Six Sigma for Small Business - Book Review

One of the common complaints I hear about Six Sigma is that it is only for big businesses who can afford to invest in getting started. They hear stories about the cost to train a Green or Black Belt, and assume that it would not work in their own business because they are "too small."

I was intrigued by the book, "Six Sigma for Small Business" by Greg Brue (involved with GE's Six Sigma initiative). I was looking for ways to communicate with all businesses how Six Sigma concepts apply to everyone, not just Fortune 500 companies. If you've studied Six Sigma for any length of time, you'll hear all the reasons why it won't work in certain processes, businesses, organizations and industries. All of these reasons are completely false, and I often spend significant time trying to give examples of how it does apply to what they do.

Brue provides a list of common myths about Six Sigma, and his response to them:

• Only applies to large companies
• Only applies to manufacturing
• Requires outside consultants and experts (Black Belts)
• It is a complicated methodology that ordinary people do not understand
• It overlooks customer requirements
• It is a repackage of Total Quality Management (TQM)
• It is an accounting game with no real savings
• It is only about training
• It is a "magic pill" to fix problems with no effort

Once companies are able to get past these myths, then they are willing to see the value it can provide.

There are a couple quotes about Six Sigma that can be used with small businesses, to help them understand why they need to implement a program.

Six Sigma is about "using science and an established set of steps that will give you the bottom-line results you and your employees want."

"Six Sigma is all about identifying and fixing problems that lower costs, improve quality, and raise your bottom line."

What company could argue with that logic? I would add that the customer wants and needs should also be included in these quotes, but I think it's a good way to summarize how Six Sigma can be beneficial to any business.

One reason small businesses NEED to have an improvement program is that they are competing with larger companies, and most likely are more expensive (due to scale and volume pricing). Therefore, small businesses cannot afford to have quality and customer satisfaction issues, whereas larger companies can afford more issues because they can still retain customers with lower prices.

He also provides an interesting Sigma level scale that relates to employee empowerment, that is another key benefit of an improvement initiative.

He also provides a table for different sized companies, showing who should fill certain key Six Sigma roles, and how many people based on your employee size. For example, a business with $3-7 million in revenue with 10-50 employees should have the following roles:

• Champion: President/owner
• Master Black Belts: Outside expert, or experienced Six Sigma employee
• Black Belts: 2-3 employees 100% dedicated
• Green Belts: 1-5 employees 20% dedicated
• Project Team members: 6 member project team

Brue also gives some real-world examples of Six Sigma tools and ways to simplify them, such as:

• Quality Function Deployment (QFD): It can be a complicated tool to use, so he provides a simplified template (provided in book) to help businesses clearly understand their customer needs, without making it too complex.
• Gage Repeatability and Reproducibility (R&R): Checking the accuracy of grocery check-out lines to see if each cashier gets the same total
• Correlation Analysis: Without calculating an actual correlation coefficient, you can use his technique for outlining the shape of the pattern on a scatter plot, and using the ratio of length and width to estimate correlation. The formula is provided in the book.
• Design of Experiments (DOE): He provides a simple example of DOE using shower water temperature based on hot and cold knob settings.

There were a few tips that were provided that work well for small businesses:

• Balance the amount of training and projects with the need for results. It doesn't have to be a full immersion, but letting projects drag out and not freeing up time to work on them will quickly kill your Six Sigma program. Do as much as you can afford to do, with the idea that you'll recoup that investment, since that is what you are doing, investing in your people.
• To reduce training costs, piggyback your training with larger companies in your area. Many are willing to help the community, and if they have an internal course, there is no extra cost to them. They might also offer some of the experts to help your business get started. Local community or technical colleges offer less expensive training. There are many inexpensive online Green and Black Belt training courses to choose from. A last resort should be to build your own training material.
• Use Excel add-in programs, such as Snap Sheets or SigmaXL, instead of starting with Minitab or another more expensive software. This might depend on your training curriculum and what package they use.

I was hoping for more tips and tricks specifically for small businesses, but I still feel this is an excellent book on Six Sigma. I would recommend it to anyone looking for a good comprehensive Six Sigma book for beginners, and especially for those working with or inside a small business.

Learn more about the 'Six Sigma for Small Business' book on Amazon >>>

Tips and tricks for more efficient and effective PFMEAs

Process Failure Modes and Effects Analysis (PFMEA) tables can be a powerful tool to identify potential failures in a process, and to prioritize which failures should be improved first. However, the effort required to complete a PFMEA can take many hours, which costs money. 

Based on our experiences with PFMEAs, here are a list of tips and tricks for making them more effective and efficient. We will break the information into three categories: Forms and Templates, Efficiency, and Effectiveness.

Forms and Templates

• Break out the process control column from the detection control column. Sometimes they are contained in the same column, and the teams often focus too much on the detection and forget to talk about prevention activities in place. We would recommend having the columns in this order: Cause of failure mode, process controls, occurrence score, detection controls, then detection score.
  
• Create a new column for Severity x Occurrence ranking, to identify internal rework cost issues (high impact and it happens frequently, regardless if we detect the failure in-house). Typically, teams rank risks by RPN only, but that is only assessing the risk of external customer escapes.
  
• Consider adding another category for cause category, based on the fishbone diagram (Machines/tools/equipment, Methods/Processes, People/Personnel, Materials, Environment, etc). The PFMEA team can summarize the type of causes, and that information can be summarized and reported to identify systemic or higher level issues. If machines is the highest category, then the team should identify a project to look at machine preventative maintenance or equipment calibration updates.

Efficiency (complete PFMEA faster with fewer people)

• "The more; the merrier" is not a good approach for conducting a PFMEA. Instead of having a larger team involved in the event just in case certain team members might be needed, invite only the core team, and have others as "experts on call". When the team runs into an issue, highlight the cell by color to identify who needs to answer the question. Then bring in each expert as needed, and review the questions for them all at once.
  
• Before the PFMEA session begins, enter the failure mode and process steps into the form, so the team doesn't waste time watching the facilitator fill it out on the screen.
  
• Don't let the team get hung up on one point differences in scores. Instead, consider flipping a coin, have someone make the tie-breaker decision, vote using majority rules with the team members, or always select the highest score (round up).

Speaking of failure modes, this coin flip controversy cost Pittsburgh the game. 

• Before diving too deep into the exercise, scope the overall effort ahead of time. Consider evaluating Key Characteristics, Critical to Quality (CTQ) or Most Important Requirements (MIRs) only, instead of trying to assess every requirement. The idea is to start with the most important risks, so the biggest risks get identified as early as possible. Often times, the teams start to dwindle over time, so address the biggest issues when the momentum and excitement is highest.
  
• Start with listing all the failure modes, then group the failure modes together and score them all. This helps align the team with the proper severity score. Next, list all the detection controls and detection scores (that align with the failure modes). Next, brainstorm the causes of the failure modes, then list the process controls and then score the occurrences (to help align the occurrence scores).
  
• Keep sessions between 2-4 hours long. Over 4 hours can be tough for the team members to keep attention. Less than 2 hours is inefficient, since it takes some time to get setup and calibrated, and requires scheduling many more sessions, which increases the chance of people not attending.

• To keep the team from digging deep into solutions during the scoring, add notes and ideas into the Improvement Actions column, so the team can move on to the next item.
  
• Keep track of attendance and hours for each PFMEA session, so actual costs can be captured. There is often overestimates of PFMEA cost, so this data will help dispell myths. Ideally, your company will begin to create estimates for how must each PFMEA will cost based on size and magnitude of the effort.

Effectiveness (Identify more potential failures and causes, and make analysis more complete)

• Bring in the physical product, forms, software (view on screen), etc that is being discussed, so the team can physically see the process. If possible, perform the PFMEA right in the process area, so observations and questions can be answered quickly by the right people.
  
• Align the failure modes with defect categories in your quality system, and align your process steps with process step names in your business system or documentation.
  
• Fill out as much detail as possible into each column, such as document and reference numbers. Often times, what was written down was a summary of the discussion, and teams struggle to remember what the statements mean when the read it days later, and it helps others not involved in the sessions to understand what was discussed.

We prefer this level of detail, not just "friction" or "excess weight"

• After actions are implemented, in order to reduce occurrence scores, there must be a process control (training, fixture, mistake proof device, procedure change, etc) implemented. To reduce detection scores, there must be an inspection or test implemented.
  
• Spend time calibrating the team on the scoring tables at the beginning of each PFMEA session (especially the first session). Don't speed through this process, or you will struggle to keep the team aligned.
  
• Provide scoring handouts for each team member, or post the scoring on the wall. Allow extra time to go through the first couple lines slowly with the team.

• A regular review of the PFMEA should be setup as a recurring meeting (suggest monthly or quarterly), to force the teams to get together and update the PFMEA.
  
• Don't use a cut-off RPN score criteria for actions, instead work on the top risks only. Teams can be biased in their scoring when trying to stay below a value (such as 150 or 100) that require actions. Some processes may have many actions over that threshold, but the team cannot address all of them at once. However, AS 9100 requires that the criteria for how the team decides to take action should be defined on the PFMEA. We would recommend taking action on the top 5 RPNs, regardless of score.
  
• Customize the PFMEA ranking tables to align with your business, to minimize scoring differences between teams. Especially if conducting a PFMEA in a service or transactional process, or an industry other than manufacturing (where PFMEAs were developed, and most scoring tables were designed for). 

For more information about PFMEAs, download our training material or FMEA Excel template