Some companies decide not to use Six Sigma because they fear it’s too expensive.
While it’s true that there are costs associated with Lean Six Sigma training and deployment, this is not the full story. Any Six Sigma cost benefit analysis that only takes into account its initial training costs and pays no attention to the long-term benefits of a Six-Sigma-trained workforce is misleading.
Companies that see Lean Six Sigma as being too expensive to implement are probably evaluating the program and methodology solely on the training and certification costs.
They would be much better served by asking themselves, “Do the benefits of Six Sigma outweigh the training costs?”
The Benefits of Six Sigma
Six Sigma improves performance in several different ways:
Transforms employees – Employees who understand Six Sigma principles and know how to use them never see the world the same way again. Six Sigma certification turns employees into problem solvers who identify defects and produce solutions.
Giving employees Six Sigma training is like a vaccination. Training helps inoculate your company against quality defects and process variation.
Decreases costs – It costs the same amount of money to produce a quality product as it does to produce a defective one.
When Six Sigma training helps employees produce products with fewer defects, the company has more quality products to sell at a profit. Higher product quality also decreases inspection and rework expenses, and eliminates wasted raw material and labor.
Organizations that have embraced Six Sigma have drastically reduced costs.
U.S. Army – Realized cost savings, using Six Sigma methods, of over $2 billion.
General Electric – Reduced costs in excess of $1.8 billion.
Allied Signal – Saved $800 million by implementing Six Sigma programs.
Increases customer satisfaction – Customer satisfaction is a key part of Six Sigma. From the beginning of the project, Six Sigma teams are focused on the impact their actions have on the customer. As the project progresses, teams are guided by the voice of the customer when making decisions that impact the end product.
When customers become the focus of the Six Sigma improvement efforts, they respond with greater loyalty and increased demand.
Increases revenue – Producing high-quality products to meet an increased demand gives organizations greater pricing power, which leads to increased revenue and improved profitability.
Provides a competitive advantage – In an organization infused with Six Sigma expertise and training, continuous improvement is not just a vaguely imagined objective – it becomes part of daily operations and company culture.
Organizations that are supported by a team of Six Sigma trained employees produce better products that command higher prices. This dedication to quality also helps Six Sigma-centered organizations stand apart from the rest.
Organizations that see Six Sigma as no more than a training expense are missing the big picture.
Once Six Sigma training has permeated the organization, continuous improvement becomes more than just a slogan on a plaque. It flows through the organization’s bloodstream. The company now has hundreds of eyes to spot problems and hundreds of hands to help solve them. Not just today, but every day going forward.
Isn’t that worth the cost of training?
