Significance of Six Sigma Essay

2637 Words Nov 4th, 2012 11 Pages
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As a Management System, Six Sigma is used to ensure that critical improvement opportunity efforts developed through the Metrics and Methodology levels are aligned with the firm’s business strategy. The focus of this paper, however, is on the application of Methodology for business process improvement within the financial reporting process. The core of the Six Sigma Methodology level is DMAIC which stands for define, measure, analyze, improve, and control. These are explained in detail in the following sections. In the Define phase, the project team must work closely with stakeholders to clearly define the problem statement, project scope, budget, schedule, and constraints. Understanding customer (internal and external) requirements is the key to achieving the project’s goal. The team has to define problems and goals of the project that are consistent with customer demands and with the firm’s business strategy. Process mapping and “voice of the customer” (VOC) tools are iterative techniques recommended as a means of incorporating customer requirements. During the Measure phase, the team creates a value stream mapping (VSM) of the process, capturing the flow of information—where and what information is needed. Then, based on the VSM, the team starts collecting data relevant to measuring the current process performance relative to the project’s goals. The most important
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