By Jeffry J. Smith How can practitioners create a rigorous accounting method for measuring the financial benefits from their Six Sigma projects? The key here is being able to translate measured operational benefits into dollars, either in the form of cost reduction, inventory reduction or a revenue increase. The following five areas should be measured…
A dilemma many organizations face while implementing Six Sigma is the selection of a deployment model. Many practitioners feel that they must choose between a central team running projects to attack pain areas or a dedicated team of Black Belts who are attached to each function and support the leadership in improving performance. While there…
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 the payback model in which returns and/or cost savings can be generated. This young Internet…
Once upon a time there was a company who decided to implement Lean manufacturing. They hired a large prestigious consulting firm who created the grand strategy and trained everyone in lean thinking. Significant operating improvements were identified. It was all documented in a report two inches thick. Teams were launched, a lot of activity took…
There are people who say that Six Sigma is dead – that it has no value in modern business culture. But these people are mistaking growth and evolution for complete departure. It is true that aspects of Six Sigma have adapted to customers’ changing needs over the years, but its role as a problem-solving system…
Financial assessment of process improvement activities is the cornerstone to project selection and to benefit evaluation. Representatives from finance organizations, charged with such a task, may be confronted with assessing a large number of projects out of many different areas within their company. For a detailed benefit assessment, often the mechanics of the process in…
Many Six Sigma companies experience challenges in their effort to calculate and allocate benefits from throughput projects. This is a complex process, especially when the throughput capacity profile includes several different processes that behave independently, and where bottlenecks shift from one process to another. Employing the theory of constraints provides an effective solution. At BHP…
“So what?” That’s all your CEO has to say after you present your latest Lean Six Sigma triumph. You gaze out over a deafeningly silent boardroom. Your team is stunned. While you try to comprehend the CEO’s demoralizing response, the other managers and administrators chime in: “Yeah, so what?” The above scenario might be an…
Many of the attendees at a recent Lean Six Sigma conference were investigating how to start a Lean and Six Sigma program in their organization. Most were very excited about Lean and Six Sigma and how it could help them introduce process improvement and customer focus to their organizational cultures. Of course, some also were…
Anyone who has deployed Six Sigma, or has thought about deploying Six Sigma, is familiar with the main stumbling blocks to a successful deployment – lack of senior leader support, lack of data, longer-than-expected project cycle time, part-time Black Belt resources, and most important, poorly defined projects. Since the first financial firm started deploying Six…
Many quality managers have read about and seen the benefits of Six Sigma but are unsure how to approach their senior leadership about the opportunity because they do not have a concise package of information to convey. Fortunately, there is a series of tried and true steps which can be taken to sell management on…
Which is more important initially in a Six Sigma deployment – Belt training or project benefits? Without quality training of project leaders, a Six Sigma program is unlikely to be successful. So there is no question of its importance. Yet the purpose of Six Sigma is to make a positive difference to the bottom line via…
During recent decades, a number of different methodologies have evolved to help organizations improve quality, speed and efficiency, and better serve their customers. Manufacturing businesses have concentrated primarily on the ISO system, a series of increasingly tough manufacturing benchmarks and requirements developed by the International Standards Organization, and Lean manufacturing (originally known as the Toyota…
Liquid Controls, a manufacturer of high-quality flow meters and accessories for accurate liquid measurement, is a well-practiced user of Six Sigma methodologies. Having adopted Six Sigma in 1999 and made significant strides in improving manufacturing processes, the company more recently began to turn attention to transactional processes for serving customers. Liquid Controls identified several processes…
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