Article Revised: March 27, 2019
Motorola, General Electric and Samsung are just three examples of major companies who have used Six Sigma methodology to improve their business. There are many other global businesses which have used Six Sigma to make their operations run more efficiently and therefore more cost-effectively. While this is a tribute to Six Sigma’s effectiveness it is, perhaps, somewhat unfortunate that it fails to highlight the fact that Six Sigma’s principles can be applied to the vast network of SMEs, which also have a need to manage quality. Six Sigma training can be every bit as beneficial to these smaller companies as it is to their larger counterparts, possibly even more so since smaller companies are less likely to have the financial reserves to cope with any issues caused by ineffective processes.
Efficiency Is The Core Of Six Sigma
Traditionally there has always been a conflict between high quality and low price and to an extent this is unavoidable. The quality of an item is usually a combination of the raw materials used and the workmanship involved in creating it. Therefore an item which is hand-carved out of wood by a skilled carpenter carries a higher production cost than its mass-produced MDF counterpart and this cost must ultimately be passed to the end customer in order for the carpenter to stay in business. These examples are, however, extremes. In the real world, one of the keys to being competitive is delivering value by creating a product as cost-effectively as possible given the nature of the product. A carpenter working by hand is operating in a completely different environment from a modern factory but may still be able to improve their efficiency for example by reorganizing their tools. Likewise an SME can still aim (and implement strategies) to ensure that they operate as efficiently as possible, thereby reducing production costs without sacrificing quality. This is the goal of Six Sigma.
Large Or Small The Basics Are Still Much The Same
Once you have found a product people want, the most fundamental rule of business is arguably to get everything right first time so that all supplies can be turned into manufactured products and all manufactured products will work out of the box as the customer expects them to. Doing so avoids the costs of having to detect and remove defective products before they are shipped to the customers as well as the expense and reputational damage of having to manage returns, fulfil warranty repairs and deal with upset customers. Six Sigma is a methodology for eliminating (or at least vastly reducing) the variations in production which can ultimately result in faulty products. SMEs actually have a head start on their larger counterparts when it comes to implementing Six Sigma in that their production processes tend to be simpler than those of the global companies, which often makes it easier to detect areas of improvement.
Six Sigma Can Empower The SME
It’s taken as read that SMEs lack the resources of larger companies and that includes in-house staffing resources. This is, however, precisely the reason why they need to use what they have as efficiently as possible. With this in mind, spending time and budget on development should be seen as essential rather than optional. The key point to understand about Six Sigma is that used effectively it will not only pay for itself but also generate further savings which can be invested elsewhere in the business. For example it may be challenging for an SME to devote an entire headcount to Six Sigma as recommended by standard methodology, but on a short-term basis, consultants can fulfil that role while employees are trained. Once employees understand how to implement Six Sigma and gain experience in using it, they will be able to manage the bulk of Six Sigma projects themselves, simply using a consultant when a particularly high degree of expertise is required. The size difference between SMEs and larger companies means that the former tend to be significantly more flexible and able to take and implement decisions more quickly with much more direct communication and interaction between management and the workforce.
It has already been remarked that this should make it easier to identify inefficiencies and the flip side of this is that it should make it easier for improvements to become visible and for the cost-savings and improved customer satisfaction to benefit the business.