How Can the Service Industry Benefit from Six Sigma?
Over the last few years, many companies in the service sector have implemented Six Sigma techniques to help improve service delivery, reduce processes and waste. Due to improved focus resulting from Six Sigma strategies, many service businesses are reaping the benefits of better business strategies, improved organizational structure, and better project management outcomes.
This has become possible because businesses in the service sector have successfully adopted the Six Sigma tools in every department. As a result, the sector is reaping many benefits as follows.
Benefits of Six Sigma in the service sector
Lean Six Sigma in the service industry uses various strategies and different forms of data to measure productivity. The primary aim is to weigh the variations within the outcomes. The methodologies of Six Sigma focus more on variation reduction and hence the reduction of defects or errors.
The benefit is improved service delivery and better results to customers. Since the service industry directly serves customers, the outcomes achieved from Six Sigma strategies implementation translate into several benefits.
Improved profitability
Upon implementing the Six Sigma framework into their business models, the Six Sigma tools help the business undergo a series of processes aimed at helping the business reduce errors, save for service delivery, and improve the quality of service.
During the implementation process, the business might start operating at 2 Sigma. At this level, the yield level is mostly at 40 percent in terms of cost of quality. Over time, the business can improve and start operating at 4 Sigma and attain a cost on quality sales of 15 to 25 percent. At 6 Sigma, the cost drastically reduces to 0 to 10 percent.
As a result, every business in the service industry using Six Sigma productivity measuring tools consistently reports profitability because they have reduced errors, save on delivery time and serve happy customers.
Happy customers due to enhanced customer focus
Even though a business in the service industry is performing well with high numbers of customers, the good times might not last for long. When the time comes and the customers shift to another business, that’s the time managers begin to ask themselves the difficult questions – why?
Although they were enjoying a good business time, they didn’t implement strategies that would help develop sustainable customer focus strategies to keep them coming for many years. Six Sigma helps create a framework for vibrant customer-focused service that helps recognize customer voice, changing needs, and deliver products that align with that need. This is a major benefit the service industry reaps by implementing the Six Sigma tools.
Reducing waste
Every business sector that has yet to implement the Six Sigma framework will likely suffer the eight lean wastes – excessive production, transport, defects, excessive inventory, waiting, motion, over-processing, and not using talent. All these wastes are significantly reduced using Six Sigma tools and the result is saving on costs.
Focused mission, vision, and goals
Every business already has a defined vision, mission, and goals, but with Six Sigma, it successfully redefines these three and aligns them with the rest of the Sigma tools. Because the tools help businesses to foster a process of continuous learning, employee and business development, the entire organization uses them to create clear goals that are measurable and eliminates the ambiguity in its processes.
Sustainable growth and development
According to research, 90% of startup businesses fail within their first five years. The reason why they fail is large because they lack a sustainable path for growth and development. For startups to grow consistently, they need to be innovative because the field is highly competitive. Implementing Six Sigma strategies is helping many businesses become innovative and create strategies for sustained growth and development.