Can Six Sigma Really Increase Your Organization Profits?
Read in 3 min. Can Six Sigma really impact their business bottom line and increase the efficiency of your business processes?
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To start with, Six Sigma can be defined as an organization-wide approach to drive breakthrough business improvements linked directly to the bottom line and strategic goals. Unlike other programs, Six Sigma specifies exactly how the project will be set up and how teams will use the tools to achieve measurable results.
The efforts will require data collection, usage of statistical tools, highly trained project leaders known as Black Belts and Green Belts, project selection approach based in organization strategy and a dramatic goal of reducing defects or errors to 3.4 defects per million opportunities.
Sigma (written with the Greek letter σ) is a measure of a process’s variation. Six Sigma methodology will squeeze process variation and produce lower count of defects. For example, a power distribution organization is said to be at six sigma level when it provides power to all its customers with no more of 7 seconds power interruption of each month.
If you would like to run a focused project for a 3-6 months period to reduce your processes cycle time, reduce customer complaints, and reduce variation in any major process from the production floor to the headquarters offices then a Six Sigma project would provide you with a structured approach to achieve your goals. Six Sigma prescribes an improvement structure known as DMAIC: Define Measure, Analyze, Improve, Control.
* Define the improvement project’s goals, deriving them from customer needs or wants and organization strategy.
* Measure the current processes and establish metrics to monitor progress towards goals.
* Analyze the current process to understand problems and their root causes.
* Improve the process by identifying and piloting solutions to the problems
* Control the improved process with standardization and ongoing monitoring
The structure of Six Sigma goes beyond the improvement process and tools. Projects selected and approved by the organization’s leaders drive the improvement to ensure the relevance to organization’s goals and their impact on stakeholders. Six Sigma approach will ensure that all success factors are present before organizations can launch any project: clear guidelines for establishing and leading the effort, top management support, and a team blueprint for effective usage of quality tools.
Jack Welch, former CEO of GE, once said "The best Six Sigma projects begin not inside the business but outside it, focused on answering the question - how can we make the customer more competitive.... One thing we discovered with certainty is that anything we do that makes the customer more successful inevitably results in a financial return for us. During the first five years of Six Sigma implementation GE was able to save $12 billion and add $1 to its earnings per share."
In summary, Six Sigma can provide organizations with a clear roadmap to plan and execute a project that will have direct impact on their bottom line.
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