In our industry, Six Sigma is one of the most talked about efficiency methodologies. While there are many benefits, companies have to evaluate if those benefits are worth the strain it puts on their business. For those unfamiliar with Six Sigma, we’ve broken the what’s, why’s, and who’s of it below.
What is Six Sigma?
Six Sigma is a management methodology, originally developed by Motorola that describes how management of product and service delivery should be implemented to increase efficiency and reduce defects. The management processes emphasize setting extremely high objectives, collecting data, and analyzing results to a fine degree. Once companies determine where the defects are in a process, they work to reduce them. In order for a company to achieve Six Sigma, it cannot produce more than 3.4 defects per million opportunities.
Why would a company consider developing the Six Sigma methodology?
The potential benefits of Six Sigma include up to 50% process cost reduction, cycle-time improvement, less waste of materials, a better understanding of customer requirements, increased customer satisfaction, and more reliable products and services. One of the largest drawbacks with Six Sigma is that it can be costly to implement and can take several years before results appear on a company’s bottom-line. Also, since achieving Six Sigma requires so little error, many companies end up eliminating some of their workforce in favor of automation which is one of the reasons why Six Sigma is so controversial.
Who uses the Six Sigma methodology?
Six Sigma is generally implemented in companies that manufacture products. For companies that are in the business of producing things that are less tangible, other efficiency methodologies are often used.
Ultimately, it’s up to your company to decide which efficiency models to adopt. For all of Six Sigma’s benefits there are just as many drawbacks that need to be taken into account.