A company that has recently had substantial losses, such as shrinking market share or losses due to high labor costs, might decide to focus on short-term cost reduction. On the other hand a company enjoying strong profits may decide to focus on long term projects aimed at strengthening its business by improving overall quality and customer satisfaction.
Another company might want to reduce costs by, focusing on reducing its cycle time. How a company decides to focus its Six Sigma certification projects heavily influences the way Six Sigma is deployed. Standards must be established and consistently met. Bringing about improvement is one thing; sustaining it is often more difficult and requires greater diligence.
Which Objectives are used in Six Sigma?
Focus 1: On Project Cost Savings
Projects are selected for potential reductions in fixed and/or variable costs, and not necessarily for their effect on the root drivers of process capability.
By focusing on project cost savings, a company can determine the number of projects it needs to complete to save a specific dollar amount.
This is a more limited approach, and will likely do little to spread Six Sigma throughout the organization.
Focus 2: On Deliverable
Identify the product family or system that is the greatest cause of poor customer satisfaction in a product or service that is important to a company’s overall strategy.
This kind of focus requires that companies examine a number of processes that contribute to the product or service.
High warranty costs, for example, can signal products that might benefit from the Breakthrough Strategy.
Companies should be wary of selecting projects that focus solely on products. Focusing on problems such as high warranty returns and customer complaints will highlight a product’s symptoms but not the processes that create the symptoms.
A management system that requires regular system audits.
Focus 3: Standardize Best-in-Class Management System Practices
Once a company has standardized a particular Six Sigma practice, it must integrate the practice into the fabric of its operations, reinforcing it through a reward and recognition systems.
Standardization at the operations level is no different from standardization at the business level.
The best-in-class practices of other businesses can be investigated and applied, allowing the company to leapfrog its way to a higher retention rate.
Once the business has uncovered a best in-class management practice, it should seek to standardize it and transfer the knowledge to all relevant sectors within the business.
Focus 4: Integrate Standardized Six Sigma Practices into Policies and Procedures.
Once a Six Sigma practice is standardized, it must be integrated into the fabric of the operations.
Practices become institutionalized when their cross-applicability is interwoven into operating policies and procedures and then reinforced through reward and recognition systems.
Integration at the operations level is no different from what takes place at the business level.