Six Sigma for Small- and Medium-sized Businesses

One of the more familiar dilemmas in business today is how to implement Six Sigma in small and medium-sized companies. This is a serious issue because larger companies are beginning to mandate Six Sigma to their supply base as a condition of doing 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 full time resources, and training of the masses. Those of you who have experienced this situation will agree that this approach to Six Sigma is unrealistic for smaller and mid-sized organizations. But there still exists a real need to bring smaller and mid-sized companies into the Six Sigma fold, because collectively they might represent as much as 75 percent-80 percent of total value stream activity.

The traditional top-down implementation approach is a major barrier to entry for smaller and mid-sized companies, and it doesn’t need to be. There are alternative Six Sigma deployment models that allow smaller and mid-sized organizations to implement at a pace where they can actually digest the methodology and achieve benefits, without the significant resource commitment and overhead structure of the traditional Six Sigma implementation approach. As a result, organizations are sometimes able to achieve faster and more impressive benefits than their larger customers.

One Size Fits All? – NOT!

One observation I’ve made about the Six Sigma implementation lifecycle is that the majority of benefits are not derived from Black Belts – they are generated at the Green Belt and Yellow Belt level, especially when the Six Sigma process becomes institutionalized. Another observation is that Black Belts and Green Belts are interchangeable for about 80% of the organization’s Six Sigma opportunities. Using a Green Belt and Yellow Belt approach addresses many of the constraints of smaller and mid-sized companies and allows them to implement at a more manageable pace. These organizations become just as technically skilled as their larger company counterparts; in fact, many are outperforming their larger customers in terms of both financial results and cultural transformation.

Scaleable Six Sigma – How It Works

Below is a brief eight-step process overview of a Six Sigma deployment and execution process I recommend for smaller and mid-sized organizations:

1. A Six Sigma strategy and overarching infrastructure is developed. The strategy, implementation approach and projects are directly aligned to the organization’s strategic plan and customer requirements. This step also includes well-organized communication and awareness building for Six Sigma.

2. Implementation planning is completed. Beyond the overall program, this includes defining objectives, scope, goals, priorities, work plans, deliverables, baseline performance, and expected performance/financial improvements for a pool of high-impact Six Sigma projects.

3. Team formation and the education plan begin concurrently. The Six Sigma strategy definition and implementation planning provides background and focus for the teams, and prevents wasted time and resources debating over what needs to be done. In addition, education is customized to business specific needs and includes sample issues, data and examples from their actual processes.

4. Executives complete Champion education where they learn about the Six Sigma process, methodology and tools. Executives also focus on how to lead, structure, and mentor a successful Six Sigma effort through several exercises. Although the Six Sigma approach is different in smaller and mid-sized companies, Executives must understand that Six Sigma still requires the same leadership and commitment as in larger companies.

5. Selected individuals complete Green Belt certification (e.g., a group of 25 individuals over a 2-3 month period). This education focuses on Six Sigma but it includes and integrates Kaizen and Lean. I believe a program should stress deployment of the right tools to the right opportunities, because not all problems require a complex statistical approach.

6. Other team members complete Yellow Belt certification (e.g., 25-50 individuals over a 2-4 week period). This education focuses on the basic “blocking and tackling” tools of Six Sigma, as well as Kaizen and Lean.

7. Later in the lifecycle, individuals are transitioned to the next level of Six Sigma achievement. Some selected Green Belts are developed into Black Belts, and some Yellow Belts are developed into Green Belts. Other new resources are developed into Green Belts and Yellow Belts respectively based on need. The goal is to ramp up to a point where the tangible savings is funding the Six Sigma program.

8. In all cases, certification is by achievement, not attendance. Beyond the classroom time, all certification candidates must complete a mandatory project that demonstrates the correct deployment of Six Sigma, solves a real business problem and achieves a targeted savings.

The above building-block approach can be modularized so that the organization can quickly transition their Six Sigma resources to the next highest level of achievement. Additionally, they can accomplish their Six Sigma implementation at a more manageable pace and scope. The number of projects, the levels of education, and the whole deployment and execution approach occur at a digestible pace, with a direct link to strategy and results.

There Is A Better Way

This above type of scaleable approach to Six Sigma enables smaller and mid-sized organizations to achieve results at a more manageable pace, while still achieving desired results. The “one size fits all” Six Sigma deployment model just isn’t practical for every company or organization, and other deployment models should be explored. The real need to bring smaller and mid-sized companies into the Six Sigma fold can be satisfied with the right deployment model.