Advantages and Disadvantages of Six Sigma

The Six Sigma approach to quality improvement has been around for more than 30 years. Companies that use Six Sigma seek to reduce errors and defects to 3.4 per million, equal to a 99.99966 percent defect-free rate. The benefits of Six Sigma in manufacturing are improved quality and efficient processes. Flaws with Six Sigma include the demands it makes on company money and resources.

How Six Sigma Works

Six Sigma businesses devote themselves to continuous quality improvement. Six Sigma uses statistical and empirical methods to track defects and variations in your business outputs and to identify the causes. Then you work on improving operations to eliminate the flaws.

The benefits of Six Sigma in manufacturing are obvious, but sales and service organizations also use Six Sigma for improvement. The benefits to the Six Sigma process in services are that managers can analyze, for example, how staff interact with customers and how information is shared. Managers can then apply that knowledge to improve performance.

There are two main methods of applying Six Sigma. One is designed to improve existing processes. The other is for new processes, or for completely replacing old and inefficient ones.

Six Sigma Masters

Six Sigma isn't just about number crunching and analysis, it's also about people. Like martial arts masters, trained Six Sigma staff are ranked by belts.

A Six Sigma champion, for example, is an upper manager who sponsors Six Sigma projects, helps remove obstacles and provides Six Sigma teams with resources. A black belt is a lower-ranked but highly trained expert, working on Six Sigma projects full time. A green belt works part of their time on Six Sigma projects and helps train other employees in Six Sigma principles.

Benefits to Six Sigma Process

Like any business-management concept, Six Sigma has advantages and disadvantages. Companies that successfully adopt Six Sigma can see profits rise; companies that try it and fail may lose ground. Supporters say the benefits to Six Sigma processes make it more than worthwhile:

  • Spotting the potential for defects before they occur, then eliminating them, is cheaper than fixing problems after they happen.

  • Six Sigma's analysis of your company processes is data-heavy, making it easy to spot problems and solve them promptly.

  • Six Sigma is about continuous improvement rather than a one-time fix. If your initial solutions for improving processes don't work out, Six Sigma professionals are prepared to move on to the next.

  • Even if you never hit the 99.99966 percent defect-free rate, striving for it will make your products or services much better. 

  • Six Sigma is proactive, which is good for customers. You can spot and fix problems ahead of time rather than reacting after customers make complaints. 

  • Six Sigma can save money by reducing returns. 

Flaws With Six Sigma

Despite the undeniable benefits, critics say businesses should keep in mind the flaws with Six Sigma before jumping on the bandwagon.

  • Six Sigma is about quality improvement, not cost reduction. Improving quality and eliminating defects can cost money in the form of increased overhead and added investment in machinery.

  • Achieving Six Sigma often requires better equipment, improved testing systems, more quality checks and tighter tolerances. This can consume a lot of resources.

  • The statistical analysis necessary for Six Sigma requires a commitment of resources, too. 

  • If you commit to Six Sigma and your competitors don't, your products or services will become higher quality, worthy of a higher price. Some customers, however, may prefer cheaper products over quality. 

Before launching Six Sigma, weigh the pros and cons for your company. If, say, you manufacture cancer drugs or space shuttle parts, your customers may be very happy to pay top dollar for defect-free products. If you're selling pens or scissors, customers will probably make price a higher priority.

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About the Author

Fraser Sherman has written about every aspect of business: how to start one, how to keep one in the black, the best business structure, the details of financial statements. He's also run a couple of small businesses of his own. He lives in Durham NC with his awesome wife and two wonderful dogs. His website is frasersherman.com