Qualitymanagement has long been established as an important management strategy forachieving competitive advantage. Traditional quality concepts like Statistical ProcessControl (SPC), Zero Defects and Total Quality Management (TQM), have been keyplayer for many years.
While six-sigma is a more recent quality improvement initiativeto gain popularity and acceptance in many industries across the globe. Thebasic elements of six-sigma like, SPC, Failure Mode Effect Analysis (FMEA),gage repeatability and reproducibility and other tools have been in use forsome time. Actually, six-sigma provides a framework which unites these basicquality tools with high-level management support. However, most serviceindustries still do not use the basic aspects of SPC. In fact, they can benefitsignificantly by implementing both SPC and six-sigma. Implementation of thesix-sigma helped industries like GE, Citibank and a few other service industriesto drive defects/errors out of their delivery process and create successstories for others to follow. The limitation of six-sigma in service industriesis that the features of service industries are not uniform. The application ofsix-sigma and its benefits are limited to some specific type of services likehealth care and banks.
This paper aims to identify the key performance indicators(KPIs) for a wider range of services. Understanding control variables of aprocess will help in broadening the applications of six-sigma in serviceindustries. Six Sigma:Six Sigma, as part of a long-range business strategy, includes the following:• Creating a strong processorientation. Insurance/financialservices organizations learn to identify the core business processes criticalto customer satisfaction.
This in turn enables them to focus on improving theirquality and reliability at a business process level—based upon a concise and morecomprehensive understanding of their policy owners’ requirements.• Improving quality while reducingcosts. Six Sigmaoffers organizations a disciplined way to prevent errors, minimize hand-offs,and eliminate rework and workarounds. This aids greatly in expeditingtransactions and reducing costs. • Using facts for managementdecisions. Six Sigmaadds statistical rigor to improvement projects. Managers are able to makedecisions based on data and hard facts—not perceptions or gut feelings, andmore accurately establish what levels of performance can be achieved andpromised to insureds, clients and prospects.
• Gaining and retaining customerloyalty. With itsstrong emphasis on the voice of the customer, Six Sigma provides a much betterunderstanding of what creates and drives customer loyalty, and how to buildlong-term and more profitable relationships among current and prospectivepolicy owners.