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HBOK 1-447

Title Where Has All the Magic Gone?
Author(s) Brian Swayne and Brent Harder
Source Six Sigma Forum Magazine
Topic Qualities of Customer-Focused Organizations

Performance Improvement

Change Management

Abstract Six Sigma is a management philosophy that relies on prioritizing customers and their needs, reducing variation, and selecting projects based on bottom-line results. A 2002 study sponsored by Greenwich Associates, however, shows a notable disconnect by some successful Six Sigma companies in focusing the philosophy on its main target, the external customer. The purpose of the study was to determine the root causes of successful projects in organizations with Six Sigma programs. Of the three companies reporting an average return greater than $1 million, the typical project was worth $250,000, a figure matching the Juran Institute’s standard project selection advice. The study revealed that profits were coming largely from cost takeout, with few companies mentioning customers as critical success factors, despite Six Sigma’s first rule of listening to the voice of the customer. Companies are more likely to measure their investment in a Six Sigma project through internal costs than external opportunity costs. Increasingly, Six Sigma is viewed as a guise for cutting costs, and for many customers and suppliers, simply an excuse for cutting costs and reducing services. While the study didn’t answer the original question regarding root causes of successful projects, the data provide a starting point for further research. A sidebar article lists the questions covered in the survey.
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