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Training Trends: Six Sigma for Small Companies

November 1, 2003
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Implementing a Six Sigma intervention need not cost millions.

One of the more familiar problems in business is how to implement Six Sigma in small- and medium-sized companies. This is an issue because larger companies are beginning to mandate Six Sigma to their supply base as a condition of future business. The problem arises when small- and mid-sized organizations solicit deployment proposals from Six Sigma consulting companies only to learn that the traditional Six Sigma implementation approach can require millions of dollars in investment, dedication of their best resources and training of the masses.

Those who have experienced this situation have found that this approach to Six Sigma is unrealistic for smaller and mid-sized organizations. But there still exists a need to bring these companies into the Six Sigma fold, because together they might represent as much as 70% to 80% of total value stream activity.

The traditional top-down Black Belt implementation approach is a barrier for smaller and mid-sized companies, but it does not need to be. There is an alternative Six Sigma deployment model called Six Steps to Six Sigma. AT&T, and later Motorola, originally pioneered it, and it allows smaller organizations to implement the methodology at a cost and pace that they can grasp. They can achieve benefits without the significant resource commitment and overhead structure of the Black Belt approach, which can reach a million dollars or more. As a result, these organizations can achieve faster and more impressive benefits than their larger customers.

An observation made about the Six Sigma implementation process is that the majority of benefits are not derived from Black Belts-they are generated at the Green and Yellow Belt level. Another observation is that the Black Belts and Yellow Belts are interchangeable for about 55% to 65% of the organization's Six Sigma opportunities. Using a Yellow Belt approach, embodied in the Six Steps to Six Sigma, addresses many of the constraints of smaller and mid-sized companies and allows them to implement Six Sigma at a less costly, more manageable pace. These organizations become just as technically skilled as their larger counterparts. In fact, many are outperforming their customers in terms of financial results and cultural transformation.

Six Steps to Six Sigma

The following is a brief overview of the Six Steps to Six Sigma deployment and execution process.

1. Begin with elevating senior management awareness on the procedure and benefits of the Six Sigma process. At this time, the strategy and implementation approach are aligned with the organization's strategic business plan, focusing on customer requirements. Also at this step, a steering committee is established to create, foster and ensure application of the Six Sigma process throughout the organization.

2. Implementation planning is completed. This includes establishing baseline performance factors, expected performance and financial improvements, communicating program goals, implementation strategies and developing training schedules for all employees. Employees and management are brought into the training in natural or functional workgroups.

3. During training, the Six Steps to Six Sigma process, methodology and tools are explained. This course is designed to help organizations reach their goal of total customer satisfaction through the attainment of reduced cycle time yielding high levels of quality. This is done by showing how functions can increase the extent to which their work meets the expectations of the customers.

4. Training and team formation begin concurrently. During training, employees learn the specific methodology in resolving differences in product and service expectations, so those mistakes, which lead to customer dissatisfaction, can be minimized. Emphasis is on learning ways of achieving high levels of quality-on the order of 3 to 4 defects per million or Six Sigma-and gives participants a chance to start applying it right away to their own work.

5. Upon completion of the training, the natural work group is the yellow belt action team. The team sets about applying the six-step methodology to improve their major product or service. They identify customers, suppliers and their critical requirements, define value vs. non-value-added activities via process analysis, improve cycle time by removing defect causing, non-value-added tasks and implement quality performance measures to ensure continuous improvement. The team continues this approach focusing on other products or services for improvement.

6. Later in the progress of the program, certain individuals in the team may be transitioned to the next level of Six Sigma achievement. Some selected team members are developed into Green or Black Belts based on need.

Real-life situation

An example of this approach is that of Thybar Corp. (Addison, IL), a supplier to the HVAC industry. A major customer of Thybar insisted that they adopt the Six Sigma methodology. However, the investment to embrace the traditional Back Belt approach that customer was taking was too prohibitive for Thybar.

In January of this year, Thybar started implementing the Six Steps to Six Sigma with a significant effect on bottom-line results. Each training workshop yields 25 to 30 improvement ideas that average a 25% reduction in cost and process cycle time. Thybar's president, Bill Evitt, is so convinced of the process that he has authorized introducing it to his other three plants in the United States.

Using the foregoing approach, organizations can accomplish their Six Sigma implementation at a more economical and manageable pace. The number of improvement activities, the levels of education, and the whole deployment and execution approach occur at a suitable rate, using all employees, with a direct link to strategy and results.

The aforementioned type of functional approach to Six Sigma enables smaller and mid-sized organizations to achieve results at a more economical and manageable pace, while still achieving desired results. The "one size fits all" Six Sigma Black Belt deployment model is not practical for every company or organization. The real need to bring smaller and mid-sized companies into the Six Sigma fold can be satisfied with the Six Steps to Sigma approach.

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