MBA Journal Six Sigma Education Resources

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.