Six Sigma in the Social Sector

July, 2015

Key Concept Explanation

This researcher’s review of several sources yielded no single definition of Six Sigma that so clearly surpassed others in clarity and thoroughness as to mitigate the need for clarification. Penna (2011) labeled Six Sigma as “the world’s single most effective methodology for improving organizational performance” (p. 211). According to Feng and Manuel (2008), “It has proven to be a customer-focused, data driven and robust methodology to improve process and reduce costs” (p. 536). Similarly, Jenicke, Kumar, and Holmes (2008) referred to it as “one of the approaches that has been successfully used by companies in the US and other parts of the world to improve quality of products manufactured or services delivered” (p. 453). Finally, Dahlgaard-Park (2013) explained that “Six Sigma is related to statistical modeling of variation in any process or any product and indicates a degree of process capability” (p. 708). One might summarize these sources by stating that Six Sigma is a suite of management techniques that enables organizations to minimize process variations, allowing them to meet critical quality standards with increasing consistency even as they reduce costs.

Agreeing on a precise definition of Six Sigma may be challenging, but one fact seems to be incontrovertible: It first came to prominence in the manufacturing industry, being associated with companies such as Motorola and General Electric. Since then it has been adopted in many different kinds of organizations, including those that are primarily service-focused (Dahlgaard-Park, 2013). This discussion board posting focuses on the application of Six Sigma to the social sector, which is meant to include both nonprofit organizations and government agencies. Topic selection was based on the author’s desire to understand how management tools that have transformed manufacturing might improve the operations of organizations that are driven by the pursuit of social ideals rather than the profitable production of physical goods.

Comparison

In their introduction to Six Sigma methodology, Meredith and Shafer (2013) affirmed without reservation that it applies as much to a nonprofit as to any other kind of organization. In support of this claim, their chapter on process improvement included an example of a not-for-profit hospital that employed Six Sigma techniques to improve performance and reduce costs. Concurring with this view, Dahlgaard-Park (2013) observed that “the Six Sigma methodology has spread all over the world and is used in various sectors—private and public—manufacturing and services” (p. 707). Furthermore, in a book aimed toward leaders of nonprofit organizations, Penna (2011) devoted an entire chapter to coverage of Six Sigma. He explained its relevance as follows:

All organizations, whatever the sector we’re involved in, run on processes. Process, no matter what our field, is the means by which we take inputs, add some sort of value, and produce the outputs that lead to our desired outcomes. (p. 217)

Judging by the testimony of the three sources just cited, managers of nonprofits would do well to view Six Sigma as a useful tool. Accordingly, this author reviewed three additional sources that described the application of Six Sigma techniques to three distinct social sector organizations: health care, higher education, and government. The remainder of this section summarizes implementation lessons specific to these organizational contexts.

Feng and Manuel’s (2008) survey data revealed a broad uptake of process improvement methodologies in the U.S. healthcare industry. However, the majority of respondents had not implemented Six Sigma methodologies, and most of those who had adopted them had done so fairly recently. Nevertheless, there was concrete evidence that Six Sigma had helped institutions improve both clinical and non-clinical operations. Furthermore, at least in healthcare, these benefits were not achievable only by large organizations, contradicting suggestions in the literature.

According to Jenicke et al. (2008), Six Sigma techniques had not gained widespread adoption in higher education. Those who would implement the methodology faced a number of obstacles, including “the difficulty in defining the customer for a university, the nature of the product, and the difficulty of measuring quality and reward systems for employees” (p. 455). This researcher agrees with their recommendation that higher education’s non-academic business processes will likely be most receptive to Six Sigma projects. The organizational structure of the academy makes it very difficult for administrators to force unwilling academic departments to undertake process improvements, especially in a limited span of time.

Finally, evidence amassed by Brandt (2012) suggests that, while government and military operations can definitely benefit from Six Sigma, structural factors deter adoption of the methodology. These deterrents include budgetary protocols, political cycles, and a relative lack of concern for the bottom line.

Article Summary

As implied by its title, Penna’s 2011 book The Nonprofit Outcomes Toolbox aims to equip leaders of nonprofit organizations to achieve the social ends for which their organizations exist. Chapter 11 of this work introduces Six Sigma as a tool that is very much relevant to nonprofit management. Presuming no prior acquaintance with Six Sigma, the chapter covers the subject matter beginning at a basic level. Penna summarily describes the tool as “a methodology for minimizing mistakes” (p. 211). Discussion of mistakes and their attendant costs leads the author to introduce concepts pertaining to organizational processes, system design, and variations in output. All of this sets up explanations of (a) the statistical meaning of Six Sigma, (b) Critical to Quality and related concepts, and (c) the DMAIC model.

Penna’s (2011) coverage is not limited to the foundational. A 30-page chapter allowed him to elaborate on the subject and to explain a number of Six Sigma concepts that this reader did not recall seeing in more formal management sources (e.g., Meredith & Shafer, 2013; Dahlgaard-Park, 2013). Such concepts included, for example, the hidden factory, First Time Yield, and the Voice of the Business. The chapter’s most distinctive feature is its consistent effort to relate a technique born in the world of manufacturing to the very different realm of the social sector.

Application

For three decades, the business world has employed Six Sigma techniques to reduce process variation, thereby reducing costs and satisfying customers with higher-quality products and services. The social sector has been slow to adopt Six Sigma, but there are positive indications of its potential to improve operations in healthcare, higher education, and government. Nonetheless, certain features of the social sector deter the implementation of process improvements. As stated overtly by at least two sources cited in this thread (Feng & Manuel, 2008; Jenicke et al., 2008), executive leaders of social sector organizations have a critical role to play in launching Six Sigma efforts and ensuring that they persist to successful ends.

Annotated Bibliography

Brandt, D. (2012, March). The vote for lean Six Sigma. Industrial Engineer, 44(3), 34–39. Retrieved from http://search.ebscohost.com.ezproxy.liberty.edu:2048/login.aspx?direct=true&db=bth&AN=71838002&site=ehost-live&scope=site

Brandt’s (2012) article, published months before the last U.S. presidential election, assessed the prospects for launching a large-scale effort to improve the efficiency and effectiveness of American government. Nearly half of the article discussed the views and actions of Mike George, a consultant-turned-activist who has lobbied for the application of lean Six Sigma to federal government operations. The remainder of the article discussed how the distinctive context of government constrains efforts to eliminate waste and improve quality. Quoting various authorities, Brandt cited challenges such as dysfunctional funding processes, lack of incentives for change, political motivations, and the concern for human welfare over fiscal solvency. Notwithstanding these obstacles, the author referred to several projects that have successfully applied lean Six Sigma to military and local government operations.

Dahlgaard-Park, S. M. (2013). Six Sigma. In E. H. Kessler (Ed.), Encyclopedia of management theory (pp. 707–710). Thousand Oaks, CA: SAGE Publications. Retrieved from http://site.ebrary.com.ezproxy.liberty.edu:2048/lib/liberty/reader.action?docID=10717553

Dahlgaard-Park (2013) contributed a helpful overview of Six Sigma to the Encyclopedia of Management Theory. The article traced the emergence of Six Sigma concepts and tools from the mid-1980s forward, focusing mostly on Motorola’s six-step approach and the more familiar DMAIC approach espoused by General Electric (GE). Not only did Dahlgaard-Park note variations between these two approaches; he also explained how GE adapted Six Sigma to the unique processes associated with “innovation and new product development” (p. 708). The article emphasized the following principles:

  • Improving quality by reducing variation is at the heart of Six Sigma.
  • Successful implementation of Six Sigma depends not only on the leadership of top managers, but also on widespread education and training efforts.
  • Six Sigma enables companies to save money, and thus deserves the broad acceptance that it has achieved.
  • Six Sigma is not a rival to management techniques such as total quality management or lean. Rather, these are complementary, sharing a common lineage in the Japanese emphasis on quality.

Feng, Q., & Manuel, C. M. (2008). Under the knife: A national survey of six sigma programs in US healthcare organizations. International Journal of Health Care Quality Assurance, 21(6), 535–547. doi:10.1108/09526860810900691

Feng and Manuel (2008) reported the results of a 2006 study that collected data from 56 health care institutions across the United States. The study entailed the distribution of two surveys—one to institutions that were using Six Sigma (n=15; 27%), and another to those that were not using it (n=41; 73%). Key findings included the following:

  • Organizations that had adopted Six Sigma had typically done so between 1 and 4 years before.
  • Six Sigma projects had been performed in a variety of departments, including providers of clinical and non-clinical services.
  • Projects usually aimed at “reducing cycle time, streamlining process flow, and reducing medical errors” (p. 544).
  • Executive-level support was widely considered critical to successful implementation.
  • All institutions that were not using Six Sigma reported that they used other quality improvement programs.

Jenicke, L. O., Kumar, A., & Holmes, M. C. (2008). A framework for applying six sigma improvement methodology in an academic environment. TQM Journal, 20(5), 453–462. doi:10.1108/17542730810898421

Jenicke et al. (2008) analyzed the application of Six Sigma methods to a university setting. Their study consisted of three main parts. First, they examined the literature to find precedents for Six Sigma implementation in academia. They found evidence that Six Sigma had been used to improve certain academic outcomes, and that its concepts were recognized as valuable additions to the curriculum. However, the literature also revealed “difficulties of implementing six sigma in a university environment” (p. 455).

The second part of Jenicke et al.’s (2008) study elaborated on some of the ways that the academic enterprise differs from the industries where Six Sigma has yielded the most success. Features of higher education that complicate the application of Six Sigma include the definition of the customer and the product, the measurement of quality, the availability of data, prevailing reward systems, and the presence of uncontrollable influences.

In the final segment of their study, Jenicke et al. (2008) presented a framework for using Six Sigma in academia. The framework included three tiers, representing the interests of the university as a whole, the college/school, and the department/major. The authors wisely suggested applying Six Sigma first in non-academic areas, and then expanding to core academic functions.

Penna, R. M. (2011). The nonprofit outcomes toolbox: A complete guide to program effectiveness, performance measurement, and results. John Wiley & Sons, Inc. Retrieved from http://ezproxy.liberty.edu:2048/login?url=http://site.ebrary.com/lib/liberty/Doc?id=10462162

Penna’s (2011) book targets managers of nonprofit organizations—broadly defined—with concepts and tools intended to help those organizations define desired outcomes and institute processes that lead to their achievement. The focus of this annotation is chapter 11, which is entitled “The Power of Six Sigma.” Not surprisingly, it covers such concepts as variations in products and services, error prevention, Critical to Quality, DMAIC, and Voice of the Customer, among others. Since the chapter is intended for readers who have little, if any, understanding of Six Sigma, the presentation is very approachable, complete with graphics, exercises, and case studies. The author makes a concerted effort to present examples and explanations that clearly illustrate the relevance of Six Sigma to the nonprofit world.

Reference

Meredith, J. R., & Shafer, S. M. (2013). Operations management for MBAs (5th ed.). Hoboken, NJ: Wiley.

Want to learn more about Six Sigma and related topics?

Click the buttons below to see relevant entries in my bibliography, SmithFile.