MBA Journal September 2011

Roles & Responsibilities

Six sigma operates on a hierarchy beginning with the Champion, the Master Black Belts, the Black Belts and the Green Belts. All of these groups work together to perform their different roles and the result is meant to be a successfully actualized six sigma project. What are the roles and responsibilities of each of these “belts?”

The Champion

The champion is generally known as the person who is responsible for authorizing a six sigma project. Because the Champion is the person who begins a project, this is also the person that is in control of the finances. Any high level decisions concerning the project that must be made will be made by the Champion. If there are any obstacles in the way of continuing a six sigma project, it is the Champion who will remove them.

Champions are the ones that will act as middle people between upper management and those below them. Black belts are given a considerable amount of autonomy in six sigma projects, but there are times when issues present themselves that they can’t handle alone. These are the times when the Champions will step in and take over for them.

Master Black Belts

After a project has been chosen by the Champion, Master Black Belts are the ones that solve problems that come up while the project is going on; when they aren’t capable of doing so, this is when they obtain help from the Champion. They are responsible for the Black Belts below them as they are the ones the Black Belts will report to in case of any difficulties. They must be able to easily adapt new strategies to situations when they are presented with the fact that an idea isn’t working as it was planned.

Black Belts

Black Belts are at the head of the team that will implement six sigma projects. In order to do this, they need to be able to identify everybody’s strengths and place those people in roles that will exercise those abilities. They fully understand the six sigma philosophy and they can use this knowledge to decrease non-essential activities that may be going on in the workplace. The Black Belts are the ones that try to make the work environment as productive as it can be.

Green Belts

Green Belts have been trained in six sigma, and they are capable of being put in charge of a project that is being overseen by a Black Belt. They may also lead an area of a project by themselves if they are experienced enough to do so in the areas of analysis, for example.

How Is Six Sigma Different?

Manufacturing encompasses a variety of processes designed to make capital and consumer goods from raw materials. These processes can operate at varying levels of efficiency and productivity. Efficiency measures the ratio of inputs to outputs, especially how much input is needed to create a certain level of output. Productivity simply refers to output per unit of input, such as hours of labor. Improving efficiency and productivity enables a manufacturing system to increase the quality of the goods it produces while wasting little time or energy. Quantitatively measuring this improvement is the goal of Six Sigma, a methodology first invented in the 1980s.

Six Sigma emphasizes creating improvements for three groups: employers, shareholders and customers. World class performance helps create high improvement rates, which in turn create value for the above three groups. The foundational concept of six sigma is measurement. Quantifying the goals to be achieved and current operational levels gives a numerical assessment of how much productivity and efficiency have to improve in order to reach the goals.

Six Sigma has a unique goal defined by the concepts of defects and opportunities. An opportunity is all of the chances for a defect to occur. Products have a defect when they fail to meet customer expectations or advertised benefits in any way, shape or form. Obviously, the number of opportunities can be extensive depending on the product. The ideal for Six Sigma is a standard of quality where there are only 3.4 defects per million opportunities. By statistically modeling manufacturing processes, Six Sigma hopes to systematically eliminate the chances for defects to occur, dramatically improving customer satisfaction.

Defects occur as a consequence of variations in the processes of manufacturing. Six Sigma hopes to control and largely eliminate variation, improving the performance of a process up to six standard deviations above the mean. A process operating at the Six Sigma level produces products that are 99.99966 percent defect-free, which corresponds to the ideal of only 3.4 defects per million opportunities.

Six Sigma is different because of the rigorous quantitative analysis behind its recommendations and procedures. Improving the quality level is given statistical significance and a more solid foundation instead of subjective quality analysis based on customer surveys. By giving manufacturing a quantitative theoretical structure, Six Sigma aims to give profit expectations a more realistic basis. Dramatic product improvement is conducted with the goal of increasing sales volume and total profits net of expenses.

Are You Ready For Six Sigma?

Do you have a business infrastructure that is lacking in attaining common goals? Is management being directed by fact or emotion? Do you have readily available information and data to address these following fundamental tools for success?

• a. What do your customers think of your business or organization relative to quality and customer service?
• b. Is there an accurate tracking system in place to resolve logistical and technical issues?
• c. Are we the best at what we do?

Six Sigma is one of the most powerful tools in performance problem solving methodology available to both businesses and organizations.

The general perception of Six Sigma is that of a complex system that generates reams of paperwork. Management’s reaction is a “why bother” attitude. We need to get past that belief and wrap our thoughts around the fact that Six Sigma is easy to understand and straightforward to implement. Business success does not manifest itself by radically changing your business model, but through incremental improvements to allow the business to adapt and grow.

In the best possible terms, Six Sigma is about applying structured, analytical methods to improve any aspect of your business, organization, or processes. The question is, are you ready to establish and implement Six Sigma, and the potential for overall improvement, into your operation methods.

Rule #1

Throughout the organization, there must be a commonality of goals, a strategic action plan, knowledge, and understanding that for Six Sigma to be successfully implemented there will be a need for allocated resources, and an unwavering management commitment to Six Sigma implementation.

Rule#2

There must be in place a business philosophy focused on continuous improvement of key processes using process analysis to achieve operational excellence.

Rule #3

Define the Six Sigma metrics to be used with these targeted goals in mind.

• a. Continuously lower costs.
• b. Grow revenue.
• c. Improve customer satisfaction.
• d. Increase capacity and capability.
• e. Reduce defects and errors.

The Six Sigma approach is not for those without complete commitment and preparation. As the Six Sigma system matures in your organization, you will have an aggressive advantage to establish ambitious goals, promote accountability, implement process improvements, while continually improving the business. The eventual goal of Six Sigma is to improve the overall business operating structure while also implementing systems that enable the business to adjust, evolve, and remain competitive.

What is lean supply chain?

Why do companies have a love hate relationship with inventory? After all, inventory does cost money and the longer it’s held, the higher the company’s costs. However, companies also need inventory to close sales, grow their market size and retain business. While inventory is a cost of money, without it, companies can’t win business. It’s just that simple. Therefore, the focus shouldn’t be on why inventory costs as much as it does, but rather how a lean supply chain can help reduce these costs. What is a lean supply chain? More importantly, how can streamlining a company’s supply chain help to reduce a company’s costs of inventory?

A company’s supply chain encompasses all those vendors and partners responsible for providing the company with its purchases of raw material, parts and finished goods. Unfortunately, too large a vendor base and the company’s costs increase substantially as it must manage multiple vendors, vendors with different pricing, delivery methods and payment options. This is why a key component of a lean supply chain is the ability to reduce the vendor base and pursue vendor consolidation practices that reduce the company’s total cost of ownership. This is accomplished by using economies of scale to reduce the pricing on parts & materials as well as to reduce the per-unit freight costs on incoming shipments of finished goods.

More volume spent with fewer vendors allows the company to aggressively negotiate discounts, rewards and incentive programs and use the company's higher volumes to lower its overall purchasing costs. Unfortunately, most companies measure their inventory costs simply by the amount of inventory purchased. However, included in a company’s inventory carrying costs are costs associated with the company’s financing costs of inventory, the incidence of inventory damage & obsolescence, as well as the cost of freight on incoming parts & materials. By reducing the vendor base through a leaner supply chain, companies can effectively reduce these aforementioned costs by shipping more product from fewer vendors, streamlining vendor management and eliminating the incidence of damage & obsolescence through the use of contractual agreements on supply.

Every company has a supply chain. Unfortunately, not all know how best to manage that supply chain. Some companies espouse a practice of bouncing around from one vendor to the next, in a constant pursuit of the lowest possible price, never realizing that their inventory costs include far more than just the price for parts. However, there are other companies that are proactive in reducing their inventory carrying costs by streamlining their supply chain and amalgamating their volumes through a smaller, more reliable number of vendors.

What is Lean Management?

Lean management is a part of the Six Sigma methodology that focuses on reducing waste, inventory, customer response time and several other things. Lean management is a style that company managers use; which is part of lean manufacturing, a methodology first used by Toyota. The principles of lean management are credited to Taiichi Ohno, and date back to World War II. Ohno is known for this, and the philosophy he developed that focused on waste elimination. Lean management requires a specific type of focus and attitude by managers using this system. The managers must have a frame of mind that seeks continuous improvements for the company, for the long run.

The philosophy of lean management aims at improving productivity in a company, and increasing profits. Six Sigma is a methodology that focuses primarily on improving all of the processes a business uses. Lean management takes this a step further by focusing on reducing waste using 10 specific principles. These principles focus on several things, including eliminating waste. Companies, using lean management, focus on minimizing inventory and maximizing the flow of processes.

They study all of the company’s processes, and find areas that are wasteful, or non-productive. Other principles, involved with lean management, deal with pleasing customers. Lean management understands the value of customer satisfaction, and attempts to meet customer requirements and demand for goods and services. Lean management also tries to accomplish processes the right way, the first time. Trial and error can be a good thing, but with lean management, too many attempts are considered wasteful. Other principles include partnering with suppliers to build good relationships, giving power to workers and dwelling on constant improvements in the company.

One method used under lean management is the Six Sigma DMAIC method. It uses a five-step process to accomplish the stated principles. This process is made up of defining, measuring, analyzing, improving and controlling. This process is used to promote continuous improvements in an organization. When Ohno developed the theory of lean manufacturing, he identified seven common wastes. These seven items are things that companies, with lean management, focus on. He called them “the 7ws” and they are defects, over-production, waiting, transporting, movement, inappropriate processing and inventory. Each of these items can cause waste within a company. Companies must investigate each of these areas in order to successfully improve all processes used. Companies, that institute lean management, often begin noticing improvements in processes and

Understanding The Concepts Behind Big Business

When it comes to big business nothing stands out more or gets more attention then Six Sigma and the ways in which it has impacted the business world over the past several decades. When it comes to a system that provides structure, statistics, and a good foundation for customer satisfaction there is only one system that fits the bill.

For many years big companies resisted Six Sigma even when it was being touted by Motorola as one of the greatest new developments in the industry. Most companies shied away from making a change and from training their employees in this new management system. But a few did get on board early and by example these companies began to hit new heights with their businesses. They began to be recognized for achieving amazing levels of customer satisfaction and thus over time other companies wanted to know more about the 6 Sigma methodology and the ways in which they could put it to work in their own companies.

What was at first looked upon as a strange new way became anything but allowing companies to achieve new heights and profit margins with their business and allowing them to grow in ways that they could only dream about before. Improving customer experience and working as a team to make improvements in the overall manufacturing process allowed 6 Sigma companies to shine and the more companies that achieved success in this way the more that were willing to train and certify their employees through a Six Sigma certification program.

When it comes to big business Six sigma is a program that remained underestimated for a good long time. Even when larger companies were meeting and surpassing their goals with profits that were off the charts many were skeptical. Today if you look at a list of the companies that are utilizing 6 Sigma they are amongst some of the largest companies in the entire world. Companies like Honeywell, Motorola, Bank of America, and Home Depot are amongst a few of the many that have integrated Six Sigma principles to attain a higher level of business success.

Six Sigma combines old and new schools of thought and adapts them into formats that suit a wide variety of businesses in a growing number of industries. Classes are available both online and through a wide variety of universities throughout the world. It is one certification program that crosses continents and language barriers very simply because it so effective.

Managing Your Entire Business With The Six Sigma Philosophy

Six sigma is a management process that has been used by a variety of different companies for the past several decades. It is a program unlike all of its predecessors that offers a unique look into business in a way that not only helps to encourage teamwork and improvements but does so in a way that allows for measurable improvements and constant updates. It is a system that really works and when it comes to running a business every company should have at the very least a few Six Sigma trained employees in their back pocket.

Even in a company that is not running completely under Six Sigma there are many benefits that can be had by using well trained employees to integrate some of the processes into a company’s infrastructure. Six Sigma philosophies although best when used exclusively can still greatly benefit a company when integrated into an already well functioning business management structure.

Getting your top employees 6 Sigma trained is by far one of the best ways to ensure that you will have some good guidance for your entire team moving forward and it is best to send upper level managers to a classroom or online Six Sigma Black Belt training and certification program. These programs can help to instruct managers not only on how to incorporate Six Sigma into an existing company structure but they can also help them to learn when and where to use it to best adapt it to get the changes that they seek.

Most companies however, turn to Six Sigma when they determine that the methods that they are using just simply are not working effectively. It is then that they begin their search for something greater, something that can either raise their business to the next level or retrieve it from the garbage pile. When researching most CEO’s and CFO’s come across Six Sigma because it is one management program that has been helping to make improvements in a variety of different fields over several decades and the many of the very top companies in the world have gained their notoriety from the success that they have achieved by utilizing this methodology.

Six Sigma is something that can benefit a wide variety of companies in many, many ways and is also a program that can not only be used exclusively but one that can be integrated into your existing business structure as well. Want to get results like some of the top companies in the world? Well, then it is time to get your 6 Sigma certification started. You really have nothing to lose.

Six Sigma Management Training

These days most companies are looking for a little boost. Something that can take their business to the next level and push them up to a level of success that has eluded them thus far and for many companies that secret thing that will help them excel in the current marketplace is Six Sigma.

Six Sigma is a program that many companies turn to during their time of need very simply because it has worked for so many companies over time that it is an obvious choice for business owners large and small. It is a program that offers training and certification courses all around the world in a variety of different formats and for a variety of different industries.

Currently Six Sigma training and certification is being offered in both online and classroom settings to offer a wider range of individuals and companies the opportunity to participate in this training program that can significantly help to improve their overall business and most are finding that having these different training program options works well to help create a more flexible learning environment.

And since 6 Sigma is a program that now also is adapted to a wide variety of formats more companies than ever before can take advantage of this superior program. Currently you can select from a wide variety of different Six Sigma programs, which include but are not limited to Lean, Green, Health Care Based, and of course Customer Service based businesses.

Each company and individual needs to do some research as this will help them to come up with a better understanding of the Six Sigma program that is best for their needs whether they are seeking individual training and certification or a program for their entire company to participate in. Selecting not only the right mode of training but also the right format will help to ensure that everyone goes away with exactly what they need to make the greatest success out of their business.

Understanding the intricate ways in which Six Sigma can help to enhance your business is just the first part of the implementation process. From there it is imperative to determine the best process by which to acquire this valuable information that will definitely help to enhance the experience for your customers and will help to significantly improve your bottom line.

Which Six Sigma Belt is Right for a Management Position

Black belts have the demonstrated skills and knowledge of Six Sigma principles to qualify for management and project management positions. The individual certified as a Six Sigma black belt not only possesses skills and knowledge in Six Sigma strategies, but also the ability to put the principles into practice in their daily tasks.

Those who pursue a black belt certification have the leadership abilities that are necessary for a management position. The leadership skills necessary for a management position include the ability to motivate others, delegate responsibilities and effective decision-making. Six Sigma black belt training and certification focuses on these abilities and provides the basic knowledge to lead a project or improvement team.

The training for certification as a Six Sigma black belt is open to anyone who chooses to pursue the credential, but for those without management experience, obtaining a green belt is a good place to gain an understanding of Six Sigma principles and strategies before moving on to black belt training and certification. When training for certification as a green belt, individuals learn the basics of quality analysis and improvement techniques. The training provides the student with a thorough understanding of the tools and techniques needed to work on quality improvement projects. Moving up to a black belt training program provides an in depth study of quality improvement techniques and strategies.

Black belts in Six Sigma have a demonstrated ability to lead others and teach the philosophy to those just starting out in Six Sigma. Training for a black belt includes a study of team dynamics and the techniques necessary when assigning roles and responsibilities to team members for a quality project. In addition, black belts learn complex calculations and the methods for applying Six Sigma principles to any business situation. Black belt certified individuals exhibit the skills necessary for a position as a manager including coaching skills and the ability to motivate others.

In the job market, a Six Sigma black belt demonstrates to potential employers that the candidate has the desire to grow and learn. Earning the Six Sigma certification also shows employers that the candidate possesses the leadership qualities and skills to work in a project management position or as a manager. In organizations that have implemented the Six Sigma strategy to problem solving and continuous improvement, black belts are attractive management candidates who can step in and immediately understand the company’s approach to quality and improvement.

How Six Sigma Changes Manufacturing Companies

The methodology of Six Sigma quickly became popular with companies in other industries once Motorola used it with spectacular success in the 1980s. Six Sigma focuses on eliminating errors in the production process to achieve a very high level of quality. Fundamentally, Six Sigma is a quality control philosophy as well as a technique. Six Sigma aims for almost perfect products. Businesses love it because it produces what it promises in terms of results. Manufacturing industries in particular have used Six Sigma to great effect, reducing mistakes in their production schemata and creating better products, not to mention increasing profitability.

Controlling production errors is critical to the success of a manufacturing enterprise. Making a tangible product gives employees, managers, owners and customers a crystal clear view of production. The product either works or it doesn't. Avoiding malfunctions and giving customers high-quality products are the top goals of a manufacturing company. Six Sigma helps to accomplish these goals by quantitatively analyzing a given production line and clearly indicating where the errors or defects are made. Six Sigma is rigorous and does not waste time on theoretical concepts. The design of this methodology is to get the production line running at optimal efficiency as soon as possible.

The phenomenal results this produces spurs manufacturing companies to new heights as they apply it to other production lines. The key insight of Six Sigma is how a process can make errors through incorrectly defined and executed application. Six Sigma is specifically adapted to manufacturing needs because every product goes through a process where basic components are made, modified and assembled into the final product. The stages of the manufacturing process can be improved through Six Sigma to the point where errors are almost completely eliminated.

The goal of Six Sigma is to achieve a quality level that represents 3.4 defects per million opportunities. An opportunity is all the chances for a defect to occur at a specific step in the manufacturing process. A defect is defined as anything about the product that does not satisfy customer requirements. Achieving 3.4 defects per million opportunities represents an astounding level of quality for the product. With this realization, it becomes easy to see why Motorola's success took off during the 1980s and why so many companies sought to imitate them. Six Sigma is responsible for enormous increases in productivity and profits.

How Six Sigma Can Change The Corporate World

A corporation is a legal entity recognized by law as having its own privileges, rights and liabilities distinct from the corporation's officers, managers and employees. The value of the corporate structure in terms of business is it allows the debts of the corporation to be separated from the personal liability of the members. This legal separation of liabilities gives the corporation the power to create context for its employees. This context plays a role in creating the corporate culture that guides employees and managers as they attempt to increase productivity and product quality. Introducing a new methodology like Six Sigma can change the corporate culture and the corporation for the better.

Six Sigma is sometimes used as a catch-all for cost-cutting measures; however, this is not truly what Six Sigma is about. This methodology is devoted to reducing the incidence of errors or defects in a production process to the point where they appear only in extremely small numbers. Six Sigma applies quantitative analysis to production with a huge focus on quality control and meeting the needs of the customer. The term "Six Sigma" itself refers to a level of quality expressed as 3.4 defects per million opportunities.

An opportunity is composed of all the chances for a defect to occur during a particular stage of the production or manufacturing process. A product exhibits a defect if it fails to meet customer expectations in some way. When seen in this light, 3.4 defects per million opportunities means an almost perfect product. This was an unheard of standard before Motorola introduced it in the 1980s. Corporations quickly caught on as they saw the tremendous profits resulting from Motorola's implementation of Six Sigma. Today, Six Sigma is an integral part of many businesses' long-term strategies.

Six Sigma is especially effective in manufacturing corporations with tangible products to show for their efforts. Manufacturing is the perfect environment to implement Six Sigma since there are so many discrete steps in the corporation's process. More steps equals more opportunities for defects to appear. Six Sigma can result in phenomenal improvements to productivity and profits because the manufacturing process experiences tremendous reduction in error generation. The entire point and purpose of Six Sigma is to remove defects, and manufacturing is an optimum setting for Six Sigma to really shine and take the stage.

The Three Top Reasons For Six Sigma Success

Many companies were leery to try out Six Sigma and quite a few thought that those companies that were claiming Six Sigma success were just blowing smoke. Honestly, one of the reasons for this was 6 Sigma just seemed to simple and truthfully that is because it was and still is very simple. Six Sigma is one process that incorporates three basic principles to make one winning combination.

1. Goal Setting – For a long, long time businesses and managers have known that one of the biggest keys to a company’s success is goal setting. Setting goals that are attainable, realistic, and graduated can help any company to attain the success that they are seeking. It is not a new concept for a company to say that goal setting was at the crux of their success.

2. Team Work – Nothing is quite as important to Six Sigma success as teamwork. This program is one that is designed to be used in a group dynamic setting and each individual has their own role in Six Sigma. The system is designed to have employees at each level of a business working together toward common goals and to collaborate for the best possible results. The tiered management system is one that lends itself to working together in such a way that incorporates dedication on all levels for the highest overall results.

3. Statistical Analysis – Statistics is another aspect of Six Sigma that helps to make this program so successful. Instead of trying to guess at results, this program helps a company measure and then revise their goals to help them attain the highest levels of success possible in all areas of business. It is important to realize that by analyzing and refining results that companies can make fewer mistakes and catch most before they begin to affect their bottom line.

Six Sigma is so tremendously successful because it combines a variety of successful business management techniques and places them in a winning business structure to create a winning climate for success down the line. By improving customer experience and refining results companies find as others before them have that Six Sigma is a program that can help any company improve their bottom line. Most companies find that the efficiency of the work environment makes for an excellent business climate and one that is heading for major success and while many companies are a bit skeptical of Six Sigma those who have used it with success know how well it works.