Reasons why smaller companies should be using Six Sigma.
Background-
I have my Six Sigma Black Belt, Green Belt and Lean certifications and my focus has always been the area of small businesses and startups.
"In the US, small business (less than 500 employees) accounts for around half the GDP and more than half the employment...The most recent data shows firms with less than 20 employees account for slightly more than 18% of the employment" Wikipedia
Growing your business with Six Sigma contains a variety of ideas of how a small business can apply Six Sigma to its existing operations. I think every small business owner should take 2 minutes out of their day and read it.
A couple of examples really hit home with me and my experiences therefore I really wanted to share these examples.
"If a company is in crisis mode, this excerise is redundant until the firm becomes more stable"
You can't begin to implement a six sigma program if you don't have stability in your environment.
It's like explaining fire preventation to someone while they are looking for an exit in a burning building.
You can however use some LSS tools to help stabilize the situation prior to implementation.
Here is an example I see all too often - Getting paid in a timely manner
"The company was experiencing problems receiving payment from its client so Bellwether analysed the contractor's processes and discovered communications gaps among sales, operations and the client, which resulted in unmet expectations.
In order to prevent future issues with payment and customer delivery, the contractor changed its entire project management process."
I've done a project similar to the one listed above with great success
Getting paid in a timely manner can be accomplished in under 3 weeks. After implentation the company I worked with saw immediate results. The DSO (Days Sales Outstanding) for customer repayment dropped by 50% in the first month.
The controller told me afterwards that "he was now an LSS convert and had seen the light."
In doing that project I also created a quick list of items a small business can do to help its bottom line immediatley.
In this economy every small company should be using some type of continuous improvement to support their operations. Surviving this recession should not be your only goal, you need to be ready to reap the windfall that follows it.
