In my second blog in a series explaining business methodology you may have heard of but don’t understand, I’m talking Six Sigma. Yes, it might sound like some American sorority but it’s probably less fun than that — but better for business!
Six Sigma is data-driven methodology businesses can use to improve their processes, eliminate defects and waste, and increase customer satisfaction. It was developed by Motorola in the mid-1980s and has since been adopted by companies across various industries. It’s where you use statistical tools and techniques to identify and reduce waste and defects in processes. This might be in production or administration or another facet of your business.
Some examples of Six Sigma: improving customer service delivery, cutting down the time it takes to invoice, reducing maintenance costs, reducing lead times in production, improving quality control, reducing the time it takes to complete a customer order and so on.
In statistical analysis, the Greek letter sigma is used to denote a standard deviation from the mean. The name “Six Sigma” refers to the goal of achieving a process that is six standard deviations away from the mean, which equates to a defect rate of 3.4 parts per million.
In simple terms, it means to minimise variation in your business production and processes in the pursuit of perfection.
At a time when we all need to be looking at costs – and especially unnecessary costs — in our businesses, considering Six Sigma can have a great impact on your bottom line. It’s a great framework to help you figure out where the waste is in your business, both of materials and time/labour.
Is there a pain point in your business that you’re constantly putting a band aid on but not addressing a fix? Something you know takes longer that it should? Something that often results in complaints from customers? Six Sigma is a good methodology to correct this.
To apply Six Sigma to a process you already have in place in your business, use this framework:
- Define: Define the scope of the project, identify the processes to be improved, and set specific goals and targets.
- Measure: Use data to understand your current performance. You need a baseline to see how you can improve and to measure your efforts. Identify and measure the key metrics that are critical to the success of the project. This includes collecting data on defects, cycle time, and customer satisfaction.
- Analyse: Once the data is collected, it needs to be analysed to identify the root causes of defects and waste in the process. This includes using statistical tools and techniques to analyse the data and identify the sources of variation. In this stage you’ll determine what the root causes are of any waste or defects in your process or production.
- Improve: Based on your analysis, the next step is to improve the processes. Establish ways to eliminate defects and correct the process, such as standardising procedures, eliminating waste, and reducing variation.
- Control: The final step is to control the process to ensure that the improvements are sustained in the future. This includes establishing control plans, training all staff, monitoring the process, and implementing corrective actions when necessary.
To be successful with Six Sigma you need to have a customer focus, use data (and the right data), improve continuously, involve your team, and be thorough. Don’t miss a step or you won’t embed the right processes to achieve success.
There are so many benefits to using Six Sigma in your business.
- Improved quality: Six Sigma helps businesses improve their quality by reducing the number of defects in their processes. This results in better products and services and increased customer satisfaction.
- Increased efficiency: Six Sigma helps businesses identify and eliminate waste and non-value-added activities in their processes. This leads to increased efficiency and productivity.
- Reduced costs: Six Sigma helps businesses reduce costs by eliminating defects and waste, which can lead to savings in materials and time.
- Improved employee morale: Because Six Sigma involves employees in the process of improving the business, it can lead to increased employee engagement and morale. Most people want to be a part of improving the way we do business.
With the right approach, Six Sigma can help your business achieve significant improvements in processes and operations, reducing waste and costs. Give it a go and let me know how you get on!