MBA Journal January 2012

Six Sigma Belt System Under Scrutiny

Six sigma offers a management program that allows all individuals in a company or corporation to be involved in creating success. In order to do this everyone in a company takes on their own role in the six sigma process and while many understand the need to have different levels working together in different aspects of the company toward a common goal many feel that the belt system actually discriminates against some giving them a lower ranking within the Six Sigma structure than others.

In essence this is both true and false. Of course, there are levels within 6 sigma just as there are levels within any company. There are those who are in management and those that are the worker bees. There are many that fall on different rungs in between as well. There is inevitably in every corporation a hierarchy per say that does make some employees weigh in more heavily than others and this is just a fact of life.

All that Six Sigma does in reference to the already existing levels is gives each one a specific role to fulfill within the Six Sigma belt system. Those in upper management are Six Sigma Master Black Belts, then there are Black Belts, Green Belts, and Yellow Belts. Each level most definitely has its own role within the company however these roles are not created by the six sigma methodology but are instead just delineated and defined within it.

It is essential for everyone in a functioning Six Sigma company to know and understand their role in goal setting and implementation as well as in making the quality improvements that need to be made. Ultimately, everyone does play a role and it is for this reason that Six sigma trains individuals to fulfill their own specific role in the process and provides everyone with support and coaching at their own level.

Six Sigma doesn't discriminate against employees but helps each one to find their own niche within the company. Six Sigma works to bring together a team and not divide and conquer and most who are working within this business methodology find that they system works very well and encourages employees on all levels to excel and improve.

What is Six Sigma?

Simply stated Six Sigma is a management philosophy that offers companies a method to develop future business leaders of an organization. To many people Six Sigma is many different things. This is because it offers a company many different tools which can be used together or separately to create a facets of organization that can benefit a company or organization.

In order to truly understand what Six Sigma is one must understand that it is many different things to a variety of different businesses which is why it tends to be so successful in working a variety of different settings and in a variety of different industries. It is marketed as an improvement methodology one that is designed to make a marked improvement in business from several different angles.

First, Six Sigma can take an organization to a completely different level by offering not only a metric method of statistical analysis by which to measure all quantitative results but helps to create a common language by which every part of a business can communicate with its other parts to a level of understanding that creates a cohesive atmosphere and common goals.

On the other hand, Six Sigma is a management philosophy. It is a way to run an effective, goal driven business and one that has been proven by many large companies in a variety of different industries. But it is a philosophy and program that extends well beyond what it can do for businesses. It is a way of not only transforming a business but a culture.

When it comes to business there is no other management system that integrates all the basic concepts together in such a way that it allows for companies to excel in ways that they never dreamed possible. It is difficult to believe that just one simple management program could accomplish so much and gain worldwide recognition in a variety of different fields but Six Sigma has spent decades building up its reputation with the best of the best in the business community.

Involve Finance in Project Selection, Not Just Validation

The success of any project relies mostly on financing, without funds nothing can go on as evidenced by stalling or complete downfall of great projects when funding is suspended. The trend has bee that whenever projects are being evaluated and selected, the personnel from the finance department usually are left to do routine work pushing papers instead of actively assessing project viability, sustainability among other crucial duties.

However, organizations are coming up with new trends and ways of doing business. They involve the finance staff in the bulk of the project selection all through to completion. In order to be successful in any 6 sigma project finance must be involved from idea generation and triage, project charter, benefit assessment, project approval, project prioritization, project works control and tollgate, project completion and finally tracking and reporting benefits.

It clearly indicates that other than validation, finance if importance and issues to d with auditing the project must be handled actively by the finance team. Most companies including the ones using Six Sigma are known to involve the financial staff in project completion to handle audits and review results, it should not be this way; let them run a bigger stake all through.

When accounting errors are not scrutinized and documented from the beginning, bigger challenge will be encountered by the auditors and data analyzers at the end of the project. Finance personnel should collect data right from the start for a smooth flowing project and for total financial accountability. When the company is not able to explain where funds have gone to, finance department will not be able to defend nor explain the origin of the errors if they are brought in only towards the end of the project.

The successful companies which are changing their ways of operation have realized that involving the finance people in strategy, idea generation at the beginning of the project will go a long way in streamlining all processed since everything in a project requires finances. Developing the culture of feeding financial data into project selection can have great benefits to the project and organization as a whole. A good control of he financial systems will have immense rewards resulting in remarkable savings on expenses, overheads and job costing.

The support of the finance department is needed in every other department and their projects, maybe the approach should be that of a consultant or line management in order to avoid a confrontation and being locked out by the department head who may see the finance guys as nosy intruders.

How to Explain Six Sigma by Using the Profit Triangle

In marketing, the profit triangle is a tool that can be used to aid's employees' comprehension of Six Sigma's part in the organization. It targets two important parts of Six Sigma, constantly improving business and monetary savings.

Even though the financial savings of Six Sigma should be self explanatory, many people do not totally see what the savings are from the start. For instance, if a business tries to improve a procedure or piece of equipment where demand is low, there is no immediate savings. On the other hand, if demand is slightly over budget and the business can heighten output, it could result in a high increase in profit.

Another hidden financial savings comes when smaller problems and costs are addressed while a larger problem is worked out. The smaller issues usually go unlisted during financial analysis. In a project that is successful, many improvements are accomplished. In the end, raising a company's productivity will lead to higher morale and lower production costs.

Besides saving money, Six Sigma helps better the entire business. It does not consist of inside consultants who fix broken processes. It must change into a process of continual improvement where everyone has a role and a goal.

The profit triangle can effectively help employees understand the idea involved with Six Sigma. The profit triangle displays in simple terms how a company can deliver customer satisfaction to create profits.

The three parts of the profit triangle includes creating value, inside operations, and competitive advantage. All of these things are essential to a profitable company. A business must accomplish all three of these items to raise to the top of the field. Everything is joined and affects other things. A business performance has a direct effect on other aspects. For example, is a company has poor operations, the business will be unable to make something valuable or be able to compete. Six Sigma strongly targets inside operations. It is always wise to concentrate on this aspect when a company is being created. However, many times this is not the case and must be bettered later.

Six Sigma also involves product development and marketing. Since the business environment is highly competitive, a company must be at the top in all of these items. Business that utilizes Six Sigma are looking to achieve the highest possible level of operations. Six Sigma is a structured program that is driven by information and continually improves processes to reach this goal.

Plan, Do, Check, Act: The Essence Of Six Sigma

Plan, Do, Check, Act is the essence ofthe business management strategy known as Six Sigma. Popularized in the 1980s by the Motorola Corporation, the Six Sigma method focuses on creating consistently high quality products by constantly monitoring and improving the entire production process. The goal of Six Sigma is zero defects. This goal is attained through a laser like focus on every step of production. It is a system in which every employee on any level within the production chain is empowered to identify defects in the product or system and alert management and work to eliminate the problem. Six Sigma has grown to become one of the most effective management systems ever devised.

The Plan, Do, Check, Act paradigm calls for rigorous planning, flawless implementation, consistent monitoring and the willingness and ability to act immediately to make any necessary changes to the production methodology to eliminate errors. Initially seen as tedious and expensive, the Six Sigma system has proven itself to be the ideal way to improve any product or service. It engages everyone in the company in the process of improving the products and services created and the company as a whole. As such it has grown from merely being a management strategy to being a type of corporate culture where perfect products are the ultimate goal.

The rudiments of the system first began to be identified and utilized in the 1970s by Art Sundry, a senior executive at Motorola in response to what he saw as bad quality within the Motorola. Bill Smith is credited with having formalizing the system within Motorola which led to the dramatic rise in the company's fortunes. The concepts themselves are not new. They built on the concepts of Zero Defects, Total Quality Management and Quality Control promoted by such legendary management gurus as Taguchi, Ishikawa, Juran, Crosby Shewhart and Deming. The concept is based on eliminating imperfections in the product before it's released into the marketplace.

The Six Sigma concept of Plan, Do, Check, Act is now used in many industries. The strength of the Plan, Do, Check, Act concept is that all eyes in the company are focused on doing their best, identifying potential problems and taking immediate action to eliminate them. Although the concept was initially associated with manufacturing, visionary managers have come to realize it can be applied to almost any type of business with great success.