The Benefits of Organizational Six Sigma Training

Editor's Note: Take a look at our featured best practice, Lean Six Sigma Deliverables Workbook Templates (Excel workbook). Several organizations are trying to build a culture of Lean Six Sigma (LSS) that not only requires extensive amount of training but also effective application of the same on multiple projects. These projects are successful only when the business objectives are achieved be it increase in [read more]

* * * *

The Six Sigma framework and certification program is nothing new to businesses. This methodology was created in 1986, built on learnings stemming back to the early 1800s. The concept was created to improve business processes, using a framework that emulates the martial arts hierarchy. It’s been adopted by industry innovators such as General Electric, Amazon, and 3M.

While many business leaders know and respect the terminology, there’s a gap in understanding the benefits of incorporating Six Sigma training at an organizational level. Let’s explore some of the advantages of this methodology and mindset as it pertains to efficiency and change management.

Identifying and Eliminating Organizational Waste

One of the core functionalities of Six Sigma is identifying and eliminating waste in an organization. Waste is a versatile term that falls under one of seven categories:

1. Motion – the goal is to minimize the path from point A to point B. For example, the goal is to have a production line that presents all the steps in the right order rather than having a product go elsewhere and come back.
2. Waiting – identifying blockers within a process that prevents progress. For example, if an employee can’t enter sales into the system until they get a printed report from the packing floor.
3. Inventory – minimizing wasted inventory that doesn’t get sold or takes up space, limiting high-value offerings. For example, your warehouse is full of slow-selling items, so you can’t increase the supply of in-demand items.
4. Over-processing – dedicating time to low-value tasks or using inefficient tools to complete a task. For example, calculating time cards by hand rather than using an automated system integrated into payroll.
5. Overproduction – wasted time, energy, materials, talent to get a job done. For example, producing extra product as a buffer but overestimating your needs significantly.
6. Transport – supply chain and logistics specific issues with how products are produced or shipped. For example, issues with coordinating deliveries to create a full truckload.
7. Defects – problems with production or design, leading to a quality assurance issue. For example, a missed safety concern resulting in a recall.

Identifying and eliminating waste is reason enough to invest in organizational Six Sigma training, offering the potential for a significant return on investment.

Incorporating Structure in Project Execution

While Six Sigma is particularly effective in manufacturing businesses, the learnings are versatile enough to apply to service-based companies and other project-based enterprises.

The DMAIC (Define, Measure, Analyze, Improve, Control) methodology creates a project planning and execution structure. This strategy helps create a better mindset around project management and contributes to the aforementioned elimination of waste.

Studies have shown that implementing the DMAIC methodology has led to cost reductions, increased revenue, fewer delivery errors, and ultimately better customer service and retention.

Improving Employee Buy-In and Engagement

Customers aren’t the only ones benefitting from Six Sigma methodologies; employees also experience advantages from this structural shift. The improvements made in productivity, time management, and minimized waste significantly influence overall employee satisfaction.

One of the most common employee complaints is a lack of communication. In eliminating waste and implementing the DMAIC framework, companies can create consistent communication and manage expectations across the board. One company used the DMAIC methodology specifically to address employee turnover and saw a decrease in turnover rate from 2.5% to 1.4%, with correlating increases in production quality and yield stability.

Better Profits

In summary, incorporating Six Sigma training at an organizational level improves profits. The notable reduction in waste paired with increased efficiency helps companies accomplish more while using fewer resources. This means lower expenses with higher returns, expanding the margin gap, and producing higher quality products and service offerings.

Challenges and Disadvantages of Six Sigma

While the advantages of Six Sigma are clear, it’s still integral to explore the disadvantages of incorporating this framework. Implementing change— especially significant process and system changes— is incredibly challenging. There are upfront costs associated with implementing Six Sigma and the changes the system identifies.

In a creative firm, the limitations and strict framework can be confining. For some organizations, it will be better to adopt the mindset and core methodologies rather than embrace Six Sigma entirely.

Ultimately, it’s worth exploring the nuances of Six Sigma to determine whether it’s right for your organization.

Do You Want to Implement Business Best Practices?

You can download in-depth presentations on Six Sigma Project and 100s of management topics from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.

For even more best practices available on Flevy, have a look at our top 100 lists:

• Top 100 in Strategy & Transformation
• Top 100 in Digital Transformation
• Top 100 in Operational Excellence
• Top 100 in Organization & Change
• Top 100 Management Consulting Frameworks

These best practices are of the same as those leveraged by top-tier management consulting firms, like McKinsey, BCG, Bain, and Accenture. Improve the growth and efficiency of your organization by utilizing these best practice frameworks, templates, and tools. Most were developed by seasoned executives and consultants with over 20+ years of experience.