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May 22, 2011

Benefits Of Six Sigma

Although six sigma promises many potential benefits still it is very important to understand them before going to start six sigma projects in your organization.

Being a vital part of any six sigma methodology, it is very important to choose the right six sigma project. Six sigma projects are identified in an organization by considering its strategic direction and impacts on the bottom-line and customer satisfaction. Weigh the pros and cons properly and make sure that you have taken all constraints into consideration. Below things should be kept in mind before selecting any six sigma project:

Remember, not all projects have the potential to save same amount of money. Make sure that the project you are choosing is capable of giving you long-term benefits and has the ability to induce further improvements in other projects of your organization.
Be careful while choosing the six sigma team for your project. This team should be strong as it has to lead the project towards success. Perform proper cost benefits analysis and then decide if you should recruit black belts from some outside resource or use the in-house team. Long term benefits and affordability are two key factors that should be kept in mind while selecting a project and its team.
In order to get best results it is important to sub-divide the project into two or more smaller six sigma projects. These projects will handle the strategic, tactical as well as operational aspects of the project.
Monitor the project regularly and make sure that it does not deviate from the track.

Being an effective process improvement strategy, six sigma projects promises many potential benefits to the organization that uses them. Ranging from financial to organizational and operational, six sigma projects carry their own individual benefits.

Financial Benefits: The financial benefits include:

1- The cost is reduced by decrease in the cost of production and services.
2- The profitability as well as productivity of existing products and services is increased.
3- There is an increase in cash flow due to additional revenue generation.
4- The cost avoidance factor is enabled.
5- Current revenue is increased or additional revenue is produced.
6- Organizations get fast return on investment.
7- Risk management.

Operational Benefits: The operational benefits of six sigma projects include:

1- The employee's workload is reduced.
2- The employee satisfaction level is increased due to improvements in the workflow.
3- Non-value-added services and activities are eliminated.
4- Team spirit is increased.
5- Internal communication within the organization is improved.
5- Processes are simplified and improved.