MBA Journal Methodologies

Channeling Six Sigma For Success

Six Sigma is by far one of the most incredible and effective tools that any business has to solve problems and create success. No matter what the field of expertise this program is one that can truly help to create savings, reduce the number of problems, and improve the overall efficiency of the company itself. Even the best management tools need a certain climate to breed success and Six Sigma is no different. The following are some of the things that must be put in place for Six Sigma to be most effect.

Senior management must get involved and show their support in order to help a company set the right climate for an effective Six Sigma implementation. Top management members need to create the right setting by not only helping with selecting and reviewing projects and assigning teams to them but also by resolving conflicts and approving ideas as they come across the board. The more active a role senior management takes in Six Sigma implementation the more successful it will be.

Choosing the right projects is essential to making the most of six sigma. Many companies that struggle with Six Sigma implementation and getting the results that they are looking for are actually struggling because they have not selected the right project for the greatest improvement. While it may seem that choosing a project with a wide scope will create the greatest number of successful outcomes having a project that is not specific enough will actually hurt the results of the project in the long run.

Assigning the right team and team members to a specific project is equally as important as the two factors listed above. When you are looking at a project you don't just want to ask those employees who happen to be available but those that are best for the job at hand. Also putting employees who compliment each other together will help to produce greater and more successful outcomes each and every time.

Six Sigma is a very effective business tool and even when it is used incorrectly can make a marked improvement in a business. When used and implemented and utilized in the correct climate it can help a company achieve unimaginable success.

Six Sigma Is Just Another Way Of Expressing Perfection

Six Sigma is something that many people in the business world struggle to understand but in essence all that 6 Sigma is is another way of expressing near perfection. What this means for businesses is that you must continue to refine and rework everything that you are doing to continue to improve results and in essence that is what 6 Sigma is really all about.

Each company will go about this in their own way. In manufacturing industries such as Motorola where Six Sigma originated it is about improving the customers' experiences by improving the quality of the product. Doing so requires pinpointing the areas in which the customer experience or the product itself is not all that it could be and then working on a plan to improve the quality by reducing the errors in the production process.

Of course, when a company is customer service based the improvement of the customer experience relies on improving the level of customer service that is being provided to the customers. This is a more difficult item to measure and as a result it is important to use the customers to gain feedback in addition to talking to employees about their assessment of the improvement process as well.

It is important to make sure that Six Sigma training and certification is obtained in order to help each company meet its goals more effectively. Many companies make the mistake of trying to send only upper management members to meetings and training sessions and have them pass the information on to others in the organization. The problem with this is that there are too many variables and many times companies that use this method of passing it along don't train their employees in the best possible way and the result is usually that the company never seems to get their Six Sigma process rolling and thus eventually give it up entirely.

A 6 sigma certification and training program is essential in order for companies to be able to attain the best possible results from their Six Sigma implementation. After all, success relies on not only the training and certification programs but also on the implementation and coaching that can help jump start the process. This can only be accomplished when ever member of the team is on board.

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.

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.

Driving Six Sigma Success Without Top-level Support

Business of all sizes can use the Six Sigma training program to achieve a desired result The program requires commitment throughout all levels of an organization The employees may not be on board with any new idea at first, but an employee may change his or her mind when he sees how the program works. He may also decide not to complain if the employee realizes that there is little he can do about the change. Most employees go along with changes if going along with the changes is necessary for a worker to keep his employment.

The system works best with top level support, as program is often implemented at the upper levels of management, but it is not always possible to get support from upper level management. A mid-level manager may decide to get the support he needs. If a person in middle management wants to show initiative, he can use the Sigma Six system without the support. If he is going to use the system without the support of his supervisors, he needs to know what the system entails and how to use it. He still needs to go through the training course.

If he wants to implement it, he needs to educate the people who work under him about how they will be involved in the process. They do not need to know about the system itself, but they should have a good idea what they need to do under the new system. The new system, or at least the system that is new to the business should be started with the permission of the supervisors. The supervisors can see if the system works.

A manager can achieve success if he follows the steps of the system and follows through with it. The Sigma Six system requires that the manager evaluate the system every so often to see if the system is working as well as it should. There are many places where a manager can get support from others who are using the system. There are entire forums devoted to the site as well as many blogs and websites that can help a manager get ideas.

Before a manager can implement the Sigma Six system, he needs to go through the training process. The training seminars take a few days to complete. He may want to keep the training materials she he can refer to them. Driving Sigma Six success without top-level support is a matter of determination.

Defining Defects, Units, and Opportunities

There are lots of business strategies that are overwhelming the world of business. Some tried a few and given up resulting to either using their own methods or ended up losing the business because of too much bad decisions. How do you choose the right strategy? Simple, Look for evidences. One of the most successful strategies around is the Six Sigma, this strategy was introduced by Motorola Inc., which is now a successful company, A direct proof that Six Sigma really did a great job.

Where the idea did came from?

The very concept of six Sigma was born on 1970s at Motorola. The concept was brought by the criticism of the recent senior executive Art Sudry because of Motorola’s bad quality. It was inspired by the quality improvement methodologies such as quality control, total quality management and zero defects. These methodologies brought serious escalations to how these three could be achieved. The term came from a field of statistics known as process capability studies. The strategy was first used mainly by Motorola but later on was used by Honeywell, General electric and fortune 500. Today, there are now seminars and workshops that are conducted to teach six sigma to other manufacturing companies to lessee their costs when it comes to defect items.

How does it work?

Unless you’ve had much training like anybody does, you won’t get every procedure intended for those who attend their workshop. Six Sigma actually follows two methodologies inspired by Deming which is known as the Plan-Do-Check-Act-Recycle. These methodologies are composed of two acronyms both with 5 letters: the DMAIC and the DMADV. Here is more elaborate explanation:

DMAIC – stands for:

• Define the problem
• Measure key aspects and collect important data
• Analyze the data and look for cause and effect relationships
• Improvise the current process using the latest data analyzed
• Control the future states of the production. Prevent defects by making sure that your goals are fixed.

DMADV which is also known as DFSS (Design for Six sigma) stands for:

• Define goals that are consistent with the market’s demands
• Measure and identify CTQ (Critical to quality)
• Analyze to develop new design alternatives
• Design Details, optimize and plan for verification
• Verify the design, set up pilot plans, implement production process and you are now ready to start your innovated production.

This strategy has been known for years and there are actual trainings that consider this plan and actually making It known over the years. As more and more people is trusting this very same strategy, more businesses are more likely to bloom as they continually accept wrong decisions and turns and are now heading for the right path.

Applying Lean Principles To Improve Workforce Management

Lean Workforce ManagementProcess improvement drives cost savings and bigger profits with any business. One area of improvement that brings the opportunity for high cost savings revolves around workforce management. Workforce management concerns making decisions that inspire your employees to work efficiently while eliminating wasted activities.

Lean principles provide a framework for improving workforce management. Businesses that embrace lean principles realize the benefits of these actions in employee attitudes and in real costs. Employees see the efforts of the company to succeed financially and invest themselves in being part of that success. Three lean principles apply directly to workforce management.

Identify Non-Value-Added Labor

To understand non-value-added labor, it’s often easier to understand value-added labor. Value-added labor refers to activities the employees engage in which increase the selling price of the product, increase the salability of the product or increase internal efficiencies. Each of these activities create a financial benefit for the organization whether through the cost savings of efficiency or the increased revenue from customers.

When a company pays employees to engage in non-value-added labor, the money spent earns no return and brings no benefit to the organization. The money spent to pay these employees could be spent on activities that bring value to the organization. An organization that identifies the labor activities which do not add value can find ways to eliminate those activities and redirect the employees into value-added activities.

Manage Variability

Consistency breeds efficiency and improves the financial impact of each work activity that occurs. When the work of employees varies from one shift to the next, the company experiences a moments of high efficiency and moments of low efficiency. Low efficiency in work processes costs money. When the company determines how each work process should occur, all employees should be trained to follow this procedure. This maintains both consistency and efficiency.

Motivating Employees

Employees who see their managers invested in the success of the company build on that attitude. Motivated employees seek methods for improving the work activities. As these employees implement their ideas, they feel vested in the improvement as well as motivated to continue eliminating waste.

Management - Decisions That Will Benefit The Company

Many managers are getting canned and if you are an individual who holds a management position with a thrviing company then perhaps your job is safe. If however you are a person in a place of upper management within a company that is not doing well then you are most likely losing a little sleep at night wondering when it will be when your company will give you the ax. It may sound harsh but whenever a company isn't doing well it is the heads of upper management and CEO's that have to watch out. After all, no good company is going to fire the underpaid worker bees, as they are the crux of the company. No instead it will be the overpaid members of upper management who are going to have to accept the brunt of the responsibility and therefore it is wise to wake up and smell the coffee before it is too late.

As a manager you are probably seeing that the company's numbers are not all they could be, not everything they should be. Perhaps you are thinking that you have done nothing wrong and that this has little to do with your ability or inability to manage. Likely you are right. It is most likely nothing that has to really do with you but it is however, something that you really need to look at and consider if you really want to make a difference.

Keeping all this in mind, in the end it doesn't really matter whether any of this is your fault or not because you will be the one to blame and in the end you will likely find that you lose your job because of a failure to produce. Instead of waiting for the day that they give you your walking papers you are better off trying to find solutions to the company's problems. In order to best find the solution that works you will need to assess the company and the problems that it is having. In many cases you may just find that revamping the company's structure without actually changing anything else can be helpful.

One way to really make changes to a company is to implement a new six sigma management program and create a new format which focuses on the end result and the customer experience. Something along the lines of Six Sigma can create the right focus for your company and implementation and training may be just what can help you to enhance those sales figures and improve the company's bottom line. In the end a move like this may seem a bit daring and scary but it could mean the difference between saving your job and improving the company or being handed your walking papers.

Calculating your process sigma

Six Sigma is one of the most influential quality control measures ever introduced to the business community. Calculating Process Sigma enable managers to evaluate how close they are to attaining perfection. Sigma level 6 is the highest level attainable therefore calculating Process Sigma can help evaluate your efficiency. It is a five step process that includes:

1. Defining Defects
2. Defining Opportunities
3. Measuring Opportunities & Defects
4. Calculating Yield
5. Looking up Process Sigma

Defining Defects

Defects are the lowest levels of fault that can occur in a system. Motorola, the founder of Six Sigma once defined a defect as a paper that did not function properly when shipped to the customer. For a software company, this defect may be an error in the installation of newly launched software. Whenever the software fails to install, it is counted as a defect.

Defining Opportunities

An opportunity is the lowest defect recognizable by the customer. Therefore, a single defect can have multiple opportunities. Referring to the software installation example, multiple opportunities can be present in a single installation. For example, engineers may notice that a large number of software fail to install after Step 2. Likewise, 20% of the software fail after Step 3. If a software installation is a multi-step process, it can have multiple opportunities.

Measuring Opportunities & Defects

After you have defined the defects and opportunities, it is vital to create a sound data collection plan, which will ensure that the data is well-organized and statistically reliable. Reverting to the software example, if engineers find that 200 software failed to install properly then 200 is the number of defects. Likewise, if the installation is a 5 step process then there are 5 opportunities during an installation process.

Calculating Yield

The yield calculation is very simple as it is measured by subtracting the total number of defects from the total number of opportunities, and dividing the result by the total number of opportunities multiply by hundred. Taking into account the software example, there were 200 defects therefore 10000 installations in a 5 step installation process converts to 50000 opportunities.

Opportunities: 50000
Defects: 200
Yield: (50000 – 200 / 50000) * 100 = 99.6%

Looking up Process Sigma

The sigma conversion table provides the corresponding level attained according to the results of the yield. On a typical Yield to Sigma conversion table, 99.6% may equal to a Sigma of 4.2.

Coronary Artery Bypass Grafts: Six Sigma Breakthrough

Coronary artery bypass grafting, otherwise known as CABG is a six sigma break through. It is a surgical procedure which can increase blood flow to the heart. This procedure is generally done on patients with severe forms of coronary heart disease (CHD), also known as coronary artery disease.

This condition occurs when plaque accumulates on the inside of coronary arteries. Plaque is a substance which is made up of cholesterol, calcium, fat, and other particles found in blood. This plaque can decrease the flow of blood to the heart, causing subsequent breathing difficulties, chest pain, and eventually heart attack if the blockage is severe enough. Because coronary heart disease can be fatal, it is imperative that an early diagnosis is made and surgery such as CABG is performed in serious cases.

Coronary artery bypass is an open-heart surgery which is done with great frequency in the USA. The physicians who do this type of surgery are called cardiothoracic surgeons. Candidates for CABG are those who have life-threatening forms of CHD and have tried other methods of treatment with no success.

This surgical procedure uses blood vessel grafts to bypass one or several blocked arteries and restore healthy blood flow to the heart. These grafts are taken from the other veins and arteries in the patient, generally found in the legs (saphenous), the arms (radial), or the chest (thoracic). The graft is twisted around the artery which is blocked, allowing new paths for oxygen-rich blood to reach the heart.

The candidate for coronary artery bypass surgery can expect to live a much more active lifestyle after the procedure. They can also expect to have an improved quality of life due to the cessation of chest discomfort and other symptoms. The pumping action of the patient's heart will improve if the muscles has been damaged by heart disease. Additionally, the risk of heart is substantially decreased, and their chances of survival are greater.

Coronary artery bypass grafting isn't the only treatment for coronary artery disease. A number of people can be treated successfully with medications, lifestyle changes, or a less invasive procedure called an angioplasty.

People who receive this surgery generally have excellent results. After a coronary artery bypass graft, up to 85 percent of patients have significantly fewer symptoms, less chance of heart attacks, and a greater chance of living for 10 or more years. Additionally, this is a surgery thought to be relatively safe and is therefore a viable option for those suffering from otherwise impending heart failure.

U.S. Rep. Inslee Touts Six Sigma in Wash. Governor's Race Announcement

Lean Six Sigma has been used to improve processes in the private business and non-profit sectors, and if Jay Inslee has his way, will soon play a prominent role in government as well.

Inslee, a Democratic candidate for governor in Washington, is running on a platform of job creation and improving the business climate in the state, and central to those goals is his belief in the process improvement method Lean Six Sigma. Inslee’s background gives him a unique perspective on the workings of different sectors. As a young man he worked with his father as a painter, also working in construction jobs and as a community college professor. He later became a lawyer and prosecutor, and won a seat in Congress in 1988, where he served until losing office in 1994. Inslee again ran for, and won, a seat in the House of Representatives in 1998, and has served there since.

His experience with private business led Inslee to learn about the practice of constant improvement and the results it brought companies like Boeing and Virginia Mason Hospital, which was named the top hospital in the country thanks to its use of process improvement. The tenets of Lean Six Sigma have worked well for the private business sector, and this approach will work for the state of Washington as well with a committed executive, Inslee said.

Though the public sector has been seen as slower to accept the process improvement principles embraced by private business, Inslee’s proposal would not be the first use of Lean Six Sigma in government. The U.S. Navy hired consulting firms to train officers in Lean Six Sigma, formed a task force to find and support lean projects and started a full-time lean office. In three years since implementing the system the Navy has been able to improve its efficiency and reduce costs. Six Sigma principles have also been used by the U.S. Army, which used the approach to devise a more efficient system for delivering payments.

For Inslee, a more efficient government in Washington would bring immediate savings in health care costs, which the state could then re-invest in education. His approach would evaluate the many layers of government and eliminate redundancies, creating a more streamlined system that Inslee said would be “not quite so ossified.”

Gathering The Information You Need To Make Six Sigma Decisions

For years many companies have been driven to the Six Sigma methodology out of desperation. Many came not because they wanted to but because they truly felt that they needed something to help them keep their business afloat. The results were in and many companies were boasting that they had gotten significant results by utilizing the 6 Sigma program.

Many today, however, still struggle to understand 6 Sigma and while they do believe that the big companies that have been so successful such as Bank of America and GE for example are onto something they also realize that they need just a bit more information before moving forward. Fortunately since six sigma came into existence approximately a quarter of a century ago, there is a good a amount of information available for those business owners who wish to take a closer look at it and find out if they feel that Six Sigma is something that will work well for them in their current business structure.

As a result many are turning to the Internet to accumulate information about what options are available to them as far as training and certification are concerned. While this may seem like a good way to go about gathering information this can sometimes be a bit misleading because many of the companies that are providing information about Six Sigma Online are trying to sell you something and this may make it difficult to discern fact from fiction when accessing a variety of different information sources.

There have actually been several books written about Six Sigma and many business owners find it more pleasing to sit down and read a book and gather information about the program in this way verses on the web. While the World Wide Web has much information on it all this information must be collaborated in order to truly reach the truth about anything.

Reading and gathering information about Six Sigma and finding out not only where it began but also the different ways in which companies are utilizing it to full success is the best way to discern the best course of action for your business. When it comes to managing your business you are best off taking the time to find out what will work best in your current structure because sometimes revamping the entire system is not an option and in this case if 6 Sigma is not a good fit for you than perhaps something else will work better. It just makes sense to choose what will be most successful for your business.

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.

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.

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.

What To Expect From Black Belt Training And Certification

Six Sigma offers companies and the individuals in those companies not only knowledge of the philosophy and principles associated with the program but the support systems and tools they need to actually put the program into action. Someone who is a certified black belt in 6 Sigma is someone who is looking to strive for excellence and who has the leadership skills to model the basics that the other members of their team need to follow. These individuals not only understand their role in the company but the role of each individual in the process as well which helps them to effectively manage the team dynamics as well as to delegate responsibility.

Not everyone in your company is designed to be a Black Belt. While you may have many good employees most companies look toward the leaders in their company to take on such an important role and to undergo the Black Belt Certification Program.

Individuals assigned to these roles need to have a complete understanding of the DMAIC model and know how to incorporate the Six Sigma principles into that structure. Six Sigma Black Belt Certification programs help managers become more efficient and effective as this program helps them to better understand and oversee the Six Sigma projects that the company has before it. A person who is assigned to a Black Belt position will more often be in that position on a permanent basis at least for the duration of a few years ad then they will return to their prior job commitments.

Most Six Sigma projects are designed to save a company between one hundred and three hundred thousand dollars per year. The role of a certified black belt is to lead, coach, advise, manage, and help develop each employee at their own level to help the entire company meet its collaborative goal. In most instances coaching helps to get implementation off the ground and most companies find that with coaching and a little restructuring that they are able to turn Six Sigma to gold relatively quickly.

No matter what the industry that you are in Six Sigma is a structure that easily adapts from one type of business to the next. Any company that is looking for a faster track to success or any individual who is looking to propel their career to the next level should consider Six Sigma training and certification as an easy way to get a quick boost and get things moving in the right direction.

How to Know if You Are Ready for Six Sigma

Six Sigma is a popular process improvement method utilized by companies world wide. Many people look at getting certified as a Six Sigma Green or Black Belt because it will be a good addition to a resume. Job lookers in the current market note that many companies are looking for this certification, and salaries for those with Six Sigma backgrounds do tend to be higher on average. However, it is important for individuals to understand how to know if you are ready for Six Sigma.

Six Sigma is a data driven improvement approach, which means there are a lot of statistics involved. In order successfully drive and implement change through a Six Sigma approach, individuals must be able to collect data, provide analysis, and understand complex statistical principles. Many Master Black Belts recommend that those interested in earning Six Sigma certification take a college level statistics course prior to beginning certification classes.

In addition to a good understanding of statistics, experience and knowledge in project management is also important. A person who has never worked with project teams implementing process, facility or software changes should seek opportunity to be a part of one of these teams prior to attempting Six Sigma certification. Work completed in conjunction with these types of projects is often very different than the work required to maintain daily production requirements. Even the best day-to-day department managers may not have the required skill sets to succeed as a Six Sigma Black Belt.

For individuals looking to determine if their process is ready for a Six Sigma project, there are many forms and tools to help. It is a good idea to develop a definition for the problem, and how the process is measured. If the business can not define the problem, they might not be ready to employ Six Sigma to improve it.

When looking to find out how to know if you are ready for Six Sigma, individuals should never feel that a failure to reach Six Sigma certification means they are not a good manager or able to provide value to the company. Six Sigma is a great tool for driving process improvement, but those certified in Six Sigma are only one part of a team. Non-Six Sigma managers work daily with those certified in the process to create the best possible outcome for the company.

When should six sigma be used?

Companies that are not currently using six sigma are wondering whether they should begin to do so or not. The answer to this question lies in how the executives in the company think the manufacturing of their products is going. If they believe that there is room for improvement in that area, six sigma may be the set of principles that helps them.

Motorola is where the philosophy of six sigma was born. It came to the executives’ notice that their products were not of the best quality. In order to improve the quality of their products, they needed to make major changes within their organization. Part of those changes was to discover where the problems began, and seek to fix those issues. A company that sees itself in this description is one that could benefit from six sigma.

Six sigma is the philosophy that seeks to improve the quality of the products that a company makes at the same time that they increase their profits. Major changes may need to be made before a company can switch over to practicing six sigma principles. If the executives at a company believe that they need to improve their quality, and would like to increase their profits with six sigma, they will have to examine their company’s culture.

Implementing six sigma principles means that the company’s entire culture will have to change. Changing a company’s culture requires constant attention to its detail, and this is done by upper management called Master Black Belts. These Master Black Belts can be hired as consultants or someone from within the company can be sent to be trained to become a Master Black Belt who will help to guide the entire company in the direction of six sigma. A company that can devote itself to abandoning their existing practices for those of six sigma can begin to become a six sigma organization.

The people at Motorola were under the impression that if they worked to improve the quality of their products, it would cost them a lot more money and diminish their profits. What they discovered instead was that making a product that did not break down as quickly encouraged profit-earning and decreased production costs. A company that is currently experiencing high production costs that they would like to lower may find that six sigma would be helpful.