{"id":8697,"date":"2019-11-22T11:21:16","date_gmt":"2019-11-22T19:21:16","guid":{"rendered":"https:\/\/www.qad.com\/blog\/?p=8697"},"modified":"2020-11-05T15:54:19","modified_gmt":"2020-11-05T23:54:19","slug":"the-pros-and-cons-of-implementing-six-sigma-in-your-company","status":"publish","type":"post","link":"https:\/\/www.qad.com\/blog\/2019\/11\/the-pros-and-cons-of-implementing-six-sigma-in-your-company","title":{"rendered":"The Pros and Cons of Implementing Six Sigma In Your Company"},"content":{"rendered":"<p>[vc_row][vc_column][vc_single_image image=&#8221;8743&#8243; img_size=&#8221;full&#8221;][vc_column_text]<span style=\"font-weight: 400;\">Motorola\u2019s new business strategy of adopting Six Sigma was received with mixed reactions back in 1986. While some saw it as a revolutionary strategy that would significantly improve efficiency, others dismissed it as a complicated process that wouldn\u2019t lead to improved profits, which is the core principle of business. Fast forward a couple of decades and the strategy has progressively evolved into a revolutionary tool that primarily focuses on identifying and eliminating causes of errors and defects in manufacturing processes aimed at meeting, or exceeding customer requirements.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In his 1999 publication \u201c<\/span><a target=\"_blank\" href=\"http:\/\/asq.org\/qic\/display-item\/?item=22822\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">Why Should Statisticians Pay Attention To Six Sigma<\/span><\/a><span style=\"font-weight: 400;\">\u201d, Snee Ronald describes Six Sigma as a business strategy that is aimed at distinguishing and eradicating causes of failures, defects, or errors in business processes, by paying specific attention to outputs that are critical to consumers. Since Motorola\u2019s introduction in 1986, it has also been widely used as a quality measure that seeks near elimination of defects by employing statistical methods. The measurements adopted are founded on process strategies highlighting variation reduction, which theoretically, triggered improvements in the actual process.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">At first, resistance and skepticism to this methodology was relatively extensive, with most organizations and managers shunning it away due to its perceived statistical complexity. With time, their perceptions changed as businesses increasingly adapted, tested, and tweaked their overall methodology to improve their operations. So far, many organizations have tested it, as demonstrated by the University of Nebraska-Lincoln through a <\/span><a target=\"_blank\" href=\"https:\/\/books.google.co.ke\/books?id=BhHlAgAAQBAJ&amp;pg=PA144&amp;lpg=PA144&amp;dq=percent+of+organizations+using+six+sigma&amp;source=bl&amp;ots=zcsZlT6zEO&amp;sig=6lQOcvNiZ1zgmz2AQ8cjYQn0J1M&amp;hl=en&amp;sa=X&amp;redir_esc=y#v=onepage&amp;q=percent%20of%20organizations%20using%20six%20sigma&amp;f=false\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">study they did to establish underlying factors impacting an organization\u2019s adoption of Sigma, and subsequent long-term success<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Their findings indicated a significant difference between companies that had successfully implemented Six Sigma and those that were yet to do so. 64 percent of the former overwhelmingly increased their profits by more than 100 percent, while 64 percent of the latter registered comparatively low profits.\u00a0 Interestingly, 81 percent of the companies that were yet to successfully implement Six Sigma had registered significantly higher profits before adopting the strategy.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So, going by these indications, what are the pros and cons of Six Sigma in your company?<\/span><\/p>\n<h2>The Upside of Six Sigma<\/h2>\n<p><span style=\"font-weight: 400;\">To begin with, implementing Six Sigma spreads a progressive process improvement methodology to all organization levels. Once inserted in your business\u2019 culture, your individual operations will continue improving with time thanks to a system that closely monitors your processes, consequently identifying and correcting problems as they develop.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The culture of identifying and eliminating possible defects before they occur, as opposed to fixing them after occurring, helps save time and money, which would otherwise have been spent on rework. This ultimately translates to increased profits and reduced operational costs in an organization. According to a <\/span><a target=\"_blank\" href=\"https:\/\/www.isixsigma.com\/implementation\/financial-analysis\/six-sigma-costs-and-savings\/\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">report released by General Electric<\/span><\/a><span style=\"font-weight: 400;\">, their company was able to save more than $8 billion from 1999-2002 thanks to identifying and eliminating such defects.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Since Six Sigma heavily relies on data, you can conveniently and comfortably look into your processes in real time. As the measurement trend starts hitting the lower of upper chart control limits, you\u2019ll be able to identify the problem and swiftly act accordingly after understanding, documenting and measuring the current process. In case the revised process fails to deliver as required, your Six Sigma team will be on standby to evaluate it, and subsequently, correct any developing problems.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Having a team of dedicated quality experts places you ahead of other companies that contrastingly multi-task their general workers with quality monitoring and improvement.\u00a0 The systematic hiring and training of Six Sigma black belts in your company will start off a continuous process that will see them train green and yellow belts from new hires.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Finally, by documenting your processes and defects, you\u2019ll be setting up a learning platform, where lessons are shared by experts and other employees in a bid to improve their individual assembly lines.<\/span><\/p>\n<h2>The Downside of Six Sigma<\/h2>\n<p><span style=\"font-weight: 400;\">Interestingly, by virtue of being a quality improvement and not a cost reduction strategy, Six Sigma may not necessarily result in cost savings. In some cases, it even leads to increased production costs. That is because the cost savings made by virtue of eliminating returned products, costly reworks, and defective products, are only a process improvement byproduct. With time, progressive quality improvement may lead to increased overhead and capital costs due, thus canceling out initial savings made.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You should also note that lean manufacturing is not particularly synonymous to Six Sigma. Adding tighter tolerances, better manufacturing equipment, improved testing systems and quality checks, eventually consumes more resources and increases manufacturing footprints. Lean Six Sigma uses an approach that focuses on hybridizing these two aspects, but unfortunately, requires deeper data assessment to compare operations and their outcomes.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As a business, of course, you\u2019ll eventually offset the costs by increasing the value of your products, hoping that customers will be willing to pay extra for (and buy more) higher quality products that meet Six Sigma standards. Unfortunately, however, you may end up losing out to your cheaper competitors, especially if you are dealing in products that customers do not actually care about extra quality.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Customers buying aerospace or medical products, for instance, will be willing to pay extra for <a href=\"https:\/\/www.qad.com\/blog\/2019\/01\/the-impact-of-six-sigma-in-the-automotive-industry\">Six Sigma<\/a> quality standards, while those buying simple things like pens, papers and desks likely won\u2019t pay as close attention to the Six Sigma quality improvements. So, you\u2019ll need to assess your company\u2019s target market and adopt a requisite Six Sigma strategy that falls in line with your company goals, market, and growth projections.<\/span>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[vc_row][vc_column][vc_single_image image=&#8221;8743&#8243; img_size=&#8221;full&#8221;][vc_column_text]Motorola\u2019s new business strategy of adopting Six Sigma was received with mixed reactions back in 1986. While some saw it as a revolutionary strategy that would significantly improve efficiency, others dismissed it as a complicated process that wouldn\u2019t lead to improved profits, which is the core principle of business. Fast forward a couple [&hellip;]<\/p>\n","protected":false},"author":100,"featured_media":8743,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[199],"tags":[24,113,1359,376,231],"class_list":["post-8697","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-manufacturing-trends","tag-manufacturing","tag-quality","tag-quality-improvement","tag-quality-management","tag-six-sigma"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Pros and Cons of Implementing Six Sigma In Your Company | QAD Blog<\/title>\n<meta name=\"description\" content=\"The Six Sigma strategy evolved into a revolutionary tool that focuses on identifying causes of errors\/defects in manufacturing processes &amp; eliminating them.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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