Can Small Businesses Afford Lean Six Sigma?
A business coach recently sent me this email. I've included my response.
Hi Jay,
I have a client who is a small businesspaint distributorauto body shops, some house paint, etc., ~ $2 million in annual volume. He's expressed an interest in lean six sigma at his company after reading a couple of books on the topic.
To boost profits, your client will want to reduce: - delay (typically 95% of total turnaround time) - Use Lean
- defects (wrong paint, wrong time, wrong customer, wrong quantity, inaccurate invoices, etc.) - Use Six Sigma
- deviation (off-color, inconsistency, etc.) - Use Six Sigma
My understanding of lean six sigma is that it can take a significant investment to make it work, and I've only heard of large(r) businesses implementing it.
If you do it the Jack Welch way, you can spend a fortune on Lean Six Sigma.
(A lot of businesses that start this way end up abandoning Lean Six Sigma because this approach dilutes the results.)
If you do it my way, you only invest in solving mission critical problems, not training all colors of belts.
The difference is focus.
Remember my 4-50 rule: 4% of the business is causing 50% of the delay, defects and deviation.
You only have to fix the 4% to make breakthrough improvements in speed, quality and profitability.
For small businesses we offer a Lean Six Sigma Do-it-yourself System: http://www.qimacros.com/sixsig290.html.
We also offer telephone and email coaching at $175/half hour.
How small a business have you worked with, and have you worked w/this industry or type of industry?
I use LSS on my small business.
One consultant I know helped her father run his muffler shop this way so that he could compete with Midas.
I've done it with credit unions, aluminum manufacturers, hospitals, Federal Reserve, telephony of all sizes.
They all have the same problems: delay, defects, and deviation which can be solved with a handful of tools and methods.
Your client can sign up for our free Lean Six Sigma Lessons on line at: http://www.qimacros.com/freestuff.html.
Jay Arthur, the KnowWareâ Man, works with companies that want to fire up their profits by plugging the leaks in their cash flow using Lean Six Sigma. He is the author of Lean Six Sigma DeMYSTiFieD (McGraw Hill 2007) and the QI Macros SPC Software for Excel. train Black Belts and Green Belts, Jay wants you to develop Money Belts--people who can find and fix the leaks in your cash flow.
mailto:knowwareman@mindspring.com
http://www.qimacros.com
2253 S. Oneida St, Ste D
Denver, CO 80224
303-756-9144 (888) 468-1537
Can Innovation and Six Sigma Coexist?
Motorola, one of the champions of Six Sigma that got into trouble when it fell behind in the cell phone innovation race, has found a way to make innovation and Six Sigma coexist. With phones like the Razr, Motorola has recovered from a 15% market share to a 22% market share.
The efficiencies created by Six Sigma can free employees to do more innovation.
Innovation, by it's nature, is somewhat sloppy. Six Sigma can help ensure that the next big thing will be delivered in a flawless fashion and improved beyond the reach of copycat competitors.
Be an innovator and an improver. Don't settle for just one or the other. Do both.
Jay Arthur, the KnowWareâ Man, works with companies that want to plug the leaks in their cash flow using Lean Six Sigma. He is the author of the Lean Six Sigma Simplified System and the QI Macros SPC Software for Excel. While most consultants tell you to train some Black Belts, Jay wants you to develop Money Belts--people who can find and fix the leaks in your cash flow.
mailto:knowwareman@mindspring.com
http://www.qimacros.com
2253 S. Oneida St, Ste D
Denver, CO 80224
303-756-9144 (888) 468-1537
Mistake-proofing Drunk Drivers
According to Businessweek's October 9th issue, Nissan and Toyota are developing sensors and software to detect when a driver is drunk and then disable the vehicle. After watching a drunk driver plow into a stalled lane of traffic on a local interstate recently, it seems like a heck of a good idea.
They haven't quite perfected it yet; erratic drivers can trigger the safety mechanism. Knowing Toyota and Nissan, I'm sure they'll figure it out.
That's mistake-proofing.
How do you change your processes, product or service to make it impossible for humans to cause an error, especially a potentially fatal one?
Jay Arthur, the KnowWareâ Man, works with companies that want to plug the leaks in their cash flow using Lean Six Sigma. He is the author of the Lean Six Sigma Simplified System and the QI Macros SPC Software for Excel. While most consultants tell you to train some Black Belts, Jay wants you to develop Money Belts--people who can find and fix the leaks in your cash flow.
mailto:knowwareman@mindspring.com
http://www.qimacros.com
2253 S. Oneida St, Ste D
Denver, CO 80224
303-756-9144 (888) 468-1537
Lean Computers
Sun Microsystems' "One Touch" supply chain accelerates the configuration and delivery of network servers. Instead of building a basic server at one of their suppliers and shipping it to Sun for final configuration, the customized server is shipped directly to the customer saving Sun an estimated $20 million.
Speed and Simplicity
It's all about speed and simplicity. One Touch has enabled Sun to deliver products on time 95% of the time vs 85%.
What are You Doing?
How can you reduce many touches to one touch?
How can you reduce delay and improve on time deliveries?
Jay Arthur, the KnowWareâ Man, works with companies that want to plug the leaks in their cash flow using Lean Six Sigma. He is the author of the Lean Six Sigma Simplified System and the QI Macros SPC Software for Excel.
mailto:knowwareman@mindspring.com
http://www.qimacros.com
2253 S. Oneida St, Ste D
Denver, CO 80224
303-756-9144 (888) 468-1537
Costly Battery Recall at Dell
Dell recalled 4.1 million batteries for laptops built between April Fool's Day 2004 and July 18, 2006. While known for their quality, it seems that crimping of metal strips in Sony's production of the Lithium batteries left tiny shards of metal in the battery that can cause it to short and overheat.
Estimated cost of this recall: $200-400 million. Ouch!
Kudos to Dell and Sony for admitting the problem and stepping up to its resolution.
While quality may not be totally free, as Phil Crosby once said, the cost of poor quality can be brutal.
What are you doing to plug the leaks in your cash flow?
Jay Arthur, the KnowWareâ Man, works with companies that want to plug the leaks in their cash flow. Jay specializes in Lean Six Sigma for Health Care and Information Systems applications: ordering, billing, purchasing, and payments. He is the author of Six Sigma Simplified and the QI Macros SPC Software for Excel.
mailto:knowwareman@mindspring.com
http://www.qimacros.com
2253 S. Oneida St, Ste D
Denver, CO 80224
303-756-9144 (888) 468-1537
Toyota Tops in Satisfaction Survey
Tuesday's Rocky Mountain News article by Tom Krisher reported that Toyota leads customer satisfaction in the automotive industry with a record score of 87 out of 100. One point back at 86 were:
- Toyota Lexus
- Honda
- GM (Buick)
It's tight at the top, but overall rankings are up a point (which from a pure variability standpoint isn't much). Is it really a trend or just natural variation? Only time will tell.
Jay Arthur, the KnowWare
â Man, works with companies that want to plug the leaks in their cash flow. Jay specializes in Lean Six Sigma for Health Care and Information Systems applications: ordering, billing, purchasing, and payments. He is the author of Six Sigma Simplified and the QI Macros SPC Software for Excel.
mailto:knowwareman@mindspring.com
http://www.qimacros.com
2253 S. Oneida St, Ste D
Denver, CO 80224
303-756-9144 (888) 468-1537
IRS Software System Costs Taxpayers $321 Million
The July 15th Rocky Mountain News article by Mary Dalrymple sites the failure of a software developer to deliver the new IRS tax refund fraud screening system as the reason for their inability to catch the estimated $200-300 million in tax fraud. The IRS has caught only 34% of the fraudulent claims caught the prior year.
While Computer Sciences Corporation was paid $21 million for the project, the IRS has asked them to stop work and restore the original program to operating status before 2007 tax returns are filed.
Why do companies continue to think it's easier to build a new but complex system from scratch than it is to upgrade an existing one that works? Murphy's law says that every complex system will be found to have evolved from a simple system that works. Trying to build a complex system from scratch is doomed to failure and you will have to start over with a simple system that works. The IRS already had a complex system that worked that had evolved from a simple system that worked.
The 4-50 Rule
I'll bet that only 4% of the code contained 50% of the defects and could be rewritten to eliminate the bugs. I'll also bet that only 4% of the code suffers 50% of the enhancements; this code could be rewritten to be table driven, instead of code driven, to maximize maintainability and flexibility. New systems sound sexy, but rarely do what they're supposed to do. Existing systems have so much embedded knowledge that it's almost impossible to capture all of the requirements such that you can build it.
Simplify, Simplify, Simplify
Any simple system will become more complex over time. The trick is to continuously simplify and streamline the simple system as it grows in complexity. That way, you'll never have to try and fail at replacing it.
Jay Arthur, the KnowWareâ Man, works with companies that want to plug the leaks in their cash flow. Jay specializes in Lean Six Sigma for Health Care and Information Systems applications: ordering, billing, purchasing, and payments. He is the author of Six Sigma Simplified and the QI Macros SPC Software for Excel.
mailto:knowwareman@mindspring.com
http://www.qimacros.com
2253 S. Oneida St, Ste D
Denver, CO 80224
303-756-9144 (888) 468-1537
