The Hindu Business Line : A six-point agenda

Going from manufacturing to customer centric is what companies like Whirlpool are doing, today. And ensuring that `quality' and `profits' stay high is the Six Sigma programme.

Are market realities compelling the manufacturing sector to review its core capabilities in the areas of cost, quality and productivity? The answer is `yes' with most of the manufacturing companies, be it Korean major Samsung India Electronics Ltd or durable major Whirlpool of India Ltd, who have adopted the Six Sigma programme as a quality initiative to transform the organisation to a globally competitive entity.

"It integrates with your core business processes to streamline operations, improve quality and eliminate defects. Increased customer satisfaction and enhanced bottom line are the benefits that Six Sigma brings to an organisation," says Ramesh Sharma, Vice-President, Human Resources, Whirlpool of India Ltd.

A few forward-looking companies are currently using Six Sigma either as a tool for improving quality, productivity and reducing costs, says Vatsala Misra, Consultant, KSA Technopak (India) Ltd. "The Six Sigma programme, a strategy for profitable growth, has been adopted by the manufacturing companies. Not only is it the best way to minimise wastes but it also increases efficiency. The programme is being extended to cover processes at the consumer end as well," she says.

Initiated in 1999, today Whirlpool is in the process of consolidating the programme. The programme, which started as `renewed commitment to operational excellence (Opex)', has now become ccOpex — customer-focused.

"Market realities are forcing us to revisit our quality and cost paradigm in a radically-aggressive manner. Incrementalism is not the answer anymore. We need to respond with `speed' on `step changes' in our platforms all across our business," says Sharma.

"Core competencies are the set of unique, deeply embedded capabilities that no other company can easily replicate, and are central to a company's success. We believe that three core competencies are required to achieve the goal of building unmatched levels of customer confidence — customer excellence, customer centred operational excellence and innovation," he adds.

The programme, which Whirlpool launched three years ago, covers the entire gamut from production to sales, marketing and service. In fact, while the company has invested only about Rs 1.6 crore, it has been able to save to the tune of Rs 34 crore, says S.S. Raman, Executive Director and Vice-President, Manufacturing, Technology and Procurement.

"Six Sigma is the branding given to club a basket of processes and a work philosophy. Half the battle is won in such interventions by having strong branding for your processes that gives members a direction to focus upon. Six Sigma is a tactical tool for improving `quality' and `profits'. It is used to describe the state of zero defects or a state, which is as close as possible to near perfection. It tells us to count critical defects actually occurring in whatever we are doing, versus the total number of defects possible. Then we reduce these defects," Gautam Nath, Director - Corporate Services, TNS India, explains.

Although it started in manufacturing organisations, Six Sigma works across industries, products, services and functions, says Nath.

To implement Six Sigma philosophy successfully, the following have to be taken care of:

Defect reduction resulting in cost reduction.

Projects should be tied in with business strategies.

Project progress should be monitored and reported.

Everyone should be involved with Six Sigma and speak the same language.

Infrastructure must be improved to measure and control the Six Sigma process.

Comfort level of the employees must be enhanced through preliminary training classes.

Total top management commitment and visibility of this commitment.

And last but not least, patience

Says Raman, "By application of the Opex discipline and the involvement of our trained Black belt' resources we have generated substantial savings for our business." He goes onto explain the relationship between Opex and Black belt. "Black belt is associated with the sport of Karate. Both Karate and Opex depend on mental discipline and systematic, intensive training. Just as black belts in karate depend on power, speed and decisiveness, Opex black belts also depend on the same qualities."

Currently, the company has 34 certified black belts and an additional 23 are in the process of qualifying across the organisation. He adds,"What is required is that each certified Black belt takes this challenge and charters a project, cutting across the whole operations of our organisation and committing to a sizeable savings for realisation in a year itself. In addition to traditional focus on quality and cost, the company has also added a customer centric approach to managing the business by looking at areas such as warranty, service delivery, overall value chain of our products and overall product value proposition."

The Opex Black belt understands the `big picture' of the business, focuses on results, understands the importance of the bottom line and speaks the language of money, time and organisational objectives. Besides, they are experts in statistical tools and are capable of consulting, mentoring and coaching. Says Sanjay Rai, Quality Leader and the man responsible for implementing Six Sigma at Samsung India, "We have made significant cost savings and quality improvements by using Six Sigma tools and methodology. But more importantly, the training has helped our employees develop a process-oriented mindset, set up simple and speedy processes and add value to their jobs."

According to Rai, Six Sigma starts from the customer — anything that dissatisfies our customer is a defect. "So we start with measuring our current defect level and work on making significant improvements every year." The companies seem to be unanimous on how this activity works as a "change agent" in the functioning of the company. Further, to attain this cultural transformation, the company needs breakthroughs in all areas — design, waste elimination and process optimisation. These measures would lead to profitability, customer satisfaction and business excellence, says Raman.

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A six-point agenda