Measuring Six Sigma Benefits
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Business > Management
Feb 26, 2008
tjacowski
Measuring Six Sigma Benefits
Measuring Six Sigma benefits on a regular basis is necessary because it is only then that a business will be able to assess the effectiveness of the ongoing Six Sigma implementation project. Keeping the project on the right track is vital for its success, and this is why businesses need to constantly monitor its progress. Another reason is that deviations and errors can be fixed only if they are identified at an early stage; left unchecked, such discrepancies can easily lead to the termination of the entire project. What To Measure Six Sigma offers a wide range of benefits, so much so that it would not be feasible or productive to measure each and every component. This is why businesses need to concentrate their efforts only on those benefits that offer the most value. For example, direct financial benefits that accrue to the organization as a result of the implementations should be given preference. For better results, businesses should make different assessments for different financial benefits that may include components such as cost reductions, cost avoidance, increase in capacity, revenue growth, retained revenue, improved investment income, and improved risk management. Using individual assessment plans is necessary because only then will a business be able to identify the root cause that might be preventing the implementation project from achieving the set goals and objectives. Opting for an overall assessment plan might be relatively easier, but should be avoided because then it would become quite difficult to identify root problems, if any. Other Important Measurement Components Another component that requires constant monitoring and assessments is the operational performance benefit that represents the improvements made in the overall efficiency of the organization. Measuring performance benefits is necessary because it indicates efficiency improvements of both the employees as well as the existing business processes. To make things easier, businesses can select a few Key Performance Indicators (KPIs) and concentrate their efforts on measuring these rather than wasting their time on measuring each and every individual component. For better assessments, businesses need to keep updating their KPI list on a regular basis because overall efficiency being contributed by a business process may change with time. Inability to do this may result in faulty measurements that may not represent the true state of affairs of the organization concerned. Measuring Six Sigma benefits may not result in any direct monetary gains, but it is still important because it functions as an effective control system, allowing the management to assess the overall progress of the Six Sigma implementation project. This is why such measurements have now become an integral part of Six Sigma implementations and are increasingly being integrated into the overall management system existing in a business organization. Without these measurements, ensuring the success of Six Sigma implementation projects will become virtually impossible.
Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution's Six Sigma Online offers online six sigma training and certification classes for lean six sigma, black belts, green belts, and yellow belts.
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