Six Sigma Implementation in a Small Organization
Forrest Elton Hett
2339 N. Richmond
Wichita, Ks 67204
316-706-5976
motorhett@gmail.com
B.B.A. In Entrepreneurship from Wichita State University
Currently a Graduate Student in Industrial Engineering at Wichita State University
APICS Kansas Student Chapter S272
Full-Time Graduate
Six Sigma Implementation in a Small Organization
Abstract
Six Sigma is a successful strategy to increase organizational effectiveness. The Six
Sigma framework can be applied to small businesses even though they do not have the resources
a large company may have for implementation. Struggles and solutions regarding Six Sigma
faced by small organizations are outlined in this paper.
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Six Sigma was first implemented by Motorola in the mid 1980’s and was a scientific
approach to measure and reduce the defects of a process through calculated experimentation.
Implementation in a small organization can be effective with the correct management and
structure. Many large firms have implemented Six Sigma practices effectively and are now
expecting this performance from smaller suppliers (5, pg. 1). Large organizations have
implemented Six Sigma with great results but smaller organizations need to reap similar benefits
without investing millions of dollars. This paper will give an introduction to the methodology
behind implementing Six Sigma in a small organization.
Definition and Common Implementations of Six Sigma
The motivation behind Six Sigma is to reduce the cost that arises from poor quality.
Quality related costs have been measured to be as much as 40% of sales in some organizations
(1, pg. 48). These costs, known as the Costs of Poor Quality (COPQ), can occur in many
different ways ranging from scrapping of work in process, customer returns after the products are
sold and even retyping letters (1, pg. 49). Much of the blame for poor quality can be placed in
the processes used to get to the final product. Six Sigma methodology is a way to work through
the processes and ask the correct questions in order to create a process that has less opportunity
for variation and failure.
The basic foundation of Six Sigma is a relatively simple strategy to understand where
defects can occur and develop a new process that will improve over the existing process. This
procedure is structured as an experiment that will guide the organization by the results, and
decisions will be made from this vital information. The information gained will help managers
control process variation (2, pg. 16).
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The Six Sigma process is done, along with other aspects, through a framework designed
mainly by Motorola, known as the DMAIC framework (5, pg. 5). The DMAIC framework first
entails defining the initiative. This may involve things such as defining customer requirements,
key processes of variation and end results (1, pg. 18). Secondly, the defects must be defined and
measured. This will allow the company to see where the problems exist and the impact Six
Sigma made. The third step is to analyze the current situation. Analysis starts with getting the
information in a useable format and then proceeding to interpret and hypothesize what is actually
affecting the results. The fourth step is to improve on the current process. This is the step in
which planning and brainstorming occur in order to obtain input from all stakeholders involved
in the process and gain all the information possible to make the process function better. The last
stage is the control stage which involves implementation of systems to make sure the changes are
continually applied and the processes do not slip back to the way they were before the Six Sigma
application (4, pg. 18).
Six Sigma incorporates measurements that demonstrate the importance of what is Critical
to Quality (CTQ) and what is driving the variation in the system. If an organization can measure
what the customer wants, and what drives the possibility of failure within that goal, then the
organization can effectively change processes in order to more successfully satisfy customer
needs.
The implementation of Six Sigma in a large organization requires a significant time and
financial investment. Burton and Sams (2, pg. 37) outline a common training sequence in their
book. First, executive training will take place over four to eight weeks and will be considered
the champion level. The executives are trained at this level in order to develop and support a Six
Sigma culture. Second, the individuals that will become the experts in the organization will
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receive black belt training that will last five months, including a training project. Next, the more
basic green belt training will begin, lasting 5 days followed by a mandatory project. After that,
the most basic yellow belt training will occur for individuals who will use Six Sigma techniques
for limited everyday use. All the training can commonly be done in a year, but it commonly
takes two to three years for a large company to effectively incorporate the methodologies and
practices.
Difficulties in Small Organizations
Small organizations have a special set of difficulties when implementing a Six Sigma
methodology that makes the implementation process different than that of a large organization.
There are two types of variation in an organization. One is common cause variation and the
other is special cause variation. The difficulty with these two types of variation is they are dealt
with differently (1, pg. 59). A small organization will have processes that are probably not as
well defined and are not repeated as often as in a large organization. The small organization will
not as easily identify the difference between a problem with the system (common cause
variation), or one time problem that needs to be rectified and will then not arise again (special
cause variation). The special cause variation needs to be dealt with at that moment and then
move on. The common cause variation needs to be researched, and a new process needs to be
developed to address the issues that are entailed with the problem. Also, since a small
organization will not repeat the same process as many times as a large organization, it will take
longer to reach a statistically significant sampling of data to prove the solution satisfied the
problem.
According to Patel (5, pg. 12), the limited resources of a small or medium size
organization can pose difficulties for the implementation of Six Sigma such as employee
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education, flow of information and practical experimentation. These are all things that are much
more limited in a smaller organization. The large implementations of Six Sigma require many
employees undergoing full time training and focusing on Six Sigma and their related projects.
This may be a completely impossible investment for a small or medium sized organization to
undertake. The common training and implementation process may take years to show a return
(2, pg. 36). Small and Medium sized organizations may not even be able to investigate an
investment of that magnitude.
A common implementation of Six Sigma may have at least several full time employees
working for the initiative within an organization (5, pg. 19). Without a full time dedication, an
incorrect implementation of this may lead to poor acceptance of the movement within the
company. This will not allow the process to fully develop or may delay the cost savings. Small
organizations are more likely to fall prey to this than a large organization that can have dedicated
managers who will dedicate all their time to making sure the employees understand and embrace
the methodologies and apply them correctly. The size of the organization and availability of
financial resources always dictate the implementation strategy (5, pg. 19) but without the ability
to dedicate even one employee full time may lead to a disaster of the project.
Small Organizations Benefit from Six Sigma
Even though small organizations have a special set of difficulties when implementing an
official Six Sigma strategy, they can also benefit greatly from the program. According to Patel,
Six Sigma is more a management program and not a technical program (5, pg. 9). This means
that management of a small organization should be able to effectively implement a management
philosophy and change the culture of the organization just like a large organization.
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Thomas and Barton observed the application of Six Sigma principles in a small
engineering firm and it showed great success even in the early stages. A 55% reduction in the
rejection rate as well as a 12% energy reduction was observed after the experiment. Performance
was also increased by 31% in throughput and downtime was reduced from 5% to 2% (6, pg.
125). This shows that in a company with only 150 employees, a very positive result can be
obtained. This company only trained one employee to the black belt level and then allowed a
small team to work with him to obtain the results.
This is just one example of a company increasing output and decreasing costs with a relatively
small investment in Six Sigma, translating into significant gains for the company. Because they
had a well defined goals for a project, Six Sigma proved successful for them.
Implementing a Six Sigma Culture in a Small Organization
Since Six Sigma has been defined not as a technical program that must be implemented
in a rigid hierarchy but as a methodology that is flexible in many different environments, small
organizations are able to train in the practices and benefit when implemented correctly. Even
though small organizations do not have the resources that a large organization can use to push
through an elaborate Six Sigma structure, there are concepts and tools they can use to have
success without causing them to go bankrupt in the process. As stated before, one of the main
factors of success is the full acceptance and adoption of the methodology as an everyday practice
for managers and employees.
According to Patel, one strength of implementing Six Sigma in a small organization is the
open communication between employees and managers (5, pg. 81). Since a small organization
commonly has fewer levels of management hierarchy, the communication can move very
quickly from where it is gathered to the people who can make a change in the process. When
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choosing a person or persons to use as the Six Sigma pioneer within the company, they must
already have good communication and rapport with the other employees as well as being a good
and patient teacher. This increases the likelihood of other employees identifying with them,
understanding the concepts and successfully applying the principles. This also goes along with
Patel’s suggestion that support from top management is crucial to success (5, pg. 12). Top
management support allows the Six Sigma implementation to change the culture and bring about
a new way of thinking to solve problems.
Burton and Sams outline several key principles of implementing Six Sigma in any
organization but specifically in a small organization. One of them is linking the vision to only
the most critical issues (2, pg. 67-8). The Pareto principle outlines that 80% of the issues can be
taken care of with 20% of the fixes. Implementation of Six Sigma should be focused on the
issues that will bring about the most solutions. The chosen projects on which to implement the
Six Sigma strategy are even more critical in a small organization due to limited resources. It
would be easy for any organization to get bogged down attempting to apply Six Sigma to all
their projects initially, but care must be taken when choosing projects that will have the best
results in the shortest time period. The objectives must be communicated by management to the
project coordinators regarding the goals of the implementation in order to select and solve the
most critical issues. Patel also touches on this subject by stating that there will be many
opportunities, but time and resources will define the scope of projects (5, pg. 82).
The common paradigm that surrounds the hierarchy of necessary green, yellow and black
belt training can be misleading for small organizations. A successful implementation in a small
organization does not require all levels of training. Gnibus and Krull observed in their testing
that training to the green belt level yielded excellent results for the organization in their test (3,
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pg. 51). The training can be costly and time consuming and only training to a green belt level
can prove successful without the excessive costs involved with other levels of training. Patel
also states that the level of training does not determine the degree of success the organization
will have (5, pg. 82). If the organization is willing to adopt the methodologies and work with a
limited amount of training, they will be able to successfully apply it to the issues that will arise in
the organization even though they have not trained to the extent of much larger organizations.
There are two options regarding the training for Six Sigma. An organization can develop
an in-house education structure or can hire an outside firm. Breyfogle et al. state that an inhouse training program is probably not the best idea because it can take years to develop the
needed resources to have a successful program. If an outside firm is hired they will commonly
train a smaller group of people and allow those people to use the training material to train others
in the organization (1, pg. 147-8). This process will be a faster and more effective structure due
to the experience the trainers have with Six Sigma. It may look more expensive in the
beginning, but the cost of employees developing a program that is not effective would cost a
great deal more. A small organization will not likely have the resources to develop any kind of
effective Six Sigma training and will have the most success by hiring a competent firm to
educate a handful of individuals to manage projects within the company.
Training can be completed successfully with two different approaches. Thomas et al.
showed success in a small organization with only one individual trained to the black belt level (6,
pg. 121). Gnibus and Krull observed successful results with a handful of individuals trained to
the green belt level (3, pg. 51). These are two different approaches that both yielded success.
This shows that the implementation’s success does not depend on the level of the training, but on
the ability of individuals to teach, connect, communicate, learn and understand the scope of the
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education, not only applying it to problems faced but extending it to new types of unforeseen
problems. A small organization can be successful at implementing the Six Sigma plan using
these principles. Conclusion
Six Sigma is not a discipline that can only be used by large organizations. It can be
effective in a small organization with the correct understanding of how resources should be used.
Competent individuals must be chosen to pilot the project. Clear and precise goals are critical to
the success of the Six Sigma implementation. It will require a financial investment, but will also
reward the company as long as it is embraced and supported by the management. It has been
proven successful in different types of small companies with various styles of education, tools
and training. In conclusion, Six Sigma is an approach that can be successfully applied in small
organizations in order to realize significant cost savings, increased quality and greater customer
satisfaction.
References
1. Breyfogle, Forrest III, Cupello, James & Meadows, Becki. “Managing Six Sigma: a
practical guide to understanding, assessing, and implementing the strategy that yields
bottom line success”, Wiley, New York 2001
2. Burton, Terence & Sams, Jeff. “Six Sigma for Small and Mid-Sized Organizations”, J.
Ross Publishing, Inc., Florida, 2005.
3. Gnibus, Robert & Krull, Rik. “Small Companies See the Money”, Quality, Aug 2003;
42, 8. Pg. 48
4. Nelson, Karen. “A Study of Six Sigma Methodology on Defect Reduction in a Wire
Bundle Assembly”, Wichita State University, Department of Industrial and
Manufacturing Engineering, 2008.
5. Patel, Dharmesh. “Initiation and implementation of six sigma in a small organization”,
Wichita State University, Department of Industrial and Manufacturing Engineering 2004
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6. Thomas, Andrew & Barton, Richard & Chuke-Okafor, Chiamaka. “Applying Lean Six
Sigma in a Small Engineering Company – A Model for Change”, Journal of
Manufacturing Technology Management, Emerald Group Publishing Limited, Vol. 20
No. 1, 2009, p. 113-129.
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