Inside Small Business | Small Business & Home Business Marketing
Small Business and Six Sigma: a Powerful Combination
Marcelo Cazado, New Entrepreneur
Small Business and Six Sigma: a Powerful Combination
Six Sigma is a well structured project methodology that aims to reduce variation in business processes. It is currently used in most of the major corporations worldwide. From a Six Sigma perspective, variation is evil. For instance, let’s assume you have an average of 80% customer satisfaction with your products. Depending on the business, this figure may be fair. However when you start analyzing it and breaking down the data you may find out that while sometimes your customer is 100% satisfied, for many times your customer satisfaction level is around 60%, which is pretty bad. Ideally all business indicators should exceed the customers’ expectations and also they should not present large variations. Six Sigma’s motto is “show me the data”, so it prevents a lot of unproductive discussions based on personal opinions.
For countless times I have been asked if Six Sigma is applied to small business. Some time ago, I was not quite sure if and how a small company could engage in a Six Sigma implementation. But not anymore.
Actually these days I do recommend Six Sigma as a strong and disciplined methodology which brings positive outcomes to any business, whatever size. Although Six Sigma is not the last panacea that solves all business problems, it may be applied to processes where their outcomes are expected to reach a minimum level and where their variation is not desirable.
There are many consultancies companies in the market that could help out small businesses implementing a Six Sigma mindset between entrepreneurs and their teams.
From my previous experience, I consider it a journey worth taking. Certainly quantifiable benefits will exceed the investment on training.
My name is Marcelo Cazado and I am a new entrepreneur. My business is a management consultancy company called Andoha and I may be reached through e-mail at mcazado@andoha.com.
Posted on Thursday, November 1st, 2007 at 7:56 am and is filed under Business, Entrepreneurship, Marketing, Money/Finance. You can follow any responses to this entry through the RSS 2.0 feed.
Marcelo – I’m a black belt and I completely agree with your thoughts on applying six sigma to small businesses. Most businesses don’t get it because they either don’t have the time (fighting too many fires) or they think that it is only for manufacturing. Most of what I have experienced in the projects that I have done have focused more on Lean than six sigma. I have also found that most people in a given process “know” what the solutions are, they just don’t know how to verbalize them. Show the business leaders what their process really looks like (in a map) and overlay lead time / NVA / VA time with that and ask them if that is acceptable to them / their customers. That usually gets them to see the light. Remember, most small businesses start out as lean but as they grow, this changes and results in inefficiencies in the business impacting their customers and their bottom line.