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Implementation Financial Analysis

Financial Analysis

Ask the Expert: The Topic – Six Sigma and Return on Investment

John Lopez-Ona, president and CEO of Six Sigma Qualtec, offers his perspective on Six Sigma and return on investment – from how to measure ROI in a Six Sigma initiative to the critical success factors in achieving a satisfactory ROI.

Calculating COPQ Using Weighted Risk of Potential Failures

The Cost of Poor Quality (COPQ) is the initial financial analysis conducted for a Six Sigma project. The challenge comes when no measurements are available at initiation of a project. Here is an approach for meeting that challenge.

Cost of Quality: Not Only Failure Costs

The cost of good quality must be factored into the overall cost of quality. Following the Six Sigma philosophy of building quality into process, service and products, however, can lower the cost of good quality and therefore overall cost.

Green Belt, Black Belt, Now the Six Sigma ‘Money Belt’

In addition to the more familiar Green Belts and Black Belts, some Six Sigma organizations have defined another role called a “Money Belt.” The goal is to provide an independent and objective evaluation of the financial benefits of Six Sigma projects.

Hard and Soft Savings: What Counts Can Be Counted

Organizations using Six Sigma measure success in terms of hard savings, and are less impressed with soft savings. But it pays to consider both when evaluating a Six Sigma project. Sometimes soft savings are harder than management realizes.

How to Explain Six Sigma by Using the Profit Triangle

The profit triangle, often used in marketing theory, can help people understand Six Sigma's role within the organization and focuses on both continuous business improvement and financial savings.

Involve Finance in Project Selection, Not Just Validation

Most companies using Six Sigma are used to including financial staff at the back-end of projects to validate results. But the savviest organizations are getting their finance departments involved in what projects to work on in the first place.

Involving Finance in Six Sigma – Do It Early and Fully

How confident can a company be that claims of Six Sigma benefits actually impacted the bottom line? BHP Billiton Base Metals found an answer through the involvement of the finance department in its deployment of Six Sigma.

Managing COPQ by Analyzing and Optimizing Thresholds

Threshold investigations should be an integral part of any continuous improvement program. By optimizing thresholds, Belts can yield incredibly significant and immediate results because thresholds directly affect scrap and lost sales.

Monitoring Return on Investment for Internet Initiatives

During the past four years the Internet channel has seen the migration from an exploratory revolution of new functionality to creating a viable profitable business. It is no longer feasible to place additional technological enhancements on the web without considering…

Six Sigma Costs and Savings

You can't expect to significantly reduce costs and increase sales using Six Sigma without investing in training, organizational infrastructure and culture evolution.

What Belts Should Know About the Cost of Poor Quality

With a firm understanding of COPQ – both what it includes and what it does not – Belts can determine and justify projects, and gain buy-in for efforts based on financial findings.

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