Important results of six sigma are in four areas

Financial
1. 2. 3. 4. Financial Benefits for customers Benefits for employees Effects of quality

For most people the most important reason for using six sigma is financial. So lets start with the gains achieved by some of the companies that have invested in implementing six sigma.

At General Electric, Six Sigma added more than $2 billion to the bottom line in 1999 and $2.4 billion in 2000. Motorola saved more than $15 billion in the first 10 years of its Six Sigma efforts. Allied Signal (Honeywell), from 1992 through 1996, reduced costs by$1.4 billion and reduced new product introduction time by 16 percent. DuPont started Six Sigma in 1998 and realized more than $1.6 billion in cost savings in four years in addition to reducing environmental impact and/or increasing safety. The City of Fort Wayne is using Six Sigma in a number of departments, and the projects have resulted in over $3 million of savings or cost avoidance. Performance results through Six Sigma vary, depending on the deployment of this problem-solving

methodology. But its been estimated that you should expect a minimum return on investment (ROI) of three or four times the costs of implementing Six Sigma. How long does this take? The break-even analysis generally takes about eight months, and about 1 to 112 years later, you will realize the ROI. The most important thing is to remain focused on your commitment to the program. The knowledge gained by solving problems for customers and process problems while increasing ROI will result in a significant competitive advantage. Here are a few questions for you to consider for your organization:

What is the cost of scrap? What is the cost of rework? What is the cost of excessive cycle times and delays? What is the cost of business lost because customers are dissatisfied with your products or services? What is the cost of opportunities lost because you didnt have the time or the resources to take advantage of them? What is the total cost of poor quality in your organization?

Do you know the answers to these questions in terms of dollars? If so, then you know how important it is to reduce process variation and defects in your organization. If not, then you need to get the knowledge that gives you the power to make the necessary changes. As you identify and correct process variations, you save on expenses which means money to invest in growing your businessand in further improving your processes.

Benefits for Customers

How important are your customers? In other words, where would you be without them? You must attract and satisfy and keep customers. Otherwise, you obviously wont stay in business long. The better you satisfy your customers (cur-rent and potential), the healthier your revenue. You know that. But what role do your customers play, besides being a source of income? Do they help you improve your products, services, and processes? Do you know how to satisfy customers most effectivelyand do what you do even better? Six Sigma focuses on the expectations of your customers: thats what matters most. By using Six Sigma management methods, your company can target the vital few factors in your processes that are allowing variations and defects that keep you from meeting the critical expectations of your customers. You can better align your business goals with the requirements and expectations of your customers. The experiences of various organizations have demonstrated how Six Sigma management improves customer satisfaction. In every process, product, or service, theres potential for better satisfying your customers. And that translates into money. Focusing on the customer is an absolute business requirementespecially as the pressure is increasing to perform, produce, and deliver faster, better, and cheaper. As technology has accelerated the speed of business and the quality movement has focused on the customer, customer expectations have changed. Your customers have access to the Internet and other channels of information and distribution, so they know more about whats available and they have greater freedom to choose among products and services and companies. And they tend to choose and continue to patronize companies that deliver the highest quality at the lowest price the fastest. Six Sigma helps you get there by showing you how to find the breakthrough points in your processes. That means not only identifying the waste streams in your processes, but also understanding all the elements that create them. As you meet the requirements and expectations of your customers more effectively and achieve higher customer satisfaction, you increase your incomewhich means money to invest in growing your business.

Benefits for Employees

The beneficial effects of Six Sigma on employees can be powerful. Lets briefly consider a few of those benefits. Six Sigma inspires employees. When the company is committed to improving its processes, meeting customer expectations, and cutting costs, employees will naturally feel motivated to do better. After all, how many of your employees actually want to do their jobs badly, to waste time and money, and to fail to meet the expectations of your customers? Furthermore, employees play an integral role in the entire Six Sigma processit empowers them. For example, employees are actively involved in the changes taking place. Here are the typical cultural shifts: Employees have a voice in the decision-making process that is heard at the leadership level. Employees are actively involved in making changes. Old organizational barriers are removed. Employees presentation skills are elevated. Employees have higher access to data levels and information. Employees are allowed to voice their opinions without fear of retribution. Face-time from senior management to the rank and file is significantly increased. Strategy goals are aligned with the rank and file. Black belts are empowered as opposed to micromanaged.