The Truth about Six Sigma Costs

Six Sigma is a very powerful quality improvement tool used in many business industries. Its main objective is fault detection and determining ways to improve day to day business processes. This particular quality control approach is more focused on defect prevention than defect detection.

There are five major stages in the DMAIC Method within the Six Sigma Theory. These phases include; Define, Measure, Analyze, Improve and Control. If your company is thinking of implementing this methodology, you need to understand the costs associated with implementing such a quality control program company-wide.

Many companies thinking of implementing the Six Sigma Methodology first think about its cost, or the initial investment required to train and certify employees. This follows the assumption that taking in more work means that you need to take in more employees.

While thinking about embracing this approach in an organization, one also needs to consider the team as well. You can organize the team in such a manner to contain the cost of training. The big question you should ask yourself is whether the team should be comprised of freshly trained Six Sigma Professionals or if you should try to incorporate consulting professionals with experience as well.  This will have a big impact on the overall budget.

Another consideration that should also be made is whether the cost of training will help offset the cost of hiring a consulting professional and time. This is to be evaluated keeping in mind any other future projects, as the Six Sigma Methodology is often not a one-time thing, but rather an ongoing way of doing business for a company. A thorough analysis should be done of the costs involved, in the same way you view revenue generation and market expansion.

In order to achieve reduction of costs in the long run and improve your productivity, there are a number of things that can be done. One of these is adopting the Six Sigma Culture of change. Unless your personnel are properly trained, the initiative and the cost of hiring consulting black belts will all be wasted. To make an impact on your processes and methods, the culture should be fully adopted at all levels in the organization.

Another key part of the process is monitoring the costs. It is important that you check all the costs involved in the same way you view revenue generation. Some of the key organizational areas that should be monitored are the overall organizational structure, external expenses, process complexity, and benefits.

This approach reduces cycle time in processes thus increasing overall productivity, both for the employees and the process; and subsequently, the business overall. This is achieved through the elimination of non-value added activities. In a nutshell, the best savings come by improving the quality of services or products given to your customers; this is accomplished through reducing defects.

The basic truth about getting certified is that the success of any organization will only be achieved through continuous education, excellent formation of teams, and the introduction of the six sigma tools and procedures company-wide. With such an approach, six sigma startup costs would be minimal compared to the overall benefits gained by an organization through implementing this strategy.