Six Sigma is a management methodology which allows companies to use data to eliminate defects in any process. For a process to have achieved Six Sigma, a process must not produce a defect – that is anything outside of customer specifications – more often than 3.4 times per million opportunities.
Six Sigma works through the use of two sub methodologies; DMAIC which stands for Define, Measure, Analyse, Improve and Control and is used for existing processes, and DMADV which is used for new processes and stands for Define, Measure, Analyse, Design and Verify.
Implementing Six Sigma within a business offers a number of benefits. However there are six key advantages that this methodology will offer any company.
Improved Customer Loyalty
Any business wants to retain its customers. Indeed, this is a significant factor in determining the success of a firm. But, of course, customer loyalty and retention only ever come as a result of high levels of customer satisfaction.
Surveys suggest the reasons given by most customers for not returning to a business are dissatisfaction with the experience and employee attitude. Often a company will not even know they have a dissatisfied customer as they will simply take their businesses elsewhere.
Implementing Six Sigma reduces the risk of your company having dissatisfied customers, for once training is complete, so few experiences should be outside of their specifications. To achieve this you may want to consider running a voice of the customer study which helps your business understand which of your products attributes are critical to the customer’s perception of satisfaction.
Employing a Six Sigma methodology at your business can help employees manage their time effectively, resulting in a more a efficient business and more productive employees. Users are asked to set SMART goals and then apply the data principles of Six Sigma to those goals. This is done by looking at three key areas; learning, performance and fulfilment.
For instance, under learning, a practitioner of Six Sigma might ask themselves; how often do interruptions take me away from my task and how many of these interruptions require my attention?
Similarly, under performance, they might consider how their practices are helping them reach their professional goals. Users can then create an action plan, the result of which can be employees who are up to 30 per cent more efficient and who are happier in themselves, having achieved a better work-life balance.
Reduced Cycle Time
Unfortunately, most projects firms embark on end up extending beyond their original deadline often because there are changes in project scope or there is a shift in management policy.
By using Six Sigma, a business can set up a team of experienced employees from all levels within the organisation and from every functional department. This team are then given the task of identifying factors that could negatively affect the project leading to long cycle times.
They can then be tasked to find solutions to these potential problems. This method allows business to create shorter cycle times for projects and stick to those schedules, with many firms reporting reductions in cycle times of up to 35 per cent.
Every business, if destined to succeed, needs its employees to act in the right way – but for employees to do so there must be sufficient motivation. Indeed, organisations who are willing to fully engage with employees have consistently demonstrated 25 – 50 per cent increases in productivity.
Sharing Six Sigma problem solving tools and techniques will allow for employee development and help create a climate and systems for employee motivation.
Six Sigma can play an integral part in any strategic vision. Once your business has used a created a mission statement and carried out a SWOT analysis, then Six Sigma can help you focus on areas for improvement.
For instance, if your business strategy is based on being a cost leader in the market, then Six Sigma can be used to improve internal processes, increase yields, eliminate unnecessary complexity and gain or maintain lowest cost supplier agreements. In fact, whatever your strategy happens to be, Six Sigma can help make your company the best at what it does.
Supply Chain Management
As previously mentioned, the aim of Six Sigma is to have a defect rate of less than 3.4 per million, and your suppliers have a major influence on whether this target is met. One of the possible ways to reduce the risk of defect is to use Six Sigma to drive down the number of suppliers your businesses has, as this in turn reduces the risk of defects.
It’s also important to understand if your supplier is planning to implement any changes. For instance, a change in machinery can have an effect like the ripples from a rock thrown into a pond. The most successful firms drive their Six Sigma improvements as far up the supply chain as possible.