Six Sigma for Small Business

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Converted to Six Sigma language , there are 50, defects per million opportunities. This is done by multiplying the numerator 50 and the denominator each by Notice in the table below that 6 Sigma statistically six standard deviations is 3.

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Two Sigma is , defects per million or nearly one out of three errors. Three Sigma improves to 66, errors per million, or one error for every 15 opportunities—a It is important to note that the road to higher business quality gets increasingly difficult and expensive. Four Sigma is actually one defect in opportunities or a This is a very good starting point for the core systems and processes of most organizations. New companies typically start with processes at about 2 to 2. This may be somewhat shocking to you, but it points out the great opportunity for quality improvement in most organizations.

Formal improvement methods such as Six Sigma are usually required to achieve greater results than 3. Most errors happen because of faulty systems and not faulty people. People want to perform well, and will, if put into an effective business system. Mistakes and defects are normal.

How many you will tolerate is a business decision. Remember, without a conscious effort to improve, you will hover in the Sigma range and lose a significant portion of your potential profit. This is one reason why effective business systems pay for themselves many times over!

I repeat, YOU are in control and can choose what Sigma level you are willing to pay the price to achieve. For example, the airline industry has chosen to pay whatever it costs to operate airplanes at above Six Sigma—fewer than 3. However, baggage claims operate at 4 Sigma—a lost bag for every handled. This is why airlines put a lost-luggage claim office in every airport. The airlines make these business decisions by balancing cost and customer satisfaction.

Then consider for a moment the potential lost profit in your company that is probably operating at Sigma. Like the Theory of Constraints and Lean Thinking, the principles of Six Sigma apply in product or service-based companies, in the office, the retail store, or on the production line—wherever mistakes can be made.

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I think you would be surprised! A small effort to improve business quality can significantly boost customer satisfaction, profit, and hopefully your take-home pay. Business Systems and Processes. The Systems Thinker Blog.

Three major concepts will aid in your understanding. A "quality" product or service is one that conforms to standards.

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Quality refers to an acceptable level of performance within an approved range of customer specifications or expectations. For example, are the roof shingles the grade specified in the house plans? Has the steel part been machined to engineering specifications? Was the furniture delivered within the promised time range of a.

3 Things Small Business Managers Can Learn from Six Sigma

Are the restrooms "clean"? Six Sigma can work in any size business because the nature of Six Sigma is dependent upon characteristics inherent to any business, not on the size of a business. Six Sigma MAIC measure, analyze, improve, and control discipline s work no matter the size of the organization or even the size of the Six Sigma project. Small businesses do have constraints that limit their ability to initiate a large scale Six Sigma implementation.

However, there are ways to overcome these limitations. A certified Six Sigma consultant can act as your Black Belt for the initial projects until you have generated sufficient savings to be able to provide some of those savings for training your own people.

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Training happens at a slower scale for smaller companies but it still happens. Financially, savings realized from the first set of projects usually justifies the entire cost of the Six Sigma training. Using a more gradual training approach addresses many of the constraints of smaller companies and allows them to implement Six Sigma at a pace a small business can more easily manage.

There is a benefit to implementing Six Sigma in a smaller business. Because of the size of a small business, the financial results and cultural transformation that stem from Six Sigma will propagate more quickly through a smaller organization.