Quality key performance indicators (KPIs) for a wider

Quality
management has long been established as an important management strategy for
achieving competitive advantage. Traditional quality concepts like Statistical Process
Control (SPC), Zero Defects and Total Quality Management (TQM), have been key
player for many years. While six-sigma is a more recent quality improvement initiative
to gain popularity and acceptance in many industries across the globe. The
basic elements of six-sigma like, SPC, Failure Mode Effect Analysis (FMEA),
gage repeatability and reproducibility and other tools have been in use for
some time. Actually, six-sigma provides a framework which unites these basic
quality tools with high-level management support. However, most service
industries still do not use the basic aspects of SPC. In fact, they can benefit
significantly by implementing both SPC and six-sigma. Implementation of the
six-sigma helped industries like GE, Citibank and a few other service industries
to drive defects/errors out of their delivery process and create success
stories for others to follow. The limitation of six-sigma in service industries
is that the features of service industries are not uniform. The application of
six-sigma and its benefits are limited to some specific type of services like
health care and banks. This paper aims to identify the key performance indicators
(KPIs) for a wider range of services. Understanding control variables of a
process will help in broadening the applications of six-sigma in service
industries.

 

Six Sigma:

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Six Sigma, as part of a long-range business strategy, includes the following:

• Creating a strong process
orientation. 

Insurance/financial
services organizations learn to identify the core business processes critical
to customer satisfaction. This in turn enables them to focus on improving their
quality and reliability at a business process level—based upon a concise and more
comprehensive understanding of their policy owners’ requirements.

• Improving quality while reducing
costs. 

Six Sigma
offers organizations a disciplined way to prevent errors, minimize hand-offs,
and eliminate rework and workarounds. This aids greatly in expediting
transactions and reducing costs. 

• Using facts for management
decisions. 

Six Sigma
adds statistical rigor to improvement projects. Managers are able to make
decisions based on data and hard facts—not perceptions or gut feelings, and
more accurately establish what levels of performance can be achieved and
promised to insureds, clients and prospects. 

• Gaining and retaining customer
loyalty. 

With its
strong emphasis on the voice of the customer, Six Sigma provides a much better
understanding of what creates and drives customer loyalty, and how to build
long-term and more profitable relationships among current and prospective
policy owners. 

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