Cornerstone Consulting Blog

Six Sigma: The Importance of Proper Application

May 9, 2018 11:31:00 AM / by Bill Currence

operations-consulting

Six Sigma can be a revolutionary tool to improve your organization’s operational efficiency. Its basic approach is to reframe common business activities and overall systems as statistical problems. Applying Six Sigma principles, a consultant defines specific steps for each standard process, collects performance data about each step, analyzes that data, and figures out the combination of variable values that creates the best result with the least variation or inefficiency.

While Six Sigma can be an extremely valuable tool to help improve your operational efficiency and profitability, its success depends on applying it correctly to situations where it is appropriate.

 

Some Projects Just Aren’t Right for Six Sigma

Many senior executives, seeing that Six Sigma works well when improving quality in a high-volume manufacturing environment, try to apply this strategy to the entire organization. “Using Six Sigma tools,” they think, “everyone from Accounts Payable to Sales will become well-oiled machines, consistently cranking out revenue, invoices, or whatever it is that they do!”

Unfortunately, Six Sigma isn’t right for everything. Often, people want to use Six Sigma so badly that they apply a cookie cutter template when they’re actually baking a pie! Six Sigma is best suited for processes that have a normal distribution—a predictable amount of deviation from the mean. Processes that frequently have deviations that are wildly variable, unpredictable, or outside of a relatively small level of variance are not ideal candidates for Six Sigma’s tools. It’s difficult to use these strategies to improve processes with these kinds of variances (sometimes called “fat tail” or “Murphy’s tail” deviations)—it’s like trying to put a square peg into a round hole. A skilled consultant can help you use other, more appropriate tools to optimize these processes, but Six Sigma probably isn’t the way to go.

 

Some Projects Are a Waste of Six Sigma

On the other hand, optimizing some processes just doesn’t translate into money saved. For example, imagine you implement Six Sigma processes and reduce the time you spend on payroll each week from 10 employee hours to 9.5. If this frees up your payroll staff to take on other necessary projects, then this is an improvement that helps your bottom line. It’s likely not a big enough savings, however, to reduce personnel or resources dedicated to payroll, and if that time can’t be used for something valuable it will just be wasted. Make sure that you target processes for optimization that will add tangible value to your organization.

Another mistake is applying Six Sigma to only one small piece of your “big picture” production system. In Six Sigma, each time you affect a process you must consider how the changes will affect the rest of the system. If you optimize one step of a system that wasn’t affecting the speed of the overall production, you may actually create a bottleneck later on down the line. Six Sigma looks at the system from start to finish, evaluating not only each individual step but appraising and improving the overall functionality of the system as a whole. Using Six Sigma on only one part of a large-scale operation can increase stratification (variations up and down the system) and actually reduce your overall efficiency and productivity.

 

Is Six Sigma Right for my Situation?

An experienced consultant can help evaluate your situation and determine whether Six Sigma is an appropriate tool to improve your organization’s productivity, efficiency, and profitability. Cornerstone Consulting Organization’s operations consulting experts have the tools at their fingertips and the experience to know how—and when—to apply them. Contact us today to schedule a consultation and find out more about whether Six Sigma is right for you.

Contact us

Written by Bill Currence