Organizations that do not subscribe to Six Sigma methodologies or the Six Sigma culture take a huge chance when implementing a “good” idea. This is because they don’t go through proper analysis and measurement for the data they need to take this “good” idea through to fruition. 

The management or those with clout decide that this “idea” will be successful, without any data to back up the decision. So they go ahead and implement the idea, perhaps in beta mode, to keep costs down and minimize risk. 

After the idea is implemented is when the success is weighed, and problems are addressed after they have affected the business in some unwanted way. An idea might sound good in theory, but until you have the data to back it up, you’re taking a risk with your established business.

Timing Is Everything

Problems must be identified, data must be collected, solutions must be brainstormed, and a carefully thought out plan must be obtained before implementation — and not after! This is why Six Sigma has tools such as statistical analysis and process mapping. These tools will aid in visualizing the issues and make it easier to come up with a solution.

By working to obtain the necessary data before you implement that idea, you will save yourself a great deal of time, money, and unnecessary stress.

Six Sigma tools are simple to use and reap huge benefits, even if you implemented them without first doing your due diligence. Some of these incredible tools are the 5 Whys, 5S, Value Stream Mapping, Regression Analysis, Pareto Chart, FMEA, and Kaizen.

When we say timing is everything, we are saying that prevention is better than a cure. Practicing due diligence is a small price to pay to increase the success of your business ideas.

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

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The elements of Six Sigma are all there. The research regarding milestones that the child should be having have been documented and proven so the data is there as proof. These programs work, and believe it or not, follow the DMAIC template.

Define: The early intervention program defines the problem and identifies those who are at high risk. Many are identified at lower socioeconomic levels who are having problems meeting certain milestones at a young age.

Measure: Through fun activities, data is collected and a current baseline is measured and compared to clearly researched data.

Analyze: After obtaining the important aspects, the data is analyzed to see exactly what is needed. It can be any number of therapies or interventions.

Improve: Set out what is needed to make sure the child is meeting these important milestones.

Control: Through ongoing classes and therapies, the progression of the child’s mental development can have amazing results. This early intervention program is basically a controlled study with steady improvement.

This program also has Kaizen, which we all know as slow and steady improvements built in. The learning and stimulation is disguised as fun play so the child responds positively to learning. Many children have prospered from this early intervention because they are left with a love of learning. Plus they have met their milestones, and some have even surpassed them!

Interested in learning more about the value of Lean Six Sigma methodologies? For more information on our courses and services, please visit 6sigma.com. 

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Exploring Lean Six Sigma and Environmental Improvement Initiatives

There are two incredibly powerful business trends which are shaping today’s corporate landscape. They are organizations’ demands for an increase in efficiency in production and the social imperative that companies reduce their environmental footprint. Modern process improvement experts have discovered that the two aims do not have to be mutually exclusive or unrelated. As a matter of fact, if a Lean Six Sigma implementation has environmental improvement as one of its objectives, it is more likely to become a permanent part of corporate operations and receive funding.

What change managers need to understand is that projects based on environmental improvement are not opposed or passed over because an organization’s management opposes them or that they do not care about the environment. They fall by the wayside because, by themselves, they are not presented as being significant enough for top level leaders to allocate significant resources to them.

However, a combination of environmental improvement initiatives and Lean Six Sigma is certain to sweeten the deal. Such combined projects are certain to appeal to managers because they offer both environmental and quality advantages to the organization.

Environmental Impact Analysis of an Organization

Getting into more detail, analysis of your organization’s environmental impact is a measure of how much your company impacts the surrounding environment. When you are busy operating business processes and the supply chain, there may be negative environmental impacts caused by your business that can occur with or without you knowing it. Among these are spillages of toxic waste, leakage, improper disposal of waste, and other kinds of contamination.

At times, these occurrences may not be easy to notice. Similarly, pinpointing the exact source of such contamination may be difficult. In order to avoid having an adverse effect on the environment, it is essential that you carry out environmental impact analysis.

The variables that you measure and how they are measured largely depends on the type of operation and the industry within which your organization operates. For most lean organizations, the carbon footprint, water use, energy consumed and the percentage of waste recycled are the most common metrics.

Connecting Lean Six Sigma and Environmental Impact Analysis

Carrying out regular analysis of your impact on the environment can be expensive and time consuming. However, when the right approach is taken, unnecessary costs can be eliminated. The initial data collection and analysis is what requires the most manpower, money and time. However, once you have perfected your processes after the first round, you can repeat the steps again after regular periods.

There are many Key Performance Indicators and variables that you can measure to establish how much of an environmental impact your business has. Still, it is important to select the right ones and stick to them.

For your organization to achieve this, it is recommended that you appoint a certified Six Sigma project manager. This manager should be at least a Black Belt. The project manager has the task of collecting the correct data from the right sources. The project team could be comprised of more Six Sigma experts who will collect, store and analyze data.

Once the appropriate data is at hand, you can use it to establish if there are any changes that you can make to your operations or supply chain. To do this, it is recommended that you compare the results of your organization to those of your competitors while also examining existing legislation.

Through taking a proactive stance with your environmental impact study, you could potentially save countless hours and avoid falling foul of strict environmental protection laws. The avoidance of fines can often be the biggest driver of improvement, to get the attention of management.

Conclusion

No matter whether you support climate change laws or not, the fact is that governments all over the world and customers are agitating for organizations and businesses to be run in an environmentally friendly way.

Companies that carry out production and manufacturing operations should expect to be the most affected by tough new environment-related legislation. However, through the reduction of waste and elimination of unnecessary production steps, your organization can be well prepared to avoid losing time and paying hefty fines.

In combination with Six Sigma methodologies, carrying out environmental impact analysis and acting on the findings is the best way to run environmental improvement initiatives.

To learn more, visit LeanSixSigmaEnvironment.org

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DMAIC and DMADV are two of the most common Six Sigma methodologies in use today. Businesses frequently rely on them to produce high quality with minimal defects while meeting the expectations of customers. While both are designed to help businesses to be more effective and efficient, they are certainly not interchangeable and are optimized for different process types.

Let us examine and similarities and differences between the two tools and see how businesses can decide the best strategy for optimizing their processes.

DMAIC vs DMADV: The Similarities

Let’s first see a basic overview of these two methodologies before we begin to compare them. DMAIC involves Define, Measure, Analyze, Improve, and Control phases while DMADV involves the phases of Define, Measure, Analyze, Design, and Verify.

There’s no denying the fact that DMADV and DMAIC have a number of similarities. Both these techniques use statistical tools to propose solutions to quality-related problems.

They are implemented by Green, Black, and Master Black Belts and target a reduction of defects to less than 3.4 per million available opportunities in accordance with the term Six Sigma’ itself. They both propose data-intensive solutions that derive from hard facts.

The Differences Between DMAIC and DMADV

The major differences between the two tools come in the way they handle the final two steps. In the case of DMADV, the Design and Verify phases involve the redesign of a process to meet the needs and requirements of customers.

This is in contrast to the Improve and Control Steps of DMAIC where the focus is on controlling and adjusting the process. In a nutshell, while DMAIC defines business processes and their applicability, DMADV focuses on customer needs and their relationship with products and services.

Let’s now consider how the tools handle measurement. DMAIC measures current performance while the DMADV technique measures customer needs and specifications. While DMAIC uses a control system to monitor the future performance of the business, DMADV proposes a business model whose efficiency can be verified through simulations.

In conclusion, DMAIC will help improve business processes to remove or reduce defects, while DMADV will help shape a business model that can meet the requirements of the customers.

When to Use Which: The Nature of the Project

It is critical to first determine the nature of your project to be able to choose from amongst the Kaizen, DMAIC, and DMADV methodologies. Businesses need to have a process in place that can help determine whether a project should be directly implemented or if the DMAIC, Kaizen, or DMADV methodology can contribute value.

If you have new product and service designs at hand, it is best to consider DMADV. However, this methodology might not always be the best to work with when considering the existing processes and products. If you do not have any existing product at all, you could use DMADV to implement the design of the product.

Experts recommend using DMADV when you are dealing with a process improvement that does not meet expectations.

DMAIC, on the other hand, works with pre-existing products and processes that no longer meet customer needs.

The best step forward, if a business does not possess in-house Six Sigma expertise, is to seek the support of Six Sigma Master Black Belts and Black Belts who can help make the decision between DMADV and DMAIC.

Conclusion

Six Sigma is a very powerful methodology that can help minimize defects and meet customer needs and expectations. However, choosing between DMAIC and DMADV can be a challenge at times even for businesses that possess Six Sigma expertise.

It is highly advisable to consider first the nature of the project you wish to apply the tools to. Businesses must have a mechanism in place that could determine the best step forward” proceeding directly or using one amongst the two methodologies, as the case may be. Six Sigma experts and Black Belts too can offer valuable insights into this matter.

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Many people in the logistics industry fail to realize just how important it is to optimize transportation and how much value improving fleet operations offers to the overall performance of a business. In spite of continually rising costs, ineffective utilization of logistics assets is a widespread problem and is characterized by haphazard and inefficient routing as well as empty backhauls after delivery runs have been made.

At the heart of the issue is the lack of total visibility throughout the transportation network and a lack of planning and strategy, connectivity and collaboration. It is possible to achieve all of the above by taking advantage of Six Sigma strategies alongside transportation management software.

Nowadays, fleet operations systems are built with the purpose of minimizing the risks of vehicle investment, lowering staff and transportation costs, increasing productivity and reducing inefficiency. The result is general optimization of an organization’s fleet management processes. Here are three ways to improve fleet operations using Six Sigma:

1. Fleet Operations Planning

Since fleet operations management has an essential role within planning and execution of transportation, optimization of your corporate logistics network is one way to increase profitability without having to compromise efficiency. When optimizing fleet operations with Six Sigma methodologies, two main areas are examined: shipment planning and optimization of dispatch.

Through effective shipment planning, your organization will find it easier to create efficient loads that fit in with your scheduling process while maximizing utilization of assets and ensuring compliance with industry regulatory requirements. On the other hand, dispatch optimization is an ongoing process which allows for ongoing evaluation of resource assignments and allocation of loads on the basis of real time data on events and conditions.

When used together, these two capabilities help to ensure that you have all-round visibility and integration of the whole logistics network, helping your business and its network of carriers to manage their fleet operations in a more efficient and productive way. For instance, optimization of route assignments from the outbound end and at the supplies end as well reduces the occurrence of empty backhauls.

2. Use of Fleet Telematics

The use of telematics is continuing to change how many fleet operators conduct their operations. Telematics work by vehicle performance information, diagnostic data and driver actions in order to give businesses a complete picture of the performance of the fleet on a daily basis and in real time.

A key advantage to be gained by using telematics is that your in-house fleet management team gains a greater degree of control over the process. The team can help you to then determine whether there are drivers who are not performing to the standards you expect. Telematics also help your team to develop more efficient methods of delivery by using the data obtained to design faster routes for them to use.

3. Committing to a Reduction in Fuel Cost by Eliminating Waste

There are several different techniques which you can use to limit your organization’s long-term fuel costs and reduce wasteful use of your fleet. Although fuel costs will almost certainly continue to rise, you can use fleet monitoring applications and tools to find out which vehicles are consuming an inordinately high amount of fuel. These tools may also be used to figure out the most effective routes that drivers can use, reducing mileage costs in the process.

Another way in which your company can commit to lowering its fuel costs is through retraining of drivers in the use of more fuel efficient driving styles. If a company takes a proactive stance towards reducing fuel consumption by its fleet, operations can continue at a high level of efficiency for years to come.

Conclusion

Your organization’s business and your fleet have different characteristics and needs from anyone else’s, which means that you also need to devise custom fleet operations procedures that reduce waste, save costs and maximize your profits. Through continuous improvement of existing fleet management practices, Six Sigma allows your fleet to operate on the cutting edge of efficiency.

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Six Sigma is a set of techniques and tools used for process improvement that was developed by Motorola and promoted by General Electric. These set of tools and techniques have a wide range of applications beyond manufacturing. The application of the Six Sigma methodologies in sourcing and procurement processes can lead to exceptional results in terms of business process improvement.

Six Sigma can be applied to a wide range of procurement projects, in spite of the level of process quality goals that have been set. The application of these set of tools requires that the process in question be clearly defined in order to be addressed within a reasonable period of time. It also requires that the process should produce significant returns to warrant the diversion of organizational resources into the task of process improvement.

The following are some of the instances where Six Sigma has been applied to achieve better procurement processes:

Reduction of Cycle Time

Lengthy procurement cycles can have an adverse impact on the budget. Also, long cycles tend to erode the commitment of the managers to the project. Using reliable data, a clear definition of the process, amongst other techniques, you can cut down procurement cycle time.

Six Sigma can be applied to the most fundamental aspects of your procurement process, be it invoice receipt and approval, drafting contracts, or sourcing process cycle times. Six Sigma seeks to minimize errors and perfect processes, while at the same time eliminating processes that do not adhere to the CTQ (Critical To Quality) benchmark.

Transaction Quality

Besides perfecting processes and identifying those that are not Critical To Quality, other projects that should be considered are:

• First-Pass Invoice Rates: Six Sigma methodologies can enhance the purchase order, invoice and receipt details to minimize data errors.
• Electronic Orders and Deliveries: Six Sigma enhances the process and allows you to make the most of electronic systems with minimal errors.
• Coding and Classification Codes: Requisitions need to be correctly matched with their corresponding classification codes.
• Spend with Line Item Visibility: Get more value from your SRM (Supplier Relationship Management) system by using visibility and analysis tools more effectively.

Six Sigma is a discipline and it may not be the standard to use to gauge some of these processes. However, getting over 90% results for these processes would mean that you are operating within world-class standards.

Adoption of Technology

From time to time, organizations find that they need to deploy new technology to gauge procurement performance and tweak it further. Six Sigma has been found to be an enabler in the adoption of new applications, IT infrastructure, and digital systems needed in these organizations.

One way the deployment and adoption of new technology can be enhanced is by tracking metrics such as the adoption rates of users, vendors, and external contacts. Some of the processes that can be tracked include:

• Tracking the Supplier Management Tools for User Adoption Rate: Supply management tools used in procurement such as AMD can achieve a 100% adoption rate compared to other organizational wide systems that are not tailored for specific end users.
• Tracking Percentage of Enabled Suppliers: Six Sigma proposes the use of the Pareto Principle. Focus on the suppliers contributing 80% of the spend, more than those contributing 20%.
• Tracking Indirect RFQs through E-Sourcing: Find out the total percentage of indirect RFQs. An 85% score is impressive, but an exceptional score for direct RFQs would be around 50%.

An ERP (Enterprise Resource Planning) software is the basic setup for the system required to generate transactional data. However, other applications may be integrated if the quality of the transactional data is found to be unreliable.

Compliance

We must acknowledge the fact that every process exists to generate a desired output. The output of these processes must adhere not only to customer’s expectations, but also to local codes and government regulations. The acknowledgement of this fact will help businesses avoid legal risks and costs associated with non-compliance.

Six Sigma based processes may need to be initiated to track some of the following issues:

• Data and information on contracts drafted, vendors on-boarded, issuance of purchase orders and receipt of invoices
• Renewals of expiring contracts, certificates and accounts
• Costs incurred through engagement with unwanted or blacklisted vendors
• Monitor Call For Bids by tracking uncompetitive bids or ignore bids from a list of vendors

Conclusion

Looking at the big picture, it is clear that the tools and techniques outlined by Six Sigma and the strategic sourcing process have the same objective; enhance, improve and adopt a more cost-effective approach to business. These methodologies improve processes by ensuring decisions are derived from reliable metrics.

Six Sigma is often associated with the improvement of the supply chain and manufacturing processes, but the methodology can be applied to a wide range of applications. By following the five phases DMAIC (Define, Measure, Analyze, Improve, Control), you will not only transform the critical business processes, but you’ll also provide clients with a reliable service and be in a better position to adhere to standards and regulations.

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There are various steps you could take to improve your procurement process. It may involve minor adjustments with the aim of enhancing part of the system. Other strategies may involve an overhaul of the entire process. This article outlines instances where the Six Sigma methodologies can be applied to procurement processes, thereby adding value to the business:

Smooths the Adoption of New Technologies

The adoption of new technology is critical to an organization. It can determine the capacity of the organization to deliver goods and services efficiently and how effectively costs can be minimized. Six Sigma offers a framework that facilitates the smooth adoption of application software, IT infrastructure, and digital systems.

One of the applications you should consider adopting is the contract management system. It helps to manage obligations, and both parties benefit from this convenient setup. It assists entrepreneurs to determine which contract can be reused when moving from one vendor to the next.

Increases Employee Capability and Skills

Training and development is another critical factor that can determine the direction of the enterprise. Part of the Six Sigma philosophy is to train and help members of staff develop the confidence that will enable them to initiate and successfully complete tasks. Procurement managers can incorporate Six Sigma methodologies to train staff and ensure smooth implementation of policies.

Incorporating Six Sigma is not only beneficial to the staff but also to the organization’s efficiency and the bottom line. Additionally, it promotes goodwill between the business and suppliers, leads to higher rates of customer satisfaction, and accelerates growth while cutting costs.

Helps to Maintain Good Relationships with Suppliers

The aim of the procurement manager is to ensure that the suppliers are content with the organization’s policies and processes. You could ask for bids from new suppliers when the need arises, but that process often proves to be costly and time-consuming.

If you take the example of the supplier base of businesses that have been implementing the Lean Six Sigma methodologies for the last two to three decades, you’ll realize that these businesses have a different perspective towards supplier relationship. These organizations are not in the habit of changing vendors frequently.

Sending requests for bids every time you need something from the vendors is time-consuming. It involves analyzing each application that answers your request, getting information about their position in the industry, as well as identifying the best negotiation tactics for the shortlisted suppliers.

Reduces Expenses

The most desirable quality of a procurement officer is the ability to procure the items the company needs while at the same time reducing the associated cost. The key question then is, how do we achieve this? It requires careful considerations before making purchases. The process is not always as simple as it sounds. Some inexperienced procurement staff may opt to create purchase orders for every single application. This is one of the problem areas that may incur unnecessary costs. The Six Sigma methodologies are often applied to these processes to research, identify, purchase and administer the items and orders that are relevant to your company.

Encourages Analytical and Negotiation Skills

Procurement managers have to handle a myriad of tasks in between the planning and execution stages of the projects they oversee. While this could mean experienced managers have well developed analytical skills, it is also important to ensure that the analytical skills are applied in more than one area of the process. A good understanding of quantitative data related to these processes is important to acquire. It fulfills an integral part of the Six Sigma methodology (i.e. the Analyze step of DMAIC) which requires a thorough analysis of each of the processes.

A procurement manager who follows the Six Sigma principles needs to understand that negotiating with vendors is an intricate process. The challenge is to strike a balance between getting good contract terms for the organization while ensuring that the organization and the suppliers uphold their business relationship.

Conclusion

Streamlining your procurement process increases the company’s profitability and maximizes efficiency. While the adoption of the Six Sigma tools and techniques may seem like an intimidating undertaking, it could prove beneficial to your organization in many positive ways.

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Due to its focus on ensuring any kind of business operation is effective and efficient, the tools and techniques used in Six Sigma can give individuals who aspire to be leaders a highly effective method that they can use to make better decisions. Six Sigma methodologies themselves have received widespread acclaim for their effective application in process improvement across a range of corporate sectors, but when they are paired with skilled leaders, some truly amazing results can be seen.

Among the key leadership traits that are required of Six Sigma professionals, there are five qualities which stand out above the others. Leaders who are looking to move into the management of Six Sigma projects need to sharpen and develop the traits below to gain a competitive edge.

1. Customer Advocacy

A Six Sigma leader should be able to easily communicate to the rest of the team and help them understand that the customers (both external and internal) are the recipients of the process results, and that they are always the ultimate judge of the quality of a product or service. Understanding the needs of the customer is the first step in process improvement. For this reason, a Six Sigma leader will always be able to show how the elimination of variation in processes is key to overall business improvement.

2. Passion and Leadership

A Six Sigma leader needs to have initiative, a positive personality and be self-motivated. This is because there will be times when they have to be the cheerleader who picks up the team, helping them to move forward in a productive manner. Passion also gives the leader the strength they need to persevere when a project is not going their way.

They also need to have demonstrable experience as an agent of change and challenger of the status quo in some capacity in the past, regardless of their position. Changing an organization’s established processes and revamping how it is run is something that could upset employees. However, leaders who are change agents find ways of accomplishing changes while, at the same time, they amass support for change.

3. Effective Communication

Six Sigma leaders are effective communicators, an essential trait considering the various roles they are expected to take on: coaches, trainers and mentors. They need to talk to (and be clearly understood) by various audiences ranging from top management to employees on the shop floor. Understanding the audience’s needs and then being able to tailor a message to speak to the audience members’ concerns is the true hallmark of an effective communicator. Once the Six Sigma leader attains these qualities, they can easily create presentations that express the process improvement project in a way that will make the audience supportive of the effort.

4. Business Savvy

Unlike the quality managers who directed corporate processes in the past, Six Sigma professionals are expected to be business leaders. Because of this, it is necessary for them to have knowledge of business as well as the ability to illustrate the link between a Six Sigma implementation and the business’s overriding goals. They should understand and be able to explain how a project makes the company stronger, both financially and competitively.

5. Technical Aptitude and Project Management Ability

Implementation of Six Sigma is done a project at a time. Therefore, it is vital that a leader does not forget that they are responsible for the entire project, from scoping, establishing requirements and resources to organizing the timeline and analyzing variance perspectives. It is not necessary for a Six Sigma leader to be a graduate of engineering or statistics, but there are cases where the qualifications prove to be useful.

Conclusion

Although technical knowledge is clearly essential if one is to be an effective Six Sigma leader, there are certain soft skills and leadership traits that are required as well in order to complement business theory. Six Sigma professionals who aspire to be leaders would do well to develop these traits by seeking mentors and coaches as well as through continuous professional development.

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For those who aren’t too familiar with data warehousing, it describes the process of storing data that on a server that has to be managed so that it can be extracted and made available for use.

Software engineers can actually refine the software during its development stage; this is when they would apply the Six Sigma process. At the analyze phase of the Six Sigma process, the software engineers can discover the root causes of any defects, using process mapping, as well as cause and effect diagrams.

Data Warehousing Issues

Back in 2009, Bank of America used Lean Six Sigma to improve its data warehousing issues. They used the Lean Six Sigma methodology to track their data warehousing tasks on a value stream map. They discovered that 90% of their process was considered non-value processing or waste!

During the analyze phase, they also used the Fishbone diagram. This tool showed them in detail all the possible causes of the non-value processing they had been doing. Another important tool used was the 5 Whys tool, which helped them discover the root cause of their non-value added data problem. 

It is amazing how a technique developed back in 1986 (when the internet was in its infancy stage) can help figure out major flaws in a data warehousing management system and its data retrieval!

Want to learn more how Lean Six Sigma can help your organization? For more information on our courses and services, please click visit 6sigma.com. 

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Revenue leakage has become a very real concern for thousands of businesses across the world, costing them billions of dollars every year in lower net revenues. If these leaks are left unchecked, they could have a profound negative impact on your business, leaving your profit margins suffering a slow “death through a thousand paper cuts.” Your organization may also be burdened with the cost of taking care of your customers’ needs without being offset by sufficient incoming revenue.

With the business landscape becoming more competitive with each passing day, you cannot let margin compression compromise the financial sustainability of your organization. In spite of this, many businesses continue to allow their hard-earned revenues to escape through cracks within their revenue funnel. It is important to detect and patch the leaks in order to get instant financial relief and improve processes in the long term. The Six Sigma philosophy is one way to achieve this.

How Streamlined Processes Improve Revenue and Reduce Leakage

Six Sigma methods have been proven as a way to increase revenue for many organizations. Through streamlining the organization’s unique processes by the elimination of wasteful steps, delivery of products and services is achieved quickly and more efficiently without losing quality. The following steps improve the performance of a business and increase revenue:

1. Assess

Anytime a business process related to revenue management needs to be improved, the implementation team needs to start by carrying out an assessment of the workflow from the start to the end of the process. The assessment carried out will provide analysts with the foundation to create an optimal solution for process improvement.

Every business has its unique qualities. This means that the Six Sigma implementation team needs to have an intimate understanding of the organization’s challenges and ultimate goals in order to devise a workable and systematic plan to improve them.

2. Plan

Quite often, marketing teams operate in an isolated manner, executing and optimizing in a manner that is disconnected from the company’s revenue goals, corporate planning and revenue performance measurement. What naturally results is confusion regarding the best course of action to take when revenues fall short of projections.

In this case, teams need to hold brainstorming sessions aimed at identifying effective ways for the organization to achieve and design a customized Six Sigma method that will pinpoint revenue streamlining opportunities, eliminate waste and boost revenue. Due to performance tracking and attribution, the revenue data collected during these sessions can be used by an organization to come up with a strategic plan of action.

Once the best solution has been found, the next step is to lay down a plan of action, down to the smallest detail. The available resources can then be put to work on the implementation of the plan.

3. Implement & Optimize

After the brainstorming sessions outline strategic decisions and map out strategy, key workflows can be laid down to the smallest detail. The available resources can then be put to work on the implementation of the plan. The idea is to have the organization’s go-to-market team more effective through automating processes, eliminating unnecessary steps and reducing cross-functional tasks.

After implementing the plan, the various departments in the organization need to hone it down to a science by continually measuring, optimizing processes and challenging each individual involved to help make the processes better and faster.

Conclusion

Thanks to the implementation of Six Sigma methodologies into their business processes, many organizations today have been able to greatly increase their efficiency. These methods allow the organizations to continuously improve and successfully compete with their peers on a global scale.

While rapid advances in technology and emerging efforts have increased the opportunities available for new and innovative products to succeed by offering new ways to deliver to customers, innovation could strain already established processes, resulting in waste and increased costs. For a company to stay in the black now and remain profitable in the future, it is essential that it saves money and improves quality. Improving processes through Six Sigma methodologies is a way to achieve both of these aims.

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Lean and Six Sigma have quickly become two of the most important methods to gauge business process quality in many industries, helping organizations attain higher effectiveness and improved operational efficiency. Both of these are vital aspects within the hospitality industry, giving a hotel a competitive advantage thanks to great customer service, the desired guest experience and high quality of service.

By combining these two methodologies, Lean Six Sigma allows hotels to anticipate and meet guests’ specific expectations, needs and wants and deliver them. Invariably, this will bode well for even the most demanding hotel guests.

How Lean and Six Sigma Methodologies Come Together To Give Hotels a Competitive Advantage

Lean and Six Sigma are the two preeminent process improvement methodologies that have received wide acceptance and adoption by many service and manufacturing organizations across the globe that need to identify weaknesses (defects) in their operations and work towards streamlining their processes. The resulting improvements in quality lead to higher profitability and sustainability of their competitive advantage.

In particular, businesses in the service industry such as hotels can put in place business process improvement plans like Six Sigma and Lean in order to offer their customers a higher value, distinctive and authentic experience while developing their competitive advantage thanks to the following benefits:

1. Increased profits

Adoption of Lean Six Sigma helps to increase the profitability of an organization through streamlining of its operational processes. The end game is to have the hotel’s services delivered to guests faster and in a more efficient manner without compromising quality. Put simply, the Lean Six Sigma model will increase revenues by allowing the hotel to achieve more with fewer resources.

2. Lowered costs

Another major benefit of Lean Six Sigma is that it lowers the hotel’s costs of doing business by:

• Elimination of waste from processes: These are any activities within the hotel which are not necessary for the provision of quality service to guests, but still incur costs for the establishment.
• Solving of process problems: These defects are activities that, while essential for the hotel’s operations, take up much more resources than are necessary and cost money.

In a nutshell, a hotel can reduce costs and use of valuable resources by identifying and fixing defective processes through Lean Six Sigma.

3. Improved effectiveness and efficiency

The efficiency of hotel operations and the effectiveness of processes can be improved by Lean Six Sigma in the following ways:

• Maximizing the hotel’s efforts to offer a satisfactory service to guests
• Allowing an establishment to allocate revenues and resources realized from the implementation of new and improved processes towards business development and growth.

Through more efficient and effective business processes, Lean Six Sigma ensures that hotels are able to offer their guests more services, resulting in a more satisfied clientele.

4. Development of effective teams

Another benefit of Lean Six Sigma implementation in the hospitality industry is its capacity to give employees a sense of accountability and ownership. In this way, their effectiveness increases and they are more focused on delivering the desired results for any part of the process improvement project which they may be involved in. This methodology improves the effectiveness of hotel employees by:

• Getting employees involved: When hotel employees feel that they are an integral part of the process improvement project, they become more active, engaged and accountable.
• Fostering trust: When transparency cuts across all levels of the hotel’s organizational structure, the Lean Six Sigma method promotes a mutual understanding and appreciation among staff of each person’s importance to its overall success.

5. Enhanced customer experiences

The benefits to guests at a hotel will usually be in the form of improved service, better delivery and high quality. Efficiencies in internal processes will have a trickle-down effect on the customer experience, and often results in maintaining a high number of repeat visitors.

It also helps from a marketing standpoint, with implementation of Lean Six Sigma methodologies letting hotels publicize the fact that improved processes and problem-solving methods allow them to offer an enhanced range of services and amenities to guests.

Conclusion

In order to achieve and maintain competitiveness in the cut-throat hospitality industry, hotels have to identify and meet the expectations of their guests, as well as deliver high-quality service. The effectiveness and efficiency resulting from Lean Six Sigma in the hotel business will lead to better service quality, higher morale among employees and increased customer satisfaction.

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Our answer? With businesses failing because of the high cost of materials and poor quality management (which can lead to loss of revenue through defects and long production times), there is a good reason why Six Sigma is important for any business in any industry.

The reason businesses fail is because changes occur, and what worked before won’t necessarily work in today’s work climate. These changes occur a little bit at a time; they are almost unnoticeable at first. Then before you know it, you are laying off perfectly great help because you are cutting costs in order to stay afloat. 

By implementing Six Sigma’s DMAIC methodologies, the following can happen:

• Cut process cycle time
• Reduce or eliminate waste 
• Increase customer satisfaction
• Reduce defects
• Eliminate expensive revising

Define-Measure-Analyze-Improve-Control = DMAIC

By using Six Sigma methodologies, you are using the best template for working smart. The Six Sigma tools that are used are easy to understand, and so flexible that any business in any industry can benefit. Other than the cost of training, these tools do not cost any money. Six Sigma’s DMAIC is a great template for working smart; otherwise you’re doing just enough to get through the day.

The Six Sigma certifications, whether it’s White & Yellow Belts, Green Belt, Black Belt or Master Black Belt, is a great journey with the added benefits of having a community of support, as well as a fraternity or network of like-minded business people like yourself.

This all adds up to success in business and a nice network of business connections, not to mention the great knowledge you will have.

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

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Today, many companies have managed to get the balancing act of getting costs down and handling manufacturing inefficiencies right. This can mostly be attributed to the adoption of Six Sigma methodologies. However, the level of discipline that is now commonplace with regard to the cost of doing business is sorely lacking when it comes to revenue management. The result is that many companies’ top lines suffer as a result of cash leaks from the revenue side.

1. Definition

Any Six Sigma project begins with the clarification of a problem within business processes and narrowing of the scope to produce measurable goals that can be achieved quickly. A team is then assembled in order to break down each process in minute detail, suggest what can be improved and lay down a plan to implement the improvements. Project managers alongside their sponsors will typically start by examining processes and defining defects in the process that allow salespeople to go against set guidelines laid down by pricing analysts.

2. Measurement

For the second step of the project, the team will gather data and make it ready for analysis. This starts by mapping the pricing process with the help of team members, who fill out the details in each step. In order to generate the necessary information and verify it, the project manager should hold formal and informal interviews with individuals from the major functional divisions, usually: marketing, IT, finance, sales and pricing. The exercise results in a high-level map of the pricing process from start to finish, showing how information flows from step to step.

3. Analysis

After mapping and documentation of the process, the Six Sigma team can start analyzing the data collected. The team will identify ways through which different people or roles do not act as required or fail to effectively control a stage within their area of responsibility. This analysis is aided by a Cause and Effect (C&E) Matrix, a Six Sigma tool which helps to identify and prioritize problems while listing the requirements of the customer from that particular process.

4. Improvement

The results from data analysis lead into the fourth step of the Six Sigma method, which is to recommend modifications of current processes. The aim is to reduce the occurrence of unapproved price quotes without the creation of a tedious approval process, since response speed is of the essence if salespeople are to act fast to close deals. However, this requirement comes with challenges for personnel in pricing. The Six Sigma team therefore needs to provide clear guidelines that help pricing to decide if they should approve larger-than-usual discounts when sales promise them to customers.

5. Control

Finally, the Six Sigma team sets up control measures to allow the company to maintain and add to the improvements in the pricing operations. If prices have been brought under control but a company loses its market share, the pricing guidelines may need to be reviewed further. Sales could also investigate cases where a particular representative is constantly making sales error transactions to find out how the individual is carrying out negotiations with customers.

6. Payoff

When examined from the organizational perspective, Six Sigma pricing has been proven to significantly reduce friction within the relationship between sales and pricing roles. By systematically collecting and analyzing transactions, pricing analysts obtain hard evidence that can counter claims that salespeople typically advance when negotiating discounts with customers.

Why Six Sigma Pricing Is Important

There is a host of challenges related to pricing processes within an organization which could lead to defects’ in the form of unusually high prices or excessive discounts. If discounts offered are excessive, they could directly affect a company’s top and bottom lines. Excessive prices could appear attractive to a company, but its customers will eventually find out that the seller has offered the same product or service at a higher discount to other customers.

The result is that such customers can affect revenues by leaving or reducing their business with the company. Profitability may also be affected because the customers may want to negotiate deeper discounts in the future. Any negative experiences will lead to a perception among customers that a company is an unsuitable or troublesome partner to work with.

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There is a strong connection between the way assembly lines are planned and organized, and common Six Sigma practices and principles. It should come as no surprise to anyone experienced in either of the two fields that there are some very strong positive implications in both directions, and it’s a good idea to understand the general idea behind assembly lines as a leader trying to implement lean principles in their organization. And to that end, Six Sigma offers a very powerful set of tools that can help you progress through the field at a rapid pace.

Reducing Waste Across All Nodes

An important point to understand about assembly lines is that waste reduction in just one node on the chain can lead to significant improvements across the board. That’s not just the case when that chain is a bottleneck, either you can see those improvements in many cases when making adjustments to some part of the assembly line.

Because of this, once you start applying Six Sigma methodologies to optimize the production line and reduce the waste in its operation, you’ll often find that the overall improvement in performance is significant. Sometimes this will rely on some unexpected actions, which may even include eliminating a node altogether. Remember, as long as you apply the methodologies correctly, you should be able to not only eliminate waste, but potentially optimize your assembly line in ways that were not obvious before.

Reducing Inventory

Another common problem in assembly lines, which Six Sigma can be very helpful in addressing, is that of excessive inventory. Storing too many materials at any stage of the production can lead to harmful effects in the long term, especially if there is a significant decay in the quality of those materials with time.

While this is clearly another type of waste, it’s often a good idea to consider it on a separate level than others, and look very carefully into the possibilities you have for optimizing your current inventory practices. Otherwise, other improvements may not matter much as they will not achieve their full impact.

Six Sigma can help you identify areas where you can benefit from inventory optimizations particularly well, and even though it’s not a magic wand that will automatically solve all your problems in this regard, it can still help you improve the current situation a lot. You’ll end up dealing with far smaller storage requirements, while at the same time you’ll be able to optimize the output of your main product(s).

Better Training on All Levels

Another great benefit of Six Sigma is that it can significantly improve the training practices in your organization, allowing you to get much better results with each new person hired on the assembly line. This is a common problem in many organizations that implement assembly lines, and that’s unfortunate, considering how easy it is to actually address. All you have to do is ensure that you have appropriate practices in place for cross-training, and you should be able to see some great results in a relatively short time.

The basic concept is simple, yet very effective: make sure that higher-ranking employees are responsible for training those below them, and develop this as a continuous cycle that’s deeply integrated into the whole working system of your organization. This can significantly reduce the overall training requirements of your employees, while also helping build team morale and preventing misinformation. On the other hand, it can promote information sharing as well, leading to a more productive environment where everyone feels motivated to contribute.

The benefits of improved training practices can be tremendous, and the sooner an organization implements the appropriate processes, the better results it will see in the long run.

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We understand that Six Sigma implementation within a company requires that everyone’s goal be:

1. Increase customer satisfaction
2. Increase efficiency of the processes
3. Lower costs
4. Increase profits

Now remember, the Six Sigma concept of quality has to apply to every process within the company, so everyone has the same high standard.

In the Six Sigma culture, the VOC (Voice of the Customer) is extremely important, as that tells us what exactly is our customer’s needs and requirements. So in our schools, the parents could not only be considered the customers, but could also be considered the shareholders, as they are either paying the fees if it is a private school, or the taxes if it is a public school. The teachers are the employees, or the team who produces the service, which in this case would be educating the students.

Using DMAIC 

Define: In this phase, write down the purpose of the project or assignment, the complete definition, using a process map, what area it will be applied, and the exact goal (desired improvement, benefits). Be as specific as possible. In this definition, you could define the problems such as noise or distractions in the classroom, high absentee rates, etc.

Measure: Conduct data on current condition of the project in which you are trying to improve. This data should be on the emphasis of this project.

Analyze: Here, the analysis is conducted for identifying where in the process is the quality being affected, or where the issue or problem is situated.

Improve: Here you find a permanent solution to the problem.

Control: Maintain the new improved process with the solution by creating protocol and management procedures to be kept and maintained.

One can implement Six Sigma at several levels — both at the professional level within the school system, and at the learning level to teach children how to achieve their goals and maintain high standards.

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

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