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It is possible to adapt six sigma for SMEs!

If you don’t get too hung up on the complex maths, or detailed rules and methods – Six Sigma has some really good core ideas for Smaller businesses too – it builds upon many successful elements of previous quality improvement initiatives and incorporates a unique method of its own.

At its core Six Sigma is a problems solving approach addressing

* problems of quality
* problems of waste

Most business (actually pretty well ALL businesses) are looking to increase profits – and Six Sigma is one method of doing that.
As an SME it is hard to have the time, money and head-space to apply all the fabulous tools and methods that big business have access to, and the resources to deploy; unfortunately Six Sigma is often seen as one of these.
Some Definitions:

Six Sigma seeks to improve the quality of outputs by identifying and removing the causes of defects (errors) and minimising variability in methods of production. Solutions address reducing variation by improving design.

Lean Six Sigma is an extension of the original model and also addresses process flow and waste issues, aimed at promoting “business and operational excellence”.

Originally, the name six sigma arose from the goal of this method – a statistical calculation relating to how many errors and/or defects occur. To achieve Six Sigma, a process must not produce more than 3.4 defects per million outcomes.
Unfortunately these foundation numbers are quite large – if I see a million customers in my entire career I will be extremely busy… For the cake shop on the corner sells a million cakes it has to be open every day for twenty years and sell 1 cake every 3 minutes – 365 days per year for 8 hours a day … well beyond the normal production and selling capabilities of most small cake shops….It is this side of the method that immediately puts SMEs off.
BUT returning to the cake shop by using these methods to focus on how to prevent burnt cakes, or to ensure the right ingredients are always combined in the right order etc etc is a very important aspect of how profitable they will be.
At the heart of lean six sigma is focusing on the process to shorten production time, reduce errors and wastage, decrease rework and improving consistency whilst improving quality – again, factors that impact the success of any business no-matter what its size.
For example the cake shop can consider:

  • how the kitchen and shop are layed-out to minimise travel time between the fridge, the bench, the oven, the mixer, the counter etc to wasting time retracing the same paths over and over
  • how the ingredients are stored, labelled, and dispensed to reduce waste related to errors in cooking
  • the cake-tins used and how the oven operates to ensure an even cook every time
  • supply lines for the ingredients so that quality is standardised and any opportunity for bulk discounts
  • writing out the recipes and the process so there is less reliance on one person

Each of these options looks at process improvements from Lean Six Sigma – but how do you decide Where to start?? What will have the biggest impact???

1. Set the Scene

Often people talking out six sigma will talk about “DEE-MAKE” – this isn’t actually a Six Sigma tool as such but an approach to implementing any changes within your business. Actually it is an acronym “DMAIC” used to outline how any improvement process needs to be approached:

* Define
* Measure
* Analyse
* Improve
* Control

Starting with Define – you need to choose a process to begin with – again as an SME you usually know your pain points, if not the whys and wherefores of the pain, so pick a place to start.
TIP – start small you can repeat the process again and again increasing size and complexity of the issues to be solved once you are more practiced.

To Apply Six Sigma for SMEs use the TOOLS

2. Create a Checklist

Checklists can serve two purposes:

a) act as a way of monitoring the situation, as an observer you can collect data to identify issues
b) to act as a guide and therefore to influence behaviour and monitor progress.

A great example of this is popping up in public toilets (think about the airport, or train station). A checklist, with various cleaning activities ticked and the time the task was performed is usually visible somewhere near the entrance – making it easier for cleaners to remember to do all the tasks in order when they are listed out. Ensuring people put their name to their work – helps them take pride in their work and creates accountability.


3. Make a Summary and Analyse the Outcomes

You can hand-write a table, it doesn’t have to be complicated – you simply what to see what issues on your checklist are are arising most often.

Customers Postage

Issue 1

Letters Completed by 4pm

Issue 2

Envelopes address correctly and logged in mailbook

Issue 3

Mail Taken to Post Office before 6pm

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4. Work out the Causes and Effects

Draw yourself a fishbone diagram – just like the one below – and ask why? why? why? why? and why? – until all the causes are filled in – interrogate each aspects of your business involved either directly or indirectly in the issue (People, Process, Material, Machines, Environment)
SixSigma Fishbone
It is often all to easy to say – “the mail is always late it must be the mailroom’s fault” when in fact the cause is due to insufficient stationery being stocked so there is always a mad scramble to find “express post” envelopes of the right size – ie lack of stationery is the root cause of the delays.
This can actually be done on the back of an envelope (or a plain piece of paper) there is no need for fancy software to investigate the causes – just a thorough questioning of each area, drilling down further and further until the underlying reason is revealed.
Once you identify the issues you can go about addressing them by introducing change – but you want to make sure the changes actually lead to the result you want (and don’t accidentally miss their target).

5. Measure Change

Make sure you keep up the checklist you started in Step 2 and track any improvements you make as a result of the change. This shows you two things – firstly if your change is working, and secondly when you reached your targeted successful place of improvement – and of course that is then time for a celebration!

Remember – take a few of the key messages

You don’t need to have an army of consultants to start making some changes for the better.

About the Author

Eve Blackall Smart Accounting image
Eve Blackall the small business answer to The Supernanny.
At Smart Accounting you work one-on-one with Eve who has already assisted hundreds of business owners increase cash-flow, grow profits, also ensuring those businesses fetch the highest price when it comes time to sell.[box type=”tick” style=”rounded” border=”full” icon=”empty”]

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