Sunday, June 10, 2007

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




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