What are some of the benefits experienced by organizations that implement Six Sigma?
There are many benefits for organizations that decide to implement Six Sigma. This is one of the reasons the process improvement method has thrived over the last three decades. Six Sigma was originally thought of as a way to streamline internal processes. In today’s business environment, organizations use Six Sigma methods in both conventional and non-conventional ways.
Most people know that Six Sigma methods focus on continuous improvement. What many don’t realize is that these methods don’t just apply to manufacturing, they can apply to any process, system, or method. That’s because Six Sigma focuses on statistical averages. It looks at a function and determines how far it deviates from the mean average.
Practically, that means you can apply some element of Six Sigma to every aspect of your organization. Successful companies have realized this and are using it to their advantage in the market. Let’s look at four of these advantages and the benefits experienced by organizations implementing Six Sigma.
Lower production costs
The first and most obvious benefit of implementing Lean Six Sigma is reducing production costs. Kanban is enabled with just-in-time delivery within production so that stock is not held, waiting to be used. Organizations will implement TIMWOOD – an acronym for Transport, Inventory, Motion, Waiting, Overproduction, Over-processing, and Defects; all areas for examination of savings.
There may be several Critical-to-Quality characteristics for a Six Sigma project team to consider for production. These include
- (CTC) Critical to Cost
- (CTP) Critical to Process
These can greatly reduce the Cost of Poor Quality (COPQ) when factored correctly. Cost of Poor Quality is the sum of internal and external failures. All Lean Six Sigma Black Belts are familiar with COPQ and actively look to measure it during a project.
Many production environments measure their performance in terms of yield or their wastage rate. If 100 products are created, and 98 of them are usable, then the yield is calculated as 98%.
Six Sigma and Lean can cut down on the amount of this rework through the use of statistical analysis. While it’s true that you measure quality to the customer and not the accuracy of the product, it’s also true that quality problems equal waste. That waste costs the organization money.
Faster transportation times
Another Critical-to-Quality characteristic that can be improved using Six Sigma is CTD, Critical to Delivery. Lean Six Sigma examines a company’s complete supply chain, from start to final delivery. It can determine which Critical-to-Delivery components are vulnerable to disruption and add redundancy to reduce delivery delays.
Remember that transportation is much more than the delivery of a product to a retailer. Transportation can include transporting the order details to the warehouse, packaging, transportation of goods on-site, and collection arrangements.
Using methods like 5S, Critical-to-Safety (CTS) procedures can be enhanced within an organization. 5S is a Japanese philosophy that focuses on the effective organization of the workstation and on standardized work processes. It is an Instrument to design a safe, clean and structured work environment, to reduce unproductive activities and to improve quality, efficiency and security.
For example, during the Seiri (Sort) stage of 5S, all tools and parts are reviewed and only the items that are absolutely necessary are kept. This makes the workspace less cluttered and safer for everyone at that station.
Interested in learning more about Six Sigma. MSI offers Six Sigma certification at all levels. You can start for free with our Six Sigma White Belt certification. You can view all of our Six Sigma certifications here.