Determining an organization’s readiness to embrace Six Sigma is crucial at the onset. Chapter 6 of the book The Six Sigma Way devotes on this assessing if your organization is ready for change. “The starting point in gearing up for Six Sigma is to verify that you’re ready to?or need to?embrace a change that says There’s a better way to run our organization.
Readiness means being capable to embrace change, a whole new way of doing things. To know your readiness, you need to consider the following:
1. know the voice of the customer, their needs, and develop some metrics for this
2. assess the result, output, yield, or the DPMO
3. evaluate if there?s still a room for improvement in the organization
4. determine which areas need to be improved
Readiness also considers the organization?s systems and its capacity for improvement. Timing is the key word here. Your organization may be ready for a Six Sigma initiative but is also undertaking other efforts or changes using another methodology. You must again, therefore, look at your cross-functional processes. Are they managed in such a way that everyone in your organization understands the whole process? In any case, it is only fair that the people are trained well.
Undoubtedly, Six Sigma efforts if undertaken well will yield amazing results for your organization. There are instances however that Six Sigma may not be right for you.
First, your organization is already a strong, effective performance and process improvement. Second, the changes are overwhelming to your organization, thus will impede their initiatives. Third, potential gains are simply not there.
If you think however that Six Sigma is right for your organization, your next focus will be on the cost and the kind of return you will get.
To know the exact rewards will be easy at the outset. But you can definitely make intelligent guesses by evaluating the rework, inefficiency, unhappy or lost customers and then estimate the amount by which you can reduce them.
Your assessment measure may not be perfect because you can only know the actual cost after you?ve started doing the real work of Six Sigma improvement. Still you need to establish some lead time. Plan your DMAIC from the first project to the next until finish.
Some of the most important Six Sigma budget items can include the following:
1. direct payroll - who will work full time on the project
2. indirect payroll - how long will the people devote on the project
3. training and consulting
4. improvement implementation cost - how much to install new solutions or process designs
Estimates of the cost will depend on your implementation speed, scale of your effort, and your general “risk profile.” These factors should not be compromised.
The Six Sigma Way: How GE, Motorola, and Other Top Companies Are Honing their Performance
