Steps For Small Businesses To Put Lean Six Sigma Into Action

Steps For Small Businesses To Put Lean Six Sigma Into Action

Many small businesses can benefit by putting the principles of Lean Six Sigma into action, particularly those who want to focus on process improvement. By using the right tools and techniques, small business leaders can avoid common mistakes that lead to business challenges.

In some cases, those challenges can become fatal. Those who run a small business know the often-repeated statistics from the U.S. Bureau of Labor Statistics: about a third of small businesses fail within two years, 50% fail in five years and only 33% survive a decade.

But Lean Six Sigma for small businesses and adherence to continuous process improvement can address many of the common challenges that topple businesses. They include poor financial management (especially cash flow and mispricing of goods and services), ineffective business planning, and not understanding the needs of the consumer base.

The Need For Process Improvement

Six Sigma started at Motorola in 1986. The principles of Lean started with Toyota in the mid-20th century. Lean focuses on reducing waste and eliminating anything that does not serve the customer. Six Sigma focuses on limiting variance in an operation, resulting in a reduction in errors and defects.

Both have grown in use over the past half century, saving Fortune 500 companies an estimated $427 billion, according to research cited by DTG founder and CEO Steve Shaheen in Forbes. Shaheen writes that his company is among those that has achieved significant savings using Six Sigma.

The same needs that drove business leaders to develop and adopt Lean Six Sigma strategies decades ago still exist today. Process improvement is just as important now as it was then. One could argue it’s even more critical in a global market where business leaders face multiple challenges.

Steps To Implement Lean Six Sigma Strategies

The following provides an overview of steps to take before starting a Lean Six Sigma project at a business of any size. Small business owners may have to handle much of this themselves, depending on the size of the operation – the government defines a small business as having anywhere from one to 1,500 employees. These steps should happen before the first fishbone diagram is created or a project team begins to apply DMAIC to eliminate errors and defects.

Training and Certification in Lean Six Sigma

The first step in using Lean Six Sigma involves knowing the methodologies of Lean and Six Sigma in terms of tools, techniques and strategies. Enrolling in Lean Six Sigma training is a big step toward achieving that goal. Training levels are marked by a belt system that uses colors to denote the level of knowledge and skills acquired.

  • White Belt: Learn Six Sigma jargon and basic tools
  • Yellow Belt: Participate in project teams, helping apply Lean Six Sigma tools to process improvements projects
  • Green Belt: Work under the direction of Black Belts on project teams, assist with data collection and analysis. Can also lead smaller scope Green Belt projects
  • Black Belt: Lead project teams, oversee all activities, coach project team members
  • Master Black Belt: Coach Black Belts and Green Belts, and typically helps set direction and strategy for an organization’s Lean Six Sigma efforts

Certification programs are available at the various belt levels. An investment in earning a belt designation can make implementing Lean Six Sigma more effective.

Know Your Issues

Many companies – especially smaller businesses – get tripped up before they even start using Lean Six Sigma. That’s because they don’t have enough data to help them pinpoint the issues they are experiencing.

The strategies and tools used in Lean Six Sigma help companies identify areas where they can make improvements, resulting in better products, fewer defects, more satisfied customers and a stronger bottom line. But reaping the benefits in these areas requires an understanding of where you are today.

Shaheen writes that knowing the right questions to ask is where all companies should start with Lean Six Sigma. Doing so requires “an investigative and consultative approach,” he writes, one that is built on Lean Six Sigma principles. Doing so allows business leaders to uncover problems that lead to errors, identify sources of waste, and quantify their cost to the operation.

The Power of the Gemba Walk

Gemba Walk enables project leaders to ask the right questions and get the information they need to find solutions to their issues. It’s the place to start for a smaller business looking to find where to make process improvements. Given that, it’s surprising the number of people who do not do so.

A Gemba Walk is simple in concept but powerful in its impact. It involves managers (or, in the case of a small business, the owner) making an in-person evaluation of how some aspect of the business is done. This accomplishes a variety of goals.

  1. They see how employees accomplish the tasks under review
  2. They see firsthand how well or poorly equipment operates
  3. They can speak with employees who have firsthand knowledge about the process

This also is the first step for collecting data on an operation that will drive decision-making in a process improvement project.

Voice of the Customer

Another frequent issue with small businesses is an inability to find a large enough consumer base. Using the Voice of the Customer (VOC) strategy that is part of Lean can support growth of the base and result in more loyal customers. Voice of the Customer involves using direct feedback from consumers to find out what they like and dislike about a product and what needs that the company is not meeting.

Project teams that start with this information have a firm idea of the opportunities available for improvement. VOC can help businesses of all sizes make better strategic decisions and design more popular products and services.

Create a Project Team

With more details about the challenges the company faces, a small business owner can create a project team that will work on putting Lean Six Sigma tools to use. The size of the team will depend on the size of the company. In some cases, the business owner will manage the project. Larger teams should be cross-functional, with every area involved in creation and marketing of a product represented on the team.

These steps can get a small or medium-sized business started on a Lean Six Sigma project. Other benefits include:

  • Improved teamwork
  • Employee engagement
  • A focus on using data
  • Improvement in production and communication

The result is a company that is more agile and better meets the demand of consumers.

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