Six Sigma :Your Resource for Strategic Management

Lean and Six Sigma Deployments

Posted by: meikah | 2 September 2005 | 3:00 am

In my July 15th article, I introduced the concept of adding Lean to Six Sigma deployments. As you’ve known a combination of the two will result in a fast and a streamlined process improvement.

The current trend is that more and more organizations are realizing the combined benefits of investing in both Lean and Six Sigma. The benefits are:

1. It adds a significant value to customers.
2. It encourages top and bottom-line growth.
3. It allows an increased intellectual capital from projects.
4. It spurs involvement and excitement throughout the workforce.
5. Continuous improvement becomes culture-based, thereby both internal and external relationships also improve.

How do the benefits track over time when investing in Lean Six Sigma? Air Academy Associates has found the following three deployment trends and characteristics summarized in the following graph:

Why then would you invest in both Lean and Six Sigma simultaneously?

“Market forces, including global competition, commoditization and product/service complexity continue to challenge business. ?Price? is established by the market, not by the business. To maintain reasonable profit margins, the options for business include reducing waste, queuing times and extraneous variation or cutting the costs of operations in terms of labor, material costs, material utilization, debt, etc. Lean and Six Sigma combined effectively attacks waste, queuing times and variation. Investing in both prevents the need to use substandard materials while providing for reasonable profitability through improved operational efficiencies.”

Tags
streamlining
waste reduction

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Six Sigma for Customer Activities

Posted by: meikah | 1 September 2005 | 3:28 am

The common practice for many companies, their relationship with customers stops the moment they have deliverd the product or service. Few companies take the extra step of understanding fully how the products or services are used or appreciated by their customers.

For Six Sigma companies however quite the opposite is happening. They aim for growth by understanding customers? issues, problems, and expenditures. They make it their business to know that the customer has to bear many costs associated with purchased products and services. In reality, the purchase cost itself is a small part of the customer?s total costs.

For example, it has been estimated that 40% to 50% of all information technology spending is on maintaining existing systems. This has many IT companies focusing on developing new offerings in an effort to gain customer wallet share. There is a wide range of ongoing expenditure related to the customer?s use of the product, from maintenance and repair to operator training.

Using Six Sigma methods such as core and peripheral activity mapping and brainstorming can generate a wide list of related customer costs and activities. This information enables the company to know their customer’s total economics. Consequently, they are able to look systematically at each customer activity and analyze it for ways of expanding and improving their offering. As the offering is likely to be new, or require a major change in an existing product or service, it is best to follow a rigorous Design for Six Sigma (DFSS) approach. The DFSS approach ensures that the new offerings will meet customer?s requirement and is sustainable.