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What Are the Benefits of Lean Six Sigma for My Company?

What Are the Benefits of Lean Six Sigma for My Company?

Lean Six Sigma is a methodology and toolset that combines all the benefits of Six Sigma with those of Lean enterprise, so you can find the right tool for every job. Its aim is to identify and systematically remove defects and waste from every process within a company, organization or entity – in any industry, segment and business size.

Ultimately, the result of using Lean Six Sigma is improved efficiency within the company and a higher quality product or service for the customer. But there are some additional ways your company can benefit.

Financial Benefits

The financial benefits of Lean Six Sigma are large and well documented. Companies dedicated to implementing Lean Six Sigma not only see increased profits by reducing expenses, but can also benefit from an increase in revenue. For example, at North Shore-Long Island Jewish Health System, a radiology throughput project not only helped meet the demands of patients, providers and physicians, but it also generated an additional $375,000 per year in revenue.

Michael Cyger, founder and publisher of iSixSigma, discussed research conducted by his team in “Six Sigma Cost and Savings.” In that research, iSixSigma looked at the hard statistics recorded by Motorola, Allied Signal, GE and Honeywell and discovered that these companies experienced a year-on-year increase in savings and revenue growth, amounting to billions of dollars.

Research by Arvind Rongala of Invensis Learning has also found that enterprises that adhere to the Lean Six Sigma process improvement methodology achieved 40 percent more return on investment, or ROI, than those that didn’t.1

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Employee Satisfaction Benefits

Six Sigma doesn’t just improve the top and bottom line for your company, which shareholders love. Six Sigma employees themselves attest to improved job satisfaction.

One of the core tenets of Lean Six Sigma is to stop relying on the intuition and gut feel of managers to make the right steps for business operation and growth. Instead, empower every employee to make suggestions by teaching them how to collect and analyze data within their own process at work. They do this by giving them the Lean Six Sigma toolset.

Solving problems then develops confident employees who feel enabled to speak out, challenge the norm and enact real change for their customers and themselves.

At Black & Veatch Corp., a global engineering, consulting and construction company, human resource leaders found the causes of employee turnover and fixed their on-boarding process, reducing first-year voluntary turnover and eliminating $500,000 per year in costs.

Company Culture Benefits

The benefits earned by employees are not one off – they are cumulative.

Lean Six Sigma also has a follow-on effect as trained Green and Black Belts share their knowledge and reasoning with their colleagues in their current positions and as they rise up the ranks within their company and oversee their own teams.

Implemented correctly, with an awareness of the needs that motivate individuals and teams, Lean Six Sigma optimizes individual and team performance, which manifests itself in a culture of continuous improvement throughout the company.

Decrease in Error Benefits 

It’s often hard for employees to diagnose the root cause of a problem within a company and – as a result – time, energy and resources are wasted making superficial changes.

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Lean Six Sigma simplifies processes by facilitating deep investigation and process understanding so that employees can root out the real issue that is causing customer-perceptible defects. Lean Six Sigma empowers your employees to take charge of improving their areas of expertise, and it gives them the skills to analyze data, identify problems and help to create effective solutions.

Satisfied Customer Benefits

If Lean Six Sigma is done properly, it starts with the customer and ends with the customer. The upper and lower specification levels for every product or service that the customer receives are determined, so the company can determine how well it is performing. If a company is out of specification, they know exactly what to work on to improve their processes and delight the customer.

Fewer customer complaints leads to fewer customer service inquiries, which leads to less rework to fix problems and bureaucracy to oversee the rework. It is well established that customer satisfaction leads to customer loyalty, which in turn influences the financial performance of the company.

Benefits of Lean Six Sigma to Your Company

The potential benefits for a company that embarks on a Lean Six Sigma initiative make it a worthwhile investment.

Though you can start to see results from the first year, the financial benefits grow as employees experience a culture change and take initiative to identify and eliminate waste.

And while Lean Six Sigma is not easy to implement, it is a competitive advantage for every organization – and an organization’s staff, customers and stakeholders will reap the benefits.

Reference

  1. Rongala, Arvind. “How Lean Six Sigma Maximizes ROI of an Enterprise,” Invensys Learning. Published December 18, 2015. https://www.invensislearning.com/blog/how-lean-six-sigma-maximizes-roi-of-an-enterprise/.

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