Advantages & Disadvantages of Six Sigma - Knowledge Management, Contemporary Management | Contemporary Management - B Com PDF Download

Six Sigma is a customer-driven quality-control program that is most commonly associated with General Electric (GE), which embraced the program even though it was developed by Motorola. After observing GE's many successes with Six Sigma, other firms adopted it with varying results. Some small businesses, particularly those in manufacturing, may find Six Sigma principles ideal for ensuring the quality of their products. Other businesses may find the Six Sigma system too rigid or otherwise impractical for their particular situations.

Six Sigma Advantages

The main advantage of Six Sigma compared to other approaches to quality control is that Six Sigma is customer driven. Six Sigma is defined as a limit of 3.4 defects per one million products or service processes, where anything not acceptable to the end customer is considered a defect. Six Sigma addresses the entire process behind the production of an item or completion of a service, rather than just the final outcome. It is proactive rather than reactive, as it sets out to determine how improvements can be made even before defects or shortcomings are found.

Six Sigma Disadvantages

Because Six Sigma is applied to all aspects of the production and planning process, it may create rigidity and bureaucracy that can create delays and stifle creativity. In addition, its customer focus may be taken to extremes, where internal quality-control measures that make sense for a company are not taken because of the overlying goal of achieving the Six Sigma-stipulated level of consumer satisfaction. For example, an inexpensive measure that carries a risk of a slightly higher defect rate may be rejected in favor of a more expensive measure that helps to achieve Six Sigma, but adversely affects profitability.

Advantages for Small Businesses

A small business that achieves the coveted Six Sigma quality certification will certainly stand out among its competitors. It is particularly valuable to a specialty manufacturing concern that produces precision goods, such as medical technology, where quality is the utmost customer priority and the customer expects to bear the cost of the Six Sigma process. Even businesses that are unable to implement Six Sigma due to cost or practicality may benefit from having a partner or employee learn and implement some of the basics of the system, especially the philosophy of proactivity and customer satisfaction that underlies Six Sigma.

Disadvantages for Small Businesses

Six Sigma is extremely costly for many small businesses to implement. Employees must obtain training from certified Six Sigma institutes in order for an enterprise to receive Six Sigma certification. Even if a firm wishes to implement Six Sigma without formal certification, much training is necessary in order to understand the system and how to apply it to particular business processes. Many small businesses cannot possibly afford such training, even for a single employee. In addition, small businesses that need to remain nimble and creative often find the Six Sigma system of process analysis stifling, bureaucratic and overly time consuming.