Healthcare is important to all of us. We like to believe that not only are we being cured of our ailment, but that our healthcare provider really does care about us. If it is our loved one that is being affected, we’d like to believe that the healthcare provider did everything within their power to save or improve their quality of life.

On the other hand, the healthcare provider has to deal with operating costs, government control of health insurance reimbursements, rising malpractice lawsuits, among other financial issues. It is safe to assume that rising healthcare costs isn’t all the fault of the economy; some of those costs could be attributed to the providers not being as efficient and effective as they could be.

Six Sigma to the Rescue

Six Sigma is a data driven process, which means the decision maker is…data. So gut instinct, intuition, even past history doesn’t play any part in changes that need to be made in the present.

This data includes Six Sigma’s own tactics that will prioritize and isolate the issue at hand; then given a time frame (usually 4-6 months) to improve the issue by 50%. Please understand that Six Sigma’s ultimate goal is to get the problem corrected to as near perfection as possible.

The healthcare industry is the ultimate service industry. So as an example, you’d have to define the patient’s needs, requirements and the process that is being targeted for improvement. Each improvement has its own targeted requirement. Patient satisfaction is top priority in the healthcare industry, and it looks like Six Sigma is making its mark.

6Sigma.com has many clients across the healthcare field, including Blue Cross Blue Shield, California Department of Mental Health, Vanderbilt University Medical Center, Aetna, among others.

If you would like more information or are interested in one of our courses please visit the 6Sigma.com training class schedule.

Learn more information about 6Sigma.com’s Lean Six Sigma training coursework, available as classroom, onsite, or online options.

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Ask yourself, do you want to deliver faster Six Sigma projects that don’t overstep your budgeting parameters? Then it’s essential for you to outline a detailed plan in your project charter. Your plan will act as your guide through the rough waters of process improvement.

Key performance indicators are highly useful tools here, enabling you to identify precisely which actions benefit you as a company. As such, there are numerous KPIs to help you on your Six Sigma journey, one of which we look at today: Project Cost Variance (PCV). Join us and learn how you can use PCV to deliver Six Sigma projects on time and on budget.

Stay Focused with Project Cost Variance

It’s important to know that Six Sigma relies on the measurement and analysis of process issues. Controlling problems allows you to create solutions that prevent them from recurring, benefitting the business in the long- and short-term. Without a strong plan to follow, you’re likely to lose sight of your goals and business needs. Losing track of your priorities will only send you veering off budget towards slow delivery times. Moreover, this doesn’t just impact you, but also your customers, who depend on you for quality products and services. If customers don’t see any value in your services, or if they see you as unreliable, they’ll take their business elsewhere. For you, this is detrimental, but Six Sigma can help. First, however, we must define cost variance.

What is a Cost Variance?

A cost variance is the amount by which your project exceeds or falls under your maximum budget. Cost variance is one of two key areas that you should monitor throughout your project, the other being schedule variance, i.e., how early or late you are to meet project deadlines. You can use the following equations to calculate both cost and schedule variance:

• Cost Variance = BCWP (budgeted cost of work performed) – ACWP (actual cost of work performed)
• Schedule Variance = BCWP – BCWS (budgeted cost of work scheduled)

What is Project Cost Variance?

PCV is the process of evaluating your project’s financial performance. You should compare the budget you agreed before starting the project with the actual amount you spend. You can calculate PCV by finding the difference between BCWP and ACWP. Your ideal project cost variance should be when your BCWP equals the same as your ACWP. Your project cost variance provides otherwise unavailable insight into your finances throughout the scope of your project. Using it to your advantage allows you to monitor when and where you breach your budget. When you use PCV together with DMAIC, you can actively control your finances, targeting areas for improvement, like overspending. The result is a more focused, efficient, and successful project.

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All organizations experience change. Change occurs when a company expands into new territory or manufactures a new brand or product. Change happens when new clients jump on board and the old way of doing things doesn’t deliver exactly what they need. Change is the order of the day when two companies merge or when a new CEO is appointed.

Change is inevitable when a company continues to grow and needs new and better ways to exploit opportunity. Outstanding companies embrace change and put a premium on change management.

In a nutshell, the role of change management is to successfully manage change. Change management is primarily concerned with three basic elements:

1. The Nature of Change
Naturally, it all begins and ends with change. The key to successful change management is to understand clearly what change involves and to implement the correct plan on how to deal with it.

To deal with change, an organization must ask the right questions. What is the nature of the change that it requires to be managed? What are the goals of this change and what is necessary to achieve them? What are the key departments involved and how many of their people will be affected? Who is the sponsor of change and who will be in charge of change management?

The organization must mobilize a team to address change. The team may include project leaders within the company or external specialists who are more familiar with the technical side of the change. This team can either be under Human Resources or assigned under the department where most of the change takes place. The sponsor of the change must create a team structure that best addresses change management.

2. The Repercussions of Change
Change management has two perspectives: the organization and the people. The repercussions of change are usually strongest in the rank and file. They manifest themselves in two areas: technical and behavioral.

In the technical area, change management is concerned with whether the skills of employees are sufficient to deal with changes in their deliverables and whether the company’s systems and processes adequately support the attainment of these deliverables. Is additional training necessary? Will the company have to hire specialists and new project leaders? Does the company have to tweak or drastically alter its systems and processes? These are the questions that change management must address.

In the behavioral area, change management is concerned with how people deal with change and whether this affects their behavior and performance on the job. Is there resistance to the new way of doing things? Are employees stressed or depressed and does this affect their productivity? Is there resentment, disloyalty, mistrust, envy? The behavioral area of change management can sometimes be the most difficult to manage.

3. Addressing the Imperatives of Change
Based on the first two elements, the organization must now determine strategy and draw up a plan of action to address the imperatives of change.

This plan should include a roadmap that gives a step-by-step account of what the organization must do to manage change properly. The plan should have provisions for training employees to develop new skills, coaching them as they use these new skills and motivating them to fully adapt to the new way of doing things. The plan should also anticipate resistance and how to deal with it.

The change management team should also plan how to communicate change to employees in a manner that emphasizes its benefits, addresses resistance and prompts them to embrace change.

In closing, the plan should ensure that employees have successfully adapted to change and that the desired levels of efficiency and productivity are achieved on a consistent basis.

Learn more information about 6Sigma.com’s Lean Six Sigma training coursework, available as classroom, onsite, or online options.

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What is Business Process Management and What’s its use?

BPM is a stacked practice of optimizing and continuously improving operational processes. It helps organizations achieve the highest levels of efficiency in time and cost performance. This modular structure of BPM has been the guiding principle for a successful business for a long time. It was 1911 when Frederick Winslow Taylor (Father of Scientific Management) published the 4 principles of scientific management. They go as follow:

• Replace working by “rule of thumb”. Use the scientific method to study work and determine the most efficient way to perform specific tasks.
• Rather than simply assign workers to just any job, match workers to their jobs based on capability and motivation for maximum efficiency.
• Monitor worker performance, and provide instructions and supervision.
• Distribute work amongst managers and workers so that the managers spend their time planning and training.

According to Workflow Management Coalition,

“Business process management (BPM) is a discipline involving any combination of modeling, automation, execution, control, measurement and optimization of business activity flows, in support of enterprise goals, spanning systems, employees, customers, and partners within and beyond the enterprise boundaries.”

The Association of Business Process Management Professionals defines BPM as,

“A disciplined approach to identify, design, execute, document, measure, monitor, and control both automated and non-automated business processes to achieve consistently, targeted results aligned with an organization’s strategic goals. BPM involves the deliberate, collaborative, and increasingly technology-aided definition, improvement, innovation, and management of end-to-end business processes that drive business results, create value, and enable an organization to meet its business objectives with more agility.”

Gartner too has a take on what BPM is all about,

“The discipline of managing processes (rather than tasks) as the means for improving business performance outcomes and operational agility. Processes span organizational boundaries, linking together people, information flows, systems, and other assets to create and deliver value to customers and constituents.”

There are multiple takes on BPM. But the definition comes to only one conclusion. BPM is any combination of methods used to manage a company’s business processes.

Business Process Management System

A Business Process Management System is comply used in mid-to-large organizations. The system assists in automating business processes through various styles of workflow apps.

Growth in digital solutions, AI technology and cloud-based management have encouraged businesses to use business process management. This has led to growth in the business process management market.

The system processes data that might be grouped, analyzed or improved using the lifecycle process such as — expense reporting, PTO requests, employee onboarding, invoicing, account management, compliance management, loan origination, CRM, project management, and more.

The system tends to focus on long-term analysis and improvement rather than providing one-time solutions.

To give pointers, a BPM system does the following:

• Enables complex business creation, spanning across multiple departments and locations
• Monitors and maintains processes to ensure optimal performance
• Modifies existing processes to facilitate change

Business Process Management and Six Sigma

Similar to the BPM, Six Sigma is a process management methodology designed to improve process quality by removing errors and defects. Often in organizations, the success measurement is done by measuring the Six Sigma deployment and how much it grossed ROI-wise. But sometimes, there might be some reports in the sheets with saving errors. This happens due to executives are unable to calculate a certain amount as the savings are in the silos. This necessarily does not impact much on the enterprise level, but it does leave an impact.

This is where the BPM and Six Sigma merge to create a unique framework where executives can easily confront every shortcoming in the first go.

Business Process Management and Six Sigma Offering

Six Sigma methodology is a driving force in today’s age that can influence BPM. Such that, BPM can be regarded as a broader and inclusive approach, while Six Sigma contributes for the tools and techniques. Six Sigma supports project executions and shows how measurements and data are to be examined and concluded.

This integrated approach of BPM and Six Sigma has two key fundamentals:

• Improve business process flow and speed
• Delight the customers with speed and quality

BPM alongside Six Sigma drives positive outputs of:

• Providing Framework – The merger of BPM and Six Sigma helps to uncover the information that supports eliminating the non-value-added work. It showcases how it can be tackled with well-defined activity or a group of steps.

• Weakness Coverage – Both the processes, BPM and Six Sigma, has their individual shortcomings. Merging them negates those shortcomings, thus providing you with a comprehensive, stable, and productive approach to operational excellence.

• High-Profit Margin – It has been known that using any of the two, BPM or Six Sigma, yields in higher ROI. Now imagine what the ROI will be when these two are merged!

End Thoughts

The BPM’s ability is to understand processes and workflow through modeling and examination of inputs, outputs, and performance. It has its moments where it might fall off, but to fill in the potholes, one can utilize Six Sigma with its rigorous approach to data collection and analysis. Both the processes go hand-in-hand, where one monitors the process improvements and the other provides tools to automate the process improvements and connect them to the entire organization.

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Here are the three methods to know:

• The Contact Method: This method will physically put a deterrent using the shape, size or color of the item. For example, if one constant mistake is that a part is placed upside down on the product, the design is altered so that the only way to place the part is the correct way because it only fits if placed correctly. This could include a switch that limits or prohibits incorrectly installing parts.
• The Constant Number Method: This could also include a fixed number of parts used. If a set number of movements are not made, there is an alert. Another example would be that a certain number of parts are at each step in the process. If you have parts left over, that means something went wrong. All parents have experienced this at one time or another while building a bike or a piece of furniture for their kids.
• The Sequence Method: A set amount of prescribed steps are in said process before the next stage is rendered. This could be boxed opening in a certain sequence, color coding, and tagging, and then inspecting to ensure that important steps were completed. The theory behind poka-yoke is if it can’t eliminate the chance of error completely, then there should be an immediate warning. 

For more information on our Lean Six Sigma courses or services, please visit 6sigma.com. 

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The beauty of Six Sigma’s DMAIC is it’s simplicity. The acronym tells you what to do; there isn’t any secret being kept or confusing descriptions to be had. 

BPM could actually be compared to the DFSS or DMADV, which we all know is used when designing a new product or service that doesn’t exist in the way that is needed. 

What Steps are in Business Process Management (BPM)?

1. Design: Must include customer requirements and taking into account current issues; design an improved process that will reduce existing issues and address possible future issues.
2. Model: Takes design and does what-if scenarios in real world applications.
3. Implementation: Creating process flow, data mapping and such.
4. Execution: Staff training, organizational changes to be in symmetry with the new processes.
5. Monitoring: Processes are monitored and data is collected.
6. Optimization: Process data is analyzed to see how well the new process performs.

Note: This is done on a continuous basis. Hence Business Process Management!

Six Sigma DMAIC Steps

Define: The problem, goal, reason the issue needs to be resolved.

Measure: The current state as a baseline and use it as a starting point for improvement.

Analyze: The root cause, identify with data-driven tools and validate as to why said is is happening.

Improve: Identify some creative solutions to get to the root cause so the issue will be fixed once and for all.

Control: Maintain the improvements and sustain the success of those improvements. 

For more information on our Six Sigma training courses and services, please visit 6sigma.com.

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Moreover, forecasting can also affect your business’s growth and market potential, which is why accuracy is important. There’s no use expanding into a specific market if there’s no profit there! Think of it this way: if you have fewer competitors, you can price higher, but only when demand is also high.

When entering a new market, forecasting can provide essential insights to help you make the best decisions. Much of this comes down to estimation, but all predictions come from raw facts. You can’t refute facts. So listen to them.  You’ll be an astounding success for it. Learn how you can accurately forecast your company’s demand with Six Sigma.

Useful Forecasting Techniques

There are multiple different methods you can utilize when forecasting demand. In any business, it is typically the management and business owners that perform this role. Using historical data allows your higher-ups to identify demand for specific products and services. If demand points to something already in existence, simply take that product and deliver it to the customer. You can also use forecasting to recognize potential demand for new, different products. All you need to do then is use your findings to produce what customers want.

Similarly, test markets can prove highly beneficial when it comes to forecasting demand. Test markets are simply a type of micro-market, generally found in cities, that reflect the demands of larger markets. Look at your test market. Is the demand high? If so, this tends to suggest a similar demand in larger markets where your product will almost certainly perform well. The only way to know for sure is to try. And with strong forecasting to back up your decisions, you’ve nothing to worry about.

Why Forecasting Is Essential

For those new to forecasting demand, we can understand you may be skeptical. All we can say is, don’t be. The key to using Six Sigma to great effect is to open your mind to new ideas. Not every business responds well to Six Sigma ideas at first but is their resistance that causes such friction in the first place.  Demand forecasting and estimation are key tools in Six Sigma businesses, both of which are integral to effective inventory management.

Remember, businesses like yours purchase inventory based on information gleaned from demand forecasts. Imagine you have a chain of grocery stores that increase their stock of items like ice cream in summer because past data tells them demand increases then. By neglecting to utilize accurate demand forecasting, you run the risk of failing to satisfy, if not exceeding, your inventory needs. More is not always better, and too much inventory can lead to significant losses. You will lose some items, particularly perishables, as their expiration dates pass by.

Moreover, too little inventory will have customers in uproar, leading to missed revenue opportunities. They may even turn away from you completely, losing value in the customers’ eyes. Once that happens, you’ll find it difficult to recover.

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Ask yourself, do you want to deliver faster Six Sigma projects that don’t overstep your budgeting parameters? Then it’s essential for you to outline a detailed plan in your project charter. Your plan will act as your guide through the rough waters of process improvement.

Key performance indicators are highly useful tools here, enabling you to identify precisely which actions benefit you as a company. As such, there are numerous KPIs to help you on your Six Sigma journey, one of which we look at today: Project Cost Variance (PCV). Join us and learn how you can use PCV to deliver Six Sigma projects on time and on budget.

Stay Focused with Project Cost Variance

It’s important to know that Six Sigma relies on the measurement and analysis of process issues. Controlling problems allows you to create solutions that prevent them from recurring, benefitting the business in the long- and short-term. Without a strong plan to follow, you’re likely to lose sight of your goals and business needs. Losing track of your priorities will only send you veering off budget towards slow delivery times. Moreover, this doesn’t just impact you, but also your customers, who depend on you for quality products and services. If customers don’t see any value in your services, or if they see you as unreliable, they’ll take their business elsewhere. For you, this is detrimental, but Six Sigma can help. First, however, we must define cost variance.

What is Does Cost Variance Mean?

A cost variance is the amount by which your project exceeds or falls under your maximum budget. Cost variance is one of two key areas that you should monitor throughout your project, the other being schedule variance, i.e., how early or late you are to meet project deadlines. You can use the following equations to calculate both cost and schedule variance:

• Cost Variance = BCWP (budgeted cost of work performed) – ACWP (actual cost of work performed)
• Schedule Variance = BCWP – BCWS (budgeted cost of work scheduled)

What is Project Cost Variance?

PCV is the process of evaluating your project’s financial performance. You should compare the budget you agreed before starting the project with the actual amount you spend. You can calculate PCV by finding the difference between BCWP and ACWP. Your ideal project cost variance should be when your BCWP equals the same as your ACWP. Your project cost variance provides otherwise unavailable insight into your finances throughout the scope of your project. Using it to your advantage allows you to monitor when and where you breach your budget. When you use PCV together with DMAIC, you can actively control your finances, targeting areas for improvement, like overspending. The result is a more focused, efficient, and successful project.

The post Six Sigma KPIs: Defining Project Cost Variance appeared first on 6sigma.

Staying Aware and Accepting the Inevitable

It’s an unavoidable fact. If you’ve built a successful Six Sigma organization, sooner or later, someone will try to copy your success. While this is somewhat inevitable, you don’t have to sit back and accept it. Take an active hand in deterring fraudulent practitioners from stealing your business. Just look at companies like Coca Cola and Apple. There are countless rip-offs, knock-offs, fakes, and counterfeits floating around. The same is true of Six Sigma.

Countless Counterfeits, Frequent Fraud

Some companies try to pass their services off as the real deal via a flimsy copycat name, e.g., China’s Sunbucks, Wu Mart, and HiPhone. But Six Sigma fraudsters have the audacity to use the Six Sigma name while offering up sub-standard training services. Even more disturbing, some fake practitioners use Six Sigma as a ploy to clean out your wallets, promising the world and giving you nothing. They may recognize your success and try to piggyback off it with a similar-sounding name and list of services.

Moreover, it’s not uncommon for criminals to send phishing emails claiming to represent your organization. We’ve even heard of fraudulent websites, whose only purpose is to draw in customers to exploit, that are virtually indistinguishable from their legitimate counterparts. As such, accepting and building an awareness of these risks is the first step to deterring fraud in the Six Sigma industry.

Innovation is the Key to Success

Our advice? Keep innovating in every way possible, as quickly as you can. Use Six Sigma techniques to improve your training services. Employ Lean principles and continuous improvement culture for an added triple-effect solution. Outpacing your fake competitors through sheer innovation will put you at the top of the leader board, making it clear to customers why you deserve their custom. Once they realize their bait isn’t catching, fraudulent practitioners will throw it somewhere else.

Maintain Strong Company-Customer Relationships

Six Sigma stresses strong reliance on data which practitioners use to make improvements. Customer satisfaction is a key driving factor behind business success and one that Six Sigma aims to improve by proxy. It’s difficult to improve customer satisfaction directly. There’s more to it than simple hocus-pocus. Six Sigma streamlines processes for added efficiency while improving quality through systematic elimination of defect. All this adds up to greater quality products delivered quickly into customers’ hands, driving up customer satisfaction rates. The key to deterring fraud is to demonstrate to customers why your business is the one they need.

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What is Capacity Analytics?

Remember, your capacity utilization is inextricably linked to efficiency and productivity. These two keystones enable your business to move along at a rapid pace, making prompt, proactive decisions on the go. As such, both have a large impact on profit. You can use capacity utilization analytics to measure your capacity, providing insight into how you’re currently doing. This is extremely helpful when trying to find solutions to low revenue, as you never know how much more you could be doing.

While there are similarities between customer utilization analytics and employee capacity analytics, they focus on different things. The key difference is that the former focuses on machinery and equipment as opposed to employees. Modern production machinery feature sensors which collect information on their usage. You can then analyze this data to gain useful insights into your efficiency. Moreover, you can then apply Six Sigma techniques to devise improvement solutions.

Your Guide to Capacity Analysis

First off, decide what area you wish to assess, be it admin, production, or another sector of your business. You should lay out a plan for analyzing the data before commencing the analysis. Consider your current capacity levels. Take a holistic approach, and you will gain a holistic understanding of the issues affecting performance and inhibiting change. You can then act on this information to change your operations for the better. Moreover, the capacity types you find may vary from business to business. Don’t forget to zero-in on hard and soft capacities, as well as factors like power distribution and leadership.

You should also lay out which tools and approach you wish to use. You could take an incremental approach which begins by identifying your current capacity, allowing you to build on this information, to create viable solutions. On the other hand, a gap analysis may benefit you more. This technique begins by defining the optimal conditions for your business, i.e., how they should be, so you can identify what’s missing. All you have to do then is fill in the gap.

Remember, each entity within your business progresses at a different rate. Paying attention to past analyses will help you track the entity’s course from then to now, allowing you to make decisions that will affect your future capacity. Moreover, don’t fall prey to generalization, as your conclusions will suffer from inaccuracies. Pragmatism is important here as too much information can be redundant. You’ll never need to perform analysis down to the smallest detail, so don’t waste valuable time. Instead, develop strategies to expand your capacity using Six Sigma process improvement. Use business analytics well, and you can transform your organization for the better.

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Calculate Your Customer Profitability Score

To calculate your customer profitability score, simply subtract the cost of supporting a customer from the revenues they generate for you. CPS is a highly useful decision-making tool, one that is pivotal when customer-company value exchanges are in flux. The company-customer relationship is often volatile, fluctuating in response to new information. Customers don’t always value the same things, with changing needs affecting profitability. Monitoring your value stream with Six Sigma provides insight into how you can manage changes to CPS. Moreover, it can also shed light on the value of new business versus the cost of lost business. Using Six Sigma techniques like root cause analysis, affinity diagrams, DMAIC, and hypothesis testing, you can do the following:

• Select customers to target that would benefit the company.
• Separate customers to retain from customers to drop.
• Decide which customers to cross-sell, plus what products to sell to them.
• Set prices for products and services.
• Set sales compensation rates and reward program entitlements.
• Recognize customer behaviors that generate or destroy value.

Multiple types of value determine customer profitability. If you are to make the most of CPS, we recommend getting to know each one.

Historical Value

Historical value derives from long-term company-customer relationships. It is most useful when ranking your customers regarding value, plus when selecting targeted marketing groups. Similarly, historical value also impacts on your assessment of pricing and budgeting.

Current Value

Current value comes from short periods of time, usually the current or previous month, as this coincides with reporting cycles. It tends to be highly volatile, as cyclical relationship factors don’t always register within such specific time frames. The benefit of current value is that it underscores the effects of changes in the customer relationship compared to previous values.

Present Value

Present value looks to the future, specifically at revenue and cost streams of current customer business. It projects future revenues and costs, helping to model the impact of price and service decisions before you implement them. Using it effectively requires patience, but the payoff is worth the effort.

Lifetime Value

Lifetime value also focuses on the future, while acknowledging projected revenue and cost streams from existing business and prospective customers. Implementing lifetime value requires insight into your customers’ repurchase behavior. Similarly, it also entails the likelihood of the customer increasing or reducing their future business with you. Lifetime value is the optimal customer value measurement and is appropriate for just about any decision-making situation. If you can use it effectively, you can maximize profit and increase customer exposure.

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Before You Begin

Planning is integral to Six Sigma project work. Remember, if you fail to prepare, prepare to fail. Before you commence any project work, ensure you have a sufficient plan to guide you through it. This should include your itinerary, as well as the strategies, techniques, and solutions you intend to employ. When working within a short time frame (weeks or months), it’s important you push yourself to create an effective plan.

Shorter time frames may seem like the easier option, but a lot can go wrong in a short time. Whereas, long-term Six Sigma projects allow you more time to course-correct if something goes wrong. With short-term projects, it’s imperative you take a disciplined and thorough approach to planning will ensure you don’t go off track.

Planning your project properly is beneficial for numerous reasons. Namely, it enables you to determine scope and outcomes. It also allows you to predict any would-be road bumps, and to measure, test, and correct visible problems before you begin. We’ve seen highly promising projects fail due to minor oversights snowballing into massive problems without project leaders realizing. When it comes to Six Sigma project work, you can’t afford to wing it.

In the Thick of It

Learning to leverage your Six Sigma tools effectively hones your creativity, allowing you to develop innovative solutions to problems you encounter. As a Six Sigma professional, you should know how to use your selection and decision-making tools to identify viable solutions. Don’t let yourself fall prey to intellectual snobbery. The answer isn’t always obvious. In fact, it’s sometimes a case of the more creative your solutions, the better. But, on the other hand, complex solutions aren’t always appropriate. Don’t forget about Occam’s Razor, i.e., the simplest answer is most often the right one. Don’t jump on your first idea, as it’s not always the most optimal solution. You should always approach problems from multiple angles to determine how to proceed. Once you understand the problem, you have the best chance of finding the right solution. The most common mistakes made in this area are.

Helpful Tools

We recommend applying hypothesis testing beforehand, to decide how to proceed, and DMAIC once the project has commenced. Hypothesis testing, while relying on data to first suggest a hypothesis, is primarily speculation. It helps to give ideas a test-run first, as doing so draws attention to problems that may crop up later. DMAIC, on the other hand, produces a data-centric understanding of problems you discover, on which you can then act. It’s essential to act quickly on short-term Six Sigma projects, and DMAIC provides all the tools for you to make short work of difficulties as they arise.

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Plan to Succeed

All you need do is browse the internet to find inspiration for your time-saving, cost-reducing process improvement plan. Using Six Sigma techniques like DMAIC and root cause analysis, you can identify problems on which to act. Similarly, Six Sigma also prompts you to devise solutions driven by data, with the potential for massive savings. For some businesses, it’s even possible to save up to 100 thousand dollars per year. Not only will this radically improve your cash flow, but you can then redirect that money to areas that need it, which could potentially drive greater savings. That’s like winning a scratch card, only to then win the lottery.

San Diego Six Sigma

Let’s look at some real-life examples of time and cost-savings. Only this year, San Diego enrolled city staff on a sixteen-week Lean Six Sigma course at UC San Diego Extension. The aim of this was to find ways of improving customer satisfaction and process efficiency. They certainly succeeded. Not only did they manage to reduce 911 call waiting times and speed up street light maintenance to minimize disruption, but also to improve customer service in local libraries. This shows that businesses big and small aren’t the only ones Six Sigma can benefit.

Almis Udrys, San Diego’s director of the Performance and Analytics Department, has a lot to say on the matter. For Udrys, Six Sigma represents a huge opportunity to reinvigorate city staff problem-solving skills. Skills that enable you to locate problems at the source and eliminate them to save time and increase cost-savings. Lean wastes like overprocessing, overproduction and human error are the usual causes of concern. Correcting these harmful issues will stand your business in good stead down the line.

The Secret to Saving Time and Money with Six Sigma

Six Sigma training doesn’t just revitalize your practical process improvement abilities. It helps you to look at problems from new perspectives. Naturally, you’ll want your employees to come complete with a wide array of skills that will benefit your organization. The business world is changing at a rapid pace, and Six Sigma can help you keep up by saving time and costs. The key to successful process improvement is for employees to open their minds to innovation, embrace data-driven decision-making, and commit to continuous improvement.

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Customer Focus

Airbnb takes advantage of the sharing economy’s popularity. Respect for customer expectations lies at the heart of their business practices, with their strong customer-focus overlapping with Six Sigma. One of several driving factors behind Airbnb’s success is the high rate of customer satisfaction they enjoy. Not only from those staying in the properties but also the owners who rent them out. Their motto is “A community build on trust,” which signifies some strong connections to Six Sigma thinking. Strong company-customer relationships are important in Six Sigma as they allow you to gain a greater understanding of customer need. The better your understanding, the greater your ability to serve the customer.

Enforcing the Rules

They also employ an extensive list of standardized community standards to which members should adhere. In fact, thousands of hosts, and guests become barred from using the site due to not following these guidelines. This is reassuring for the rest of Airbnb’s client-base and creates an environment of openness and transparency. But how does Six Sigma fit in here? Take a look at what Airbnb does. By actively monitoring processes and enforcing regulations to deter problems, it’s clear they’re using DMAIC.

While they seem to take a laissez-faire approach, they are, in fact, surprisingly hands-on when necessary. There’s no need for them to define their primary problem, as they already know it. But by measuring and analyzing issues such as rule-breaking, they can take actions to correct and improve them. As such, they exercise a great deal of control over their business operations often without having to interfere at all.

Resolving Problems with Six Sigma

One of the benefits of listing strangers’ homes for rental, means customers can see what they’re in for. TV and internet advertizing can sometimes be misleading. Who hasn’t booked a room thinking it was The Ritz, only to discover it was a hotel from hell? Airbnb provides an accurate picture while never setting up false expectations. Moreover, they originally got off to a rocky start, as many customers were uploading poor quality photos to the site. Naturally, this didn’t do their business any favors, and so they began professionally photographing all properties.

Here they recognized a problem – one responsible for poor quality and profit – devised a hypothesis, and implemented a solution. The impact of this was clear, prompting them to direct more resources to that area. Customers don’t like to be disappointed, and one mistake can lose them forever. Airbnb understands how Six Sigma can help prevent this right from the start.

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