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 >>>

"Six Sigma on a Budget" book review with simplified tools

One of the biggest issues with companies deploying Six Sigma is the upfront cost for training. For a company of 1000 employees, most consultants would recommend 10 Black Belts and 100 Green Belts. Although it can be an effective way to gain critical mass, the price tag can scare many companies away.

There are many ways to cost effectively implement Six Sigma, without all the upfront costs. In fact, we prefer a more targeted approach to process improvement, not a mass training that cannot possibly be supported or managed properly.

Based on these issues with Six Sigma deployment, I was intrigued by the book "Six Sigma on a Budget: Achieving More with Less Using the Principles of Six Sigma"

Despite the title, this book is not about how to deploy Six Sigma cost effectively. We utilize an approach where we identify a target area, focus on making that area successful, then roll out to the rest of the areas in a methodical manner. Please contact us for help with this approach.

Instead, the book focuses on how to use the Six Sigma tools more effectively, to increase utilization with employees and reduce training time. The author, Warren Brussee, went through Six Sigma training at GE, but felt there was a better way to train, without as much technical details, with an approach that provides a more effective use of the tools.

The book covers the basic concepts of Six Sigma, and says that you only need high school level math and Excel software to achieve Green Belt level skills from this book.

Brussee presents many different simplified versions of existing tools, to show how to easily utilize the concepts, without the complexity and effort.

Here are the tools he presents as "Simplified," along with a description on how it differs from the traditional application:

• Quality Function Deployment (QFD)
• Only uses the two comparisons between customer needs and design options (items). The design items are grouped to help determine priorities. Each customer need is ranked with a 1 to 5 scale (5 being safety or critical), and each design item is ranked with a 1 to 5 scale (5 being that it addresses the customer need completely). The design option that ranks the highest is the best approach for the team. This reminds me of a Cause and Effect Matrix.
  
• Failure Mode and Effects Analysis (FMEA)
• Only lists the concerns (risks) on the left side column, and lists the potential solutions across the top, using a similar scale as QFD.
  
• Process Flow Diagrams (PFD)
• Uses only a few symbols, and only displays four process types: assembly, transfer, measurements, quality judgments
  
• Correlation Tests
• Instead of running correlation statistical tests (generating a correlation coefficient), he suggests using visual charts to stack different factors on top of each other, using the same timeline on the x-axis. If you can visually see how variation aligns with other factors, then there might be a correlation. I've seen these simplified charts in Excel, called sparklines. Learn more about sparklines >>>
  
• Gauge Verification
• Suggests using "master" parts that are centered near the target (middle of the specifications), then having 3 different operators/machines measure the master part 7 times each. This will provide 21 measurements, of which repeatability and reproducibility can be calculated.
  
• Control Charts
• Uses a simpler chart to identify issues that is more intuitive and understandable to workers. Instead of plotting a single data point, a vertical bar is plotted showing the average of the last 11 readings, and the spread represents the variation of the 11 readings. The bars are colored coded based on whether they exceed control or tolerance limits.
  
• Design of Experiments (DOE)
• He discusses using a 2-level factorial DOE with 5 replicates (i.e. a 2 factor experiment would require 2^2 x 5 = 20 samples), and to compare the average and standard deviation results to each combination, to find the settings that have minimal variation, and that is closest to the nominal results.

Overall, I would recommend this book if you are looking for "simplified" ways to teach and utilize the tools listed above (QFD, FMEA, PFD, Gage R&R, SPC, DOE).

To order the book or read the first chapter, visit the Amazon page for "Six Sigma on a Budget" >>>