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Six Sigma in Small Companies

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  • #27148

    Charles Waxer
    Participant

    Almost all Quality professionals have heard the benefits of Six Sigma Quality for large companies like GE, AlliedSignal and Motorola. But what about the small companies? Has anyone implemented Six Sigma successfully in a small company?What does everyone else think? Please post your thoughts.-Charles

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    #66114

    howe
    Participant

    Charles-
    I agree with your list of requirements. I have seen Six Sigma fail because of one or more of those issues missing. Usually training is the easiest to fullfill. The rest are typically breakdowns. One suggestion however. Since resources is most often the biggest issue, small companies should deviate from the traditional role of Black Belts. Instead, train supervisors, engineers, foremen, etc. in full Black Belt skills but have them remain in their present positions (similar to Green Belts). I call them “Operational Black Belts”. I have found that Six Sigma practioners that have a vested interest in the outcome of their projects have a higher success rate. They tend to get more buy-in from operators and know their processes, “first-hand”. Due to smaller volumes of smaller companies, the standard “$175K savings from Black Belt Projects” won’t hold true. Smaller companies won’t get the return on dedicated Black Belts at high salaries as Fortune 500 companies.

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    #66116

    T. Burton
    Member

    Six Sigma is very appropriate for smaller companies too. We have modified the traditional Six Sigma implementation process for our smaller clients. The Six Sigma process works well in billion dollar corporations as well as $50 million privately held companies. In fact, it has been our experience that the results are usually quicker and more visible in smaller companies. The politics surrounding Six Sigma are also simpler once the commitment is made by the CEO.

    American industry is often very good at finding reasons “why it can’t work here.” But a quality problem is a quality problem. Variation is variation. Waste is waste. An unhappy customer is an unhappy customer. The size of your business really doesn’t change these facts.

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    #66118

    Edwards
    Participant

    Charles
    I agree with your list of requirements. However, the size of “a small company” is a key variable that can avoid the success of Six Sigma. The size have a strong relationship with resources. A small company-$50 million privately held companies, as says T. Burton- in USA is really different from the concept of small company in other countries. What are the characteristics that define a “Small Company”?
    I agree with T. Burton when he says that variation is variation. Waste is waste. An unhappy customer is an unhappy customer. But to solve these problems there are other available strategies that we can use.

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    #66125

    P Duda
    Participant

    I say five req’mts…You need a local champion…If you don’t have someone to shepherd the effort it will fail. One individual must be in it for the long haul otherwise it becomes the book of the month club as managers change. Obviously more of a problem in a big co than a small one but I’ve observed too many failures of good programs due to the lack of ability to implement.

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    #66128

    Charles Waxer
    Participant

    I agree with your champion comment completely. I may not have clearly outlined who I meant by “management” in my article. That includes the champions, who are the process owners and people within the business that are key implementers — in addition to the executive management team.

    Thanks for clarifying that point. It is crucial!

    -Charles

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    #66129

    Charles Waxer
    Participant

    Mike,

    That’s a terrific point that I completely left out. I agree that small companies SHOULD deviate from the “typical” black belt and master black belt roles that are set up at the fortune 500 companies that we always hear about. I like your “Operational Black Belts” role title.

    In some cases, these belts are the actual operators of the equipment! The results of empowerment are unbelievable sometimes.

    The standard $175-250K savings per project are not to be expected in a smaller company. Mike, do you have any figures from your work that would give everyone a order of magnitude? I want to say $20-40K, but I don’t have the data — it’s just based on what I recall from various implementations and projects.

    Cheers,
    Charles

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    #66130

    howe
    Participant

    Charles-
    I have seen anywhere from $250K to $2K in savings. Leveraging potential seems to be the key for large savings. However, nowhere near the marketed $190k per year most Six Sigma consultants claim as a return for the $35k tuition per student. Can small companies afford such fees? Do they get return on their investments? Remember, roll travel costs and Black Belt salaries into the cost and it may take several years to break even. I believe it makes more sense for smaller companies to train their current employees, on site (provided they allow at least 50% of their time to be devoted to Six Sigma during training). Those of you who have the luxury of devoting 100% of your time may object. However, I have seen more successful projects come from “Part-time” or “Operational Black Belts” than full-time traditional Black Belts at several companies.

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    #66134

    Charlie Pfaff
    Participant

    Small companies can implement six sigma, they just will never have a black belt. With the requirements of savings of $175,000 per project, the black belt and master black belt must do so many of these. Am I correct? Many small companies can not find a manageable project with a savings of over $50,000.
    Another requirement is taking a key person in your company, a leader, having him leave his job, having to replace him so that he can be a certified black belt? Many small companies would answer, “Give me a break!” It would be difficult for them. Other larger companies could eventually have a full time person, but the project savings in small companies is a tough nut to crack. I still say six sigma is a good tool for small companies.

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    #66160

    Merlin DuVall
    Participant

    In regards to small companies, I think that the definition of “Small” is very important to the need for QA system. In the printing industry 1 mil/yr is considered small. However the need for QA is amplified with the number of employees and the layers of managment,
    In very small companies QC drives QA as a cause and effect system with the company not surviving if the system doesn’t work. As size increases the QC inspection process becomes disconnected from the QA process that would correct the problems and there is a fine line between the managers that will accept the expence while visualizing the results and those who are not profitable enough to see the expence as being offset by the results. However the motivated QA managers can install a working system in any small company with managements approval. That IS the key.

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    #66176

    Sinnicks
    Participant

    We can discuss cost justification forever. It comes down to what the company’s cost of failure is and the nature of their processes and products. A high throughput/low number of process tracks type of companies like a printer will have higher leverage on projects. A small run injection molding shop has less opportunity for a large project because the actual product manufacturing happens in a product-specific mold.
    That said, other variables include the ability to conduct projects on support processes (like material handling or maintenance), the quality of your cost of quality assessment, and your creativity in creating opportunities.
    That goes back to what I will assume is a major weakness for many Six Sigma efforts. Black Belt training in many cases has come down to basic quality and statistical tools, and a project strategy. That is where the rubber meets the road so to speak, but it misses the more important topic of which road and which direction.
    Finding or creating the Champion/MBB that can drive change beyond the obvious problems and benefits is a key component. That individual is frequently not identified or mis-identified by salary figures and credentials.

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    #66183

    Earle Richardson
    Participant

    I agree that Six Sigma is a great idea for small companies, or any size company. The challenge, I believe, is not that there is a lack of large dollar savings, but a lack of imagination or insight.

    One project I developed many years ago was a very simple cash flow management problem: put the money in the bank when you get it. Simple enough. But two other suggestions made at the time were not acted on until twenty-five years later, and the other’s adoption was just announced a few days ago!

    I teach management topics at local colleges and universities, and even among the MBA students you will find a lack of imagination. To be successful one needs breadth of vision, and depth of insight.

    You also need skills: accounting, statistics, operations research / management science, etc.

    Of course, you also need top management support, and a management that is educated. One of the texts I often use is Drucker’s The Practice of Management; several fairly large firms I have done work for have this book in their library – but that it has not been read is attested by the fact that the sign-out library card is blank, and the books are in mint condition. The price sticker was still on one I saw five years ago: the price was $6.95. The paperback version today is $14.95.

    You can lead a horse to water…

    What do you think?

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    #66191

    Cooper Crouse
    Participant

    Charles,

    I think you right about the four listed. I would add having a vision of Six Sigma that supports the company’s strategy, in at least one area. For instance, becoming the absolute low cost producer and applying Six Sigma in operations and, more importantly, in engineering using DFSS.

    Cooper Crouse

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    #66198

    Andy Brody
    Participant

    It would seem appropriate to me that the “Large Company” mindset of many of the quality initiatives especially six sigma must come up with new perspectives, definitions, processes and operative parameters that will still allow them to be considered fully six sigma.

    Case in point. My company is a small OEM coatings manufacturer that is QS 9000; ISO 9001 registered. We have no opportunities for SPC. (We have challenged auditors to prove differently and they leave babbling with no suggestions.) I am the closest person to being free to work on projects but as the Quality Systems Manager, I also have other projects and responsibilities that require my attention. There are no project opportunities, at least presently visible that could yield a net savings of anywhere close to even 50K.

    I know extremely little to nothing about six sigma, but it may be appropriate for small, like-industry companies to meet and develop alternative six sigma strategies to submit to the six sigma powers that be wherever they may be these strategies for consideration and suggestions. Maybe many small companies could afford to share the expense of a black belt who could have time budgeted to each company in some fair fashion. The quality gophers like myself could act as on-site champions and green (or whatever) belts to oversee the projects.

    Just a thought.

    Andy Brody

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    #67506

    Kevin Beard
    Participant

    I can’t speak from experience of implementing 6 Sigma at a small company,  but from informal conversations with small business owners, this population is very interested in 6 Sigma and how it applies to their smaller operations.  I have a neighbor that has a 14 employee print shop, and he is very open to learning how 6 Sigma can be applied to his business.

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    #67510

    Anonymous
    Participant

    i worked in start-up compnay which was bought by one of the largest companies in the world. However,we’re still small company. I tried to implement the six sigma methodology ,which i was exposed to in my previous work in Motorola, however the higher managment excpet the operation and the engineer department managers aren’t supporting or aware of the benefits of the six sigma implementation. We released our first product due to implementation of  some of the statistical tolls that are recommended in six sigma methodology. However without the supporting of the higher management to implemnt the six sigma proccess i find it very difficult to implement this methodology. Our products have poor quality which i belive is a result of not fully implementing the six sigma methodology. I belive that without implementing the six sigma when we were start up company we couldn’t reach high yields and satisfaction from our customer. Another factor that is crucial for implementing six sigma methodology in a company is open minded employees and managers, especially managers or key employees. without it people will think that criticism is personal and you won’t get full co-operation and good information flow in the company. One of the main difficulty that i’m facing is the ignorance of my co workers to this methodology.
     
     
     
     
     
     

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    #67964

    isoquality.com
    Participant

    I have curiosity in reading that no opportunities in applying SPC in your workplace. My feeling is that auditor may be incompetent in SPC! In another word, you’re telling me that no variations in your processes!Let me quote one real-life example which is overlooked insofar. Our traffic police in Malaysia always released yearly fatality rate by saying the number of death in the road accdient either is higher or lower compared to last year. Many people say it’s impossible to apply SPC in this case simply due to no imagination and lack of understanding in SPC.A lesser number of death in a year does not mean the traffic system is improving IF the number of death is still within the control limits and vice versa is true.Shall we say SPC cannot be applied in the traffic police department? Many people say YES.But I’ll rather say NO by just using a little bit of our imagination. The opportunities to use SPC is in any place. No such thing SPC cannot be applied in your workplace in my opinion !

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    #67966

    S. Aleck
    Member

    What?

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    #67976

    isoquality.com
    Participant

    Sorry for your confusion with my “third language” used in this forum. BTW, SPC is nothing to do with second or third language or control chart plotting etc. Without a full understanding on its concept, many quality practitioners still in confusion on what is SPC and concluded that SPC is useless.

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    #68062

    Niraj Goyal
    Participant

    Hi,I have read with great interest amd sympathy in this forum the problems of implementing six sigma in small companies due to the costs vs benefits not being commensurate. There was another reference in this forum about the need of mindset change for successful implementation of six sigma and the prohibitive cost of consultants in US for this activity (@3000-4000 per day)We have set up a company, Cynergy Creators Private Limited, for six sigma training and mindset change, which would suit a lot of the smaller companies referred to here. Since we are based in India our costs are a fraction of the costs indicated above.
    Our credo is “Business results must result” and we facilitate the internalisation of techniques by training as groups solve problems and achieve large improvements and savings.

    We have a client (small company as defined here) based in the US and have helped him achieve significant savings in one and a half years of work. These savings are larger than the figures of $30-40K per project stated here but smaller than the $175-250K quoted for black belts. We follow the philosophy that the operating managers can be trained to do the six sigma job and help train them in the techniques as well as change the mindset of the whole organisation.We will welcome any enquiries.Niraj Goyal

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    #69393

    P N Dhawanjewar
    Participant

    We are a leading IT product manufacturing organization in SSI Catagory with International Quality. We are already operating under ISO9001 QMS since last 7 years with other good practices in place. We wish to further improve our overall Business performance by following best practices in all areas of our operations.

     
    Any one in India who is willing to offer services in this direction please contact thru e-mail. Particularly we are looking for understanding of SIX SIGMA Quality requirements, its establishing and implementing the process. For this please send further details on how & what services you can offer in this regard.
     
     
    P N Dhawanjewar
     

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    #69394

    Niraj Goyal
    Participant

     
    Hello,
     
    I represent a company based in Mumbai called Cynergy Creators Private Limited, We help train companies it Six Sigma and TQM. The name Cynergy connotes out philosophy – S(C)ynergy between people and techniques.
     
    Our Credo is Business Results must Result. We do this by training the organization and facilitating the implementation of our training until it is internalized.
    This is done in 2 stages:
    1            Creating the Six Sigma Awareness and Quality Mindset            – A highly workshop lasting two days for all employees in batches
    2            Train in detailed Six Sigma techniques and facilitate cross-functional teams to build a few success stories of major improvements using the techniques including cascading the process down to the operating levels.
     We currently consult in the India and US.
    We have had great success with applying these techniques in an IT enabled service company. You can refer to a case study of this company “Digitzing Data” which was displayed on isixsigma a couple of weeks back.
    We will be pleased to assist you. For further details please e mail me at the [email protected].
     
    Regards,
     
    Niraj Goyal
     

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    #90597

    Arnel
    Participant

    10 English  Second Language

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    #122491

    Deva
    Participant

    Hi Guys,
    Can you quote me some of the small companies that evolved as successful role models in implementing Six Sigma.
    Thanks
    Deva

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