Six Sigma principles and applications

¶ … Sigma methodology was developed by Bill Smith at Motorola and has become one of the leading quality management tools in the world. Yet, small and medium sized enterprises (SMEs) often shy away from using Six Sigma. The methodologies place emphasis on data, and SMEs may feel that they do not have the resources to gather the large amount of information needed to successful implement Six Sigma. However, the methodology can bring just as much benefit to SMEs as to larger corporations.

The adoption of Six Sigma offers many advantages to SMEs. In order to achieve Six Sigma results, the organization must often undergo a culture change. SMEs often have a more casual culture than larger organizations and while this is not undesirable in and of itself, it can lead the firm to make commit more errors. Six Sigma places increased emphasis on a culture of perfection.

Six Sigma also has a strong focus on the role of management. Commitment to the process must be total, starting at the top and permeating throughout the entire organization. The adoption of Six Sigma forces senior management to become engaged, and to take the message to the rest of the company. For SME's, this is an advantage that they will have. With often just one site, the management team at SMEs tends to be more visible and take a more hands-on role in the daily operations than at larger firms. This not only facilitates the use of Six Sigma methodologies, but gives SMEs a distinct advantage over larger firms in terms of Six Sigma adoption.

One of the key ways in which Six Sigma can benefit an SME is with its focus on data. For a variety of reasons, SMEs too often rely on guesswork and assumptions in their decision-making processes. Six Sigma demands an increased professionalization of decision-making processes. Data must be gathered and decisions made on the basis of data analysis, rather than the gut instinct of a handful of senior managers. This allows SMEs to make better decisions.

Flowing from this is another distinct advantage of Six Sigma for SMEs. Many of these firms have grown on the basis of a handful of key people. Six Sigma provides concrete processes that any manger can adopt. This will put most SMEs in a better position to grow their company, by decreasing reliance on a handful of core people and strengthening the management pool by teaching managers strong, standardization practices in all aspects of the firm's operations.

Six Sigma also places emphasis on determining cause-effect relationships in a company's processes. For SME's this is especially valuable for the many SMEs that are still in a growth stage because often these firms are not operating at peak efficiency, simply because growth is a bigger concern. Six Sigma takes the focus back to eliminating mistakes through the cause-effect analysis. Many small firms grow, but Six Sigma will allow for that growth to occur while simultaneously weeding out bad practices and bottlenecks in the system. This lends the SME a competitive edge over those who do not adhere to Six Sigma methods.

Another advantage to SMEs is that Six Sigma is often not only applied to the company, but to the company's key suppliers as well, as done by GE. This will allow the SME to develop stronger supplier relationships that will provide competitive advantage today by giving them access to better supplies, and will also allow for the suppliers to grow along with the SME without any drop-off in quality.

Six Sigma also provides an organization with a sense of focus. Many SMEs struggle to maintain a consistent corporate focus as they expand their product lines and their markets. The increase in operational complexity sometimes obfuscates the goals of the organization. The first step in Six Sigma is to define the goals, and the overall corporate-wide goal definition is going to remain consistent even as the company grows and the amount of smaller goals increases.

Additionally, Six Sigma is a system that brings everything back to the bottom line. Other management systems have value to an organization, but do not necessarily integrate focus on processes with bottom line results. For an SME, this is a critical advantage to Six Sigma, in that it is one total program that can be used throughout the organization, rather than a hodgepodge of different quality programs through different parts of the company, with no focus on how each impacts the bottom line.