Financial Services Six Sigma Defined
So we begin at a very basic level – discussing why manufacturing Six Sigma is not the same as healthcare, or as financial services. Applying Six Sigma in its manufacturing iteration will decrease your probability of success in a transactional/information driven environment.
There are 4 key tenets or truisms financial services firms must keep in mind as they undertake the Quality journey. These same tenets are also the reasons why manufacturing Six Sigma, which is a compilation of disparate, complex tools, cannot be applied - in its original form – to a financial services environment:
1. Manufacturing is driven by a visible or tangible product. The critical driver in financial services is information
2. In manufacturing, processes negotiate hundredths of a millimeter to improve a product. There are no such tight “tolerances” in financial services at this stage.
3. Manufacturing Six Sigma has matured and has gotten beyond the “detection” stage and is now well on the path to “prevention.” financial services Six Sigma is still in its infancy, focusing first on stabilizing and standardizing processes.
4. Manufacturing processes are highly automated. Despite its IT infrastructure, financial services relies heavily on human input/manipulation.
So how do these truisms translate into differences in the Six Sigma methodology? Manufacturing Six Sigma is a compilation of complex tools designed to address the tight tolerances in the manufacturing process (i.e. hundredths of a millimeter in variation). It also inherently assumes that the process being used to develop a product is fully visible and standard among all of its users. And so its goal, in the way that the tools are designed and used, is to prevent an error from occurring.
On the other hand, the central goal of Six Sigma in financial services is to first develop the infrastructure to detect an error and then move on to preventing it. Because financial services processes are not as visible as those in manufacturing, and those processes (by default) rely significantly more on human interaction, the central focus of financial services Six Sigma is to stabilize the process. By stabilizing the process you can begin to detect errors and ultimately move on to preventing them.
For these central reasons manufacturing Six Sigma uses a different set of tools or methodology (most often more complex) than financial services. We should understand Six Sigma in this sector as an ever-evolving set of tools. Ten years ago senior executives in the financial services sector may not have considered adopting such a rigorous, data-driven methodology in their daily business operations. But today, simple economics and some forward-thinking practitioners have proven that the methodology will benefit the sector in innumerable ways.
Shahbaz Shahbazi - ProcessArc, Inc.
