During the last few decades, quality assurance has taken many forms, including Six Sigma and Total Quality Management. A bit of history about Six Sigma: Similar to many other great technological and process improvements techniques, Six Sigma is a product of the long and in-depth experiences of Motorola that has now been translated into a general concept to improve quality assurance and quality control.
Simply put, Six Sigma combines techniques used in business, engineering and statistics to reduce the opportunities for undesirable products or services. It relies heavily on statistical modeling and methods to evaluate and improve procedures. Six Sigma is currently used in a wide range of industries, including medical, insurance, supply chain, project management, operation management, call center and service industries.
How does Six Sigma work? The fundamental step of Six Sigma is DMAIC, which stands for Define opportunities, Measure performance, Analyze opportunities, Improve performance, and Control performance. DMAIC can be used in quantitative and qualitative ways, depending on data availability, consistency and viability.
Businesses such as call centers, offsite sales forces, financial institutions, insurance companies and e-commerce providers have successfully used Six Sigma to enable greater efficiency and effectiveness.
Generally speaking, many large companies, such as GE and Motorola, have managed to successfully implement Six Sigma methodology into standard operating procedure; however, smaller businesses have been very slow to take advantage of such proven methodology.
One of the most common myths about Six Sigma is that it is mostly beneficial to large companies with mass production or service capability.
In reality, firms with as few as 10 employees can greatly benefit from the implementation of Six Sigma methodology.
In essence the problems with adaptation of Six Sigma in small and medium-size businesses are twofold: available expertise and funding. Most small businesses are unlikely to have employees with expertise in sophisticated use of Six Sigma. Even those employees with such expertise may prove themselves to be versed in theoretical aspects of Six Sigma rather than actual implementation.
That is when small businesses face their second problem: funding. In order to benefit from Six Sigma expertise, third parties have to be involved; however, the cost of experienced Six Sigma consultants can be sky high. Ultimately, it is more a question of fundamental business decision making:
Do you hire a Six Sigma green belt or black belt? Do you hire someone with an M.B.A. or a Ph.D.? Do you hire an employee or do you hire a management consulting firm? How about quality assurance companies? What is the benefit of investing in employee training and/or further education?
At first glance, it may even appear to be a human resource decision, but it is not. It is a question of measuring the return on investment, which is purely a management decision.
Be advised: A decision to implement Six Sigma will result in either a substantial amount of human capital, including time and man power, or a good chunk of your cash. But the results will be well worth it: greater efficiency in service or production, reduction in customer service costs and, most importantly, an overall improvement in effective business management and your bottom line.
Kamyar Shahmohammadi is the owner of managment consulting firm World Consulting Group at www.worldconsultinggroup.com. He can be reached at (866) 543–2WCG.
Originally published at columbiabusinesstimes.com on October 7, 2006.