Understanding Internal Vs. External Six Sigma Failures

One of the most important parts of implementing a Six Sigma program is spotting the difference between internal vs. external failures. Companies must be able to use hard data to determine where problems are occurring. This is the first step in addressing and resolving issues so that spending can go down, profits can increase, and customer satisfaction levels can rise; the three major overall goals of the Six Sigma Methodology.

Internal failures are those that are directly related to your in-house operations. These errors might not appear to have a direct impact on your products or services, but they do. For instance, you might have a number of redundancies in your workforce. Several employees could be repeating the same tasks without providing the company with any additional benefits. This is often due to poor organization, poor management, and a lack of communication.

There can be tangible evidence of these redundancies, especially among your hard files. You might have several administrative assistants copying and filing the same document, simply because this has appeared to be the most efficient way of doing things. Although this probably seems like a small and irrelevant issue, it impacts the productivity of your workforce and the forward movement of your company (as well as space in the filing cabinet!). One of your administrative employees could be better devoting his or her time to other tasks.

This can lead to an external failure given that workforce inefficiency often leads companies to believe that certain projects must be outsourced. Their goal when doing so is not just to save money, but to make up for staffing shortages. Thus, a business might start outsourcing its payroll or its account receivables. When doing so, they will have to rely on the quality control measures of a third-party, rather than making good use of their own.

Things can go wrong when too many elements of the supply chain are being outsourced. These are issues that are not directly related to the company, however, there remains an indirect connection. If the employees a business are making the most efficient use of available resources and time, more elements of the supply chain can be kept in-house. There will be more control over the quality of the output and a lesser chance for dissatisfaction among clients, associates and all others who are directly affected by these services.

Another common in-house mistake is failing to use the technical tools that are readily available. Most companies have technology on-site that they are not fully using, wasting potential. These might be multi-functional machines or systems that are simply more complex than the technical knowledge of existing team members. Learning how to make optimal use of these tools can also help companies to avoid unnecessary outsourcing in the long run.  Even though learning something new takes many employee hours in the short run, it is often always extremely beneficial in the long run to take the time for training.

While failures can start both within a business and outside of it, these things tend to have an undeniable connection. By correcting the root of the issue through the Six Sigma quality management process, many business managers are able to resolve these problems and keep more aspects of their ongoing projects inside their offices. Rather than entrusting important tasks to outsiders, these entities can spend less and retain control over the results that they are getting.

Learning the difference between internal and external failures is a vital part of Six Sigma implementation. This helps companies to create leaner operations and to devise plans that are far more effective at promoting a low overhead and optimal client satisfaction. In the end, these entities will be able to retain more of their clients and can enhance their commercial images.