted to the 4 pillars of balanced score card can be of great value creator in the long term followed with every step of Six Sigma being applied the quality enhancement is created to a new heights. In my research I have developing extensive combination of cost management principles and strategies using the various tools to develop a sustainable and competitive business and industry in the long term. One of the biggest resembling points of balanced score card and Six Sigma is that they both define the matter and develop strategies to measure. But Six sigma further helps to control the changes being adopted into the systems and follow the same. 
Written By Indraneel Kripabindu sen Gupta & Hardik Bhatt


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