January 2002

Vol. 4, No. 1


Six Sigma and More:
Six Sigma Simplified for small organizations

by David R. Schwinn

I just received an email from an old friend, asking, “What’s the ‘beyond’ in the title of your column?” I’m glad he asked, since his question prompted me to get a little clearer about a presentation I made last month at the 10th Annual Quality Dayton Awards Celebration.

They asked me to bring a message to local small business owners and executives about Six Sigma. The Six Sigma I know about is oriented toward the cost side of large manufacturing organizations. It costs a lot of money to get started, and as with all changes, there are pitfalls that enthusiasts sometimes find. For example, in order to recognize Six Sigma successes, very simple improvements may be made using needlessly complex Six Sigma tools. By focusing only on these “successes,” systems that ought to be redesigned are simply improved. The underlying management values, philosophy and intent may remain unclear and sometimes even a little dark. And, Six Sigma cost reductions occasionally result in deterioration of other aspects of performance such as quality and delivery to the customer. I know that these shortfalls may not be the intent of Six Sigma, but I hear and read enough about them to believe there may be an opportunity for improvement as Six Sigma technologies are applied to small organizations.

So, I developed Six Sigma Simplified (S3). I am advocating it as an approach to Six Sigma tailored for small organizations. What I have said about Six Sigma in previous columns is consistent with S3. In this column, I will suggest entering the Six Sigma process in a way that requires minimal upfront investment cost and permits an organization to delve ever more deeply into Six Sigma as it pays for itself.

The trick is to start small. Get just the training required to “pick the low hanging fruit” or, as another friend, Bud Lunsford, once told me, “shoot the fat rabbit.” You can begin S3 using the process I suggested in last month’s article to get to that first project. I’ve included a summary of a relatively simple process you can use on that first project. It may, in fact, work for many other projects. My guess is that you will need more sophisticated processes as time goes by, but this is a good place to start. Once your internal S3 consultant is comfortable with this simple process and the tools that go with it, get started. Here are a few personal, real life examples of small organizations starting small.

  • A food processor used the plan-do-study-act (PDSA) process, a flow chart, a control chart, a Pareto chart, and brainstorming to reduce shipping errors. The company saved $14,000 in annual shipping costs and got happier customers. They did not calculate the return on investment, but it must have been high since the most costly change they made involved adding mirrors to improve the lighting. That savings provided the seed money for more in-depth S3 training.

  • A foundry, using only cause and effect diagrams and control charts worked to reduce their scrap by controlling the quality of their sand, saving $140,000 in annual scrap with no significant investments.

  • A printing company used only run charts, control charts, and brainstorming to enter new markets and increase its sales.

  • A manufacturer of control cables used run charts, control charts, flow charts, and a little common sense to save $12,000 in annual scrap. Teams accomplished this by revising a few specifications on incoming material and providing some operator training.

  • A manufacturer of customized manufacturing conveyors saved $10,000 annually in lost labor by simply revising the process by which the stockroom provided parts to the assembly area. Tools: flow charts, Pareto charts, run charts, and control charts.

  • A state-run training facility that provided residential services to persons with mental retardation also started S3 at the entry level. This facility, while a little larger than the organizations above, still had fewer than 300 employees. The organization was paying $1 million a year in overtime to cover unforeseen employee absences. By using cause and effect diagrams, Pareto analyses, flow charts, control charts, and broad employee involvement, the agency identified a state-mandated policy that was causing the problem. They asked the state to permit them to suspend the policy for a short trial period. They also set up a peer review board to decide on all employee requested absences. The problem went away. Moreover, the state extended the policy suspension to other training facilities in the state. A million dollars is not a bad return on learning and applying a few simple tools.

I do not intend to denigrate the power of complex tools such as experimental design. But entry into S3 is much easier for small organizations if they start small and let the beginning savings feed the more in-depth approach. So, what’s the ‘beyond’? For me it’s the S3 approach, an entry into the world of Six Sigma for small organizations that:

  1. Recognizes the need to be clear about values and assumptions.

  2. Recognizes that a Six Sigma approach is not always the best approach.

  3. Starting small and minimizing the initial investment makes sense.

  4. Explicitly recognizes that a Six Sigma effort can focus on the revenue side of the organization, as well as the cost side.

  5. Explicitly recognizes that any kind or size of organization or community can benefit from Six Sigma technology.

As always, let me know what you think. You can reach me at support@pqsystems.com


 

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