Down the slope with Six Sigma
I have to wonder what the companies that are doing Six Sigma everywhere are going to think when Tom Davenport writes a post that discusses Why Six Sigma is on the Downslope for business process improvement. He gives it five big problems:
First, there was all the statistical mumbo-jumbo it implied -- but seldom delivered on in most companies' implementations. Second, it didn't incorporate information technology -- arguably the most powerful force available for improving (or screwing up) processes -- in any way. Third, it was overly elitist. Instead of relying on Six Sigma expert "black belts" do the process analysis and design, every employee should be a process improver, as I argued last week. Fourth, it really only enabled incremental improvement, not radical breakthroughs. Fifth and last, it wasn't a good fit for innovation-oriented work.
He then suggests that there really aren't any better approaches that apply everywhere. That's really the problem: Six Sigma works great in manufacturing (sometimes), but then organizations have decided that it would apply equally well in any kind of process.
But there are good ways to think about how to go about improve the business. Incremental improvements are useful in some places. But how do you decide which improvements are actually going to be helpful? That's where you need other methods that help identify the areas of the business that need the most help.
Guess what area that is? The business constraint. Big surprise on this blog, right? No, not the bottleneck. Get rid of those annoying things that get in the way. But the constraint - the faucet that the business uses to throttle or open the flow of more business - that is where process improvement can do some good. Theory of Constraints provides some great guidance on this matter. Since there are generally very few constraints, this means the number of big improvement projects is likely quite small. (There are also near-constraints that will need improvement, but this is also a small number of things.) For evidence, there was an APICS article in 2006 that showed how much better Six Sigma and Lean could be when guided by TOC.
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