For small businesses, it may constrain new ideas favoring creativity and innovation, which require some risk-taking to implement. Companies have to find certified Six Sigma institutes to train their employees or conduct in-house training without formal certification. In either case, the cost of Six Sigma adoption by small businesses is too high to be feasible. Even large companies must provide a lot of training for employees to grasp the system. Every employee had to attend a training course of 100 hours to understand practical use of a data based six sigma approach at work place. Additionally, General Electric hired trained and full-time mentors of six sigma for the assistance of employees at every stage.
Six Sigma inspects the business processes minute-by-minute and generates large amounts of empirical data, leading to time-consuming and complicated procedures. Also, because it is a quality improvement process at its root, adoption of its protocols often leads to an increase in the overall costs. Six Sigma has a proven track record of adding value and ensuring quality to the output of a business in the form of incremental improvements to a product or a service. It may also be used to optimize supply chain processes and increase customer satisfaction.
Disadvantages:
Such processes are integral to business performance, quality of products, employee morale, and decreasing the variation process. Because Six Sigma is applied to all aspects of the production and planning process, it may create rigidity and bureaucracy that can create delays and stifle creativity. For example, an inexpensive measure that carries a risk of a slightly higher defect rate may be rejected in favor of a more expensive measure that helps to achieve Six Sigma, but adversely affects profitability. Clearly, there are several reasons why Six Sigma has become so popular, and the outcomes of many companies demonstrate its value.
Now a standard business methodology, this approach started as a revolutionary manufacturing process in the 1950s. At that time, the main Lean principles were respect for people and continuous improvement. These are five-phase, repeatable frameworks, which can be applied continuously across manufacturing, management, and other business processes in order to accomplish Six Sigma’s main goals of quality control and improvement.
Advantages of Choosing Lean
With time, progressive quality improvement may lead to increased overhead and capital costs due, thus canceling out initial savings made. Since Motorola’s introduction in 1986, it has also been widely used as a quality measure that seeks near elimination of defects by employing statistical methods. The measurements adopted are founded on process strategies highlighting variation reduction, which theoretically, triggered improvements in the actual process. It is worth noting that this strategy is primarily focused on quality improvement.
- Because Six Sigma is applied to all aspects of the production and planning process, it may create rigidity and bureaucracy that can create delays and stifle creativity.
- On the one hand it is a revolutionary strategy which has the tremendous potential of significantly improving the efficiency but on the other hand to some it is a complex process that seems to reap no actual benefits.
- 64 percent of the former overwhelmingly increased their profits by more than 100 percent, while 64 percent of the latter registered comparatively low profits.
- It also boosts the employees’ morale by making sure they are in constant communication with their bosses.
- As a result of these initiatives, many organizations saw marked reductions in costs and improvements in quality.
After this venture, Motorola further applied the principle successfully to many other areas of their business like for improvement of human resource, management of operational cycle and cost cuttings. Six sigma is a method which is applied by modern day companies to enhance the proficiency of their operational activities. The primary objective for implementing six sigma doctrine is to concentrate and amend those areas of a process that trigger the process variations thus creating defects. A six sigma defect is the one that a customer does not expect from the business as an output. This approach enables a company to make its processes predictable in a positive manner. Because, if a process deviates too much from what it is expected to produce, the solutions become more difficult and complex.
Should You Use Lean or Six Sigma?
There is a vigorous ongoing debate about which of the two methods is better for streamlining business processes and eliminating waste. The main aim of business owners, after all, is to improve their ability to meet customer’s expectations. Employees must obtain training from certified Six Sigma institutes in order for an enterprise to receive Six Sigma certification. Even if a firm wishes to implement Six Sigma without formal certification, much training is necessary in order to understand the system and how to apply it to particular business processes. Many small businesses cannot possibly afford such training, even for a single employee. In addition, small businesses that need to remain nimble and creative often find the Six Sigma system of process analysis stifling, bureaucratic and overly time consuming.
Six Sigma is a proactive methodology that identifies and provides recommendations for potential problems before the company incurs any form of loss. Six Sigma may be implemented in several categories within a business, directly impacting profitability and reducing costs. It is significant to note that for B2B customers, the Six Sigma standard for manufacturing products is a credible endorsement. General Electric, an American Multinational Conglomerate, implemented the six sigma approach in 1995 in its attempt for process improvement. This was the initiative of Ex-CEO of General Electric Jack Welch – an author and chemical engineer.
Effects of Implementing Six Sigma in Your Business
Adding tighter tolerances, better manufacturing equipment, improved testing systems and quality checks, eventually consumes more resources and increases manufacturing footprints. Lean Six Sigma uses an approach that focuses on hybridizing these two aspects, but unfortunately, requires deeper data assessment to compare operations and their outcomes. Having a team of dedicated quality experts places you ahead of other companies that contrastingly multi-task their general workers with quality monitoring and improvement. The systematic hiring and training of Six Sigma black belts in your company will start off a continuous process that will see them train green and yellow belts from new hires.
This limited scope means that Six Sigma may exclude other important areas of the business, so it should not be viewed as a “cure-all” to an organization’s problems. For many, the statistics behind this method are less relevant than the outcomes produced by this methodology. However, after deliberating on all the merits and the demerits of this strategy it can surely be analyzed that the benefits tend to be greater than the pitfalls. Therefore, you need to be a little cautious as to see at what all places this strategy will work as per the plan and objective. It also boosts the employees’ morale by making sure they are in constant communication with their bosses. Six Sigma is highly recommended for organizations that are highly structured and use a hierarchical model of leadership.
The aim of Bill was to devise a mechanism that would standardize the defect management system in the manufacturing process of Motorola. In result, Motorola formulated such a method that provided them with a metrics to improve and monitor their quality development. The six sigma was reflective based on the metric that a product or process will only have 3.4 defects in a million opportunities. Six Sigma identifies the errors and variances beforehand and hence helps in avoiding wastage. The documentation and analysis of processes, errors, and variances provide experts and general employees a greater insight into the business processes and their efficiency.
Six Sigma quality control not only identifies a problem, but it also provides a solution and monitors the situation continually. At last, by documenting the processes as well as the defects, you get an opportunity to set up a learning platform not only for yourself but also for the other workers. You can easily share the lessons given by the experts as well as the other employees in a bid to make an improvement in their individual lines of assembly. The following pros and cons will help you gain a better understanding of the processes and decide which is more suitable for your business.
Six Sigma regards waste as a result of variation within a process, whereas Lean defines it as a process or activity that has no benefit to the customer. Instead, it should be used with the intention of improving efficiency, reducing errors, and optimizing processes. Clearly, Six Sigma can generate positive results for an organization, but, since it is limited in scope, it should not be applied universally to any business, process, or discipline.
These include engineering, manufacturing, sales and marketing, and customer service. Lean looks to maximize value for the customer with the smallest number of resources, whereas Six Sigma aims to achieve high customer satisfaction by minimizing costs. According to Toyota, the seven kinds of waste in Lean manufacturing are inventory, waiting for motion over-processing, overproduction, defects, and transport. It is now being challenged by new innovative approaches but it still remains a good way to improve processes. This methodology is commonly related to General Electric (GE) but it was actually developed by Motorola. GE was the one to set the precedent of this methodology and soon many manufacturing companies followed seeing amazing results and a few others saw that this methodology was just not for them.
The motive behind the implementation of six sigma in General Electric was the realization of drawbacks in systems of the company by Jack Welch. He was of the opinion that the company needs a complete overhaul to eliminate its waste build-up and to cope up with the poor governance issues. Workers become more focused on daily improvement, making their work more impactful. Six Sigma projects focus on implementing a measurement-based strategy to improve processes and reduce variation.
